DC District Court Rules for FDA in Generic SEROQUEL Exclusivity Case; Grants Motion for Summary Judgment

By Kurt R. Karst – 

In a decision that, unless appealed, marks the end of AstraZeneca Pharmaceuticals LP’s (“AstraZeneca’s”) battle with FDA over the approval of generic versions of the company’s blockbuster antipsychotic drug SEROQUEL (quetiapine fumarate) Tablets, the U.S. District Court for the District of Columbia granted FDA’s Motion for Summary Judgment and denied AstraZeneca’s Cross-Motion for Summary Judgment.  At the heart of the case is a controversy over the applicability and scope of 3-year exclusivity based on FDA’s simultaneous approval of supplemental NDAs (“sNDAs”) that contained information on pediatric uses of quetiapine and that made changes to the drug’s labeling to add “Table 2” of the Warnings section regarding “general safety information that is not indication-specific.”

As we previously reported (here and here), the court battle with FDA started around mid-March when AstraZeneca sought to enjoin FDA from granting final ANDA approvals for generic SEROQUEL after FDA denied without comment two citizen petitions AstraZeneca submitted to FDA last year concerning labeling carve-out issues for generic versions of SEROQUEL (as well as an extended-release version of the drug, SEROQUEL XR (quetiapine fumarate) Extended-Release Tablets.  The DC District Court denied AstraZeneca’s Application for Prelimiary Injunction and dismissed the action without prejudice, saying that it was premature.  Just days later, FDA approved several ANDAs for generic SEROQUEL, and AstraZeneca filed a second lawsuit seeking to vacate FDA’s ANDA approvals and to enjoin FDA from granting any further final ANDA approvals.  The DC District Court promptly denied AstraZeneca’s Motion for Temporary Restraining Order; however, the case progressed to the summary judgment stage. 

AstraZeneca argued that under the plain language of FDC Act § 505(j)(5)(F)(iv), the company is entitled to a period of 3-year marketing exclusivity for the Table 2 information until December 2, 2012, plus 6 months if you count in pediatric exclusivity.  (FDA previously determined that such information could not be omitted from generic drug labeling.)  According to AstraZeneca, the court’s analysis should begin and end at Chevron Step One, because the plain language of the FDC Act says that “if (1) there is an approved sNDA containing reports of new clinical investigations sponsored or conducted by the applicant that were essential to the approval of the sNDA, then (2) the sNDA applicant has three years of exclusivity over a ‘change approved in the supplement.’”  And because, according to AstraZeneca, the sNDAs FDA approved for SEROQUEL on December 2, 2009 included reports of new clinical investigations that were essential to the approval of the sNDAs, the Table 2 labeling change FDA approved at that time is entitled to 3-year exclusivity.  AstraZeneca also argued that independent of the pediatric sNDAs FDA approved, Table 2 deserves exclusivity on its own merit because it “contains reports of new clinical investigations” conducted by AstraZeneca that were “essential to approval” of the labeling change “approved in the supplement.”

FDA, following the explanation provided in the Agency’s March 27, 2012 Letter Decision, primarily argued that the scope of 3-year exclusivity relates to the scope of new clinical investigations conducted by the NDA sponsor.  That is, the FDC Act sets up a “logical relationship between the change in the product for which the new clinical investigations were essential to approval of the supplement, and the scope of any resulting three-year exclusivity.”  According to FDA, “AstraZeneca reads the statute to provide for exclusivity for any labeling change, even if the change was initially submitted through general correspondence (and not a supplement), and it was unrelated to the purpose for which the supplement was submitted, and the change occurred only coincidentally and contemporaneously with the changes relating to the new clinical investigations that were the subject of the supplements.”

Finding FDC Act § 505(j)(5)(F)(iv) ambiguous, Judge Beryl A. Howell moved on to Chevron Step Two where she concluded that FDA’s interpretation of the statute – i.e., “that a substantive relationship between new clinical studies and changes in the supplement, not the format of a submission, dictates what changes receive exclusivity” – is reasonable for three reasons: “First, the administrative record shows that the pediatric supplements were approved on their own merits based upon clinical investigations unrelated to the Table 2 labeling change, which standing alone does not entitle AstraZeneca to exclusivity.  Second, the FDA’s interpretation of the statute is largely consistent with past practice, and therefore not arbitrary and capricious. Third, the FDA’s interpretation is consistent with the legislative history” while AstraZeneca’s interpretation would disrupt the careful balance Congress crafted with the Hatch-Waxman Amendments by warranting evergreening of exclusivity.

FDA did not get off scot-free, however.  Following her previous criticism that the case record “strongly suggests that the FDA has made ‘tactical decision[s]’ to prevent the plaintiff ‘from seeking judicial review of FDA’s legal position,’” and that FDA engaged in tactics of “hiding the ball” of its position on the approval of generic SEROQUEL until March 27, 2012 (which FDA objected to in footnote 17 of the Agency’s brief), Judge Howell included in her opinion comments critical of FDA’s handling of the exclusivity decision.  Judge Howell also suggested that “FDA could in the future minimize misunderstanding about which approved change warrants an exclusivity period, prompted by the ambiguity in the statute, by more carefully and precisely delineating at the time of the approval — in separate communications if necessary — those changes in an sNDA that warrant an exclusivity period and those changes that do not.”  This is not a bad idea.  After all, Orange Book exclusivity codes do not provide such depth and are only shorthand for what a period of 3-year exclusivity actually covers.