Administrative Law Trumps the “Immutable Laws of Science,” Says the DC Circuit in Challenge Over Generic Derma-Smoothe Approvals; Hill Appeals and Denial Quickly Follows

By Kurt R. Karst –      

A recent per curiam decision from the U.S. Court of Appeals for the District of Columbia Circuit may be the last word in litigation Hill Dermaceuticals, Inc. (“Hill”) initiated in November 2011 against FDA, as Hill filed a petition for rehearing last week that was denied earlier this week.  Hill filed the lawsuit after FDA approved three ANDAs submitted by Identi Pharmaceuticals Inc. (“Identi”) for generic versions of Hill’s peanut-oil containing fluocinolone acetonide drug products Derma-Smoothe/FS Topical Oil, 0.01% (Scalp Oil and Body Oil) and Derm-Otic Oil Ear Drops, 0.01%, based on waivers of the in vivo bioequivalence testing requirement.  As we previously reported, Hill filed a Complaint and Motion for a Preliminary Injunction in the D.C. District Court alleging that FDA’s approval of the Identi ANDAs violates various provisions of the FDC Act concerning ANDA labeling “sameness”  to Derma-Smoothe,  product misbranding, and bioequivalence requirements, and the Administrative Procedure Act (“APA”).  In December 2011, the district court denied Hill’s preliminary injunction motion, and, in May 2012, the court granted FDA’s Motion to Dismiss the case (and denied Hill’s cross-motion for summary judgment).  A lengthy appeal to the D.C. Circuit followed. 

In addition to alleging that FDA violated the FDC Act and the APA in approving Identi’s ANDAs, Hill argued on appeal that the district court abused its discretion in refusing to consider several extra-record declarations that Hill alleged would advance its case.  The Court first dispensed with that allegation in its March decision, saying that it is “black-letter administrative law that in an APA case, a reviewing court should have before it neither more nor less information than did the agency when it made its decision” (internal quote omitted). 

On to the meat of the case – the claims concerning the FDC Act and the APA – the D.C. Circuit ruled in a 6-page opinion that FDA reasonably determined that a waiver of the in vivo bioequivalence testing requirements for generic Derma-Smoothe was appropriate and proper, notwithstanding the fact that Identi’s products omit two fragrances in Derma-Smoothe.  “The FDA reasonably concluded — after examining the makeup of Identi’s drugs and consulting with multiple divisions within the agency — that the omission of the fragrances would have no expected effect on efficacy or safety,” wrote the Court deferring to FDA’s expertise in such scientific matters.  The Court was similarly unconvinced that alleged errors in the Identi ANDAs renedered FDA’s approval decisions arbitrary and capricious.  “[M]ost of these alleged errors are minor technical mistakes . . . and Hill develops no argument suggesting that the alleged errors resulted in prejudicial treatment or that the agency’s ultimate decision would have been any different but for these inaccuracies,” said the Court. 

Hill’s final argument – that FDA should not have approved Identi’s ANDAs because the drugs’ labeling omits reference to an amino acid analysis test for peanut proteins and, therefore, violates the same labeling requirement at FDC Act § 505(j)(2)(A)(v) – was also unavailing, wrote the Court:

The key phrase in the statute is “labeling approved for the listed drug.”  The FDA has concluded that Hill’s amino-acid testing method has not been validated and has thus instructed to Hill to remove this line from its labels. . . .  Hill’s label is not “approved” for the listed drug, so Identi need not copy Hill’s statement about a non-validated method.  Moreover, 21 C.F.R. § 314.94(a)(8)(iv), the regulation implementing this labeling requirement, specifically states that the different-manufacturers exception “may include . . . labeling revisions made to comply with current FDA labeling guidelines or other guidance.”

The Court, in affirming the D.C. District Court decision, found that FDA’s ANDA approvals were not arbitrary and capricious, and commented that various “hyperbolic references” by Hill in its briefs to the “immutable laws of science” do not trump “the  basic tenets of administrative law,” which “have greater impact on our decisions.”  Last week, Hill filed a Petition for Panel Rehearing of the per curiam decision alleging that the Circuit panel overlooked and misapprehended facts and law with respect to FDA’s ANDA approvals.  On March 27th, the Court denied the petition.