FDA and Ranbaxy Prevail in Dispute Over Generic DIOVAN 180-Day Exclusivity; Court Grants Motions for Summary Judgment

January 2, 2013

By Kurt R. Karst –      

Last week in a post-Christmas decision, Judge John D. Bates of the U.S. District Court for the District of Columbia granted both FDA’s and Intervenor-Defendant Ranbaxy Laboratories Limited’s (“Ranbaxy’s”) Motions for Summary Judgment and denied Mylan Laboratories Limited’s and Mylan Pharmaceuticals Inc.’s (collectively, “Mylan’s”) Motion for Preliminary Injunction in a case stemming from an October 2, 2012 Complaint challenging FDA’s September 28, 2012 decision that Ranbaxy is eligible for 180-day exclusivity for its generic version of DIOVAN (valsartan) Tablets despite Ranbaxy not having obtained tentative approval of its ANDA No. 077492 within 30 months of ANDA submission.  Unfortunately, many of the documents in the case remain sealed – including FDA’s September 28, 2012 letter decision on the non-forfeiture of 180-day exclusivity eligibility – so we don’t have much to go on except the 25-page decision from Judge Bates.

As we previously reported, Mylan’s lawsuit is the first involving 180-day generic drug exclusivity and the so-called “failure to obtain timely tentative approval” forfeiture provision at FDC Act § 505(j)(5)(D)(i)(IV) added by the 2003 Medicare Modernization Act (“MMA”).  Under FDC Act § 505(j)(5)(D)(i)(IV), 180-day exclusivity eligibility is forfeited if:

The first applicant fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed.

FDA has explained that under FDC Act § 505(j)(5)(D)(i)(IV),

it is not sufficient to show that FDA changed or reviewed the requirements for approval while the application was under review.  The applicant must also show that its failure to obtain tentative approval at the 30 month date is caused by this change in or review of approval requirements – that is, the issues holding up approval at the 30 month date must be causally connected to the approval requirements that FDA reviewed or changed. [(Emphasis added)]

On December 28, 2004, Ranbaxy submitted the first ANDA to FDA containing a Paragraph IV certification to an Orange Book-listed patent for DIOVAN Tablets; specifically a Paragraph IV certification to U.S. Patent No. 6,294,197 (“the ‘197 patent”), the pediatric exclusivity for which expires on December 18, 2017.  Ranbaxy’s ANDA also contained a Paragraph III certification to now-expired U.S. Patent No. 5,399,578 (“the ‘578 patent”), and a “section viii” statement to U.S. Patent No. 5,972,990, a method-of-use patent the pediatric exclusivity for which expires on April 26, 2017.   FDA tentatively approved ANDA No. 077492; however, that tentative approval came on October 25, 2007, which is well after the 30-month anniversary date of the submission of ANDA No. 077492 (i.e., June 28, 2007 by FDA’s calculation).  Mylan’s ANDA No. 090866 was submitted to FDA on September 15, 2008 and also contains a Paragraph IV certification to the ‘197 patent.  FDA tentatively approved the ANDA on September 28, 2012.  Final approval of ANDA No. 090866 (as well as the ANDAs of subsequent applicants) depends on the disposition of Ranbaxy’s 180-day exclusivity.

Although there was no patent or exclusivity block preventing FDA from granting final approval to Ranbaxy’s ANDA No. 077492 once the ‘578 patent expired on September 21, 2012, the application remains unapproved.  This may be due to a January 2012 Consent Decree Ranbaxy entered into with the United States after FDA invoked the Agency’s Application Integrity Policy against Ranbaxy.  The Consent Decree identifies several Ranbaxy ANDAs by a non-descriptive label that may be subject to forfeiture if certain conditions detailed in the Consent Decree are not met within certain timeframes.  It is possible that ANDA No. 077492 is one of those affected applications.  Nevertheless, at this time, Ranbaxy remains eligible for 180-day exclusivity. 

Why does Ranbaxy remain eligible for 180-day exclusivity despite having failed to obtain timely tentative approval?  According to FDA’s September 28, 2012 letter decision discussed in Judge Bates’ decision, “there had been changes to the approval requirements for both labeling and chemistry” affecting Ranbaxy’s ANDA.  Specifically, “[f]irst, on November 22, 2006, FDA approved a labeling supplement for Diovan that consisted of changes to three sections of the drug’s labeling, [and second], on May 1, 2007 (about two months before the 30- month forfeiture date), a new USP monograph for valsartan became official.”  Indeed, FDA’s October 25, 2007 tentative approval letter noted that for purposes of FDC Act § 505(j)(5)(D)(i)(IV), “the agency regards the change in the USP monograph for Valsartan, published on May 1, 2007, . . . to be a change in the requirements for approval imposed after the date on which your ANDA was filed.”  According to FDA’s letter decision as conveyed by the court, “Ranbaxy had not forfeited its eligibility for 180-day exclusivity because its efforts to comply with the USP monograph, and FDA’s review thereof, ‘were a cause of’ Ranbaxy’s failure to obtain tentative approval within 30 months.”  As a result, FDA apparently “found it unnecessary to determine whether the November 22, 2006 labeling change was also a cause of the failure to obtain tentative approval.”

FDA’s determination as to whether Ranbaxy’s failure to obtain timely tentative approval of ANDA No. 077492 was “caused by” a change in USP requirements was based on a 7-factor test:

(1) “whether the monograph change is in a proposed or final monograph,” (2) “the timing of any publication of or change in a monograph in relation to a particular 30-month forfeiture date,” (3) “whether FDA requires compliance with the new/changed compendial standard [i.e., the USP],” (4) “whether the [FDC Act] requires compliance with the new/changed compendial standard,” (5) “the consistency of the new/changed monograph with pre-existing approval requirements,” (6) “the nature and timing of the sponsor’s efforts to comply with USP monographs,” and (7) “[the nature and timing] of FDA’s review of such efforts.”  [(Quoting FDA’s September 28, 2012 letter decision)]

After considering each of these factors, “FDA determined that (1) the May 1, 2007 publication of the USP monograph for valsartan constituted a change in the requirements for approval of Ranbaxy’s ANDA, and (2) this change was a cause of Ranbaxy's failure to obtain tentative approval by the 30-month forfeiture date.”

In evaluating the likelihood of success of Mylan’s Administrative Procedure Act (“APA”) challenge, Judge Bates considered three sets of arguments raised by Mylan in the company’s Motion for a Preliminary Injunction: (1) whether there was a lack of reasoned FDA decisionmaking; (2) whether FDA’s decision is contrary to congressional intent; and (3) whether Ranbaxy failed to actively pursue ANDA approval.  In each instance, Judge Bates rejected Mylan’s arguments.

Mylan’s primary argument was that FDA’s September 28, 2012 letter decision lacks a reasoned explanation and states only a bare conclusion that Ranbaxy did not forfeit 180-day exclusivity eligibility, and, in particular, with respect to factor number 5 of the 7-factor test – i.e., “the consistency of the new/changed monograph with pre-existing approval requirements.”  Although the court agreed with Mylan that this factor should be considered in the causation analysis, because “[c]ausation in this context requires a showing of something more than just the fact and timing of a USP monograph publication,” Judge Bates ultimately found that FDA’s decision was based on something more than merely the fact and timing of publication of the USP monograph: 

The Forfeiture Memo discusses Ranbaxy’s efforts to comply with the monograph, listing the specific changes to drug substance specifications and test methods proposed by Ranbaxy. . . .  The consistency of the monograph with pre-existing approval requirements mattered to FDA’s decision because (1) the monograph was new and set USP-specific requirements, and (2) the time that it took Ranbaxy to both make responsive changes and show that some of its existing methods met the new requirements, and for FDA to review these efforts, spanned a period of more than three months.  It does not take guesswork to see that, regardless of any case-by-case standards that existed before the USP monograph became official, the imposition of USP standards for the first time, and the specific sequence of events that took place thereafter, led FDA to conclude that the publication of the monograph was a cause of the delay in tentative approval.

Mylan also argued that FDA’s September 28, 2012 letter decision violates the APA  because it frustrates the congressional policy underlying the Hatch-Waxman Amendments, and, in particular, the intent of the MMA’s forfeiture provision – to “ensure that the 180–day exclusivity period enjoyed by the first generic to challenge a patent cannot be used as a bottleneck to prevent additional generic competition.”  Not so, said Judge Bates:

Stripping Ranbaxy of exclusivity where, as FDA has determined, its failure to obtain tentative approval was caused by a change in approval requirements would contravene congressional intent as expressly stated in the exception.  It also would deprive Ranbaxy of its anticipated reward for “stick[ing] out [its] neck[] (at the potential cost of a patent infringement suit)” by challenging Novartis’s patent and, at least in theory, decrease the expected returns from future generic challenges to patents claiming brand drugs. . . .  Considering the purposes of not only the forfeiture provision, . . . but also the exception and the exclusivity incentive created by Congress, the Court will not set aside FDA’s decision on the ground that it frustrates the congressional policy underlying Hatch-Waxman.

Finally, Judge Bates refused to consider Mylan’s argument that immediate approval of Mylan’s ANDA is warranted because Ranbaxy is not actively pursuing approval of ANDA No. 077492.  FDA’s regulation at 21 C.F.R. § 1314.107(c)(3), which was raised in litigation in 2012 concerning generic PROVIGIL (modafinil) Tablets (see here) states, in relevant part, that “if FDA concludes that the applicant submitting the first application is not actively pursuing approval of its abbreviated application, FDA will make the approval of subsequent abbreviated applications immediately effective if they are otherwise eligible for an immediately effective approval.”  FDA has never enforced this regulation.  Judge Bates concluded that Mylan raised this argument to late (i.e., in the company’s Reply Memorandum in support of its Motion for a Preliminary Injunction) and waived it. 

It is unclear at this time whether Mylan will appeal the decision.  The generic DIOVAN decision is the last Hatch-Waxman 180-day exclusivity court decision in a year that saw its share of litigation, both on the pre-MMA and post-MMA exclusivity fronts.  With less than a handful of pre-MMA drugs remaining, 2013 may be the last hurrah for pre-MMA cases (i.e., the generic ACTOS 180-Day exclusivity decision – see here – is still on appeal), but with a vast majority of FDA’s post-MMA 180-day exclusivity forfeiture decisions involving the “failure to obtain timely tentative approval” forfeiture provision, it seems likely that more litigation over this provision remains on the horizon.