Court Denies ViroPharma’s Motion for TRO/PI in Vancomycin Case—Leaves Generics on the Market

By John R. Fleder & Jennifer M.Thomas—

As previously reported here, on April 13, 2012 ViroPharma Incorporated (“ViroPharma” sued FDA to challenge the agency’s April 9, 2012 approval of three Abbreviated New Drug Applications (“ANDAs”) for generic versions of the company’s antibiotic drug Vancocin® (vancomycin hydrochloride).  ViroPharma alleged that (1) FDA impermissibly interpreted the Food, Drug, and Cosmetic Act (“FDCA”) when it denied the company three-year exclusivity for its NDA supplement (“sNDA”) (“exclusivity claim”); and (2) FDA violated its own regulations—and changed established policy without the procedure required by law—when it chose to accept in vitro bioequivalence data for oral vancomycin (“bioequivalence claim”).  The owners of the three approved ANDAs for generic oral vancomycin—Akorn, Incorporated (“Akorn”), Watson Laboratories, Inc. (“Watson”), and Alvogen, Inc. (“Alvogen”)—intervened in this suit on the side of the government.  Hyman, Phelps & McNamara P.C. represents Akorn in this matter.  At a hearing on April 19, 2012, the parties agreed to treat ViroPharma’s Motion for a Temporary Restraining Order and/or Preliminary Injunction as a Preliminary Injunction Motion.

Judge Ellen Segal Huvelle denied ViroPharma’s Motion for a Preliminary Injunction (“PI”) in a Memorandum Opinion issued on April 23, 2012.  Judge Huvelle determined that the company had not demonstrated a likelihood of success on the merits of either its exclusivity claim or its bioequivalence claim.  First, she found that the statutory provision governing exclusivity for “old antibiotics” under the QI Act is ambiguous, and that FDA’s interpretation of the phrase “condition of use” in that provision is entitled to deference.  Moreover, the agency’s interpretation is likely to be found reasonable in light of the QI Act’s purpose and legislative history.  Second, with regard to bioequivalence, Judge Huvelle noted that the agency’s interpretation of its own bioequivalence regulations is controlling unless it is plainly erroneous or inconsistent with the regulations.  While she concluded that FDA’s purpose at the time of promulgating a regulation—as expressed in the regulation’s preamble—is relevant to determining its correct interpretation, the preamble to the bioequivalence regulations contains statements that would support either party’s reading.  In view of the above findings, and the degree of deference warranted in this case, ViroPharma failed to demonstrate a likelihood of success.

Judge Huvelle was also unpersuaded by ViroPharma’s irreparable injury argument.  Her Opinion cited ViroPharma’s own statements in an investor update call on April 10, 2012, which substantially undermined the company’s alleged case for irreparable injury.  Judge Huvelle found that ViroPharma failed to demonstrate that it was threatened with serious injury, because its statements constituted only vague allegations of economic impact without specific numbers or concrete harms to the company’s operations.  Judge Huvelle noted that the company’s allegations of reputational harm were also entirely speculative and lacking in evidentiary support.

Finally, Judge Huvelle found that both the balance of equities and the public interest weighed against granting ViroPharma’s requested injunctive relief.  She determined that the harm to ANDA-holders Akorn, Watson, and Alvogen would be significant in having to pull their generic oral vancomycin from the market and lose any benefits of early market entry.  On the other hand, the harm to ViroPharma upon denial of injunctive relief would be much less, since the company could continue selling both its branded product and an authorized generic.   Further, the public benefit of lower-priced generic vancomycin would be lost if an injunction issued.

The parties’ briefs in opposition can be found here, (Gov’t), here (Akorn), here (Watson), and here (Alvogen).