Lannett Co. v. U.S. Food & Drug Admin.

• Decision Date: 25 October 2017
• Docket Number: Civil Action No. 16–1350 (RBW)
• Parties: LANNETT COMPANY, INC. and Lannett Holdings, Inc., Plaintiffs, v. UNITED STATES FOOD AND DRUG ADMINISTRATION, et al., Defendants.
• Court: U.S. District Court — District of Columbia

300 F.Supp.3d 34

LANNETT COMPANY, INC. and Lannett Holdings, Inc., Plaintiffs,

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

Civil Action No. 16–1350 (RBW)

United States District Court, District of Columbia.

Signed October 25, 2017

Daniel G. Jarcho, Marc J. Scheineson, Tamara Rae Tenney, Alston & Bird LLP, Washington, DC, for Plaintiffs.

Natalie N. Sanders, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

REGGIE B. WALTON, United States District JudgeThe plaintiffs, Lannett Company, Inc. and Lannett Holdings, Inc. (collectively, "Lannett"), bring this action against the defendants, the United States Food and Drug Administration (the "FDA") and the United States, for judicial review of the FDA's decision to rescind "the marketing approval for one of [their] generic drugs[, Temozolomide,] based on the agency's argument that the approval was ‘mistakenly granted.’ " Complaint ("Compl.") at 2. Specifically, Lannett petitions this Court to "[s]et aside the FDA's rescission of [its] [Abbreviated New Drug Application ("ANDA") ] approval" of Temozolomide, to "[d]eclare [the] FDA's rescission of [its] ANDA approval unlawful," and to "[e]njoin [the] FDA from revoking the ANDA approval for [its] Temozolomide Capsules in the future without a hearing, and without following the procedures established by 21 U.S.C. § 355(e) [ (2012) ]." Id. at 18. Currently before the Court are the Plaintiffs' Motion for Summary Judgment ("Pls.' Mot."), ECF No. 16, the Defendants' Cross–Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment ("Defs.' Summ. J. Mot."), ECF No. 37, and the Defendants' Motion to Strike Extra–Record Documents ("Defs.' Mot."). After careful consideration of the parties' submissions and the administrative record ("A.R."),¹ the Court concludes for the reasons set forth below that it must deny the plaintiffs' motion for summary judgment, grant the defendants' cross-motion for summary judgment, and deny as moot the defendants' motion to strike.

I. STATUTORY AND REGULATORY BACKGROUND

The Food, Drug, and Cosmetic Act (the "FDCA") provides that "[n]o person shall introduce or deliver for introduction into interstate commerce any new drug, unless an approval of an application filed pursuant to ... this section is effective with respect to such drug." 21 U.S.C. § 355(a). In order to obtain approval, a new drug application (a "NDA") must include, among other things, "full reports of investigations which have been made to show whether or not [the] drug is safe for use and whether [the] drug is effective in use." Id. § 355(b)(1)(A). Because this process is "costly and time[-]consuming," Congress amended the FDCA in 1984 to "permit[ ] a manufacturer of a generic alternative to a pioneer drug to seek FDA approval by submitting an [ANDA]," Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1316 (D.C. Cir. 1998), which references and relies on the prior approval of the pioneer drug, Astellas Pharma US, Inc. v. FDA, 642 F.Supp.2d 10, 13–14 (D.D.C. 2009). So, "[r]ather than requiring the [ANDA] applicant to make an independent showing that the proposed generic is itself safe and effective, the amended statute requires a showing that the proposed generic operates in the same manner as the pioneer drug on which it is based." Id.

To that end, FDA regulations require that an ANDA include information comparing, among other things, the proposed generic drug's "[a]ctive ingredients," "[r]oute of administration, dosage form, and strength" to the "reference listed drug." 21 C.F.R. §§ 314.94(a)(5–6) (2016). The ANDA must also contain "a full description of the methods used in, and the facilities and controls used for, the manufacture, processing, and packing of such drug." 21 U.S.C. § 355(b)(1)(D) ; see also 21 C.F.R. § 314.94(a)(9)(i). For ANDA approval, the FDA must find that these requirements, commonly referred to as current Good Manufacturing Practice ("cGMP"), "are [ ]adequate to assure and preserve [the generic drug's] identity, strength, quality, and purity." 21 U.S.C. § 355(j)(4)(A). To make this assessment, the

FDA assesses cGMP compliance by inspecting the facility or facilities where the drug will be manufactured. If the finished drug manufacturer will use an active pharmaceutical ingredient manufactured by a different company, [the] FDA will review the compliance status of each named facility and inspect the facilities of both the finished drug manufacture and the active pharmaceutical ingredient manufacturer as needed.

Pls.' Mem. at 5. Once the FDA approves an ANDA, the ANDA sponsor may begin "market[ing] its drug lawfully in interstate commerce." Id. at 6; see also 21 U.S.C. § 355.

The FDCA also sets forth the process for the withdrawal of an ANDA approval, outlining the circumstances in which the FDA is required to rescind an ANDA approval or when it may do so in its discretion. See 21 U.S.C. § 355(e). Under either scenario, the FDCA requires "due notice and opportunity for hearing to the applicant" before the FDA withdraws its ANDA approval. Id. Relevant to this case, the FDA may withdraw ANDA approval on the basis of "new information" regarding non-compliance with cGMP:

The Secretary may also, after due notice and opportunity for hearing to the applicant, withdraw the approval of an application submitted ... on the basis of new information before him, evaluated together with the evidence before him when the application was approved, the methods used in, or the facilities and controls used for, the manufacture, processing, and packing of such drug are inadequate to assure and preserve its identity, strength, quality, and purity and were not made adequate within a reasonable time after receipt of written notice from the Secretary specifying the matter complained of.

Id. (emphasis added).² However, the FDA is not limited to these statutorily provided circumstances for withdrawing ANDA approval, as it may also rescind an ANDA approval under its "inherent authority" if done within a reasonable period of time and if Congress has not otherwise spoken.

See Ivy Sports Med., L.L.C. v. Burwell, 767 F.3d 81, 86 (D.C. Cir. 2014) ("[A]dministrative agencies are assumed to possess at least some inherent authority to revisit their prior decisions, at least if done in a timely fashion.... [However,] an agency may not rely on inherent reconsideration authority ‘when Congress has provided a mechanism capable of rectifying mistaken actions.’ " (quoting Am. Methyl Corp. v. EPA, 749 F.2d 826, 835 (D.C. Cir. 1984) )).

II. FACTUAL BACKGROUND

Lannett Company, Inc., is a "manufacturer of generic drugs," and Lannett Holdings, Inc. "maintains, owns[,] and manages the intangible assets of its parent company Lannett Company, Inc." Compl. ¶ 3. Lannett Holdings, Inc. owns "the drug approval at issue in this case, and the drug is to be manufactured by Lannett Company, Inc." Id. And the drug, Temozolomide, "is an oral chemotherapy drug used in the treatment of certain cancers

." Id. ¶ 18.

On February 15, 2011, "Lannett filed an ANDA with [the] FDA, seeking approval to market generic Temozolomide capsules in a variety of different strengths." Pls.' Mem. at 8 (citing A.R. at FDA658). In conjunction with its ANDA, Lannett identified Chongqing Lummy Pharmaceutical Co. Ltd. ("Lummy"), a company located in Chayuan, China, "as the proposed manufacturer of the active pharmaceutical ingredient for the finished drug product." Compl. ¶ 18; see also A.R. FDA659. As part of its review of Lannett's ANDA, the FDA, in July 2013, "conducted a pre-approval inspection of Lummy's factory ... to determine whether Lummy's manufacturing was in accordance with cGMP requirements." Pls.' Mem. at 9; see also A.R. FDA659 n.5. The FDA determined that "Lummy['s] facility had ‘an acceptable compliance status,’ " and this finding was documented in the FDA's Center for Drug Evaluation and Research's electronic platform used in the review and processing of ANDAs. Pls.' Mem. at 9 (quoting A.R. FDA659 n.5).

From March 14 to 16, 2016, an FDA investigator from the agency's China office conducted a routine inspection at Lummy's facility to confirm that its cGMP compliance remained acceptable. A.R. FDA59, FDA64. The inspection revealed that Lummy was "in the process of moving manufacturing operations from the Chayuan site to the newly established Changshou site located [near] ... Chongqing city," A.R. FDA68, and thus, the FDA investigator inspected both manufacturing sites, A.R. FDA66. Although the Changshou "facility ha[d] not been registered with the FDA," Lummy "ha[d] already transferred all analytical instrumentation and stability samples [for the Temozolomide batches] to the Changshou site." A.R. FDA70. Based on his inspection, the FDA "investigator ... conclude[d] that there were significant cGMP compliance problems relating to data integrity, including numerous records relating to manufacturing that [he] determined to have been falsified." Pls.' Mem. at 10 (citing to A.R. FDA4–7); see also Defs.' Mem. at 9–10 (citing various portions of the A.R.). The investigator provided Lummy with the list of objectionable practices and conditions he observed, and requested that Lummy provide a response indicating its corrective actions. See A.R. FDA79.

On March 15, 2016, the FDA investigator sent an e-mail "to the Office of Compliance ... and to [the Center for Drug Evaluation and Research's Office of Pharmaceutical Quality's] Office of Surveillance," informing them of his "recommendation that the Lummy facility be classified as [Official Action Indicated ("OAI") ]," which is an inspection conclusion "reflect[ing] the fact that ‘objectionable conditions were found and a regulatory action is recommended." A.R. FDA659; see also Defs.' Mem. at 11. However, "[b]ecause the investigator's e[-]mail recommendation did not also include the ‘field alert’ form typically used to trigger entry of an OAI alert into the [electronic p]latform, ... staff...