United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 3, 1998 Decided December 29, 1998
No. 98-5334
Purepac Pharmaceutical Company,
Appellant
v.
Michael A. Friedman, M.D.,
Acting Commissioner of Food and Drugs,
Food and Drug Administration,
Appellee
---------
Consolidated with
Nos. 98-5335 & 98-5337
Appeals from the United States District Court
for the District of Columbia
(98cv01780)
Robert A. Dormer argued the cause for appellants. With
him on the joint briefs were James R. Phelps, Douglas B.
Farquhar, David M. Malone, John F. Cooney, John R.
Fleder, David F. Weeda and Arthur Y. Tsien. Brett T.
Schwemer entered an appearance.
Howard S. Scher, Attorney, U.S. Department of Justice,
argued the cause for the federal appellee. On the brief were
Frank W. Hunger, Assistant Attorney General, Wilma A.
Lewis, U.S. Attorney, Douglas N. Letter, Appellate Litigation
Counsel, U.S. Department of Justice, and Jeffrica Jenkins
Lee, Attorney.
James D. Miller argued the cause for intervenors-appellees
Torpharm, A Division of Apotex, Inc., et al. With him on the
joint brief were Eugene M. Pfeifer and Donald O. Beers.
Before: Randolph, Rogers, and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Randolph, Circuit Judge: "The active ingredients in most
prescription drugs constitute less than 10% of the product;
inactive 'excipients' (such as coatings, binders, and capsules)
constitute the rest. The term 'generic drug' is used to
describe a product that contains the same active ingredients
but not necessarily the same excipients as a so-called 'pioneer
drug' that is marketed under a brand name." United States
v. Generix Drug Corp., 460 U.S. 453, 454-55 (1983). New
drugs, including new generic drugs, may not be marketed
without the Food and Drug Administration's approval. The
Drug Price Competition and Patent Term Restoration Act of
1984, Pub. L. No. 98-417, 98 Stat. 1585, revised the proce-
dures for obtaining the FDA's approval. One of the provi-
sions in the "Hatch-Waxman Amendments," as this Act is
known, conferred on the first generic drug applicant a 180-
day period during which it would be free of competition from
generic applicants who file later. The FDA implemented this
provision through a regulation. In Mova Pharmaceutical
Corp. v. Shalala, 140 F.3d 1060 (D.C. Cir. 1998), we sustained
a district court injunction against the FDA's enforcement of
one of the regulation's requirements, finding it inconsistent
with the statute. In response to Mova, the FDA revised its
system for granting the 180-day exclusivity period. The
questions in this case concern the validity of the revision.
I
In July 1998, the FDA tentatively approved Purepac Phar-
maceutical Company's application to market the generic drug
ticlopidine hydrochloride, marketed by other companies under
the brand-name "Ticlid."1 Although Purepac's application
has become ready for final approval, the FDA is withholding
action. Purepac must, the FDA insists, wait until the first
ticlopidine applicant--Torpharm, a division of Apotex, Inc.--
markets its product for 180 days. At the time of this writing,
it is not certain when these 180 days will start running. The
FDA has not yet finally approved Torpharm's application.
With matters thus at a standstill, Purepac decided to take
legal action. It sued for an injunction and a declaratory
judgment, challenging the validity of the FDA's post-Mova
revision and claiming that Torpharm was not entitled to the
180-day exclusivity period because it had not been sued for
patent infringement (a claim we will explain later in this
opinion). Other companies intervened on Purepac's side;
Torpharm and the companies who market the brand-name
drug intervened as defendants.2 The district court denied
Purepac's motion for a preliminary injunction and this appeal
followed.
II
Under the Hatch-Waxman Amendments, an applicant
seeking to market a new drug--that is, a "pioneer appli-
cant"--must file a "New Drug Application." See 21 U.S.C.
s 355(a). Among other things, the application must include
full reports of investigations of the drug's safety and effec-
__________
1 Ticlid is widely prescribed for patients who have a high risk of
thrombotic strokes and who cannot tolerate aspirin.
2 Invamed, Inc. and Teva Pharmaceuticals U.S.A., Inc. inter-
vened as plaintiffs; Hoffman-LaRoche Inc. and Syntex (U.S.A.)
Inc, in addition to Torpharm, intervened as defendants.
tiveness. See 21 U.S.C. s 355(b)(1). An applicant seeking to
market a generic drug may submit an "Abbreviated New
Drug Application." As the name suggests, an abbreviated
application is less demanding than a pioneer application; it
may, for instance, rely on the safety and effectiveness studies
submitted by the pioneer applicant. See 21 U.S.C.
s 355(j)(2)(A)(i)-(v); Mead Johnson Pharm. Group v. Bowen,
838 F.2d 1332, 1333 (D.C. Cir. 1988). An abbreviated applica-
tion also must include a certification that, for each of the
patents applicable to the pioneer drug, the proposed generic
drug would not infringe the patent because (I) the patent
information has not been filed; (II) the patent has expired;
(III) the patent will expire on a stated date; or (IV) the
patent is invalid or will not be infringed by the manufacture,
use or sale of the drug for which the abbreviated application
applicant seeks approval. See 21 U.S.C. s 355(j)(2)(A)(vii)(I)-
(IV).
Our concern is with IV, the method Torpharm and then
Purepac used. In a paragraph IV certification, the generic
applicant must give notice to the owner of the patent, and to
the holder of the approved application for the drug covered
by the patent. See 21 U.S.C. s 355(j)(2)(B)(i). FDA approv-
al of the abbreviated application may be made "effective
immediately," unless a patent infringement suit is brought
against the applicant within forty-five days from the date the
patent owner or application holder receives notice of the
paragraph IV certification. See 21 U.S.C. s 355(j)(5)(B)(iii).
No one brought a patent infringement suit against Torp-
harm (or Purepac) and it is therefore unnecessary to describe
the provisions dealing with the various contingencies of such a
lawsuit. The section directly in dispute--the section confer-
ring the 180-day period of exclusivity--reads as follows:
If the application contains a certification described in
subclause (IV) of paragraph (2)(A)(vii) and is for a drug
for which a previous application has been submitted
under this subsection continuing3 such a certification, the
__________
3 This should probably read "containing." See Mova Pharm.
Corp., 140 F.3d at 1064 n.3.
application shall be made effective not earlier than one
hundred and eighty days after-
(I) the date the Secretary receives notice from the
applicant under the previous application of the first
commercial marketing of the drug under the previous
application, or
(II) the date of a decision of a court in an action
described in clause (iii) holding the patent which is the
subject of the certification to be invalid or not infring-
ed,
whichever is earlier.
21 U.S.C. s 355(j)(5)(B)(iv), as amended by Pub. L. No.
105-115, 111 Stat. 2296 (1997).
The FDA's original regulation implementing this section,
promulgated in 1994, provided:
If an abbreviated new drug application contains a certifi-
cation that a relevant patent is invalid, unenforceable or
will not be infringed and the application is for a generic
copy of the same listed drug for which one or more
substantially complete abbreviated new drug applications
were previously submitted containing a certification that
the same patent was invalid, unenforceable or would not
be infringed and the applicant submitting the first appli-
cation has successfully defended against a suit for pat-
ent infringement brought within 45 days of the patent
owner's receipt of notice submitted under s 314.95, ap-
proval of the subsequent abbreviated new drug applica-
tion will be made effective no sooner than 180 days from
whichever of the following dates is earlier:
(i) The date the applicant submitting the first application
first commences commercial marketing of its drug prod-
uct; or
(ii) The date of a decision of the court holding the
relevant patent invalid, unenforceable, or not infringed.
59 Fed. Reg. 50,338, 50,367 (1994) (emphasis added). The
italicized language embodied what the parties and our Mova
opinion call the "successful defense" requirement: the first
generic applicant was entitled to the 180-day exclusivity
period only after it had successfully defended a patent in-
fringement suit.
Mova held that this portion of the regulation was "inconsis-
tent with the statutory text and structure." 140 F.3d at
1076.4 As the court read the statute, it provided that a later
generic applicant could not start marketing its product for
180 days after either commercial marketing by the first
applicant, or a court decision declaring the patent invalid or
not infringed. Id. at 1069. The FDA's successful defense
requirement read the commercial marketing "trigger" out of
the statute. As a result, first applicants who were not sued
could never receive the benefit of the exclusivity period. Id.
After Mova, the FDA issued a "Guidance to Industry"
announcing its intention to "formally" remove the successful
defense requirement from the regulation and to conduct a
rulemaking proceeding to issue new regulations under
s 355(j)(5)(B)(iv). In the meantime, the FDA said it would
follow the statute as Mova interpreted it. That is, the agency
would inform "the first applicant to submit a substantially
complete" abbreviated application, "with a paragraph IV cer-
tification," that the applicant was eligible for 180 days of
market exclusivity even though it had not been sued for
patent infringement. The FDA added that it expected first
applicants to begin marketing their product "promptly upon
approval."
In November 1998, while this case was pending, the FDA
published an interim rule in the Federal Register amending
its regulation to eliminate the successful defense requirement.
The interim rule accomplished this by deleting from the
regulation the following language, italicized above (21 C.F.R.
s 314.107(c)(1)): "and the applicant submitting the first appli-
cation has successfully defended against a suit for patent
infringement brought within 45 days of the patent owner's
__________
4 The Fourth Circuit, in an unpublished decision, reached the
same result, Granutec, Inc. v. Shalala, 1998 U.S.App. LEXIS 6685,
at * 19 (4th Cir. Apr. 3, 1998).
receipt of notice submitted under s 314.95."5 See 63 Fed.
Reg. 59,710, 59,712 (1998).
III
We come at last to Purepac's legal arguments. In essence,
Purepac maintains that the regulation containing the success-
ful defense requirement did not entitle Torpharm to the 180-
day exclusivity period because Torpharm had not been sued
for patent infringement. As Purepac sees it, even after Mova
the FDA still had to require, as a condition for exclusivity,
that the first generic applicant be sued for patent infringe-
ment, although the FDA could no longer insist that the
applicant defend the suit successfully.
The FDA's Guidance for Industry embraced a different
interpretation of Mova and of the severability of the regula-
tion: under the Guidance, a first applicant like Torpharm did
not have to be sued in order to be entitled to the exclusivity
period. Purepac opposed the Guidance on a procedural
ground, claiming that the FDA had gone beyond the mandate
of Mova, and thereby effectively amended the regulation,
something agencies may do only through notice and comment
rulemaking, or through an interim rule. The FDA's promul-
gation of an interim rule duplicating the Guidance puts an end
to Purepac's arguments in this regard.
In apparent anticipation of the FDA's issuing an interim
rule (as the Guidance suggested it would), Purepac's brief
also contended that the agency could not validly use this
procedure because it would be unable to show "good cause"
under 5 U.S.C. s 553(b)(B), a necessary condition for dispens-
ing with pre-promulgation notice and comment. See Mid-
Tex Elec. Co-op., Inc. v. FERC, 822 F.2d 1123, 1131-33 (D.C.
Cir. 1987). The basis for this contention is basically the same
__________
5 The interim rule also amended 21 C.F.R. s 314.107(c)(4) by
deleting the phrase "if sued for patent infringement." See 63 Fed.
Reg. at 59,712. The original regulation had provided that the first
applicant should notify the FDA of the date that it commenced
commercial marketing, "if sued for patent infringement." See 59
Fed. Reg. at 50,368.
as Purepac's procedural challenge to the Guidance: Mova did
not strike down the regulation's requirement that the first
applicant must defend a lawsuit before being eligible for the
180-day exclusivity period; the only portion of the regulation
Mova rendered unenforceable was the requirement that the
applicant "successfully" defend the lawsuit; and because this
so-called "lawsuit" requirement remained untouched by
Mova, the FDA would have no grounds for claiming that it
faced some pressing need, some good cause, to dispense with
notice and comment before promulgating an amendment to
the regulation. Purepac also advanced the same line of
reasoning to support its position that the FDA's response to
Mova was irrational and inconsistent with s 355(j)(5)(B)(iv).
We see the FDA's revised system for granting exclusivity
as consistent with the statute and with our Mova decision.
Section 355(j)(5)(B)(iv) does not, on its face, require the first
applicant to be sued in order to benefit from market exclusivi-
ty. It provides, as we said in Mova, that the 180-day
exclusivity period for the first applicant begins running upon
the occurrence of one of two events, whichever is earlier--
commercial marketing by the first applicant, or a court
decision in favor of the applicant. 140 F.3d at 1069. The
second condition obviously presupposes a lawsuit. The first
does not. The words of the statute provide no reason to
think, as Purepac must, that the only "commercial marketing"
contemplated in s 355(j)(5)(B)(iv) is marketing that takes
place while the first applicant is defending a lawsuit or after
the lawsuit has concluded. The regulation, as it now stands,
is fully consistent with the statute. By removing the lan-
guage embodying the successful defense requirement, the
FDA eliminated a significant difference between its regula-
tion and s 355(j)(5)(B)(iv).
Agencies occasionally promulgate a regulation merely du-
plicating the underlying statute. As matters stand after the
FDA's revisions, its regulation is of that type. There is
nothing irrational in the FDA's giving first applicants the
180-day exclusivity period even if they have not been sued.
On its face, the statute does the same. Seen in this light,
Purepac's real objection is to the words Congress used, not
the FDA's revision of its regulation.
Purepac points out that in the preamble to the final rule
containing the successful defense requirement, the FDA stat-
ed that the statute--s 355(j)(5)(B)(iv)--"can be applied
straightforwardly only when the applicant who seeks the 180-
day period of exclusive marketing has been involved in a
patent infringement lawsuit." 59 Fed. Reg. at 50,353.
Whether this and other remarks in the preamble were intend-
ed to convey the idea that the statute should be read to
require a lawsuit against the first applicant, although not a
successful defense of the lawsuit, is uncertain and, in any
event, beside the point. The FDA's current position is that,
as a temporary measure pending a rulemaking proceeding, it
will not infer requirements for exclusivity that are not in the
statutory text. Its explanation for this position is more than
adequate: the decision in Mova forced it to go back to the
drawing board.
Purepac also offers a policy reason for reading a lawsuit
requirement into s 355(j)(5)(B)(iv). If a first applicant is
never sued for patent infringement, it is possible that neither
of two "triggers" for the running of the 180 days of market
exclusivity--commercial marketing or a judicial decision--
would ever occur. Without a lawsuit there would be no
judicial decision. If the applicant never begins marketing its
product, the 180 days would never run and all later generic
applicants would be barred from bringing their products to
market. Purepac's point is hardly new. Mova discussed it at
some length, 140 F.3d at 1067, said in dictum that a lawsuit
requirement "would have corrected the problem," id. at 1071,6
__________
6 It is not clear that the "problem" would be entirely solved.
Suppose, as Purepac proposes, only the word "successfully" were
eliminated from the regulation, thus retaining as a condition to
receiving exclusivity that the first applicant "has successfully de-
fended against a suit for patent infringement brought within 45
days of the patent owner's receipt of notice." Suppose further that
a first applicant is sued but that the suit does not result in a judicial
decision finding the patent not infringed or invalid, so that the
and then cautioned that "Congress may have intended to
reward the first ... applicant for his enterprise whether or
not he is later sued," thus suggesting that a lawsuit require-
ment might be inconsistent with congressional intent. See id.
at 1071 n.11. For this reason, Mova described a narrower
answer to the problem: for first applicants who are not sued,
they must bring their products to market within a prescribed
period in order to benefit from exclusivity. See id. There is
some indication that the FDA will consider this alternative in
the rulemaking promised in its Guidance, or in response to
comments on its interim rule.7 That is the proper time and
setting for Purepac to repeat its point and to offer its
solution. In the meantime, the FDA has implemented an
interim measure, basically duplicating the statute. The
FDA's action, pursuant to which it is withholding final ap-
proval of Purepac's generic application pending Torpharm's
commercial marketing, is not irrational, it is not inconsistent
with s 355(j)(5)(B)(iv) and it is not contrary to the mandate in
Mova.
The district court's judgment denying the motion for a
preliminary injunction is therefore affirmed.
So ordered.
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judicial decision trigger in s 355(j)(5)(B)(iv) is not activated. This
could happen if, for instance, the suit is dropped or settled. In
those events, only commercial marketing could trigger the running
of the 180-day period. And the same problem Purepac identifies
would exist if the first applicant fails to market its product.
7 The Guidance stated that first applicants who are not sued will
receive a letter from the FDA telling them that they will neverthe-
less receive the benefit of exclusivity, but warning that the agency
"expects that you will begin commercial marketing of your product
promptly upon approval."