United States: Generic Labels Can Omit Orphan Drug Indications To Avoid Brand Exclusivity Rights

Otsuka Pharm. Co., Ltd. v. Burwell (D. Md. Apr. 29, 2015)

Two hours after the U.S. Food and Drug Administration (FDA) approved generic versions of Abilify® (aripiprazole) (excluding pediatric indications and dosage information), the U.S. District Court for the District of Maryland held a hearing on Plaintiff Otsuka Pharmaceutical's motion for a temporary restraining order (TRO) seeking to enjoin the FDA from granting further approvals and the generic companies from launching their generic products. Since the FDA had recently approved a pediatric indication for Abilify that is protected by orphan drug exclusivity, Otsuka argued that the FDA could not approve any generic form of Abilify within its seven-year period of orphan drug market exclusivity. The district court held, however, that the Food, Drug and Cosmetics Act (FDCA) likely did not support such a position and, as a result, denied Otsuka's request for emergency injunctive relief. Otsuka Pharmaceutical Co., Ltd. v. Burwell, Case No. 15‑852, 2015 WL 1962240 (D. Md. April 29, 2015).

In considering Otsuka's motion for a TRO, the court performed the standard four-part TRO analysis, evaluating (1) the likelihood that Otsuka would succeed on the merits; (2) the likelihood that Otsuka would suffer irreparable harm in the absence of preliminary relief; (3) whether the balance of the equities tip in Otsuka's favor; and (4) whether injunctive relief is in the public's interest.

Likelihood of Success on the Merits

Otsuka argued that, in general, where a specific pediatric indication exists, that pediatric indication must be described under the "indications and usage" section of a drug label. In addition, the "dosage and administration" section of the label must include any appropriate pediatric dosage information. Moreover, Otsuka argued that, under 21 U.S.C. § 355(j)(2)(A)(V), generic labels must contain the same information as the label of the respective brand-name drug. Thus, because the label for Abilify included a pediatric indication, and pediatric dosage information, Otsuka argued that any label for a generic version of Abilify must contain that same information. However, the pediatric indication for use of Abilify fell within Otsuka's orphan drug market exclusivity, so no generic could be approved for this indication until 2021. Contrary to Otsuka's view of the FDCA, however, the FDA approved the generic applications that omitted pediatric indications and dosage information to avoid Otsuka's orphan drug exclusivity for pediatric indications.

Otsuka objected to the FDA's approval of the generic version of Abilify without pediatric indications and dosage information, arguing that Section 505A(o) of the FDCA permitted approval of generic drugs with labels omitting such information in only two circumstances: (1) When the information was protected by a patent; and (2) when that information was protected by three-year new clinical study exclusivity. Otsuka maintained that neither of those circumstances existed here, and as a result, the FDA was prohibited from approving the generic labels. In response, the FDA argued that, while 505A(o) limits the ability to deny approval of generic drugs with labels omitting pediatric information in those two circumstances, it does not limit the ability to grant approval in other circumstances, such as where a pediatric indication falls within a period of orphan drug exclusivity.

Observing that the arguments presented turned on the FDA's construction of the FDCA—a statute which the FDA administers—the district court explained that it was required to apply the two-step Chevron analysis to address the scope of Section 505A(o).

Chevron Analysis Step One: Did Congress Directly Address This Question?

First, the court considered whether Congress had directly spoken on the precise question at issue and whether the intent of Congress was clear. The court looked to the explicit language of 505A(o), which states that an application for approval of a generic drug may not be denied because it omits pediatric indications when the pediatric indications are protected by a patent or subject to a three-year new clinical study exclusivity.

Otsuka argued that, because 505A(o) did not limit the FDA's ability to reject applications omitting pediatric information, 505A(o) effectively requires the FDA to reject such applications. The court noted that Otsuka was imprudently relying on a principle of statutory construction known as expressio unius esi exclusion alterius (i.e., the expression of one thing is the exclusion of another). The court did not agree that such a principle should be applied here, because no evidence suggested that Congress considered other exclusions (such as orphan drug exclusivity), but intended to exclude them by silence. Nevertheless, the court conceded that the intent of Congress was not sufficiently clear. Accordingly, the court was required to consider step two of the Chevron analysis.

Chevron Analysis Step Two: Was the Agency's Action Based on a Permissible Construction of the Statute?

Under step two of the Chevron analysis, the district court considered whether the FDA's approval of generic Abilify was based on a permissible construction of 505A(o). In performing this analysis, the court recognized that it could overturn the FDA's interpretation only if the statute unambiguously foreclosed the particular construction. Believing that the statute itself, relevant case law, and FDA regulations all supported the FDA's construction, the court concluded that it would likely find that the FDA's interpretation of 505A(o) was permissible. Thus, since it was unlikely that the court would depart from the FDA's interpretation of 505A(o), the court concluded it was unlikely that Otsuka would succeed on the merits. As a result, the court held that Otsuka was not entitled to the requested TRO.

Remaining Factors for TRO and Preliminary Injunction

Even though the district court concluded that Otsuka was not entitled to a TRO, the court nevertheless considered the remaining three prongs of the TRO inquiry for the sake of completeness.

On the issue of irreparable harm, Otsuka argued that it would suffer irreparable harm if a TRO was not granted, because the release of generic Abilify would result in price erosion, loss of market share, loss of profits, layoffs and loss of goodwill. Otsuka maintained that, because it could not recover monetary damages from the FDA, the potential damages were irretrievable and irreparable. The court rebuffed Otsuka's arguments and suggested that courts typically find irreparable harm where the monetary losses are so severe that they "threaten the very existence of the company." In this case, the court noted that Otsuka had been preparing for the entry of generic Abilify, and had even been releasing other products to compensate for the anticipated loss of exclusivity. Accordingly, the court concluded that the release of generic Abilify would not constitute a catastrophic event or "sound the death knell" for Otsuka. As a result, the court concluded that Otsuka would not suffer irreparable harm.

In addressing the balance of the hardships, the court relied heavily on a prior decision by Judge Jerome Simandle on a related TRO motion brought by Otsuka in the U.S. District Court for the District of Delaware. The court merely echoed Judge Simandle's opinion that a TRO would be devastating to a generic that has undertaken extensive and costly steps to enter a market, particularly where Otsuka's likelihood of success was low. Accordingly, the court concluded that the balance of the hardships tipped away from Otsuka.

Finally, on the issue of public interest, the court concluded that a TRO would not serve the public interest. Indeed, the court concluded that Otsuka had enjoyed 12 years of exclusivity, and made over $100 billion in revenue over that time period. Thus, Otsuka's desire for additional exclusivity should yield to the public's interest in having access to low-cost generic versions of Abilify.

Generic Labels Can Omit Orphan Drug Indications To Avoid Brand Exclusivity Rights

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
BakerHostetler
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
BakerHostetler
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions