District Court’s Extension of 30-Month Stay on Generic XYZAL Approval Ends; ANDA Sponsors are Itching for an FDA Decision on “Carved-Out” Urticaria-Only Labeling

By Kurt R. Karst –      

As folks in the Hatch-Waxman community patiently await FDA’s decision on an October 2010 citizen petition (Docket No. FDA-2010-P-0545) requesting that the Agency not approve any ANDA for a generic version of XYZAL (levocetirizine dihydrochloride) with skinny labeling that omits, via a “section viii” statement, information on allergic rhinitis covered by U.S. Patent No. 5,698,558 (“the ‘558 patent”), we read with interest a decision from the U.S. District Court for the Eastern District of North Carolina (Western Division) on a related issue.

The North Carolina case stems from a May 2008 Paragraph IV patent certification Sandoz, Inc. made with respect to the ‘558 patent, and a timely filed patent infringement lawsuit triggering a 30-month stay of ANDA approval.  The ‘558 patent, which expires on September 24, 2012 and is subject to a period of pediatric exclusivity that expires on March 24, 2013, is listed in the Orange Book as a method-of-use patent with a U-812 patent use code defined as “RELIEF OF SYMPTOMS ASSOCIATED WITH SEASONAL AND PERENNIAL ALLERGIC RHINITIS.”  In February 2010, Sandoz allegedly revised its Paragraph IV certification to the ‘558 patent to a section viii statement, requesting approval for its proposed generic version of XYZAL for what the NDA holder has characterized in the above-referenced citizen petition as the “secondary indication,” chronic idiopathic urticaria, and that carves out the “primary indications,” namely seasonal and perennial allergic rhinitis.

Given the change from a Paragraph IV certification to a section viii statement, Sandoz filed a Motion to Dismiss arguing that the District Court no longer had subject matter jurisdiction over the litigation.  The plaintiffs in the case filed their own motion – a Motion to Extend Sandoz’s Thirty-Month Stay – arguing that Sandoz “has not reasonably cooperated in expediting this litigation.”  Naturally, Sandoz opposed the motion, and argued that it should be denied for at least three reasons: “(1) the Court lacks subject matter jurisdiction over Sandoz’s section viii ANDA filing, (2) the 30-month stay is inapplicable to ANDA applicants proceeding under section viii, and (3) Sandoz has not unreasonably delayed this action.”

Under the FDC Act, a timely filed patent infringement lawsuit in response to a Paragraph IV certification means that “the [ANDA] approval shall be made effective upon the expiration of the [30-month stay] . . . or such shorter or longer period as the court may order because either party to the action failed to reasonably cooperate in expediting the action . . . .”  FDC Act § 505(j)(5)(B)(iii) (emphasis added).  Since the enactment of the Hatch-Waxman Amendments in 1984, it has been quite uncommon for a court to extend the statutory 30-month stay on ANDA approval.  In 2009, for example, the U.S. Court of Appeals for the Federal Circuit in Eli Lilly & Co. v. Teva Pharms. USA, Inc., 557 F.3d 1346 (Fed. Cir. 2009) affirmed a district court decision extending a 30-month stay with respect to an ANDA for a generic version of EVISTA (raloxifene HCL) Tablets.

Relying, in part, on a 2009 decision out of the U.S. District Court for the Eastern District of Wisconsin concerning an animal drug and the animal drug Hatch-Waxman counterpart, the Generic Animal Drug and Patent Term Restoration Act (Bayer Healthcare, LLC v. Norbrook Labs. Ltd., No. 08 C 0953, 2009 U.S. Dist. LEXIS 126929 (E.D. Wis. Sept. 24, 2009)), the North Carolina District Court denied Sandoz’s Motion to Dismiss.  The Court concluded that that was no evidence “to demonstrate that the FDA must or in fact has accepted the withdrawal of the Paragraph IV certification, or that the FDA will allow Sandoz to amend its application to include a section viii statement and ‘carve out’ information related to allergic rhinitis,” and that “Sandoz’s failure to cite any authority for the proposition that jurisdiction under section 271(e)(2) requires that an ANDA filer maintain a ‘Paragraph IV’ certification dooms its position” (internal quotation omitted; emphasis added).  As such the Court concluded that subject matter jurisdiction over the litigation is maintained. 

Given this conclusion, the Court rejected Sandoz’s arguments that an extension of the 30-month stay is inapplicable and proceeded to identify examples that the Court deemed sufficient to demonstrate that Sandoz failed to “reasonably cooperate in expediting the action” and that warranted an extension of the 30-month stay under FDC Act § 505(j)(5)(B)(iii) – namely failure to timely produce a privilege log and to comply with the Court’s discovery orders.  Accordingly, the Court extended the 30-month stay by 60 days, until January 27, 2011.

Now that the extended 30-month stay has ended, it would seem that the only block to an approval decision on any pending ANDAs containing a section viii statement to the ‘558 patent is FDA’s decision on the October 2010 citizen petition.  Although FDA has already approved one ANDA for generic XYZAL Tablets – ANDA No. 90-229 – that application contains a Paragraph IV certification to the ‘558 patent.  The sponsor qualified for 180-day exclusivity, which according to the most recent Orange Book Cumulative Supplement has not yet been triggered by commercial marketing, but that exclusivity would not prevent FDA from taking action on ANDAs containing a section viii statement to the ‘558 patent, just subsequent ANDAs containing a Paragraph IV certification to the patent.  Depending on (or perhaps regardless of) how FDA rules on the pending citizen petition, it is possible that the battle over generic XYZAL is far from over.