In yet another chapter of a long and convoluted history involving generic versions of the drug Pravachol, the U.S. Court of Appeals for the District of Columbia Circuit summarily affirmed a refusal to grant a preliminary injunction forbidding the U.S. Food & Drug Administration (FDA) from allowing a generic drug manufacture to begin exclusive marketing under the Hatch-Waxman Act. The court found that a stipulation and order in the district court stating that the challenged patent holder had no intention of suing and that the complaint should be dismissed for lack of subject matter jurisdiction was insufficient to trigger market exclusivity. Apotex, Inc. v. Food & Drug Admin. and Teva Pharmaceuticals, Case No. No. 06-5105 (Ct App for D.C. Cir. June 6, 2006) (Per Curium).
The Hatch-Waxman Act grants an 180-day marketing exclusivity period, free from competition with other generic manufactures, to the first generic drug manufacture that files an abbreviated new drug application (ANDA). A court decision holding a challenged patent to be invalid or not infringed triggers the exclusivity period.
In a related set of appeals, generic drug manufacturers Teva Pharmaceuticals (Teva) and Apotex contested the sufficiency of whether a court order dismissing a suit for lack of subject matter jurisdiction can trigger the 180-dayexclusivity period. In the initial appeal (Teva I), an FDA decision that a district court order dismissing a patent suit for lack of subject matter jurisdiction was not sufficient to trigger the exclusivity period was reversed and remanded. Reasons included a failure to explain why such a dismissal did not meet the requirements of a triggering court decision.
As a result, the FDA established a bright-line rule that the agency would not look beyond the face of a court order to ascertain whether it qualified as triggering. It decided that a dismissal for lack of subject matter jurisdiction was not "holding" that operates a 180-day exclusivity trigger.(this sentence seems like it’s missing a word??? The following appeal (Teva II) resulted in another remand; the appellate court rejected the "self serving" FDA justification and required the FDA to "meaningfully address" the questions posed in Teva II.
Following the substantive holdings of Teva I and Teva II, Apotex appeared to successfully trigger the 180-day exclusivity period for Teva’s generic Pravachol before Teva obtained FDA market approval. After Teva filed an ANDA to market a generic version of Pravachol, Apotex filed a declaratory judgment suit against Bristol Myers Squibb (BMS), the patent holder of the Pravachol patents, seeking judgment that its own generic version of Pravachol did not violate the BMS patents. After BMS’ motion to dismiss for lack of subject matter jurisdiction, the parties resolved the dispute by a "stipulation and order" that stated BMS had no intention of suing and that the complaint should be dismissed for lack of subject matter jurisdiction. Believing itself bound by the court decision in Teva I and Teva II, the FDA ruled the stipulations did not qualify as a triggering court decision. In the resulting appeal (Teva III), the appellate court found that the FDA’s decision was arbitrary and capricious because it mistakenly thought itself bound by the court’s earlier decisions and once again remanded the case to the FDA.
Again on remand, the FDA re-adopted its bright-line rule requiring an actual holding expressing a determination of invalidity, non-infringement or unenforceability. However, in this decision, the FDA reasoned it was in both the public’s and the FDA’s interest to implement a clear, easily administered legal regime to govern the exclusivity trigger. Apotex filed suit in district court but was denied a preliminary injunction, which would have forbid the FDA from allowing Teva to begin exclusive marketing of a generic version of Pravachol. Apotex appealed.
In the present appeal, the court affirmed the FDA and noted it never held the FDA’s bright-line rule to be untenable. Rather, the rule was rejected only because the FDA had failed to provide a reasoned decision and justification for it. This time the court found the FDA’s explanation sufficient justification for its bright-line test.
The court agreed that a less objective standard than a holding-on-the-merits would force an agency lacking patent law expertise to resolve the effect of borderline patent law questions, leading to uncertainty and fruitless litigation. Acknowledging the FDA’s rule will treat court decisions explicitly holding a patent unenforceable differently from a decision that includes a patent holder’s promise not to sue, the court found nothing inconsistent about it. The FDA can maintain that an order holding a patent unenforceable triggers the exclusivity period while at the same time, it will not look beyond the face of such an order. The FDA provided sufficient explanation to justify these different treatments.
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