Ferring Pharm., Inc. v. Burwell
| Decision Date | 15 March 2016 |
| Docket Number | Civil Action No.: 15-0802 (RC) |
| Citation | 169 F.Supp.3d 199 |
| Parties | Ferring Pharmaceuticals, Inc., Plaintiff, v. Sylvia M. Burwell, et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
Catherine E. Stetson, Kathryn Victoria Long, Susan Margaret Cook, Hogan Lovells, US LLP, Washington, DC, for Plaintiff.
Ann Frances Entwistle, U.S. Department of Justice, Washington, DC, for Defendants.
GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
Plaintiff Ferring Pharmaceuticals, Inc. (“Ferring”) is the manufacturer of PREPOPIK, a fixed-dose combination drug product that contains three drug substances: sodium picosulfate, magnesium oxide, and anhydrous citric acid. When it submitted a New Drug Application (“NDA”) for PREPOPIK to the U.S. Food and Drug Administration (“the FDA”), Ferring sought a five-year period of marketing exclusivity because one of the drug substances, sodium picosulfate, had never previously been approved in a NDA. The Federal Food, Drug, and Cosmetics Act (“FDCA”) provides for a five-year period of marketing exclusivity when a drug application is approved “for a drug, no active ingredient (including any ester or salt of the active ingredient) of which has been approved in any other application.” 21 U.S.C. § 355(j)(5)(F)(ii)
. During that five-year period, “no application may be submitted ... which refers to the drug for which the subsection (b) application was submitted.” Id.
The dispute in this case is whether the statutory term “drug,” as used in this provision of the FDCA, can reasonably be read to refer to a “drug product” (the finished dosage form of a drug), or must be read to refer to a “drug substance” (the active ingredient of the drug). See 21 C.F.R. § 314.3
(). Because PREPOPIK's other two active ingredients had previously been approved for market, the FDA applied its then-existing interpretation of the FDCA and determined that PREPOPIK was not entitled to a five-year period of marketing exclusivity. Ferring filed a Citizen Petition challenging the FDA's interpretation. In response, the FDA—acknowledging the policy concerns Ferring and two other pharmaceutical companies raised regarding the agency's interpretation—concluded that the FDCA could reasonably be read to refer to “drug substances,” and announced that it would change its interpretation and permit five-year exclusivity for fixed-combination drug products that contained a novel drug substance, even if that drug product also contained other previously-approved drug substances. Yet, the victory was a pyrrhic one for Ferring: the FDA concluded that it would apply its interpretation only prospectively, and declined to alter its exclusivity determination for PREPOPIK.
In this Administrative Procedure Act (“APA”) action, Ferring challenges the FDA's prior interpretation as contrary to the plain language of the FDCA, or an unreasonable interpretation of statutory ambiguity, under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)
. Alternatively, Ferring claims that even if the FDA's prior interpretation was permissible, the agency's refusal to apply its new interpretation retroactively is arbitrary and capricious. For the foregoing reasons, the Court concludes that the term “drug” as used in the five-year exclusivity provision is ambiguous and that the FDA's prior interpretation was a reasonable one. This conclusion preserves the agency's discretion to choose among the reasonable interpretations of an ambiguous statutory term, and accords with the Supreme Court's admonition that “ ‘change is not invalidating, since the whole point of Chevron is to leave the discretion provided by the ambiguities of a statute with the implementing agency.’ ” Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs. , 545 U.S. 967, 981, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005) (quoting Smiley v. Citibank (South Dakota), N.A. , 517 U.S. 735, 742, 116 S.Ct. 1730, 135 L.Ed.2d 25 (1996) ). Thus, the Court will grant summary judgment in part to Defendants on the Chevron issues. The Court concludes that supplemental briefing is necessary on the retroactivity question, however, and the Court will deny both motions for summary judgment on that ground, without prejudice. The Court will direct the parties to file renewed motions for summary judgment on the retroactivity issue that discuss the authorities identified below.
The FDCA requires that all new prescription drugs be approved by the FDA before they can be marketed. See 21 U.S.C. § 355(a)
. Generally, when a pharmaceutical manufacturer submits a NDA for approval, it must support that application with full reports of clinical studies that demonstrate that the product is safe and effective. See
id. § 355(b). In 1984, Congress altered aspects of this process when it enacted what are popularly referred to as the Hatch-Waxman Amendments. See Drug Price Competition and Patent Term Restoration Act, Pub. L. No. 98–417, 98 Stat. 1585 (1984)
; see also
Abbott Labs. v. Young , 920 F.2d 984, 985 (D.C.Cir.1990). The Hatch-Waxman Amendments “created a new system for protecting both the interests of drug manufacturers who produce new drugs and the interests of generic drug manufacturers and their consumers.” Abbott Labs. , 920 F.2d at 985. “Facing the classic question of the appropriate trade-off between greater incentives for the invention of new products and greater affordability of those products, Congress struck a balance between expediting generic drug applications and protecting the interests of the original drug manufacturers.” Id.
As part of that balance, Congress simplified the approval process for generic versions of listed drugs. The Hatch-Waxman Amendments provided for the submission of an abbreviated new drug application (“ANDA”) for the generic version of a previously approved drug. See 21 U.S.C. § 355(j)(1)
. To file an ANDA, a pharmaceutical manufacturer may rely on the FDA's finding that a previously approved drug—referred to as the “listed drug”—is safe and effective, so long as the applicant can demonstrate that the proposed generic drug is the “same as” the reference listed drug in several essential respects. See generally
id. § 355(j)(2)(A). The Hatch-Waxman Amendments also provide for the approval of a NDA in which some or all of the investigations relied upon to show that the drug is safe and effective “were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted.” Id. § 355(b)(2). Such applications are referred to as “505(b)(2) applications.”
Despite the availability of these less onerous approval avenues, Congress also put in place incentives to promote the development of new drugs. As relevant to this case, the Hatch-Waxman Amendments established a five-year marketing exclusivity period for certain types of drugs, protecting a manufacturer from the submission of an ANDA or 505(b)(2) application and, thus, from generic competition. As amended, the FDCA provides that:
If an application submitted under subsection (b) of this section [21 U.S.C. § 355(b)
] for a drug, no active ingredient (including any ester or salt of the active ingredient) of which has been approved in any other application under subsection (b) of this section, is approved after September 24, 1984, no application may be submitted under this subsection [concerning ANDAs] which refers to the drug for which the subsection (b) application was submitted before the expiration of five years from the date of the approval of the application under subsection (b) of this section ....
21 U.S.C. § 355(j)(5)(F)(ii)
; see
id. § 355(c)(3)(E)(ii) ().
Even if a drug is not eligible for a five-year period of marketing exclusivity, the Hatch-Waxman Amendments provide for a shorter, three-year period of exclusivity for certain changes to previously approved drugs. If an applicant submits one or more new clinical studies in support of a change in the conditions of an approved drug's use, the FDCA confers a three-year period of marketing exclusivity, so long as the FDA considers those studies to have been essential to the agency's approval of the change. 21 U.S.C. § 355(j)(5)(F)(iii)
; see also
id. § 355(c)(3)(E)(iii). Unlike the five-year exclusivity provision, which prohibits the FDA from even accepting an application during the exclusivity period, the three-year exclusivity provision only precludes the FDA from making a new ANDA or 505(b)(2) application effective before the end of the three-year period. Compare id. § 355(j)(5)(F)(ii)
, with
id. § 355(j)(5)(F)(iii).
The two clauses of the five-year exclusivity provision relevant to this case are what the parties refer to as the “eligibility” and the “bar” clauses. See A.R. 203; Pl.'s Mem. Supp. Summ. J. at 13 (“Pl.'s Mem. Supp.”), ECF No. 20-1. The “eligibility clause” describes whether a drug is eligible for five-year exclusivity. To be eligible, a drug must be “a drug, no active ingredient (including any ester or salt of the active ingredient) of which has been approved in any other application under subsection (b) of [§ 355
].” 21 U.S.C. § 355(j)(5)(F)(ii). If a drug meets that requirement, it will bar the types of ANDAs or 505(b)(2) applications identified in the “bar clause.” Specifically, “no application may be submitted ... which refers to the drug for which the subsection (b) application was submitted before the expiration of five years from the date of the approval of the application.” Id. (emphasis added).
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