Ranbaxy Laboratories, Ltd. v. Burwell

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
RANBAXY LABORATORIES, LTD, et al.,
Plaintiffs,
v.
SYLVIA MATHEWS BURWELL, Secretary, Civil Action No. 14-1923 (BAH)
United States Department of Health and
Human Services, et al., Judge Beryl A. Howell
Defendants,
v.
DR. REDDY’S LABORATORIES, INC.,
ENDO PHARMACEUTICALS, INC., IVAX
PHARMACEUTICALS, INC, TEVA
PHARMACEUTICALS USA, Inc.
Defendant-Intervenors.
MEMORANDUM OPINION
A subsidiary of the plaintiffs, Ranbaxy Laboratories, Ltd. and Ranbaxy, Inc.
(collectively, “Ranbaxy” or the “plaintiffs”), paid, in 2013, what was then the “largest drug
safety settlement” in history, amounting to $500 million, in connection with criminal charges for
falsifying data and manufacturing adulterated drugs at two of its facilities in India. U.S. Dep’t of
Justice, “Generic Drug Manufacturer Ranbaxy Pleads Guilty and Agrees to Pay $500 Million to
Resolve False Claims Allegations, cGMP Violations and False Statements to the FDA,” May 13,
2013, available at http://www.justice.gov/opa/pr/generic-drug-manufacturer-ranbaxy-pleads-
guilty-and-agrees-pay-500-million-resolve-false. During the course of the investigation into the
plaintiffs’ (now) admitted wrongdoing, the Federal defendants in this case—the Secretary of
Health and Human Services, the Commissioner of the U.S. Food and Drug Administration
1
(“FDA”), and the FDA—granted “tentative approval” to five Abbreviated New Drug
Applications (“ANDAs”) submitted by the plaintiffs for the manufacture of certain generic drugs
at the same facilities involved in the plaintiffs’ subsidiary’s criminal case. See Defs.’ Mem.
Opp’n Pls.’ Mot. Prelim. Inj. and Supp. Defs.’ Mot. Summ. J. (“Defs.’ Mem.”) at 10–17, ECF
No. 52.
Years after the grant of those ANDAs, when two of these tentative approvals were
preventing other drug manufacturers from coming to market with generic versions of costly
medications, the FDA reexamined and revoked two of those five tentative approvals, for
esomeprazole and valganciclovir, stating the approvals had been granted “erroneously.” Defs.’
Mem. at 3; Compl. ¶ 38, ECF No. 1; Administrative Record (“AR”) at 1 (Letter from FDA to
plaintiffs regarding esomeprazole and valganciclovir ANDAs, Nov. 4, 2014 (the “Rescission
Letter”)). This agency action prompted the plaintiffs to file the instant suit, contending that the
Federal defendants had no authority, statutory or otherwise, to correct their egregious error and
rescind the tentative approvals. See generally Compl. Now pending before the Court is the
plaintiffs’ Motion for Preliminary Injunction (the “Pls.’ Mot.”), ECF No. 41; the Federal
defendants’ Motion for Summary Judgment (the “Defs.’ Mot.”), ECF No. 51; and the Motions
for Summary Judgment from four other generic drug manufacturers, Dr. Reddy’s Laboratories
(“Dr. Reddy’s”), Endo Pharmaceuticals, Inc. (“Endo”), Ivax Pharmaceuticals, Inc. (“Ivax”), and
Teva Pharmaceuticals USA, Inc. (“Teva”), 1 which have each been granted leave to intervene in
this matter as defendants, ECF Nos. 53 and 73. 2 Although the FDA’s practices, which
1
Ivax is a subsidiary of Teva, see FRCP 7.1 Statement and Certificate Req. by LCvR 7.1 for Ivax and Teva at 1,
ECF No. 72, and, although the two companies each intervened individually, the two defendant-intervenors moved
jointly for summary judgment, Mot. of Ivax and Teva for Summ. J. at 1, ECF No. 73.
2
The Court consolidated the hearing on the plaintiffs’ Motion for Preliminary Injunction with its consideration of
the merits of the plaintiffs’ claims. Minute Order, Nov. 21, 2014; see FED. R. CIV. P. 65(a)(2).
2
apparently led to these errors, raise grave concerns, the Federal defendants’ interpretation of the
relevant portions of the Food, Drug, and Cosmetics Act (the “FDCA”) as permitting the
rescission of the erroneously issued tentative approvals is reasonable. Consequently, the Federal
defendants’ and defendant-intervenors’ motions are granted and the plaintiffs’ motion is denied. 3
I. BACKGROUND 4
The statutory regime under which generic drug applications, such as those at issue here,
are approved, is complex. Thus, a brief summary of the regulations governing ANDAs and their
approval is provided before turning to the history of the plaintiffs’ applications, the concurrent
investigations into the plaintiffs’ manufacturing processes by the FDA, and the procedural
background of the instant matter.
A. The Statutory Regime
All pharmaceutical manufacturers wishing to sell their products in interstate commerce
must first seek approval from the FDA in compliance with 21 U.S.C. § 355. New drug
applications (“NDAs”) are subject to rigorous application protocols under which the applicant
must prove the drug is safe and effective. See 21 U.S.C. § 355(b); Defs.’ Opp’n Pls.’ Mot.
Temp. Restraining Order (“Defs.’ TRO Opp’n”) at 5, ECF No. 22-1. The applicant must also
provide information about patents used in the drug, or for using the drug, “to which a claim of
patent infringement could reasonably be asserted if a person not licensed by the owner engaged
in the manufacture, use, or sale of the drug.” 21 U.S.C. § 355(c)(2).
3
Portions of the AR in this matter contain confidential or sensitive information, which portions are unavailable to
the public and, in some cases, to one or more of the parties to this case. The Federal defendants and plaintiffs refer
to some of those portions in their submissions, which have been filed under seal with redacted versions publicly
available. Consequently, this Memorandum Opinion will be filed under seal for a limited period to allow, first, the
Federal defendants, and then the plaintiffs, the opportunity to propose any redactions necessary to protect such
confidential or otherwise sensitive information.
4
Although the defendant-intervenors have submitted extensive legal memoranda and exhibits, resolution of the
pending motions is predicated entirely upon the administrative record submitted and the arguments raised by the
plaintiffs and the Federal defendants.
3
1. The Hatch-Waxman Amendments
Between 1962 and 1984, companies wishing to manufacture generic versions of drugs
already approved for use had to follow the same rigorous steps as in a new drug application
before the drug could be approved and sold, even though the generic equivalent was effectively
identical to a brand name drug. 5 H.R Rep. No. 98-857, pt. 1, (Report of the House Committee
on Energy and Commerce on Drug Price Competition and Patent Term Restoration Act) at 14–
15 (1984). In 1984, Congress passed the Drug Price Competition and Patent Term Restoration
Act, codified in 21 U.S.C. § 355. Colloquially known as the “Hatch-Waxman Amendments,” the
amendments created a process by which generic drugs could be approved on the basis of an
“abbreviated” new drug application, an ANDA, by “piggy-back[ing]” on the studies already
completed by the pioneer drug manufacturer. FTC v. Actavis, Inc. (Actavis), 133 S. Ct. 2223,
2228 (2013); see Mylan Labs, Inc. v. Thompson, 389 F.3d 1272, 1274–75 (D.C. Cir. 2004).
This statutory change removed a major expense for generic drug manufacturers, since
“[u]nlike an NDA, an ANDA need not contain clinical evidence of the safety or efficacy of the
drug.” See Teva Pharm. Indus. Ltd. v. Crawford, 410 F.3d 51, 52 (D.C. Cir. 2005). Its purpose
is “to speed the introduction of low-cost generic drugs to market,” Caraco Pharm. Labs., Ltd. v.
Novo Nordisk A/S (Caraco), 132 S. Ct. 1670, 1676 (2012), thus increasing competition and,
theoretically, lowering prices, Teva Pharms. USA, Inc. v. Sebelius, 595 F.3d 1303, 1305 (D.C.
Cir. 2010). To further this goal, the Hatch-Waxman Amendments included the “so-called
paragraph IV certification.” Caraco, 132 S. Ct. at 1677. Since “the FDA cannot authorize a
generic drug that would infringe a patent,” id. at 1676, Congress required ANDA applicants, in
5
The FDA had created “its own abbreviated procedures for generic copies of pioneer drugs,” Serono Labs., Inc. v.
Shalala, 158 F.3d 1313, 1316 n.1 (D.C. Cir. 1998), but did not apply those procedures to drugs approved after 1962,
H.R. 98-857 pt. 1 at 16. In other words, the FDA’s administrative abbreviated procedures applied only to pioneer
drugs approved prior to 1962. See id.4
21 U.S.C. § 355(j)(2)(A)(vii), to certify that the generic drug would not infringe upon any valid
patents.
2. Paragraph IV Certification
Relevant to the instant matter, one of the bases on which an ANDA applicant may certify
that its product will not infringe any valid patents is by certifying that some or all of the patents
used in the making of the pioneer drug are invalid. 21 U.S.C. § 355(j)(2)(A)(vii)(IV). Known as
a paragraph IV certification, this course of action entails significant risk since it will almost
inevitably “provok[e] litigation” and, indeed, the mere filing of a paragraph IV certification is
deemed to be “an act of infringement, which gives the [pioneer drug manufacturer] an immediate
right to sue.” Caraco, 132 S. Ct. at 1677; see 35 U.S.C. § 271(e)(2)(A). Assuming the pioneer
drug manufacturer timely files suit, the FDA may not approve the ANDA, “usually for a 30-
month period,” while the patent dispute is litigated. Actavis, 133 S. Ct. at 2228.
To incentivize manufacturers to take advantage of paragraph IV certifications, despite the
considerable expense and difficulties, the Hatch-Waxman Amendments included a provision
allowing the first generic manufacturer to file an ANDA predicated on this certification to “enjoy
a period of 180 days exclusivity (from the first commercial marketing of its drug).” Id. at 2228–
29 (citing 21 U.S.C. § 355(j)(5)(B)(iv)); Teva Pharms. USA, Inc., 595 F.3d at 1305 (noting
exclusivity provision designed to “compensate [generic] manufacturers for research and
development costs as well as the risk of litigation from patent holders” (internal quotation marks
and citation omitted; alteration in original)). This exclusivity functions as a mini-generic
monopoly for the generic drug manufacturer, providing a 180-day period in which only the first
generic manufacturer may compete with the pioneer drug. Actavis, 133 S. Ct. at 2229. This
incentive can be worth “several hundred million dollars,” but it can “belong only to the first
generic to file.” Id. (citations omitted).
5
3. Forfeiture Triggers
While the 180-day exclusivity period holds out the promise of substantial monetary
compensation for first-to-file generic manufacturers, it is not guaranteed. The exclusivity is
forfeited if any statutorily defined “forfeiture event” occurs. 21 U.S.C. § 355(j)(5)(D)(i). An
applicant forfeits any 180-day exclusivity by (1) failing timely to market the drug after certain
specified events have occurred, id. § 355(j)(5)(D)(i)(I); (2) withdrawing the ANDA, either itself
or constructively by the agency, “as a result of a determination by the Secretary that the
application does not meet the requirements for approval under [21 U.S.C. § 355(j)(4)],” id.§ 355(j)(5)(D)(i)(II); (3) amending or withdrawing the applicant’s paragraph IV certifications, id.
§ 355(j)(5)(D)(i)(III); (4) failing to obtain 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,” id. § 355(j)(5)(D)(i)(IV); (5) entering into an agreement “with another applicant, the listed
drug application holder, or a patent owner” found to be in violation of antitrust laws, id.
§ 355(j)(5)(D)(i)(V); or (6) expiration of the valid patents that would otherwise be infringed if
the ANDA applicant marketed its drug, id. § 355(j)(5)(D)(i)(VI).
The forfeiture triggers were added to § 355(j) as an amendment to the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (the “MMA”). 108 Pub. L.
173, 117 Stat. 2066, 2448–64. One of the amendment’s primary sponsors noted during the final
floor debate that the forfeiture triggers’ purpose was to “ensure that the 180-day exclusivity
period enjoyed by the first generic to challenge a patent cannot be used as a bottleneck to prevent
additional generic competition.” 149 Cong. Rec. S15746 (daily ed. Nov. 24, 2003) (statement of
Sen. Schumer). The amendment was prompted by some “brand and generic companies . . .
abusing this [180-day] exclusivity period-both through collusive agreements and use of other
6
tactics” that prevented the timely appearance of generic drugs in the marketplace. Id. The
amendments were intended to “end this abuse because the generic company forfeits its
exclusivity if it doesn’t go to market in a timely manner.” Id. In short, the amendments were
viewed as “important, pro-consumer cost containment provisions.” Id.; see also id. at 15761(statement of Sen. Frist) (“The [amendments] also take[] additional steps to reduce or eliminate
the delays in the movement of generic drugs to the marketplace.”).
Although Congress’ stated goal with the 1984 and 2003 amendments to the FDCA was to
bring generic drug products to market faster, the Act still requires ANDA applicants to fulfill
myriad statutory requirements before receiving approval to market a generic version of a pioneer
drug. This approval process is discussed below, since the transition from one stage to the next,
and whether those transitions are irrevocable, are the key questions at issue in the instant matter.
B. The ANDA Approval Process
The Federal defendants describe three significant “milestones” in the ANDA process: (1)
when the ANDA may be “received” by the FDA because it is “substantially complete” such that
the agency may conduct a “substantive review,” Defs.’ Mem. at 5; (2) when an ANDA receives
“tentative approval,” id. at 6; and (3) when an ANDA receives final, or “effective,” approval, id.Each milestone is described in further detail below.
1. Substantially Complete
An ANDA does not require the submission of the results of human clinical trials, as is
required for NDAs, but the application materials are substantial and governed by statute. See 21
U.S.C. § 355(j)(2)(A). An ANDA must contain, inter alia, “information to show” the
bioequivalence of the proposed generic drug to the pioneer drug, id. § 355(j)(2)(A)(ii), id. §
355(j)(2)(A)(iv); a certification regarding any potential patent infringement, including, if
applicable, the aforementioned paragraph IV certification, id. § 355(j)(2)(A)(vii); and “the items
7
specified in clauses (B) through (F) of” 21 U.S.C. § 355(b)(1), which is the section of the FDCA
governing the contents of NDAs, 21 U.S.C. § 355(j)(2)(A)(vi). By cross-referencing and
incorporating certain clauses of § 355(b)(1), Congress required ANDAs to contain
(B) a full list of the articles used as components of such drug; (C) a full statement of the
composition of such drug; (D) a full description of the methods used in, and the facilities and
controls used for, the manufacture, processing, and packing of such drug; (E) such samples of
such drug and of the articles used as components thereof as the Secretary may require; (F)
specimens of the labeling proposed to be used for such drug.
21 U.S.C. § 355(b)(1). Thus, ANDAs must contain all the elements required for NDAs under
§ 355(b)(1) except for “full reports and investigations which have been made to show whether or
not such drug is safe for use and whether such drug is effective for use” and “assessments
required under [21 U.S.C. § 355c].” 6 Id. The agency “may not require that an abbreviated
application contain information in addition to that required by” the statute. Id. § 355(j)(2)(A).
The Federal defendants summarize that § 355(j)(2)(A) requires, in essence, that the ANDA
applicant “demonstrate that its proposed generic drug product is the same as the previously
approved-innovator drug in several respects and that the ANDA sponsor can reliably
manufacture the drug product.” Defs.’ Mem. at 4.
FDA regulations mandate that “within 60 days after FDA receives an application, the
agency will determine whether the application may be filed.” 21 C.F.R. § 314.101(a)(1). In
reviewing the application, the FDA determines if the ANDA complies with the terms of
§ 355(j)(2)(A) and any applicable agency regulations so that the “application is sufficiently
complete to permit a substantive review.” Id. § 314.101(b)(1). The same regulation lists the
acceptable reasons for the agency to refuse to “receive[]” an ANDA and the procedure to perfect
6
21 U.S.C. § 355c pertains to certain special assessments and other requirements for pediatric uses of new drugs and
biological products.
8
the application. Id. § 314.101(d), (e). Once this “threshold determination” has been made, the
ANDA proceeds to the next phase of its review.
2. Tentative Approval
The substantive review of an ANDA “involves reviews by many disciplines of various
aspects of an application, including bioequivalence, chemistry, labeling, and manufacturing,”
and, according to the Federal defendants, “often requires multiple ‘review cycles’ before an
application is ready for approval.” Defs.’ Mem. at 5; see Admin. Rec. (“AR”) at 312–14
(routing slip for tentative approval of generic ANDA, showing review by at least twelve FDA
employees). 7 The purpose of this review is to determine whether an ANDA meets the statutory
requirements for approval such that the drug can be sold in interstate commerce. See 21 U.S.C.
§ 355(j). Since an ANDA is, by definition, based on a drug that has already been approved for
marketing and, consequently, has been found to be safe and effective, an ANDA “shall” be
approved by the FDA unless the ANDA fails to meet certain conditions, including if “the
methods used in, or the facilities and controls used for, the manufacture, processing, and packing
of the drug are inadequate to assure and preserve its identity, strength, quality, and purity.” Id.§ 355(j)(4)(A).
As the Federal defendants point out, however, “[t]he timing for ANDA approval depends,
in part, on statutory patent protections afforded to the innovator drug.” Defs.’ Mem. at 6. In
other words, an ANDA may meet all the requirements for approval, but the FDA may be barred
by statute from approving the application until such time as certain patents for elements of the
pioneer drug expire; in such cases, the agency may grant the ANDA “tentative approval.”
7
Per the Court’s order, the entire AR has been submitted for in camera review. Minute Order, Jan. 6, 2015; see
LCvR 7(n)(1). Citations to page numbers in the AR refer to the “bates” stamp number in the lower right corner of
each page. All page numbers in the AR are preceded by the letters “FDA.”
9
21 U.S.C. § 355(j)(5)(B)(iv)(II)(dd)(AA). “Tentative approval,” according to the statute, “means
notification to an applicant by the Secretary that an application under this subsection meets the
requirements of paragraph (2)(A), but cannot receive effective approval because the application
does not meet the requirements of this subparagraph . . . .” 8 Id.Tentative approval is often an intermediate step between the submission of a substantially
complete application and “effective approval” allowing the marketing of a generic drug, but the
practical importance of tentative approval is limited. “A drug that is granted tentative approval .
. . is not an approved drug and shall not have an effective approval until the Secretary issues an
approval after any necessary additional review of the application.” 21 U.S.C.
§ 355(j)(5)(B)(iv)(II)(dd)(BB); 21 C.F.R. § 314.107(b)(3)(v) (“Tentative approval of an
application does not constitute ‘approval’ of an application and cannot, absent a final approval
letter from the agency, result in an effective approval . . . .”). Nevertheless, tentative approval
does affect the eligibility of an ANDA applicant for the 180-day exclusivity period provided in
21 U.S.C. § 355(j)(5)(B)(iv).
As previously noted, the first ANDA applicant to file an ANDA with a paragraph IV
certification is eligible for the 180-day exclusivity period, so long as none of the forfeiture
triggers added to the law in 2003 apply. Supra Part I.A.3. One of those six forfeiture triggers,
described as “forfeiture events” in the statute, is the failure of the ANDA applicant “to obtain
tentative approval of the application within 30 months after the date on which the application is
filed . . . .” 21 U.S.C. § 355(j)(5)(D)(i)(IV). Thus, while tentative approval, standing alone, does
not provide any tangible benefit to the ANDA applicant, if an ANDA applicant becomes eligible
8
Tentative approval also may be granted on the grounds that effective approval cannot be granted because “there is
a period of exclusivity for the listed drug under subparagraph (F) or [21 U.S.C. § 355a] . . . or there is a 7-year
period of exclusivity for the listed drug under [21 U.S.C. § 360cc].” 21 U.S.C. § 355(j)(5)(B)(iv)(II)(dd)(AA).
10
for the 180-day generic marketing exclusivity, the securing of tentative approval is necessary
within a set time period in order to avoid forfeiting that exclusivity. Id. 9
Importantly for the present dispute, the FDA maintains that its “policy . . . has always
been, and remains, that an ANDA is not eligible for tentative approval absent a satisfactory
showing of CGMP compliance.” Defs.’ Mem. at 29.
3. Final Approval
The eleven reasons allowed by statute for declining to provide final approval to an
ANDA are set forth in 21 U.S.C. § 355(j)(4). Among these multiple reasons for the FDA to deny
approval of an ANDA are that (1) the agency finds a drug’s manufacturing process to be
“inadequate to assure and preserve [a drug’s] identity, strength, quality, and purity,” id.§ 355(j)(4)(A); (2) the generic drug is not shown to be sufficiently similar to the pioneer drug, id.
§ 355(j)(4)(C); id. § 355(j)(4)(F); (3) the drug’s inactive ingredients “are unsafe for use under the
conditions prescribed,” id. § 355(j)(4)(H); (4) the approval of the pioneer drug has been revoked,
id. § 355(j)(4)(I); (5) “the application does not meet any other requirement of paragraph (2)(A),”
id. § 355(j)(4)(J); and (6) “the application contains an untrue statement of material fact,” id.
§ 355(j)(4)(K).
Final approval does not follow by operation of law from a tentative approval letter. See
Ranbaxy Labs Ltd. v. FDA, 30 F. Supp. 2d 15, 21 (D.D.C. 2004) (noting tentative approval does
not convert to final approval “automatically” upon the cessation of patent litigation and
9
Under the President’s Emergency Plan for AIDS Relief (“PEPFAR”), drugs that have received tentative approval
but are barred from sale in the United States because of patent or other exclusivity protection may be purchased by
the United States Agency for International Development (“USAID”) for distribution outside the United States, under
certain circumstances. AR at 128. This tangible benefit does accrue for certain generic drugs used to treat AIDS
based on tentative approval alone, but is a limited exception to the general rule. See id. Notably, the FDA states in
its description of the PEPFAR program that tentative approval “signifies that the product meets all safety, efficacy,
and manufacturing quality standards for marketing in the U.S.” Id. Neither of the ANDAs at issue in this litigation
are on the list of approved drugs for the PEPFAR program. See id. at 128–64 (listing all “Antiretrovirals Approved
and Tentatively Approved in Association with the President’s Emergency Plan Expedited Review Process”).
11
expiration of a patent that previously prevented final approval). Rather, as expressly
contemplated in § 355(j)(5)(B)(iv)(II)(dd)(BB), final approval accrues only after “any necessary
additional review of the application” by the FDA after the impediments to final approval that
necessitated a grant of tentative approval have been removed. 10 Once final approval is
requested, the agency once again reviews the ANDA and determines whether final approval
should issue. See Abbreviated New Drug Application Regulations; Patent and Exclusivity
Provisions, 59 Fed. Reg. 50,338, 50,352 (Oct. 3, 1994) (stating the “agency will examine the
application to determine whether there have been any changes in the conditions under which the
application was tentatively approved” before sending notice of final approval).
Once an ANDA has been granted final approval, the manufacturer may begin selling the
drug in interstate commerce. See 21 U.S.C. § 355(a). Even after a drug has been marketed,
however, the agency retains the ability to revoke that final approval. Id. § 355(e). The agency
“shall, after due notice and opportunity for hearing to the applicant, withdraw approval of an
application with respect to any drug under this section,” when it makes one or more of five
findings: (1) that “such drug is unsafe for use under the conditions of use upon the basis of which
the application was approved;” (2) that “new evidence of clinical experience,” indicates the drug
is no longer safe for use; (3) that new evidence indicates the drug is not effective; (4) that
appropriate patent information was not filed in a timely manner; or (5) “that the application
contains any untrue statement of a material fact.” Id. If the Secretary determines that “there is
an imminent hazard to the public health,” the application may be suspended “immediately,” with
an expedited hearing to be held after such suspension. Id.
10
The agency requires applicants whose ANDAs are tentatively approved to “reactivate” the applications “prior to
final approval” by submitting a “‘Minor Amendment – Final Approval Requested’” letter “90 days prior to the date
[the applicant] believe[s] that [its] ANDA will be eligible for final approval.” E.g., AR at 233 (tentative approval
letter for ANDA 77-830 (esomeprazole)).
12
The agency “may also, after due notice and opportunity for hearing to the applicant,
withdraw the approval of an application” if the Secretary finds that (1) “the applicant has failed
to establish a system for maintaining required records, or has repeatedly or deliberately failed to
maintain such records . . .;” (2) that new information “evaluated together with the evidence
before him when the application was approved, [shows that] the methods used in, or the facilities
and controls used for, the manufacture, processing, and packing of such drug are inadequate to
assure and preserve its identity, strength, quality, and purity;” or (3) that new information
combined with knowledge previously available to the Secretary shows that “the labeling of such
a drug . . . is false or misleading.” Id.
* * *
To sum up, an ANDA typically passes through three distinct phases of FDA review on
the generic drug’s way to the marketplace. A generic drug manufacturer must first perfect an
application before that application is reviewed on the merits. If the ANDA could be approved,
except for the presence of blocking patents or other periods of exclusivity, the ANDA may be
tentatively approved, which approval does not allow the marketing of the drug but may serve to
preserve eligibility for a 180-day generic marketing exclusivity period by eliminating a potential
forfeiture event. After any patent impediments are removed, the ANDA may be granted final
approval, at which point the drug may be marketed in interstate commerce. Post-final approval,
an ANDA’s approval must be revoked, after due notice and hearing, pursuant to certain statutory
requirements, and may be revoked in certain other circumstances. As context for the treatment
of the ANDAs at issue in this litigation, the Court turns next to a review of the recent history of
enforcement actions against the plaintiffs as a result of rampant compliance problems at the
13
plaintiffs’ production facilities in India where the generic drugs at issue were to be
manufactured.
C. The Plaintiffs’ Repeated Compliance Failures
The history of the plaintiffs’ compliance—or lack thereof—with Current Good
Manufacturing Practice (CGMP) at their facilities in India, where the plaintiffs planned to
manufacture the generic drugs at issue in this litigation, is extensive. These compliance
problems were apparently ongoing before, during, and even after the Federal defendants gave
tentative approval to the ANDAs at issue. The Federal defendants now admit that granting
tentative approval to these ANDAs was egregious error, which the FDA rectified, in November
2014, by rescinding the tentative approvals. These are the agency actions challenged by the
plaintiffs in this lawsuit.
1. The 2006 Inspection
The plaintiffs’ manufacturing facility in Simour District, Himanchal Pradesh, India
(“Paonta Sahib”), was inspected by the FDA between February 20 and 25, 2006 in connection
with certain of the plaintiffs’ pending NDAs and ANDAs, including for antiretroviral drugs on
the list of PEPFAR approved medications that were manufactured at the facility. AR at 1488
(Establishment Inspection Report, Ranbaxy Laboratories, Ltd. Simour District, India facility for
inspection beginning Feb. 20, 2006 and ending Feb. 25, 2006 (the “2006 Inspection Report”)).
At the time of the 2006 Inspection Report, the plaintiffs
Id. at 1491. 11
11
AR at
1491.
14
As reported in the 2006 Inspection Report,
, 12 id. at
1498–1506;
id. at 1507;
id.;
id.; , id. at 1507–08;
id. at 1508–09;
id. at 1509; and
, id.
The plaintiffs discounted these observations in three letters filed with the FDA. AR at
1478–83 (Letter from plaintiffs to FDA, Mar. 20, 2006); id. at 1475–77 (Letter from plaintiffs to
FDA, Apr. 20, 2006); id. at 1469–74 (Letter from plaintiffs to FDA, May 25, 2006). In each
letter, the plaintiffs addressed one or more of the FDA’s observations, either offering an
explanation for the observation, see, e.g., id. at 1481 (noting
), or noting that the
plaintiffs had adopted new practices in response to the observations, see, e.g., id. at 1477 (noting
new ).
12
Testing a drug’s stability determines the amount of time the drug remains safe and effective for use, with the
results of such tests determining the expiration date for the tested drug. See United States v. Baxter Healthcare
Corp., 901 F.2d 1401, 1414–15 (7th Cir. 1990).
15
2. The 2006 Warning Letter
Despite these explanations and implemented changes, the FDA issued a “Warning Letter”
to the plaintiff on June 15, 2006, noting that the inspection of the Paonta Sahib facility “revealed
significant deviations from U.S. Current Good Manufacturing Practice (CGMP) Regulations . . .
in the manufacture of drug products.” Id. at 1462 (Letter from FDA to plaintiff, June 15, 2006
(the “2006 Warning Letter”)). The 2006 Warning Letter acknowledged the plaintiffs’ “actions to
restructure the stability group and institute a Management Review Committee to oversee the
stability program,” but noted that the agency “still [had] concerns regarding the observations.”
Id. Even with the changes, the FDA stated that “[t]here is no assurance that the stability sample
test intervals for each attribute examined have been met to assure valid estimates of stability.”
Id. at 1463.
Perhaps foreshadowing later problems that would develop with the plaintiffs’ reports to
the FDA, the agency noted that the plaintiffs had averred that “a hard copy handwritten master
list . . . identifies all the samples placed in each of the stability chambers” at the facility. Id. at
1464. The FDA investigators, however, did not see any such master list, “nor was it mentioned
or provided to the investigative team when they initially requested the sample logbook or
throughout the inspection.” Id. The 2006 Warning Letter required the plaintiffs to submit a
print-out of another log pertaining to stability sampling that the FDA investigators also failed to
observe on their inspection, and further noted that certain of the plaintiffs’ explanations were
self-contradictory. See id. (noting “samples cannot be for both ‘investigational purposes’ only
and ‘impurity profile trending/deviations’ because impurity testing is part of the drug product
stability program”); id. at 1466 (“the purpose of these ‘stand-by’ samples remains unclear . . . .
[p]lease clarify if these samples are for ‘investigational’ purposes, ‘impurity profile’ trending, or
16
for ‘regulatory global filings’ and explain the rationale for storage of these samples at for up
to months.”).
Additionally, the 2006 Warning Letter contained details of the FDA’s own studies
finding that certain drugs from the Paonta Sahib facility “show much lower potencies in these
batches within approximately three to six months of release, and well before their expiration
dates,” as well as findings of “several abnormalities” among antiretroviral drugs shipped by the
plaintiff to African nations under the PEPFAR program. See id. at 1467. As a result, the 2006
Warning Letter advised the plaintiffs that “[u]ntil FDA has confirmed correction of the
deficiencies observed during the most recent inspection and compliance with CGMPs, this office
will recommend withholding approval of any new applications listing your Paonta Sahib facility
as the manufacturer of finished pharmaceutical drug products.” Id.In late August 2006, the plaintiffs responded to the 2006 Warning Letter by reaffirming
their intention “to improve our quality programs and to enhance [their] operational performance
at the Paonta Sahib facility.” Id. at 1436 (Letter from plaintiffs to FDA, Aug. 29, 2006). As part
of that commitment, the plaintiffs advised that they had retained a consulting firm “to verify that
[their] stability laboratory program improvements are effective and systemic, and to verify the
effectiveness of [their] commitments made in response to the Warning Letter.” Id. This
consulting team’s assessment began in early July 2006 and was still ongoing as of August 29.
Id. The plaintiffs also included a detailed response to the 2006 Warning Letter, identifying
changes made to their policies and procedures in response to the FDA’s observations, including
some additional documentation. See id. at 1438–59. A month later, and of particular importance
for the instant ANDAs, the agency requested
17
Id. at 1434 (Letter from FDA to plaintiffs, Sept. 27, 2006).
The promised audit results proved to be a sticking point between the agency and the
plaintiffs. In response to the FDA’s request, the plaintiffs noted that “it was our and
PAREXEL’s understanding that it is FDA’s policy not to review or copy any reports or records
that result from such audits” and, consequently, the plaintiffs believed that turning over the
report would “affect the candor with which personnel would approach future audits, and make
them a far less valuable tool for senior management and for the company as a whole.” Id. at
1431 (Letter from plaintiffs to FDA, Oct. 13, 2006). The plaintiffs offered to work with the
agency to provide “other relevant materials” while stopping short of producing the audit report.
Id.On November 29, 2006, a team from the plaintiffs, including the plaintiffs’ CEO,
President, counsel, and a Vice-President from the plaintiffs’ consulting firm, met with twelve
FDA staff regarding the 2006 Warning Letter. Id. at 1424 (FDA’s Meeting Minutes, Nov. 29,
2006). The agency expressed concern at the meeting “that there appeared to be a lack of global
corrective actions” in response to the 2006 Warning Letter and peppered the plaintiffs’
representatives with questions. See id. at 1425–28. In response to at least one of the concerns,
the plaintiffs’ consultant noted that certain “information was not provided” to the consultant
“when requested” and believed that certain discrepancies between the plaintiffs’ recollection of
certain events and the inspectors’ memories was “due mainly to communication barriers.” Id. at
1427. 13
13
The plaintiffs’ minutes of the meeting indicate that the outside consultant vouched for the plaintiffs’ efforts and
good intentions, stating
18
The PAREXEL audit report was a specific topic of discussion. “The Agency clarified
that FDA’s policy of not requesting company audits does not apply to third party audits,” such as
that conducted by the plaintiffs’ consultant. See id. at 1428. The plaintiffs’ consultant averred
that “disclosing results of audits to the Agency would be destructive to the company’s audit
program and be destructive to [the plaintiffs’] quality improvement goals for fear of disclosure of
audits to the FDA.” Id. The agency dismissed those concerns, noting that “audits are routinely
received and reviewed by [the agency], and requested to see any information that could be
provided by Parexel.” Id. The plaintiffs agreed to “consider the request.” Id. As to the scope of
the audit, the plaintiffs’ consultant stated that the consultant was “doing a retrospective
verification of stability samples” and that a review of the accuracy of “all current and future
ANDA filings” and that the results for the pending ANDAs “will be completed . . . and provided
to the Agency in December, 2006.” Id.Finally, the FDA reiterated to the plaintiffs that the “hold on Ranbaxy’s application[s]”
instituted as part of the 2006 Warning Letter “would not be removed until the facility is re-
inspected to ensure that updated procedures have been implemented and global issues have been
addressed.” Id. Although the plaintiffs appeared to push for a re-inspection as soon as possible,
the agency noted that it “would be difficult to schedule a re-inspection in January, 2007, as this
does not allow for sufficient preparation time.” Id. Nevertheless, the FDA agreed to “work to
schedule the re-inspection as soon as it is possible” after the additional information the plaintiffs’
promised the agency in December 2006 was received. Id. at 1429.
AR at 1416
(Plaintiffs’ Minutes of Ranbaxy/FDA Meeting, Nov. 29, 2006).
19
The FDA conducted its re-inspection between January 26 and February 1, 2007, finding
the Paonta Sahib “site acceptable for APIs.” 14 AR at 1374 (Memo of Teleconference between
FDA and plaintiffs’ counsel, Apr. 5, 2007). The plaintiffs admitted in an April 2007
teleconference with the FDA that “Ranbaxy had not yet addressed all of [the FDA’s] concerns
from the June 2006 Warning Letter,” and that the audit of “stability raw laboratory data” was
still ongoing. Id. at 1375. The FDA informed plaintiffs that until they “reviewed the audit
report,” which the FDA had requested during the November 2006 meeting, “FDA could not
complete its CGMP compliance assessment” necessary to lift the hold on processing the
plaintiffs’ ANDAs. See id.
3. The Plaintiffs Seek Withdrawal Of FDA’s Compliance Hold
Two days before the plaintiffs’ would lose their 180-day generic marketing exclusivity
for a drug, tamsulosin hydrochloride—which is not at issue in this litigation—due to the
plaintiffs’ failure to obtain tentative approval within thirty months of the ANDA’s submission,
the plaintiffs notified the agency that “the retrospective stability verification promised during the
November 29, 2006 meeting between Ranbaxy and FDA has been completed, and that the
company’s ANDA submissions are being updated today to reflect changes identified in the
course of the review.” Id. at 1371 (Letter from plaintiffs to FDA, June 18, 2007). The plaintiffs
averred that with the completion of this retrospective review, the agency should be able to “lift
the application hold related to Ranbaxy’s finished dosage facility at Paonta Sahib, India” in time
to grant tentative approval to the plaintiffs’ tamsulosin ANDA so as to preserve the potential for
180-day exclusivity. Id. The plaintiffs summarized the review’s findings, noting that three
categories of errors were found and updates made to correct those errors, but, significantly, “in
14
“API” stands for “active pharmaceutical ingredients.”
20
no case did the corrections affect the previous conclusions about the stability of the sample.” Id.
at 1373.
Shortly after the submission of the corrections occasioned by the retrospective review,
the FDA requested further information, including access to the plaintiffs’ consultant’s stability
verification audit reports. See id. at 1366 (Letter from plaintiffs’ counsel to FDA, July 27, 2007
referring to “meeting with FDA on June 26, 2007”). In late July 2007, the plaintiffs’ counsel
provided the reports due to “the importance of resolving the hold,” even though they “were
initially prepared under privilege.” Id. The plaintiffs’ counsel summarized the reports as
showing a tiny proportion of errors discovered during a review of a sample of the plaintiffs’
stability tests, and averred that the plaintiffs had “taken exhaustive steps to assure the accuracy of
data contained in its stability reports and ANDA submissions.” Id. at 1370.
At the same time that the plaintiffs were advocating for the FDA to lift the compliance
hold on products manufactured at Paonta Sahib, a Federal criminal investigation into the
plaintiffs was ongoing. See id. at 1362 (Email chain between plaintiffs’ counsel and FDA, Dec.
27–28, 2007, referring to “implications for the criminal case of providing the audits”). Despite
the FDA’s persistent requests to review the audit reports from PAREXEL, the plaintiffs insisted
that these audits were privileged and would not be produced. See id. The failure to submit the
audits resulted in the withdrawal of an ANDA for clarithromycin, a drug for which the plaintiffs
did not have 180-day exclusivity but would otherwise have been able to market at the beginning
of 2008. See id. at 1365. The compliance hold continued. See id.
4. The 2008 Inspection
Between March 3 and March 7, 2008, FDA inspectors returned to the plaintiffs’ facilities
in India, this time to inspect a “new” plant, called “the Batamandi plant,” which was
21
See AR at 1316 (Establishment Inspection Report, issued Apr. 16,
2008). The inspection had three goals: (1)
(2)
and (3) f
15
Id. at 1314. The inspection revealed (1)
(2)
(3) . Id. at
1314–15.
In the course of the inspection, the FDA personnel discovered
. See id. at 1336–49.
. See id. at 1349.
Regarding the relationship between the Batamandi plant and the Paonta Sahib plant, the
inspectors discovered that
15
The FDA initiated the investigation
” AR at 1307.
22
Id. at 1351. The inspectors noted that
Id. at 1351. As
one inspector was leaving,
Id. at 1353.
In response to the damaging findings from this inspection, the plaintiffs
See AR at 1275 (Letter from plaintiffs
to FDA, May 1, 2008); but see id. at 1356 (noting that
).
The plaintiffs also admitted that
Id. at 1273.
See id. at 1277.
5. The 2008 Warning Letter
Following the 2008 inspection and after reviewing the plaintiffs’ response to the
inspectors’ observations, the FDA issued another Warning Letter to the plaintiffs. AR at 1266
(FDA Warning Letter to plaintiffs, Sept. 16, 2008 (the “2008 Warning Letter”)). Similarly to the
2006 Warning Letter, the 2008 Warning Letter alerted the plaintiffs to “significant deviations
from U.S. Current Good Manufacturing Practice” at both parts of the Paonta Sahib plant, and
that “[t]hese CGMP deviations cause [the plaintiffs’] drug products to be adulterated within the
meaning of” the FDCA. Id. Since the Batamandi plant was determined to be a mere extension
23
of the Paonta Sahib facility, not a new, separate facility as the plaintiffs had claimed, “the
violations observed during the March 2008 inspection [were] indications of continuing CGMP
deficiencies in the quality systems at the Paonta Sahib facility, including the failure of
production and quality management to prevent such deficiencies.” Id.
By 2008, the FDA’s inspectors were “concerned that these instances of discrepancies
observed during the March 2008 inspection, are indications of continuing, systemic CGMP
deficiencies at the Paonta Sahib facility.” Id. at 1267. For instance, the 2008 Warning Letter
opines that the plaintiffs’ “response regarding Employee I [who signed off on operations for
which he was not present] demonstrates a lack of knowledge by the employee regarding the
fundamental purpose of independent verification under CGMP, and the failure of [the plaintiffs]
to ensure that employees conducting and recording these checks understood these essential
requirements.” Id. at 1268. Such independent checks are “an essential part of U.S. CGMP
regulations” and the failure to perform the checks was cited as an “important example of the
necessary steps [the plaintiffs] need to implement to ensure product quality.” Id.
After detailing multiple instances of deficiencies in the plaintiffs’ Paonta Sahib plant’s
quality systems, the 2008 Warning Letter stated in no uncertain terms that if the plaintiffs “wish
to continue to ship [their] products to the United States, it is the responsibility of [the plaintiffs]
to assure compliance with all U.S. standards for Current Good Manufacturing Practices.” Id. at
1270. While the 2006 Warning Letter indicated that the FDA would recommend denial of any
applications for drugs manufactured at Paonta Sahib, the 2008 Warning Letter enhanced this
sanction by instituting a “refusal of admission” prohibiting the plaintiffs from exporting drugs
manufactured at Paonta Sahib to the United states because “the methods and controls used in
24
their manufacture do not appear to conform to current good manufacturing practice.” Id. at
1271. 16
6. The 2009 Letter
By 2009, with the criminal investigation proceeding and the FDA’s Center for Drug
Evaluation and Research (“CDER”) still concerned with the plaintiffs’ practices, the FDA issued
a letter informing the plaintiffs that it had “determined that Ranbaxy Laboratories Limited . . .
submitted untrue statements of material fact in abbreviated and new drug applications filed with
the Agency.” AR at 1254 (Letter from FDA to plaintiffs, Feb. 25, 2009 (the “2009 Letter”)).
Citing the observations at Paonta Sahib in 2006 and 2008 as well as the responses given by the
plaintiffs to those inspections, the agency determined that “[t]hese and other findings indicate a
pattern and practice of submitting untrue statements of material fact and other wrongful conduct,
which raise significant questions regarding the reliability of the data and information contained
in applications (pending and approved) . . . filed with the Agency.” Id. at 1258. Consequently,
the FDA informed the plaintiffs that, pursuant to FDA policy, the agency would begin assessing
“the validity of the data and information in all of Ranbaxy’s affected applications” and that the
FDA did “not intend ordinarily to conduct or to continue its normal substantive scientific review
(including review of data and labeling) of any such pending application or supplement, or of any
new application or supplemental applications” until the review was complete. Id. Among the
applications affected by the 2009 Letter were the two ANDAs at issue here: ANDA 77830 (for
esomeprazole magnesium) and ANDA 78078 (for valganciclovir hydrochloride). Id. at 1263. In
16
The FDA made an exception for one drug, ganciclovir, because the plaintiffs were “the sole source supplier of
Ganciclovir oral capsules” and “FDA considers it important to maintain a sufficient supply of this drug product.”
AR at 1271. Nevertheless, the plaintiffs were warned that a new arrangement would have to be reached regarding
this drug, “which would likely include third-party supervision and verification of each batch prior to release” in
order to allow the drug to be exported to the United States. Id.
25
essence, as of February 25, 2009, the FDA had frozen all of the plaintiffs’ applications
containing data from Paonta Sahib and would take no further steps toward approving those
applications until the review of the plaintiffs’ data was complete.
7. The Consent Decree And Criminal Plea
Three years later, the United States filed a Complaint for Permanent Injunction against
the plaintiffs in the U.S. District Court for the District of Maryland. AR at 1232 (Complaint for
Permanent Injunction, Case No. 12-cv-250 (JFM), Jan. 25, 2012). On the same date, the
plaintiffs and the government filed a consent decree requiring the plaintiffs to, inter alia,
establish new practices and offices to ensure compliance, AR at 1180–81 (Consent Decree of
Permanent Injunction, Case No. 12-cv-250 (JFM), Jan. 25, 2012); withdraw certain ANDAs, id.
at 1185; submit other ANDAs to new audits, id. at 1187–89; and ensure compliance with CGMP
at the plaintiffs’ Paonta Sahib and Dewas, India facilities, id. at 1189–90. 17 The extensive
requirements in the Consent Decree supplanted the 2009 Letter’s requirements, such that “the
provisions of [the] Decree with respect to [the Paonta Sahib] facilities constitute the full
requirements that [the plaintiffs] must satisfy to address FDA’s concerns.” Id. at 1224.
Sixteen months later, one of the plaintiffs’ subsidiaries, Ranbaxy USA, Inc., pleaded
guilty to seven criminal counts of fraud and introduction of adulterated drugs into interstate
commerce. See Pls.’ TRO Reply at 18, ECF No. 28 (referring to guilty plea and stating plaintiffs
“paid a very heavy price from which it will take years to recover”). The combination of criminal
fines, criminal forfeitures, and a civil settlement levied against the plaintiffs’ subsidiary
amounted to $500,000,000. U.S. Dep’t of Justice, “Generic Drug Manufacturer Ranbaxy Pleads
17
The agency issued a Warning Letter for the plaintiffs’ manufacturing facility at Dewas, India that was similar to
one for Paonta Sahib, based on extensive CGMP violations at the former facility. AR at 1513 (FDA Warning Letter
to plaintiffs, Sept. 16, 2008).
26
Guilty and Agrees to Pay $500 Million to Resolve False Claims Allegations, cGMP Violations
and False Statements to the FDA,” May 13, 2013, available at
http://www.justice.gov/opa/pr/generic-drug-manufacturer-ranbaxy-pleads-guilty-and-agrees-pay-
500-million-resolve-false. As previously noted, this guilty plea was touted as the “largest drug
safety settlement” in history. Id.
Yet, even this massive fine and the Consent Decree do not appear to have resolved the
plaintiffs’ compliance problems. Due to newly observed CGMP deficiencies at two of the
plaintiffs’ other plants in India, the Consent Decree has been expanded and currently “prohibits
Ranbaxy from distributing in interstate commerce drug products, including APIs, manufactured
at the Paonta Sahib, Dewas, Mohali, and Toansa facilities until Ranbaxy demonstrates its CGMP
compliance at those facilities.” Defs.’ TRO Opp’n at 17.
Having provided context for the FDA’s evolving understanding of the breadth and depth
of the plaintiffs’ compliance failures, culminating in a criminal conviction, an import ban, and
hundreds of millions of dollars in fines, the Court now turns to the two ANDAs at issue in this
litigation and the errors by the FDA that led to their tentative approval.
D. The Plaintiffs’ ANDAs
Five of the plaintiffs’ ANDAs affected by the problems at Paonta Sahib are of particular
relevance to the instant litigation, including three ANDAs approved in 2007 and 2008,
immediately prior to the tentative approval of ANDA 77830 for esomeprazole magnesium, and
ANDA 78078 for valganciclovir hydrochloride tablets, which are the two ANDAs at issue here.
The three prior ANDAs are addressed first before turning to the two ANDAs at issue in the
instant litigation.
27
1. Tentative Approval For Three Of The Plaintiffs’ ANDAs Despite
Compliance Problems At Paonta Sahib
The AR shows that the plaintiffs received five tentative approvals despite their Paonta
Sahib facility failing to comply with CGMP. The first of these ANDA exceptions was the
application for tamsulosin, for which the plaintiffs would have forfeited any claim to 180-day
exclusivity if they did not obtain tentative approval by June 20, 2007. See supra Part I.C.3.
Despite the compliance hold preventing any tentative approvals for generic products
manufactured as the Paonta Sahib facility, the plaintiffs launched a multi-pronged initiative to
get this ANDA approved by approaching two FDA components, CDER and Office of Generic
Drugs (“OGD”), with different arguments. See AR at 1371. In one approach, the plaintiffs
alerted the FDA’s CDER component that the stability verification audits the FDA had requested
were complete and showed Paonta Sahib was following CGMP, thus negating the need for the
compliance hold. See AR at 1371. As a second approach, the plaintiffs’ counsel threatened the
FDA’s OGD component with a lawsuit if the agency did not immediately “confirm[] that
Ranbaxy will not forfeit on June 20, 2007 its right to 180-day exclusivity.” AR at 1868 (Letter
from plaintiffs’ counsel to FDA’s OGD, June 18, 2007).
In a June 18, 2007 letter to the OGD, plaintiffs’ counsel raised the same argument the
plaintiffs press here: that 21 U.S.C. § 355(j) “does not authorize FDA to withhold tentative
approval, and thereby deprive an ANDA applicant of its 180-day exclusivity, based on the
adequacy of the methods, facilities, or controls used for the manufacture of the drug product.”
Id. at 1873. The letter left no doubt that if OGD did not grant tentative approval by June 20,
2007, just two days after the date of the letter from the plaintiffs’ counsel, the FDA would find
itself embroiled in lawsuit because, in the plaintiffs’ view, failure to do so “would be arbitrary
28
and capricious,” and because “there is no factual basis” to conclude that the conditions of the
2006 Warning Letter had not been resolved. See id. at 1874.
Under this threat of litigation and while CDER was processing the results of the stability
studies submitted by the plaintiffs, though without the oft-requested independent audit reports
from PAREXEL, see supra Part I.C.3, the OGD tentatively approved the plaintiffs’ ANDA for
tamsulosin. AR at 1858 (OGD Approval Routing Summary). Included in the routing summary
for the tentative approval is an email chain from CDER employees to OGD, noting that,
In other words, the agency’s compliance staff
apparently believed,
See id. CDER noted that
Id. 18 With this caveat, CDER OGD’s grant of tentative
approval. Id. at 1860.
18
r
29
The process by which the FDA considered four more of the plaintiffs’ other ANDAs for
tentative approval is reminiscent of a child’s game of telephone, where the initial message
becomes distorted upon repetition. A second ANDA from the plaintiffs, for valsartan, was
reactivated by agency staff the day after tentative approval was granted to the tamsulosin ANDA
because the plaintiffs were
AR at 1856 (email chain between FDA employees, June
21–July 10, 2007). Review of this ANDA was, similarly to the ANDA for tamsulosin, urgent,
since the plaintiffs would lose their eligibility for the 180-day generic marketing exclusivity if
the ANDA were not tentatively approved in short order. An intervening change in the drug’s
monograph, however, resulted in a several month delay from the OGD’s resuming review of the
ANDA to its tentative approval. See id. at 1854–55.
r Id. at 1858. The defendants have not disputed the plaintiffs’ attribution of these
titles and others noted by the plaintiff, see Pls.’ Mem. at 35, with the exception of Ms. Dickinson’s title at the time
being “Associate Chief Counsel,” not “Deputy Chief Counsel,” Defs.’ Mem. at 8 n.4.
30
By October 2007, OGD asserted that the
” Id. at 1838 (email chain
between Edwin Rivera Martinez and William P. Rickman, Oct. 25, 2007). This rationale never
appeared in communications from CDER prior to October 2007 and, indeed,
. See generally AR. Nevertheless, the valsartan ANDA was given tentative
approval shortly thereafter. See id. at 1834–35 (OGD Approval Routing Summary).
Thus, by late 2007, the FDA had violated its own policy not to grant tentative approval to
ANDAs when a compliance hold was in place three times, for the plaintiffs’ tamsulosin,
galantamine, and valsartan ANDAs. Also, by late 2007, the CDER and OGD employees
involved in making these decisions were apparently no longer considering why an exception to
the plaintiffs’ compliance hold should be granted, but were merely cutting-and-pasting language
from previous emails pertaining to other ANDAs recommending that OGD issue tentative
approval despite the compliance hold.
31
The two ANDAs at issue in this litigation, for
esomeprazole and valganciclovir, were issued after this game of telephone had progressed for six
months.
2. The Plaintiffs’ Esomeprazole ANDA
The plaintiffs filed their ANDA for esomeprazole, including their paragraph IV
certification, by letter dated August 4, 2005. AR at 1792 (ANDA Checklist for Completeness
and Acceptability of an Application). The ANDA was noted as the first generic product
application received and was approved for filing as substantially complete on September 30,
2005 by personnel in OGD. Id.
f
32
f
f
Based on CDER’s recommendation, OGD
granted tentative approval for the plaintiff’s esomeprazole ANDA 77830, on February 5, 2008,
noting
Id. at 1771–72 (OGD
Approval Routing Summary).
19
“OAI” stands for “Official Action Indicated,” meaning an intervention from the FDA.
33
As part of the 2012 Consent Decree, the plaintiffs were required to
Id. at 1768 (letter from FDA to plaintiffs, May 4, 2012
(internal quotation marks omitted)). CDER notified the plaintiffs that the esomeprazole ANDA
when it was initially filed, allowing the FDA, under the terms of
the consent decree, to proceed in its audit of the esomeprazole ANDA. Id. at 1769. This audit
was designed to determine if the application contained any “untrue statements of material fact”
or “a pattern or practice of data irregularities affecting approval,” as provided for in the Consent
Decree. AR at 1766 (letter from FDA to plaintiffs, Nov. 4, 2014). The plaintiffs were notified
on November 4, 2014, that there did not appear to be any “untrue statements of material fact” or
“data irregularities” preventing the FDA from resuming its review of the ANDA. Id. Since the
2009 Letter and the Consent Decree had frozen all action on any of the plaintiffs’ NDAs or
ANDAs, completing this audit did not guarantee final approval, but rather allowed the FDA to
resume considering whether the ANDA was eligible for such approval. See id.
3. The Plaintiffs’ Valganciclovir ANDA
The plaintiffs filed their ANDA for valganciclovir, including their paragraph IV
certification, by letter dated December 22, 2005. AR at 1820 (ANDA Checklist for
Completeness and Acceptability of an Application). This ANDA, number 78078, was the first
generic product application received for this drug and was approved for filing as substantially
complete on February 27, 2006. Id.
34
Id.
Based in part on this recommendation, OGD granted the
plaintiffs tentative approval for valganciclovir on June 20, 2008. Id. at 1807 (OGD Approval
Routing Summary).
Pursuant to the 2012 Consent Decree, the ANDA was reviewed and found to have been
substantially complete when submitted. Id. at 1802–03 (letter from FDA to plaintiffs, May 15,
35
2012). Also pursuant to the consent decree, the ANDA was audited and found not to “appear to
contain any untrue statements of material fact . . . nor does it appear to contain a pattern or
practice of data irregularities affecting approval,” thus allowing FDA to resume reviewing the
ANDA on August 10, 2012. Id. at 1798–99 (letter from FDA to plaintiffs, Aug. 10, 2012).
E. The Instant Litigation
Despite the intensive investigation the FDA conducted of the plaintiffs’ manufacturing
facilities—and the parallel criminal investigation—the FDA did not revisit any of the ANDAs
tentatively approved in 2007 and 2008, including the valganciclovir and esomeprazole ANDAs,
until 2014. Defs.’ Mem. at 37. The Federal defendants explain that “[i]t was only in 2014, when
applications from two other sponsors were ready for approval, that FDA had reason to determine
whether Ranbaxy was entitled to exclusivity for this drug and, at that time, the agency
recognized that Ranbaxy’s claim to exclusivity was predicated on an erroneous decision.” Id.
When two other generic drug manufacturers, defendant-intervenors Dr. Reddy’s and Endo,
sought final approval for their own ANDAs for valganciclovir, the FDA reexamined the two
ANDAs at issue here. See id. After review, the agency “determined that FDA erred in
tentatively approving” the plaintiffs’ two ANDAs because tentative approval was granted “while
the compliance status of one or more of the facilities referenced in the applications was
unacceptable to support tentative approval.” Rescission Letter at 1. Consequently, the FDA
revoked the tentative approval for the plaintiffs’ valganciclovir and esomeprazole ANDAs and
determined that the rescission meant the plaintiffs had forfeited any eligibility for 180-day
exclusivity for the valganciclovir ANDA by failing to obtain tentative approval within thirty
months of the date of the ANDA’s submission. Id. at 1–2. The same day, November 4, 2014,
the agency granted final approval to defendant-intervenors Dr. Reddy’s and Endo for their own
valganciclovir ANDAs. Compl. ¶ 41.
36
Ten days later, the plaintiffs filed the instant suit for declaratory and injunctive relief,
Compl. at 1, and a motion for a temporary restraining order, ECF No. 2. A hearing on the TRO
was held on November 19, 2014, by which time defendant-intervenors Dr. Reddy’s and Endo
had moved for and been granted leave to intervene. Minute Order, Nov. 17, 2014 (setting
hearing date); Minute Order Nov. 17, 2014 (granting defendant-intervenor Endo’s Motion to
Intervene); Minute Order, Nov. 17, 2014 (granting defendant-intervenor Dr. Reddy’s Motion to
Intervene).
After oral argument at the November 19, 2014 hearing, the Court denied the plaintiffs’
motion for a temporary restraining order “because the plaintiffs have not made a clear showing
that this Court has subject matter jurisdiction over this matter or a likelihood of irreparable harm
. . . let alone satisfy the other factors for the extraordinary relief of a TRO.” Hrg. Tr. 91:20-25,
ECF No. 61. Specifically, the plaintiffs had not shown at the time of the November 19, 2014
hearing that the plaintiffs “can take advantage of that [180-day] exclusivity” for valganciclovir
that had been rescinded, “or that they will suffer any imminent harm as a result of the loss of that
exclusivity.” Id. 92:21-24. As for the plaintiffs’ esomeprazole ANDA, the plaintiffs failed to
show “that the FDA has taken any final agency action regarding the plaintiffs’ eligibility for 180-
day exclusivity,” since the Rescission Letter stated that the FDA, “consistent with its
longstanding policy . . . ‘has not made any determination regarding Ranbaxy’s eligibility for
180-day exclusivity for this ANDA.’” Id. 93:6-16 (quoting Rescission Letter at 1 n.3).
In light of the plaintiffs’ stated intention to move for a preliminary injunction and the
proposed briefing schedule submitted by the parties, consideration of the plaintiffs’ preliminary
injunction motion and the defendants’ and defendant-intervenors’ motions for summary
judgment was consolidated. Minute Order, Nov. 21, 2014 (citing FED. R. CIV. P. 65(a)(2)).
37
After receiving extensive briefing from the parties, the preliminary injunction hearing was
vacated “to conserve the parties’ and judicial resources.” Minute Order, Jan. 7, 2015 (citing
LCvR 7(f)).
After the motions were fully briefed, the defendants notified the Court that FDA had
“forfeited its eligibility for 180-day exclusivity for esomeprazole because it failed to obtain
tentative approval of its ANDA within 30 months after the date on which the ANDA was
submitted” and approved an ANDA filed by defendant-intervenor Ivax for the same medication.
Defs.’ Not. Admin. Action at 1, ECF No. 67. Three days later, defendant-intervenors Ivax and
Teva moved for and were granted leave to intervene. Minute Order, Jan. 30, 2015. Defendant-
intervenors Ivax and Teva moved for summary judgment on February 2, 2015, which motion
became ripe for decision on February 5, 2015.
II. LEGAL STANDARD 20
A. Summary Judgment
Pursuant to Federal Rule of Civil Procedure 56, summary judgment may be granted when
the court finds, based upon the pleadings, depositions, affidavits, and other factual materials in
the record, “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), (c); see Tolan v. Cotton, 134 S. Ct. 1861,
1866 (2014) (per curiam); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). “A
20
Although the plaintiffs’ motion is one for preliminary injunction, since the Court consolidated consideration of the
preliminary injunction motion with the defendants’ and defendant-intervenors’ motions for summary judgment on
the merits, the motions are all properly considered as motions for summary judgment. Pls.’ Reply Defs.’ Opp’n Pls.
Mot. (“Pls. Reply”) at 23 n.8, ECF No. 60; Teva Pharms. USA, Inc. v. FDA, 441 F.3d 1, 3 (D.C. Cir. 2006)
(accepting without comment district court’s consideration of consolidated preliminary injunction and summary
judgment motions as motions for summary judgment); Ass’n. of Flight Attendants v. USAir, Inc., 24 F.3d 1432,
1436 (D.C. Cir. 1994) (same); Takeda Pharms., USA v. Burwell, No. 14-1850, 2015 WL 252806, at *2 n.1 (D.D.C.
Jan. 13, 2015) (consolidating consideration of preliminary injunction motion with summary judgment motions and
evaluating all motions under summary judgment standard). Thus, the familiar four part test for issuing a preliminary
injunction is irrelevant to the resolution of the instant motions.
38
genuine issue of material fact exists if the evidence, ‘viewed in a light most favorable to the
nonmoving party,’ could support a reasonable jury’s verdict for the non-moving party.”
Muwekma Ohlone Tribe v. Salazar, 708 F.3d 209, 215 (D.C. Cir. 2013) (quoting McCready v.
Nicholson, 465 F.3d 1, 7 (D.C. Cir. 2006)).
In APA cases such as this one, “the district judge sits as an appellate tribunal. The ‘entire
case’ on review is a question of law.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083
(D.C. Cir. 2001) (collecting cases). Accordingly, this Court need not and ought not engage in
lengthy fact finding, since “[g]enerally speaking, district courts reviewing agency action under
the APA’s arbitrary and capricious standard do not resolve factual issues, but operate instead as
appellate courts resolving legal questions.” James Madison Ltd. by Hecht v. Ludwig, 82 F.3d
1085, 1096 (D.C. Cir. 1996); see also Sierra Club v. Mainella, 459 F. Supp. 2d 76, 90 (D.D.C.
2006) (“Under the APA . . . the function of the district court is to determine whether or not as a
matter of law the evidence in the administrative record permitted the agency to make the
decision it did.”) (quotation marks and citation omitted)); accord McDonough v. Mabus, 907 F.
Supp. 2d 33, 42 (D.D.C. 2012); Wilson v. McHugh, 842 F. Supp. 2d 310, 315 (D.D.C. 2012).
Judicial review is limited to the administrative record, since it “is black-letter administrative law
that in an [Administrative Procedure Act] case, a reviewing court should have before it neither
more nor less information than did the agency when it made its decision.” CTS Corp. v. EPA,
759 F.3d 52, 64 (D.C. Cir. 2014) (internal citations and quotation marks omitted; alteration in
original); see 5 U.S.C. § 706(2)(F) (“[T]he court shall review the whole record or those parts of it
cited by a party . . . .”); Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 743 (1985) (in applying
the arbitrary and capricious standard under the APA, “[t]he focal point for judicial review should
39
be the administrative record already in existence . . . .” (quoting Camp v. Pitts, 411 U.S. 138, 142
(1973)).
B. Chevron Framework
The familiar two-step process set out in Chevron U.S.A., Inc. v. Natural Resources
Defense Council, Inc. (Chevron), 467 U.S. 837, 845 (1984), applies to judicial review of claims
that an agency has acted “in excess of statutory jurisdiction, authority or limitations, or short of
statutory right” under the APA. See Am. Fed’n of Gov’t Emps. Local 3669 v. Shinseki, 709 F.3d
29, 33 (D.C. Cir. 2013) (internal quotation marks omitted). At the first step of the inquiry, a
court must “ask whether Congress has directly addressed the precise question at issue.” Mayo
Found. for Med. Educ. & Research v. United States, 131 S. Ct. 704, 711 (2011) (internal
quotation marks omitted). “‘If the intent of Congress is clear, 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.’” City of Arlington, Tex. v. FCC, 133 S. Ct. 1863, 1868 (2013) (quoting Chevron, 467
U.S. at 842–43).
On the other hand, if “‘Congress has not directly addressed the precise [interpretative]
question at issue’ . . . the agency is charged with filling the ‘gap left open’ by the ambiguity.”
EPA v. EME Homer City Generation, L.P. (EME Homer), 134 S. Ct. 1584, 1603 (2014) (quoting
Chevron, 467 U.S. at 843, 866) (first alteration in original). Thus, if the statute is silent or
ambiguous with respect to the specific issue under consideration, the analysis shifts to Chevron
step two, where “the question for the court is whether the agency’s answer is based on a
permissible construction of the statute.” City of Arlington, Tex., 133 S. Ct. at 1868 (internal
quotation marks omitted); see CSX Transp., Inc. v. Nat’l Surface Transp. Bd., 754 F.3d 1056,
1063 (D.C. Cir. 2014) (same). The job of the courts is not to engage in “their own interstitial
lawmaking” and “mak[e] public policy by prescribing the meaning of ambiguous statutory
40
commands.” City of Arlington, Tex., 133 S. Ct. at 1873 (quoting Ford Motor Credit Co. v.
Milhollin, 444 U.S. 555, 568 (1980)). Rather, the “archetypal Chevron questions, about how
best to construe an ambiguous term in light of competing policy interests” belong to the
“agencies that administer the statutes.” See id.When Congress has delegated to the agency authority to make rules carrying the force of
law, and the challenged agency interpretation was promulgated in the exercise of that authority,
then the agency’s rule is entitled to deference “as long as it is a permissible construction of the
statute, even if it differs from how the court would have interpreted the statute in the absence of
an agency regulation.” Sebelius v. Auburn Reg’l Med. Ctr., 133 S. Ct. 817, 826 (2013); see also
EME Homer, 134 S. Ct. at 1606 (determining if agency’s interpretation of ambiguous phrase is
“permissible construction of statute” as second step of Chevron analysis); Nat’l Cable &
Telecomms. Ass’n v. Brand X Internet Servs. (Brand X), 545 U.S. 967, 980 (2005) (“If a statute is
ambiguous, and if the implementing agency’s construction is reasonable, Chevron requires a
federal court to accept the agency’s construction of the statute, even if the agency’s reading
differs from what the court believes is the best statutory interpretation.”). Courts “routinely
accord dispositive effect to an agency’s reasonable interpretation of ambiguous statutory
language.” EME Homer, 134 S. Ct. at 1603 (citation omitted). “Deference is appropriate even if
the agency’s interpretation first appears during litigation, unless the interpretation conflicts with
prior interpretations or amounts to nothing more than a convenient litigating position.”
Shieldalloy Metallurgical Corp. v. Nuclear Regulatory Comm’n, 768 F.3d 1205, 1208–09 (D.C.
Cir. 2014) (internal quotation marks and citations omitted). A court “need not conclude that the
[agency’s] interpretation of the [s]tatute is the only one it permissibly could have adopted, or
even the interpretation deemed most reasonable by the courts,” so long as it is reasonable. Nat’l
41
Treasury Emps. Union v. Fed. Labor Relations Auth. (NTEU), 754 F.3d 1031, 1042 (D.C. Cir.
2014) (internal quotation marks and citations omitted; emphasis in original).
C. Administrative Procedure Act
Under the APA, a reviewing court shall “hold unlawful and set aside agency action,
findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law,” 5 U.S.C. § 706(2)(A), “in excess of statutory jurisdiction,
authority, or limitations, or short of statutory right,” id. § 706(2)(C), or “without observance of
procedure required by law,” id. § 706(2)(D); see Otis Elevator Co. v. Sec’y of Labor, 762 F.3d
116, 120–21 (D.C. Cir. 2014) (citing Fabi Constr. Co. v. Sec’y of Labor, 370 F.3d 29, 33 (D.C.
Cir. 2004)).
In evaluating agency actions under the “arbitrary and capricious” standard, courts “must
consider whether the [agency’s] decision was based on a consideration of the relevant factors and
whether there has been a clear error of judgment.” Marsh v. Ore. Natural Res. Council, 490 U.S.
360, 378 (1989) (citation and internal quotation marks omitted); Citizens to Preserve Overton
Park, Inc. v. Volpe (Overton Park), 401 U.S. 402, 416 (1971), overruled on unrelated grounds
by Califano v. Sanders, 430 U.S. 99, 105 (1977); Blue Ridge Envtl. Def. League v. Nuclear
Regulatory Comm’n, 716 F.3d 183, 195 (D.C. Cir. 2013). The scope of review under this
standard “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. Auto. Ins. Co. (State Farm), 463 U.S. 29, 43 (1983); see
also Fogo De Chao (Holdings) Inc. v. U.S. Dep’t of Homeland Sec., 769 F.3d 1127, 1135 (D.C.
Cir. 2014) (same) (quoting Judulang v. Holder, 132 S. Ct. 476, 483 (2011)); Agape Church, Inc.
v. FCC, 738 F.3d 397, 408 (D.C. Cir. 2013) (same) (quoting Cablevision Sys. Corp. v. FCC, 597
F.3d 1306, 1311 (D.C. Cir. 2010)).
42
“[T]he arbitrary and capricious standard is ‘highly deferential’ and ‘presumes agency
action to be valid[.]’” Am. Trucking Ass’ns, Inc. v. Fed. Motor Carrier Safety Admin., 724 F.3d
243, 245 (D.C. Cir. 2013) (quoting Am. Wildlands v. Kempthorne, 530 F.3d 991, 997 (D.C. Cir.
2008)); Envtl. Def. Fund, Inc. v. Costle, 657 F.2d 275, 283 (D.C. Cir. 1981) (same). If an
agency, however, “failed to provide a reasoned explanation, or where the record belies the
agency’s conclusion, [the court] must undo its action.” Cnty. of Los Angeles v. Shalala, 192 F.3d
1005, 1021 (D.C. Cir. 1999) (quoting BellSouth Corp. v. FCC, 162 F.3d 1215, 1222 (D.C. Cir.
1999)); see Select Specialty Hosp.-Bloomington, Inc. v. Burwell, 757 F.3d 308, 312 (D.C. Cir.
2014) (“[T]here are cases where an agency’s failure to state its reasoning or to adopt an
intelligible decisional standard is so glaring that we can declare with confidence that the agency
action was arbitrary and capricious.” (quoting Checkosky v. SEC, 23 F.3d 452, 463 (D.C. Cir.
1994) (internal quotation marks omitted; alteration in original)). At the very least, the agency
must have reviewed relevant data and articulated a satisfactory explanation establishing a
“rational connection between the facts found and the choice made.” State Farm, 463 U.S. at 43(internal quotation marks and citation omitted); EME Homer, 134 S. Ct. at 1602 (holding that
agency “retained discretion to alter its course [under a regulation] provided it gave a reasonable
explanation for doing so”); see also Amerijet Int’l, Inc. v. Pistole, 753 F.3d 1343, 1350 (D.C. Cir.
2014) (“[A] fundamental requirement of administrative law is that an agency set forth its reasons
for decision; an agency’s failure to do so constitutes arbitrary and capricious agency action.”
(internal quotation marks and citation omitted)). “[C]onclusory statements will not do; an
agency’s statement must be one of reasoning.” Amerijet Int’l Inc., 753 F.3d at 1350 (internal
quotation marks omitted; emphasis in original).
43
An agency’s action is arbitrary and capricious if that action “has relied on factors which
Congress has not intended it to consider, entirely failed to consider an important aspect of the
problem, offered an explanation for its decision that runs counter to the evidence before the
agency, or is so implausible that it could not be ascribed to a difference in view or the product of
agency expertise.” Am. Wildlands, 530 F.3d at 997–98 (internal quotation marks omitted). While
the agency’s explanation cannot “run[ ] counter to the evidence,” State Farm, 463 U.S. at 43,
courts should “uphold a decision of less than ideal clarity if the agency’s path may reasonably be
discerned,” Bowman Transp., Inc. v. Ark.–Best Freight Sys., Inc., 419 U.S. 281, 286 (1974).
Furthermore, when “an agency has acted in an area in which it has ‘special expertise,’ the
court must be particularly deferential to [the agency’s] determinations.” Sara Lee Corp. v. Am.
Bakers Ass’n Ret. Plan, 512 F. Supp. 2d 32, 37 (D.D.C. 2007) (quoting Bldg. & Constr. Trades
Dep’t, AFL–CIO v. Brock, 838 F.2d 1258, 1266 (D.C. Cir. 1988)). “Deferring as appropriate to
the agency’s expertise and looking only for ‘a rational connection between the facts found and
the choice made,’” Am. Trucking Ass’ns, Inc., 724 F.3d at 249 (quoting State Farm, 463 U.S. at
43), “we remain ever mindful that in performing ‘a searching and careful inquiry into the facts,
we do not look at the [agency’s] decision as would a scientist, but as a reviewing court exercising
our narrowly defined duty of holding agencies to certain minimal standards of rationality.’” Id.(quoting Nat’l Envtl. Dev. Ass’ns Clean Air Project v. EPA, 686 F.3d 803, 810 (D.C. Cir. 2012)).
III. DISCUSSION
The plaintiffs assert four grounds to invalidate the Federal defendants’ decision to rescind
the tentative approvals for the plaintiffs’ ANDAs for esomeprazole and valganciclovir. First, the
plaintiffs argue that the FDA’s decision is contrary to the plain text of 21 U.S.C. § 355, which, in
the plaintiffs’ view, does not authorize the FDA to decline to issue tentative approval for an
44
ANDA because the facility in which the drug is to be manufactured is out of compliance with
CGMP. Pls.’ Mem. at 1. Second, the plaintiffs contend that, contrary to the FDA’s assertions
about making an “error,” the agency “consciously adopted [the plaintiffs’] interpretation of the
statute when it considered” whether to issue tentative approval to the ANDAs at issue and has
now changed its policy. Id. at 2. Third, the plaintiffs contend that the FDA has no authority to
rescind an ANDA’s tentative approval. Id. at 3. Finally, the plaintiffs argue that the agency’s
interpretation of the forfeiture trigger at issue here is contrary to the plain text of the statute. Id.
at 31. None of these arguments is persuasive for the reasons explained below. 21
A. The FDA May Condition Tentative Approval On Compliance With CGMP
First, the plaintiffs assert that the Federal defendants’ interpretation of the FDCA as
allowing them to condition tentative approval of ANDAs on compliance with CGMP is not in
accordance with law, and thus violates the APA. See Pls.’ Mem. at 1. Under the APA, the
agency’s interpretation of a statute that the agency is tasked with enforcing is subject to the
familiar two-step Chevron inquiry. See Chevron, 467 U.S. at 845. Under the first step, the
statute under which the agency purports to act must be examined for ambiguity. Id. If Congress
has not spoken with clarity as to the precise question at issue in the matter at issue, the analysis
moves to Chevron step two. Under the second step, assuming the statute is ambiguous, a court
must determine if the agency’s interpretation of the statute is reasonable. Id. In the instant
matter, the statutory provision at issue is ambiguous as to whether the agency may condition
21
The FDA issued its final decision regarding the plaintiffs’ eligibility for 180-day exclusivity for the plaintiffs’
esomeprazole ANDA on January 26, 2015, after briefing on the instant motions was complete. Defs.’ Not. Admin.
Action (“Defs.’ Not.”) at 1, ECF No. 67. The Federal defendants now concede that the plaintiffs’ claim regarding
the esomeprazole ANDA is ripe for judicial review, and the Court concurs. Id. By contrast to the posture of the
plaintiffs’ claim regarding the esomeprazole ANDA at the time of the TRO hearing, the Court finds that the
plaintiffs have alleged a concrete and particularized injury stemming from the agency’s rescission of tentative
approval for this ANDA and the resulting loss of 180-day exclusivity eligibility, that is both fairly traceable to the
defendants’ actions and redressable by the relief sought. Accordingly, the plaintiffs have standing to challenge the
agency’s action. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
45
tentative approval on compliance with CGMP, and the agency’s interpretation of the statute is
reasonable.
1. 21 U.S.C. § 355(j) Is Ambiguous Regarding CGMP Compliance
The plaintiffs’ submissions fail to make clear whether they are challenging the FDA’s
position under the first or second step of the Chevron analysis. Nevertheless, the arguments
raised by the plaintiffs acknowledge the agency’s alternative interpretation of 21 U.S.C. § 355(j)
and thereby recognize that this provision is ambiguous as to whether the agency may condition
the granting of tentative approval on compliance with CGMP at the facility identified in an
ANDA for manufacture of the generic drug product. See, e.g., Pls.’ Mem. at 25 (“FDA’s Letter
Decision misinterprets the statutory requirements for obtaining TA”); id. at 28 (“FDA’s position
effectively rewrites the statute”); Pls.’ Reply at 4 (“The problem for the defendants is that only
Ranbaxy’s statutory interpretation fulfills that duty” to “give meaning to every clause and word”
(internal quotation marks omitted)). But see Pls.’ Mem. at 27–28 (“the statute’s plain text and
structure make clear that FDA cannot lawfully condition the award of [tentative approval] on
substantive compliance with ultimate . . . standards for final approval.”).
As previously noted, the statutory provision at issue, 21 U.S.C. § 355(j), describes the
process by which an ANDA is approved, including the information an ANDA “shall contain,” 21
U.S.C. § 355(j)(2)(A), under what circumstances “an application for a drug” may be denied, id.§ 355(j)(4), and the circumstances under which an applicant’s 180-day exclusivity eligibility
may be revoked, id. § 355(j)(5). The term “tentative approval” appears three times in § 355(j): in
§ 355(j)(5)(B)(iv)(II)(dd), where the term is defined, in relevant part, as “notification to an
applicant . . . that an application under this subsection meets the requirements of paragraph
(2)(A), but cannot receive effective approval because the application does not meet the
requirements of this subparagraph;” in § 355(j)(5)(D)(i)(I)(bb), where the term appears in the
46
“failure to market” forfeiture provision to start the clock running on the applicant’s duty to
obtain final approval; and in § 355(j)(5)(D)(i)(IV), where the term appears in the “failure to
obtain tentative approval” within thirty months of the filing of the ANDA.
None of the three subsections that contain the words “tentative approval” expressly state
that tentative approval may be conditioned on a manufacturing facility’s compliance with
CGMP. Only the definition of “tentative approval,” in § 355(j)(5)(B)(iv)(II)(dd), references the
requirements for granting tentative approval, and that section describes a “notification” to an
ANDA applicant that the ANDA “meets the requirements of paragraph [355(j)](2)(A),” which
lists the items an ANDA must contain. The statute does not define or describe the precise steps
for fulfillment of “meets the requirements.”
The only subsection addressing the conditions under which any approval may be denied
is 21 U.S.C. § 355(j)(4), which describes eleven conditions that would prevent final approval of
an ANDA. The first such finding is that “the methods used in, or the facilities and controls used
for, the manufacture, processing, and packing of the drug are inadequate to assure and preserve
its identity, strength, quality, and purity.” 21 U.S.C. § 355(j)(4)(A). This subsection does not
reference tentative approval. In short, the statute is utterly silent as to the relationship between
CGMP compliance at manufacturing facilities where generic drug products are to be produced
and tentative approval, but the statute clearly requires such compliance before final approval may
be granted. See id.This conspicuous silence weighs heavily in favor of finding the statute ambiguous as to
the circumstances upon which the FDA may condition tentative approval, since absent a specific
Congressional command, “silence suggests, instead, that the [agency] has the discretion to fill the
consequent statutory gap.” Brand X, 545 U.S. at 997. Indeed, the D.C. Circuit has held that
47
Congress’ “decision to leave ‘a gap for an agency to fill . . . is a delegation of authority to the
agency to give meaning to a specific provision of the statute by regulation.’” Nat’l Mining Ass’n
v. Kempthorne, 512 F.3d 702, 709 (D.C. Cir. 2008) (quoting Michigan v. EPA, 268 F.3d 1075,
1082 (D.C. Cir. 2001)) (alteration in original).
This silence does not, as the plaintiffs argue, mean that the statutory text must be read as
barring the conditioning of tentative approval on CGMP compliance. Pls.’ Mem. at 1; Pls.’
Reply at 1. To the contrary, absent any statutory language describing the circumstances under
which the agency may decline to issue tentative approval, under the first step of the Chevron
analysis, the statute is ambiguous. Therefore, the Court moves on to the second step of the
Chevron analysis, to consider whether the agency’s interpretation of the statute is reasonable.
2. The Agency’s Interpretation Is Reasonable
By regulation, the FDA clearly conditions tentative approval on a finding of compliance
with CGMP. Specifically, the regulations require the agency to notify an ANDA applicant that
its application is approved “if none of the reasons in [21 C.F.R.] § 314.127 for refusing to
approve the [ANDA] applies. The approval becomes effective on the date of the issuance of the
agency’s approval letter unless the approval letter provides for a delayed effective date.” 21
C.F.R. § 314.105(d). Approval letters with “delayed effective date[s are] tentative.” Id. The
cross-referenced section of the agency’s regulations lists as a reason for refusing to approve an
ANDA that “[t]he methods used in, or the facilities and controls used for, the manufacture,
processing, and packing of the drug product are inadequate to ensure and preserve its identity,
strength, quality, and purity.” 21 C.F.R. § 314.127(a)(1). Together, these two regulations at
21 C.F.R. §§ 314.105(d) and 314.127(a)(i), require the FDA to reject an ANDA for tentative or
final approval if the agency finds that the facility in which the ANDA drug is to be manufactured
is not in compliance with CGMP. See 21 C.F.R. §§ 314.105(d), § 314.127(a)(1).
48
The parties do not dispute that the FDA may condition final approval of an ANDA on
demonstrated compliance with CGMP, nor could they: 21 U.S.C. § 355(j)(4)(A) prohibits the
agency from approving an ANDA if the drug is to be manufactured in a facility out of
compliance with CGMP. The plaintiffs contend, however, that after the 2003 MMA Amendment
to 21 U.S.C. §§ 355(j)(4) and (5), which added the circumstances under which an applicant
forfeits its 180-day exclusivity eligibility, Congress implicitly overturned the longstanding FDA
practice of requiring demonstrated compliance with CGMP for tentative approval, requiring
instead only that the ANDA applicant present a plan for a facility where the drug could be
manufactured. See Pls.’ Mem. at 25-26. The plaintiffs root this contention in the alleged
difference between two three word phrases, “information to show,” and “full description of.” Id.
at 26. Indeed, plaintiffs’ counsel even highlighted these two phrases in a Powerpoint slide
presented at the TRO hearing to ensure that the Court saw them. See Pls.’ Resp. to Minute Order
Attach. 1 (Pls.’ Powerpoint Presentation) at 8, ECF No. 31-1. Even without the visual aids,
however, the Court can see that the statutory language the plaintiffs highlight is not the silver
bullet the plaintiffs believe it to be.
The plaintiffs’ reasoning is that the phrase “information to show” imposes more of a
burden on an applicant than the phrase “full description of.” In the plaintiffs’ view, the statute’s
use of the phrase “information to show” signals that the requirement is “proof-based,” meaning
“mere disclosure” is insufficient to satisfy the requirements of § 355(j)(2). Pls.’ Mem. at 26. In
contrast, the plaintiffs contend that the phrase “full description of” is not “proof-based.” Id.
Thus, for example, when the phrase “information to show” is used, such as in
§ 355(j)(2)(A)(ii)(I)—which requires ANDA applicants to submit, as part of their applications,
“information to show that the active ingredient of the new drug is the same as that of the listed
49
drug”—the FDA may condition granting tentative approval on the fulfillment of that condition.
Id. By contrast, when the statute uses the phrase “full description of,” such as in
§ 355(b)(1)(D)—which requires NDA and ANDA applicants to submit, as part of their
applications, “a full description of the methods used in, and the facilities and controls used for,
the manufacture, processing, and packing of such drug”—the plaintiffs contend that the FDA
may not condition granting tentative approval on actual compliance with that statutory provision.
See id.
At the outset, neither phrase “information to show” nor “full description of” is defined in
the FDCA. The plaintiffs cite a canon of statutory interpretation that “when the legislature uses
certain language in one part of the statute and different language in another, the court assumes
different meanings were intended,” as support for their contention that conditioning tentative
approval on actual compliance with, or fulfillment of, items for which a “full description of” is
required in the ANDA is contrary to the statute. Pls.’ Mem. at 27 (quoting Roberts v. Sea-Land
Servs., Inc., 132 S. Ct. 1350, 1357 n.5 (2012)). Without any support from the statute’s
legislative history or case law, the plaintiffs baldly assert that any other interpretation
“impermissibly conflates the distinctions Congress drew” between the language in § 355(j)(2),
the conditions that must be met for the grant of tentative approval, and § 355(j)(4), the conditions
that must be met for final approval. Pls.’ Mem. at 28.
In essence, the plaintiffs argue that the cross-reference in the definition of tentative
approval, in § 355(j)(5)(B)(iv)(II)(dd), to § 355(j)(2)(A), means that the FDA may only condition
tentative approval on “the requirements of” that subparagraph. See Pls.’ Mem. at 26–27.
Section 355(j)(4), which describes the eleven findings that would prohibit the FDA from
granting final approval, specifically mentions failure to comply with CGMP as a condition that
50
would prohibit granting such approval. Ergo, in the plaintiffs’ view, since § 355(j)(2)(A)
requires only “information to show” compliance with CGMP, instead of the actual compliance
required by § 355(j)(4), the FDA may not condition a grant of tentative approval on compliance
with CGMP at the facility identified as the one where the generic drug will be manufactured.
See id. at 27-28. The plaintiffs’ interpretation would, quite simply, lead to absurd results in at
least two ways.
First, the plaintiffs’ contention that tentative approval of an ANDA must be granted so
long as the ANDA applicant includes any description of the methods, facilities, and controls used
at the facility where the ANDA drug is to be manufactured cannot be squared with the statutory
purpose or text. By the plaintiffs’ logic, an applicant could state in its ANDA that it planned to
manufacture a generic drug in an outhouse behind the applicant’s house using a child’s chemistry
set, and the FDA would have no power to deny tentative approval to that application on the
grounds that the applicant could never, as submitted, be granted final approval since the
application does not comply with CGMP.
Second, the plaintiffs’ argument that tentative approval cannot be conditioned on any
circumstance required for final approval, as outlined in § 355(j)(4), unless that circumstance is
also contained in § 355(j)(2), which is cross referenced in the definition of tentative approval,
would lead to equally absurd results. For example, § 355(j)(4) prohibits the awarding of final
approval where the approval of the pioneer drug has been withdrawn, 21 U.S.C. § 355(j)(4)(I), or
where the application contains an untrue statement of material fact, id. § 355(j)(4)(K). Section
355(j)(2) does not require “information to show” or a “full description of” the reasons why the
ANDA does not run afoul of those conditions. See 21 U.S.C. § 355(j)(2). By the plaintiffs’
logic, therefore, the FDA could not withhold tentative approval of an ANDA even if the FDA
51
knew it had withdrawn approval for the pioneer drug or that the ANDA contained an untrue
statement of material fact. Such a reading of the statute is patently absurd: the plaintiffs cannot
argue seriously that the FDA is prevented from denying tentative approval to an ANDA in such
circumstances. Yet the interpretation proposed by the plaintiffs would lead inexorably to such a
result.
Despite the untenable nature of the plaintiffs’ interpretation, they vigorously contend that
their interpretation is superior to the FDA’s. See Pls.’ Mem. at 28 (“Any other approach
impermissibly conflates the distinctions Congress drew . . .”); Pls.’ Reply at 4 (contending that
“only Ranbaxy’s statutory interpretation fulfills that duty” to “give meaning to every clause and
word” in a statute (internal quotation marks omitted)). The Court’s role, however, is not to
determine if the FDA’s interpretation is the best interpretation, but rather whether the FDA’s
interpretation is reasonable. NTEU, 754 F.3d at 1042 (“We need not conclude that the
[agency’s] interpretation of the [s]tatute is the only one it permissibly could have adopted or
even the interpretation deemed most reasonable by the courts. On the contrary, we defer to an
agency’s interpretation of a statute so long as it is reasonable.”) (internal quotation marks and
citations omitted; emphasis in original); see also Novartis Pharm. Corp. v. Leavitt, 435 F.3d 344,
349 (D.C. Cir. 2006) (“We have held on a number of occasions that FDA interpretations of the
FDCA receive deference, as do its interpretations of its own regulations unless plainly erroneous
or inconsistent with the regulations.”). The FDA’s interpretation of § 355(j) as allowing it to
withhold tentative approval based on non-compliance with CGMP is a reasonable one. See
Defs.’ Mem. at 1.
The FDA relies on four interrelated subsections of the FDCA to show that the agency’s
interpretation follows directly from the text of the FDCA: 21 U.S.C.
52
§ 355(j)(5)(B)(iv)(II)(dd)(AA); 21 U.S.C. § 355(j)(2)(A); 21 U.S.C. § 355(b)(1)(D); and
21 U.S.C. § 355(j)(4). See Defs.’ Mem. at 24-26. In 21 U.S.C. § 355(j)(5)(B)(iv)(II)(dd)(AA),
the FDCA defines tentative approval as “notification to an applicant by the Secretary that an
application under this subsection meets the requirements of [21 U.S.C. § 355(j)(2)(A)], but
cannot receive effective approval because the application does not meet the requirements of this
subparagraph,” referring to the FDCA’s section regarding 180-day exclusivity eligibility based
on paragraph IV certification. The FDA interprets this clause, including the use of the word
“because,” as requiring the agency to grant tentative approval, instead of final approval, to an
ANDA when the only reasons preventing final approval from being granted is “a stay, some
form of exclusivity, or existing patents.” Defs.’ Mem. at 26. The FDA interprets § 355(j)(2) as
containing all of the requirements for an application to be substantially complete and § 355(j)(4)
as the requirements for an application to be granted final approval. See id. at 24. In other words,
in the FDA’s view, the requirements for tentative and final approval are identical, except that
tentative approval does not require a showing that the ANDA will not infringe upon any valid
patent. Thus, the FDA must withhold tentative approval for the same reasons it must withhold
final approval, including a lack of CGMP compliance. See 21 U.S.C. § 355(j)(4)(A). This is a
reasonable interpretation of the statutory text. 22
22
The plaintiffs contend that the Federal defendants should be estopped from arguing that the FDCA’s use of the
word “because” in 21 U.S.C. § 355(j)(5)(B)(iv)(II)(dd)(AA) denotes an exhaustive list of conditions. Pls.’ Reply at
4–5. According to the plaintiffs, the FDA “has taken—and prevailed in court on—precisely the opposite position
with respect to the FDCA’s other causation requirement, which arises in this same context.” Id. at 5. The plaintiffs
cite Mylan Laboratories Ltd. v. U.S. Food and Drug Administration (Mylan Labs), 910 F. Supp. 2d 299 (D.D.C.
2012) for this contention, Pls.’ Reply at 5, but the position taken by the Federal defendants in that case is the same as
the Federal defendants’ position in this one. In Mylan Labs, the clause at issue provides for the forfeiture of 180-day
exclusivity eligibility when an ANDA applicant fails to obtain tentative approval within thirty months of filing the
ANDA “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.” 21 U.S.C. § 355(j)(5)(D)(i)(IV) (emphasis supplied);
Mylan Labs, 910 F. Supp. 2d at 302. The FDA’s interpretation of this clause, as explained in Mylan Labs, was that
an applicant must “show that one or more issues holding up tentative approval at the 30 month date [was] causally
connected to approval requirements that FDA reviewed or changed.” Mylan Labs. 910 F. Supp. 2d at 302 (internal
quotation marks and citation omitted). The FDA stated in Mylan Labs, however, that “[b]ut-for causation is not
53
Consequently, under step two of the Chevron analysis, the FDA’s interpretation of the
FDCA as allowing the agency to condition tentative approval on a showing that the facility in
which the drug is slated for manufacture complies with CGMP is a reasonable one and entitled to
deference. This does not, however, end the inquiry. In addition to challenging the FDA’s
interpretation of the FDCA, the plaintiffs also challenge whether the FDA changed its policy of
conditioning tentative approval on compliance with CGMP at the facility where the drug was to
be manufactured after the plaintiffs raised a challenged to the policy in its letter of June 18, 2007.
See Pls.’ Mem. at 33.
B. The FDA Did Not Change Its Policy Regarding Tentative Approval
The parties do not dispute that at the time the FDA granted tentative approval to the
plaintiffs’ two ANDAs, for esomeprazole and valganciclovir, the facilities in India where those
generic drug products were to be manufactured were out of compliance with CGMP. Pls.’ Mem.
at 33 (“[T]he Agency was fully aware of, and indeed carefully considered, [the plaintiffs’]
compliance problems before it issued these [tentative approvals] in 2008”); Defs.’ Mem. at
16-17. As a consequence, the FDA admits that granting tentative approval to the two ANDAs at
required to meet this exception,” meaning that the “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 have been outstanding at the 30-month date.” Id. The plaintiffs argue that the phrase “is
caused by,” in 21 U.S.C. § 355(j)(5)(D)(i)(IV), is “materially indistinguishable” from the word “because” in the
definition of tentative approval and, therefore, the use of “because” in 21 U.S.C. § 355(j)(5)(B)(iv)(II)(dd)(AA)
similarly does not limit the listed reasons for tentative approval. Pls.’ Reply at 5. The Court agrees that the word
“because” and the phrase “caused by” are “materially indistinguishable” in this context, but disagrees with the
plaintiffs’ conclusion that the Federal defendants’ positions are inconsistent. The FDA interprets the language in
both statutory provisions as setting forth necessary and sufficient conditions. In 21 U.S.C. § 355(j)(5)(D)(i)(IV), the
FDA interprets the 30-month forfeiture trigger as being tolled if (1) there is “a change in . . . requirements for
approval of the application,” and (2) tentative approval could not be granted as a result of that change. See Mylan
Labs, 910 F. Supp. 2d at 302. In 21 U.S.C. § 355(j)(5)(B)(iv)(II)(dd)(AA), the FDA interprets the statute to require
an ANDA (1) meet all the requirements for final approval and (2) be ineligible for final approval by virtue of a
blocking patent or other statutory bar. Defs.’ Mem. at 26. In both instances, the circumstance listed in the statute
immediately after “because” or “caused by,” i.e., the presence of a blocking patent or a change in requirements, must
be present and must be sufficient, standing alone, to prevent the preceding statutory clause from taking effect, i.e.,
forfeiture of 180-day exclusivity eligibility or the 30-month forfeiture trigger. Thus, the FDA’s reading of both
statutory provisions is consistent.
54
issue was an error, which the Federal defendants attribute to a breakdown in communications
between CDER, the compliance inspection component of the FDA, and OGD, the approval
component of the FDA. Defs.’ Mem. at 14-16. The plaintiffs dispute this characterization,
contending that the FDA consciously changed its policy as a result of the plaintiffs’ legal
arguments. Pls.’ Mem. at 34.
At the TRO hearing, before the filing of the AR, the Court observed that “the record is
decidedly cloudy on this assertion.” Hrg. Tr. 101:21-22. The plaintiffs stress that whether the
FDA erred or changed a long-standing policy matters, noting that “the power to correct
inadvertent ministerial errors may not be used as a guise for changing previous decisions because
the wisdom of those decisions appears doubtful in light of changing policies.” Pls.’ Mem. at 36
(quoting Am. Trucking Ass’ns v. Frisco Transp. Co., 358 U.S. 133, 146 (1958)). The Court
concurs with the long-standing principle articulated by the plaintiffs but, upon review of the full
administrative record, concludes that documentation of intra-agency communications supports
the Federal defendants’ view that miscommunication and, bluntly, a rushed and ill-considered
process, led to the erroneous issuance of tentative approval to the ANDAs in dispute despite the
existence of a clear policy against such issuance.
First, the circumstances under which the OGD granted tentative approval to the plaintiffs’
ANDAs in 2007 and 2008 belies the plaintiffs’ assertion that a policy change had occurred. The
AR contains documentary evidence of personnel within OGD, specifically OGD Deputy Director
Robert West, 23 asking CDER for a recommendation to grant tentative approval to each of the
plaintiffs’ ANDAs even though the plaintiffs had failed to address the FDA’s concerns in the
2006 Warning Letter. AR at 1786; id. at 1814; id. at 1847; id. at 1856; id. at 1859. These
23
As previously noted, due to the lack of clarity in the AR, the titles for individual FDA employees at the relevant
time period are derived from the plaintiffs’ memorandum in support of its preliminary injunction. Pls.’ Mem. at 35.
55
documented requests to deviate from policy and grant tentative approval to the plaintiffs’ANDAs
is a clear indication that no policy change had occurred to cease requiring CGMP compliance
before granting tentative approval. Had such a policy change occurred, there would have been
no need for Mr. West to seek CDER recommendations each time.
Second, although the plaintiffs assert that “at least 21 different officials,” including high-
level FDA officials, “personally were involved in the decision to issue these TAs despite their
awareness of [the plaintiffs’] compliance issues,” Pls.’ Mem. at 34 (emphasis in original), that
assertion is not supported by the AR. For instance, the plaintiffs contend that Elizabeth
Dickinson, the Associate Chief Counsel in the Office of the FDA Commissioner, was one of
those FDA leaders “personally . . . involved” in the decision to grant the plaintiff tentative
approval for an ANDA despite non-compliance with CGMP. Pls.’ Mem. at 35. As grounds for
this contention the plaintiffs rely upon their former counsel’s declaration stating that she had
explained the plaintiffs’ “situation and [the plaintiffs’] interpretation of the MMA’s new
definition of TA. [Ms. Dickinson] asked [the plaintiffs’ counsel] to memorialize [the plaintiffs’]
legal position in a letter to Gary Buehler, the Director of OGD, with a copy to her.” Decl. of
Kate C. Beardsley (“Beardsley Decl.”) ¶ 10, ECF No. 40-4.
The AR contains no record of this phone call, although a letter from the plaintiffs’ former
counsel to Mr. Buehler, with a copy to Ms. Dickinson, does appear in the AR. AR at 1868-75.
The presence of this letter in the AR, listing Ms. Dickinson as the recipient of a copy, may
indicate that Ms. Dickinson may have received the letter, but falls far short of demonstrating that
she accepted the rationale outlined in it. As another example, the plaintiffs list every official
appearing in the “cc” line of an email chain between FDA employees as having participated in
this alleged policy change, even though many of those employees authored no part of the email
56
chain. See Pls.’ Mem. at 35 (listing, inter alia, John Dietrick, Shawnte Adams and Theresa Liu
as among the officials to “personally” review the decision to issue tentative approval, citing AR
1782-87); AR 1782-87 (showing John Dietrick, Shawnte Adams and Theresa Liu in “cc” line of
email without authoring any portion of email chain). The AR simply does not contain evidence
of extensive, substantive discussion among more than twenty high-ranking FDA officials, as the
plaintiffs characterize the record, see Pls.’ Mem. at 34, regarding the plaintiffs’ ANDAs. The
AR also does not contain any indication that the FDA ever adopted the plaintiffs’ argument
expressed in June 2007 that the FDA could not condition tentative approval on CGMP, nor do
the plaintiffs point to any portion of the AR aside from its own letter to the agency as support for
this contention.
After this initial determination—which was made on an accelerated
basis under the threat of litigation from the plaintiffs—the record is bare that any further analysis
was undertaken by the FDA regarding whether CGMP compliance was an appropriate condition
for tentative approval. See generally AR.
f
57
The slipshod nature of this approval process, especially considering the long-existing
policy in place designed to prevent approval of applications for drugs manufactured in non-
CGMP compliant facilities, is disturbing. See Tr. 45:17-21 (questioning from the Court
regarding what steps, if any, had been taken to hold accountable the FDA staff responsible for
the errors). Yet, despite the plaintiffs’ contrary interpretation, the fact that the officials involved
consistently had to ask recommendations to deviate from established policy; the lack of evidence
in the record of any other generic drug manufacturer receiving tentative approval absent a
showing of compliance with CGMP; and the obvious confusion within CDER regarding why it
was deviating from policy make clear that the FDA did not change its policy. Instead, a rushed
and confused approval process, conducted with lackadaisical regard for an important public
health policy, contributed to an error that took the FDA more than six years to discover. Such a
consistent failure of policies and procedures is stunning, but it does not indicate a change in
policy. The Court finds that the FDA did not alter its policy regarding conditioning tentative
approval on CGMP compliance and, instead, clearly erred when it tentatively approved the
plaintiffs’ ANDAs for esomeprazole and valganciclovir.
C. The FDA’s Rescission Of Tentative Approval For Plaintiffs’ ANDAs Was An
Appropriate Exercise Of The FDA’s Inherent Authority
Even assuming an error had been made, the plaintiffs nevertheless contend that the
FDA’s rescission of tentative approval for the plaintiffs’ ANDAs was contrary to law in violation
of the APA for two reasons. First, the plaintiffs argue that the FDA lacks any authority to
58
rescind tentative approval. Pls.’ Reply at 12. Second, the plaintiffs posit that if the FDA has
such authority, its exercise of that authority regarding the plaintiffs’ ANDAs was unauthorized.
Id. at 13. Neither argument is persuasive.
1. The FDA Has The Inherent Authority To Rescind Tentative Approval
The plaintiffs’ contention that the FDA cannot rescind tentative approval at all rests on a
statutory construction that elevates form over substance to the detriment of the statutory scheme
and purpose. Initially, the plaintiffs contend that because the statute provides for the rescission
of final approval in a number of circumstances, see 21 U.S.C. § 355(e), the absence of a specific
mechanism for the rescission of tentative approval indicates that Congress did not intend to
provide for one, Pls.’ Reply at 12. 24 The plaintiffs cobble together this interpretation from two
inapposite court decisions.
First, the plaintiffs rely on New York v. FERC, 535 U.S. 1, 18 (2002), for the proposition
that “an agency literally has no power to act . . . unless and until Congress confers power upon
24
Section 355(e) provides, in pertinent part, that “[t]he Secretary shall, after due notice and opportunity for hearing
to the applicant, withdraw approval of an application with respect to any drug under this section if the Secretary
finds” one of five conditions to have occurred. 21 U.S.C. § 355(e). The subsection further provides that the
Secretary “may also, after due notice and opportunity for hearing to the applicant, withdraw the approval of an
application submitted under subsection (b) or (j) of this section” when certain other conditions are found, including
that on the basis of new information before him, evaluated together with the evidence before him
when the application was approved, the methods used in, or the facilities and controls used for, the
manufacture, processing, and packing of such drug are inadequate to assure and preserve its
identity, strength, quality, and purity and were not made adequate within a reasonable time after
receipt of written notice from the Secretary specifying the matter complained of.
Id. The D.C. Circuit has described this subsection as applying to tentative approvals as well as final
approvals by mentioning more than one form of approval to which § 355(e) applies. See Mylan Labs. v.
Thompson, 389 F.3d 1272, 1281 (D.C. Cir. 2004) (“[S]ection 355(e) simply sets out specific, not
necessarily exclusive, circumstances under which the FDA must withdraw any ANDA approval (whether
final or otherwise) after notice and hearing.” (emphasis supplied)). The parties are unanimous in asserting
that the Circuit’s discussion of this subsection is dicta and that the reference to “approval” in § 355(e)
means only final approval. See Pls.’ Mem. at 38 (“Every party to this case . . . agrees that section 355(e)
applies only to final approvals”); Defs.’ Mem. at 35 (“Section 355(e) does not apply to rescission of
tentative approvals”). Absent an assertion from any party that the agency’s interpretation of § 355(e) is in
error, and the briefing that would accompany such an assertion, the Court assumes, without deciding, that
the provisions in § 355(e) do not apply to the agency’s ability to rescind tentative approval.
59
it.” Pls. Mem. at 40. That case addressed a federal agency’s power to preempt state regulations,
as is evident from the full quotation cherry-picked by the plaintiffs: “[A] federal agency may
pre-empt state law only when and if it is acting within the scope of its congressionally delegated
authority . . . [for] an agency literally has no power to act, let alone pre-empt the validly enacted
legislation of a sovereign State, unless and until Congress confers power upon it.” 535 U.S. at
18 (emphasis indicates words omitted in plaintiffs’ brief). In context, New York v. FERC stands
for the unsurprising principle that federal agencies may not preempt state law unless Congress
has explicitly authorized them to do so. See id. Preemption is simply not at issue here and,
consequently, the FERC has no bearing on whether the FDA has inherent authority to rectify
regulatory errors in furtherance of the FDCA’s comprehensive scheme for the federal
government to ensure the safety of drugs in interstate commerce and to “supplement the
protection for consumers already provided by state regulation and common-law liability.” Wyeth
v. Levine, 555 U.S. 555, 566 (2009).
The other case relied upon by the plaintiffs, North Carolina v. EPA, 531 F.3d 896, 922
(D.C. Cir. 2008), is similarly inapposite. The plaintiffs quote North Carolina for the proposition
that the EPA “is ‘a creature of statute,’ and has ‘only those authorities conferred upon it by
Congress’; ‘if there is no statute conferring authority, a federal agency has none.’” Pls.’ Mem. at
40; Pls.’ Reply at 12. North Carolina involved the EPA’s attempt to redistribute emissions
credits among states under the Clean Air Act. North Carolina, 531 F.3d at 920. In that case, the
D.C. Circuit found that the agency’s exercise of inherent authority was contrary to the statute’s
limited goals since the agency purported to create an entirely new emissions control scheme. See
id. North Carolina said nothing about an agency’s ability to correct its own errors. Rather,
North Carolina stands for the principle that an agency cannot unilaterally expand the scope of a
60
limited statute. See id. In the instant matter, the FDA is not expanding the scope of the FDCA,
but exercising its inherent authority to ensure the FDCA’s statutory purpose is followed by
correcting its own admitted error. In sum, the two primary cases cited by the plaintiffs for the
assertion that the FDA has no power to correct its mistakes are inapposite and the Court rejects
the argument. 25
Indeed, the D.C. Circuit recently reaffirmed federal agencies’ inherent authority to
reconsider and correct their own mistakes in Ivy Sports Medicine, LLC v. Burwell (Ivy Sports),
767 F.3d 81, 86 (D.C. Cir. 2014). In that case, the D.C. Circuit recognized its long held principle
that “administrative agencies are assumed to possess at least some inherent authority to revisit
their prior decisions, at least if done in a timely fashion.” Id. The D.C. Circuit found, however,
that the FDA lacked the authority to rescind a previous classification of a medical device—in
order to reclassify the device—since Congress had established a statutory mechanism for
reclassifying such devices that would be subverted by the mechanism employed by the agency.
See id. at 87. In the instant matter, the parties do not dispute that Congress has not provided an
exclusive statutory mechanism for the rescission of tentative approval, such as that provided for
final approvals. 21 U.S.C. § 355(e); Pls.’ Reply at 12 n.4 (“All parties, however, agree that
25
In a string of citations, the plaintiffs also assert that United States v. Seatrain Lines, Inc., 329 U.S. 424, 432–33
(1947), and Civil Aeronautics Board v. Delta Air Lines, Inc., 367 U.S. 316, 333–34 (1961), support their contention
that an agency may not revoke a prior decision unless explicitly authorized to do so by statute. Pls.’ Mem. at 40–41.
In Seatrain Lines, Inc., the Supreme Court found that the agency’s decision was a change in policy, not an
inadvertent error, and, consequently, the Commission could not reopen proceedings to “correct a mere clerical
error,” 329 U.S. at 428–29, a situation that is decidedly not present here, see supra Part III.B. Additionally, in
Seatrain Lines, Inc., the agency had a specific statutory mechanism to review and revise certain decisions within a
set period of time. Seatrain Lines, Inc. at 432–33. Unsurprisingly, the Supreme Court found that when Congress
has set forth a specific mechanism to review and revoke previous decisions, the agency may not rely on its inherent
authority to act outside of the authority Congress has inferred. Id. Similarly, in Delta Air Lines, Inc., the Supreme
Court reiterated that an agency “must follow the procedures ‘specifically authorized’ by Congress and cannot rely
on their own notions of implied powers.” Delta Air Lines, Inc., 367 U.S. at 334. In the instant matter, the parties
agree that the statute does not contain any set procedure for revoking tentative approval. See supra note 24.
Consequently, Seatrain Lines, Inc. and Delta Air Lines, Inc. are inapposite.
61
section 355(e) applies only to final approvals.”). 26 Thus, the FDA has the inherent authority to
revisit its own decisions, since “the power to reconsider is inherent in the power to decide.” Ivy
Sports, 767 F.3d at 86 (internal quotation marks omitted).
2. The Rescission Of The Plaintiffs’ Tentative Approvals Was A
Reasonable Exercise Of The FDA’s Inherent Authority
The plaintiffs’ fallback position—that the FDA exceeded its inherent authority by failing
to rescind the tentative approvals at issue in a timely manner, Pls.’ Mem. at 37-38—is more
troubling, but still does not save the plaintiffs’ case. At first glance, the FDA’s description as
“timely” of its reconsideration and rescission of tentative approvals more than six years after
those approvals were granted strains credulity. Yet, the unique circumstances of this case render
the FDA’s lengthy delay in correcting its error by rescinding tentative approval for the ANDAs
at issue is more understandable, even if the delay is extraordinary.
The FDA was stymied at nearly every turn by the plaintiffs in the agency’s attempt to
discover the extent of CGMP violations at the Paonta Sahib facility. As previously noted, it took
over a year for the plaintiffs to turn over audit reports that the FDA had made clear were needed
to complete a review of the plaintiffs’ compliance with CGMP. See supra Part I.C.3. The initial
summaries the plaintiffs did turn over deceived the FDA into believing that all of the issues
identified in the 2006 Warning Letter were resolved. AR at 1859
The compliance hold was not lifted, however, and, in 2008, the FDA discovered the
problems at Paonta Sahib were unresolved and systemic. See generally 2008 Warning Letter.
26
As previously noted, the parties’ position that § 355(e) applies only to final approvals is open to dispute, supra
note 24, but the parties’ failure to engage this issue despite the Court’s invitation, see Pls. Reply at 12 n.4, renders a
decision on this point unnecessary to resolve the instant motions.
62
By 2009, the FDA had stopped processing the plaintiffs’ applications, including the two ANDAs
at issue here, as a penalty for the plaintiffs’ failure to address the problems at Paonta Sahib and
Dewas. See 2009 Letter at 1258 (“[T]he Agency does not intend ordinarily to conduct or to
continue its normal substantive scientific review (including review of data and labeling) of any
such pending application or supplement, or of any new application or supplemental applications .
. . that contain data developed at the Paonta Sahib site . . . .”).
The FDA froze all of the plaintiffs’ applications, including the ANDAs at issue in this
suit, until 2014, first as a result of the plaintiffs’ own recalcitrance in providing audit reports,
then as a result of the 2009 Letter, the subsequent consent decree and criminal charges, and
additional reviews. When the FDA finally resumed reviewing the plaintiffs’ ANDAs, the FDA
did so with the information unavailable when the tentative approvals were issued in 2008—
namely, the full picture of the plaintiffs’ compliance problems developed over the intervening
years.
The plaintiffs argue that an agency’s inherent authority to correct its own errors is
fleeting, and must be exercised “in weeks, not years.” Pls.’ Mem. at 37 (quoting Mazaleski v.
Treusdell, 562 F.2d 701, 720 (D.C. Cir. 1977)). Mazaleski does state that the time in which an
agency could reconsider its decision and rescind it “would be measured in weeks, not years,” but
the D.C. Circuit acknowledged that such a time period was appropriate “absent unusual
circumstances.” Mazaleski, 562 F.2d at 720. The agency error considered in Mazaleski was the
agency’s failure to provide the specific reasons for an employee’s termination, as required by
applicable procedures. Id. at 718. After the terminated employee filed suit in federal court, the
agency provided those reasons and sought to excuse the belated compliance with procedures
because the lapse “was fully rectified by this corrective action.” Id. The D.C. Circuit did not
63
accept this excuse, insisting that the agency “afford [the employee] the opportunity of
prosecuting his administrative appeal once again. In the event that this appeal ultimately proves
unsuccessful, [the employee] must be permitted his day in court . . . .” Id. at 722. Thus, the D.C.
Circuit’s rationale for remanding Mazaleski to the agency was rooted in a desire to ensure
adequate consideration at the administrative level before judicial review. See id.The instant case differs from Mazaleski in at least two crucial respects. First, no evidence
was presented in Mazaleski that the employee affirmatively interfered with the agency’s ability
to recognize and rectify its error. By contrast, in the instant case, the plaintiffs failed to provide
the requested audit reports to the FDA and also concealed the extent of their non-compliance
with CGMP to such an extent that the plaintiffs were eventually held criminally liable. Hence,
although the D.C. Circuit did not detail the type of “unusual circumstances” that would excuse a
corrective action occurring more than a period of “weeks” after the original decision, this Court
believes that the instant matter qualifies for such an exception, particularly in light of the public
safety risks presented by disallowing the FDA from correcting its mistakes in approving a
generic drug product.
Second, in Mazaleski, the terminated employee’s circumstances had changed
dramatically by the time the agency attempted to rectify its error: he had been terminated and
filed suit in federal court. See Mazaleski, 562 F.2d at 718. By contrast, the plaintiffs in this case
were in the identical position when the tentative approvals at issue were granted as when they
were rescinded: the blocking patents had not expired. Indeed, even if the tentative approvals had
remained in place, the plaintiffs would have been unable to obtain final approval to market the
drugs due to the compliance holds that persist on the plaintiffs’ manufacturing facilities in India.
Defs.’ TRO Opp’n at 17. The plaintiffs contend that they are harmed by the rescissions even
64
though they are not able to market the generic drug products at issue because they should be able
to monetize their 180-day exclusivity rights by receiving payment from their potential
competitors, including the pioneer drug maker, to abstain from exercising that right. See Pls.’
Mem. at 5. This argument bolsters the Federal defendants’ position and undermines that of the
plaintiffs.
The plaintiffs’ asserted harm—that the rescission of tentative approval for their ANDAs
prevents them from excluding generic competitors from the market, see id.—is the exact
situation the MMA Amendment was designed to prevent, see supra Part I.A.3. Indeed, the
Hatch-Waxman framework and its subsequent amendments were designed to prevent first
ANDA applicants from creating a “bottleneck” and stop low-cost generic drugs from reaching
the market. See id. In particular, the MMA Amendment was designed to eliminate “parking”
exclusivity rights and to speed generic drugs’ progress to market. See id. The plaintiffs’
interpretation of the FDCA as supporting the plaintiffs’ “right” to exclude competitors and keep
a generic drug off the market is directly contrary to the intent of Congress and, as such, is
rejected. Consequently, since the plaintiffs were not able to market their drugs when the
tentative approvals were rescinded, the plaintiffs’ position had not materially changed.
* * *
In sum, the FDA should have recognized its errors earlier, but its failure to do so was
caused in substantial part by the plaintiffs’ own malfeasance to which they eventually pleaded
guilty criminally and paid $500 million in fines. Such a set of circumstances qualifies as
“unusual” within the meaning of Mazaleski, since following that case’s “weeks, not years”
maxim in this case would lead to the incongruous result of allowing the plaintiffs to benefit from
65
their own misdeeds. Such a result is not mandated by case law or the statute. The FDA acted
within its inherent authority to rescind its tentative approval of the plaintiffs’ ANDAs.
D. The FDA’s Interpretation Of The 30-Month Forfeiture Trigger Is
Reasonable
The plaintiffs’ final argument is that the FDA’s interpretation of the 30-month forfeiture
trigger for a first ANDA applicant’s 180-day exclusivity eligibility is contrary to law since
tentative approval is an “historical fact . . . established for all time” and, therefore, cannot be
rescinded. Pls.’ Mem. at 33. Since the question is one of interpretation of the forfeiture trigger
found in 21 U.S.C. § 355(j)(5)(D)(i)(IV), the FDA’s interpretation is due deference under
Chevron so long as the statute is ambiguous and the FDA’s interpretation is reasonable. The
FDA has no trouble meeting both prongs of the Chevron test here.
1. The Forfeiture Trigger Is Ambiguous
21 U.S.C. § 355(j)(5)(D)(i)(IV) defines one of the six forfeiture triggers as the failure of
an ANDA applicant otherwise eligible for 180-day exclusivity “to obtain tentative approval of
the application 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.” As previously noted, “tentative
approval” is defined as “notification to an applicant by the Secretary that an application under
this subsection meets the requirements of” § 355(j)(2)(A), but “cannot receive effective
approval” because of blocking patents or statutory exclusivity.
21 U.S.C. § 355(j)(5)(B)(iv)(II)(dd)(AA). The statute does not define “notification,” id., nor
does the statute say anything about whether a “notification,” once given, may never be
withdrawn by the agency or whether the rescission of tentative approval nullifies a previous
notification and causes a retroactive forfeiture of 180-day exclusivity. See generally 21 U.S.C.
66
§ 355. Indeed, although the plaintiffs state that “the statute’s plain language and structure
foreclose FDA’s assertion that [the plaintiffs’] constructively failed to obtain [tentative approval]
within the statutory deadline,” Pls.’ Mem. at 33, the plaintiffs rely only on statutory silence
regarding the possible retroactive effect of tentative approval rescission for their contention that
the statute is unambiguous, see id. at 32. As previously noted, statutory silence weighs strongly
in favor of finding that a statute is ambiguous and the Court, consequently, finds the FDCA
ambiguous here. Thus, the Court must move on to Chevron’s second step.
2. FDA’s Interpretation Is Reasonable
The plaintiffs interpret “notification” of tentative approval as a one-time matter of
historical fact. Pls.’ Mem. at 32-33. The plaintiffs contrast tentative approval with final
approval, which the plaintiffs contend “is a continuing status” that may be revoked “[i]f its
requirements cease to be met . . . that is why Congress empowered FDA to rescind it.” Id. at 32.
In other words, according to the plaintiffs, the FDA’s sending of a letter notifying the applicant
that an ANDA was tentatively approved prior to the 30 month deadline imposed by the forfeiture
trigger is sufficient to preserve potential 180-day exclusivity rights, no matter what happens
subsequently. The FDA asserts an alternative interpretation that “forfeiture under section
355(j)(5)(D)(i)(IV) is avoided only when a tentative approval is valid,” and the issuance of an
invalid notification does not prevent forfeiture. Defs.’ Mem. at 40.
The two interpretations may both be colorable, but the FDA’s interpretation will be
credited so long as it is reasonable. NTEU, 754 F.3d at 1042. The FDA’s interpretation here
does not, as the plaintiffs assert, add a “gloss on the statute that is not found in the text.” Pls.’
Reply at 10 (quoting Kloeckner v. Solis, 133 S. Ct. 596, 606 (2012)). Instead, the agency merely
reads the forfeiture trigger in the context of the larger statute and interprets the forfeiture trigger
accordingly. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (“It is a
67
‘fundamental canon of statutory construction that the words of a statute must be read in their
context and with a view to their place in the overall statutory scheme.’” (quoting Davis v. Mich.
Dep’t of Treasury, 489 U.S. 803, 809 (1989)).
The Hatch-Waxman Amendments, in general, and the MMA Amendment, in particular,
are designed to speed generic drugs to market. See supra Part I.A. The forfeiture triggers were
written into the statute to prevent first applicants from “parking” their rights by failing to act on
their applications, either due to a monetary “pay-to-delay” settlement or for other reasons. See
149 Cong. Rec. S15746 (Statement of Sen. Schumer) (noting purpose of amendments was to
“ensure that the 180-day exclusivity period enjoyed by the first generic to challenge a patent
cannot be used as a bottleneck to prevent additional generic competition.”). The FDA’s
interpretation of the statute as allowing the retroactive forfeiture of exclusivity if tentative
approval is later rescinded is entirely in keeping with this Congressional goal and the larger
Hatch-Waxman goal of streamlining generic drug approvals to allow safe, effective generic
drugs to reach the market sooner.
As the Court noted at the temporary restraining order hearing, reading the forfeiture
trigger as the plaintiffs’ suggest “elevates form over substance and would lead to absurd results.”
Hrg. Tr. 106:6-7. If forfeiture for failure to obtain tentative approval could not be triggered
retroactively, any ANDA later discovered to be deficient would still prevent other manufacturers
from entering the market, even though, as is the case in the instant matter, the ANDA should
never have been granted tentative approval in the first instance. Such a scheme would create a
perverse incentive to pharmaceutical companies to conceal any deficiencies in an ANDA until
tentative approval is granted, relying on the often lengthy time period between tentative approval
and final approval to fix any problems. Since the plaintiffs’ argument to the contrary is rooted
68
entirely in an alternative interpretation of the statute that does not show the FDA’s interpretation
to be unreasonable, either exclusively based on the statutory text or in the context of the statute
as a whole and its purposes, the Court credits the FDA’s interpretation that the forfeiture trigger
in 21 U.S.C. § 355(j)(5)(D)(i)(IV) may be applied retroactively under Chevron step two.
69
IV. CONCLUSION
A series of agency errors combined with the plaintiffs’ malfeasance led to the tentative
approval of the plaintiffs’ ANDAs for generic drug products for esomeprazole and
valganciclovir. The patented forms of these drugs, Nexium© and Valcyte©, are used by
hundreds of thousands of Americans to treat maladies both minor and severe. Even though the
plaintiffs have no realistic chance at entering the market in the near future, they nonetheless
argue that they should be allowed to keep their competitors from entering the generic market for
these drugs because they managed to deceive and pressure the FDA into erroneously granting
tentative approval to the plaintiffs’ ANDAs. For its part, the FDA has demonstrated that its
internal system of checks and balances failed to prevent serious errors with at least five of the
plaintiffs’ ANDAs, including the two at issue in this lawsuit, and the very employees who were
tasked with carefully reviewing manufacturers’ applications to ensure compliance with the
industry’s best practices were granting approval without knowing why, using language they did
not understand.
In the final analysis, neither the plaintiffs nor the Federal defendants should be satisfied
with their actions during the processing of the two ANDAs at issue. Nevertheless, the Federal
defendants’ interpretation of the FDCA and the agency’s implementing regulations is due
substantial deference. Since the FDA is authorized to condition tentative approval on a showing
of CGMP compliance at the facility where a generic drug is to be manufactured, the FDA erred
in granting tentative approval to the plaintiffs’ ANDAs for esomeprazole and valganciclovir.
Even though that error was belatedly corrected, the agency has the inherent authority to correct
its mistakes. The FDA’s interpretation of the statutory provision requiring forfeiture of 180-day
generic marketing exclusivity rights if the first ANDA applicant is found not to have met the
70
requirements for tentative approval within thirty months of an ANDA’s submission is
reasonable. Consequently, the Federal defendants’ motion for summary judgment and the
defendant-intervenors’ motions for summary judgment are granted and the plaintiffs’ motion for
a preliminary injunction is denied.
An Order consistent with this Memorandum Opinion will issue contemporaneously.
First Issued: February 27, 2015
Interim Redacted Opinion Issued: March 11, 2015
Digitally signed by Judge Beryl A.
Howell
DN: cn=Judge Beryl A. Howell,
o=United States District Court,
ou=District of Columbia,
email=Howell_Chambers@dcd.u
scourts.gov, c=US
Date: 2015.03.11 12:11:22 -04'00'
__________________________
BERYL A. HOWELL
United States District Judge
71