DC Circuit Rules for FDA in SEROQUEL Exclusivity Case; AstraZeneca Not Entitled to 3-Year Exclusivity

By Kurt R. Karst –      

In a brief opinion handed down last week by the U.S. Court of Appeals for the District of Columbia Circuit, the Court affirmed a July 5, 2012 decision from the U.S. District Court for the District of Columbia granting summary judgment for FDA in a case brought by AstraZeneca Pharmaceuticals LP’s (“AstraZeneca’s”) over the approval of generic versions of the company’s blockbuster antipsychotic drug SEROQUEL (quetiapine fumarate) Tablets.  As we previously reported, the case concerns the applicability and scope of 3-year exclusivity under FDC Act § 505(j)(5)(F)(iv) based on FDA’s simultaneous approval of supplemental NDAs (“sNDAs”) that contained information on pediatric uses of quetiapine and that made changes to the drug’s labeling to add “Table 2” of the Warnings section regarding “general safety information that is not indication-specific.” 

AstraZeneca’s legal attempts to stave off FDA approval of generic SEROQUEL started in March 2012 when the company sought to enjoin FDA from granting final ANDA approvals for generic SEROQUEL after FDA denied without comment two citizen petitions (Docket Nos. FDA-2011-P-0662 and FDA-2011-P-0663) AstraZeneca submitted to FDA concerning labeling carve-out issues (see our previous post here).  The DC District Court dismissed the action without prejudice, saying that it was premature (see our previous post here).  Just days later, however, FDA approved several ANDAs for generic SEROQUEL.  AstraZeneca filed a second lawsuit seeking to vacate FDA’s ANDA approvals and to enjoin FDA from granting any further final ANDA approvals.  The DC District Court denied AstraZeneca’s Motion for Temporary Restraining Order (see our previous post here). 

The case progressed to the summary judgment stage, where the AstraZeneca argued that under the plain language of FDC Act § 505(j)(5)(F)(iv), the company is entitled to a period of 3-year marketing exclusivity for the Table 2 information until December 2, 2012, plus 6 months of pediatric exclusivity (until June 2, 2013).  FDA, following the explanation provided in the Agency’s March 27, 2012 Letter Decision, [http://www.hpm.com/pdf/blog/SEROQUEL%20-%20FDA%20Letter%20Decision%203-27-2012.pdf] primarily argued that the scope of 3-year exclusivity relates to the scope of new clinical investigations conducted by the NDA sponsor and approved in an sNDA, but that “AstraZeneca reads the statute to provide for exclusivity for any labeling change, even if the change was initially submitted through general correspondence (and not a supplement), and it was unrelated to the purpose for which the supplement was submitted, and the change occurred only coincidentally and contemporaneously with the changes relating to the new clinical investigations that were the subject of the supplements.”  Finding FDC Act § 505(j)(5)(F)(iv) ambiguous, the DC District Court ruled that under Chevron Step Two,  FDA’s interpretation of the statute – i.e., “that a substantive relationship between new clinical studies and changes in the supplement, not the format of a submission, dictates what changes receive exclusivity” – is reasonable and granted summary judgment in favor of FDA.

On appeal, FDA argued the case was moot because the period of 3-year exclusivity at issue expired on December 2, 2012.  The DC Circuit disagreed, citing the possibility of pediatric exclusivity expiring on June 2, 2013.  Moving on to the merits of the D.C. District Court’s summary judgment decision, the Court examined the core of the dispute: the reasonableness of FDA’s interpretation of FDC Act § 505(j)(5)(F)(iv), which limits exclusivity to “a change approved in the supplement” and requires that “the supplement contain[] reports of new clinical investigations . . . essential to the approval of the supplement,” to deny exclusivity in this case.  As the Court pointed out, the statutory language “is permeated by ambiguities that, under Chevron, leave discretion in the FDA to adopt reasonable interpretations of the application process outlined by the statute.”

AstraZeneca argued that FDC Act § 505(j)(5)(F)(iv) clearly entitles Table 2 to exclusivity on two grounds, thereby making FDA’s approval of ANDAs incorporating Table 2 prior to June 2, 2013 contrary to the statute.  First, AstraZeneca argued that Table 2 was “a change approved in” the pediatric supplements the company submitted to FDA, and that the supplements included “reports of new clinical investigations . . . essential to the approval of the supplement[s].”  Second, AstraZeneca argued that the labeling changes independently warrant exclusivity because some of the clinical studies that provided the data for Table 2 were “new clinical investigations” “essential to the approval” of the labeling changes.  FDA maintained that that Table 2 was not “a change approved” in any supplement, and that only changes approved in an sNDA are entitled to marketing exclusivity.  (Briefs in the case are available here, here, and here.)

Noting that FDA “has exhaustive regulations detailing the parameters of the application process, including how to amend pending supplements and applications,” the Court said that “AstraZeneca makes no attempt to show that these procedures are contrary to the statute,” and that AstraZeneca did not show “that the FDA’s application of the law to the relevant facts was arbitrary or capricious.”  As such, the Court found “nothing arbitrary or capricious about the FDA’s reasoned explanation for its actions.”  AstraZeneca’s  attempts to establish that FDA was arbitrary or capricious in its exclusivity an ANDA approval decisions by directing the Court to prior grants of exclusivity to label changes approved in supplements similarly fell flat. “FDA’s explanation that it considered Table 2 independently of a supplemental application sufficiently distinguishes this case to defeat that claim,” wrote the panel of Judges Rogers, Tatel, and Sentelle.  “The consistency of the FDA’s denial of exclusivity in this case with prior FDA actions is strikingly underscored by the fact that the agency did not extend exclusivity in seven other recent labeling changes for drugs in Seroquel’s class.”