K–V Pharm. Co. v. U.S. Food & Drug Admin.

• Citation: 889 F.Supp.2d 119
• Decision Date: 06 September 2012
• Docket Number: Civil Action No. 12–1105 (ABJ).
• Parties: K–V PHARMACEUTICAL COMPANY, et al., Plaintiffs, v. UNITED STATES FOOD AND DRUG ADMINISTRATION, et al., Defendants.
• Court: U.S. District Court — District of Columbia

889 F.Supp.2d 119

K–V PHARMACEUTICAL COMPANY, et al., Plaintiffs,

v.UNITED STATES FOOD AND DRUG ADMINISTRATION, et al., Defendants.

Civil Action No. 12–1105 (ABJ).

United States District Court, District of Columbia.

Sept. 6, 2012.

Holly MacKay Conley, Michael V. Pinkel, Richard Melvyn Cooper, Williams & Connolly LLP, Washington, DC, for Plaintiff.

Gerald Cooper Kell, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

AMY BERMAN JACKSON, District Judge.

Plaintiff K–V Pharmaceutical Company (“KV”) and its wholly owned subsidiary, plaintiff Ther–RX Corporation (“Ther–RX”), own and market a drug called Makena, which is a hydroxyprogesterone caproate injection. Makena was approved in 2011 for use by pregnant women with a history of preterm birth to reduce the risk that they would experience another preterm birth. Plaintiffs have sued the United States Food and Drug Administration (“FDA”), its Commissioner Margaret A. Hamburg, the United States Department of Health & Human Services (“HHS”), and HHS Secretary Kathleen Sebelius, alleging that defendants are violating the Administrative Procedure Act (“APA”) and several provisions of the Food, Drug, and Cosmetic Act (“FDCA”) by failing to take action against pharmacies that compound the drug and thereby creating a cheaper alternative for doctors to prescribe. The compounded form of the drug is referred to as “17P” in this action.

In particular, plaintiffs challenge a March 30, 2011 press release in which FDA announced its intention not to take enforcement action against the compounders except under certain circumstances. They also challenge FDA's failure to block foreign shipments of the active pharmaceutical ingredient (“API”) used in 17P from entering the United States. According to plaintiffs, FDA's actions have given rise to unlawful competition with Makena and caused them irreparable economic harm.

Defendants have moved to dismiss the action under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). [Dkt. # 7]. They argue that plaintiffs lack standing, and that the actions they challenge are the types of discretionary enforcement decisions that the Supreme Court found to be unreviewable in Heckler v. Chaney, 470 U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985). Alternatively, they argue that the complaint fails to state a claim upon which relief can be granted. The Court concludes that Counts I through III of the complaint challenge FDA's discretionary enforcement activities and therefore assert unreviewable claims, and that Count IV fails to state a claim under Rule 12(b)(6).

BACKGROUND

Plaintiff KV is the owner of the drug Makena, which has been approved by the FDA. Compl. ¶ 24. Plaintiff Ther–RX is a “wholly-owned subsidiary of KV [that] markets, sells, and distributes Makena on behalf of KV.” Id. ¶ 25. On January 25, 2007, FDA designated Makena as an “orphan drug” to be used for the prevention of preterm birth in women who have a singleton pregnancy and a history of prior preterm delivery.¹Id. ¶¶ 50–51.

Under the Orphan Drug Act, 21 U.S.C. §§ 360aa-ee (“ODA”), an “orphan drug” is a drug used to treat a disease or condition that affects fewer than 200,000 people in the United States. Compl. ¶ 36. Congress passed the ODA in 1983, as an amendment to the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq. (“FDCA”).² The congressional findings reflect that Congress sought to create incentives for the development of drugs for rare conditions. Pub.L. No. 97–414, § 1(b)(4), 96 Stat.2049, 2049 (1983). Accordingly, when a drug receives the FDA's orphan drug designation, section 360cc(a) of the OCA prevents the Secretary of Health from “approving another application under section 355 of this title ... for such drug for [the same] disease or condition” within seven years after the approval date of the orphan drug. 21 U.S.C. § 360cc(a).

Makena, a hydroxyprogesterone caproate injection is the first drug approved by FDA to reduce the risk of preterm birth in women with a singleton pregnancy who have a history of singleton spontaneous preterm birth. Compl. ¶ 1. Because it has been designated as an “orphan drug,” its seven year exclusivity period began running on the day it was approved, February 3, 2011. Compl. ¶ 14.

However, for a number of years before FDA approved Makena, women were treated for risk of preterm birth with versions of hydroxyprogesterone caproate that were compounded by entities known as “compounding pharmacies” or “compounders.” Id. ¶ 9. According to the complaint:

Drug compounding is a process by which a pharmacist or doctor combines, mixes, or alters ingredients to create a medication customized to the needs of an individual patient. Compounded drugs generally are not reviewed or approved by FDA. Compounded versions of 17P were not and are not reviewed or approved by FDA; and, in general, their individual formulations, manufacturing processes, labeling, and adverse-event and treatment-failure histories were and are unknown to FDA. The facilities in which the compounding occurred and continues to occur generally were not and are not registered with or routinely inspected by FDA.

Compl. ¶ 9.

When Makena was released, the media began reporting on its high list price of $1,500 per injection, or up to $30,000 for a course of treatment. Id. ¶ 68. Plaintiffs allege that these reports were misguided, see id. ¶¶ 69–73, but that the press accounts prompted members of Congress to pressure FDA to make the 17P injection available at a lower price than the initial list price for Makena. Id. ¶ 74.

On March 30, 2011, FDA issued a statement for immediate release titled, FDA Statement on Makena.³ FDA Statement (Mar. 20, 2011), available at www. fda. gov/ News Events/ Newsroom/ Press Announcements/ ucm 249025. htm (“March Statement”). The statement explained that FDA had approved Makena on February 3, 2011, and that as a result, Makena obtained seven years of exclusivity under the Orphan Drug Act. Id. It further explained that for many years, a version of the active ingredient of Makena had been available to patients whose physicians requested the drug from a pharmacist who compounded the drug, and that FDA had generally exercised enforcement discretion with respect to those drugs. Id. The March Statement went on:

Because Makena is a sterile injectable, where there is a risk of contamination, greater assurance of safety is provided by an approved product. However, under certain conditions, a licensed pharmacist may compound a drug product using ingredients that are components of FDA approved drugs if the compounding is for an identified individual patient based on a valid prescription for a compound product that is necessary for that patient. FDA prioritizes enforcement actions related to compounded drugs using a risk-based approach, giving the highest enforcement priority to pharmacies that compound products that are causing harm or that amount to health fraud.

FDA understands that the manufacturer of Makena, KV Pharmaceuticals has sent letters to pharmacists indicating that FDA will no longer exercise enforcement discretion with regard to compounded versions of Makena. This is not correct.

In order to support access to this important drug, at this time and under this unique situation, FDA does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate based on a valid prescription for an individually identified patient unless the compounded products are unsafe, of substandard quality, or are not being compounded in accordance with appropriate standards for compounding sterile products. As always, FDA may at any time revisit a decision to exercise enforcement discretion.

Id.

In their complaint, plaintiffs do not mention the language in the press release that suggests that the March Statement may have been prompted by their own actions. Instead, they allege that the March Statement was issued in response to public pressure about the price of Makena. Compl. ¶ 75. They further allege that some Medicaid programs have interpreted the March Statement as “authorizing the total displacement of Makena by compounded 17P.” Id. ¶ 86.⁴ Plaintiffs assert that “numerous compounded versions of 17P (not customized for individual patients) have entered, re-entered, or remained on the U.S. market, some manufactured on a commercial scale”; and that FDA is permitting unapproved 17P API to be imported into the United States. Id. ¶ 15. According to the complaint, many or all of the compounders of 17P use active ingredients manufactured in China by establishments that have not been identified in an approved new drug application and are not inspected by FDA. Id. ¶ 89.

Since issuing the March Statement, FDA has issued three additional press releases regarding Makena, Compl. ¶ 94, two of which are relevant to this action.⁵ On June 15, 2012, FDA addressed safety concerns plaintiffs had raised about the 17P compounds, and it described the enforcement approach it was following with respect to compounded 17P. It announced that it had tested API from sixteen samples of 17P, and thirteen samples of compounded 17P prepared by eight different pharmacies, and that it had not identified any major safety problems. Updated FDA Statement on Compounded Versions of hydroxyprogesterone caproate (the active ingredient in Makena) (June 15, 2012), available at www. fda. gov/ News Events/ Newsroom/ Press Announcements/ ucm 308546. htm (“June Statement”). However, it also stated that “approved drug products, such as Makena, provide a greater assurance of safety and effectiveness than do compounded products.” Id.

The June Statement further explained:

The drugs that pharmacists compound (including compounded hydroxyprogesterone caproate) are not FDA approved, which means they do not undergo premarket review nor do they have an FDA finding of safety and efficacy. Compounding large volumes of drugs that are copies of...