Generic COZAAR/HYZAAR 180-Day Exclusivity – Teva Wins, FDA Too (Despite Itself) in the DC District Court; Appeals Abound

By Kurt R. Karst –   

When we last blogged on the issue of 180-day exclusivity for generic versions of Merck & Co., Inc.’s blockbuster drugs COZAAR (losartan potassium) Tablets and HYZAAR (hydrochlorothiazide; losartan potassium) Tablets, FDA had issued an 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 letter decision was curious.  Based on the D.C. Circuit’s recent decision in Teva Pharms USA, Inc. v. Sebelius, 595 F.3d 1303 (D.C. Cir. 2010), in which the court ruled that Teva did no forfeit 180-day exclusivity eligibility under the failure-to-market forfeiture provisions at FDC Act § 505(j)(5)(D)(i)(I), FDA concluded that Teva did not forfeit 180-day under FDC Act § 505(j)(5)(D)(i)(VI).  In that decision, the Court ruled that there is “no reason to conclude that the [2003 Medicare Modernization Act] meant to give the brand manufacturer a right to unilaterally vitiate a generic’s exclusivity.”  The Agency spilled a lot of ink in its March 26th letter decision repudiating its own decision.  This strategic move appeared to us to be an invitation for other generic applicants to sue FDA.  And, as we noted in a March 30th update to our March 29th post, both Apotex, Inc. and Roxane Laboratories, Inc. promptly sued FDA seeking a preliminary injunction (here and here).  The companies argued that FDA’s March 26, 2010 letter decision violates the FDC Act and the Administrative Procedure Act.

The case moved forward last week at breakneck speed.  After the motions for preliminary injunction were filed last Tuesday, Teva intervened in the case and both Teva and FDA filed their responses (here and here) last Wednesday.  FDA’s mere 10-page response contrasted sharply with Teva’s 42-page opposition memorandum.  With allusions to Alice in Wonderland, Teva argued that:

Incredibly, [Apotex and Roxane] now take the position that FDA acted “arbitrarily and capriciously” when it followed the D.C. Circuit’s decision in post-remand administrative proceedings.  There is no basis in law or logic for that remarkable assertion.  Federal agencies, no less than private parties, are bound by the law, and that is so regardless of whether the law is set forth in statutes or court cases interpreting those statutes (at Chevron step one).  If it is arbitrary and capricious for FDA to account for the D.C. Circuit’s teachings, then every agency stands condemned—and “‘judicial review of agency action [would be transformed] into a ping-pong game,’” . . .  in which agencies are free simply to ignore every judicial decision with which they disagree.  That is madness, and this Court should reject plaintiffs’ invitation to Wonderland.  Plaintiffs have no likelihood of success on the merits.

Apotex and Roxane filed their replies (here and here) last Thursday.  On Friday, Judge Rosemary M. Collyer issued an order and a 7-page memorandum opinion ruling denying the Apotex and Roxane preliminary injunction motions.  Judge Collyer, agreed that FDA properly followed the logic of the D.C. Circuit’s decision in Teva:

The Court cannot find that the FDA was arbitrary or capricious when it politely expressed its disagreement with a D.C. Circuit decision that had ruled against the agency, but nonetheless applied the reasoning of the Circuit to a different but, on these facts, closely related question. Given the facts and law in this record, the Court finds that Plaintiffs have a very slim chance of success on the merits. This factor does not support issuance of a preliminary injunction.

Apotex and/or Roxane might very well appeal the decision before FDA approves Teva’s ANDAs with 180-day exclusivity, which is expected on April 6th.  The Solicitor General is considering seeking rehearing of the Teva decision.  We will update this post throughout the day with any additional information.

UPDATES (April 5, 2010):

• On April 5th, Apotex filed with the D.C. Circuit a motion for a summary reversal of the D.C. District Court’s April 2nd decision denying Apotex’s preliminary injunction request and a motion to stay the district court’s judgment pending appeal (here and here).  Apotex argues, among other things, that FDA was not bound to apply Teva because the decision did not address patent expiration.  As such, according to Apotex, “FDA’s determination that it was precluded by Teva from following Chevron deference is a clear error of law.” 
   
• Later on April 5th, Teva submitted its brief opposing Apotex’s stay request, arguing that Apotex’s motion should be summarily denied. “[T]his Court already considered and rejected the assertion that Merck’s unilateral failure to pay maintenance fees on the ‘075 patent provides a basis for stripping Teva of its exclusivity, when FDA raised the same claims Apotex now asserts in post-judgment proceedings concerning issuance of the panel’s mandate,” according to Teva. 

And to further complicate things . . .

• Late in the day on April 5th, FDA filed a petition for panel rehearing and rehearing en banc of the D.C. Circuit's March 2nd decision in Teva.  "The panel's decision conflicts with well established ripeness jurisprudence.  Moreover, its interpretation of the statute is not only contrary to the unambiguous text and Congress's deliberate rebalancing of competing goals, it squarely conflicts with this Circuit's message in other FDA decisions concerning the importance of fidelity to Congress's enactments.  As a result, FDA finds itself whipsawed, with a 'damned-if-you-do, damned-if-you-don't' dilemma in administering this very complex statute," according to FDA. 

UPDATE (April 6, 2010):

• Early on April 6th, FDA filed its opposition brief and stated in the brief that the Agency intends to make approval decisions regarding generic losartan products later in the day.  Later that same day, the D.C. Circuit DENIED Apotex's motion for a summary reversal of the D.C. District Court’s April 2nd decision and DENIED Apotex's motion to stay the district court’s judgment pending appeal.  According to a Teva press release, FDA approved Teva's ANDAs with 180-day exclusivity.