Carve Away: D.C. Circuit Keeping the “Chubby Label” Carve-Out Alive

FDA has long permitted ANDA applicants to “carve-out” patent-protected uses from product labeling, resulting in differences between the Reference Listed Drug and the ANDA.  Legal challenges to the carve-out are not new: The GSK v. Teva saga, followed by the Amarin v. Hikma litigation, made clear that Reference Listed Drug sponsors are no fans of the carve-out.  But the recent highly-publicized challenges have originated from patent law, essentially taking the position that ANDA manufacturers induce infringement by promoting their carved-out generics as AB-rated or therapeutically-equivalent to the fully-labeled Reference Listed Drugs (even though such a generic is only AB-rated insofar as it is labeled the same as the brand-name drug).  While we’re still waiting to see if the induced infringement theory renders the carve-out effectively dead (and whether legislation will revive it), the D.C. Circuit recently had the opportunity to take on an Administrative Procedure Act (APA) challenge to the carve-out as one of the first suits challenging FDA’s authority after Loper Bright.

In 2024, Novartis sued FDA in the District Court of D.C. under the APA for approving MSN’s ANDA for a generic version of ENTRESTO (sacubitril/valsartan) with a carve-out of a patent-protected use.  Specifically, MSN carved-out a modified dosing regimen for patients not taking other drugs used to treat heart failure.  The generic label included an indication for chronic heart failure with reduced ejection fraction, which was an indication previously on the ENTRESO labeling before the addition of the modified dosing regimen. The proposed label also stated that the generic drug “contains anionic forms of sacubitril and valsartan, and sodium cations.”  Novartis argued that the carve-out was improper, as it both rendered the product less safe and effective than the Reference Listed Drug and impermissibly added words to the indication statement, rather than simply omitting words as permitted under the statute.  Novartis also argued that the complex active ingredient in the Reference Listed Drug is not the same as the active ingredient in the ANDA.

This lawsuit comes on the heels of a 2019 and repeat 2022 Citizen Petition (Docket No. FDA-2022-P-2228), both filed by Novartis, asking FDA to reject any generic version of ENTRESTO that does not present the active ingredients—sacubitril and valsartan—“in the same chemical structure.”  Novartis also asked that FDA prohibit the carve-out of its patented uses from its label, arguing that carving out the modified dosage would impermissibly render the generic version less safe and effective than the Reference Listed Drug.  Finally, Novartis argued that such a carve-out would require the impermissible addition of words to ENTRESTO’s existing label (i.e., the so-called labeling “carve-in” or “chubby label” approach FDA first took with generic SENSIPAR (cinacalcet) Tablets and then discussed later in a Citizen Petition response (Docket No. FDA-2017-P-3672) concerning generic VELCADE (bortezomib) Injection – see our post here).  FDA denied both petitions in July 2024 and approved the MSN ANDA, and Novartis filed this suit seeking to set aside FDA’s denial of the petitions and approval of the ANDA.  Novartis lost in the District Court and immediately appealed.

In this appeal, Novartis asked the Court to resolve two questions:

1. Did FDA approve labeling for generic ENTRESTO that impermissibly deviates from the ENTRESTO label (i.e., labeling carve-out)?
2. Did FDA unreasonably conclude that the generic drug has the same active ingredients as ENTRESTO?

To address the first question, the Court looked at FDA’s reasoning for approving the language change omitting the modified dosing regimen.  While Novartis argued that the omission rendered the generic “less safe or effective” than ENTRESTO in violation of 21 C.F.R. § 314.127(a)(7), the Court found that FDA’s Citizen Petition “analysis turns squarely on the FDA’s expertise in evaluating the clinical significance of drug studies, which” the Court “will not lightly second-guess.”  Indeed, FDA looked at a study relied upon by Novartis showing that patients not taking concomitant heart drugs “might” have fewer side effects with a modified dosing regimen and determined that 1) the study was not sufficient to prove that the dosing regimen would put patients at any greater risk of adverse reaction, and 2) any adverse reaction could be adequately managed through the warnings included in the generic labeling.

The Court also determined that allowing MSN to omit the modified dosing regimen could be “reconciled with [the Agency’s] approval of the regimen for Entresto itself” even though “[b]oth decisions rested on the same titration study.”  Novartis argued that either the results of that study were robust enough to require inclusion of the modified regimen on both labels or its results were inconclusive enough to foreclose the inclusion on either label.  The Court said that FDA’s reasoning that ENTRESTO is safe and effective with the modified regimen “does not foreclose a later determination that the generic equivalence is not ‘less safe or effective’ without it.”  There thus is no unexplained change in the Agency’s position.

Next, the Court looked at the concerns about a difference in indications. Novartis argued that FDA compared the ANDA labeling to an old version of the ENTRESTO labeling, which had an indication only for patients with a reduced ejection fraction.  The Court found that that allegation was wrong: “FDA plainly compared it to Entresto’s current label.”  And, more importantly, the Court found that the addition of four words to the indication section was not impermissible, as those words were added specifically to omit an indication.  “[T]hat is how this scheme is supposed to work; an ANDA applicant may ‘propose labeling for the generic drug that ‘carves out’ from the brand’s approved label the still-patented methods of use.’”

Finally, Novartis challenged FDA’s finding that ENTRESTO and the ANDA have the same active ingredients.  Novartis claimed that ENTRESTO’s active ingredient is a complex, while the ANDA’s is not a complex.  But the Court found that “longstanding FDA regulations and guidance make clear that drugs can have the same active ingredients even if they have different solid-state physical forms or crystal structures” and that “FDA convincingly applied that principle in rejecting Novartis’s request to require generic drugs to have the same co-crystal structure as Entresto.”

The long-short of the decision is that Novartis gave the Court “no reason to question the FDA’s expert judgment regarding these scientific issues.”  Even after Loper-Bright, the Court is going to continue to defer to FDA on matters of science.

Moreover, the carve-out lives on at FDA, even if a few words are necessary to properly carve-out an indication (and even if it can induce infringement).