Generic COZAAR/HYZAAR 180-Day Exclusivity Litigation Update – FDA Files Motion to Dismiss; Apotex Seeks to Intervene; Teva Replies

By Kurt R. Karst –      

We recently reported on a Complaint and a Motion for Preliminary Injunction Teva Pharmaceuticals USA, Inc. (“Teva”)  filed in the U.S. District Court for the District of Columbia against FDA concerning 180-day exclusivity forfeiture for generic versions of Merck & Co., Inc.’s (“Merck’s”) blockbuster angiotensin II receptor antagonist drugs COZAAR (losartan potassium) Tablets and HYZAAR (hydrochlorothiazide; losartan potassium) Tablets.  Although FDA has made no determination with respect to generic COZAAR and HYZAAR 180-day exclusivity, Teva is challenging FDA’s interpretation of the “failure to market” 180-day exclusivity forfeiture provisions at FDC Act § 505(j)(5)(D)(i)(I), and in particular, FDA’s interpretation of the patent information withdrawal provision at FDC Act § 505(j)(5)(D)(i)(I)(bb)(CC), which was added to the law in December 2003 by the Medicare Modernization Act (“MMA”).  This provision, which Teva terms as the “Delisting Rule” in its court papers, is used to determine whether a “first applicant” that is eligible for 180-day exclusivity has forfeited such eligibility.  According to Teva, FDA’s interpretation of the Delisting Rule, as stated and applied in recent 180-day exclusivity forfeiture decisions (here and here) is unlawful, “open[s] the proverbial floodgates to manipulative, exclusivity-divesting patent delistings by brand manufacturers,” and “abrogate[s] the longstanding prohibition against such delistings that Ranbaxy recognized.”  (In Ranbaxy Labs. Ltd. v. Leavitt, the U.S. Court of Appeals for the District of Columbia Circuit held in 2006 in a pre-MMA case that FDA may not condition the delisting of a patent on the existence of patent litigation and deprive an ANDA applicant eligible for 180-day exclusivity of such exclusivity.)

Earlier this month, FDA filed a Motion to Dismiss the case on several grounds – specifically, that Teva is not challenging final agency action, Teva’s claims are not ripe, Teva has not suffered sufficient injury for Article III standing, and Teva has failed to exhaust administrative remedies.  According to FDA:

In an attempt to avoid these major flaws in its case, Teva argues that an FDA decision regarding another generic drug that was approved by FDA in May 2008 – which is not manufactured by Teva – constitutes a “rule” that Teva is entitled to challenge in this Court.  Teva is thus asking this Court to declare that this decision – made in an informal adjudication, not a rulemaking – constitutes a “rule” subject to judicial review, and then to declare that this “rule” will be used by FDA to improperly deny Teva 180 days of marketing exclusivity when Teva’s generic products are eligible for approval next year. The decision FDA made in the context of another generic drug application, however, is not “rule.”  Teva has failed to demonstrate the basic prerequisites necessary to bring a case in this Court: final agency action and a ripe, actual injury.  Significantly, this Court recently faced essentially the same issue in the same context; i.e., a generic drug manufacturer sued FDA before FDA had taken final action on its application because it wanted to know ahead of time whether it would receive 180 days of marketing exclusivity.  Hi-Tech Pharmacal Co., Inc. v. FDA, 587 F. Supp.2d 1 (D.D.C. 2008). (Teva participated as amicus in Hi-Tech).  There, Judge Bates had no trouble recognizing that the case presented no final agency action: “Hi-Tech is not entitled to judicial review of the interpretation and application of the exclusivity forfeiture provisions of the Medicare Modernization Act until the FDA itself first interprets and applies those provisions with respect to Hi-Tech’s ANDA – i.e., until there is final agency action.”  Id. at 8.

So too here. Teva has failed to challenge a final agency action under the Administrative Procedure Act (“APA”), and presents no ripe injury to this Court.  There is therefore no final, ripe action for Teva to challenge under the APA, much less any justification to grant its request for emergency relief, and Teva’s complaint should be dismissed and its motion for preliminary injunction denied.

Teva fires back in ite reply brief that “FDA makes no effort to defend its Delisting Rule on the merits.  Instead, it mounts a kitchen-sink attack on the Court’s jurisdiction to consider the merits at all. . . .”  With respect to FDA’s position that its interpretation of FDC Act § 505(j)(5)(D)(i)(I)(bb)(CC) is not a rule and that there is no final agency action, Teva argues that:

there is no basis for FDA’s insistence that this Court lacks statutory jurisdiction to consider Teva’s claims under the APA because the Agency has not taken any “final action” with respect to Teva’s ANDA or Teva’s exclusivity. As a threshold matter, that argument misses the point: Teva is not challenging FDA’s failure to approve Teva’s ANDA or its failure to announce that Teva is entitled to 180-day exclusivity. Instead, it is challenging the Delisting Rule on its own terms – as a final agency action that definitively fixes the parties’ rights and obligations and thereby already has harmed Teva. 

FDA tries to get around this point by arguing that the Delisting Rule is not really a “rule” because it allegedly lacks “legislative” or “future effect.” FDA Br. at 16. But regardless of whether the Delisting Rule is called a “rule” or an “order,” it is a final agency action subject to review under the APA. And in any event, the D.C. Circuit long has made clear that the relevant inquiry is a “practical” one that seeks simply to determine whether a given agency pronouncement functionally “binds” the parties or the agency – either because it appears to be binding on its face or because the agency itself treats the rule as binding in practice.  Gen. Elec. Co. v. EPA, 290 F.3d 377, 383 (D.C. Cir. 2002). The Delisting Rule meets both of these independent tests. On its face, the Delisting Rule speaks in broad and unqualified terms, declaring that the delisting trigger applies “whenever” a brand manufacturer seeks to delist a patent and, thus, even when doing so would divest the first applicant of its right to exclusivity.  Acarbose Dec. at 8; COSOPT® Dec. at 14 & n.15.  And in practice, FDA already has given the Delisting Rule future effect: after announcing that rule in the acarbose matter, it rejected Hi-Tech’s efforts to evade the rule in the COSOPT® matter because it deemed the relevant issues settled.  COSOPT® Dec. at 14 & n.15. [(Emphasis in original)]

Apotex, Inc. (“Apotex”) is also seeking to intervene in the case as a defendant.  The company recently submitted a Motion to Intervene and a brief in opposition to Teva’s motion for preliminary injunctive relief.  Apotex argues that Teva’s motion for a preliminary injunction should be denied, because it does not meet the standards for injunctive relief.  With respect to the forfeiture of 180-day exclusivity under the “failure-to-market” provisions, Apotex argues that Teva’s reliance on Ranbaxy is misplaced, and that although the MMA forfeiture provisions are complex, their “complexity should not be allowed to obscure its plain meaning” and result – “Teva has forfeited its eligibility for exclusivity.”

Teva opposes Apotex’s intervention, arguing that Apotex “has no business assuming party status, because it has no legal standing to exercise the rights to which intervening parties otherwise are entitled.”  Instead, Teva states that “[i]f Apotex would like to express its views on the merits, it is free to participate as an amicus curiae.”  Indeed, this is the route Teva took in a recent forfeiture case.

A preliminary injunction hearing in the case is set for July 13, 2009 at 3:15 PM in Courtroom 2 before Judge Rosemary M. Collyer.