Otsuka Pharm. Co. v. Burwell
302 F. Supp. 3d 375
D.C. Cir.2016Background
- Otsuka developed Abilify Maintena (extended-release injectable aripiprazole) and received undisputed three-year exclusivity for the NDA and a separate three-year exclusivity for a supplemental NDA for an acute-relapse schizophrenia indication.
- Alkermes submitted a 505(b)(2) NDA for Aristada (aripiprazole lauroxil → N‑hydroxymethyl aripiprazole active moiety), relying in part on prior studies submitted for Abilify Tablets but conducting its own essential studies for Aristada.
- FDA denied Otsuka's citizen petition and approved Aristada in October 2015, explaining that the three-year exclusivity bars only subsequent approvals for drugs with the same active moiety as the exclusivity-holder’s drug.
- Otsuka sued under the APA, alleging (1) the FDA misread the FDCA exclusivity provisions, (2) the FDA violated its own regulations, and (3) the agency effectively amended rules without notice-and-comment.
- The district court applied Chevron/Auer deference, found the exclusivity statutes and regulations ambiguous, upheld the FDA’s active‑moiety interpretation as reasonable, and granted summary judgment to FDA and Alkermes while denying Otsuka’s motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FDCA 3‑year exclusivity bar unambiguously covers any 505(b)(2) application "for the conditions of approval" regardless of active moiety | Otsuka: "conditions of approval" should be read broadly to block any later application that seeks the same approved conditions (method of administration/indication) even if active moieties differ | FDA: statute is ambiguous; reasonable to limit bar to later applications for the same active moiety to preserve competition and tie exclusivity to the studied substance | Court: Statute ambiguous at Chevron Step One; at Step Two, FDA's active‑moiety interpretation is reasonable and upheld |
| Whether FDA's interpretation conflicts with its implementing regulations (21 C.F.R. §314.108(b)(4)-(5)) | Otsuka: Regulations unambiguously bar later 505(b)(2)s for the same conditions/change irrespective of active moiety; Auer deference not warranted | FDA: Regulations mirror statutory ambiguity; reasonable to construe "conditions of approval"/"change" as tied to the drug (active moiety) that received exclusivity | Court: Regulations ambiguous; FDA's interpretation not plainly erroneous or inconsistent; Auer deference applies and supports FDA |
| Whether FDA’s approval of Aristada effected a de facto amendment requiring notice-and-comment rulemaking | Otsuka: Approving Aristada effectively added language to regulations and thus required notice-and-comment | FDA: Action was an adjudicative application of an interpretive construction of ambiguous statute/regulations, not a legislative rule | Court: Because regulations/statute ambiguous and FDA’s action was interpretive, no notice-and-comment required; claim fails |
| Whether agency departed from prior practice arbitrarily | Otsuka: Prior FDA statements (e.g., Xalatan letter) suggest inconsistent treatment | FDA: Prior statements were context‑specific; current decision adequately explained and grounded in statute, science, and policy | Court: FDA adequately explained its reasoning; any change rationally justified and not arbitrary |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (establishing two‑step deference for agency statutory interpretation)
- Auer v. Robbins, 519 U.S. 452 (deference to agency interpretation of its own ambiguous regulations unless plainly erroneous)
- National Cable & Telecomm. Ass'n v. Brand X Internet Servs., 545 U.S. 967 (agency interpretations of ambiguous statute are given controlling weight even if courts previously interpreted statute differently)
- Village of Barrington, Ill. v. Surface Transp. Bd., 636 F.3d 650 (D.C. Cir. 2011) (discussion of Chevron Step One/Two framework)
- AstraZeneca Pharm. LP v. FDA, 713 F.3d 1134 (D.C. Cir. 2013) (finding ambiguity in supplement‑exclusivity language)
- Abbott Labs. v. Young, 920 F.2d 984 (D.C. Cir. 1990) (background on exclusivity as incentive to innovate)