Apotex Files Declaratory Judgment Actions in an Effort to “Unpark” 180-Day Exclusivity for Generic ARICEPT and VALTREX

By Kurt R. Karst –      

Over the past week, generic drug manufacturer Apotex, Inc., which we understand recently parted ways with the generic drug trade association, GPhA, has filed two similar declaratory judgment actions in an effort to “unpark” 180-day exclusivity eligibility that is reportedly held by Ranbaxy Laboratories, Ltd.  Both complaints cite Ranbaxy’s Good Manufacturing Practice (“GMP”) problems as a basis for arguing that absent a declaratory judgment to trigger 180-day exclusivity, generic competition will be “indefinitely delayed.”  Apotex’s efforts are consistent with recently introduced legislation that we understand was backed by the company, as well as a paper the company issued earlier this year, titled “Patent Settlements Between Brand and Generic Pharmaceutical Companies: Parked Exclusivity & Lack of Incentive for Subsequent Generic Filers to Fight On Are the Problems, Not ‘Reverse Payments.’”  (see our June 23, 2009 post)

In December 2003, the Medicare Modernization Act (“MMA”) amended the FDC Act to affirmatively permit a generic applicant with an application containing a Paragraph IV certification to bring an action for declaratory judgment of patent invalidity or noninfringement (referred to in the law as a “civil action to obtain patent certainty”), provided: (1) the NDA holder or patent owner has allowed the 45-day period in which to file a suit for patent infringement to expire without bringing an action for patent infringement or invalidity; and (2) if the generic applicant’s notice to the NDA holder or patent owner relates to patent noninfringement, the notice includes an offer of confidential access to the generic applicant’s application for purposes of determining whether the NDA holder or patent owner should bring an action for patent infringement.  The MMA also amended the patent statute to provide that “courts of the United States shall, to the extent consistent with the Constitution, have subject matter jurisdiction in any action brought  . . . under [28 U.S.C. § 2201] for a declaratory judgment” of invalidity or noninfringement.

Apotex’s declaratory judgment actions, both of which were filed in the U.S. District Court for the Middle District of North Carolina, concern generic versions of ARICEPT (donepezil) and VALTREX (valacyclovir).  Copies of the complaints are available here and here.  Both actions are intended to trigger Ranbaxy’s 180-day exclusivity.  According to FDA’s Paragraph IV Certification List, 180-day exclusivity for generic ARICEPT and two generic VALTREX products appears to be governed by the pre-MMA statute under which exclusivity is triggered by the earlier of “the first commercial marketing of the drug,” or “the date of a decision of a court in [a patent infringement action] holding the patent which is the subject of the certification to be invalid or not infringed.”  Another generic VALTREX product appears to be governed by the post-MMA statute, under which a court decision is a component in the 180-day exclusivity failure-to-market forfeiture calculus. 

In each complaint, Apotex argues that due to Ranbaxy’s GMP problems a declaratory judgment is necessary to remove the bottleneck for subsequent ANDA applicants for generic versions of these drugs.  In February 2009, FDA determined that Ranbaxy “submitted untrue statements of material fact in abbreviated and new drug applications filed with the Agency” and stated that the review of certain pending applications would likely be stopped.