Mylan Pharmaceuticals, Inc. v. United States Food & Drug Administration

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1522
MYLAN PHARMACEUTICALS, INCORPORATED,
Plaintiff – Appellant,
and
WATSON LABORATORIES, INCORPORATED; LUPIN PHARMACEUTICALS,
INCORPORATED,
Intervenors/Plaintiffs,
v.
UNITED STATES FOOD AND DRUG ADMINISTRATION,
Defendant – Appellee,
TEVA PHARMACEUTICALS USA, INCORPORATED,
Intervenor/Defendant – Appellee.
No. 14-1529
MYLAN PHARMACEUTICALS, INCORPORATED,
Plaintiff,
WATSON LABORATORIES, INCORPORATED,
Intervenor/Plaintiff,
and
LUPIN PHARMACEUTICALS, INCORPORATED,
Intervenor/Plaintiff – Appellant,
v.
UNITED STATES FOOD AND DRUG ADMINISTRATION,
Defendant – Appellee,
TEVA PHARMACEUTICALS USA, INCORPORATED,
Intervenor/Defendant – Appellee.
No. 14-1593
MYLAN PHARMACEUTICALS, INCORPORATED,
Plaintiff,
LUPIN PHARMACEUTICALS, INCORPORATED,
Intervenor/Plaintiff,
and
WATSON LABORATORIES, INCORPORATED,
Intervenor/Plaintiff – Appellant,
v.
UNITED STATES FOOD AND DRUG ADMINISTRATION,
Defendant – Appellee,
TEVA PHARMACEUTICALS USA, INCORPORATED,
Intervenor/Defendant – Appellee.
2
Appeals from the United States District Court for the Northern
District of West Virginia, at Clarksburg. Irene M. Keeley,
District Judge. (1:14-cv-00075-IMK)
Argued: September 17, 2014 Decided: December 16, 2014
Before WILKINSON, SHEDD, and WYNN, Circuit Judges.
Reversed and remanded by unpublished opinion. Judge Wynn wrote
the opinion, in which Judge Wilkinson and Judge Shedd joined.
ARGUED: Douglas Brooke Farquhar, HYMAN, PHELPS & MACNAMARA,
P.C., Washington, D.C.; Chad Allen Landmon, AXINN, VELTROP &
HARKRIDER LLP, Hartford, Connecticut; Arthur Y. Tsien, OLSSON
FRANK WEEDA TERMAN MATZ, PC, Washington, D.C., for Appellants.
Daniel Tenny, UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C.; Michael David Shumsky, KIRKLAND & ELLIS LLP, Washington,
D.C., for Appellees. ON BRIEF: John H. Tinney, Jr., THE TINNEY
LAW FIRM, PLLC, Charleston, West Virginia, for Appellant Lupin
Pharmaceuticals, Incorporated. Jennifer M. Thomas, HYMAN,
PHELPS & MCNAMARA, P.C., Washington, D.C.; Ralph S. Tyler,
VENABLE LLP, Washington, D.C., for Appellant Mylan
Pharmaceuticals, Incorporated. Mark D. Alexander, AXINN,
VELTROP & HARKRIDER LLP, Hartford, Connecticut, for Appellant
Watson Laboratories, Incorporated. Stuart F. Delery, Assistant
Attorney General, William B. Schultz, General Counsel, Scott R.
McIntosh, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C.; William J. Ihlenfeld, II, United States
Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Wheeling, West
Virginia; Elizabeth H. Dickinson, Associate General Counsel,
Annamarie Kempic, Deputy Chief Counsel, UNITED STATES FOOD AND
DRUG ADMINISTRATION, Rockville, Maryland; Shoshana Hutchinson,
Associate Chief Counsel, UNITED STATES DEPARTMENT OF HEALTH AND
HUMAN SERVICES, Washington, D.C., for Appellee United States
Food and Drug Administration. John C. O'Quinn, John K. Crisham,
Stephen S. Schwartz, KIRKLAND & ELLIS LLP, Washington, D.C., for
Appellee TEVA Pharmaceuticals USA, Incorporated.
Unpublished opinions are not binding precedent in this circuit.
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WYNN, Circuit Judge:
In April 2014, the U.S. Food and Drug Administration
(“FDA”) issued a letter decision regarding the rights of patent
holders and the ease with which generic drugs could enter the
market place under the Hatch-Waxman Act. Though disclaiming
that it was adjudicating the rights of any specific parties,
this letter effectively prevents Appellants Mylan
Pharmaceuticals, Inc., Watson Laboratories, Inc., and Lupin
Pharmaceuticals, Inc. from bringing their generic versions of
celecoxib, an arthritis treatment drug currently sold under the
brand name Celebrex, to the market until June 2015. The FDA
based its decision on its interpretation of a Hatch-Waxman Act
provision it deemed ambiguous. However, as explained below, we
find the pertinent provision unambiguous in context.
Accordingly, we reverse the district court’s opinion upholding
the FDA’s letter decision.
I.
In 1984, Congress amended the Food, Drug, and Cosmetic Act
to “make available more low cost generic drugs by establishing a
generic drug approval procedure for pioneer drugs first approved
after 1962.” H.R. Rep. No. 98-857, part 1, at 14. See The Drug
Price Competition and Patent Term Restoration Act of 1984 (the
“Hatch-Waxman Act” or “Hatch-Waxman”), Pub. L. No. 98-417, 98
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Stat. 1585 (1984), formerly codified at 21 U.S.C. § 355 and 35
U.S.C. §§ 156, 271, 282. In furtherance of this goal, the
Hatch-Waxman Act created a truncated approval process for
generic drugs and, crucially for this case, the potential for a
180-day period of market exclusivity for the first company to
bring its generic drugs to market. The statute, and
specifically the language at issue in this case, has since been
amended by the Medicare Prescription Drug Improvement and
Modernization Act, Pub L. No. 108-173, 117 Stat. 2066 (2003).
Because the initial Abbreviated New Drug Applications at issue
in this case were filed prior to the enactment of this revision,
the pre-amendment version of the statute applies.
Before marketing a new drug, a drug company must submit a
New Drug Application, an elaborate document detailing, among
other things, the drug’s safety and efficacy. See 21 U.S.C. §
355(b)(1). A New Drug Application also must contain “the patent
number and the expiration date of any patent which claims the
drug . . . or which claims a method of using such drug[.]” Id.The FDA publishes information about those patents and methods of
use “in a fat, brightly hued volume called the Orange Book[.]”
Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 132 S. Ct. 1670,
1676 (2012).
Generic drug companies, by contrast, need not submit a
complete New Drug Application to seek FDA approval of their
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drugs. Under Hatch-Waxman, they may instead file an Abbreviated
New Drug Application, in which they may “rely on the clinical
studies performed by the pioneer drug manufacturer” instead of
having “to prove the safety and effectiveness of [their] generic
drug from scratch.” aaiPharma, Inc. v. Thompson, 296 F.3d 227,
231 (4th Cir. 2002). “[T]he generic manufacturer must prove
only that its drug is bioequivalent to the brand name drug it
wants to copy.” Id.In its Abbreviated New Drug Application, a generic drug
company must make one of four certifications regarding the non-
infringement of “listed” patents referenced in the Orange Book.
See 21 U.S.C. § 355(j)(2)(A)(vii). With the fourth
certification option (a “Paragraph IV certification”), the
relevant one for this case, generic drug makers confirm that any
patent for the pioneer drug is invalid or will not be infringed.
Id. Additionally, the Abbreviated New Drug Application
applicant must also certify to “later-listed patents” when they
are published in the Orange Book. Id. § 355(j)(2)(B).
If, as in this case, a generic drug company makes a
Paragraph IV certification, it must provide notice of its
Abbreviated New Drug Application to the owner of any patent
covered by the Paragraph IV certification and to the brand-name
company that filed the New Drug Application. Id. §
355(j)(2)(B)(i). Hatch-Waxman treats a Paragraph IV
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certification as an artificial act of patent infringement by the
generic drug company. Id. §§ 355(j)(2)(B)(i)-(ii); Eli Lilly &
Co. v. Medtronic, Inc., 496 U.S. 661, 678 (1990). If the brand-
name company wants to defend its patent, it must bring an
infringement action within forty-five days of receiving the
generic company’s notice. 21 U.S.C. § 355(j)(5)(B)(iii).
In general, the FDA “shall approve or disapprove” the
generic drug application within 180 days of receiving the
Abbreviated New Drug Application. Id. § 355(j)(5)(A). However,
the effective date of the FDA’s approval is dependent on several
factors, including which of the four certifications the generic
company used. In the case of a Paragraph IV certification, the
timing of the FDA’s approval of an Abbreviated New Drug
Application depends on whether the brand-name company brings an
action to defend its patent. If it does, the FDA’s approval of
the Abbreviated New Drug Application is stayed for 30 months.
Id. If, during that 30-month stay, “a court decides that such
patent is invalid or not infringed, the approval shall be made
effective on the date of the court decision.” Id. §
(j)(5)(B)(iii)(I).
If more than one applicant submits an Abbreviated New Drug
Application with a Paragraph IV certification, the statute
provides that a later-filed “application shall be made effective
not earlier than one hundred and eighty days after” either (1)
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the date that the FDA received notice that the first-filer began
marketing the drug; or (2) “the date of a decision of a court in
an action [brought by the brand-name company against the company
filing the Abbreviated New Drug Application] holding the patent
which is the subject of the certification to be invalid or not
infringed”—also known as the “court-decision trigger.” Id. §
(j)(5)(B)(iv). This 180-day exclusivity period, potentially
worth millions of dollars, is meant to incentivize generic
pharmaceutical companies to bear the costs of the patent
infringement lawsuit. Teva Pharm., USA, Inc. v. Leavitt, 548
F.3d 103, 104 (D.C. Cir. 2008).
Finally, when multiple patents protect a brand-name drug
from competition, the FDA, under the pre-amendment version of
Hatch-Waxman at issue in this case, took a “patent-by-patent
approach” in determining whether a generic drug company is
entitled to the 180-day exclusivity period. As it explained in
its letter decision:
eligibility for 180-day exclusivity would be based on
which company submitted the first paragraph IV
certification challenging each listed patent.
Therefore, in cases where multiple patents are listed,
different applicants may have the first paragraph IV
certification as to different patents and multiple
ANDA applicants may simultaneously be eligible for
180-day exclusivity as to the particular patents on
which they were first.
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J.A. 43. None of the parties challenge the FDA’s patent-by-
patent approach (while recognizing that the law has, in the
interim, changed and that the FDA now uses a drug-by-drug
approach).
II.
Pfizer produces the brand-name arthritis drug Celebrex.
Celebrex was protected by the following patents listed in the
Orange Book as of 2003: 5,466,823 (“the ‘823 patent”); 5,563,165
(“the ‘165 patent”); 5,760,068 (“the ‘068 patent”); and one
other patent not at issue in this case. In 2003, Teva filed
Abbreviated New Drug Application 76-898, which contained
Paragraph IV certifications as to the ‘823, ‘165, and ‘068
patents. Pfizer sued Teva for patent infringement, and the
District Court of New Jersey held that all three patents were
valid and infringed by Teva. Pfizer, Inc. v. Teva Pharms. USA,
Inc., 482 F. Supp. 2d 390 (D.N.J. 2007). The Federal Circuit,
however, reversed in part, deeming eleven of the claims in the
‘068 patent invalid. Pfizer, Inc. v. Teva Pharms. USA, Inc.,
518 F.3d 1253 (Fed. Cir. 2008).
Teva then resubmitted its certifications as to the ‘823 and
‘165 patents as “Paragraph III certifications”—that is, they
sought approval of their Abbreviated New Drug Application only
subsequent to the expiration of those two patents. See 21
9
U.S.C. § 355(j)(2)(A)(vii). Meanwhile, several other generic
drug manufacturers, including Mylan, Watson and Lupin, filed
Abbreviated New Drug Applications for Celebrex based on
Paragraph IV certifications.
On March 5, 2013, the United States Patent and Trademark
Office (“PTO”) reissued the invalidated ‘068 patent as RE44048
(“the ‘048 patent”), Pfizer notified the FDA, and two days
later, the FDA listed the ‘048 patent in the Orange Book. On
March 7, 2013, Teva, Mylan, and Watson amended their Abbreviated
New Drug Applications so that their Paragraph IV certifications
included the reissued patent. And Lupin amended its Abbreviated
New Drug Application on March 28, 2013. Again, Pfizer sued for
patent infringement.
One year later, in March 2014, the District Court for the
Eastern District of Virginia deemed the ‘048 patent invalid for
substantially the same reasons that the ‘068 patent had been
invalidated. G.D. Searle LLC v. Lupin Pharms., Inc., No. 2:13-
cv-00121 (E.D. Va. Mar. 12, 2014). Teva and Pfizer entered into
a settlement agreement allowing Teva to market celecoxib in
December 2014. Mylan and Watson also settled with Pfizer. Only
Lupin remains in the appeal of that decision, which is pending
in the Federal Circuit.
During the litigation of the ‘048 patent, the various drug
manufacturers engaged in letter writing and private meetings
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with the FDA inquiring into how the agency would approach
approval of their celecoxib Abbreviated New Drug Applications.
On April 24, 2014, the FDA issued a letter decision addressed to
“Celecoxib ANDA Applicant.” The question the FDA purported to
answer was “whether a prior court decision on the original
patent triggered (and exhausted) any exclusivity to which a
first applicant on the original patent was entitled.” J.A. 41.
Underlying the FDA’s question was the assumption “that the
reissued patent cannot be the basis for a new period of 180-day
exclusivity[.]” J.A. 49. The FDA concluded that:
for purposes of 180-day exclusivity, upon the listing
of a reissued patent, a prior court decision on the
original patent is not regarded as having triggered
180-day exclusivity for the single bundle of patent
rights represented by the original and reissued
patent. In such a case, eligibility for 180-day
exclusivity is only available to the applicant that
first filed a paragraph IV certification to the
original patent, and that applicant must make a timely
submission of a paragraph IV certification to the
reissued patent to remain eligible for 180-day
exclusivity.
J.A. 51. The letter decision stated that the FDA was merely
clarifying “the regulatory framework to be applied to the
relevant ANDAs when such exclusivity determination is made[,]”
and “not making a determination with respect to 180-day
exclusivity in a particular case[.]” J.A. 46.
The following day, April 25, 2014, Mylan sought injunctive
and declaratory relief against the FDA regarding its letter
11
decision. Mylan sought to prevent the FDA from granting any
other company a 180-day exclusivity period. Watson and Lupin
intervened as plaintiffs, and Teva intervened as a defendant.
The district court consolidated the hearing on Mylan’s
preliminary injunction motion with a trial on the merits,
granted Mylan’s motion for judgment, but in favor of the FDA,
and dismissed the case. Mylan Pharmaceuticals, Inc., v. FDA,
No. 1:14-cv-00075-IMK Doc. 125 (N.D. W.Va. June 16, 2014). This
appeal followed.
III.
Summary judgment is appropriate “if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). We review a grant of summary judgment de novo,
Nat’l Audubon Soc’y v. Dep’t of the Navy, 422 F.3d 174, 185 (4th
Cir. 2005), taking the facts in the light most favorable to the
non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986).
Under the Administrative Procedure Act, 5 U.S.C. § 551 et
seq., we must set aside an agency action that is “not in
accordance with law.” Id. § 706(2)(A). To determine whether
the FDA’s interpretation of the Hatch-Waxman Act was “in
accordance with law,” we engage in the analysis set out by
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Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S.
837, 842 (1984). The first inquiry under Chevron is whether
“Congress has directly spoken to the precise question at issue.”
Id. at 842. “If the statute is clear and unambiguous ‘that is
the end of the matter, for the court, as well as the agency,
must give effect to the unambiguously expressed intent of
Congress.’” Bd. of Governors of the Fed. Reserve Sys. v.
Dimension Fin. Corp., 474 U.S. 361, 368 (1986) (quoting Chevron,
467 U.S. at 842-43). In determining whether Congress has
“directly spoken,” we “begin by examining the plain language and
give the relevant terms their common and ordinary meaning.” Yi
Ni v. Holder, 613 F.3d 415, 424 (4th Cir. 2010) (internal
quotation marks and citation omitted). “This is because we must
‘assum[e] that the ordinary meaning of that language accurately
expresses the legislative purpose.’” Id. (quoting Gross v. FBL
Fin. Servs., Inc., 557 U.S. 167, 175 (2009)). When ascertaining
the ordinary meaning of words we may refer to standard reference
works such as legal dictionaries. See, e.g., Id. at 425;
Dickenson-Russell Coal Co., LLC v. Sec'y of Labor, 747 F.3d 251,
258 (4th Cir. 2014). Further, we are not to limit our inquiry
solely to a precise statutory provision in isolation, as “[t]he
meaning—or ambiguity—of certain words or phrases may only become
evident when placed in context.” Food & Drug Admin. v. Brown &
Williamson Tobacco Corp., 529 U.S. 120, 132 (2000).
13
If step one leads to the conclusion that Congress has
spoken clearly, that is the end of the Chevron inquiry. We move
to Chevron step two only if “devices of judicial construction
have been tried and found to yield no clear sense of
congressional intent.” Gen. Dynamics Land Sys., Inc. v. Cline,
540 U.S. 581, 600 (2004). See also Chamber of Commerce of U.S.
v. N.L.R.B., 721 F.3d 152, 160 (4th Cir. 2013) (“Only if the
statute is silent or ambiguous with respect to the specific
issue are we to proceed to Chevron’s second step, asking whether
the agency’s answer is based on a permissible construction of
the statute.” (internal quotation marks omitted)).
Here, Congress has spoken directly regarding the court-
decision trigger. The statute makes plain that the 180-day
exclusivity runs from “the date of a decision of a court in an
action . . . holding the patent which is the subject of the
certification to be invalid or not infringed.” 21 U.S.C.
§355(j)(5)(B)(iv). As to generic celecoxib, such a decision was
reached by the Federal Circuit in 2008. Pfizer Inc. v. Teva
Pharms. USA, Inc., 518 F.3d 1253 (Fed. Cir. 2008). That
decision struck eleven of the claims in Pfizer’s ‘068 patent as
invalid. Id. The ‘068 patent was the subject of the Paragraph
IV certification that Teva submitted to FDA. Teva’s 180-day
exclusivity period as to the ‘068 patent began to run from the
date the Federal Circuit issued its mandate in May 2008. And
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the exclusivity period expired on November 9, 2008, i.e., 180
days later.
Hatch-Waxman does not define “patent” nor does it
specifically speak to reissued patents. This does not, however,
render the statute ambiguous. The “court-decision trigger”
speaks of “the patent which is the subject of the
certification.” 21 U.S.C. §355(j)(5)(B)(iv) (emphasis added).
FDA’s interpretation of this language treats the original patent
and the reissued patent as a single “bundle of rights” which can
only be the subject of one Paragraph IV certification and
therefore provides only a single 180-day exclusivity period.
However, this interpretation is contrary to the plain statutory
language.
Black’s Law Dictionary defines “patent” as “[t]he
governmental grant of a right, privilege, or authority.”
Black’s Law Dictionary 1300 (10th ed. 2014). It also defines
“reissue patent” as “[a] patent that is issued to correct
unintentional or unavoidable errors in an original patent, such
as to revise the specification or to fix an invalid claim.” Id.
at 1301. In other words, a reissue patent exists because of
some mistake in the original patent. It does not grant the same
“right[s], privilege[s], or authorit[ies]” as the original
patent because the original cannot protect the rights it claims—
it was issued in error or was otherwise mistake-ridden.
15
Instead, it is a separate grant of rights, even if elements of
the reissued patent overlap with those of the original patent.
See 35 U.S.C. § 251 (describing the reissue of defective
patents).
The original 2008 court decision triggered a 180-day
exclusivity period regarding the ‘068 patent. That patent was
thus “the patent which” was “the subject of the certification”
Teva sent to FDA in 2003. Because the ‘068 patent could not
protect the rights it claimed, Teva’s marketing of celecoxib
would not infringe the original patent, at least to the eleven
invalidated claims. Teva’s successful challenge of the ‘068
patent, however, could not address its rights as to the ‘048
patent, which did not come into existence until years later.
The reissued ‘048 patent represented a new set of rights granted
by the PTO, due to the court-recognized mistake in the original
‘068 patent. The reissue necessitated new Paragraph IV
certifications and a subsequent legal challenge to determine the
patent’s validity. Because the statute requires recertification
as to a reissued patent, the ‘048 reissued patent thus was also
“the patent which” was “the subject of the certification[s]”
that Mylan, Teva, and Watson issued in 2013 and that led to
litigation.
The plain language of the statute indicates that each
patent that is the subject of a certification may trigger
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exclusivity. The Hatch-Waxman Act required Abbreviated New Drug
Application applicants to certify as to both the original and
reissued patents; each could be “the patent which is the subject
of the certification.” 21 U.S.C. §355(j)(5)(B)(iv). Because we
find that FDA’s interpretation to the contrary violated the
plain statutory language, we must set it aside. Household
Credit Servs., Inc. v. Pfennig, 541 U.S. 232, 239 (2004) (“If
[Congress has spoken to the question at issue], courts, as well
as the agency, must give effect to the unambiguously expressed
intent of Congress.”). See also Mylan Pharms., Inc. v. FDA, 454
F.3d 270, 274-75, 276-77 (4th Cir. 2006) (holding that 21 U.S.C.
§ 355(j)(5)(B)(iv) was plain and therefore the court had no
choice but to enforce the language as written).
IV.
For the reasons above, we reverse and remand with
instructions for the district court to proceed with adjudicating
the rights of the Abbreviated New Drug Application applicants
consistent with this opinion.
REVERSED AND REMANDED
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