DC Circuit Reinstates KV Lawsuit Over MAKENA and Compounded 17p in Light of Cook Decision and DQSA

By Kurt R. Karst –      

With primary briefing over (briefs here, here, and here), and a December 13, 2013 Oral Argument before Judges Griffith, Kavanaugh and Randolph concluded, we were waiting with bated breath for the U.S. Court of Appeals for the District of Columbia Circuit to rule on K-V Pharmaceutical Company’s (“KV’s”) appeal of a September 2012 decision from the U.S. District Court for the District of Columbia that stymied the company’s efforts to “restore” orphan drug exclusivity for the pre-term birth drug MAKENA (hydroxyprogesterone caproate) Injection, 250 mg/mL, the compounded version of which is known as “17P.”  In an interesting turn of events, the DC Circuit issued an unpublished judgment on January 7, 2014 ordering and adjudging that the DC District Court’s September 6, 2012 order dismissing KV’s claims be vacated and that the case be remanded to the district court for reconsideration in light of the DC Circuit’s July 23, 2013 decision in Cook v. FDA, 733 F.3d 1 (D.C. Cir. 2013), and the November 27, 2013 enactment of the Drug Quality and Security Act (“DQSA”), Pub. L. No. 113-54, 127 Stat. 587 (2013).  In Cook, the DC Circuit largely affirmed a March 2012 decision from the DC District Court permanently enjoining FDA from permitting the entry of (or releasing any future shipments of) foreign manufactured thiopental into interstate commerce (see our previous post here).  Title I of the DQSA, the Compounding Quality Act, concerns state and federal oversight of compounding of human drugs (see our previous posts here and here summarizing the DQSA).  

As we previously reported (here, here, and here), KV filed a Complaint and a Motion for Temporary Restraining Order and Preliminary Injunction alleging that FDA and the Department of Health and Human Services violated myriad provisions of the FDC Act, the Administrative Procedure Act (“APA”) § 706(2), and the Due Process Clause of the Fifth Amendment to the U.S. Constitution by failing to take sufficient enforcement action to stop the unlawful competition with MAKENA by pharmacies that compound 17P.  FDA filed a Motion to Dismiss arguing, among other things, that KV’s claims are not justiciable for lack of standing, and that even if KV can establish standing, certain Agency statements concerning compounded 17P are not subject to judicial review under the APA because FDA’s decisions not to take enforcement action are committed to the agency’s discretion under Heckler v. Chaney, 470 U.S. 821 (1985).  In Chaney, the U.S. Supreme Court held that “an agency’s decision not to prosecute or enforce, whether through civil or criminal process, is a decision generally committed to an agency’s absolute discretion,” and as such, is presumed to be unreviewable under the APA. 

After finding that KV alleged sufficient facts to support standing, the D.C. District Court found KV’s first three Counts concerning orphan drugs (FDC Act § 527(a)), compounding (FDC Act § 503), and new drug approval (FDC Act §§ 505(a) and 301(d)) unreviewable, because APA § 701 “precludes judicial review of final agency action, including refusals to act, when review is precluded by statute or ‘committed to agency discretion by law,” and because Chaney is controlling.  Addressing Count IV of KV’s Compliant alleging that FDA violated FDC Act § 801(a) by permitting foreign-manufactured active pharmaceutical ingredient to be imported into the United States for compounding into 17P, the court found that the Count failed to state a claim.

The DC Circuit’s decision to vacate the DC District Court’s decision and remand the case to the district court for reconsideration follows a string of letters submitted to the Court over the past several months after the completion of briefing, but before the December 13th Oral Argument, concerning Cook and the DQSA.  In those letters (available here, here, here, here, and here) KV and FDA dispute the relevance of the Cook decision and the DQSA’s provisions to the case at hand.  So back to the DC District Court we go . . . and perhaps someday appealed again up to the DC Circuit.