KV Says “Heckler/Chaney Defense” is Inapplicable in Appeal Concerning Compounded 17P and Orphan Drug MAKENAMarch 13, 2013
By Kurt R. Karst –
Briefing is underway in K-V Pharmaceutical Company’s (“KV’s”) appeal of a September 2012 decision from the U.S. District Court for the District of Columbia that stymied the company’s efforts to “restore” orphan drug exclusivity for the pre-term birth drug MAKENA (hydroxyprogesterone caproate) Injection, 250 mg/mL, the compounded version of which is known as “17P.” In its Opening Brief, KV presses its case that FDA’s decision not to take enforcement action against 17P compounders and the Agency’s issuance of a March 30, 2011 press release to that effect (referred to KV in its brief as “FDA’s Statement”) is the equivalent of an order or license reviewable in court, and that FDA caved to political pressure when it decided not to take enforcement action against 17P compounders.
As we previously reported (here and here), KV filed a Complaint and a Motion for Temporary Restraining Order and Preliminary Injunction alleging that FDA and the Department of Health and Human Services violated myriad provisions of the FDC Act, the Administrative Procedure Act (“APA”) § 706(2), and the Due Process Clause of the Fifth Amendment to the U.S. Constitution by failing to take sufficient enforcement action to stop the unlawful competition with MAKENA by pharmacies that compound 17P. FDA filed a Motion to Dismiss arguing, among other things, that KV’s claims are not justiciable for lack of standing, and that even if KV can establish standing, certain Agency statements concerning compounded 17P are not subject to judicial review under the APA because FDA’s decisions not to take enforcement action are committed to the agency’s discretion under Heckler v. Chaney, 470 U.S. 821 (1985). In Chaney, the U.S. Supreme Court held that “an agency’s decision not to prosecute or enforce, whether through civil or criminal process, is a decision generally committed to an agency’s absolute discretion,” and as such, is presumed to be unreviewable under the APA.
After finding that KV alleged sufficient facts to support standing, the D.C. District Court found KV’s first three Counts concerning orphan drugs (FDC Act § 527(a)), compounding (FDC Act § 503), and new drug approval (FDC Act §§ 505(a) and 301(d)) unreviewable, because APA § 701 “precludes judicial review of final agency action, including refusals to act, when review is precluded by statute or ‘committed to agency discretion by law,” and because Chaney is controlling. Addressing Count IV of KV’s Compliant alleging that FDA violated FDC Act § 801(a) by permitting foreign-manufactured active pharmaceutical ingredient to be imported into the United States for compounding into 17P, the court found that the Count failed to state a claim.
Interestingly, another D.C. District Court decision, also on appeal to the D.C. Circuit, Beaty v. FDA, 853 F. Supp. 2d 30 (D.D.C. 2012), appeal docketed sub nom. Cook v. FDA, Nos. 12-5176, 12-5266 (D.C. Cir. May 31, 2012), came out the other way for FDA when the Agency pressed Chaney as a defense. In that case, the court found that FDA “ignore[d] an administrative directive” when the Agency exercised enforcement discretion with regard to the importation of unapproved sodium thiopental for use by state Departments of Corrections to carry out death sentences by lethal injection. (See our previous post here.)
KV argues in its Opening Brief that the case falls outside of the Chaney framework for three reasons:
First, FDA’s Statement involves active solicitation of unlawful conduct, not mere non-enforcement. Second, FDA’s Statement announces a policy applicable to more than 1,000 compounders, not a single-shot decision not to proceed in a particular case involving a particular party or parties. Third, FDA’s action in making a public statement intended to elicit unlawful conduct that otherwise would not have occurred is an abdication of FDA’s responsibility to administer the FDCA.
Moreover, says KV, even if Chaney applies, “its rebuttable presumption of unreviewability is rebutted here” because the factors identified in the Supreme Court’s decision as supporting enforcement discretion, such as enforcement priorities and quality of evidence, are absent. “FDA’s Statement does not invoke any of the factors to which enforcement discretion applies.”