District Court Denies Motion for Temporary Restraining Order and Preliminary Injunction in Marketed Unapproved Morphine Sulfate Oral Solution Case

By Kurt R. Karst –   

On July 26, 2010, the U.S. District Court for the District of Wyoming denied a Motion for Temporary Restraining Order and Preliminary Injunction filed last week by Cody Laboratories, Inc. and Lannett Co., Inc. (collectively “Cody/Lannett”) against FDA in a case involving marketed unapproved Morphine Sulfate Solution Immediate-Release 20mg/mL products.  The 37-page opinion, which is nearly identical to the proposed Order submitted by FDA, also dismissed Cody/Lannett’s Complaint filed last week.

As we previously reported, the lawsuit stems from FDA’s March 2009 Warning Letters to Cody and Lannett (among other companies) to stop manufacturing certain unapproved narcotic drugs, including morphine sulfate oral solutions.  At that time, FDA concluded that marketed unapproved morphine sulfate products are “new drugs [under the FDCA] and not grandfathered and that manufacturing and marketing of these products without an approved application constituted a violation of the Act.”  In subsequent communications with Cody/Lannett, FDA stated that the Agency would exercise enforcement discretion with regard to the shipment and distribution of Cody’s/Lannett’s unapproved Morphine Sulfate Solution Immediate-Release 20mg/mL drug products until July 24, 2010, which is 180 days after FDA approved an NDA for the drug product.  Meanwhile, Lannett submitted its own NDA to FDA for Morphine Sulfate Solution Immediate-Release 20mg/mL in late February 2010.  That NDA is still under review by FDA.

Cody/Lannett argued in their lawsuit that FDA should be enjoined from taking enforcement action after July 24, 2010 if such enforcement action is based on FDA’s contention that Morphine Sulfate Solution Immediate-Release 20mg/mL is an unapproved “new drug,” and that the court should issue a declaratory judgment that FDA violated the Administrative Procedure Act (“APA”) in determining that the product is a “new drug.”  Cody/Lannett also alleged that FDA violated the APA by not treating Cody/Lannett fairly in the NDA process.

In denying the injunctive and declaratory relief requested by Cody/Lannett, the court relied on the U.S. Supreme Court’s decision in Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594 (1950).  Ewing and its progeny “established that courts lack jurisdiction to enjoin FDA from initiating enforcement proceedings under the FDCA.”  Specifically, the Supreme Court held in Ewing that “district courts do not have jurisdiction to review an FDA determination to initiate an enforcement action under the FDCA, finding that ‘[j]udicial review of this preliminary phase of the administrative procedure does not fit the statutory scheme nor serve the policy of the FDCA.’”  Applying the Ewing decision to the current case, the district court ruled:

[T]he Supreme Court in Ewing has foreclosed the possibility that an injunction, like the one plaintiffs seek here, can be granted to halt FDA enforcement actions.  Because plaintiffs are attempting to enjoin an anticipated enforcement action, the well-settled precedent applies with all the more force.  Such relief would be without foundation and a wholly inappropriate interference with FDA’s charge to protect the public health.  FDA’s ability to enforce its statutory mandate would be frustrated if, prior to even determining that initiation of an enforcement action was warranted, a lawsuit could be brought against the Agency.  Because the relief sought by plaintiffs is clearly foreclosed by Ewing and its progeny, plaintiffs’ complaint must be dismissed.

Moreover, with respect to Cody/Lannett’s claim to grandfather status for their marketed unapproved Morphine Sulfate Solution Immediate-Release 20mg/mL products, the court commented:

By their very nature, plaintiffs’ claims cannot be evaluated as a question of pure law.  An enforcement action brought on behalf of FDA by the United States Department of Justice, alleging that Plaintiffs' drug may not be legally marketed because its composition and the conditions of use reflected in its labeling have changed since 1938, would provide the appropriate forum to resolve the factual basis for plaintiffs' dispute.

Alternatively, plaintiffs could can [sic] file a citizen petition at any time seeking FDA's views as to the claimed grandfather status of their drug, and FDA's response to such a petition constitutes final agency action subject to immediate judicial review under the APA. Plaintiffs failed to exhaust this much-utilized procedure under which they could have obtained FDA's view on an administrative record.

If this Court were to become involved in this matter now, it would need to apply the criteria in FDA's regulations to plaintiffs' drug and undertake an evaluation to determine whether plaintiffs' have produced sufficient evidence in support of their claim that their drug meets the requirements of the 1938 grandfather clause and is not a "new drug." [(citations omitted)]

The court further ruled that Cody/Lannett’s claim is not ripe for adjudication, because the companies seek to “enjoin a possible future FDA enforcement action to remove their unapproved morphine sulfate oral solution from the market.”  Cody/Lannett relied on FDA’s Warning Letter as evidence of imminent and inevitable Agency enforcement action.  Consistent with other court decisions (including the recent decision in Regenerative Sciences, Inc. v. FDA, although not cited by the court), however, the district court ruled that “the issuance of a warning letter by FDA does not constitute final agency action ripe for judicial review. . . .”

Even if FDA were to take enforcement action based on the fact that Cody/Lannett’s product is an illegally marketed unapproved new drug, the court ruled that the plaintiffs’ only defense – that their drug is grandfathered under the FDC Act’s 1938 grandfather clause – would fail:

Unless the evidence produced by plaintiffs establishes that there have been no changes whatsoever in the formulation, dosage form, potency, route of administration, indication for use, or intended patient population for their 20 mg/ml morphine sulfate oral solution since 1938, plaintiffs' drug does not qualify for the 1938 grandfather clause exemption. . . .  Plaintiffs admit that they have only been marketing their drug for the past five years and have failed to produce any pre-1938 labeling for their drug.  Thus, it is impossible for plaintiffs to demonstrate that their drug's "labeling contained the same representations concerning the conditions of its use" in 1938 that it presently contains. [(citations omitted)]

Finally, the district court disagreed with Cody/Lannett’s allegations that FDA acted unfairly in violation of the APA in considering Lannett’s NDA for Morphine Sulfate Solution Immediate-Release 20mg/mL.  “FDA did nothing more than follow its well established policies for the designation of certain NDAs for priority review,” according to the court.  “Because FDA gave everyone the same notice at the same time and encouraged all to apply, and now intends to do exactly what it said 15 months ago it would do, FDA's actions are not unreasonable.”

It is unclear whether Cody/Lannett will appeal the decision.  If the decision stands, FDA will likely use it as “Exhibit A” if any company expresses its intent to challenge FDA in court over the Agency’s Unapproved Drugs Initiative enforcement plans.