FDA Rules Against Patent Expiration 180-Day Exclusivity Forfeiture for Generic COZAAR/HYZAAR, But in Doing So FDA Repudiates Its Own Decision and Asks to be Sued

By Kurt R. Karst –   

Late last Friday, FDA teed up the next battle over 180-day exclusivity for generic versions of Merck & Co., Inc.’s blockbuster drugs COZAAR (losartan potassium) Tablets and HYZAAR (hydrochlorothiazide; losartan potassium) Tablets when the Agency issued its 8-page decision concluding that Teva did not forfeit 180-day exclusivity eligibility under FDC Act § 505(j)(5)(D)(i)(VI).  That provision states that 180-day exclusivity eligibility is forfeited if “[a]ll of the patents as to which the applicant submitted a certification qualifying it for the 180-day exclusivity period have expired.”  FDA issued its response after soliciting public comment on whether Teva forfeited 180-day exclusivity eligibility because the only exclusivity-qualifying patent – U.S. Patent No. 5,608,075 (“the ‘075 patent”), which was previously identified in the Orange Book as expiring in March 2014 – “expired” in March 2009 after Merck ceased paying certain patent “maintenance fees.” 

FDA’s decision follows a decision earlier in the day on March 26th from the U.S. District Court for the District of Columbia in which the court amended a March 16, 2010 order declaring that Teva has not forfeited its right to 180-day marketing exclusivity, and ordering FDA not to approve ANDAs for certain strengths of generic COZAAR and HYZAAR until the expiration of Teva’s 180-day exclusivity.  The amended order limits the court’s previous order to the failure-to-market forfeiture provision at FDC Act § 505(j)(5)(D)(i)(VI) and notes that FDC Act § 505(j)(5)(D)(i)(VI) “was not raised in [Teva’s] Complaint, and it was not addressed by the Circuit in its March 2 Opinion or its March 12 mandate.”   Teva had opposed FDA’s motion to amend the March 16, 2010 order on the basis that the D.C. Circuit, before the Court issued its March 12th mandate, considered and rejected arguments that 180-day exclusivity eligibility could be forfeited under FDC Act § 505(j)(5)(D)(i)(VI) when a patent “expires” due to a failure to pay maintenance fees.

FDA’s March 26th letter decision is an interesting strategic move by the Agency.  Although FDA states in the first paragraph of its decision “that the expiration of the ‘075 patent does not result in a forfeiture of the first applicant’s eligibility for exclusivity for ANDAs referencing Cozaar and Hyzaar,” the remainder of the decision is a repudiation of that conclusion.  For example, FDA states:

• The Agency’s view is that, if it were writing on a clean slate, it would interpret the statute so that patent expiration for any reason is a patent expiration forfeiture event.  FDA believes that interpretation is most consistent with the plain meaning of the words of the statute and with a workable and appropriate approach to administration of the statute.

• The text of the patent expiration forfeiture event provision does not provide a basis to distinguish between “natural patent expiry” and expiration for some other reason. Section 505(j)(5)(D)(i)(VI) refers broadly to forfeiture when “all of the patents . . . have expired.”  There is no language qualifying the type of expiration the Agency is to consider relevant for forfeiture.  Thus, there is no apparent statutory basis for the Agency to conclude that only some patent expirations result in forfeiture.

• [P]ermitting the first applicant to retain exclusivity as to an expired patent requires FDA to take an action that is not sanctioned by the words of the statute.

• FDA concludes that if it were assessing this issue without reference to the Teva decision, it would find that, under the plain language of the statute, because the ‘075 patent will have expired by the time any ANDA referencing Cozaar or Hyzaar is ready for approval, any first applicant previously eligible for 180-day exclusivity as to the ‘075 patent forfeits that exclusivity.  Moreover, even if the statutory language is considered ambiguous, FDA concludes [sic] loss of exclusivity under these circumstances is most consistent with the statute’s text and goals, and provides the most reasonable way of administering the statute.

The reference to Teva is, of course, the D.C. Circuit’s March 2, 2010 opinion ruling that FDA’s interpretation of the 180-day exclusivity forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I)(bb)(CC) fails at Chevron step one and that the patent delisting counterclaim provision at FDC Act § 505(j)(5)(C)(ii)(I) added by the 2003 Medicare Modernization Act (“MMA”) must be read together with the patent delisting forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I)(bb)(CC).  Moreover, the Court ruled that there is “no reason to conclude that the [MMA] meant to give the brand manufacturer a right to unilaterally vitiate a generic’s exclusivity.”

Latching on to this statement, FDA simply states in its letter decision that “[t]his reasoning thus appears to preclude a forfeiture of exclusivity on the basis of a patent expiration where the expiration is in the control of the NDA holder.”  Accordingly, “[b]ecause the ‘075 patent expired due to Merck’s failure to pay applicable fees, that expiration, consistent with the Court of Appeals’ reasoning in Teva, is not a grounds for forfeiture of the first applicant’s exclusivity.  Although FDA believes this result is inconsistent with the plain language of the statute . . . it believes it is appropriate to apply the Court of Appeals’ reasoning to the present facts.”  FDA further notes, however, that “[i]n the event the D.C. Circuit reconsiders and revises the decision in Teva, FDA reserves the right to revisit these conclusions regarding 180-day exclusivity for ANDAs referencing Cozaar and Hyzaar.”  (The Solicitor General is reportedly considering seeking rehearing of the Teva decision.)

FDA’s letter decision is clearly a plea for other interested parties to challenge the Agency’s decision.  Apotex, which is a subsequent ANDA applicant that has already been involved in this 180-day exclusivity litigation, will likely sue FDA soon.  And other subsequent ANDA applicants might do the same.  Indeed, Roxane threatened litigation in the company’s response to FDA’s March 11th solicitation.  We will update our loyal FDA Law Blog readers as things develop.

UPDATE:

• On March 30, 2010, Apotex filed a lawsuit against FDA in the U.S. District Court for the District of Columbia seeking a preliminary injunction enjoining FDA from awarding Teva 180-day exclusivity. A copy of Apotex's memorandum of points and authorities in support of its preliminary injunction motion is available here. 

• On March 30, 2010, Roxane filed a lawsuit against FDA in the U.S. District Court for the District of Columbia seeking a preliminary injunction enjoining FDA from awarding Teva 180-day exclusivity.  A copy of Roxane's complaint and memorandum of points and authorities in support of its preliminary injunction motion are available here and here.