Spectrum Pharmaceuticals, Inc. v. Burwell

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
SPECTRUM PHARMACEUTICALS, INC., )
Plaintiff, )
)
v. ) Civil Action No. 15-631 (RCL)
)
SYLVIA MATHEWS BURWELL, et al., )
Defendants, )
)
and )
)
SANDOZ, INC., )
Intervenor—Defendant. )
)
MEMORANDUM OPINION
Plaintiff Spectrum Pharmaceuticals, Inc. (“Spectrum”) has brought this action against
Sylvia Mathews Burwell, in her official capacity as Secretary of the US. Department of Health
and Human Services (“HHS”), and Stephen Ostroff, M.D., in his official capacity as acting
Commissioner of food and drugs for the US. Food and Drug Administration (“FDA”). Sandoz,
Inc. (“Sandoz”) has intervened as a defendant. Spectrum manufactures a pharmaceutical product
under the brand name FUSILEV®. On March 9, 2015, the FDA approved Sandoz’s request to
market a generic version of this product. Spectrum seeks to enjoin the FDA to withdraw or stay
its approval of Sandoz’s abbreviated new drug application (“ANDA”) on the grounds that both the
approval and the process by which it issued violate the requirements of the Food, Drug, and
Cosmetic Act (“FDCA”) and its implementing regulations. 21 U.S.C. §§ 301 et seq. Spectrum
also argues that the F DA’s approval of Sandoz’s ANDA constitutes arbitrary and capricious
agency action in violation of the Administrative Procedure Act. 5 U.S.C. § 706.
Before the Court is Plaintiffs Motion for summary judgment [31], Defendants’
Supplemental Brief in Support of Judgment for Defendants [33], and Intervenor—Defendant’s
Cross—Motion for summary judgment [29]. Upon consideration of Plaintiffs Motion and
Memorandum in Support thereof [32], Defendants’ Supplemental Brief in Support of Judgment
for Defendants, Intervenor-Defendant’s Cross-Motion and Opposition [30], the arguments made
in open court on April 29 and May 18, 2015, the entire record in this case, and the applicable law,
the Court will DENY Plaintiff’s Motion [31] for summary judgment and GRANT summary
judgment for Defendants and Intervenor—Defendant [29]. The Court will explain its reasoning in
the following analysis.
I. BACKGROUND
A. Statutory and Regulatory Framework
1. Orphan Drug Exclusivity, New Drug Applications, and Abbreviated New Drug
Applications
Congress passed the Orphan Drug Act (“ODA”) to encourage the development of “orphan
drugs,” drugs that treat diseases or disorders affecting only a small number of people. Pub. L. No.
97-414, 96 Stat. 2049 (1983). When a company develops a drug that the FDA has designated an
“orphan drug,” the Act gives that developer seven years of market exclusivity, during which time
the FDA may not approve any other entity’s application “for such drug for such disease or
condition,” barring certain exceptional circumstances not applicable here. 21 U.S.C. § 360cc(a).
Under the FDCA, pharmaceutical companies seeking to market “pioneer” or “innovator”
drugs must first obtain FDA approval to do so by filing a new drug application (“NDA”). 21
U.S.C. § 355(a)—(b). The NDA must contain extensive scientific data and other information,
including investigative reports demonstrating the drug’s safety and effectiveness, a statement of
n.3 (8th Cir. 1996)). Much like the Sigma-Tau plaintiffs, Spectrum unabashedly discounts the fact
that the FDA “must balance the ODA's incentive structure for the development of orphan drugs
against . . . the Hatch—Waxman Amendments” and instead “puts all weight on the orphan drug
development end of the scale, as if no tension exists between the two statutes that the FDA must
negotiate.” Sigma-Tau Pharm, Inc., 288 F.3d at 148.
2. FDA Regulations Governing Drug Shortages
Spectrum also argues that the FDA violated the FDCA and its own regulations governing
drug shortages when, in February 2012, it expedited Sandoz’s ANDA for generic
levoleucovorin—a decision that Spectrum argues was intended to undermine Spectrum’s orphan
exclusivity over the Colorectal indication—without having given Spectrum notice and an
opportunity to be heard concerning the shortage of that orphan-protected indication. The FDA
responded at a hearing that it expedited Sandoz’s ANDA not due to a shortage of any particular
indication of the drug, but out of fear that the drug itself, for whatever indication, could become
scarce. Hearing Tr. 27:1—9, May 18, 2015. Sandoz likewise argued at that hearing that the
shortage was not for any particular indication levoleucovorin, but for levoleucovorin in general,
or perhaps for the Methotrexate indications as well, and also argued that the law and regulations
Spectrum had cited dealt with decisions to abrogate an entity’s exclusivity rights, which Sandoz
maintained was not relevant because Spectrum’s exclusivity rights had not been breached by any
ofthe FDA’s conduct. Hearing Tr. 29:10—30:18, May 18, 2015.
21 U.S.C. § 3600c(b)(1) provides that the HHS Secretary may approve an application for
a drug/indication pair protected by orphan exclusivity if she
finds, after providing the holder notice and opportunity for the
submission of views, that in [the exclusivity] period the holder of
the approved application or of the license cannot assure the
availability of sufficient quantities of the drug to meet the needs of
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persons with the disease or condition for which the drug was
designated.
As stated previously, none of the F DA’s conduct in this case rises to the level of violating
Spectrum’s orphan exclusivity over the Colorectal Indication. Given that § 360cc(b)(1) governs
only what the FDA must do in order to properly breach orphan exclusivity, that portion of the
statute does not apply here.
21 CPR. § 316.36, titled “Insufficient quantities of orphan drugs,” provides that
“whenever the Director has reason to believe that the holder of exclusive approval cannot assure
the availability of sufficient quantities of an orphan drug to meet the needs of patients with the
disease or condition for which the drug was designated, the Director will so notify” that holder of
the possible insufficiency, and will give the holder a chance to either (1) present evidence that the
holder can provide enough of the orphan drug to meet the needs of patients requiring the orphan
indication, or (2) give the Director consent to approve other applications for the protected drug
and indication.
The plain text of the regulation states that the FDA’s possession of “reason to believe” that
Spectrum could not “assure the availability of sufficient quantities of an orphan drug” was
sufficient to oblige the FDA to give Spectrum notice and an opportunity to be heard. The
regulation’s language is unambiguous, and an agency’s interpretation of unambiguous regulatory
language merits no Auer deference. Drake v. FAA, 291 F.3d 59, 68 (DC. Cir. 2002) (citing
Christensen v. Harris County, 529 US. 576, 588 (2000). Despite Sandoz and the FDA’s
arguments to the contrary, it does not matter whether the FDA’s decision to expedite Sandoz’s
ANDA related to the Methotrexate Indications, the Colorectal Indication, or the drug generally,
because each of these explanations (the only explanations the parties have offered) would have
triggered the FDA’s duties under § 316.36(a). The Court reaches this conclusion for two reasons.
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First, §316.36(a) does not discuss decisions to expedite ANDAs, but rather requires the
FDA to give the holder of an orphan-drug approval notice and the opportunity to be heard once
the FDA has reason to expect a shortage of that orphan-protected drug. The relevant inquiry is
thus not why the FDA expedited Sandoz’s ANDA, but whether the FDA had “reason to believe”
Spectrum could not supply sufficient quantities of the orphan drugs it manufactured. Second,
when the FDA decided to expedite Sandoz’s ANDA in February 2012, both the Methotrexate and
Colorectal indications were still orphan-protected, and the defendants have identified no non-
orphan-protected uses for the drug. AR. 1513, 1650, 1652, 1706. Consequently, even if the FDA
expedited Sandoz’s ANDA not to bolster supplies of the drug for the Colorectal Indication but
rather (as it claims) to ensure sufficient quantities of “the drug itself,” the FDA had “reason to
believe” Spectrum would be unable to “assure the availability of sufficient quantities of an orphan
drug,” as every FDA-approved use of “the drug itself’ was orphan-protected. 21 CPR. §
316.36(a). Neither the FDA nor Sandoz have offered arguments to the contrary. The Court
therefore concludes that the FDA violated 21 CPR. § 316.36 by failing to provide Spectrum with
the required notice and opportunity for a hearing
Spectrum has failed, however, to identify any prejudice it suffered from the FDA’s
violation. The Court’s review of the record in the case has revealed none: Spectrum voiced its
objections to the F DA’s approval of Sandoz’s generic in its September 30, 2014 Citizen Petition,
A.R. 16—17, and has offered no reason to believe that the arguments raised in its Petition would
have been any different, or more persuasive, if made more than two years earlier in the FDA’s
approval process. Thus, notwithstanding (1) the FDA’s February 2012 decision to expedite
Sandoz’s ANDA and (2) the FDA’s failure to give Spectrum notice and an opportunity to be heard
with respect to the FDA’s then-anticipated levoleucovorin shortage, Spectrum ultimately did have
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an unimpaired opportunity to comment on Sandoz’s ANDA. Spectrum’s request that the Court
vacate the FDA’s February, 2012 failure to comply with 21 C.F.R. § 316.36 would in practice
mean ordering the FDA to reconsider arguments it has already rightly rejected—a pointless
exercise. Without reason to believe that the FDA’s failure to give Spectrum notice and an
opportunity to be heard affected the FDA’s approval of Sandoz’s generic drug, the Court has no
basis to undo that decision.
3. The FDA ’s Approval ofSandoz’s Use of the Large Vials for the Methotrexate
Indications
Spectrum asserts that the FDA’s approval of Sandoz’s ANDA for use in large vials with
the Methotrexate indication reversed, without adequate explanation, an earlier FDA position that
the large vials were appropriate for only the Colorectal Indication. The Court agrees with the FDA
that the FDA never took such a position.
Spectrum makes much of the fact that several documents in the administrative record
establish that the FDA has repeatedly discussed the large vials and the Colorectal indication in the
same breath. See AR. 1 199 (describing the large vials as “support[ing] the new colorectal cancer
indication” and the small vial as “support[ing] the high dose methotrexate indication), 1270
(stating that the large vials “support . . . treatment of colorectal cancer”); Verified Compl. Ex. 3
(stating that “[t]he approved [Methotrexate Indications do] not require single use vials larger than
50 mg”). These examples amply prove that the FDA believed the large vials were appropriate for
the Colorectal Indication, but say nothing about whether the FDA believed the large vials were not
safely usable for anything else. And as the FDA points out, on April 20, 2011, it approved
Spectrum’s supplement to the FUSILEV® NDA requesting approval of the RTU dosage form in
the large vials—the approved labeling included in that letter listed the Methotrexate Indications—
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and did not approve the Colorectal Indication as a supplemental indication for FUSILEV® until
nine days later. AR. 1181, 1186, 1732—34.
Though Spectrum protests that it actually applied for the Colorectal Indication first and the
large vials second, the FDA nonetheless clearly expressed the View that the large vials could safely
and effectively be used in conjunction with the Methotrexate Indication. That Spectrum may have
ordered its submissions to avoid this result does not change the fact that it happened, and Spectrum
has pointed to no authority stating that it was entitled to have its supplemental NDA applications
disposed of in the order in which it submitted them. Furthermore, even if the FDA had responded
in Spectrum’s desired order, it still reasonably could (and apparently would) have approved the
large vials as appropriate for the Methotrexate Indications.
4. The FDA ’5 Regulations Governing Labeling Carve—Outs
Finally, Spectrum argues that the FDA’s approval of Sandoz’s ANDA violates FDA
regulations prohibiting labeling carve-outs for an ANDA that make the proposed generic drug less
safe or effective than its RLD. 21 C.F.R. § 314.127(a)(7). Spectrum argues that Sandoz’s generic
has two heightened risks: 1) vial contamination and (2) potential overdosing. The large vials,
being 175 mg/17.5 m1 and 250 mg/ZS ml, will contain significant amounts of leftover drug product
after a single Methotrexate dose (typically 7.5m g) is withdrawn. Though Spectrum does not
dispute that the FDA’s approved labeling for Sandoz’s generic drug includes instructions to
medical providers that the large vials are single—use only, it nevertheless insists that the temptation
to economize will spur providers to double-dip. Spectrum also argues that providers could mistake
Sandoz’s genetic drug (stored in liquid RTU form) for levoleucovorin’s predecessor leucovorin
(also stored in liquid RTU form) because providers treating patients who require the Methotrexate
Indication will, being familiar with FUSILEV®, not expect levoleucovorin to come in anything
other than the freeze-dried powder form.
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To support its premise that the FDA’s approval of Sandoz’s generic was not only wrong
but also an inadequately-explained reversal of an earlier position, Spectrum points to a draft FDA
guidance document that warns generally against approving drugs where the appropriate dosage for
the drug is far below the size of the injectable vial in which the drug is stored, for the reasons stated
above. See, e.g., Verified Compl. Ex. 13 at 4 (“Single—dose vials should not contain a significant
volume beyond what would be considered a usual or maximum dose for the expected use of the
drug product”). And the draft guidance admittedly recognizes that these risks exist “even when
appropriately labeled.” Id. at 3. But as the FDA points out, this draft guidance concerned drug
products generally, and does not analyze the specific risks affiliated with FUSILEV®. The draft
guidance was also likewise, if not to the same degree, at odds with the FDA’s approval of
Spectrum’s use of the small vials (containing 50 mg) to administer doses of 7.5 mg. To the extent
that the FDA’s approval of Sandoz’s generic drug was inconsistent with its draft guidance on
excess capacity of injectable vials, it was on the basis of the F DA’s careful analysis of the specific
risks affiliated with the drug under consideration and the extreme rarity of levoleucovorin
overdose. See A.R. 9—13.
The Court also notes that the FDA’s draft guidance, in discussing the risk of single—dose
vials containing significantly more drug than required for a single dose, no less strongly warns that
“[s]imilarly, the need to combine several single-dose vials for a single patient dose may lead to
medication errors and microbial contamination.” Verified Compl. Ex. 13 at 3. The fact that
Spectrum markets FUSILEV® exclusively in small vials—which, as Spectrum stated in their
Citizen Petition, compels oncologists to routinely “use multiple 50 mg vial to achieve the
appropriate dose” for patients requiring the Colorectal Indication, AR. 23, in direct contravention
of the draft guidance they now belatedly embrace—supports the Court’s conclusion that FDA had
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sufficient reasonable basis to disregard that draft guidance with respect to Spectrum’s and
Sandoz’s levoleucovorin products alike.
Spectrum appears to believe that the FDA was obliged to explain not only why it approved
Sandoz’s ANDA for the Methotrexate Indications in the large vials, but also why it chose not to
approve that ANDA for the small vials instead. This view fundamentally misunderstands an
agency’s obligation to engage in reasoned decisionmaking: Though an agency must have reasons
for the options it chooses, it need not pause to justify every option it does not choose. Any other
approach would doom agencies to an endless and fruitless cycle of introspection. The FDA’s
obligation in reviewing Sandoz’s ANDA was not to prove why the drug was better suited to one
vial or another, but to determine whether Sandoz’s generic drug was safe and effective as proposed.
See 21 U.S.C. § 355(b)(1)(A).
CONCLUSION
For the foregoing reasons, Plaintiff 5 Motion for summary judgment will be DENIED, and
Intervenor—Defendant’s Cross-Motion for summary judgment and Defendants’ Memorandum in
Support of Judgment for Defendants will be GRANTED, in a separate order issued this date.
Signed by Royce C. Lamberth, Judge, on May 27, 2015.
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the drug’s components, and specimens of proposed labeling for the packaging of the drug. 21
U.S.C. § 355(b)(1).
The Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman
Amendments”), codified at 21 U.S.C. § 355 and 35 U.S.C. §§ 156, 271, and 282, lets generic
versions of already-NDA—approved drug products bypass the lengthy NDA process and proceed
instead via abbreviated new drug applications (“ANDAs”). 21 U.S.C. § 3550'). The Hatch-
Waxman Amendments were intended to balance encouraging innovation in drug development with
accelerating the availability of lower-cost generic alternatives to innovator drugs. See H.R. Rep.
No. 98-857 (Part 1), 98th Cong, 2d Sess. at 14—15 (1984), reprinted in 1984 U.S.C.C.A.N. 2547—
48; see also Tri-Bio Labs, Inc. v. United States, 836 F.2d 135, 139 (3d Cir. 1987). Though an
entity submitting an ANDA must still obtain FDA approval, the ANDA need not include clinical
evidence establishing the safety and effectiveness of its proposed generic drug. Instead, the ANDA
may point to the already-approved innovator drug that their generic drug mimics, known as the
reference listed drug (“RLD”), and rely instead on the FDA’s previous finding that the RLD is safe
and effective. See 21 U.S.C. 355 § (j)(2).
To use this shortcut, the ANDA applicant must show that its proposed drug is the “same
as” the RLD in all key respects (including active ingredient, dosage form, strength, route of
administration, and, with certain exceptions, labeling), and is bioequivalent to the RLD. 21 U.S.C.
§ 355(j)(2)(A)(ii)—(v). The statute also requires that an ANDA contain “information to show that
the conditions of use prescribed, recommended, or suggested in the labeling proposed for the new
drug have been previously approved for a [listed drug].” 21 U.S.C. § 3550')(2)(A)(i). The FDA
must approve an ANDA unless it finds, among other things, that the ANDA has not provided
sufficient evidence of the foregoing. 21 U.S.C. § 355(j)(4).
FDA regulations allow for a labeling “carve-out,” whereby a generic drug’s labeling may
differ from the RLD’s to omit those parts of the RLD’s labeling that “are protected by patent, or
by exclusivity.” 21 CPR. § 314.127(a)(7). Such carve-outs are allowed, however, only where
the omissions “do not render the proposed drug product less safe or effective than the listed drug
for all remaining, non—protected conditions of use.” 1d. When a proposed labeling carve-out
renders the generic product less safe than the RLD, the FDA may not approve the ANDA. 1d. The
FDA has acknowledged that this language reflects Congress’s intent that the generic drug be safe
and effective for each “condition of use” prescribed, recommended, or suggested in the generic
drug labeling. See FDA Letter to Dexmedetomidine Hydrochloride Injection NDA Holder/ANDA
Applicant, Docket No. FDA—2014-N-0087 (Aug. 18, 2014) at 7, available at
http://www.regulations.gov/#!documentDetail;D=FDA-2014-N-0087—0025.
B. Factual Background
1. F USILE V®
The name of Spectrum’s innovator drug product at issue in this case is FUSILEV®.
FUSILEV® contains levoleucovorin, a variant of leucovorin, a drug that has been used to treat the
toxic effects of the cancer medicine methotrexate. A.R. 183—84.
3. The Methotrexate Indications
On March 7, 2008 the FDA approved FUSILEV® for injection, in the form of a freeze-
dried powder single-use Vial containing the equivalent of 50 mg levoleucovorin (the “small vial”),
for the following medical uses (“indications”): (1) Rescue after high-dose methotrexate therapy
in osteosarcoma, and (2) Diminishing the toxicity and counteracting the effects of impaired
methotrexate elimination and of inadvertent overdosage of folic acid antagonists. A.R. 135—38.
These indications are referred to collectively herein as the “Methotrexate Indications.” Before the
drug contained in the small vial can be injected intravenously it must first be reconstituted through
mixture with another chemical, and once reconstituted becomes unsafe for use after twelve hours.
AR. 65. The typical individual dose for the Methotrexate Indications is roughly 7.5 mg. AR. 26.
The Methotrexate Indications were protected by orphan exclusivity until March 7, 2015. AR. 2,
1706.
b. The Colorectal Indication
On December 8, 2008, Spectrum submitted a supplemental NDA seeking approval of a
new indication for FUSILEV®z The palliative treatment of patients with advanced metastatic
colorectal cancer (the “Colorectal Indication”). AR. 513. The use of leucovorin for the Colorectal
Indication had been eligible for orphan exclusivity since 1990. AR. 1732—34. On December 22,
2010, Spectrum submitted another supplemental NDA seeking approval of two new, larger vials
of FUSILEV® in a liquid ready-to—use (“RTU”) form (the “large vials”) to be used with the
Colorectal Indication, which requires larger doses than the previously-approved Methotrexate
Indications. Verified Compl. Ex. 3. On April 20, 201 1, the FDA approved the large vials proposed
in the second of the two supplemental NDAs. AR. 1181, 1186. Nine days later, on April 29,
2011, FDA approved the Colorectal Indication as a supplemental indication for FUSILEV®. AR
513—16. For the Colorectal Indication, FUSILEV®’s individual dose is either 15 mg or 150 mg.
Spectrum ultimately chose not to market the large vials. AR. 23. Because Spectrum does
not market FUSILEV® in the large vials, oncologists routinely use multiple small vials to achieve
the appropriate dose for colorectal cancer patients. Id. The Colorectal Indication is protected by
orphan exclusivity until April 29, 2018. AR. 1706.
2. Sandoz’s ANDA
On October 26, 2011, Sandoz submitted an ANDA seeking permission to market a
generic version of FUSILEV®. A.R. 1370. At that time, Sandoz sought permission to market its
drug solely for the Colorectal Indication, and in the larger vials associated with that indication.
A.R. 1714. After the FDA formally granted Spectrum orphan drug exclusivity for the Colorectal
Indication on November 7, 2011, Sandoz amended its ANDA on December 14, 2011, to carve out
the Colorectal Indication and instead seek approval for the Methotrexate Indications, A.R. 1703,
1706. Sandoz did not, however, change the proposed vial size, and continued to seek approval for
the large vials even after amending its ANDA to carve out the Colorectal Indication and include
the Methotrexate Indications. A.R. 1370—72. On February 9, 2012, FDA granted Sandoz’s ANDA
expedited review in order to address a “drug shortage.” A.R. 1513, 1650, 1652. One FDA
document discussing the expedited review described Sandoz’s generic as “indicated for . . .
colorectal cancer.” A.R. 1513.
3. Spectrum’s Citizen Petition and Sandoz’s ANDA Approval
On September 30, 2014, Spectrum submitted a Citizen Petition asking the FDA to (1) not
approve any ANDAs carving out the CRC Indication and requesting approval for the large vial
sizes, and (2) not approve any proposed generic levoleucovorin products in the large vial sizes
before the expiration Spectrum’s orphan protection for the Colorectal Indication on April 29, 2018.
A.R. 16—17. On February 24, 2015, the FDA denied Spectrum’s Citizen Petition and tentatively
approved Sandoz’s ANDA. A.R. 1—15. On March 9, 2015, the FDA gave Sandoz final approval
to distribute its generic drug in the single—use large vials for the Methotrexate Indications. A.R.
1370—72.
II. STANDARD OF REVIEW
The Court reviews the FDA’s decision under the Administrative Procedure Act (“APA”).
5 U.S.C. §§ 701 et seq. Under the APA, a court may set aside final agency action that is “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law” or “unsupported by
substantial evidence.” 5 U.S.C. § 706(2)(A), (2)(E). When a litigant moves for summary judgment
under Rule 56(c) in a challenge to final agency action brought under the APA, “the standard set
forth in Rule 56(c) does not apply because of the limited role of a court in reviewing the
administrative record.” ViroPharma, Inc. v. Hamburg, 916 F. Supp. 2d 76, 79 (D.D.C. 2013)
(citing Sierra Club v. Mainella, 459 F. Supp. 2d 76, 89 (D.D.C. 2006)). Instead, the district court
must “review the administrative record to determine whether the agency's decision was arbitrary
and capricious, and whether its findings were based on substantial evidence.” See Forsyth Mem’l
Hosp, Inc. v. Sebelius, 639 F.3d 534, 537 (DC. Cir. 2011) (citing Troy Corp. v. Browner, 120
F.3d 277, 281 (DC. Cir. 1997)).
A court reviews “an agency’s construction of the statute which it administers” under the
two-step process of Chevron, USA, Inc. v. Natural Resources Defense Council, Inc, 467 U.S.
837, 842 (1984). Under Chevron, the court must determine first “whether Congress has directly
spoken to the precise question at issue.” Id. If Congress’s intent 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.” Chevron, 467 U.S. at 842—43. “[I]f the statute is silent or ambiguous” on that
question, the court must defer to the agency's interpretation so long as it is “based on a permissible
construction of the statute.” Alabama Educ. Ass ’n v. Chao, 455 F.3d 386, 392 (DC. Cir. 2006)
(quoting Chevron, 467 U.S. at 843).
An agency’s interpretation of its own regulations, on the other hand, has “controlling
weight unless it is plainly erroneous or inconsistent with the regulation.” Thomas Jefi’erson Univ.
v. Shalala, 512 U.S. 504, 512 (1994) (internal quotations omitted). Therefore, the court “must defer
to [that] . . . interpretation unless an ‘alternative reading is compelled by the regulation's plain
language or by other indications of the Secretary's intent at the time of the regulation's
promulgation.” Id. (quoting Gardebring v. Jenkins, 485 US. 415, 430 (1988)).
III. ANALYSIS
A. Spectrum’s Arguments
Spectrum argues that it is entitled to summary judgment vacating the FDA’s approval of
Sandoz’s generic drug for four reasons: (1) the FDA’s approval of Sandoz’s generic drug violated
the ODA; (2) the FDA’s expedited review of Sandoz’s generic drug on the grounds of drug
shortage violated the FDCA provisions governing drug shortages and the FDA’s own regulations
regarding the same; (3) the FDA’s approval of Sandoz’s generic drug in the large vials for the
Methotrexate Indications was an arbitrary and capricious reversal of an earlier FDA position on
the permissible uses of the large vials; and (4) the FDA’s approval of a labeling carve—out of the
Colorectal Indication for Sandoz’s generic drug violated FDA regulations governing labeling
carve-outs by making the generic drug less safe for its remaining on-label uses.
Three of Spectrum’s four arguments rely on the conclusion that Sandoz’s generic drug was,
as approved by the FDA, appropriate only for the orphan-protected Colorectal Indication. The
Court finds that conclusion, and all four of Spectrum’s arguments, unpersuasive.
I. Orphan Exclusivity
The ODA states that during an approved applicant’s exclusivity period for an orphan—
designated drug and indication, the FDA may not approve any other entity’s application “for such
drug for such disease or condition.” 21 U.S.C. § 36OCc(a). Spectrum argues that the FDA violated
the ODA’s exclusivity provisions by approving Sandoz’s generic drug for the Methotrexate
Indications even though (1) the FDA knew and intended that the generic drug would be bought
and used by healthcare providers for the carved-out and orphan-protected Colorectal Indication,
and (2) the generic drug was approved in a form that was only “appropriate” for the orphan-
protected indication. The FDA responds that its approval of Sandoz’s generic drug did not violate
Spectrum’s orphan exclusivity for the Colorectal Indication because (1) Sandoz’s approved label
carved out the Colorectal indication, and (2) Sandoz’s generic drug was, as approved and labeled,
safe and effective for the Methotrexate indication.
The Court agrees with the Fourth Circuit’s conclusion that the plain language of the ODA’s
exclusivity provisions is unambiguous: Section 360cc(a), which provides simply that the FDA
“may not approve” generics for a protected indication, “is clearly directed at FDA approved-use,
not generic competitor intended-use.” Sigma-Tau Pharms., Inc. v. Schwetz, 288 F.3d 141, 145
(4th Cir. 2002). Congress’s use of the words “such drug for such disease or condition” makes
plain that § 36OCc(a) was to meant to be disease-specific, not drug-specific, and “in view of this
textual emphasis on approved-use, the evidentiary basis for the agency's approvals must be the use
for which the approvals are sought—that is, the use for which the generics are labeled.” Id.
(emphasis added).
Here, as in Sigma-Tau, the FDA properly granted labeling approval for the non-orphan-
protected indication of a drug that also has a carved-out and orphan-protected off—label use. See
Bristol-Myers Squibb Co. v. Shalala, 91 F.3d 1493, 1500 (DC. Cir. 1996) (“[T]he statute expresses
the legislature’s concern that the new generic be safe and effective for each indication that will
appear on its label; whether the label for the new generic lists every indication approved for use of
the pioneer [drug] is a matter of indifference”); Mem. Op. at 13, 0tsuka Pharm. Co., Ltd. v.
Burwell, No. 15-cv-0852 (D. Md. Apr. 29, 2015) (stating, in denying a request for Preliminary
Injunction to reverse ANDA approval, that the FDA “has broad authority to approve ANDAs
carving out exclusivities under the FDCA, including orphan drug exclusivity”). That the FDA
may have known or even intended that Sandoz’s generic would be commonly used by healthcare
providers for the carved-out, orphan-protected, and off-label Colorectal Indication does not rise to
the level of violating Spectrum’s exclusivity right: Spectrum’s right extends as far as preventing
the FDA from approving any other entity’s application to market levoleucovorin for the Colorectal
Indication, but no further.
Spectrum attempts to distinguish Sigma—Tau by arguing that one of the Fourth Circuit’s
concerns in that case—that requiring the FDA to examine a generic manufacturer’s “intended use”
of a drug with a carved-out orphan-protected indication would ultimately lead to a difficult and
overly anticompetitive “foreseeable-use” test that would hamper the development of generic
drugs—is not relevant here where, Spectrum claims, it is not merely possible but in fact certain
that Sandoz’s generic will be used for the Colorectal Indication and that the FDA intended for it
to be so.
An intended- or foreseeable-use test is not the appropriate test. Even setting that aside, the
fact that such a test might be easily satisfied here is cold comfort. Such tests must be used
consistently, not just when expedient, and there are endless possible fact patterns from which a
court would have to glean knowledge, intent, or even the relative strength of multiple
simultaneously—held intents. But more importantly, inconvenience was not the Si gma-T au court’s
only objection to an intended— or foreseeable-use test, as such a regulatory regime would also “be
one in which relatively few generics are approved,” resulting “in extensions of exclusivity periods
that Congress never intended” and “frustrat[ing] the longstanding practice of Congress, the FDA,
and the courts not to interfere with physicians’ judgments and their prescription of drugs for off-
label uses.” Sigma-Tau Pharm., Inc, 288 F.3d at 147 (citing Bristol—Myers Squibb Co., 91 F.3d
at 1496, and Rhone~P0ulenc Rorer Pharm, Inc. v. Marion Merrell Dow, Inc., 93 F.3d 511, 514
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