Freaky Friday: After An Initial Loss, FDA Takes Home a Win in Generic PRECEDEX Litigation; Appeal Immediately Taken to the Fourth Circuit

By Kurt R. Karst –    

In the 2003 movie “Freaky Friday,” based on the novel of the same name by Mary Rodgers, teenager Anna Coleman (played by Lindsay Lohan) and her mother, Tess Coleman (played by Jamie Lee Curtis), have their souls switched due to an enchanted Chinese fortune cookie.  The food and drug law version of “Freaky Friday” played out last Friday when FDA first found itself on the losing end of a court battle over orphan drug exclusivity (see our post here), and then, hours later, switched places and found itself on the winning end of another court battle over generic versions of Hospira, Inc.’s (“Hospira’s”) PRECEDEX (dexmedetomidine HCl) Injection. 

In a Memorandum Opinion and Order granting Motions for Summary Judgment filed by FDA, Mylan, and Par, and denying Hospira’s Motion for Summary Judgment, Judge George Jarros Hazel of the U.S. District Court for the District of Maryland found FDA’s August 18, 2014 Letter Decision permitting the approval of ANDAs for generic PRECEDEX not arbitrary, capricious, or otherwise not in accordance with law, but rather, a decision based on a reasonable and sound interpretation of the FDC Act.  In addition, Judge Hazel found that FDA’s Letter Decsion “was entirely consistent with the FDA’s established practice of approving generic drugs and therefore did not effect a change to settled law.”  As such, the district court said that no new “rule” was created by FDA’s decision and that FDA was not required to follow the Administrative Procedure Act’s (“APA”) formal rulemaking procedures.

The September 5th decision was a turnabout for the court.  A couple of weeks ago Judge Hazel issued a Memorandum Opinion and Order granting Hospira’s Motion for Temporary Restraining Order.  In doing so, Judge Hazel said that Hospira demonstrated that the company is likely to succeed on the merits regarding its contention that FDA violated FDC Act § 505(j)(2)(A)(viii) concerning labeling carve-outs, and with respect to Hospira’s APA claim (see our previous post here). 

Backgound on the case and on FDA’s Letter Decision is available here and here.  Briefly, 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”) listed in the Orange Book for PRECEDEX.  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, 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 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.  Hospira also alleged that FDA violated the APA in announcing a new interpretation of the FDC Act through its Letter Decision. 

FDA, on the other hand, argued that the Agency’s decision to permit a labeling carve-out of information protected by the ‘867 patent – and to approve two ANDAs (one from Mylan (ANDA No. 202881) and one from Par (ANDA No. 203972) with labeling omitting information protected by the ‘867 patent – was permissible and entirely consistent with previous carve-out decision.  According to FDA,

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.

In his September 5, 2014 decision, Judge Hazel agreed with FDA on all counts.  With respect to Count I, that FDA violated FDC Act § 505(j)(2)(A)(viii) when the Agency approved ANDAs with labeling omitting information concerning intensive care unit sedation, the court reviewed FDA’s decision under the familiar two-step process of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842 (1984).  Finding that the statute does not address what constitutes “overlap” between an NDA holder’s patent use code and an ANDA sponsor’s carved-out labeling, Judge Hazel proceeded to Chevron Step Two.  There, Judge Hazel rejected each of Hospira’s arguments that “it was the FDA’s ‘rule’ that ‘if any indication or indications in the generic’s proposed label overlap[ped] ‘at all’ with the brand’s use code as published in the Orange Book, the FDA must reject a section viii statement.’”  That rule, argued Hospira, came from the U.S. Supreme Court 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.” 

Judge Hazel cited three reasons, however, for rejecting Hospira’s Caraco argument:

[F]irst, notwithstanding the government’s statement in Caraco, the FDA has been consistent in how it has interpreted section viii; second, Hospira’s reading of the Caraco dicta would turn the holding of Caraco on its head; and, third, there is simply no overlap between the ANDA’s carved-out labels and Precedex®’s use code (original or amended).

The district court also relied on previous FDA ANDA labeling carve-out decisions and said that FDA’s decision on generic PRECEDEX is consistent with them:

FDA’s handling of the approval of generic tramadol and generic oxandrolone is entirely consistent with the way the FDA handled the approval of generic Precedex®.  That is, just as the FDA concluded that a labeling carve out was proper for tramadol and oxandrolone notwithstanding the fact that a physician might conceivably use the generic drug for a protected method of use, the FDA, here, concluded that ANDAs for Precedex® may also carve out the protected information (related to use for ICU sedation), and be approved for procedural sedation despite the fact that use for procedural sedation may at times occur in the intensive care unit.  Accordingly, the FDA has not been inconsistent with its past practice.  To the contrary, the FDA has consistently “approve[d] 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.”  That is exactly what the FDA did here.  As such, the Court will decline Hospira’s invitation to deny the FDA the heightened level of deference it is afforded under Chevron step two.

Given the court’s decision on Count I, Judge Hazel easily dispensed with Count II (violation of APA rulemaking requirements):

FDA’s August 18, 2014 decision to authorize the approval of a section viii ANDA whose carved out label omits explicit reference to a protected method of use, despite the fact that, in practice, the generic drug might be used for a protected use, was entirely consistent with the FDA’s past practice. . . .  Accordingly, the Court finds that the FDA’s August 18, 2014 was entirely consistent with the FDA’s established practice of approving ANDA’s and therefore did not effect a change to settled law.  As such, no new “rule” was created by the FDA’s decision and the FDA was therefore not required to follow the formal rulemaking procedures required by the APA when the FDA promulgates a new rule.

During a teleconference in which Judge Hazel announced his Memorandum Opinion and Order, Hospira requested and was denied a Motion for a Stay of the Court’s Order.  It was immediately clear what was coming next: an emergency appeal to the U.S. Court of Appeals for the Fourth Circuit (and a busy weekend for all of the parties involved in the litigation). 

On Saturday morning, Hospira filed an Emergency Motion For Injuction Pending Appeal and a Motion to Expedite the appeal.  On Sunday, briefs opposing the Hospira motions were filed by FDA (here), Mylan (here), and Par (here), to which Hospira later replied (here).  Sandoz filed a brief in support of Hospira’s efforts.  According to Hospira, “ [p]ending the outcome of this appeal, this Court should stay the effectiveness of FDA’s decision, including prohibiting FDA from granting any further generic drug approvals based upon the decision which Hospira challenges in this case, and prohibiting Mylan and Par from the further sale and distribution of their respective generic versions of Hospira’s drug.”

Updates:

• On September 8, 2014, the Fourth Circuit denied Hospira's Emergency Motion For Injuction Pending Appeal and granted the company's Motion to Expedite the appeal.  The court tentatively scheduled the appeal for Oral Argument on the afternoon of October 27, 2014.