Akebia Therapeutics, Inc. v. Azar, 443 F.Supp.3d 219

Background

Akebia Therapeutics (which acquired Keryx in Dec. 2018) markets Auryxia, an FDA‑approved drug with two indications: (1) control of serum phosphorus in CKD patients on dialysis; and (2) treatment of iron deficiency anemia in CKD patients not on dialysis.
Medicare Part D covers prescription drugs but expressly excludes “prescription vitamins and mineral products” under 42 U.S.C. § 1395w‑102(e)(2) (cross‑referencing 42 U.S.C. § 1396r‑8(d)(2)(E)).
In Sept. 2018 CMS emailed Part D sponsors removing Part D coverage for Auryxia when used to treat iron deficiency anemia (treating it as a mineral product) and advised sponsors to require prior authorization for the phosphorus indication.
Akebia sought reversal administratively; after CMS declined to revisit the decision, Akebia sued under the Administrative Procedure Act seeking a preliminary injunction reinstating Part D coverage for the anemia indication.
The district court denied the preliminary injunction, concluding Akebia failed to show a likelihood of success on the merits (statutory interpretation and arbitrary‑and‑capricious challenges) and failed to demonstrate irreparable harm.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether CMS email is final agency action	Email consummated agency decision and has legal consequences	Email is not a reviewable final action	Court assumed, for injunction stage, the email was final (did not decide jurisdiction)
Whether CMS’s interpretation of “mineral product” is contrary to statute	Auryxia is a novel synthetic ferric‑citrate complex and not a “mineral product” excluded from Part D	Statute’s text and context permit treating synthetic iron products as mineral products; exclusions have been applied broadly	Court rejected Akebia’s plain‑meaning challenge; CMS’s interpretation was reasonable
Whether CMS acted arbitrarily or capriciously by (a) treating Auryxia inconsistently with other drugs and (b) treating Auryxia differently by indication	(a) CMS previously covered similar synthetic mineral/vitamin drugs; (b) CMS cannot split coverage for two FDA‑approved indications	(a) CMS consistently excludes products used to treat corresponding vitamin/mineral deficiencies and covers them when used for non‑deficiency indications; (b) statute permits excluding specific uses—agency may consider use	Court held CMS provided a rational explanation and its treatment was not arbitrary or capricious
Whether Akebia showed irreparable harm warranting injunction	Loss of Part D market (≈60% of anemia market), sovereign immunity bars money damages, Auryxia is company’s only marketed product	Akebia delayed suit after purchase of Keryx, offered minimal financial proof, and economic loss alone is usually insufficient	Court found Akebia failed to show likely irreparable harm and that delay and lack of proof undercut the claim

Key Cases Cited

Univ. of Tex. v. Camenisch, 451 U.S. 390 (1981) (preliminary injunction preserves relative positions pending trial)
Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (movant must show likelihood of irreparable harm for injunctive relief)
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29 (1983) (arbitrary and capricious standard requires reasoned explanation and connection between facts and choice)
Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016) (agencies may change policy but must provide a reasoned explanation for departures)
Bennett v. Spear, 520 U.S. 154 (1997) (tests for final agency action reviewability)
Corp. Techs., Inc. v. Harnett, 731 F.3d 6 (1st Cir. 2013) (likelihood of success is the principal preliminary injunction factor)
Arborjet, Inc. v. Rainbow Treecare Sci. Advancements, Inc., 794 F.3d 168 (1st Cir. 2015) (confirming that likelihood of success is the sine qua non for preliminary injunctions)