United States: FDA Has No Duty to Ensure the Correctness of Patent Listings in the Orange Book

The U.S. Food and Drug Administration (FDA) did not fail to perform its responsibilities under the Hatch-Waxman Act when it refused to list a third party’s patent for an active ingredient of Prozac in the Orange Book. aaiPharma v. Thompson, No. 01-2113 (4th Cir. May 10, 2002).

This case is a follow on to the recent Prozac litigation. Last year, in Eli Lilly and Co. v. Barr Laboratories Inc. (IP Update, Vol. 4, No. 6), the U.S. Court of Appeals for the Federal Circuit held that an Eli Lilly patent for administering Prozac (fluoxetine) was invalid for obviousness-type double patenting. aaiPharma, as the first Abbreviated New Drug Application (ANDA) filer for FDA approval for generic fluoxetine, was involved in that litigation with Eli Lilly, the New Drug Application (NDA) holder and patentee, and against Barr Laboratories, the second ANDA filer. Then, less than a month before the expected date for the marketing of generic fluoxetine by Barr Laboratories, aaiPharma received a patent for a polymorphic variant of the active ingredient in Prozac.

Under the U.S. law known as the Federal Food, Drug, and Cosmetic Act (FFDCA), as amended by the Hatch-Waxman Act, an NDA holder is required to provide the FDA with a listing of all patents that claim the approved drug or a method of using the drug. 21 U.S.C. §355(b)(1) and (c)(2). The FDA publishes these patent listings in the "Orange Book." Patent listings are important, because several kinds of drug exclusivity depend upon a relevant patent being listed in the Orange Book. Only the NDA holder can submit a patent for listing, so aaiPharma asked Eli Lilly to submit its new patent. Eli Lilly refused. (The U.S. Court of Appeals for the Fourth Circuit decision noted this as a strange situation. aaiPharma, with no capability to market fluoxetine, did not stand to benefit from reduced competition by generic fluoxetine, while Eli Lilly, the manufacturer of Prozac, did.) aaiPharma asked the FDA to intervene, but the FDA restated its consistent position that it lacked both the resources and the expertise to review patent information for accuracy and relevance. aaiPharma could not sue Eli Lilly to force listing of the patent, since it is settled law that there is no private right of action under the FFDCA to compel patent listing.

Only hours before the FDA was set to approve the marketing of generic fluoxetine, aaiPharma sued the U.S. Department of Health and Human Services, Secretary Thompson and the FDA in district court under the Administrative Procedure Act (APA) for its failure to require Eli Lilly to list the new patent and moved for preliminary relief to prevent the FDA from approving any ANDAs for generic fluoxetine. The Federal Circuit had already held that "a generic drug manufacturer cannot bring a declaratory judgment action or an injunctive action against a NDA holder under either the FFDCA or the patent laws requiring it to take steps to remove a patent from the Orange Book." Andrx Pharm., Inc. v. Biovail Corp. However, the Andrx court also noted that the manufacturer could sue the FDA under the APA for "refusing to inquire into the correctness of a listing."

The district court very quickly denied the motion as having "no likelihood of success on the merits, because the FDA’s interpretation of the relevant statutes was not only reasonable, but also correct." aaiPharma appealed on the APA issue. The Fourth Circuit affirmed.

The issue presented was whether the district court correctly deferred to the FDA’s interpretation of the statute. The FDA interpreted the FFDCA, 21 U.S.C. §§355(c)(2), (d)(6) and (e)(4) to mean that the NDA holder bears the sole responsibility for filing the proper information on all the patents that claim its approved drug. Using a two-step Chevron analysis, the Fourth Circuit found that the FDA’s interpretation was reasonable. The court found that the requirements that the FDA "shall" withdraw an NDA application if the application fails "to contain" patent listings ((d)(6)) or where an applicant fails "to file" patent information ((e)(4)) makes sense only if these provisions require the FDA to ensure that patent lists are submitted in a timely fashion and to police improper refusals to list patents in the Orange Book. The court found that the FDA’s interpretation was more reasonable than aaiPharma’s view that the word "shall" mandated that the FDA must "make a substantive determination about eligibility" and "take remedial measures" when "it determines that the patent should be listed."

The Fourth Circuit was sympathetic to aaiPharma’s claim "that if NDA holders have a statutory obligation to submit the correct list of patents for publication in the Orange Book and the failure to comply with that obligation deprives third parties of benefits conferred by Congress, there [should] be some mechanism to enforce this obligation." However, "until Congress takes further action to address the enforcement gap in Hatch-Waxman’s patent listing provisions, the [FDA] may persist in its purely ministerial approach."

Practice Note: The Fourth Circuit noted that generic drug manufacturers, state agencies, consumer groups and the U. S. Federal Trade Commission have begun various antitrust and similar actions against those who use allegedly improper Orange Book listings. The court cited the class action case of In re Buspirone Patent Litigation, a case where the plaintiffs are seeking damages under federal and state antitrust law and redress for Bristol-Myers Squibb’s alleged unjust enrichment due to an improper listing of a patent in the Orange Book. (Mylan Pharms. Inc. v. Thompson). Earlier this year, the Buspirone court denied Bristol-Myers Squibb’s motion to dismiss.

However, more must be shown in an antitrust action than the improper listing of patents in the Orange Book, as shown in two lawsuits related to the multi-district omeprazole (Prilosec) litigation. In the case of In re Omeprazole Patent Litigation, the district court dismissed the suits with prejudice, ruling that the plaintiffs (a consumers group and a union funds group) failed to show that AstraZeneca’s attempts to block generic versions of the heartburn drug Prilosec were unlawful. In Twin City Bakery Workers v. Astra Aktiebolag) the court held that the plaintiffs failed to show that the Prilosec patent infringement litigation brought by AstraZeneca against several generic manufacturers was "sham" litigation (under the Noerr-Pennington doctrine) or an unlawful attempt to prevent generic competitors from entering the market. In the Prilosec patent infringement litigation, the allegation was that AstraZeneca listed patents in the Orange Book that it knew to be invalid and unenforceable.

Finally, in Astra Aktiebolag v. Kremers Urban Development Co., another omeprazole Orange Book patent case, the court dismissed some of the defendants’ patent misuse claims, holding that the defendants failed to plead the requisite bad faith by merely alleging that the patentee committed misuse by listing the patents in the Orange Book. By contrast, a fourth misuse claim, alleging that the patentee falsely certified to FDA that a particular patent covered Prilosec thereby forcing the defendants to certify as to that patent in their ANDAs, was not dismissed.