CARACO PHARMACEUTICAL LABORATORIES, LTD., ET AL. v. NOVO NORDISK A/S ET AL.
No. 10-844
Supreme Court of the United States
Argued December 5, 2011—Decided April 17, 2012
566 U.S. 399
Benjamin J. Horwich argued the cause for the United States as amicus curiae urging vacatur. With him on the brief were Solicitor General Verrilli, Assistant Attorney General West, Deputy Solicitor General Stewart, Deputy Assistant Attorney General Brinkmann, Douglas N. Letter, and Daniel Tenny.
Mark A. Perry argued the cause for respondents. With him on the brief were Scott P. Martin, Michael A. Sitzman, and Josh A. Krevitt.*
JUSTICE KAGAN delivered the opinion of the Court.
When the Food and Drug Administration (FDA) evaluates an application to market a generic drug, it considers whether the proposed drug would infringe a patent held by the manufacturer of the brand-name version. To assess that matter, the FDA requires brand manufacturers to submit descriptions of the scope of their patents, known as use codes. The FDA does not attempt to determine if that information is accurate. Rather, the FDA assumes that it is so and decides whether to approve a generic drug on that basis. As a result, the breadth of the use code may make the difference between approval and denial of a generic company‘s application.
*Briefs of amici curiae urging reversal were filed for AARP et al. by David A. Balto, Stacy Canan, and Michael Schuster; for the Generic Pharmaceutical Association by Roy T. Englert, Jr., and Mark T. Stancil; for Mylan Pharmaceuticals, Inc., by Dan L. Bagatell and David J. Harth; and for Representative Henry A. Waxman by Carlos T. Angulo. Briefs of amici curiae urging affirmance were filed for Allergan, Inc., et al. by Jonathan E. Singer, Terry G. Mohn, and Ellen A. Scordino; for Pharmaceutical Research and Manufacturers of America by Robert A. Long, Jr., and Natalie M. Derzko; and for the Washington Legal Foundation by Daniel J. Popeo and Richard A. Samp.
I
A
The FDA regulates the manufacture, sale, and labeling of prescription drugs under a complex statutory scheme. To begin at the beginning: When a brand manufacturer wishes to market a novel drug, it must submit a new drug application (NDA) to the FDA for approval. The NDA must include, among other things, a statement of the drug‘s components, scientific data showing that the drug is safe and effective, and proposed labeling describing the uses for which the drug may be marketed. See
Once the FDA has approved a brand manufacturer‘s drug, another company may seek permission to market a generic version pursuant to legislation known as the Hatch-Waxman Amendments. See Drug Price Competition and Patent Term Restoration Act of 1984, 98 Stat. 1585. Those amendments allow a generic competitor to file an abbreviated new
Because the FDA cannot authorize a generic drug that would infringe a patent, the timing of an ANDA‘s approval depends on the scope and duration of the patents covering the brand-name drug. Those patents come in different varieties. One type protects the drug compound itself. Another kind—the one at issue here—gives the brand manufacturer exclusive rights over a particular method of using the drug. In some circumstances, a brand manufacturer may hold such a method-of-use patent even after its patent on the drug compound has expired.
To facilitate the approval of generic drugs as soon as patents allow, the Hatch-Waxman Amendments and FDA regulations direct brand manufacturers to file information about their patents. The statute mandates that a brand submit in its NDA “the patent number and the expiration date of any patent which claims the drug for which the [brand] submitted the [NDA] or which claims a method of using such drug.”
After consulting the Orange Book, a company filing an ANDA must assure the FDA that its proposed generic drug will not infringe the brand‘s patents. When no patents are listed in the Orange Book or all listed patents have expired (or will expire prior to the ANDA‘s approval), the generic manufacturer simply certifies to that effect. See
One option is to submit a so-called section viii statement, which asserts that the generic manufacturer will market the drug for one or more methods of use not covered by the brand‘s patents. See
Of particular relevance here, the FDA will not approve such an ANDA if the generic‘s proposed carve-out label overlaps at all with the brand‘s use code. See 68 Fed. Reg. 36682-36683 (2003). The FDA takes that code as a given: It does not independently assess the patent‘s scope or otherwise look behind the description authored by the brand. According to the agency, it lacks “both [the] expertise and
The generic manufacturer‘s second option is to file a so-called paragraph IV certification, which states that a listed patent “is invalid or will not be infringed by the manufacture, use, or sale of the [generic] drug.”
In the late 1990‘s, evidence mounted that some brands were exploiting this statutory scheme to prevent or delay the marketing of generic drugs, and the Federal Trade Commission (FTC) soon issued a study detailing these anticompetitive practices. See FTC, Generic Drug Entry Prior to Patent Expiration: An FTC Study, pp. iii-vi (July 2002) (hereinafter FTC Study). That report focused attention on brands’ submission of inaccurate patent information to the FDA. In one case cited by the FTC, Mylan Pharmaceuticals, Inc. v. Thompson, 268 F. 3d 1323 (CA Fed. 2001), a brand whose original patent on a drug was set to expire listed a new patent ostensibly extending its rights over the drug, but in fact covering neither the compound nor any method of using it. The FDA, as was (and is) its wont, accepted the listing at its word and accordingly declined to approve a generic product. The generic manufacturer sued to delete the improper listing from the Orange Book, but the Federal Circuit held that the Hatch-Waxman Amendments did not allow such a right of action. See id., at 1330-1333. As the FTC noted, that ruling meant that the only option for generic manufacturers in Mylan‘s situation was to file a paragraph IV certification (triggering an infringement suit) and then wait out the usual 30-month period before the FDA could approve an ANDA. See FTC Study 40-45.
Congress responded to these abuses by creating a mechanism, in the form of a legal counterclaim, for generic manufacturers to challenge patent information a brand has submitted to the FDA. See Medicare Prescription Drug, Improvement, and Modernization Act of 2003, 117 Stat. 2452. The provision authorizes an ANDA applicant sued for patent infringement to
“assert a counterclaim seeking an order requiring the [brand] to correct or delete the patent information sub-
mitted by the [brand] under subsection (b) or (c) [of § 355 ] on the ground that the patent does not claim either—“(aa) the drug for which the [brand‘s NDA] was approved; or
“(bb) an approved method of using the drug.”
21 U. S. C. § 355(j)(5)(C)(ii)(I) .
The counterclaim thus enables a generic competitor to obtain a judgment directing a brand to “correct or delete” certain patent information that is blocking the FDA‘s approval of a generic product. This case raises the question whether the counterclaim is available to fix a brand‘s use code.
B
The parties to this case sell or seek to sell the diabetes drug repaglinide. Respondents (collectively Novo) manufacture Prandin, the brand-name version of the drug. The FDA has approved three uses of Prandin to treat diabetes: repaglinide by itself; repaglinide in combination with metformin; and repaglinide in combination with thiazolidinediones (TZDs). Petitioners (collectively Caraco) wish to market a generic version of the drug for two of those uses.
Novo originally owned a patent for the repaglinide compound, known as the ‘035 patent, but it expired in 2009. In 2004, Novo also acquired a method-of-use patent for the drug, called the ‘358 patent, which does not expire until 2018. That patent—the one at issue here—claims a “method for treating [diabetes by] administering . . . repaglinide in combination with metformin.” 601 F. 3d 1359, 1362 (CA Fed. 2010). Thus, Novo currently holds a patent for one of the three FDA-approved uses of repaglinide—its use with metformin. But Novo holds no patent for the use of repaglinide with TZDs or its use alone.
In 2005, Caraco filed an ANDA seeking to market a generic version of repaglinide. At that time, the Orange Book entry for Prandin listed both the ‘035 patent (the drug
When Caraco filed its ANDA, Novo‘s use code for the ‘358 patent represented that the patent covered “[u]se of repaglinide in combination with metformin to lower blood glucose.” 601 F. 3d, at 1362-1363. The FDA therefore advised Caraco that if it did not seek to market repaglinide for use with metformin, it could submit a section viii statement. That would allow Caraco, assuming its ANDA was otherwise in order, to market its generic drug for the other two uses. Caraco took the FDA‘s cue and in 2008 submitted a section viii statement, with proposed labeling carving out Novo‘s patented metformin therapy. See App. 166-176.
Before the FDA took further action, however, Novo changed its use code for the ‘358 patent. The new use code describes “[a] method for improving glycemic control in adults with type 2 diabetes.”3 601 F. 3d, at 1363. Because that code indicates that the ‘358 patent protects all three approved methods of using repaglinide to treat diabetes, Caraco‘s proposed carve-out of metformin therapy was no longer sufficient; even with that exclusion, Caraco‘s label now overlapped with Novo‘s use code on the other two uses.
Caraco responded to Novo‘s new, preclusive use code by filing a statutory counterclaim in the ongoing infringement suit. The counterclaim sought an order requiring Novo to “correct” its use code “on the ground that [the ‘358] patent does not claim” two approved methods of using repaglinide—alone and in combination with TZDs.
The Court of Appeals reversed, holding that Caraco lacked “a statutory basis to assert a counterclaim.” 601 F. 3d, at 1360. The court first read the statutory phrase “the patent does not claim an approved method of using the drug” to require Caraco to demonstrate that the ‘358 patent does not claim any approved method of use. See id., at 1365 (“‘[A]n approved method’ means ‘any approved method‘“). Because the patent covers one approved method of use—repaglinide in combination with metformin—the counterclaim was unavailable. The court further ruled that the counterclaim provision does not reach use codes because they are not “patent information submitted by the [brand] under subsection (b) or (c).” On the Federal Circuit‘s view, that information consists only of the patent number and expiration date. See id., at 1366-1367. Judge Dyk dissented. He would have read the phrase “the patent does not claim . . . an approved method of using the drug” to include situations
We granted certiorari, 564 U. S. 1035 (2011), and now reverse.
II
We begin “where all such inquiries must begin: with the language of the statute itself.” United States v. Ron Pair Enterprises, Inc., 489 U. S. 235, 241 (1989). This case requires us to construe two statutory phrases. First, we must decide when a “patent does not claim . . . an approved method of using” a drug. Second, we must determine the content of “patent information submitted . . . under subsection (b) or (c)” of
A
An ANDA applicant sued for patent infringement may bring a counterclaim “on the ground that the patent does not claim . . . an approved method of using the drug.”
Truth be told, the answer to the general question “What does ‘not an’ mean?” is “It depends“: The meaning of the phrase turns on its context. See Johnson v. United States, 559 U. S. 133, 139 (2010) (“Ultimately, context determines
And the statutory context here supports Caraco‘s position. As described earlier (and as Congress understood), a single drug may have multiple methods of use, only one or some of which a patent covers. See, e. g.,
Consider the point as applied to this case. Caraco wishes to market a generic version of repaglinide for two (and only two) uses. Under the statute, the FDA could approve Caraco‘s application so long as no patent covers those uses, regardless whether a patent protects yet a third method of using the drug. Novo agrees that Caraco could bring a counterclaim if Novo‘s assertion of patent protection for repaglinide lacked any basis—for example, if Novo held no patent, yet claimed rights to the pair of uses for which Caraco seeks to market its drug. But because Novo has a valid patent on a different use, Novo argues that Caraco‘s counterclaim evaporates. And that is so even though, once again, Caraco has no wish to market its product for that patented use and the FDA stands ready, pursuant to the statute, to approve Caraco‘s product for the other two. To put the matter simply, Novo thinks the counterclaim disappears because it has a patent for a method of use in which neither Caraco nor the FDA is interested at all. “It would take strong evi-
Novo argues that our reading must be wrong because Congress could have expressly “impose[d] additional . . . qualifications” on the term “an approved method of us[e]“—and indeed did so in another place in the statute. Brief for Respondents 31;
Our more essential point, though, has less gamesmanship about it: We think that the “not any” construction does not appear in the relevant counterclaim provision because Congress did not mean what Novo wishes it had. And we think that is so because Congress meant (as it usually does) for the provision it enacted to fit within the statutory scheme—here,
B
Novo contends that Caraco‘s counterclaim must fail for another, independent reason: On its view (as on the Federal Circuit‘s), the counterclaim does not provide a way to correct use codes because they are not “patent information submitted by the [brand] under subsection (b) or (c)” of
The statute does not define “patent information,” but a use code must qualify. It describes the method of use claimed in a patent. See
The more difficult question arises from the “submitted under” phrase. The subsections mentioned there—(b) and (c) of
Several of our cases support giving “under” this broad meaning. For example, in Eli Lilly, 496 U. S., at 665-668, we examined a similar statutory reference to the “submission of information under a Federal law which regulates the manufacture, use, or sale of drugs,”
So too here. “Patent information submitted . . . under subsection (b) or (c)” most naturally refers to patent information provided as part of the “comprehensive scheme of regulation” premised on those subsections. Eli Lilly, 496 U. S., at 667. It includes everything (about patents) that the FDA
Once again, that congressional choice fits the broader statutory context. Use codes are pivotal to the FDA‘s implementation of the Hatch-Waxman Amendments—and no less so because a regulation, rather than the statute itself, requires their submission. Recall that those Amendments instruct the FDA (assuming other requirements are met) to approve an ANDA filed with a section viii statement when it proposes to market a drug for only unpatented methods of use. To fulfill that charge, the FDA must determine whether any patent covers a particular method of use; and to do that, the agency (which views itself as lacking expertise in patent matters, see supra, at 406-407, and n. 2) relies on the use codes submitted in the regulatory process. See 68 Fed. Reg. 36682-36683. An overbroad use code therefore throws a wrench into the FDA‘s ability to approve generic drugs as the statute contemplates. So it is not surprising that the language Congress used in the counterclaim provision sweeps widely enough to embrace that filing.
C
Another aspect of the counterclaim provision—its description of available remedies—dispatches whatever remains of Novo‘s arguments. According to the statute, a successful
Consider first how Novo‘s an-means-any contention would accomplish that result. Recall that on Novo‘s view, a counterclaim can succeed only if the patent challenged does not claim either the drug or any approved method of using it. See supra, at 413. But when a generic manufacturer makes that showing, the remedy must be to “delete” the listing; no correction would be enough. Novo agrees with that proposition; “[a]t bottom,” Novo avers, “the counterclaim is a delisting provision.” Brief for Respondents 20. But that raises the obvious question: Why did Congress also include the term “correct” in the statute?
Novo can come up with just one answer: The counterclaim, it proposes, can correct erroneous patent numbers. Imagine, for example, that Novo mistakenly entered the number ‘359, instead of ‘358, when submitting information about its repaglinide patent for publication in the Orange Book. Then, Novo suggests, Caraco could bring a counterclaim to challenge the inaccurate listing (on the ground that ‘359 does not claim any method of use), and the remedy would be “correct[ion]” (substituting an 8 for a 9). But we think Novo‘s admission that this scenario would be “unusual,” Tr. of Oral Arg. 41, considerably understates the matter. As Novo concedes, brands have every incentive to provide the right patent number in the first place, and to immediately rectify any error brought to their attention. See id., at 40-41. By doing so, they place both generic companies and the FDA on notice of their patents and thereby prevent infringement. And conversely, generics have little or no incentive to bring
The same problem afflicts Novo‘s alternative contention—that “patent information submitted . . . under subsection (b) or (c)” includes only numbers and expiration dates (and not use codes). Once again, we cannot think Congress included the remedy of “correct[ion]” so that courts could expunge typos in patent numbers. And not even Novo has proffered a way for the counterclaim to “correct” an erroneous expiration date. Suppose, for example, that a brand incorrectly lists the expiration date of a valid patent as 2018 rather than 2015. The counterclaim would be useless: It authorizes a remedy only “on the ground that” the listed patent does not claim the drug or an approved method of using it—and notwithstanding the wrong expiration date, this patent does so. Alternatively, suppose the brand lists a patent as having a 2018 expiration date when in fact the patent has already lapsed. Then, a generic manufacturer could bring a counterclaim alleging that the patent no longer claims the drug or a method of using it—but the appropriate remedy would be deletion, not correction, of the brand‘s listing. Novo‘s reading of “patent information,” like its reading of “not an,” effectively deletes the term “correct” from the statute.
III
Novo finally advances two arguments relating to the counterclaim‘s drafting history. Neither contention, however, overcomes the statutory text and context. Indeed, consid-
A
Novo first contends that our interpretation of the statute “effectively resurrect[s] the scheme rejected by Congress.” Brief for Respondents 44 (quoting Smith v. United States, 507 U. S. 197, 203, n. 4 (1993)). In 2002, Novo notes, Congress failed to pass a bill that would have required brands to file specified “patent information,” including, for method-of-use patents, a description of “the approved use covered by the [patent] claim.” S. 812, 107th Cong., 2d Sess., § 103(a)(1), p. 7 (engrossed bill). That bill would have allowed a generic company to bring its own civil action—not merely a counterclaim in ongoing litigation—to “delete” or “correct” the information filed. Id., at 8. The Senate approved the bill, but the House of Representatives took no action on it. Novo argues that because this failed legislation would have allowed a generic company to challenge overbroad descriptions of a patent, we cannot read the statute Congress eventually enacted as doing so.
We disagree. We see no reason to assume, as Novo does, that Congress rejected S. 812 because it required brands to submit patent information beyond a number and expiration date. Indeed, Novo‘s argument highlights the perils of relying on the fate of prior bills to divine the meaning of enacted legislation. “A bill can be proposed for any number of reasons, and it can be rejected for just as many others.” Solid Waste Agency of Northern Cook Cty. v. Army Corps of Engineers, 531 U. S. 159, 170 (2001). S. 812 contained numerous items, including a title on importing prescription drugs (no controversy there!), that may have caused its failure. See S. 812, Tit. II. Moreover, what criticism there was of the bill‘s mechanism for challenging brands’ patent claims focused not on the specification of “patent information,” but instead on the creation of an independent cause of action—stronger medicine than the counterclaim Congress ulti-
B
Novo next argues that Congress established the counterclaim only to solve the problem raised by the Federal Circuit‘s decision in Mylan, 268 F. 3d 1323—the impossibility of deleting an improperly listed patent from the Orange Book. In Mylan, as earlier described, a generic company alleged that a brand had listed a patent that covered neither the approved drug nor any method of using it, and brought an action seeking delisting. See supra, at 408. The Federal Circuit held that no such action was available, even assuming the allegation was true. Because several legislators saw Mylan as “exemplif[ying]” brands’ “perceived abuse” of the FDA‘s patent listing practices, Brief for Respondents 35, Novo contends that we should construe the counterclaim provision to aid only a generic company that “finds itself in the
Once again, we think not. Maybe Mylan triggered the legislative effort to enact a counterclaim, or maybe it didn‘t: By the time Congress acted, it also had at hand an FTC study broadly criticizing brands’ patent listings and an FDA rule designed to address the very same issue. See supra, at 408, 423. But even assuming Mylan “prompted the proposal” of the counterclaim, “whether that alone accounted for its enactment is quite a different question.” Eli Lilly, 496 U. S., at 670, n. 3 (emphasis deleted). Here, we think Mylan alerted Congress to a broader problem—that generic companies generally had no avenue to challenge the accuracy of brands’ patent listings, and that the FDA therefore could not approve proper applications to bring inexpensive drugs to market. The proof of that lies in the statute itself (where the best proof of what Congress means to address almost always resides). As we have described, the statute‘s text and context demonstrate that the counterclaim is available not only (as in Mylan) when the patent listing is baseless, but also (as here) when it is overbroad. See supra, at 412-421. In particular, Congress‘s decision to allow a counterclaimant to seek “correct[ion]” of patent information explodes Novo‘s theory, because the remedy for a Mylan-type impropriety is complete delisting.
And to make matters still easier, Congress‘s equation of the two situations—the one in Mylan and the one here—makes perfect sense. Whether a brand lists a patent that covers no use or describes a patent on one use as extending to others, the brand submits misleading patent information to the FDA. In doing so, the brand equally exploits the FDA‘s determination that it cannot police patent claims. And the brand‘s action may in either case delay or block approval of a generic drug that infringes no patent—and that under the statute should go to market. See supra, at 406-407. That is the danger Caraco faces here, as much as it
Indeed, the need for the counterclaim is greater here than in Mylan. When a brand lists a patent that covers no use, a generic company has a pathway aside from the counterclaim to challenge the listing. As described earlier, the company may make a paragraph IV certification stating that the listed patent “is invalid or will not be infringed” by the generic drug.
IV
The statutory counterclaim we have considered enables courts to resolve patent disputes so that the FDA can fulfill its statutory duty to approve generic drugs that do not infringe patent rights. The text and context of the provision demonstrate that a generic company can employ the counterclaim to challenge a brand‘s overbroad use code. We accord-
The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
JUSTICE SOTOMAYOR, concurring.
The Court today interprets the counterclaim set forth in
I
I first underscore that the counterclaim can only lessen the difficulties created by an overly broad use code; it cannot fix them. The statutory scheme is designed to speed the introduction of low-cost generic drugs to market. See ante, at 405 (citing Eli Lilly & Co. v. Medtronic, Inc., 496 U. S. 661, 676 (1990)). To that end, the statute provides for the rapid approval of a drug that a generic manufacturer seeks to market for unpatented methods of use. The manufacturer need only submit an abbreviated new drug application (ANDA) with a section viii statement and a proposed label that “carves out” from the brand manufacturer‘s label any patented methods of use. See ante, at 406. So long as the use code is not overly broad (and all else is in order), the Federal Food and Drug Administration (FDA) may approve the application without requiring any further steps relating to the patent, and the generic drug may reach the public without undue delay. See ibid.
After today‘s opinion, the generic manufacturer can respond to this situation by taking the following steps: submit an ANDA with a paragraph IV certification (which requires a proposed label materially identical to the brand manufacturer‘s label, see ante, at 425), wait for the brand manufacturer to institute suit, file a counterclaim, litigate the counterclaim, and, if successful in securing the correction of the use code, return to the start of the process and do what it always wanted to do—file an ANDA with a section viii statement and a carve-out label.
The problem with this process is twofold. First, it results in delay and expense the statutory scheme does not envision. Second, there is no guarantee the process will work. It depends on the brand manufacturer initiating paragraph IV litigation, but it is not obvious the brand will have any incentive to do so. In light of today‘s holding, the upshot of such litigation will be the correction of the use code through the assertion of a counterclaim—an outcome that is desirable, to be sure, for the generic manufacturer, but perhaps less so for the brand manufacturer.
Meanwhile, it is not clear what happens if the brand manufacturer does not file suit. FDA may approve the generic manufacturer‘s application, see
In short, the counterclaim cannot restore the smooth working of a statutory scheme thrown off kilter by an overly broad use code. At best, it permits the generic manufacturer to do what the scheme contemplates it should do—file an ANDA with a section viii statement—but only after expensive and time-consuming litigation. A fix is in order, but it must come from Congress or FDA.
II
Precisely because the regulatory scheme depends on the accuracy and precision of use codes, I find FDA‘s guidance as to what is required of brand manufacturers in use codes remarkably opaque. The relevant regulation states simply that a brand manufacturer must provide “[t]he description of the patented method of use as required for publication.”
Indeed, in some respects we are here today because of FDA‘s opacity in describing what is required of brand manufacturers. In its initial NDA filing, Novo submitted a use code for the ‘358 patent that was not “overly broad“: It described narrowly the single patented method of use. App. 54-55, 99. Some years later FDA required that Novo amend its label to “[r]eplace all the separate indications” “with the following sentence: ‘Prandin is indicated as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus.‘” Id., at 163-164, 215. Novo then amended its use code to track the new label, id., at 482-486, explaining that the amendment “correspond[ed] with the change in labeling required by FDA,” id., at 483. Novo understood its amended use code to comply with FDA regulations, likely on the ground it pressed before us: that the regulations permit a brand manufacturer to submit for publication in the Orange Book a description of either the patented method of use or the indication (which refers to “what a drug does,” ante, at 417, n. 7). Brief for Respondents 10, 22, 48-50.
For the reasons explained by the Court, see ante, at 417, n. 7, Novo is mistaken. But the company can hardly be faulted for so thinking. The regulations also require submission of “a description of each approved method of use or indication,”
Prior to enactment of the counterclaim provision, Congress considered a bill that required brand manufacturers to submit a “description of ‘the approved use covered by the [patent] claim,‘” and that allowed a generic manufacturer to bring a civil action to correct that information. See ante, at 422. Congress rejected the bill, in part over criticism that it would encourage excess litigation.* Absent greater clarity from FDA concerning what is required of brand manufacturers in use codes, Congress’ fears of undue litigation may be realized.