82 F. Supp. 3d 159
D.D.C.2015Background
- Ranbaxy (and subsidiaries) had extensive CGMP compliance failures at multiple Indian facilities, producing FDA Warning Letters (2006, 2008), an FDA compliance hold (2009), a consent decree (2012), and a 2013 criminal plea and $500 million settlement.
- Ranbaxy filed multiple ANDAs; despite the compliance problems and an FDA policy requiring CGMP before tentative approval, OGD nonetheless granted tentative approvals in 2007–2008 (including ANDA 77830 for esomeprazole and ANDA 78078 for valganciclovir) after pressured or expedited internal processes.
- Tentative approval preserves but does not itself allow marketing; it can preserve eligibility for 180‑day exclusivity if timely obtained. Final approval requires demonstrated CGMP compliance; statute and regulations are silent/ambiguous about whether tentative approval can be conditioned on or rescinded for CGMP noncompliance.
- In November 2014, FDA reexamined Ranbaxy’s tentative approvals when competitors sought final approval, concluded the tentative approvals had been granted in error because the referenced facilities were non‑compliant, rescinded the tentative approvals, and determined Ranbaxy had forfeited 180‑day exclusivity where applicable.
- Ranbaxy sued seeking to enjoin the rescissions; the district court consolidated consideration of the preliminary injunction with summary judgment and ultimately denied the plaintiffs’ motion and granted defendants’ and intervenors’ summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May FDA condition tentative approval on CGMP compliance? | Ranbaxy: §355(j) bars withholding tentative approval for CGMP noncompliance; tentative approval requires only submission of "information" not proof of compliance. | FDA: Statute/regulations permit conditioning tentative approval on CGMP; regulation 21 C.F.R. §§314.105/314.127 tie approval (including tentative/delayed approvals) to manufacturing adequacy. | Court: Statute ambiguous; FDA’s interpretation reasonable and entitled to Chevron deference — FDA may condition tentative approval on CGMP. |
| Did FDA change policy (or merely err) when it granted tentative approvals despite a CGMP hold? | Ranbaxy: FDA consciously adopted Ranbaxy’s reading and changed policy to allow tentative approvals without CGMP compliance. | FDA: No policy change; approvals were erroneous deviations caused by miscommunication and rushed decisionmaking. | Court: Record shows ad hoc deviations and requests to CDER for exceptions; no agency‑wide policy change; FDA erred in granting tentative approvals. |
| May FDA rescind tentative approvals and does it have authority to do so after a long delay? | Ranbaxy: Congress provided explicit withdrawal procedures for final approvals (§355(e)) but not for tentative approvals; FDA lacks authority to rescind tentative approvals or cannot do so after many years. | FDA: Agencies have inherent authority to revisit and correct errors; no exclusive statutory bar prevents rescission of tentative approval; delay was justified by plaintiffs’ concealment and extensive enforcement process. | Court: FDA has inherent authority to rescind tentative approvals; rescission was a lawful, reasonable exercise of that authority given the circumstances (including plaintiffs’ misconduct and investigations). |
| Does rescission of tentative approval retroactively trigger the 30‑month forfeiture (loss of 180‑day exclusivity)? | Ranbaxy: A once‑issued tentative approval is a final historical fact that cannot be undone to trigger forfeiture retroactively. | FDA: Forfeiture is avoided only by a valid tentative approval; an invalidly issued tentative approval that is later rescinded does not prevent retroactive forfeiture; this reading furthers Hatch‑Waxman goals. | Court: Statute ambiguous; FDA’s retroactive application is reasonable and consistent with statutory purpose to prevent ‘‘parking’’ exclusivity. |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837 (1984) (two‑step framework for judicial review of agency statutory interpretation)
- FTC v. Actavis, Inc., 133 S. Ct. 2223 (2013) (context on Hatch‑Waxman and generic exclusivity incentives)
- Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 132 S. Ct. 1670 (2012) (paragraph IV certification and exclusivity context)
- Teva Pharms. USA, Inc. v. Sebelius, 595 F.3d 1303 (D.C. Cir. 2010) (Hatch‑Waxman purpose and exclusivity discussion)
- Mylan Labs., Inc. v. Thompson, 389 F.3d 1272 (D.C. Cir. 2004) (discussing §355(e) and ANDA approval withdrawal principles)
- Ivy Sports Med., LLC v. Burwell, 767 F.3d 81 (D.C. Cir. 2014) (agency inherent authority to revisit prior decisions)
- Mazaleski v. Treusdell, 562 F.2d 701 (D.C. Cir. 1977) (timeliness of agency reconsideration; ‘‘weeks not years’’ principle subject to unusual circumstances)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary and capricious standard requires reasoned explanation)
- Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005) (deference to reasonable agency interpretations even if court might prefer a different reading)
- FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) (statutory interpretation in regulatory context; read statutes in their broader context)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requirements)