It Lives!! Apotex Asks the Supreme Court to Review Generic COZAAR/HYZAAR 180-Day Exclusivity Decision (Our 1,000th Post)

By Kurt R. Karst –      

The voice of Michael Corleone – “Just when I thought I was out . . . they pull me back in” – played over and over again in our heads today when we learned that Apotex, Inc. filed a Petition for Writ of Certiorari with the U.S. Supreme Court asking for a review of the U.S. Court of Appeals for the District of Columbia Circuit’s decision concerning 180-day exclusivity for generic versions of Merck’s COZAAR and HYZAAR (i.e., losartan). 

As FDA Law Blog readers will recall, in April 2010 FDA approved (here and here) Teva’s ANDAs with 180-day exclusivity, which expired earlier this month.  In July 2010, a 3-judge panel of the D.C. Circuit issued a 2-page per curiam judgment affirming the U.S. District Court for the District of Columbia’s April 2, 2010 order denying motions for preliminary injunction filed by Roxane Laboratories, Inc. and Apotex.  The Roxane and Apotex motions challeged FDA’s March 26, 2010 letter decision in which the Agency reluctantly concluded  that Teva did not forfeit 180-day exclusivity eligibility under FDC Act § 505(j)(5)(D)(i)(VI), which 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 – “expired” last year after Merck ceased paying certain patent maintenance fees. 

The July 6th judgment came out after the D.C. Circuit issued two orders in May 2010, in which the Court denied FDA’s petition for panel rehearing and rehearing en banc of the D.C. Circuit’s March 2, 2010 decision in Teva Pharms USA, Inc. v. Sebelius.  In that case, a 3-judge panel of the D.C. Circuit ruled in a 2-1 decision concerning 180-day exclusivity for generic COZAAR (losartan potassium) Tablets and HYZAAR (hydrochlorothiazide; losartan potassium) Tablets that a mere patent delisting request is not enough to trigger a forfeiture event under the failure-to-market forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I), and that there is “no reason to conclude that the 2003 addition of forfeiture provisions meant to give the brand manufacturer a right to unilaterally vitiate a generic’s exclusivity.”

Apotex presents a single question for the Supreme Court’s review – “Whether a generic drug manufacturer may forfeit marketing exclusivity under 21 U.S.C. § 355(j)(5)(D) based on ‘unilateral’ action by the holder of the challenged patent” – and gives several reasons why the Supreme Court’s review is warranted: 

This Court’s immediate review is necessary to remedy fundamental and costly errors inflicted by the decision below. . . .  In ignoring that clear congressional command, the decision below did serious damage to a federal statute of the highest importance.  In concrete terms, the decision below will confer massive anti-competitive advantages on drug companies (both generic and brand-name) that Congress did not authorize.  In just the next several years, numerous major generic drugs are set to enter the market.  If they do so under the erroneous decision below, consumers will bear billions of dollars in unnecessary and unintended costs.

Its practical importance aside, the D.C. Circuit’s decision is plainly wrong as a matter of statutory interpretation.  It does not seriously confront the statutory text, relying instead on the court’s understanding of the statute’s “intended incentive structure.”  It also errs in divining those “incentives,” relying on a pre-MMA decision and, in turn, on the deeply flawed premise that brand-name manufacturers will work to frustrate the availability of generic exclusivity.  The D.C. Circuit simply misunderstood that any manufacturer will prefer government-protected duopoly to wide-open competition.

Equally troubling, the D.C. Circuit did all of this under the guise of step one of Chevron, rejecting FDA’s view that the statute draws no distinction between “unilateral” action and other action resulting in removal of a challenged patent from the Orange Book.  This Court’s immediate review is necessary to remedy these fundamental errors and the resulting damage to a vital federal statutory scheme.

If the Supreme Court decides to take the case, it could result in a landmark Hatch-Waxman decision.  We’ll keep you posted.

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