Mylan Laboratories, Inc. v. Tommy G. Thompson, Secretary, United States Department of Health and Human Services
Docket: 04-5296
Court: Court of Appeals for the D.C. Circuit; January 21, 2005; Federal Appellate Court
Mylan Laboratories, Inc. and its affiliates (Mylan) appeal a district court's summary judgment that upheld a decision by the Food and Drug Administration (FDA) granting ALZA Corp. and Janssen Pharmaceutica, Inc. a six-month pediatric marketing exclusivity period after the expiration of the patent for the Duragesic patch, a fentanyl delivery system. Mylan argues that the FDA's approval of its Abbreviated New Drug Applications (ANDAs) to market a generic version of the Duragesic patch should have allowed it to market the generic product immediately upon patent expiration, without the pediatric exclusivity period affecting its rights. The court's decision involves the interpretation of three statutory provisions:
1. **21 U.S.C. § 355(j)** (Hatch-Waxman Amendments) allows drug manufacturers to submit ANDAs for generic drugs.
2. **21 U.S.C. § 355a** (1997 amendment) provides a six-month pediatric exclusivity for patent holders who conduct FDA-requested pediatric testing.
3. **35 U.S.C. § 271(e)(4)** outlines exclusive remedies in patent infringement cases.
The appellate court affirms the district court's ruling, supporting the FDA's decision regarding pediatric exclusivity.
The ANDA provision under 21 U.S.C. § 355(j) enables applicants to seek expedited approval for marketing generic drugs without conducting independent clinical trials, provided the generic is bioequivalent to an approved drug. An ANDA must include one of four certifications regarding the patent status of the approved drug: (I) no patent information filed; (II) the patent has expired; (III) the patent expiration date; or (IV) the patent is invalid or will not be infringed. If a paragraph IV certification is included, the applicant must notify the patent holder within 20 days of filing, detailing the basis for the claim of invalidity or non-infringement. Approval timing varies by certification: immediate for I or II, on the certified expiration date for III, and generally immediate for IV unless the patent holder initiates an infringement lawsuit within 45 days, which triggers a 30-month stay on approval. The approval date then depends on the district court’s ruling on the infringement claim.
Additionally, 21 U.S.C. § 355a provides a six-month market exclusivity incentive for patent holders to conduct FDA-requested pediatric studies, contingent upon timely completion. The pediatric exclusivity's impact on ANDA certifications is also specified.
Under 35 U.S.C. § 271, remedies for patent infringement include: (A) setting the drug approval date to not precede patent expiration; (B) granting injunctive relief against infringers; and (C) awarding damages only if there has been commercial activity involving the infringing product. These remedies are exclusive, with the exception that attorney fees may be awarded under section 285.
Appellee ALZA owned U.S. Patent No. 4,588,580 ('580 patent) for Duragesic, which expired on July 23, 2004. In July 1999, the FDA requested pediatric studies for Duragesic from ALZA, which were submitted in November 2002. The FDA granted a six-month pediatric exclusivity period on January 29, 2003. In October 2001, Mylan filed an Abbreviated New Drug Application (ANDA) with a paragraph IV certification claiming the '580 patent was invalid or not infringed. Mylan notified ALZA of its ANDA on December 6, 2001, and ALZA filed a patent infringement lawsuit against Mylan on January 25, 2002, which was outside the 45-day window for an automatic 30-month stay, allowing Mylan's ANDA to proceed. On November 21, 2003, the FDA approved Mylan's ANDA. A Vermont District Court ruled on March 24, 2004, that the '580 patent was valid and that Mylan's ANDA infringed the patent, thus enjoining Mylan from marketing its generic product until the patent expired. Mylan appealed the decision. Concurrently, the FDA determined in two letters on June 22, 2004, that ALZA's pediatric exclusivity would delay Mylan's ANDA approval until six months after the '580 patent expired, based on the court's ruling that transformed Mylan's ANDA into a delayed approval. The FDA also noted that Mylan's paragraph IV certification would need to be amended upon the patent's expiration, potentially converting to a paragraph II certification, which would trigger pediatric exclusivity under the relevant statute.
The FDA notified Mylan in a letter that, due to a Vermont district court decision, the final approval of ANDA 76-258, issued on November 21, 2003, is rescinded and now considered tentatively approved. The FDA clarified that the effective date of Mylan's ANDA approval is delayed and cannot be finalized until a court decision invalidates the relevant patents or they expire, including any pediatric exclusivity granted to the NDA holder. Mylan subsequently filed a lawsuit seeking to challenge this revocation and to prevent the FDA from applying ALZA's pediatric exclusivity to its ANDA. The district court ruled in favor of the FDA, affirming that the agency correctly reclassified Mylan's approval and properly applied pediatric exclusivity. Mylan appealed, arguing that the FDA’s interpretations should receive minimal deference since they were expressed in letters rather than formal regulations. However, the court upheld the FDA's decision, applying Chevron deference because the interpretation involved complex statutory provisions and demonstrated the agency's expertise, despite lacking notice-and-comment rulemaking. The court concluded that the FDA's actions were not arbitrary or capricious and aligned with the law.
The statutory framework governing the FDA is complex and requires careful interpretation to reconcile various provisions. The FDA's recent decision, which is consistent with its prior rulings and regulations, receives Chevron deference. Under the Chevron standard, if Congress has clearly addressed a specific issue, its intent must be followed; if not, the agency’s interpretation is valid if it is permissible under the statute.
In this case, the FDA identified two ambiguities regarding Mylan's Abbreviated New Drug Application (ANDA). First, there were conflicting effective dates for Mylan’s ANDA approval due to the patent infringement remedy statute (35 U.S.C. § 271(e)(4)(A)), which mandated that the approval date cannot precede the expiration of the relevant patent, leading to the Vermont district court's order that set the effective date after the patent expiration. Conversely, the FDA was obliged to grant immediate approval under 21 U.S.C. § 355(j)(5)(B)(iii) unless an infringement action was filed, resulting in two conflicting effective dates: one from the FDA (November 21, 2003) and one dictated by the court (July 23, 2004).
Second, following the Vermont district court's affirmation of patent validity, Mylan’s ANDA certification claiming that the patent was invalid or not infringed became inaccurate. The FDA noted that the pediatric exclusivity regulations (section 355a(c)(2)) did not provide a solution to this issue since they apply only if an infringement action is filed within a specific timeframe, which did not occur here.
In addressing the exclusivity matter, the FDA interpreted the statutes to resolve the conflicts. It determined that, due to the court's ruling, Mylan's ANDA approval was not "immediately effective" but rather "tentative," as approvals with delayed effective dates do not become final until their designated effective date arrives. This interpretation aligns with the permissible construction of the FDCA provisions, thus satisfying Chevron standards.
Mylan argues that the FDA improperly revoked its final ANDA approval from November 21, 2003, asserting that the FDA's revocation authority is limited to circumstances outlined in 21 U.S.C. § 355(e), which do not apply here. However, the FDA counters that section 355(e) provides specific but not exclusive grounds for withdrawing ANDA approvals, allowing it to change Mylan's final approval to tentative under different circumstances. Additionally, the patent remedy statute mandates that a district court, upon finding infringement, establishes a new approval date that cannot precede the expiration of the infringed patent. Consequently, the FDA is required to treat Mylan's ANDA similarly to others affected by patent rights.
Mylan also claims the FDA’s actions contradict prior agency practices; however, those cases involved New Drug Applications (NDAs), which are not subject to delayed effective dates and were approved for immediate marketing. The FDA addressed Mylan's inaccurate ANDA certification based on the precedent established in Ranbaxy Labs. v. FDA, concluding that once the '580 patent expired, Mylan's paragraph IV certification automatically converted to a paragraph II certification, granting ALZA six months of pediatric exclusivity post-expiration. The FDA determined Mylan was obligated to amend its ANDA upon realizing the inaccuracy of its certification; failure to do so allowed the FDA to treat the certification as amended. This automatic amendment resulted in pediatric exclusivity attaching under 21 U.S.C. § 355a(c)(2)(A)(i). The FDA's interpretation aligns with statutory provisions and is supported by prior case law, including Ranbaxy, where similar certification conversions occurred under comparable circumstances.
The district court upheld the FDA's interpretation of the Federal Food, Drug, and Cosmetic Act regarding Ranbaxy's Abbreviated New Drug Applications (ANDAs), confirming that final approval did not automatically follow the dismissal of patent litigation, patent expiration, or the end of the thirty-month statutory stay. Upon Pfizer's patent expiration on January 29, 2004, Ranbaxy's "Paragraph IV" certifications became invalid, necessitating recertification under the pediatric exclusivity provision of 21 U.S.C. § 355a(c)(2)(A) instead.
Mylan argued that FDA regulations, specifically 21 C.F.R. § 314.94(a)(12)(viii)(A), implied that approval of an ANDA should be immediate if no lawsuit was filed within the statutory 45-day window. However, the court found Mylan's interpretation overly broad, asserting that recertification is required regardless of whether a lawsuit is filed within that timeframe. The FDA's rationale for requiring amendments to ANDAs to reflect current circumstances was supported by the regulation.
Mylan further contended that the FDA's construction disregarded section 355a(c)(2)(B), which they claimed would render the statute meaningless. The court clarified that this section applies only when specific conditions are met, which were not fulfilled in Ranbaxy's case or the current situation. The FDA's decision was deemed a reasonable response to ambiguities in the statutes that Congress did not fully address.
The Vermont district court's ruling on patent validity altered the legal context, and the FDA's response aligned with statutory objectives. The FDA's interpretation balanced the interests of the generic drug provision and pediatric exclusivity, while encouraging timely infringement actions from patent holders to maintain their market rights.
Approval of an Abbreviated New Drug Application (ANDA) is contingent on the outcomes of patent litigation. If a district court finds a patent invalid or not infringed during the stay period, ANDA approval takes effect upon the entry of judgment or settlement. Conversely, if the patent is deemed infringed and the judgment is not appealed or is affirmed, the effective date of approval will be specified by the district court in a subsequent order. Should an infringement judgment be appealed, approval becomes effective either when the appellate court determines the patent is invalid or not infringed or upon a settlement order indicating such findings.
In cases where the patent is ruled invalid or not infringed, ANDA approval is effective immediately upon the court's ruling, and the patent holder loses exclusivity. Regulatory requirements dictate that final approval letters from the FDA are necessary for an ANDA to take effect; tentative approvals do not suffice. An approval generally becomes effective on the issuance date of the approval letter, except in cases with delayed effective dates.
The court notes that it owes no deference to the FDA's interpretation of patent statutes or district court decisions, as there is no ambiguity for the FDA to interpret. Even if the FDA's decisions were subject to Skidmore deference, the district court’s affirmation of the FDA's actions would likely remain unchanged. On appeal, the appellees suggest a broader interpretation of section 355a(c)(2)(B) that could encompass actions filed beyond the initial 45-day period, although this was not the interpretation applied by the FDA initially. The court expresses skepticism regarding claims of "withdrawal" or "revocation" of ANDA approval, stating that Mylan's approval remained valid based on the FDA's review.
The approval transitioned from final to tentative status following a delay in its effective date imposed by the Vermont district court. Mylan's reference to the FDA's 1994 rulemaking is deemed unpersuasive. The FDA clarified that while it did not extend the statutory 45-day window, it would retain the authority to grant final effective Abbreviated New Drug Application (ANDA) approval even if a patent holder later initiated a successful infringement action. The FDA may have inferred that the paragraph IV certification should shift to a paragraph III certification immediately after the district court's finding of validity/infringement, in accordance with 21 C.F.R. 314.94(a)(12)(viii)(C)(1)(i), which mandates that an applicant amend their certification if it becomes inaccurate before the approval's effective date. For instance, if a district court invalidated a patent, the ANDA applicant could achieve immediate approval to market the generic product, even if the patent holder later appealed successfully.
