Ferring Pharmaceuticals, Inc. v. Burwell ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
FERRING PHARMACEUTICALS, INC., :
:
Plaintiff, : Civil Action No.: 15-0802 (RC)
:
v. : Re Document Nos.: 30, 35, 36, 37, 38,
: 39, 40, 41, 42, 48,
SYLVIA M. BURWELL, et al., : 49, 53, 57
:
Defendants. :
MEMORANDUM OPINION
GRANTING PLAINTIFF’S MOTION FOR RECONSIDERATION; DENYING AS MOOT
PAR PHARMACEUTICAL, INC.’S MOTION TO INTERVENE; DENYING AS MOOT THE PARTIES’
RENEWED MOTIONS FOR SUMMARY JUDGMENT; DENYING AS MOOT PAR PHARMACEUTICAL,
INC.’S MOTION FOR SUMMARY JUDGMENT; GRANTING THE PARTIES’ MOTIONS TO SEAL;
AND DENYING PAR PHARMACEUTICAL, INC.’S MOTION FOR A PROTECTIVE ORDER
I. INTRODUCTION
Plaintiff Ferring Pharmaceuticals, Inc. (“Ferring”) is the manufacturer of PREPOPIK, a
fixed-dose combination drug product that contains three drug substances: sodium picosulfate,
magnesium oxide, and anhydrous citric acid. When it submitted a New Drug Application
(“NDA”) for PREPOPIK to the U.S. Food and Drug Administration (“the FDA”), Ferring sought
a five-year period of marketing exclusivity because one of the drug substances, sodium
picosulfate, had never previously been approved in a NDA. The Federal Food, Drug, and
Cosmetics Act (“FDCA”) provides for a five-year period of marketing exclusivity when a drug
application is approved “for a drug, no active ingredient (including any ester or salt of the active
ingredient) of which has been approved in any other application.” 21 U.S.C. § 355(j)(5)(F)(ii).
During that five-year period, “no application may be submitted . . . which refers to the drug for
which the subsection (b) application was submitted.” Id. Because PREPOPIK’s other two active
ingredients had previously been approved for market, the FDA applied its then-existing
interpretation of the FDCA and determined that PREPOPIK was not entitled to a five-year period
of marketing exclusivity because the finished “drug product” included active ingredients that had
previously been approved in other drug products. Ferring filed a Citizen Petition challenging the
FDA’s interpretation and, in response, the FDA—acknowledging the policy concerns Ferring
and two other pharmaceutical companies raised regarding the agency’s interpretation—concluded
that the FDCA could reasonably be read to refer to “drug substances” (the individual active
ingredients of the drug). The FDA announced that it would change its interpretation and permit
five-year exclusivity for fixed-combination drug products that contained a novel drug substance,
even if that drug product also contained other previously approved drug substances. But the
FDA also concluded that it would apply its interpretation only prospectively, and declined to
alter its exclusivity determination for PREPOPIK.
Ferring challenged the FDA’s prior interpretation as contrary to the plain language of the
FDCA, or an unreasonable interpretation of statutory ambiguity, under Chevron, U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). In an earlier Memorandum
Opinion, the Court held that the FDA’s prior interpretation was a reasonable interpretation of the
FDCA’s ambiguous language under Chevron Step Two, and that the interpretation was not
arbitrary and capricious. See Ferring Pharm., Inc. v. Burwell, --- F. Supp. 3d ----, No. 15-0802,
2016 WL 1060199, at *7–14 (D.D.C. Mar. 15, 2016). At that time, the Court declined to reach
Ferring’s claim that, even if the FDA’s prior interpretation was permissible, the agency’s refusal
to apply its new interpretation retroactively was arbitrary and capricious. Id. at *14–15. The
Court noted that, at the administrative level, the FDA’s initial response to Ferring’s Citizen
Petition had cited the D.C. Circuit’s decision in Retail, Wholesale & Department Store Union v.
2
NLRB, 466 F.2d 380 (D.C. Cir. 1972) as support for its retroactivity conclusion. See Ferring,
2016 WL 1060199, at *14. The Court directed the parties to file renewed motions for summary
judgment addressing that line of cases. See id. at *15.
The parties have now filed those renewed motions for summary judgment. In addition,
Ferring has moved for reconsideration of one aspect of the Court’s Memorandum Opinion. And,
in the midst of briefing, Par Pharmaceutical, Inc., a company that has filed an Abbreviated New
Drug Application (“ANDA”) for approval to market a generic version of PREPOPIK, filed a
motion to intervene and a related motion for a protective order. As explained below, the Court
will grant Ferring’s motion for reconsideration, deny as moot Par’s motion to intervene and the
parties’ renewed summary judgment motions, and deny Par’s motion for a protective order.
II. FACTUAL BACKGROUND
The Court previously surveyed the relevant statutory and factual background in full, and
assumes familiarity with its prior Memorandum Opinion.
A. Statutory Background
The FDCA requires that all new prescription drugs be approved by the FDA before they
can be marketed. See 21 U.S.C. § 355(a). Generally, when a pharmaceutical manufacturer
submits an NDA for approval, it must support that application with full reports of clinical studies
that demonstrate that the product is safe and effective. See id. § 355(b). In 1984, Congress
enacted the Hatch-Waxman Amendments, which “created a new system for protecting both the
interests of drug manufacturers who produce new drugs and the interests of generic drug
manufacturers and their consumers.” Abbott Labs. v. Young, 920 F.2d 984, 985 (D.C. Cir. 1990);
see Drug Price Competition and Patent Term Restoration Act, Pub. L. No. 98-417, 98 Stat. 1585
(1984). The amendments simplified the approval process of generic versions of a previously
3
approved drug by providing for the submission of two new types of drug applications. In one,
called an Abbreviated New Drug Application (“ANDA”), a pharmaceutical manufacturer may
rely on the FDA’s finding that a previously approved drug—referred to as the “listed drug”—is
safe and effective, so long as the applicant can demonstrate that the proposed generic drug is the
“same as” the reference listed drug in several essential respects. See generally 21 U.S.C.
§ 355(j)(2)(A). In the other, called a “505(b)(2) application,” a pharmaceutical manufacturer
may rely on investigations that “were not conducted by or for the applicant and for which the
applicant has not obtained a right of reference or use from the person by or for whom the
investigations were conducted” to show that the drug is safe and effective. Id. § 355(b)(2).
Notwithstanding the availability of these less onerous approval avenues, Congress also
put in place incentives to promote the development of new drugs. As relevant to this case, the
Hatch-Waxman Amendments established a five-year marketing exclusivity period for certain
types of drugs, protecting a manufacturer from the submission of an ANDA or 505(b)(2)
application and, thus, from generic competition. As amended, the FDCA provides that:
If an application submitted under subsection (b) of this section [21 U.S.C. § 355(b)] for
a drug, no active ingredient (including any ester or salt of the active ingredient) of
which has been approved in any other application under subsection (b) of this
section, is approved after September 24, 1984, no application may be submitted
under this subsection [concerning ANDAs] which refers to the drug for which the
subsection (b) application was submitted before the expiration of five years from
the date of the approval of the application under subsection (b) of
this section . . . .
Id. § 355(j)(5)(F)(ii); see id. § 355(c)(3)(E)(ii) (parallel provision providing the same five-year
exclusivity period to prevent the filing of a 505(b)(2) application).
Even if a drug is not eligible for a five-year period of marketing exclusivity, the Hatch-
Waxman Amendments provide for a shorter, three-year period of exclusivity for certain changes
to previously approved drugs. If an applicant submits one or more new clinical studies in
4
support of a change in the conditions of an approved drug’s use, the FDCA confers a three-year
period of marketing exclusivity, so long as the FDA considers those studies to have been
essential to the agency’s approval of the change. 21 U.S.C. § 355(j)(5)(F)(iii); see also id.
§ 355(c)(3)(E)(iii). Unlike the five-year exclusivity provision, which prohibits the FDA from
even accepting an application during the exclusivity period, the three-year exclusivity provision
only precludes the FDA from making a new ANDA or 505(b)(2) application effective before the
end of the three-year period. Compare id. § 355(j)(5)(F)(ii), with id. § 355(j)(5)(F)(iii).
The two clauses of the five-year exclusivity provision relevant to this case are what the
parties refer to as the “eligibility” and the “bar” clauses. See A.R. at 203, ECF No. 26-4; Pl.’s
Mem. Supp. Summ. J. at 13 (“Pl.’s Mem. Supp.”), ECF No. 20-1. The “eligibility clause”
describes whether a drug is eligible for five-year exclusivity. To be eligible, a drug must be “a
drug, no active ingredient (including any ester or salt of the active ingredient) of which has been
approved in any other application under subsection (b) of [§ 355].” 21 U.S.C. § 355(j)(5)(F)(ii).
If a drug meets that requirement, it will bar the types of ANDAs or 505(b)(2) applications
identified in the “bar clause.” Specifically, “no application may be submitted . . . which refers to
the drug for which the subsection (b) application was submitted before the expiration of five
years from the date of the approval of the application.” Id. (emphasis added).
The meaning of the word “drug” as used in the five-year exclusivity provision (or the
other exclusivity provisions, for that matter) is not defined in section 355. Until recently, the
FDA read the term “drug” in the “eligibility clause” to refer to a finished “drug product”—that
is, “a finished dosage form, for example, tablet, capsule, or solution, that contains a drug
substance, generally, but not necessarily, in association with one or more other ingredients.”
21 C.F.R. § 314.3(b). The FDA codified its interpretation of the five-year exclusivity provision
5
in 21 C.F.R. § 314.108, proposed in 1989 and finalized in 1994.1 See Abbreviated New Drug
Application Regulations, 54 Fed. Reg. 28,872 (July 10, 1989) [hereinafter “Proposed Rule”]; see
also Abbreviated New Drug Application Regulations; Patent and Exclusivity Provisions, 59 Fed.
Reg. 50,338 (Oct. 3, 1994) [hereinafter “Final Rule”].
At the time it promulgated the regulation, however, the FDA acknowledged that the
statute posed a potential problem for the exclusivity holder, and that the Act “is ambiguous as to
which ANDA[s] or 505(b)(2) applications are affected by an innovator’s exclusivity.” Proposed
Rule, 54 Fed. Reg. at 28,897. Specifically, under a narrow interpretation of the “bar clause,” in
which the “protection offered by exclusivity is that exclusivity covers only specific drug
products . . . , an innovator’s exclusivity could lose its value as soon as FDA approved a second
full new drug application for a version of the drug.” Id. That is because “an ANDA could be
approved by reference to the second approved version of the drug”—a separate drug
product—“which would not be covered by exclusivity.” Id. (emphasis added). Thus,
“[d]epending upon the meaning of the phrase ‘refer to’ and the word ‘drug,’” the FDA was
concerned that the five-year exclusivity provision and the other exclusivity provisions in the
Hatch-Waxman Amendments “could be interpreted to allow ANDA[s] and 505(b)(2) applicants,
once FDA approved subsequent new drug applications for different versions of the same drug, to
1
The regulation provides that:
If a drug product that contains a new chemical entity was approved after
September 24, 1984, in an application submitted under section 505(b) of the act,
no person may submit a 505(b)(2) application or abbreviated new drug
application under section 505(j) of the act for a drug product that contains the
same active moiety as in the new chemical entity for a period of 5 years from the
date of approval of the first approved new drug application . . . .
21 C.F.R. § 314.108(b)(2).
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circumvent the innovator’s exclusivity by ‘referring to’ the subsequent versions of the
innovator’s drug.” Id.
By contrast, FDA noted that a possible “broader interpretation” of the bar clause “is that
it covers the active moieties in new chemical entities . . . rather than covering only specific drug
products,” which “would protect the new active moiety of a new chemical entity . . . from
generic competition even after FDA had approved subsequent full new drug applications for
subsequent versions of the drug.”2 Id. Because the FDA did not “believe that Congress intended
the exclusivity provisions to discourage innovators from making improvements in their drug
products nor from authorizing the marketing of competitive products,” the FDA concluded that
the “broader interpretation of the scope of exclusivity should be applied.” Id. The FDA has
coined this interpretation its “umbrella policy,” which it describes as providing that “5-year NCE
[new chemical entity] exclusivity does not attach only to the first approved drug product that was
eligible for 5-year NCE exclusivity, but also to the line of products containing the same active
moiety.” A.R. at 206. And, although it is not quite spelled out in the proposed rule’s preamble,
the FDA now acknowledges that its umbrella policy resulted from the agency’s interpretation of
“drug” in the bar clause to mean “drug substance.” Id. at 225. A “[d]rug substance” is defined
in relevant part as “an active ingredient that is intended to furnish pharmacological activity or
other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease or to
affect the structure or any function of the human body.” 21 C.F.R. § 314.3(b).
2
An active moiety is defined as “the molecule or ion, excluding those appended portions
of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or
coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of
the molecule, responsible for the physiological or pharmacological action of the drug substance.”
21 C.F.R. § 314.108(a).
7
Taken together, then, prior to 2014, the FDA interpreted the five-year exclusivity
provision to provide that only drug products containing no previously approved drug substances
were eligible for exclusivity. Once eligible, however, the FDA interpreted the bar clause to bar
all ANDAs and 505(b)(2) applications referencing that drug product or any later-approved
products containing the product’s drug substances, in order to preserve the innovator’s
exclusivity to the greatest extent possible.
B. Factual & Procedural History
Ferring’s drug product PREPOPIK is intended for use in cleansing the colon in
preparation for colonoscopy in adults. Compl. ¶ 32, ECF No. 2. PREPOPIK is a fixed-dose
combination drug product. Id. Fixed-dose combination drug products “generally include two or
more drug substances (active ingredients) in a fixed ratio, synthetically combined in a single
dosage form.” A.R. at 200. PREPOPIK in fact contains three different active ingredients:
sodium picosulfate, magnesium oxide, and anhydrous citric acid. Id. at 201; Compl. ¶ 32. Two
of these ingredients, magnesium oxide and anhydrous citric acid, had previously been approved
in an NDA. By contrast, sodium picosulfate, a stimulant laxative, had never previously been
approved in any NDA. A.R. at 201. Because sodium picosulfate constituted a new drug
substance, Ferring sought five-year exclusivity for PREPOPIK when it submitted its NDA. See
Pl.’s Mot. Summ. J. Ex. 3 at 2, ECF No. 20-6. Ferring alleges that it was unable to seek a NDA
for sodium picosulfate as a single-ingredient drug product because picosulfate’s therapeutic
benefit is realized only in combination with the other active ingredients. A.R. at 70, ECF
No. 26-2. Ferring points out that the FDA did not require factorial studies—which are employed
to evaluate the contribution of each of a drug product’s individual substances to the drug’s
overall efficacy—because of “serious ethical concerns” that “each component as a stand alone
8
would result in inadequate colon cleansing for colonoscopy.” Pl.’s Mot. Summ. J. Ex. 2 at 40,
ECF No. 20-5; A.R. at 70.
The FDA approved Ferring’s NDA for PREPOPIK on July 16, 2012, see Compl. ¶ 33;
A.R. at 201, but, consistent with its interpretation of the five-year exclusivity provision, the FDA
only awarded Ferring three-year exclusivity because the drug product contained two active
moieties (magnesium oxide and anhydrous citric acid) that had previously been approved. See
Pl.’s Mot. Summ. J. Ex. 3 at 3; A.R. at 201. Ferring submitted a Citizen Petition on January 29,
2013 requesting that the FDA change its exclusivity determination. A.R. at 64. Two other
pharmaceutical companies filed similar Citizen Petitions around the same time. See generally id.
at 98–140, ECF No. 26-3; id. at 144–58. In short, Ferring argued that the FDA’s denial of five-
year exclusivity was inconsistent with Congress’s intent in passing the Hatch-Waxman
Amendments, as discerned from the relevant legislative history, id. at 70–76, and that the
interpretation also conflicted with various other FDA policies, id. at 76–94.
On February 21, 2014, the FDA issued a single response to all three companies’ Citizen
Petitions. Id. at 199. In that response, the FDA summarized its prior interpretation of the FDCA
and its own regulation. Id. at 207–09. Although the FDA stated that it believed its “current
interpretation of the relevant statute and regulations is permissible,” the agency acknowledged
that “Petitioners have articulated an alternative interpretation of the relevant statute and
regulations that would also be permissible,” and asserted that “in either the eligibility or the bar
clause, FDA may reasonably interpret ‘drug’ narrowly to mean ‘drug product’ or broadly to
mean ‘drug substance.’” Id. at 212. The agency further explained that “recent changes in drug
development, particularly in the field of fixed-combination development in the last 20 years, and
the importance of fixed-combinations to key therapeutic areas—such as HIV, cardiovascular
9
disease, tuberculosis, and cancer—warrant[ed] revising [its] current policy,” particularly as
“fixed-combinations containing new active moieties are becoming more prevalent in drug
development.” Id. The FDA conceded that its existing interpretation “may result in drug
development strategies that are suboptimal from a public health perspective” because if sponsors
“prefer to submit two NDAs”—one for a single-entity drug containing the new active moiety and
another for a combination product—“undue importance” may be placed on “the order in which
these two NDAs are approved.” Id. at 213–14. Additionally, “in some situations, such a strategy
may not be available if a new active moiety does not clinically lend itself to approval in a single-
entity drug product.” Id. at 214.
As a result, the FDA “agree[d] that the increasing importance of fixed-combinations for
certain therapeutic areas means that it would be in the interest of public health to encourage the
development of fixed-combinations as a policy matter,” and determined that “[o]ne way to
accomplish this goal would be to adopt a new interpretation of the relevant statutory and
regulatory authorities that would encourage the development of fixed-combinations that contain
novel drug substances . . . irrespective of whether the fixed-combination also includes a drug
substance that contains a previously approved active moiety or moieties.” Id. at 214. To that
end, the FDA issued draft guidance and proposed to seek public comment on a new
interpretation which would “recognize 5-year NCE exclusivity for a drug substance that does not
contain a previously approved active moiety, even where such a drug substance is approved in a
fixed-combination with another drug substance that contains at least one previously approved
active moiety.” Id.
Despite proposing to alter its interpretation of the five-year exclusivity provision, the
FDA declined to recognize five-year exclusivity for PREPOPIK and the other drugs sponsored
10
by the companies that had filed the Citizen Petitions. See id. at 216. The agency concluded that
“[e]xclusivity runs from the date of approval of a product,” and noted that the agency’s existing
interpretation had been in effect when the drugs at issue were approved. Id. at 215. The agency
based its decision on several factors, including that its “existing interpretation of these provisions
is longstanding and has been consistently applied in many prior cases presenting similar facts,”
that the agency wished to “avoid any unnecessary disruptions to the regulated industry,” and that
the new interpretation “could impose a burden on the ANDA sponsors, who relied on [the
agency’s] existing interpretation in filing their applications.” Id. The agency also concluded that
applying its new interpretation to the companies’ drugs would not further the goals of the Hatch-
Waxman Amendments because the products had “already . . . been developed and approved.” Id.
Ferring filed a Petition for Reconsideration and Petition for Stay, arguing that the FDA’s
new interpretation is the correct one—indeed, the only one in line with congressional intent—and
that, in any event, it was arbitrary and capricious for the agency to decline to apply its new
interpretation to Ferring’s products. See id. at 1–42. The FDA denied that petition. See id.
at 829–42.
Ferring then initiated this APA action, alleging that the FDA’s action was contrary to the
FDCA and the agency’s own regulations, and that its decision was arbitrary and capricious, in
violation of 5 U.S.C. § 706(2)(A). See Compl. ¶¶ 58–71. In its prior Memorandum Opinion, the
Court rejected many of these claims. The Court first held that the term “drug” as used in the
FDCA was ambiguous at Chevron Step One. See Ferring, 2016 WL 1060199, at *7–9. At
Chevron Step Two, the Court concluded that the FDA’s construction of the statute was
reasonable and served the FDCA’s purpose, even though that interpretation read the term “drug”
in the eligibility and bar clauses to have different meanings. Id. at *9–12. The Court similarly
11
rejected Ferring’s argument that the interpretation was arbitrary and capricious. Id. at *12–14.
Specifically, the Court rejected Ferring’s contention that the FDA’s interpretation and umbrella
policy, in combination, created circumstances in which a drug substance’s eligibility for the five-year
exclusivity period turned arbitrarily on the order in which NDAs were approved. Id. at *13. The
Court conceded that “[i]f there were, in fact, situations in which a drug was eligible for five-year
exclusivity under the FDA’s prevailing interpretation but failed to receive it because of the order
in which it was approved, those circumstances might render the FDA’s policy arbitrary and
capricious.” Id. But, as the Court explained, in each of the examples Ferring identified a drug
substance was first approved as a single-entity product and then only later approved as part of a
fixed-combination drug product—in other words, in “a straightforward application of the FDA’s
umbrella policy.” Id.
Finally, the Court declined to rule on the question of whether the FDA acted arbitrarily
and capriciously in refusing to apply its new interpretation retroactively. Id. at *14–15. The
Court explained that, although the parties’ memoranda cited little law on this question, at the
administrative level the FDA had relied on the D.C. Circuit’s decision in Retail, Wholesale &
Department Store Union v. NLRB, 466 F.2d 380 (D.C. Cir. 1972)—a decision that the D.C.
Circuit has described as “provid[ing] the framework for evaluating retroactive applications of
rules announced in agency adjudications.” Ferring, 2016 WL 1060199, at *14 (quoting Clark-
Cowlitz Joint Operating Agency v. FERC, 826 F.2d 1074, 1081 (D.C. Cir. 1987) (en banc)). The
Court therefore ordered the parties to “file renewed motions for summary judgment that more
fully address the retroactivity issue.” Id. at *15.
Ferring has since moved for reconsideration of the Court’s determination that the FDA’s
prior interpretation of the five-year exclusivity provision was not arbitrary and capricious. See
12
Pl.’s Mot. Recons., ECF No. 39. Ferring now identifies several examples that, Ferring claims,
demonstrate that a single-entity drug substance’s ability to receive five-year exclusivity can turn
arbitrarily on the order in which NDAs including that drug substance are approved. See Pl.’s
Mem. Supp. Mot. Recons. at 1–3 (“Pl.’s Mem. Supp. Recons.”), ECF No. 39-1. In addition, the
parties have filed their renewed motions for summary judgment, analyzing whether the FDA
should have applied its new interpretation of the five-year exclusivity provision retroactively to
Ferring’s benefit. See generally Defs.’ Renewed Cross-Mot. Summ. J., ECF No. 37; Pl.’s
Renewed Mot. Summ. J., ECF No. 38.
Since the Court issued its Memorandum Opinion, Par Pharmaceutical, Inc. (“Par”) has
also filed a motion to intervene.3 See Par Pharmaceutical, Inc.’s Mot. Intervene (“Par’s Mot.
Intervene”), ECF No. 35. Par has developed and submitted an ANDA seeking FDA approval of
a generic version of PREPOPIK. Id. at 2. Moreover, Par is a “First Applicant” for a generic
version of PREPOPIK, which means that the company is eligible for a 180-day period of generic
market exclusivity before the FDA would be able to approve competing generic versions of
PREPOPIK. Id.; see 21 U.S.C. § 355(j)(5)(B)(iv)(II)(bb). On February 20, 2015—before this
lawsuit was filed—Ferring filed a patent-infringement action against Par in the United States
District Court for the District of Delaware, which remains pending. See Complaint, Ferring
Pharmaceuticals, Inc. v. Par Pharmaceutical, Inc., No. 15-cv-00173 (D. Del. Feb. 20, 2015),
ECF No. 1. Par now seeks to interve as a matter of right under Federal Rule of Civil Procedure
24(a)(2) or permissive intervention under Rule 24(b)(1)(B). See Par’s Mot. Intervene at 1. Par
3
As discussed infra in Part III.B, Par claims that its motion to intervene and other filings
contain sensitive and confidential business and financial information, and thus has moved to file
these documents under seal. Unless otherwise noted, the Court will cite to the redacted versions
of Par’s filings.
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also seeks a protective order to keep confidential certain information it claims constitutes
proprietary business information. See Movant-Intervenor Par Pharmaceuticals Inc.’s Mot.
Protective Order, ECF No. 36. In addition, Par has anticipatorily filed a motion for summary
judgment discussing the retroactivity question. See generally Par Pharmaceutical, Inc.’s Mot.
Summ. J., ECF No. 41. Ferring opposes Par’s motion to intervene, motion for a protective order,
and motion for summary judgment.
III. ANALYSIS
A. Ferring’s Motion for Reconsideration
The Court first considers Ferring’s motion asking the Court to reconsider its conclusion that
the FDA’s prior interpretation of the five-year exclusivity provision was not arbitrary and capricious.
1. Legal Standard
A district court has “broad discretion to hear a motion for reconsideration brought under
Rule 54(b).” Isse v. Am. Univ., 544 F. Supp. 2d 25, 29 (D.D.C. 2008). While different
jurisdictions “‘apply a variety of different standards when confronted with a motion for
reconsideration,’ this jurisdiction has established that reconsideration is appropriate ‘as justice
requires.’” Lyles v. District of Columbia, 65 F. Supp. 3d 181, 188 (D.D.C. 2014) (citation
omitted) (quoting Cobell v. Norton, 355 F. Supp. 2d 531, 539 (D.D.C. 2005)). “[A]sking ‘what
justice requires’ amounts to determining, within the Court’s discretion, whether reconsideration
is necessary under the relevant circumstances.” Cobell, 355 F. Supp. 2d at 539. “Considerations
a court may take into account under the ‘as justice requires’ standard include whether the court
‘patently’ misunderstood the parties, made a decision beyond the adversarial issues presented,
made an error in failing to consider controlling decisions or data, or whether a controlling or
significant change in the law has occurred.” Isse, 544 F. Supp. 2d at 29. In general, “a court will
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grant a motion for reconsideration of an interlocutory order only when the movant demonstrates:
(1) an intervening change in the law; (2) the discovery of new evidence not previously available;
or (3) a clear error in the first order.” Stewart v. Panetta, 826 F. Supp. 2d 176, 177 (D.D.C.
2001) (quoting Zeigler v. Potter, 555 F. Supp. 2d 126, 129 (D.D.C. 2008)).
Cobell also suggests that, because “the decision whether to reconsider its interlocutory
rulings is within the Court’s discretion,” the Court “may nevertheless elect to grant a motion for
reconsideration if there are other good reasons for doing so,” even “if the appropriate legal
standard does not indicate that reconsideration is warranted.” 355 F. Supp. 2d at 540; accord
Isse, 544 F. Supp. 2d at 29. The district court’s discretion is limited, however, “by the law of the
case doctrine and ‘subject to the caveat that where litigants have once battled for the court’s
decision, they should neither be required, nor without good reason permitted, to battle for it
again.’” Singh v. George Wash. Univ., 383 F. Supp. 2d 99, 101 (D.D.C. 2005) (quoting In re Ski
Train Fire in Kaprun, Austria, on Nov. 11, 2004, 224 F.R.D. 543, 546 (S.D.N.Y. 2004)).
In addition to showing a clear error, a change in the law, the discovery of new evidence,
or another good reason to grant the motion, the party seeking reconsideration must also show that
“some harm would accompany a denial of the motion to reconsider.” Isse, 544 F. Supp. 2d at 29.
For “justice to require reconsideration, logically, it must be the case that, some sort of ‘injustice’
will result if reconsideration is refused.” Cobell, 355 F. Supp. 2d at 540.
2. Analysis
In its first motion for summary judgment, Ferring argued that the FDA’s prior
interpretation of the five-year exclusivity provision was arbitrary and capricious because, in
combination with the agency’s umbrella policy, it created circumstances in which a drug
substance’s eligibility for exclusivity turned arbitrarily on the order in which NDAs were
15
approved. See Pl.’s Mem. Supp. Summ. J. at 25–27, ECF No. 20-1. Ferring pointed to several
examples in which a NDA for a single-entity version of a drug substance was approved shortly
before a NDA for a fixed-combination drug product, which then was able to share in the single-
entity’s exclusivity period as a result of the umbrella policy. Id. at 25–26. Ferring hypothesized
that in each such case, “if the order of the approvals had been reversed and the fixed-dose
combination drug product had been approved just hours before the single-ingredient product,
none of the products would have been awarded NCE exclusivity, because each would have
contained a previously approved active ingredient.” Id. at 26 (emphasis in original).
In order to “satisfy the arbitrary and capricious standard” an agency “must treat similar
cases in a similar manner unless it can provide a legitimate reason for failing to do so.” Indep.
Petroleum Ass’n of Am. v. Babbitt, 92 F.3d 1248, 1258 (D.C. Cir. 1996). The scope of a court’s
“arbitrary and capricious” review “is narrow” and “a court is not to substitute its judgment for
that of the agency.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Ins. Co., 463 U.S. 29, 43
(1983). To satisfy the standard, an agency “must examine the relevant data and articulate a
satisfactory explanation for its action including a ‘rational connection between the facts found
and the choice made.’” Id. (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168
(1962)). Arguments that an agency has acted arbitrarily and capriciously and that an agency’s
interpretation fails Chevron Step Two “overlap,” Nat’l Ass’n of Broad. v. FCC, 789 F.3d 165,
171 (D.C. Cir. 2015), and a court’s analysis is “often ‘the same, because under Chevron step two,
[the court asks] whether an agency interpretation is arbitrary or capricious in substance,’” Agape
Church, Inc. v. FCC, 738 F.3d 397, 410 (D.C. Cir. 2013) (quoting Judulang v. Holder, 132 S. Ct.
476, 483 n.7 (2011)).
16
In its prior Memorandum Opinion, the Court believed that the sequence Ferring identified
was simply a necessary outgrowth of the FDA’s umbrella policy: that is, manufacturers generally
developed a new, novel drug substance, obtained approval of that drug substance in a single-entity
version, and then sought protection under the umbrella policy for any later drug products which
incorporated that novel drug substance with other, previously approved drug substances. See
Ferring, 2016 WL 1060199, at *13. The Court noted that “[i]f there were, in fact, situations in
which a drug was eligible for five-year exclusivity under the FDA’s prevailing interpretation but
failed to receive it because of the order in which it was approved, those circumstances might
render the FDA’s policy arbitrary and capricious.” Id. But the Court explained that in each of
the examples Ferring specifically raised in its memorandum, the NDA for each of the single-entity
drug products was submitted well before the NDA for the relevant combination-drug product.
Id. The Court found that this general progression—from single-entity versions to incorporation
in a fixed-combination drug product—accorded with the umbrella policy’s effort to ensure that
innovators would not be discouraged from “making improvements in their drug products.” Id.
(quoting Proposed Rule, 54 Fed. Reg. at 28,897). Thus, it appeared to the Court that the FDA
was not treating similarly situated drug substances differently and that there did not exist
examples in which the temporal sequence of drug product approvals was outcome determinative.
And, as the Court explained, Ferring’s PREPOPIK was not an apt comparator to any drugs
whose single-entity versions might have lost out on exclusivity. What distinguished PREPOPIK
was not the sequence in which the NDA was approved, but that its drug substance, sodium
picosulfate, could not ethically be tested (and therefore could not be approved) in a single-entity
form, and thus “was never even eligible for five-year exclusivity under the FDA’s prevailing
policy.” Id. (emphasis in original).
17
In its motion for reconsideration, however, Ferring now provides three examples that lead
the Court to doubt the factual basis for its prior conclusion. See Pl.’s Mem. Supp. Recons. at
1–3. In each instance, a drug substance that had never been previously approved was included as
part of a fixed-combination drug product (a fixed-combination drug product that did not receive
five-year exclusivity because it contained other, previously approved drug substances). Id. And,
in each case, a single-entity version of the drug substance was later approved, but did not receive
the benefit of a five-year exclusivity period, because the drug substance had been previously
approved as part of the fixed-combination product. Id.
Take, for example, Gilead Sciences, Inc.’s product STRIBILD. That product, approved
on August 27, 2012, contains four active ingredients: elvitegravir, cobicistat, emtricitabine, and
tenofovir disoproxil fumarate. A.R. at 201. When it was approved, emtricitabine and tenofovir
disoproxil fumarate had previously been approved as part of other drug products, but elvitegravir
and cobicistat had not. Id. For that reason, STRIBLID, like PREPOPIK, did not receive a five-
year period of marketing exclusivity. Id. at 216. Yet, unlike PREPOPIK’s sodium picosulfate,
elvitegravir and cobicistat could safely be used in single-entity forms. On September 24, 2014—over
two years after STRIBLID had been approved—those drug products were each approved in a
single-entity form.4 But because elvitegravir and cobicistat had already been approved as part of
4
See NDA Approval Letter from Debra Birnkrant, MD, Dir., Div. of Antiviral Prods.,
Ctr. for Drug Evaluation & Research, to Christophe Beraud, PhD, Gilead Sciences, Inc. (Sept.
24, 2014) (approving elvitegravir under brand name VITEKTA), available at
http://www.accessdata.fda.gov/drugsatfda_docs/appletter/2014/203093Orig1s000ltr.pdf; NDA
Approval Letter from Debra Birnkrant, MD, Dir., Div. of Antiviral Prods., Ctr. for Drug
Evaluation & Research, to Christophe Beraud, PhD, Gilead Sciences, Inc. (Sept. 24, 2014)
(approving cobicistat under brand-name TYBOST), available at http://www.accessdata.fda.gov/
drugsatfda_docs/appletter/2014/203094Orig2s000ltr.pdf.
18
STRIBLID, those drugs did not receive a five-year period of marketing exclusivity.5 A second
example is similar: Organon USA’s product NuvaRing contains the active ingredients ethinyl
estradiol and etonogestrel, only the former of which had previously been approved in another
product.6 When a single-entity version of etonogestrel was approved in July 2006, it did not
receive a five-year period of marketing exclusivity as a direct result of the approval of
NuvaRing.7 In both of these cases, the single-entity version of a drug substance, which was
approved second, lost out on a period of five-year exclusivity solely because that drug substance
had first been approved as part of a fixed-combination product.
These newly highlighted examples now show that, even if the FDA’s prior interpretation
is reasonable under Chevron Step Two from a conceptual standpoint, that interpretation produces
circumstances that fail to treat “similar cases in a similar manner.” Indep. Petroleum Ass’n of
Am., 92 F.3d at 1258. Indeed, this case is not unlike Abbott Laboratories v. Young, 920 F.2d 984
5
See Exclusivity Summary for NDA 203093 at 2 (denying five-year exclusivity for
single-entity product VITEKTA [elvitegravir] because the drug substance was contained in
STRIBLID), available at http://www.accessdata.fda.gov/drugsatfda_docs/nda/2014/
203093Orig1s000AdminCorres.pdf (page 3 of PDF document); Exclusivity Summary for NDA
203094 at 2–3 (denying five-year exclusivity for single-entity product TYBOST [cobicistat]
because the drug substance was contained NDA 203100 [for STRIBLID]), available at
http://www.accessdata.fda.gov/drugsatfda_docs/nda/2014/203094Orig1Orig2s000AdminCorres.
pdf (pages 3–4 of PDF document); see also U.S. Dep’t of Health & Human Servs., FDA,
Approved Drug Products with Therapeutic Equivalence Evaluations at ADA 65 (36th ed. 2016)
(listing exclusivity period for VITEKTA ending September 24, 2017—three years after
approval), available at http://www.fda.gov/downloads/drugs/developmentapprovalprocess/
ucm071436.pdf; id. at ADA 41 (same for TYBOST).
6
See NDA Approval Letter from Florence Houn, MD, MPH, FACP, Dir., Office of Drug
Evaluation III, Ctr. for Drug Evaluation & Research, to Edwina Muir, Organon, Inc. (approving
NuvaRing, containing active ingredients etonogestrel and ethinyl estradiol), available at
http://www.accessdata.fda.gov/drugsatfda_docs/appletter/2001/21187ltr.pdf.
7
See Exclusivity Summary for NDA 21-529 at 2–3 (denying five-year exclusivity for
single-entity etonogestrel product because the drug substance was contained in NuvaRing),
available at http://www.accessdata.fda.gov/drugsatfda_docs/nda/2006/
021529s000_AdminCorres.pdf.
19
(D.C. Cir. 1990). There, the D.C. Circuit considered a related provision of the Hatch-Waxman
Amendments’ exclusivity provisions which makes a drug eligible for exclusivity only if it has
“no active ingredient (including any ester or salt of the active ingredient) . . . which has been
approved in any other [NDA].’” Id. at 986 (alteration in original) (quoting then-current 21
U.S.C. § 355(j)(4)(D)(i)). In that case, Abbott Labs sought approval of a drug the active
ingredient of which was a salt form of a previously approved active ingredient. See id. at 986.
The D.C. Circuit was faced with interpreting the term “active ingredient,” among others, to
determine whether Abbott’s second application—for the salt form of a previously approved
active ingredient—should receive a period of exclusivity. See id. at 987–89.
After rejecting the government’s proffered interpretation, see id. at 988, the circuit also
rejected the interpretation Abbott Labs urged, which focused on active ingredient in the
second-approved application, alone, see id. at 988–89. Abbott Labs asserted that because the salt
form had not yet been approved (nor had an ester or salt of that salt), the active ingredient was
eligible for an exclusivity period. As the circuit explained, that reading would mean that a drug
with a salt as its active ingredient would be eligible for a period of exclusivity (because neither
the salt itself, nor an ester or salt-form of that salt would have been previously approved as an
active ingredient), notwithstanding the fact that the active ingredient was, itself, a salt of a
previously approved drug. Id. at 989. By contrast, if the order of approvals was switched—that
is, if the salt-form was approved before its non-salt form—the second application for the non-salt
form would not receive exclusivity because a salt of that active ingredient had been approved
previously. Id. Thus, it appeared to the circuit that under Abbott Labs’ interpretation a drug’s
eligibility for an exclusivity period depended on the “entirely serendipitous” incident of whether
the salt- or non-salt form of an active ingredient was approved first. Id. And the circuit pointed
20
out that it had “not been offered any scientific, technical, economic, or other explanation why
Congress would intend the grant of a ten year market exclusivity to depend on the temporal
sequence in which . . . applications were approved.” Id. (emphasis in original).
The temporal sequence in which drug applications are approved is similarly outcome
determinative here: under the FDA’s prior interpretation certain drug substances lost out on a
five-year period of marketing exclusivity solely because they had been first approved as part of a
fixed-combination drug product. To resist this conclusion, the FDA focuses on the fixed-combination
products in Ferring’s examples, arguing that the fixed-combination products were never,
themselves, eligible for exclusivity on their own because they contained other, previously
approved drug substances. See Defs.’ Opp’n to Pl.’s Mot. Recons. at 2 (“Defs.’ Opp’n”), ECF
No. 44. The FDA rightly points out that those drug products could only share in an exclusivity
period as a result of the umbrella policy. Id. Yet, the FDA overlooks the single-entity drug
products in each of Ferring’s examples. Those products would have been eligible for a five-year
period of marketing exclusivity had they been approved before the fixed-combination product.
Those drug substances are the proper comparators when determining whether similar cases are
treated in a similar manner. In fact, the FDA concedes that the exclusivity determination for the
single-entity products might have changed depending on the order in which the drug products
were approved. See Defs.’ Opp’n at 3 (“If the manufacturers in question had sought approval for
the single-ingredient products before seeking approval for the fixed-combination products, the
agency’s exclusivity determination might have been different.”). The relevant point is that
certain drug substances received a five-year period of marketing exclusivity—in which later
fixed-combination drug products that included those drug substances were able to share, as a
21
consequence of the umbrella policy—while others were denied the same marketing exclusivity
period because a fixed-combination drug product was approved first.
And the FDA fails to provide a “legitimate reason” for treating those drug substances
differently from ones that were first approved in their single-entity forms. Indep. Petroleum
Ass’n of Am., 92 F.3d at 1258. If a drug substance is sufficiently novel to warrant protection
under a five-year exclusivity period—and sufficiently novel that other products containing that
drug substance should also be protected through the umbrella policy—it is not apparent why
timing, or the order in which the drugs were approved, should alter that assessment. Indeed, in
its response to Ferring’s Citizen Petition, the FDA acknowledged that its prior interpretation
“may place undue importance on the order in which . . . two NDAs are approved.” A.R. at 213–14.
So far as the FDA points out in its briefing here, the agency did not otherwise attempt to justify
this temporal distinction. The FDA’s response in opposition to Ferring’s motion—to the extent
it does not constitute a post hoc rationalization—is similarly unconvincing. The agency asserts
that the “different outcomes” are “simply . . . the result of FDA applying its then-current
interpretation.” Defs.’ Opp’n at 3. That reasoning is wholly circular, however, and the FDA
fails to substantively justify those differing outcomes with a legitimate reason that would serve
Congress’s purpose in enacting the exclusivity period.
Ultimately, like in Abbott Laboratories, the FDA has failed to “offer[] any scientific,
technical, economic, or other explanation [for] why Congress would intend the grant of . . . market
exclusivity to depend on the temporal sequence in which . . . applications were approved.”
920 F.2d at 989 (emphasis in original). Thus, the FDA’s prior interpretation was arbitrary and
capricious. Consequently, the Court finds that there is good reason to correct a clear error in its
prior opinion, that Ferring would be harmed by the Court’s failure to do so, and that Ferring’s
22
motion for summary judgment should have been granted. See Isse, 544 F. Supp. 2d at 29. In
light of the Court’s conclusion, it will remand this action to the FDA for further proceedings not
inconsistent with this opinion. See Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985)
(explaining that “the proper course, except in rare circumstances, is to remand to the agency”);
see also Amerijet Int’l, Inc. v. Pistole, 753 F.3d 1343, 1353 (D.C. Cir. 2014) (noting that remand
is the “usual remedy”); cf. Council for Urological Interests v. Burwell, 790 F.3d 212, 223–24
(D.C. Cir. 2015) (remanding to agency in light of conclusion that interpretation failed at Chevron
Step Two).
B. The Remaining Motions
In light of the Court’s determination that the FDA’s prevailing interpretation of the five-year
exclusivity provision was arbitrary and capricious at the time it denied Ferring’s request for
exclusivity, the Court need not consider Ferring’s alternative argument that the agency erred in
failing to apply its new interpretation retroactively. This conclusion also moots Par’s motion to
intervene. Par seeks to intervene “solely for the purpose of submitting a motion for summary
judgment directed to the retroactivity issue, and to reserve its right to appeal the final decision of
this Court.” See Par’s Mot. to Intervene at 12. Now that it is unnecessary to reach that
retroactivity issue, Par’s motion will be denied as moot.
Par’s motion to intervene and its anticipatory motion for summary judgment did include
material that Par contends is confidential business and financial information. For that reason, Par
filed a motion for a protective order, and sought to seal each of its filings.8 See Movant-Intervenor
8
Par also filed redacted versions of these filings. See, e.g., ECF Nos. 35, 40. Ferring
filed its own responses under seal, out of an abundance of caution, although Ferring disputes that
the material is confidential, see, e.g., ECF Nos. 42, 48, and has also filed redacted versions of
these filings, see, e.g., ECF Nos. 43, 52.
23
Par Pharmaceutical, Inc.’s Mot. Protective Order, ECF No. 36; see also, e.g., Movant-Intervenor
Par Pharmaceutical, Inc.’s Mot. File Under Seal, ECF No. 30. Some of the information,
including Par’s discussion of the resources it expended developing and submitting its ANDA for
a generic version of PREPOPIK, is quite general. In addition, in other instances Par has not
redacted information that seemingly discloses some of the information it claims is confidential.
The Court therefore questions whether all of the information Par seeks to seal, or protect through
its proposed Protective Order, is confidential. Nevertheless, the Court has reviewed the sealed
material and some of it is undoubtedly confidential, proprietary information. Moreover, because
the Court does not reach the retroactivity issue—and therefore does not discuss or rely on any of
the information Par provides—the need for public access to the information is at a minimum.
Ferring also had access to the information and was able to respond to it in its now-mooted
briefing. Therefore, at this time the Court will grant the parties’ motions to seal.9 See, e.g.,
United States v. Hubbard, 650 F.2d 293, 318 (D.C. Cir. 1980) (setting forth various factors a court
should consider in sealing material and noting, in particular, that unsealing was not warranted where
“[n]one of the documents at issue . . . was either used in the examination of witnesses during the
protracted public hearing . . . or specifically referred to in the trial judge’s public decision . . . or
included as part of the publicly available stipulated record”).
As for the Protective Order, Ferring raised initial concerns that the proposed order, as
written, restricted access to the confidential material only to counsel of record listed in this
action—and to the exclusion of Ferring’s patent counsel in the Delaware patent action and other
9
If this case were to return to this Court for a determination on the retroactivity question
following appeal, the Court would reconsider whether narrower, tailored redactions are
necessary to ensure the utmost public access to information relevant to the Court’s decision in
this case.
24
attorneys assisting counsel of record in this case. See Pl.’s Mem. Opp’n Par’s Mot. Protective
Order & Mots. Seal at 2, ECF No. 43. Ferring argued that it could not effectively respond to
Par’s factual contentions—particularly regarding this case’s impact on the pending patent
action—without assistance from those attorneys. Id. Par has now clarified that it seeks only to
restrict the use of the information disclosed in this action in the patent action, or other venues
beyond this case. See Par Pharmaceutical, Inc.’s Reply Supp. Par’s Mot. Protective Order at 1
(“Par’s Reply Supp. Protective Order”), ECF No. 56; see also ECF No. 54 at 3 (reproducing
letter from Par’s counsel explaining that “Par’s concern centers around use of its confidential
information, particularly in the patent case” (emphasis in original)). Par has also permitted
Ferring’s patent counsel and other attorneys to access the materials for purposes of responding to
its filings in this case. See Par’s Reply Supp. Protective Order at 2–3; see also ECF No. 54 at 2
(“Par agrees that all of the Hogan Lovells attorneys working on this lawsuit can have immediate
access to Par’s sealed filings as if these attorneys are ‘counsel of record’ under Paragraph 5(a) of
the Proposed Protective Order.”); id. at 3 (“Par will not object to Womble Carlyle’s [Ferring’s
patent counsel] access to Par’s sealed filings as if those attorneys are ‘counsel of record’ under
Paragraph 5(a) of the Proposed Protective Order . . . .”).
Thus, for purposes of this case the bell cannot be unrung. Par filed the information it
thought relevant, without knowing whether the Court would grant Par’s Protective Order, and
granted access to Ferring’s patent counsel for purposes of responding to Par’s arguments.
Presumably, Par concluded that it was in its strategic interest to share that information. It is not
this Court’s obligation to police any potential improper use of the information in a separate civil
action outside of this district. To the extent the information has been ruled irrelevant to the
Delaware patent action, and Ferring attempts to use the information in that case, it is up to the
25
district judge there to decide whether to exclude it. For that reason, the Court finds a Protective
Order unwarranted in this case and will deny Par’s motion.
IV. CONCLUSION
For the foregoing reasons, Ferring’s motion for reconsideration (ECF No. 39) is
GRANTED, Par’s motion to intervene (ECF Nos. 30, 35) is DENIED AS MOOT, Ferring and
the FDA’s respective renewed motions for summary judgment (ECF Nos. 37, 38) are DENIED
AS MOOT, Par’s motion for summary judgment (ECF No. 40, 41) is DENIED AS MOOT, the
parties’ motions to seal (ECF Nos. 42, 48, 49, 53, 57) are GRANTED, and Par’s motion for a
protective order (ECF No. 36) is DENIED. An order consistent with this Memorandum Opinion
is separately and contemporaneously issued.
Dated: September 9, 2016 RUDOLPH CONTRERAS
United States District Judge
26