Pfizer Inc v. Shalala, Donna E.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 1, 1999 Decided July 16, 1999

No. 98-5151

Pfizer Inc.,
Appellant

v.

Donna E. Shalala, Secretary,
U.S. Department of Health and Human Services, et al.,
Appellees

Appeal from the United States District Court
for the District of Columbia
(No. 97cv01554)

Bert W. Rein argued the cause for appellant. With him on
the briefs were Andrew S. Krulwich, Bruce G. Joseph and
Michael L. Sturm.

Drake Cutini, Attorney, U.S. Department of Justice, ar-
gued the cause for appellees. With him on the brief was

Frank W. Hunger, Assistant Attorney General. Gerald C.
Kell, Attorney, entered an appearance.

E. Anthony Figg argued the cause for appellee Mylan
Pharmaceuticals, Inc. With him on the brief was Steven
Lieberman.

David G. Adams was on the brief for appellee Penwest
Pharmaceuticals Group. David M. Malone and Lawrence B.
Bernard entered appearances.

David F. Weeda and David L. Durkin were on the brief for
amicus curiae National Association of Pharmaceutical Manu-
facturers.

Before: Edwards, Chief Judge, Ginsburg, and Tatel,
Circuit Judges.

Opinion for the Court filed by Circuit Judge Ginsburg.

Ginsburg, Circuit Judge: Pfizer, Inc. manufactures and
sells the pioneer drug Procardia XLR, which contains the
active ingredient nifedipine, a calcium-blocker used to treat
angina and hypertension. Procardia XLR uses a patented
"osmotic pump" to control the extended release of nifedipine.
Mylan Pharmaceuticals, Inc. filed an abbreviated new drug
application (ANDA) with the Food and Drug Administration
seeking approval of its own extended release nifedipine prod-
uct as a generic "pharmaceutical equivalent" to Procardia
XLR; Mylan's product, however, uses an extended release
mechanism different from Pfizer's osmotic pump. Despite
the different mechanisms the FDA accepted Mylan's ANDA
for processing but has not yet decided whether to approve it.

Pfizer claims, as it did in a so-called "citizen petition" filed
with the FDA before Mylan had sought approval for its drug,
that the osmotic pump is a unique "dosage form." 21 U.S.C.
s 355(j)(2)(A)(iii). It therefore follows, according to Pfizer,
that the FDA must reject Mylan's ANDA. The FDA and
intervenors Mylan and Penwest Pharmaceuticals Group,
which developed the extended release mechanism used in
Mylan's drug, argue that the agency's decision is not ripe for

judicial review. For the reasons below, we agree with the
agency and dismiss Pfizer's petition for review.

I. Background

A. Statutory and Regulatory Framework

The approval of the FDA is required before any drug may
be marketed in the United States. See 21 U.S.C. s 355(a).
The sponsor of a new drug ordinarily must undertake expen-
sive and time-consuming clinical (that is, human) studies in
order to show that its new drug is safe and effective for its
intended use. See id. s 355(b). Once the FDA approves a
new drug, however, a competitor seeking to market a generic
version may file an ANDA, relying upon the clinical findings
the FDA has already approved with respect to the pioneer
drug. See id. s 355(j).

In order to gain approval of an ANDA, an applicant must
show that its generic drug is "bioequivalent to the listed
[pioneer] drug." Id. s 355(j)(4)(F). Bioequivalence refers
generally to the rate at which, and the extent to which, the
body absorbs the active ingredient(s) in the drug. See id.
s 355(j)(8); 21 C.F.R. s 320.1(e).

To gain approval as a "pharmaceutical equivalent," 21
C.F.R. s 320.1(c), an applicant must additionally "show that
the active ingredient ..., the route of administration, the
dosage form, and the strength of the new drug are the same
as those of the listed [pioneer] drug." 21 U.S.C.
s 355(j)(2)(A)(ii)-(iii); see also id. s 355(j)(4)(C)-(D). If the
generic drug differs from the pioneer drug in any of those
four respects, then the manufacturer may still avail itself of
the ANDA process by filing a "suitability petition," see id.
s 355(j)(2)(C), upon the basis of which its product could be
approved as a "pharmaceutical alternative" to the pioneer
drug. 21 C.F.R. s 320.1(d). The distinction is significant
because many states permit only a pharmaceutical equivalent
to be substituted for the pioneer drug, and Medicaid and
many insurance plans do not reimburse patients for the cost
of a pharmaceutical alternative.

 The FDA first reviews an ANDA (whether submitted for
approval as a pharmaceutical equivalent or as a pharmaceuti-
cal alternative) in order to determine whether it may be
"received," i.e., accepted for processing, for which the stan-
dard is that "the abbreviated application is sufficiently com-
plete to permit a substantive review." Id. s 314.101(b)(1);
see also id. (d)(3) (FDA may reject ANDA if incomplete "on
its face"). If, upon substantive review, the FDA finds the
generic drug satisfies all of the applicable statutory require-
ments, then it must approve the ANDA. See 21 U.S.C.
s 355(j)(4).

The FDA publishes a current list of all approved drugs,
known as the "Orange Book." See U.S. Dep't of Health &
Human Serv., Approved Drug Products With Therapeutic
Equivalence Evaluations (17th ed. 1997). In an appendix to
the Orange Book the FDA lists 74 dosage forms. Among
these are aerosols, implants, capsules, and seven types of
tablets, including chewable, dispersible, effervescent, and the
one with which we are concerned, "extended release."

B. Pfizer's Claims

The FDA approved Pfizer's new drug application for Pro-
cardia XLR in 1989 and listed it in the 1990 Orange Book as
having the dosage form "tablet, extended release; oral." As
mentioned, the extended release mechanism in Procardia
XLR is a patented osmotic pump. As fluid from the gas-
trointestinal tract enters the shell of the tablet, it dissolves
the active ingredient, nifedipine, and causes a "push" layer to
swell, thereby gradually expelling the nifedipine into the
gastrointestinal tract through a hole in the shell. Compl.
p 20.

In 1993 Pfizer filed a "citizen petition" with the FDA,
pursuant to 21 C.F.R. s 10.30, asking the agency to recognize
Pfizer's "oral osmotic pump [as] a distinct dosage form."
Pfizer also contended the agency must require a suitability
petition if a generic drug "uses a different mechanism of
release from the reference drug."

 The FDA had not ruled upon Pfizer's petition when, nearly
four years later, Mylan submitted an ANDA for an extended
release nifedipine tablet claiming pharmaceutical equivalence
to Procardia XLR. The FDA accepted Mylan's application
for processing even though its tablet uses a different extend-
ed release mechanism than does Procardia XLR.

After failing to persuade the agency to stay or to withdraw
its acceptance of Mylan's ANDA, Pfizer filed this suit in the
district court challenging that acceptance as arbitrary, capri-
cious, and contrary to law. In a second count Pfizer repeated
the claim, first made in its still-pending citizen petition, that
the FDA was obliged to recognize its osmotic pump as a
distinct dosage form. Shortly thereafter the FDA denied
Pfizer's citizen petition.

The district court held that Pfizer's challenge to the FDA's
receipt of Mylan's application was unripe because the agency
had not yet decided whether to approve Mylan's generic drug.
See Pfizer Inc. v. Shalala, 1 F. Supp. 2d 38, 44 (1998). On
the other hand, the court held that the FDA's denial of
Pfizer's citizen petition was "final agency action," and there-
fore ripe for review. Id. On the merits of that claim, the
district court upheld as rational and consistent with the
statute the FDA's refusal to treat Pfizer's osmotic pump as a
distinct form of dosage. See id. at 44-48.

II. Analysis

The FDA contends that neither its acceptance of Mylan's
ANDA for processing nor its denial of Pfizer's citizen petition
caused Pfizer injury sufficiently imminent to confer jurisdic-
tion upon the court. Pfizer responds that it is "imminently
threatened with economic injury from unlawful competition."
So are Pfizer's claims ripe for judicial review or not?

Here is what the Supreme Court said last Term by way of
summarizing the ripeness doctrine. In order to determine
whether a controversy is ripe a court must "evaluate both the
fitness of the issues for judicial decision and the hardship to
the parties of withholding court consideration." Texas v.
United States, 523 U.S. 296, 301 (1998). "A claim is not ripe

for adjudication if it rests upon contingent future events that
may not occur as anticipated, or indeed may not occur at all."
Id. at 300. Thus, the ripeness requirement serves "to pre-
vent the courts, through avoidance of premature adjudication,
from entangling themselves in abstract disagreements over
administrative policies, and also to protect the agencies from
judicial interference until an administrative decision has been
formalized and its effects felt in a concrete way by the
challenging parties." Ohio Forestry Ass'n v. Sierra Club, 523
U.S. 726, 732-33 (1998) (quoting Abbott Labs. v. Gardner, 387
U.S. 136, 148-49 (1967)).

We assess first Pfizer's challenge to the FDA's acceptance
of Mylan's ANDA for processing. Pfizer claims the agency's
action is final and therefore fit for review because once having
decided, based upon the information contained in Mylan's
application, that Mylan's drug uses the same dosage form as
Procardia XLR, the FDA will not "alter its views with
respect to the necessity of Mylan filing a suitability petition."
The decision to accept Mylan's ANDA for processing as a
pharmaceutical equivalent to Procardia XLR is, however,
merely the first step in the agency's approval process. The
critical fact remains that the FDA may never approve My-
lan's application--whether because it decides in the end that
the dosage form of Mylan's drug is different from that of
Procardia XLR or for some entirely different reason, such as
a lack of bioequivalence. Therefore, "depending upon the
agency's future actions ... review now may turn out to have
been unnecessary" and could deprive the agency of the
opportunity to apply its expertise and to correct any mistakes
it may have made. Id. at 736 (holding challenge to agency's
logging plan unripe when no specific area was yet identified
for harvesting and agency might revise or modify plan).

Pfizer contends the FDA's own regulations demonstrate
that it does not consider its acceptance of an ANDA for
processing to be a "tentative" decision because it gives the
first person to file a generic application (here Mylan) a 180-
day marketing priority as against any later-filed generic
application. See 21 C.F.R. s 314.107(c). In other words,

says Pfizer, the agency's acceptance of Mylan's ANDA "af-
fects the legal rights of all subsequent applicants referencing
Procardia XLR." We find this argument doubly unpersua-
sive. First, it assumes its own conclusion, for Mylan will get
the 180-day marketing priority only if its application is finally
approved. Second, the legal rights that will be affected are
not Pfizer's but those of its competitors, about which Pfizer is
not in a position to complain.

Nor can Pfizer point to any imminent hardship arising from
the FDA's acceptance of Mylan's ANDA. Before Pfizer could
suffer its claimed "economic injury from unlawful competi-
tion," FDA approval for a pharmaceutical equivalent to Pro-
cardia XLR would have to be not only sought but granted.
That has not happened. Therefore "no irremediable adverse
consequences flow from requiring a later challenge." Toilet
Goods Ass'n v. Gardner, 387 U.S. 158, 164 (1967). This case
might nonetheless be ripe if the FDA's acceptance of Mylan's
ANDA for processing somehow foreclosed Pfizer's right ever
to get meaningful judicial review, but it does not. If the FDA
eventually approves Mylan's application, Pfizer may then
challenge the reasons underlying its final decision, including
the agency's interpretation of the statutory term "dosage
form."

Pfizer next suggests that the agency's acceptance of My-
lan's ANDA for processing compelled it to sue Mylan for
patent infringement and thereby to incur the burden of
litigation expenses. Not so. Pursuant to the Drug Price
Competition and Patent Term Restoration Act of 1984, which
established the ANDA procedure, see Pub. L. No. 98-417, 98
Stat. 1585, the owner of a pioneer drug may, by suing the
sponsor of the ANDA for patent infringement, cause the FDA
to stay its approval of a generic drug for 30 months. See 21
U.S.C. s 355(j)(5)(B)(iii). To get the benefit of the stay, such
a suit must be filed within 45 days after the owners of the
pioneer drug and of any associated patents receive notice
from the sponsor of the ANDA claiming that the pioneer's
patents are either "invalid or will not be infringed" by the
generic drug. Id. s 355(j)(2)(A)(vii)(IV). Nothing in the Act,
however, precludes the owner of a pioneer drug from waiting

longer than 45 days to sue for patent infringement. There-
fore, Pfizer voluntarily incurred the expense of preemptive
patent litigation in order to get a substantial statutory bene-
fit, namely, a stay of the FDA's approval of Mylan's ANDA.
In sum, Pfizer suffers no hardship because it "is not required
to engage in, or to refrain from, any conduct." Texas, 523
U.S. at 301. We therefore hold the FDA's acceptance for
processing of Mylan's ANDA is not ripe for judicial review at
this time.

If the FDA's acceptance of Mylan's ANDA is not ripe, then
it follows a fortiori that the FDA's denial of Pfizer's citizen
petition is not ripe. Pfizer raises precisely the same objection
to both agency actions, namely, that the FDA erred in
interpreting the statutory term "dosage form." But in deny-
ing Pfizer's citizen petition, the FDA did not apply that
interpretation to a particular set of facts, as it did in accept-
ing Mylan's ANDA for processing. Rather, it simply refused
to affirm the negative proposition that no other extended
release mechanism could ever be deemed under the statute to
constitute the same dosage form as Pfizer's osmotic pump.
Therefore Pfizer's challenge to the agency's refusal to recog-
nize its osmotic pump as a unique dosage form raises just the
sort of abstract disagreement over an administrative policy at
which the ripeness doctrine is aimed. See Ohio Forestry, 523
U.S. at 736. "Here, as is often true, determination of the
scope of legislation in advance of its immediate adverse effect
in the context of a concrete case involves too remote and
abstract an inquiry for the proper exercise of the judicial
function." Texas, 523 U.S. at 301.

Pfizer defends its ground by pointing to an FDA regulation
that deems the agency's response to a citizen petition a "final
agency action ... reviewable in the courts," 21 C.F.R.
s 10.45(d); but a final agency action nonetheless can be
unripe for judicial review. See Mount Wilson FM Broad. v.
FCC, 884 F.2d 1462, 1465 (D.C. Cir. 1989). Ripeness entails a
functional, not a formal, inquiry. An administrative agency,
which is not subject to Article III of the Constitution of the
United States and related prudential limitations, may issue a
declaratory order in mere anticipation of a controversy or

simply to resolve an uncertainty. See Metropolitan Council
of NAACP Branches v. FCC, 46 F.3d 1154, 1161 (D.C. Cir.
1995). An Article III court, however, may not adjudicate a
dispute until it has both crystallized as an actual "case or
controversy" and satisfied the prudential requirements of the
ripeness doctrine. See Reno v. Catholic Social Servs., Inc.,
509 U.S. 43, 57 n.18 (1993) (explaining "ripeness doctrine is
drawn both from Article III limitations on judicial power and
from prudential reasons for refusing to exercise jurisdiction").

* * *

After oral argument of this case the FDA tentatively
approved Mylan's ANDA. The agency conditioned its final
approval upon both the expiration of the 30-month period
established in 21 U.S.C. s 355(j)(5)(B)(iii), during which the
agency is prohibited from approving Mylan's new drug, and
assurance from Mylan that there is no new information
affecting whether final approval should be granted. Pfizer
argues that this development ripens its challenge to the
FDA's acceptance of Mylan's application for processing be-
cause the agency contemplates no additional substantive anal-
ysis of Mylan's application. See Regional Rail Reorganiza-
tion Act Cases, 419 U.S. 102, 140 (1974) (holding that "since
ripeness is peculiarly a question of timing, it is the situation
now rather than the situation at the time of the District
Court's decision that must govern").

We agree, however, with the FDA's contention that Pfizer's
challenge is still unripe. Although it is now more likely that
the FDA will eventually approve Mylan's drug, the agency's
tentative approval causes Pfizer no hardship at present or in
the near future, nor does it render Pfizer's challenge fit for
review. See Texas, 523 U.S. at 300 (holding case unripe even
assuming greater certainty of adverse action resting upon
future contingent events).

As to hardship, nothing untoward can happen to Pfizer
until at least December 1999, when the 30-month period
triggered by the filing of its patent suit against Mylan expires

and the FDA (assuming no change of circumstances) may
issue a final approval.* As to fitness, should we dismiss as
unripe Pfizer's present challenge to the FDA's acceptance for
processing of Mylan's ANDA, then Pfizer could not only
renew that claim, which is based solely upon the FDA's
interpretation of the statutory dosage form requirement, it
could also bring in the same action any other claim that may
arise from the agency's final approval--if and when it is
given--such as lack of bioequivalence. Accordingly, judicial
intervention at this time could lead to "piecemeal review
which at the least is inefficient and upon completion of the
agency process might prove to have been unnecessary." FTC
v. Standard Oil Co., 449 U.S. 232, 242 (1980).

III. Conclusion

We hold that Pfizer's challenges to the FDA's acceptance
for processing of Mylan's ANDA and to its denial of Pfizer's
citizen petition are both unripe for review. The judgment of
the district court is therefore

Affirmed in part and reversed in part.

* Neither party claims there is any likelihood that the patent suit
will be dismissed or settled at an earlier date.