Serono Laboratories, Inc. v. Shalala

• Decision Date: 27 October 1998
• Docket Number: 97-5227,Nos. 97-5188,s. 97-5188
• Citation: 158 F.3d 1313,332 U.S. App. D.C. 407
• Parties: SERONO LABORATORIES, INC., Appellee, v. Donna E. SHALALA, et al., and Ferring Pharmaceuticals Inc., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1313

158 F.3d 1313

332 U.S.App.D.C. 407

SERONO LABORATORIES, INC., Appellee, v. Donna E. SHALALA, et al., and Ferring Pharmaceuticals Inc. Appellants.

Nos. 97-5188, 97-5227.

United States Court of Appeals District of Columbia Circuit.

Argued Dec. 3, 1997.

Decided Oct. 27, 1998.

Appeals from the United States District Court for the District of Columbia (No. 97cv01227).

Christine N. Kohl, Attorney, U.S. Department of Justice, argued the cause for the federal appellants, with whom Frank W. Hunger, Assistant Attorney General, Mary Lou Leary, U.S. Attorney, and Douglas N. Letter, Litigation Counsel, U.S. Department of Justice, were on the briefs.

John R. Fleder, David F. Weeda and Arthur Y. Tsien were on the briefs for appellant Ferring Pharmaceuticals Inc.

Bruce S. Manheim, Jr. argued the cause for appellee, with whom Terry S. Coleman and Matthew D. Peterson were on the brief. Michael D. Petty entered an appearance.

Before: HENDERSON, ROGERS and GARLAND, Circuit Judges.

GARLAND, Circuit Judge:

In this case we consider the validity of a district court order, preliminarily enjoining approval by the Food and Drug Administration ("FDA") of a generic drug, that was issued at the behest of the manufacturer of the competing brand-name drug. We previously stayed the preliminary injunction pending our resolution of this appeal. Because we find plaintiff has not satisfied the standards for a preliminary injunction, and in particular has not shown a likelihood of success on the merits, we now vacate the injunction.

I

The Food, Drug, and Cosmetic Act (the "Act") provides that "[n]o person shall introduce or deliver for introduction into interstate commerce any new drug" without first obtaining FDA approval. 21 U.S.C. § 355(a). To obtain FDA approval, the first applicant to market a drug, known as the "pioneer," must submit a new drug application ("NDA") containing, among other things, "full reports of investigations" made "to show whether or not such drug is safe for use and whether such drug is effective in use." Id. § 355(b)(1). Recognizing that the NDA process is costly and timeconsuming, and seeking "to make available more low cost generic drugs," Congress amended the Act in 1984. H.R.REP. NO. 98-857, pt. 1, at 14 (1984), reprinted in 1984 U.S.C.C.A.N. 2647, 2647. The Drug Price Competition and Patent Term Restoration Act of 1984, Pub.L. No. 98-417, 98 Stat. 1585 (known as the "Hatch-Waxman Amendments"), permits a manufacturer of a generic alternative to a pioneer drug to seek FDA approval by submitting an abbreviated new drug application ("ANDA") that need contain only the more limited information specified in 21 U.S.C. § 355(j)(2). ¹

Two aspects of the ANDA process, corresponding to two kinds of drug ingredients, are relevant to this case. First, with respect to "active ingredients," the statute provides that the Secretary of Health and Human Services shall approve an application for a generic drug unless the Secretary finds, among other things, that "information submitted with the application is insufficient to show that the active ingredients are the same as the active ingredients of the listed [pioneer] drug...." 21 U.S.C. § 355(j)(3)(C)(ii). The FDA defines an "active ingredient" as "any component that is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease, or to affect the structure or any function of the body...." 21 C.F.R. § 210.3(b)(7).

Second, with respect to "inactive ingredients," the statute provides that the Secretary shall approve an application unless she finds that "information submitted in the application or any other information available to the Secretary shows" that "the inactive ingredients of the drug are unsafe" or "the composition of the drug is unsafe ... because of the type or quantity of inactive ingredients included or the manner in which the inactive ingredients are included." 21 U.S.C. § 355(j)(3)(H). The FDA defines an "inactive ingredient" as "any component other than an active ingredient." 21 C.F.R. § 210.3(b)(8).

In 1969, the FDA approved an NDA submitted by plaintiff Serono Laboratories, Inc. ("Serono") for Pergonal, a pioneer drug. Pergonal is a "menotropins" product administered by intramuscular injection and used to treat male and female infertility. A menotropins product is extracted from the urine of post-menopausal women, and contains two active ingredients: follicle-stimulating hormone ("FSH") and luteinizing hormone ("LH"). See Joint Appendix ("J.A.") 473; DORLAND'S ILLUSTRATED MEDICAL DICTIONARY 1013 (28th ed.1994). FSH and LH make up less than five percent of Pergonal, with lactose and uncharacterized urinary proteins ("UUPs") constituting the remainder. See FDA Br. at 6; Serono Br. at 4.

In 1990, Lederle Parenterals, Inc. ("Lederle") submitted an ANDA to the FDA seeking approval of a generic version of Pergonal, now known as Repronex. Defendant-intervenor Ferring Pharmaceuticals Inc. ("Ferring") acquired the rights to Lederle's ANDA while it was pending. In December 1992, Serono filed a "citizen petition," pursuant to 21 C.F.R. § 10.30, urging the FDA to withhold approval of the ANDA. Serono argued, among other things, that the UUPs in the proposed generic drug were "inactive ingredients" that differed from those in Pergonal and had not adequately been demonstrated to be safe. J.A. 465-69.

In a subsequent meeting, and in a supplemental filing on March 21, 1997, Serono also argued that the active ingredient FSH in the proposed generic drug was not, as required by statute, "the same as" the FSH in Pergonal because of differences in "isoforms" of the two products. Id. at 481. FSH is a protein-based hormone consisting of two protein chains in a backbone-like configuration, with carbohydrate side chains. Natural variation in the carbohydrate elements leads to different isoforms of the hormone. See id. at 482-83. Serono argued that this isoform variation in FSH rendered Repronex different from Pergonal, and hence ineligible for an ANDA. Id. at 481-82.

On January 30, 1997, the FDA approved the ANDA for Repronex. Id. at 459-60. The FDA gave Repronex an "AB" rating in its publication, Approved Drug Products with Therapeutic Equivalence Evaluations (known as the "Orange Book"), meaning that physicians and pharmacists could substitute Repronex for Pergonal. See FDA Br. at 7-8. In a memorandum to the administrative record filed on that date, Gordon Johnston, the Deputy Director of the FDA's Office of Generic Drugs, addressed another issue that had surfaced during the review--a difference in the concentration of the inactive ingredient lactose in Repronex and Pergonal. Johnston noted that although a 1992 regulation required an inactive ingredient in a generic drug to be in the same concentration as in the pioneer drug, that regulation was not in effect when the ANDA for Repronex was filed in 1990. Johnston concluded that since FDA policy was to review an application under the regulations in effect at the time of filing, the different lactose concentrations did not preclude ANDA approval. He also found that they posed no safety concerns. Id. at 457-58 (Memorandum to Record by G. Johnston, Jan. 30, 1997) (hereinafter "Johnston Memorandum").

On May 30, 1997, Serono sued the FDA in district court, raising many of the same issues contained in its still-pending citizen petition as well as the additional issue of the differing lactose concentrations. See Complaint pp 21-23. On June 13, 1997, Serono moved for a preliminary injunction rescinding the FDA's approval of Repronex, and Ferring intervened as a defendant.

On June 17, 1997, the FDA issued its final decision denying Serono's citizen petition. J.A. 472-86 (Letter from J. Woodcock to Serono, June 17, 1997) (hereinafter "Woodcock Letter"). Dr. Janet Woodcock, Director of the FDA's Center for Drug Evaluation and Research, rejected Serono's claim that the isoform variation in the active ingredient FSH meant that the FSH in Repronex was not the "same as" the FSH in Pergonal. Dr. Woodcock acknowledged the isoform variation, but concluded that it was not "clinically significant for the product's intended uses" and therefore did not preclude a "sameness" finding for purposes of 21 U.S.C. § 355(j). Id. at 484. Dr. Woodcock further concluded that the differing lactose concentrations in the two products, as well as the differing UUP profiles, did not affect the safety of Repronex. Id. at 480-81 & n. 12. She also rejected the characterization of the UUPs as "inactive ingredients," classifying them instead as "impurities." Id. at 479-80.

On July 28, 1997, the district court granted Serono's motion for a preliminary injunction, barred the FDA "from approving the Ferring ANDA," and ordered it to "rescind immediately its designation of an 'AB' rating [for Repronex] in the Orange Book." Serono Laboratories v. Shalala, 974 F.Supp. 29, 37 (D.D.C.1997). The district court found that Serono was likely to prevail on the merits of its claims; that Serono would suffer irreparable injury if interim relief were not granted; and that both the balance of harms to Serono and Ferring, and the public interest, favored granting injunctive relief. See id. at 32-37.

II

A court considering a plaintiff's request for a preliminary injunction must examine whether: (1) there is a substantial likelihood plaintiff will succeed on the merits; (2) plaintiff will be irreparably injured if an injunction is not granted; (3) an injunction will substantially injure the other party; and (4) the public interest will be furthered by the injunction. See Washington Metro. Area Transit Comm'n v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C.Cir.1977). These factors interrelate on a sliding scale and must be balanced against each other. "If the arguments for one factor are particularly strong, an injunction may issue even if the arguments in other areas are rather...