Sandoz Attempts to Clear Up Post-Losartan “Bottleneck” with DJ Action on Disclaimed Patent

November 22, 2010

By Kurt R. Karst –      

Sandoz Inc.’s recent Complaint filed in the U.S. District Court for the District of Columbia concerning Orange Book-listed U.S. Patent No. 7,429,602 (“the ‘602 patent”) covering ELESTAT (epinastine HCl) Ophthalmic Solution, could, if successful, serve as a model for future cases involving patent delistings. 

FDA approved ELESTAT under NDA No. 21-565 on October 16, 2003 with a period of 5-year New Chemical Entity (“NCE”) exclusivity that, according to the 2008 Orange Book, expired on October 15, 2008.  (Presumably this date is incorrect and the NCE exclusivity expiration date was, in fact, October 16, 2008.)   No patents were listed in the Orange Book for ELESTAT until Friday, October 10, 2008, when the ‘602 patent, which was issued on September 30, 2008, was received by FDA.  (The electronic Orange Book was first updated on October 14th to reflect the addition of the ‘602 patent.)  Thus, prior to the ‘602 patent listing, no ANDA could have been submitted to FDA for a generic version of ELESTAT until the expiration of NCE exclusivity on October 16th.  With the ‘602 patent listing, however, the law permitted the submission of an ANDA beginning at year 4 of the 5-year NCE exclusivity period. 

Some ANDA sponsor was on its game, as FDA’s Paragraph IV Certification List shows that the first ANDA containing a Paragraph IV certification to the ‘602 patent was submitted to FDA on October 14, 2008.  (An ANDA containing a Paragraph IV certification to the ‘602 patent could have been submitted as early as October 10th when the patent was officially considered to be Orange Book-listed.  An after-hours submission on October 10th would not have been considered submitted to FDA until the next business day, Tuesday, October 14th, as Monday, October 13th was a federal holiday – Columbus Day.)  This certification qualified the ANDA sponsor as a “first applicant” eligible for 180-day exclusivity.

According to Sandoz’s October 19, 2010 Complaint, the company submitted ANDA No. 90-950 to FDA on October 15, 2008 without a Paragraph IV certification.  On October 17th, Sandoz reportedly amended ANDA No. 90-950 to contain a Paragraph IV certification to the ‘602 patent.  As such, Sandoz is a subsequent applicant subject to a first applicant’s 180-day exclusivity, unless that exclusivity is forfeited under one of the various forfeiture provisions established by the 2003 Medicare Modernization Act (“MMA”). 

After FDA received ANDA No. 90-950, Sandoz provided notice of its Paragraph IV certification to the NDA holder and patent owner, but was not sued for patent infringement.  In July 2009, Sandoz filed a declaratory judgment action (Case No. 1:09-cv-01444) in the U.S. District Court for the District of Columbia seeking a declaration from the court that the ‘602 patent is invalid, unenforceable, or would not be infringed by Sandoz’s proposed generic version of ELESTAT.  That case was voluntarily dismissed by Sandoz on October 5, 2009 after a statutory disclaimer with respect to the ‘602 patent was filed with the U.S. Patent and Trademark Office and a request sent to FDA to delist the ‘602 patent from the Orange Book. 

At the time a patent delist flag was added to the Orange Book for the ‘602 patent, FDA’s position with respect to 180-day exclusivity forfeiture under the failure-to-market provisions was that the mere request to delist a patent from the Orange Book was an event that could lead to a forfeiture.  That all changed earlier this year, however, with the D.C. Circuit’s March 2, 2010 decision in Teva Pharms USA, Inc. v. Sebelius.  In that case, a 3-judge panel of the D.C. Circuit ruled in a 2-1 decision concerning 180-day exclusivity for generic COZAAR (losartan potassium) Tablets and HYZAAR (hydrochlorothiazide; losartan potassium) Tablets that a mere patent delisting request is not enough to trigger a forfeiture event under the failure-to-market forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I), and that there is “no reason to conclude that the 2003 addition of forfeiture provisions meant to give the brand manufacturer a right to unilaterally vitiate a generic’s exclusivity.”  (As we previously reported, the U.S. Supreme Court has been petitioned to review the ruling in Teva Pharms USA, Inc. v. Sebelius.)

Given the changed landscape created by the D.C. Circuit in the losartan case, the disclaimer of the ‘602 patent and the subsequent request that FDA delist the patent from the Orange Book that presumably led Sandoz to voluntarily dismiss the company’s July 2009 declaratory judgment action could no longer serve as an event to trigger 180-day exclusivity forfeiture in April 2011 (i.e., the “later of” date of the two bookend events described at FDC Act § 505(j)(5)(D)(i)(I)).  Instead, 180-day exclusivity remains intact . . . . absent a forfeiture event.  And that is exactly what Sandoz’s October 2010 Complaint seek to create.

Sandoz’s October 2010 Complaint requests a declaratory judgment that the ‘602 patent is invalid and unenforceable, and that Sandoz’s proposed generic ELESTAT drug product does not infringe the ‘602 patent.  But can an applicant seek a declaratory judgment against a disclaimed patent?  What is the actual and justiciable controversy?  Citing the recent Federal Circuit decision in Teva Pharms. USA, Inc. v. Eisai Co. Ltd., Case No. 2009-1593 (Fed. Cir. Oct. 6, 2010), in which the Court ruled that a subsequent Paragraph IV filer has a legally cognizable interest in when a first-filer’s 180-day exclusivity period begins for declaratory judgment purposes, Sandoz states in its Complaint that an actual and justiciable controversy exists regarding validity and infringement of the ‘602 patent “[b]ased on Sandoz’s intent to launch its generic 0.05% Epinastine Ophthalmic Solutions as soon as legally permissible, and the fact that the FDA will not approve Sandoz’s ANDA until the 180-day exclusivity period has run or been forfeited. . . .”  Stay tuned. . . .  this could get even more interesting!