57 F.4th 272
D.C. Cir.2023Background
- Aubagio, approved by the FDA on Sept. 12, 2012, contains teriflunomide as its sole active ingredient and was awarded new chemical entity (NCE) exclusivity preventing ANDA filings until Sept. 12, 2016.
- Arava, approved in 1998, lists leflunomide as its sole active ingredient; teriflunomide appears only as a degradant/impurity that may form during manufacture or storage and was tolerated up to a specified ceiling.
- Sandoz sought to challenge Aubagio’s NCE exclusivity, arguing teriflunomide had already been “approved” in Arava (either as an impurity that counts as an approval or as an active ingredient), and submitted early ANDAs with paragraph IV certifications.
- The FDA rejected Sandoz’s request, applying its longstanding view that a previously recognized impurity is not an ‘‘approved’’ active ingredient for NCE purposes and that Arava approved only leflunomide as active.
- Sandoz sued under the Administrative Procedure Act; the district court granted summary judgment to the FDA, and the D.C. Circuit affirmed.
Issues
| Issue | Plaintiff's Argument (Sandoz) | Defendant's Argument (FDA) | Held |
|---|---|---|---|
| Whether FDA approval of a drug means the agency "approved" known impurities (thus barring NCE exclusivity for a later drug that uses that impurity as its active ingredient) | FDA approval of a drug approves all known disclosed components, including impurities; therefore teriflunomide "was approved" in Arava | FDA approves the drug and its active ingredient(s), but tolerating an impurity up to a ceiling is not an approval of that impurity as an active ingredient | Held for FDA: approving a drug does not "approve" known impurities for NCE purposes; Aubagio eligible for NCE exclusivity |
| Whether Sandoz forfeited/failed to exhaust its statutory challenge by not presenting it to the FDA | Procedural default not asserted by Sandoz; court should decide the statutory issue now | Government says Sandoz did not reasonably raise this statutory argument before the agency (no exhaustion) | Court declined to impose exhaustion as a prudential bar and decided the statutory issue on the merits |
| Whether teriflunomide was in fact an active ingredient in Arava (factual/administrative-record question) | Teriflunomide accumulates in Arava and contributes pharmacological effect; contemporaneous patent filings suggest therapeutic intent | Arava’s NDA, clinical trials, label, and FDA review focused on leflunomide as the only active ingredient; teriflunomide was treated only as an impurity | Held for FDA: record shows Arava approved leflunomide only; teriflunomide was not approved as an active ingredient |
| Remedy/impact on ANDA timing and exclusivity rights | If teriflunomide had been approved earlier, Sandoz’s early ANDA would be timely and Sandoz would obtain sole 180‑day first‑applicant exclusivity | If teriflunomide was not previously approved, early ANDA was premature and Sandoz must share first‑applicant status with others who filed on the 4‑year date | Held for FDA: Aubagio’s NCE exclusivity stands; Sandoz’s early ANDA was premature and it does not receive a solo 180‑day exclusivity period |
Key Cases Cited
- Sims v. Apfel, 530 U.S. 103 (Sup. Ct. 2000) (limits on judicially imposed administrative issue‑exhaustion)
- Carr v. Saul, 141 S. Ct. 1352 (Sup. Ct. 2021) (exhaustion depends on similarity to adversarial litigation)
- McCarthy v. Madigan, 503 U.S. 140 (Sup. Ct. 1992) (practical inquiry for exhaustion)
- K Mart Corp. v. Cartier, Inc., 486 U.S. 281 (Sup. Ct. 1988) (statutory interpretation by reference to text and design)
- Teva Pharms., USA, Inc. v. Leavitt, 548 F.3d 103 (D.C. Cir. 2008) (context on paragraph IV and exclusivity consequences)
- Pharmanex v. Shalala, 221 F.3d 1151 (10th Cir. 2000) (role of active‑ingredient review in NDA process)
- R.R. Yardmasters of Am. v. Harris, 721 F.2d 1332 (D.C. Cir. 1983) (discretion to address unexhausted issues)