A Costly 180: The D.C. Circuit Flips FDA’s Forfeiture Playbook

What a year for Hatch-Waxman litigation!  With the Supreme Court’s decision in Amarin v. Hikma, it’s already been a big year for the Hatch-Waxman Amendments, but now we have another case from the D.C. Circuit that touches on an important aspect of generic drug incentives: 180-day exclusivity.  More specifically, 180-day exclusivity forfeiture, a topic so complicated that FDA’s Guidance on 180-Day Exclusivity spends 12 of its 26 pages of Frequently Asked Questions explaining it.

There are six different ways to forfeit exclusivity under the Hatch-Waxman Amendments, and today’s case deals with two of them: “failure to market” and “failure to obtain tentative approval” (at FDC Act § 505(j)(5)(D)(i)(I) and § 505(j)(5)(D)(i)(IV), respectively)   Under the “failure to market” provision, the Federal Food, Drug, and Cosmetic Act states that 180-day exclusivity eligibility is forfeited by the “later of” date of the two bookend dates described at FDC Act § 505(j)(5)(D)(i)(I)(aa) and (bb).  The first bookend date under item (aa) is the earlier of the date that is:

(AA) 75 days after the date on which the approval of the application of the first applicant is made effective under subparagraph (B)(iii); or

(BB) 30 months after the date of submission of the application of the first applicant.

The other bookend—the (bb) part of the equation—provides that the date is “the date that is 75 days after the date as of which, as to each of the patents with respect to which the first applicant submitted and lawfully maintained a [Paragraph IV] certification qualifying the first applicant for the 180-day exclusivity period,” one of three events occurs “with respect to the first applicant or any other applicant (which other applicant has received tentative approval)”:

(AA) In an infringement action brought against that applicant with respect to the patent or in a declaratory judgment action brought by that applicant with respect to the patent, a court enters a final decision from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) has been or can be taken that the patent is invalid or not infringed.

(BB) In an infringement action or a declaratory judgment action described in [FDC Act § 505(j)(5)(D)(i)(I)(bb)(AA)], a court signs a settlement order or consent decree that enters a final judgment that includes a finding that the patent is invalid or not infringed.

(CC) The patent information submitted under [FDC Act § 505(b) or (c)] is withdrawn by the holder of the application approved under subsection (b).

FDC Act § 505(j)(5)(D)(i)(I)(bb) (emphasis added).

Under the failure to obtain tentative approval provision, a first applicant forfeits exclusivity eligibility if it fails to secure tentative approval 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.”

This case challenged FDA’s longstanding interpretation of both of these provisions.   In the D.C. Circuit’s August 2026 decision in Norwich v. Kennedy, the court tackled two main questions:

1. Whether, for purposes of failure-to-market forfeiture, the Paragraph IV certifications “qualifying” a first generic applicant for exclusivity include all certifications meeting the statutory criteria for first applicant status, or only those regarding patents as to which a subsequent generic applicant also maintains a Paragraph IV certification. Or, framed differently, whether a first applicant’s 180-day exclusivity blocks approval of subsequent ANDAs with a carve-out to one of the exclusivity-qualifying patents.
2. Whether a first generic applicant’s failure to obtain tentative approval is excused only if such a change in FDA’s requirements for approval imposed after the application is filed is a but-for cause of any delay.

The questions arose in the context of ANDAs filed for the antibiotic rifaximin for treatment of irritable bowel syndrome with diarrhea (“IBS-D”) and to reduce the risk of recurrence of overt hepatic encephalopathy (“HE”).  There, Actavis was a first applicant eligible for 180-day exclusivity for its ANDA, but subsequent filer Norwich argued that Actavis had forfeited its exclusivity eligibility under both the “failure to market” and the “failure to obtain tentative approval” provisions.  FDA had determined that Actavis had not forfeited under either provision, so Norwich sued FDA under the Administrative Procedure Act.

Importantly, Actavis had filed Paragraph IV certifications to each of the patents listed in the Orange Book and entered into a licensing agreement with the RLD sponsor while Norwich filed Paragraph IV certifications to, and won litigation concerning, each patent other than the HE indication method-of-use patent; Norwich submitted a section viii statement for the HE patent.  Norwich argued that its litigation wins were “triggering events” under the “failure to market” provision and thus Actavis forfeited its exclusivity.  The problem for Norwich, FDA determined, is that there was no triggering event for the HE patent, and the HE patent is one of the patents to which Actavis maintained a Paragraph IV certification qualifying it for 180-day exclusivity.  Norwich argued that because Norwich did not certify to that patent, it was not a “qualifying” patent, but FDA rejected that argument.  Norwich also argued that Actavis forfeited eligibility by failing to obtain tentative approval, but FDA rejected that argument because its changes to the bioequivalence recommendations for rifaximin ANDAs was “a” cause of Actavis’s failure to obtain tentative approval within 30 months of ANDA filing.

The District Court agreed with FDA, but the D.C. Circuit ultimately held that Actavis has not forfeited its exclusivity under the “failure to market” provision, but it may have under the “failure to obtain tentative approval” provision because FDA applied the wrong causation standard.

Failure to Market. The court agreed with FDA “that the statutory phrase ‘a certification qualifying the first applicant for the 180-day exclusivity period’ is best read to encompass each of the Paragraph IV certifications ‘contain[ed] and lawfully maintain[ed]’ in the first applicant’s ANDA.” The court looked at a number of provisions in the statute to conclude that it only allows one “single, indivisible exclusivity period” for a “first applicant,” which is then either forfeited or not, all or nothing.  Accepting Norwich’s argument would mean that a first applicant could “forfeit exclusivity with respect to particular subsequent applicants but retain it as to others,” which the statute did not support.  So the court held “that all Paragraph IV certifications ‘contain[ed] and lawfully maintain[ed]’ in the first applicant’s ANDA are certifications ‘qualifying’ the first applicant for exclusivity under Section 355(j)(5)(D)(i)(I)(bb). Because Actavis’s ANDA included a Paragraph IV certification to the HE patent, and because there has been no triggering event for that patent, Actavis has not forfeited exclusivity under the failure to market provision.”

Because this ruling upheld FDA’s interpretation of the statute and the status quo, it is unlikely to make too many waves on its own. That said, we were intrigued by one question that the court expressly declined to decide, because it didn’t need to: what if, instead of some (or all) of the subsequent ANDA’s Paragraph IV certifications matching a first applicant’s, none of them did? In that event, do “only matching certifications trigger exclusivity under subparagraph (b)(iv)(I)”?  This question isn’t really one of forfeiture, but rather the scope of 180-day exclusivity; it blocks a subsequent application that contains “a [Paragraph IV] certification . . . and is for a drug for which a first applicant has submitted . . . such a certification.” FDC Act § 505(j)(5)(B)(iv)(I).  The briefs show an interesting back-and-forth on that question: Norwich argued that the words “such a certification” require a “matching certification.” FDA’s current position appears to disagree: as long as the first applicant has any Paragraph IV certification and the subsequent applicant also has any Paragraph IV certification, it is blocked by default—but here FDA primarily urged the court not to decide that issue unnecessarily (because multiple certifications matched anyways).  The resolution of that question will need to wait for a future litigant to take a crack at it, because the court took FDA up on its invitation to hold off “for a case in which it makes a difference.”

Failure to Obtain Tentative Approval. With respect to the alternative argument—that Actavis failed to obtain tentative approval within the requisite 30 months from ANDA submission—the D.C. Circuit took issue with FDA’s interpretation of the “causation” requirement.  Under the statute, to avoid forfeiture, an applicant must secure tentative approval within 30 months unless failure “is caused by” a post-submission review or change in approval requirements, as recognized by the Agency, which we’ll call the “Change-Based Exception.”

FDA has for decades interpreted this provision such that “but for” causation is not needed, and the court affirmed this position in Mylan Laboratories Ltd. v. FDA, 910 F. Supp. 2d 299 (D.D.C. 2012) (“an applicant need only show that acceptability of one aspect of the ANDA (e.g., chemistry) was delayed due to a change in or review of the requirements for approval, irrespective of what other elements may also have been outstanding at the 30-month date.”).  As FDA explained in a 2017 guidance:

[T]his interpretation of the statute best effectuates the policy underlying the exception.  It does not penalize applicants for FDA’s reviews of, or changes in, approval requirements imposed on applicants after their ANDAs are filed that are a cause of the failure to obtain final approval or [TA] within 30 months.  This interpretation also continues to incentivize ANDA applicants to challenge patents by preserving in many instances the opportunity to obtain 180-day exclusivity.

Thus, FDA presumed causation if, at the “if, at the 30 month date, the evidence demonstrates that there was a change in, or review of, the requirements for approval and that the applicant was actively addressing issues related to the change in, or review of, approval requirements (or FDA was considering such efforts), and these efforts precluded tentative approval or final approval at that time.”

The D.C. Circuit, however, flatly rejected this approach under the plain language of the statue.  “Although the statute does not define ‘caused by,’” the court reasoned, “the ‘requirement of but-for causation’ is ‘part of the common understanding of cause’ and so is ‘one of the traditional background principles against which Congress legislates.’” (citing Burrage v. US, 871 U.S. 204, 211 (2014).  Courts should deviate from that standard only where textual or contextual indications suggest that but-for cause is inappropriate.  None exists here.  The court explained, “[a]pplying the exception for independently sufficient causes, by contrast, would ‘absolve’ first applicants of their failure to secure tentative approval even if their ANDA included one or more critical deficiencies that would independently have prevented approval,” which thus points to the need for but-for causation.  And, after Loper Bright, the court explained that there’s no reason to defer to the Agency’s longstanding practice, especially since this has “little to do with” FDA’s “technical subject matter expertise.”  The court remanded back to FDA to apply the but-for causation standard and (re)analyze Actavis’ forfeiture in the first instance.

If this ruling is not further appealed (that seems unlikely) or is upheld on appeal, this change to FDA’s longstanding practice will inevitably result in more 180-day exclusivity forfeiture, curtailing an incentive designed to encourage patent-breaking litigation.  This also makes significantly more work for FDA, which explained in briefing that the but-for analysis is logistically complicated.  The ruling also may spawn future requests for FDA to reconsider, and/or litigation, from other subsequent applicants who (like Norwich) were blocked by a determination of non-forfeiture under the Change-Based Exception. Indeed, our review of FDA’s Paragraph IV List found several other drugs out there that might currently fit the bill, and thus where a subsequent applicant is probably waiting in the wings.  For those non-forfeiture decisions that relied on the Change-Based Exception, those subsequent applicants may well want another try to see if under the tighter but-for standard, the blocking first applicants forfeited after all.

But “but-for” causation it is not as black-and-white as one might think, thereby adding to FDA’s workload and what ANDA applicants (first or subsequent Paragraph IV ANDA applicants) might want to consider.  As the court pointed out in a footnote:

There can, of course, be multiple but-for causes of a single event.  See Dobbs et al., supra, § 186 (“It is by no means true that the but-for test reduces everything to a single cause.”).  Consider another baseball game, this one ending 1-0 after the winning team hit a one-run home run.  That home run is a but-for cause of the victory, as are “a host of other necessary causes, such as skillful pitching” and even “the league’s decision to schedule the game.”  Burrage, 571 U.S. at 212.

So, there may well indeed be another year (or years) for Hatch-Waxman 180-day exclusivity litigation!