In Generic PRECEDEX Litigation, Hospira Wins Temporary Restraining Order; Court Orders Recall of Generics, then Backtracks

By Kurt R. Karst –    

The pace of litigation concerning FDA’s approval of generic versions of Hospira, Inc.’s (“Hospira’s”) PRECEDEX (dexmedetomidine HCl) Injection, 100 mcg (base)/mL packaged in 200 mcg(base)/2 mL single-dose vials, has been anything but sedate.  On the morning of August 18, 2014, there was no sign of the controversy that would erupt later that day after FDA issued its long-awaited Letter Decision addressing issues raised in the Agency’s January 15, 2014 “Dear NDA/ANDA Applicant” letter (Docket No. FDA-2014-N-0087) concerning approval of generic PRECEDEX. 

As we reported earlier this week, FDA ruled that ANDA sponsors could omit (i.e., carve out) from their generic drug labeling information protected by U.S. Patent No. 6,716,867 (“the ‘867 patent”).  The ‘867 patent is currently listed in the Orange Book for PRECEDEX with a “U-1472” patent use code defined as: “INTENSIVE CARE UNIT SEDATION, INCLUDING SEDATION OF NON-INTUBATED PATIENTS PRIOR TO AND/OR DURING SURGICAL AND OTHER PROCEDURES.”  (The ‘867 patent was previously listed in the Orange Book with a “U-572” patent use code defined as “INTENSIVE CARE UNIT SEDATION.”)  

Hospira – and ANDA sponsor Sandoz, Inc. (“Sandoz”), which is eligible for a period of 180-day exclusivity based on a Paragraph IV certification to the ‘867 patent – contended that FDA was prohibited from omitting any labeling information related to the ‘867 patent, because the patent, as reflected by the U-1472 patent use code narrative, covers both approved uses for PRECEDEX – i.e., (1) sedation of initially intubated and mechanically ventilated patients during treatment in an intensive care setting, and (2) sedation of non-intubated patients prior to and/or during surgical and other procedures – thereby leaving ANDA sponsors with carved-out labeling without an approved use.  Specifically, Hospira, citing the U.S. Supreme Court’s decision in Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S, 132 S. Ct. 1670 (2012)), where the Court noted in dicta that “the FDA will not approve an ANDA if the generic’s proposed carve out label overlaps at all with the brand’s use code,” argued in comments to FDA that because the patent use code for the ‘867 patent fully covers the first indication and may overlap with the second indication, an ANDA sponsor whose application contains a “section viii” statement to omit patent-protected information must carve out both the first and the second indications in their entirety, thereby precluding approval of any ANDAs with carved out labeling.  FDA, however, concluded otherwise:

Both the original and the revised use codes are limited to “intensive care unit sedation.”  Although the revised use code includes additional language specifying some of the types of patients that Hospira claims are encompassed within the “intensive care unit sedation” use, i.e., non-intubated ICU patients prior to and/or during surgical and other procedures, it does not broaden the claimed method of use beyond “intensive care unit sedation.” . . .  Nor does the clarified use code and its explicit inclusion of a subset of patients that may undergo procedural sedation somehow expand the patented use to encompass and prevent approval for all patients who seek to use the drug for the separately delineated procedural sedation indication. . . .  FDA previously has determined that it can approve ANDAs for broad, general indications that may partially overlap with a protected method of use, so long as any express references to the protected use are omitted from the labeling.  The procedural indication and related information in the labeling do not impermissibly disclose the use of Precedex for procedures in the ICU (i.e., for the use covered by the use code).  ANDAs therefore may be approved for the second indication, consistent with how FDA has implemented use codes and allowed carve outs in other circumstances.

FDA also approved two ANDAs: (1) ANDA No. 202881 from Mylan Institutional LLC (“Mylan”), which began selling drug product; and (2) ANDA No. 203972 from Par Sterile Products.

In the wee hours of August 19, 2014, Hospira took action against FDA.  The company filed a Complaint and a Motion for Temporary Restraining Order and/or Preliminary Injunction in the U.S. District Court for the District of Maryland seeking from the court a stay of FDA’s Letter Decision, rescission of any ANDA approvals predicated upon that Letter Decision, an order FDA to recall any product sold or distributed under such an ANDA approval, and an injunction prohibiting FDA from granting any further or additional approvals predicated upon the Letter Decision.  According to Hospira, FDA’s Letter Decision that led to the ANDA approvals violates Section 505(j)(2)(A)(viii) of the Federal Food, Drug, and Cosmetic Act (“FDC Act”) concerning ANDA labeling carv-outs, as well as the rulemaking requirements of the Administrative Procedure Act (“APA”):

Instead of complying with statutory and regulatory requirements, FDA adopted an unauthorized procedure (the opening of Docket No. FDA-2014-N-0087) and then relied upon that unauthorized procedure to make a decision which is contrary to law.  Absent injunctive relief, FDA’s unauthorized approach will allow generic versions of Precedex on the market without those generics’ first establishing, as the law requires, that they do not infringe Hospira’s rights under its method-of-use patent, and FDA will have applied a “rule” within the meaning of the [APA] which rule FDA adopted without complying with any of the rulemaking requirements of the Act. . . .

Here, in the face of demonstrable and FDA admitted overlap between the indications included in the generic’s labeling and Hospira’s patent use code, FDA has acted unlawfully in issuing a decision which allows approval of generic versions of Precedex.

In addition, FDA has not adopted a regulation, pursuant to the notice and comment rulemaking requirements of the APA, to modify its prior rule and authorize the agency to approve a generic version in an “overlap case” such as this (assuming, without conceding, that FDA would have statutory authority to adopt such a rule).  In its review and approval of applications for generic versions of Precedex, FDA has unlawfully applied a new substantive rule without FDA’s complying with the rulemaking requirements of the APA.  Because FDA’s past or imminent approvals of generic versions of Precedex rests entirely on this unauthorized, unlawfully adopted new rule, any resulting generic drug approval decisions are invalid.

The Maryland District Court (Judge George Jarros Hazel) scheduled an emergency hearing on Hospira’s Motion for Temporary Restraining Order for Tuesday, August 19, 2014 at 3PM.  Both Mylan and Sandoz entered the case as intervenors, and Sandoz filed a brief in support of Hospira’s Motion for Temporary Restraining Order and/or Preliminary Injunction saying, among other things that FDA’s Letter Decision and ANDA approvals deprives Sandoz of 180-day exclusivity. 

Then came Judge Hazel’s late-night Memorandum Opinion and Order on August 19th.  In granting Hospira’s Motion for Temporary Restraining Order, Judge Hazel ruled that Hospira demonstrated that it is likely to succeed on the merits regarding its contention that FDA violated FDC Act § 505(j)(2)(A)(viii), and with respect to Hospira’s APA claim:

Here, the first indication for Precedex is entirely covered by Plaintiff’s use-code.  As to the second indication, there is, at the very least, some overlap.  Because its use-code statement asserts that its method-of-use patent overlaps with all approved indications, Plaintiff further contends the FDA must reject any ANDA application based upon a section viii statement.  FDA, on the other hand, contends that it can approve ANDAs for broad, general indications that may partially overlap with a protected method of use, so long as any express references to the protected use are omitted from the labeling. Notably, however, Plaintiff’s interpretation has been endorsed by the United States Supreme Court in its recent decision of [Caraco], in which the Court stated (albeit as dicta) that “the FDA will not approve such an ANDA if the generic’s proposed carve-out label overlaps at all with the brand’s use code.”  At this juncture, the Court therefore finds that FDA’s decision was at odds with relevant authority.

Furthermore, to now permit FDA to approve generic versions of Precedex on the basis that it can approve ANDAs for broad, general indications that overlap with a protected method of use would be tantamount to a change of the rules.  Such a change would require FDA to employ the formal rulemaking procedures of the [APA], which it indisputably did not do.  Moreover, even if the Court were to assume for argument’s sake that the governing statute is ambiguous under Chevron U.S.A., Inc. v. Nat. Res. Def. Council, 467 U.S.837 (1984), given the prior understanding of the law by the Supreme Court, the Court cannot find, at this current juncture, FDA’s interpretation to be reasonable.

But Judge Hazel did not stop there.  In his Order, which will continue in full force and effect until September 2, 2014, Judge Hazel not only stayed FDA’s Letter Decision and any future FDA actions under it, as well rescinding ab initio any FDA actions already taken pursuant to that Letter Decision, but he took the highly unusual – and perhaps unprecedented – move in a Hatch-Waxman case of ordering FDA to recall any product sold or distributed under the two ANDA’s approved for generic PRECEDEX.  

If it stands, the court’s decision could have significant implications on Hatch-Waxman law.  For some, it could be the long sought-after (and thus far illusive) Northwest Passage route to avoid some generic drug labeling carve-outs.  Companies may seek to clarify Orange Book method-of-use patent listings – and may petition FDA regarding the same – in efforts to prevent generic drug labeling omissions and to force Paragraph IV patent certification submissions. 

UPDATES:

• On August 20, 2014, the Court issued a paperless Order denying Mylan's Motion to File Response to TRO by 5 pm August 20 2014.  According to the Court, “Mylan and Sandoz have each been permitted to intervene in this matter and the Court gave consideration to their arguments at the motion hearing on the TRO. The Court did not request post-hearing briefing and did not consider the brief filed by Intervenor Sandoz prior to issuing its ruling. Both Mylan and Sandoz will be permitted to submit memoranda pursuant to the scheduling order to be set during today's scheduling call for future motions.”
• On August 20, 2014, Mylan filed a Motion to Stay Paragraph 3 (product recall) & Paragraph 4 (rescission of actions made pursuant to FDA's Letter Decision) of the Court's August 19th Order. 
• On August 20, 2014, the Court issued a paperless Order granting Mylan's Motion to Stay.  According to the Court, “Paragraphs 3 and 4 of the Court's August 19, 2014 [Order] are stayed pending Defendant Mylan's Motion for Reconsideration.”
• Par Sterile Products joins the party after the Court grants the company's Motion to Intervene.
• On August 22, 2014, the Court issued a paperless Notice of Hearing on Mylan's Motion to Reconsider for Tuesday, August 26, 2014 at 9:30 am.
• On August 26, 2014, the Court granted in part and denied in part Mylan's Motion for Reconsideration.  Paragraphs 3 and 4 of the August 19th TRO Order are vacated, and Paragraphs 1 and 2 are amended. 
• On August 29, 2014, Motions for Summary Judgment were filed by FDA (here), Hospira (here), Sandoz, (here), Mylan (here), and Par (here).