Purepac Pharmaceutical Co. v. Friedman

• Decision Date: 29 December 1998
• Docket Number: Nos. 98-5334,98-5335 and 98-5337,s. 98-5334
• Citation: 162 F.3d 1201
• Parties: , 49 U.S.P.Q.2d 1365 PUREPAC PHARMACEUTICAL COMPANY, Appellant, v. Michael A. FRIEDMAN, M.D., Acting Commissioner of Food and Drugs, Food and Drug Administration, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1201

162 F.3d 1201

333 U.S.App.D.C. 294, 49 U.S.P.Q.2d 1365

PUREPAC PHARMACEUTICAL COMPANY, Appellant, v. Michael A. FRIEDMAN, M.D., Acting Commissioner of Food and Drugs, Food and Drug Administration, Appellee.

Nos. 98-5334, 98-5335 and 98-5337.

United States Court of Appeals, District of Columbia Circuit.

Argued Nov. 3, 1998.

Decided Dec. 29, 1998.

Robert A. Dormer argued the cause for appellants. With him on the joint briefs were James R. Phelps, Douglas B. Farquhar, David M. Malone, John F. Cooney, John R. Fleder, David F. Weeda and Arthur Y. Tsien. Brett T. Schwemer entered an appearance.

Howard S. Scher, Attorney, U.S. Department of Justice, argued the cause for the federal appellee. On the brief were Frank W. Hunger, Assistant Attorney General, Wilma A. Lewis, U.S. Attorney, Douglas N. Letter, Appellate Litigation Counsel, U.S. Department of Justice, and Jeffrica Jenkins Lee, Attorney.

James D. Miller argued the cause for intervenors-appellees Torpharm, A Division of Apotex, Inc., et al. With him on the joint brief were Eugene M. Pfeifer and Donald O. Beers.

Before: RANDOLPH, ROGERS, and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge:

"The active ingredients in most prescription drugs constitute less than 10% of the product; inactive 'excipients' (such as coatings, binders, and capsules) constitute the rest. The term 'generic drug' is used to describe a product that contains the same active ingredients but not necessarily the same excipients as a so-called 'pioneer drug' that is marketed under a brand name." United States v. Generix Drug Corp., 460 U.S. 453, 454-55, 103 S.Ct. 1298, 75 L.Ed.2d 198 (1983). New drugs, including new generic drugs, may not be marketed without the Food and Drug Administration's approval. The Drug Price Competition and Patent Term Restoration Act of 1984, Pub.L. No. 98-417, 98 Stat. 1585, revised the procedures for obtaining the FDA's approval. One of the provisions in the "Hatch-Waxman Amendments," as this Act is known, conferred on the first generic drug applicant a 180-day period during which it would be free of competition from generic applicants who file later. The FDA implemented this provision through a regulation. In Mova Pharmaceutical Corp. v. Shalala, 140 F.3d 1060 (D.C.Cir.1998), we sustained a district court injunction against the FDA's enforcement of one of the regulation's requirements, finding it inconsistent with the statute. In response to Mova, the FDA revised its system for granting the 180-day exclusivity period. The questions in this case concern the validity of the revision.

I

In July 1998, the FDA tentatively approved Purepac Pharmaceutical Company's application to market the generic drug ticlopidine hydrochloride, marketed by other companies under the brand-name "Ticlid." ¹ Although Purepac's application has become ready for final approval, the FDA is withholding action. Purepac must, the FDA insists, wait until the first ticlopidine applicant--Torpharm, a division of Apotex, Inc.--markets its product for 180 days. At the time of this writing, it is not certain when these 180 days will start running. The FDA has not yet finally approved Torpharm's application.

With matters thus at a standstill, Purepac decided to take legal action. It sued for an injunction and a declaratory judgment, challenging the validity of the FDA's post- Mova revision and claiming that Torpharm was not entitled to the 180-day exclusivity period because it had not been sued for patent infringement (a claim we will explain later in this opinion). Other companies intervened on Purepac's side; Torpharm and the companies who market the brand-name drug intervened as defendants. ² The district court denied Purepac's motion for a preliminary injunction and this appeal followed.

II

Under the Hatch-Waxman Amendments, an applicant seeking to market a new drug--that is, a "pioneer applicant"--must file a "New Drug Application." See 21 U.S.C. § 355(a). Among other things, the application must include full reports of investigations of the drug's safety and effectiveness. See 21 U.S.C. § 355(b)(1). An applicant seeking to market a generic drug may submit an "Abbreviated New Drug Application." As the name suggests, an abbreviated application is less demanding than a pioneer application; it may, for instance, rely on the safety and effectiveness studies submitted by the pioneer applicant. See 21 U.S.C. § 355(j)(2)(A)(i)-(v); Mead Johnson Pharmaceutical Group v. Bowen, 838 F.2d 1332, 1333 (D.C.Cir.1988). An abbreviated application also must include a certification that, for each of the patents applicable to the pioneer drug, the proposed generic drug would not infringe the patent because (I) the patent information has not been filed; (II) the patent has expired; (III) the patent will expire on a stated date; or (IV) the patent is invalid or will not be infringed by the manufacture, use or sale of the drug for which the abbreviated application applicant seeks approval. See 21 U.S.C. § 355(j)(2)(A)(vii)(I)-(IV).

Our concern is with IV, the method Torpharm and then Purepac used. In a paragraph IV certification, the generic applicant must give notice to the owner of the patent, and to the holder of the approved application for the drug covered by the patent. See 21 U.S.C. § 355(j)(2)(B)(i). FDA approval of the abbreviated application may be made "effective immediately," unless a patent infringement suit is brought against the applicant within forty-five days from the date the patent owner or application holder receives notice of the paragraph IV certification. See 21 U.S.C. § 355(j)(5)(B)(iii).

No one brought a patent infringement suit against Torpharm (or Purepac) and it is therefore unnecessary to describe the provisions dealing with the various contingencies of such a lawsuit. The section directly in dispute--the section conferring the 180-day period of exclusivity--reads as follows:

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 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), as amended by Pub.L. No.105-115, 111 Stat. 2296 (1997).

The FDA's original regulation implementing this section, promulgated in 1994, provided:

If an abbreviated new drug application contains a certification that a relevant patent is invalid, unenforceable or will not be infringed and the application is for a generic copy of the same listed drug for which one or more substantially complete abbreviated new drug applications were previously submitted containing a certification that the same patent was invalid, unenforceable or would not be infringed and the applicant submitting the first application has successfully defended against a suit for patent infringement brought within 45 days of the patent owner's receipt of notice submitted under § 314.95, approval of the subsequent abbreviated new drug application will be made effective no sooner than 180 days from whichever of the following dates is earlier:

(i) The date the applicant submitting the first application first commences commercial marketing of its drug product; or

(ii) The date of a decision of the court holding the relevant patent invalid, unenforceable, or not infringed.

59 Fed.Reg. 50,338, 50,367 (1994) (emphasis added). The italicized language embodied what the parties and our Mova opinion call the "successful defense" requirement: the first generic applicant was entitled to the 180-day exclusivity period only after it had successfully defended a patent infringement suit.

Mova held that this portion of the regulation was "inconsistent with the statutory text and structure." 140 F.3d at 1076. ⁴ As the court read the statute, it provided that a later generic applicant could not start marketing its product for 180 days after either commercial marketing by the first applicant, or a court decision declaring the patent invalid or not infringed. Id. at 1069. The FDA's successful defense requirement read the commercial marketing "trigger" out of the statute. As a result, first applicants who were not sued could never receive the benefit of the exclusivity period. Id.

After Mova, the FDA issued a "Guidance to Industry" announcing its intention to "formally" remove the successful defense requirement from the regulation and to conduct a rulemaking proceeding to issue new regulations under § 355(j)(5)(B)(iv). In the meantime, the FDA said it would follow the statute as Mova interpreted it. That is, the agency would inform "the first applicant to submit a substantially complete" abbreviated application, "with a paragraph IV certification," that the applicant was eligible for 180 days of market exclusivity even though it had not been sued for patent infringement. The FDA added that it expected first applicants to begin marketing their product "promptly upon approval."

In November 1998, while this case was pending, the FDA published an interim rule in the Federal Register amending its regulation to eliminate the successful defense requirement. The interim rule accomplished this by deleting from the regulation the following language, italicized above (21 C.F.R. § 314.107(c)(1)): "and the applicant submitting the first application has successfully defended against a suit for patent infringement brought within 45 days of the patent owner's receipt of notice submitted under § 314.95." ⁵ Se...