Mova Pharmaceutical Corp. v. Shalala

• Citation: 140 F.3d 1060
• Decision Date: 14 April 1998
• Docket Number: No. 97-5082.,No. 97-5111.,97-5082.,97-5111.
• Parties: MOVA PHARMACEUTICAL CORP., Appellee, v. Donna E. SHALALA, Secretary, U.S. Department of Health & Human Services and Michael A. Friedman, Acting Commissioner, U.S. Food and Drug Administration, Appellees, Mylan Pharmaceuticals, Inc., Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

140 F.3d 1060

MOVA PHARMACEUTICAL CORP., Appellee, v. Donna E. SHALALA, Secretary, U.S. Department of Health & Human Services and Michael A. Friedman, Acting Commissioner, U.S. Food and Drug Administration, Appellees, Mylan Pharmaceuticals, Inc., Appellant.

No. 97-5082.

No. 97-5111.

United States Court of Appeals, District of Columbia Circuit.

Argued March 13, 1998.

Decided April 14, 1998.

Appeals from the United States District Court for the District of Columbia (No. 96cv02861).

Steven Lieberman, Washington, DC, argued the cause for appellant Mylan Pharmaceuticals, Inc., with whom E. Anthony Figg was on the briefs.

Howard S. Scher, Attorney, United States Department of Justice, Washington, DC, argued the cause for the federal appellants, with whom Frank W. Hunger, Assistant Attorney General, Mary Lou Leary, United States Attorney at the time the briefs were filed, and Douglas N. Letter, Litigation Counsel, were on the briefs.

Steven J. Glassman, New York City, argued the cause for appellant Pharmacia & Upjohn Company, with whom David O. Bickart, Washington, DC, was on the briefs.

Ronald L. Grudziecki, Alexandria, VA, argued the cause for appellee, with whom James S. Rubin was on the brief.

John F. Cooney, Washington, DC, filed the brief for amicus curiae Teva Pharmaceuticals, USA.

Before: WALD, SILBERMAN and TATEL, Circuit Judges.

WALD, Circuit Judge:

On December 19, 1996, the Food and Drug Administration ("FDA") approved an application by a drug manufacturer, Mylan Pharmaceuticals, Inc. ("Mylan") to market a generic version of micronized glyburide, a drug used to treat diabetes. Another drug manufacturer, Mova Pharmaceutical Corp. ("Mova"), had filed an earlier application to market a generic version of the same drug; however, Mova's application had not yet been approved, because of a patent infringement suit brought by Pharmacia & Upjohn Company ("Upjohn"), in which Upjohn claimed that Mova's product infringed a patent belonging to Upjohn.

When Mova learned that the FDA had approved Mylan's application, it brought suit in the United States District Court for the District of Columbia, relying on 21 U.S.C. § 355(j)(5)(B)(iv) (1994),¹ to compel the FDA to delay the effective date of this approval until 180 days after the earlier of the dates that Mova won its suit or began to market its product. Because the statutory scheme governing the approval of successive generic drug applications is quite complex, we will, for purposes of the introduction, describe the parties' contentions only in general terms. Mova argued that, because it had filed a previous application to market a generic version of micronized glyburide, the applicable statutory provision, 21 U.S.C. § 355(j)(5)(B)(iv), granted a 180-day market exclusivity period to Mova running from the date Mova won its suit or began marketing its product, and the FDA was barred from approving Mylan's similar application until after the end of that 180-day period. In response, the FDA cited a regulation that permitted the agency to approve Mylan's application immediately, because at the time Mylan submitted its application Mova had not yet "successfully defended" against (that is, prevailed in) Upjohn's patent infringement suit. See 21 C.F.R. § 314.107(c)(1). Mova in turn challenged the FDA's regulation as inconsistent with the plain language of § 355(j)(5)(B)(iv). The district court agreed with Mova, and entered a preliminary injunction requiring the FDA to delay its approval of Mylan's application until 180 days after Mova won its suit or began to market its product (whichever came first). The FDA and Mylan have appealed this decision.

While Mova's request for a preliminary injunction was pending, Upjohn submitted a motion to intervene in the litigation. After granting the injunction, the district court denied Upjohn's motion to intervene, concluding that it was moot, and that in any case Upjohn did not have a legally protected interest in the subject matter of the litigation. Upjohn has appealed this ruling and its appeal has been consolidated with that of the FDA and Mylan.

On the merits of the preliminary injunction, we find that the district court was correct in finding that Mova was very likely to be able to show that the FDA's regulation exceeded its authority under the statute. On Upjohn's motion to intervene, we find that the district court's reasons for denying the motion were erroneous, and that Upjohn is entitled to participate both in this appeal and in any further proceedings before the district court.

I. BACKGROUND

A. Statutory and Regulatory Framework

We will first briefly outline the statutory and regulatory framework applicable to the marketing of generic drugs. Generic drugs are versions of brand-name prescription drugs that are often sold without a brand name and that contain the same active ingredients, but not necessarily the same inactive ingredients, as the original. United States v. Generix Drug Corp., 460 U.S. 453, 455, 103 S.Ct. 1298, 1299-1300, 75 L.Ed.2d 198 (1983). Ordinarily, an applicant to market a drug must complete a document called a New Drug Application, or NDA. Preparing such applications can be a time-consuming and costly process, as they must include data from studies showing the drug's safety and effectiveness. Formerly, a firm that wished to make a generic version of a brand-name drug that had already been approved by the FDA was required to file a new NDA, complete with new studies showing the drug's safety and effectiveness. See generally H.R.REP. No. 98-857, Part I, at 16-17 (1984), U.S.Code Cong. & Admin.News 1984, 2647.

In 1984, Congress enacted the Hatch-Waxman Amendments, which established a simplified procedure for FDA approval of generic drugs. Under this procedure, the original applicant for FDA approval of a drug, called the "pioneer" applicant, must still complete a full NDA. However, subsequent applicants who wish to manufacture generic versions of the original have an alternative: they may instead complete an Abbreviated New Drug Application, or ANDA, which relies on the FDA's previous determination that the drug is safe and effective, and thus avoid submitting new safety and effectiveness studies.

The Hatch-Waxman Amendments specify the contents of an ANDA in detail. One requirement is that, for each of the patents applicable to the pioneer drug, the ANDA applicant must certify whether the proposed generic drug would infringe that patent, and, if not, why not. The statute provides ANDA applicants with four certification options: they may certify (I) that the required patent information has not been filed; (II) that the patent has expired; (III) that the patent has not expired, but will expire on a particular date; or (IV) that the patent is invalid or will not be infringed by the drug for which the ANDA applicant seeks approval. 21 U.S.C. § 355(j)(2)(A)(vii). We will call these paragraph I, II, III, and IV certifications, respectively.

If the applicant makes a certification under paragraphs I or II, the statute provides that the FDA may approve the ANDA effective immediately. 21 U.S.C. § 355(j)(5)(B)(i). If the applicant makes a certification under paragraph III, the FDA may approve the ANDA effective on the date that the applicant certifies that the patent will expire. 21 U.S.C. § 355(j)(5)(B)(ii).

When an applicant makes a certification under paragraph IV, things become more complicated. In such cases, the statute begins by providing a forty-five-day window during which the patent-holder may bring suit against the applicant. If the patent-holder brings suit during that forty-five-day period, the statute says that the FDA's approval of the ANDA must be delayed for thirty months, a provision that is presumably intended to allow the patent-holder time to vindicate its patent in court before the generic competitor is allowed entry into the market. 21 U.S.C. § 355(j)(5)(B)(iii). The statute permits the court to lengthen or shorten this period if it finds that either party has failed to "reasonably cooperate in expediting the action." Id. If the court finds that the patent is invalid or is not infringed, the FDA's approval becomes effective as of the date of that ruling. 21 U.S.C. § 355(j)(5)(B)(iii)(I), (III).²

It is the succeeding provision of the statute, however, that has occasioned the dispute involved in this suit (and many others). That provision says:

If the application contains a certification described in subclause (IV) of paragraph (2)(A)(vii) and is for a drug for which a previous application has been submitted under this subsection continuing [sic]³ such a certification, the application shall be made effective not earlier than one hundred and eighty days after —

(I) the date the Secretary receives notice from the applicant under the previous application of the first commercial marketing of the drug under the previous application, or

(II) the date of a decision of a court in an action described in clause (iii) holding the patent which is the subject of the certification to be invalid or not infringed, whichever is earlier.

21 U.S.C. § 355(j)(5)(B)(iv). This provision on its face appears to provide an advantage to the first party who files a paragraph IV ANDA (henceforth, the "first applicant"), by granting him a 180-day period in which to market his generic drug without competition from other ANDA applicants.⁴ We will call this Edenic moment of freedom from the pressures of the marketplace the statute's "exclusivity period." Section 355(j)(5)(B)(iv) has two sub-clauses, each of which can trigger the start of the 180-day exclusivity period; we will call subclause (I), which turns on the first commercial marketing of the drug, the "commercial-marketing trigger," and sub-clause (II), which turns on a court decision finding the patent to be invalid or not infringed, the "court-decision trigger."

The FDA, however, concluded, for reasons discussed below, that Congress could...