Ranbaxy Labs., Ltd. v. Burwell, Civil Action No. 14–1923 BAH

CourtUnited States District Courts. United States District Court (Columbia)
Writing for the CourtBERYL A. HOWELL, United States District Judge
Citation82 F.Supp.3d 159
PartiesRanbaxy Laboratories, Ltd, et al., Plaintiffs, v. Sylvia Mathews Burwell, Secretary, United States Department of Health and Human Services, et al., Defendants, v. Dr. Reddy's Laboratories, Inc., Endo Pharmaceuticals, Inc., Ivax Pharmaceuticals, Inc, Teva Pharmaceuticals USA, Inc. Defendant–Intervenors.
Docket NumberCivil Action No. 14–1923 BAH
Decision Date11 March 2015

82 F.Supp.3d 159

Ranbaxy Laboratories, Ltd, et al., Plaintiffs
v.
Sylvia Mathews Burwell, Secretary, United States Department of Health and Human Services, et al., Defendants
v.
Dr. Reddy's Laboratories, Inc., Endo Pharmaceuticals, Inc., Ivax Pharmaceuticals, Inc, Teva Pharmaceuticals USA, Inc.
Defendant–Intervenors.

Civil Action No. 14–1923 BAH

United States District Court, District of Columbia.

First Issued: February 27, 2015
Interim Redacted Opinion Issued: March 11, 2015


82 F.Supp.3d 162

John Kevin Dolan Crisham, Robert Anthony Gretch, Stephen S. Schwartz, Kirkland & Ellis LLP, New York, NY, Michael D. Shumsky, Kirkland & Ellis, LLP, Washington, DC, for Plaintiffs.

Roger Joseph Gural, U.S. Department of Justice, Portland, OR, for Defendants.

Douglas B. Farquhar, James Philip Ellison, Jennifer McVey Thomas, Hyman, Phelps & McNamara, P.C., Chad A. Landmon, Axinn, Veltrop & Harkrider LLP, Brian Burgess, William M. Jay, Goodwin Procter, LLP, Washington, DC, David K. Ludwig, Thomas K. Hedemann, Axinn, Veltrop & Harkrider LLP, Hartford, CT, for Defendant–Intervenors.

MEMORANDUM OPINION

BERYL A. HOWELL, United States District Judge

A subsidiary of the plaintiffs, Ranbaxy Laboratories, Ltd. and Ranbaxy, Inc. (collectively, “Ranbaxy” or the “plaintiffs”), paid, in 2013, what was then the “largest drug safety settlement” in history, amounting to $500 million, in connection with criminal charges for falsifying data and manufacturing adulterated drugs at two of its facilities in India. U.S. Dep't of Justice, “Generic Drug Manufacturer Ranbaxy

82 F.Supp.3d 163

Pleads Guilty and Agrees to Pay $500 Million to Resolve False Claims Allegations, cGMP Violations and False Statements to the FDA,” May 13, 2013, available at http://www.justice.gov/opa/pr/generic-drug-manufacturer-ranbaxy-pleads-guilty-and-agrees-pay-500-million-resolve-false. During the course of the investigation into the plaintiffs' (now) admitted wrongdoing, the Federal defendants in this case—the Secretary of Health and Human Services, the Commissioner of the U.S. Food and Drug Administration (“FDA”), and the FDA—granted “tentative approval” to five Abbreviated New Drug Applications (“ANDAs”) submitted by the plaintiffs for the manufacture of certain generic drugs at the same facilities involved in the plaintiffs' subsidiary's criminal case. See Defs.' Mem. Opp'n Pls.' Mot. Prelim. Inj. and Supp. Defs.' Mot. Summ. J. (“Defs.' Mem.”) at 10–17, ECF No. 52.

Years after the grant of those ANDAs, when two of these tentative approvals were preventing other drug manufacturers from coming to market with generic versions of costly medications, the FDA reexamined and revoked two of those five tentative approvals, for esomeprazole and valganciclovir, stating the approvals had been granted “erroneously.” Defs.' Mem. at 3; Compl. ¶ 38, ECF No. 1; Administrative Record (“AR”) at 1 (Letter from FDA to plaintiffs regarding esomeprazole and valganciclovir ANDAs, Nov. 4, 2014 (the “Rescission Letter”)). This agency action prompted the plaintiffs to file the instant suit, contending that the Federal defendants had no authority, statutory or otherwise, to correct their egregious error and rescind the tentative approvals. See generally Compl. Now pending before the Court is the plaintiffs' Motion for Preliminary Injunction (the “Pls.' Mot.”), ECF No. 41; the Federal defendants' Motion for Summary Judgment (the “Defs.' Mot.”), ECF No. 51; and the Motions for Summary Judgment from four other generic drug manufacturers, Dr. Reddy's Laboratories (“Dr.Reddy's”), Endo Pharmaceuticals, Inc. (“Endo”), Ivax Pharmaceuticals, Inc. (“Ivax”), and Teva Pharmaceuticals USA, Inc. (“Teva”),1 which have each been granted leave to intervene in this matter as defendants, ECF Nos. 53 and 73.2 Although the FDA's practices, which apparently led to these errors, raise grave concerns, the Federal defendants' interpretation of the relevant portions of the Food, Drug, and Cosmetics Act (the “FDCA”) as permitting the rescission of the erroneously issued tentative approvals is reasonable. Consequently, the Federal defendants' and defendant-intervenors' motions are granted and the plaintiffs' motion is denied.3

82 F.Supp.3d 164

I. BACKGROUND4

The statutory regime under which generic drug applications, such as those at issue here, are approved, is complex. Thus, a brief summary of the regulations governing ANDAs and their approval is provided before turning to the history of the plaintiffs' applications, the concurrent investigations into the plaintiffs' manufacturing processes by the FDA, and the procedural background of the instant matter.

A. The Statutory Regime

All pharmaceutical manufacturers wishing to sell their products in interstate commerce must first seek approval from the FDA in compliance with 21 U.S.C. § 355. New drug applications (“NDAs”) are subject to rigorous application protocols under which the applicant must prove the drug is safe and effective. See 21 U.S.C. § 355(b) ; Defs.' Opp'n Pls.' Mot. Temp. Restraining Order (“Defs.' TRO Opp'n”) at 5, ECF No. 22–1. The applicant must also provide information about patents used in the drug, or for using the drug, “to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug.” 21 U.S.C. § 355(c)(2).

1. The Hatch–Waxman Amendments

Between 1962 and 1984, companies wishing to manufacture generic versions of drugs already approved for use had to follow the same rigorous steps as in a new drug application before the drug could be approved and sold, even though the generic equivalent was effectively identical to a brand name drug.5 H.R Rep. No. 98–857, pt. 1, (Report of the House Committee on Energy and Commerce on Drug Price Competition and Patent Term Restoration Act) at 14–15 (1984). In 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, codified in 21 U.S.C. § 355. Colloquially known as the “Hatch–Waxman Amendments,” the amendments created a process by which generic drugs could be approved on the basis of an “abbreviated” new drug application, an ANDA, by “piggy-back[ing]” on the studies already completed by the pioneer drug manufacturer. FTC v. Actavis, Inc. (Actavis ), –––U.S. ––––, 133 S.Ct. 2223, 2228, 186 L.Ed.2d 343 (2013) ; see Mylan Labs, Inc. v. Thompson, 389 F.3d 1272, 1274–75 (D.C.Cir.2004).

This statutory change removed a major expense for generic drug manufacturers, since “[u]nlike an NDA, an ANDA need not contain clinical evidence of the safety or efficacy of the drug.” See Teva Pharm. Indus. Ltd. v. Crawford, 410 F.3d 51, 52 (D.C.Cir.2005). Its purpose is “to speed the introduction of low-cost generic drugs to market,” Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S (Caraco ), ––– U.S. ––––, 132 S.Ct. 1670, 1676, 182 L.Ed.2d 678 (2012), thus increasing competition and, theoretically, lowering prices, Teva Pharms. USA, Inc. v. Sebelius, 595 F.3d 1303, 1305 (D.C.Cir.2010). To further this goal, the Hatch–Waxman Amendments included the “so-called paragraph IV certification.”

82 F.Supp.3d 165

Caraco, 132 S.Ct. at 1677. Since “the FDA cannot authorize a generic drug that would infringe a patent,” id. at 1676, Congress required ANDA applicants, in 21 U.S.C. § 355(j)(2)(A)(vii), to certify that the generic drug would not infringe upon any valid patents.

2. Paragraph IV Certification

Relevant to the instant matter, one of the bases on which an ANDA applicant may certify that its product will not infringe any valid patents is by certifying that some or all of the patents used in the making of the pioneer drug are invalid. 21 U.S.C. § 355(j)(2)(A)(vii)(IV). Known as a paragraph IV certification, this course of action entails significant risk since it will almost inevitably “provok[e] litigation” and, indeed, the mere filing of a paragraph IV certification is deemed to be “an act of infringement, which gives the [pioneer drug manufacturer] an immediate right to sue.” Caraco, 132 S.Ct. at 1677 ; see 35 U.S.C. § 271(e)(2)(A). Assuming the pioneer drug manufacturer timely files suit, the FDA may not approve the ANDA, “usually for a 30–month period,” while the patent dispute is litigated. Actavis, 133 S.Ct. at 2228.

To incentivize manufacturers to take advantage of paragraph IV certifications, despite the considerable expense and difficulties, the Hatch–Waxman Amendments included a provision allowing the first generic manufacturer to file an ANDA predicated on this certification to “enjoy a period of 180 days exclusivity (from the first commercial marketing of its drug).” Id. at 2228– 29 (citing 21 U.S.C. § 355(j)(5)(B)(iv) ); Teva Pharms. USA, Inc., 595 F.3d at 1305 (noting exclusivity provision designed to “compensate [generic] manufacturers for research and development costs as well as the risk of litigation from patent holders” (internal quotation marks and citation omitted; alteration in original)). This exclusivity functions as a mini-generic monopoly for the generic drug manufacturer, providing a 180–day period in which only the first generic...

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6 practice notes
  • Meijer, Inc. v. Ranbaxy Inc., CIVIL ACTION NO. 15-11828-NMG
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • June 16, 2016
    ...in the ANDA approval process: receipt, tentative approval, and final approval. (#26-32 at 123; Ranbaxy Labs., Ltd. v. Burwell, 82 F. Supp. 3d 159, 166 (2015).) The District Court for the District of Columbia has summarized the process succinctly:... [An] ANDA typically passes through three ......
  • Voyageur Outward Bound Sch. v. United States, Case No. 1:18-cv-01463 (TNM)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • March 17, 2020
    ...Id. at 134, 145, 79 S.Ct. 170. Nor does the other case Voyageur cites for this proposition— Ranbaxy Laboratories, Ltd. v. Burwell , 82 F. Supp. 3d 159, 194–95 (D.D.C. 2015) —even hint that agencies may reconsider only inadvertent errors.5 In fact, substantive reconsideration is not limited ......
  • Am. Sales Co. v. AstraZeneca LP (In re Nexium (Esomeprazole) Antitrust Litig.), Nos. 15-2005
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • November 21, 2016
    ...ANDA, and Ranbaxy promptly sued the FDA in the U.S. District Court for the District of Columbia. SeeRanbaxy Labs, Ltd. v. Burwell, 82 F.Supp.3d 159, 163 (D.D.C. 2015). Subsequently, in January 2015, the FDA notified Ranbaxy that it had forfeited its first-filer exclusivity period by failing......
  • In re Ranbaxy Generic Drug Application Antitrust Litig., MDL 19-md-02878-NMG
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • November 22, 2021
    ...allegedly decided in prior litigation between Ranbaxy and the FDA (“the Burwell litigation”). See Ranbaxy Lab'ys, Ltd. v. Burwell, 82 F.Supp.3d 159, 181 (D.D.C. 2015). In that litigation, Ranbaxy sought to invalidate the 2014 decisions of the FDA rescinding tentative approvals of the ANDAs ......
  • Request a trial to view additional results
6 cases
  • Meijer, Inc. v. Ranbaxy Inc., CIVIL ACTION NO. 15-11828-NMG
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • June 16, 2016
    ...in the ANDA approval process: receipt, tentative approval, and final approval. (#26-32 at 123; Ranbaxy Labs., Ltd. v. Burwell, 82 F. Supp. 3d 159, 166 (2015).) The District Court for the District of Columbia has summarized the process succinctly:... [An] ANDA typically passes through three ......
  • Voyageur Outward Bound Sch. v. United States, Case No. 1:18-cv-01463 (TNM)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • March 17, 2020
    ...Id. at 134, 145, 79 S.Ct. 170. Nor does the other case Voyageur cites for this proposition— Ranbaxy Laboratories, Ltd. v. Burwell , 82 F. Supp. 3d 159, 194–95 (D.D.C. 2015) —even hint that agencies may reconsider only inadvertent errors.5 In fact, substantive reconsideration is not limited ......
  • Am. Sales Co. v. AstraZeneca LP (In re Nexium (Esomeprazole) Antitrust Litig.), Nos. 15-2005
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • November 21, 2016
    ...ANDA, and Ranbaxy promptly sued the FDA in the U.S. District Court for the District of Columbia. SeeRanbaxy Labs, Ltd. v. Burwell, 82 F.Supp.3d 159, 163 (D.D.C. 2015). Subsequently, in January 2015, the FDA notified Ranbaxy that it had forfeited its first-filer exclusivity period by failing......
  • In re Ranbaxy Generic Drug Application Antitrust Litig., MDL 19-md-02878-NMG
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • November 22, 2021
    ...allegedly decided in prior litigation between Ranbaxy and the FDA (“the Burwell litigation”). See Ranbaxy Lab'ys, Ltd. v. Burwell, 82 F.Supp.3d 159, 181 (D.D.C. 2015). In that litigation, Ranbaxy sought to invalidate the 2014 decisions of the FDA rescinding tentative approvals of the ANDAs ......
  • Request a trial to view additional results

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