Mylan Laboratories, Inc. v. Tommy G. Thompson, Secretary, United States Department of Health and Human ServicesMylan Laboratories, Inc. v. Tommy G. Thompson, Secretary, United States Department of Health and Human Services
Opinion for the court filed by Circuit Judge HENDERSON.
Aрpellants Mylan Laboratories, Inc., Mylan Technologies, Inc. and Mylan Pharmaceuticals, Inc. (Mylan) appeal the district court’s summary judgment upholding the decision of appellee Food and Drug Administration (FDA). The FDA decision granted appellees ALZA Corp. and Jans-sen Pharmaceutica, Inc., both subsidiaries of Johnson and Johnson, (collectively, ALZA) a six-month period of pediatric marketing exclusivity, pursuant to
I.
This appeal requires that the court consider three separate statutory provisions: (1)
A. Applicable Statutory Provisions
The ANDA provision,
(I) that such patent information has not been filed,
(II) that such patent has expired,
(III) ... the date on which such patent will expire, or
(IV) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted; ....
The ANDA provision also establishes the effective date for approval of the ANDA, depending on the particular certification made.
If the ' applicant makes a certification under paragraph I or II, “the approval may be made effective immediately.”
If the certification is under paragraph III, “the approval may be made effective on the date certified under [paragraph III].”
If the certification is under paragraph IV, “the approval shall be made effective immediatеly” unless the patent holder files an infringement action in the district court within 45 days of receiving the notice, in which event “the approval shall be made effective upon the expiration of the thirty-month period beginning on the date of the receipt of the notice,” unless the district court rules on the infringement claim within the 30-month period.
See
(2)(A) if the drug is the subject of—
(i) a listed patent for which a certification has been submitted under [paragraph II] and for which pediatric studies were submitted prior to the expiration of the patent (including any patent extensions); or
(ii) a listed patent for which a certification has been submitted under [paragraph III],
the period during which an application may not be approved under ...section 355(j)(5)(B) of this title shall be extended by a period of six months after the date the patent expires (including any patent extensions); or
(B) if the drug is the subject of a listed patent for which a certification has been submitted under [paragraph TV], and in the patent infringement litigation resulting from the certification the court determines that the patent is valid and would be infringed, the period during which an application may not be approved under ...section 355(j)(5)(B) of this title shall be extended by a period of six months after the date the patent expires (including any patent extensions).
Finally,
(4) For an act of infringement described in paragraph (2)—
(A) the court shall order the effective date of any approval of the drug or veterinary biological product involved in the infringement to be a date which is not earlier than the date of the expiration of the patent which has been infringed,
(B) injunctive relief may be granted against an infringer to prevent the commercial manufacture, use, оffer to sell, or sale within the United States or importation into the United States of an approved drug or veterinary biological product, and
(C) damages or other monetary relief may be awarded against an in-fringer only if there has been commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of an approved drug or veterinary biological product.
The remedies prescribed by subpara-graphs (A), (B), and (C) are the only remedies which may be granted by a court for an act of. infringement described in paragraph (2), except that acourt may award attorney fees under section 285.
B. This Proceeding
Appellee ALZA ownеd U.S. Patent No. 4,588,580 (’580 patent) for Duragesic. By its terms the ’580 patent expired on July 23, 2004.
In July 1999 the FDA wrote ALZA requesting that it perform pediatric studies of Duragesic pursuant to
Meanwhile, in October 2001 Mylan filed with the FDA an ANDA 'to market its generic fentanyl transdermal system pursuant to
On March 24, 2004 the Vermont District Court issued a decision holding that “[t]he ’580 patent is not invalid” and “My-lan’s ANDA filing for a generic version of Duragesic ® infringe[s] ... the ’580 patent.”
Alza v. Mylan,
In the meantime, both Mylan and ALZA sought a determination from the FDA on whether Mylan could-lawfully market its generic fentanyl transdermal system when the ’580 patent expired or whether Mylan was required to wait until the six-month pediatric exclusivity period expired. In two letters dated June 22, 2004, the FDA issued its administrative decision.
In the first letter (Letter 1), addressed to counsel for both parties, the FDA concluded that “ALZA’s pediatric exclusivity for fentanyl will attach, and thus delay effective approval of Mylan’s ANDA,” so that “[ujnless Mylan were to win its patent case on appeal, Mylan’s ANDA would be eligible for final effective approval no earlier than, six months after the ’580 patent expires on July 23, 2004.” Letter 1 at 11. The FDA rested its decision on two key determinations.
First, the FDA concluded that the Vermont district court’s order that “the effective date of any approval of Mylan’s ANDA product shall be no earlier than the date of expiration of the ’580 patent family,”
Second, the FDA concluded that, when ALZA’s patent expired, Mylan’s paragraph IV certification would no longer be accurate and Mylan would be required to amend it or, “[i]f Mylan refuses to amend its application to change its certification after the patent expires, FDA can treat that certification as automatically amended to contain a paragraph II certification (because there is no оther proper certification upon expiry).” Letter 1 at 12 (citing
Ranbaxy Labs. v. FDA,
In the second letter (Letter 2), addressed to Mylan only, the FDA informed Mylan that, “in light of [the Vermont district court’s] decision, the Agency hereby rescinds the final approval of ANDA 76-258 issued on November 21, 2003, and regards ANDA 76-258 as tentatively approved.” Letter 2 at 1. The letter again noted that, after the Vermont district court’s order, Mylan’s ANDA approval had “a delayed effective date,” which, by FDA regulation, constitutes “tentative,” rather than “final,” approval.
Id.
(citing
On June 24, 2000 Mylan filed this action in the district court seeking a determination that the FDA’s “revocation” of My-lan’s final ANDA approval wаs unlawful and an injunction prohibiting the FDA “from revoking the final approval of My-lan’s ANDA and from applying [ALZA’s] pediatric exclusivity to Mylan’s ANDA.”
Mylan v. Thompson,
II.
“The court reviews the district court’s summary judgment decision
de novo
and ‘we may affirm only if “there is no genuine issue as to any material fact [and] the moving party is entitled to judgment as a
At issue is the FDA’s application of the statutory provisions summarized above. “Ordinarily we review an agency’s interpretation of a statute it is charged with implementing under the familiar and deferential two-part framework of
Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.,
“ ‘[T]he want of notice and comment ‘does not decide the case’ ” against
Chevron
deference.
Barnhart v. Walton,
There is no denying the complexity of the statutory regime under which the FDA operates, the FDA’s expertise or the careful craft of the scheme it devised to reconcile the various statutory provisions. Further, the FDA’s decision made no great legal leap but relied in large part on its previous determination of the same or similar issues and on its own regulations.
See
Letter 1 at 11-12 (citing
“Under the
Chevron
framework, ‘[i]f ... “Congress has directly spoken to the precise question at issue, we must give effect to Congress’s unambiguously expressed intent but [i]f the statute is silent or ambiguous with respect to the specific issue,we ask whether the agency’s position rests on a permissible construction of the statute.” ’ ”
Pharm. Research & Mfrs.,
First, application of the various statutory provisions results in conflicting effective dates for Mylan’s ANDA. The patent infringement remedy statute,
Second, after the Vermont district court’s finding of patent validity, Mylan’s
In deciding the exclusivity issue submitted by Mylan and ALZA, the FDA was callеd upon to construe the statutes so as to resolve these two conflicts. We conclude the FDA did so in a way that reflects a permissible construction of the applicable FDCA provisions and therefore satisfies
Chevron. See Western Coal Traffic League v. Surface Transp. Bd.,
A. Conversion of Approval from “Final” to “Tentative”
First, the FDA concluded that, as a consequence of the Vermont district court’s determination under
Mylan contends the FDA lacked authority to revoke Mylan’s final ANDA approval granted on November 21, 2003 because its authority to revoke a final approval is limited to those specific circumstances set out in
Mylan also claims the approval conversion is “contrary to past Agency practice.” Appellants’ Br. 43 (citing
Mead Johnson Pharm. Group v. Bowen,
B. Conversion of Paragraph IV to Paragraph II Certification
The FDA next addressed the problem of Mylan’s inaccurate ANDA certification and resolved it relying on
Ranbaxy Labs. v. FDA,
In
Ranbaxy
the FDA also converted an ANDA classification from a paragraph IV to a paragraph II certification under similar circumstances. The patent holder in
Ranbaxy
filed an infringement action within forty-five days after receiving the required paragraph IV certification notice. Upon learning the district court would be unable to decide the case before the patent expiration date, the parties signed a stipulation to dismiss the action as of the expiration date. The day before expiration, the FDA informed the ANDA applicant that its ANDA would be subject to a six-month pediatric exclusivity period for the patented drug. There, as here,
[T]he district court properly affirmed the FDA’s determination that, under the Federal Food, Drug, and Cosmetic Act,21 U.S.C. § 301, et seq. , final approval of Ranbaxy’s Abbreviated New Drag Applications (“ANDAs”) did not automatically occur upon the dismissal of' the underlying patent litigation, the expiration of the patent, and the termination of the thirty-month statutory stay. The district court also properly affirmed the FDA’s conclusion- that, upon the expiration of Pfizer’s patent on January 29, 2004, Ranbaxy’s “Paragraph IV” certifications became invalid, and the applicable pediatric exclusivity provision became21 U.S.C. § 355a(c)(2)(A) , the provision pertaining to “Paragraph II” certifications. Id. Under that provision, approval of Ran-baxy’s ANDAs is delayed six months.... See21 U.S.C. § 355a(c)(2)(A) .
Mylan contends that one of the FDA’s own regulations weighs against this rationale, namely,
* * *
We affirm the district court’s judgment because the FDA’s decision reasonably resolves the ambiguity in applying the relevant statutes to a factual situation not fully foreseen or provided for by the Congress when it enacted the statutes or the FDA when it promulgated regulations. The Vermont district court’s finding of patent validity and consequent injunction changed the factual and legal landscape and the agency’s response to the court’s decision is both reasonable and consistеnt with the statutory language. The FDA’s solution effects the policies of both the generic ANDA provision, by eliminating the need for Mylan to conduct clinical trials of its generic product, and the pediatric exclusivity provision, by granting ALZA a six-month exclusivity period in return for the pediatric studies it performed, the adequacy of which Mylan does not dispute. At the same time, it maintains the incentive under
So ordered.
Notes
. If the district court decides within the stay period that the patent is invalid or not infringed, "the approval shall be made effective on” the date of entry of judgment or of a settlement order or consent decree.
. If tire district court in the patent infringement litigation determines the patent is invalid or will not be infringed, ANDA approval is effective upon the date of the court order so stating under
. This regulation provides:
In order for an approval to be made effective under paragraph (b)(3) of this section,the applicant must receive an approval letter from the agency indicating that the application has received final approval. Tentative approval of an application does not constitute "approval” of an application and cannot, absent a final approval letter from the agency, result in an effective approval under paragraph (b)(3) of this section.
. This regulation provides: “An approval becomes effective on the date of the issuance of the approval letter, except with regard to an approval under section 505(b)(2) of the act with a delayed effective date. An approval with a delayed effective date is tentative and does not become final until the effective date.”
. Mylan also asserts, correctly, that the court owes no deference to the FDA’s interpretation of
. Even were the FDA's decision subject only to
Skidmore
deference, the result would likely be the same.
See Ranbaxy Labs. v. FDA,
. On appeal the appellees argue alternatively that
. We are skeptical whether the parties properly characterize the FDA's action as "withdrawal'' or "revocation” of approval. It seems to us that Mylan's ANDA approval was never in fact "withdrawn” or "revoked” but remained continuously in effect based on the FDA's review of the ANDA described in the November 21, 2003 final approval letter. The approval merely underwent a change of status or classification from final to tentative after the Vermont district court delayed its effective date.
. Nor do we see any force in Mylan's citation to the FDA's 1994 rulemaking, in which the FDA declined to extend by rule the statutory 45-day window. Appellants' Br. at 42 (quoting
. The FDA might well have concluded that in this situation too, as ALZA suggested in the
. In a case such as this, for example, if the district court found the patent invalid, without the 30-month stay the ANDA applicant would obtain immediate approval under the court's decision to market its generic product notwithstanding the patent holder might subsequently successfully appeal the district court's decision.