On Feb 26, 2019, District Court for the District of Columbia tossed Teva’s suit because of lack of standing as Teva didn’t show evidence that it would suffer an imminent injury.
Plaintiff, Teva brought this action to obtain “immediate injunctive and declaratory relief” barring the USFDA from “depriving [Teva] of its statutory right to 180 days of marketing exclusivity for its generic version of the brand-name drug Restasis®.” Teva alleges that it qualifies as the “first applicant” to submit a Paragraph IV certification for Restasis® and that, as a result, it is entitled to 180 days of generic exclusivity. Teva fears, however, that its statutory right will be extinguished once the FDA applies the interpretation of “first applicant” it recently espoused in a letter decision relating to another drug. To avoid that loss, Teva seeks a declaratory judgment that (1) the FDA’s interpretation of “first applicant” in that letter decision is invalid under the Administrative Procedure Act (“APA”) and that (2) Teva is entitled to the 180-day exclusivity period. Teva also seeks to enjoin the FDA from “approving any [ANDA] that references Restasis® . . . other than Teva’s ANDA” during the pendency of this litigation unless that ANDA meets Teva’s definition of “first applicant.”
Allergan received FDA approval to market Restasis®, a pioneer drug to treat dry eye, on December 23, 2002. Allergan originally listed two patents associated with Restasis® in the Orange Book: US 4,839,342 and US 5,474,979. The ‘342 patent expired on August 2, 2009, and the ‘979 patent expired on May 17, 2014. Shortly before the ‘979 patent expired, Allergan added five new Restasis®-related patents to the Orange Book, beginning with US 8,629,111, which issued on January 14, 2014. The ‘111 patent is the subject of the Paragraph IV certification at issue here.
Teva filed its ANDA for cyclosporine on January 23, 2012. At the time, the “only unexpired patent listed in the Orange Book” for Restasis® was the ‘979 patent. That patent was due to expire in May 2014, and Teva filed a Paragraph III certification, indicating that it intended to enter the market after the ‘979 patent expired. According to Teva, the FDA’s initial review of its ANDA was “plagued by irregularities.” Teva alleges that the FDA failed to act on its ANDA for nearly fifteen months. Finally, the FDA issued a letter “notif[ying] Teva that it was refusing” to receive “the company’s ANDA,”—a decision the agency later rescinded in June 2015. While Teva “was considering its response to the [FDA’s letter],” the USPTO issued the ‘111 patent. That same day—January 14, 2014—Teva amended its ANDA to include a Paragraph IV certification with respect to the ’111 patent. On July 9, 2015, thirty months after Teva submitted its ANDA, the FDA issued a formal acknowledgment letter deeming Teva’s ANDA “received . . . as of January 23, 2012.” Teva, in turn, timely dispatched its Paragraph IV notices to Allergan and the ‘111 patentees. Meanwhile, the FDA indicated that “one or more” ANDAs containing “[P]aragraph IV certifications to the ‘979 patent” were submitted “before January 14, 2014.”
In late 2015, the FDA opened a docket to solicit comments regarding the 180-day exclusivity period for generic cyclosporine. The FDA revealed that “one or more” applicants had filed an ANDA containing a Paragraph IV certification referencing the ‘979 patent before the ‘111 patent was issued on January 14, 2014; however, notice was not provided to the patent owners and NDA holder because the ‘979 patent expired before the FDA accepted any ANDA for review. The FDA then sought comment on two questions:
1. Whether “[t]he one or more applicants that submitted ANDAs or patent amendments with [P]aragraph IV certifications” with respect “to the ‘979 patent” are “first applicants” for purpose of the 180-day exclusivity.
2. Whether that applicant (or those applicants) forfeited generic drug exclusivity “on May 17, 2014, when the ‘979 patent expired, such that no ANDA applicant for [c]yclosporine [o]phthalmic [e]mulsion, 0.05%, is eligible for 180-day generic drug exclusivity.
Six companies responded. Four answered yes to both questions. Teva and Akorn responded no. To date, the FDA has yet to issue a decision addressing either of these questions in the cyclosporine ANDA docket, and it has represented that it will not do so before it determines that an “ANDA applicant for cyclosporine has . . . satisfied the requirements for approval.”
In October 2016, the FDA published its final rule implementing portions of the MMA. According to Teva, the Final MMA Rule clearly provides that “eligibility for 180-day exclusivity requires timely notice of the exclusivity-qualifying Paragraph IV certification;” therefore, only those who have provided notice can qualify as first applicants. The FDA disagrees, arguing that the final rule “simply does not address the circumstance . . . where an applicant with a substantially complete ANDA containing a [P]aragraph IV certification is not able to provide valid notice . . . because the relevant patent expires before the FDA sends [the applicant] an Acknowledgement Letter.”
In July 2018, the FDA issued a letter decision in an unrelated matter, which addressed this question. (“Suboxone Letter Decision”). In that matter, “on May 14, 2013, one or more first applicants submitted a substantially complete ANDA (or an amendment to a substantially complete ANDA)” for a generic version of Suboxone® “with a Paragraph IV certification.” That applicant (or those applicants), however, subsequently withdrew their application(s) and “informed [the] FDA that [they] had not given notice to the NDA holder or patent owner.” “At least one other applicant submitted a substantially complete ANDA (or an amendment to a substantially complete ANDA)” referencing Suboxone® “after May 14, 2013, with a Paragraph IV certification and provided notice to the NDA holder and patent holder.” On those facts, the FDA concluded that the May 14, 2013 applicant qualified as the “first applicant” and, “[a]bsent forfeiture,” would have been “eligible for 180-day exclusivity.” The applicant, however, forfeited its right to exclusivity when it withdrew its application, and, because the “first applicant” did not qualify for 180-day exclusivity, the FDCA imposed “no barriers to approval of subsequent applicants.” Significantly, the FDA noted that exclusivity did not roll over to the subsequent applicant. FDA thus concluded that the “first effective approach” is inconsistent with “the statutory definition of ‘[f]irst [a]pplicant’ as defined by Congress in the MMA,” and that a “first submitted approach” better coheres with the current version of the FDCA. This event triggered the present suit among other things the preliminary injunction.
Court said that “a preliminary injunction is an extraordinary remedy never awarded as of right.” To secure a preliminary injunction, a plaintiff “must establish that he is likely to succeed on the merits that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Court said that before applying the four-part test, however, the Court must address a threshold issue: whether it has jurisdiction over Teva’s claim.
Teva challenges the FDA’s interpretation of “first applicant” in the Suboxone Letter Decision and contends that, if allowed to stand, that reading of the MMA will deprive Teva of its statutory right to 180 days of generic exclusivity for cyclosporine. According to Teva, the FDA erred as a matter of substance because the MMA definition of “first applicant” not only requires that the applicant be the first to file a substantially complete ANDA, but also requires that the applicant timely effect notice (i.e., the “first effective approach”). Teva also argues that the Suboxone Letter Decision must be set aside because it was issued in violation of the procedural requirements of the APA. In support of its motion for preliminary relief, Teva contends that each of the relevant factors tip in favor of issuing a preliminary injunction. For the reasons explained above, Teva contends that it is likely to prevail on the merits. It further argues that, unless the FDA is enjoined, “application of the [Suboxone] Letter Decision to Teva’s cyclosporine ANDA will harm Teva irreparably by divesting the company of its statutory right to 180-day exclusivity and imposing at least $50 million in losses that Teva can never recover.” Finally, Teva maintains that the balance of hardships and public interest weigh in favor of granting a preliminary injunction.
Court said that it cannot reach the merits of Teva’s APA challenge or its motion for a preliminary injunction, without first addressing standing, and, as the record now stands, Teva has failed to clear that threshold hurdle. Teva contends that it has pled two types of injuries sufficient to establish standing:
Loss of Exclusivity:
The parties agree that the loss of generic exclusivity is a concrete injury sufficient to confer standing. They disagree, however, about whether Teva has met its burden of plausibly alleging or otherwise showing that it will suffer an actual and imminent injury that is fairly traceable to the Suboxone Letter Decision. Teva argues that “first applicant status” constitutes a property right “no different from a patent” and that the right exists “regardless of whether the exclusivity holder uses the right itself.” But court said that Teva’s theory of “embedded value” misconceives how the Hatch-Waxman Amendments and the MMA function and what Article III demands. Teva fails to identify any precedent that has ever held that a first applicant acquires a property interest akin to a patent as soon as it files a substantially complete ANDA containing a Paragraph IV certification and provides the requisite notice. Because first and foremost, a patent differs in fundamental respects from first applicant status. Nor is the Court convinced that a putative first applicant attains an alienable interest in its status immediately upon submitting its ANDA and effecting notice of the Paragraph IV certification. In sum, Teva has failed to “show that [it] ‘has sustained or is immediately in danger of sustaining some direct injury,’ as the result of the FDA’s Suboxone Letter Decision.
Future Loss of Right to Exclude:
Teva argues, in the alternative, that it will likely suffer a concrete injury in the near future if the Suboxone Letter Decision is allowed to stand and that this imminent harm is sufficient to sustain its standing to sue. It asserts, in particular, that it will suffer “tens of millions of dollars in lost sales due to the decreased market share it will have when [the] FDA unlawfully approves its competitors during what Teva alleges to be its legally-protected exclusivity period.” Court said that the cases cited by Teva are not controlling for present purposes. Teva will, accordingly, have the right—if it is a bona fide first applicant—to challenge a decision by the FDA permitting one its competitors (other than another first applicant) to proceed to market even before Teva’s ANDA is approved. Although the presence of tentative approval was not a sine qua non of Teva’s standing in that case, it was essential to the court’s finding that Teva’s alleged injury was certain and impending. Because there is no guarantee that the FDA will approve any of the existing ANDAs. Without tentative approval as a signal or any other indication about the status of the FDA’s review, the Court has no means of assessing whether any ANDA is likely to receive approval, and if so, when that is likely to occur. Moreover, even if the FDA eventually approves an ANDA for cyclosporine, the Court can only speculate about whether Teva’s ANDA will still be under review at that point. Most significantly, the FDCA includes six “forfeiture events” that result in a first applicant’s loss of “[t]he 180-day exclusivity period. The Court, accordingly, concludes that Teva’s asserted loss of exclusivity due to the FDA’s Suboxone Letter Decision fails to satisfy the causation and redressability requirements for Article III standing.
Court further said that Teva’s second claim to standing—that it was injured by the FDA’s failure to abide by the procedural requirements set forth in the APA—fares no better. Teva alleges that, because the FDA’s Suboxone Letter Decision “adopted precisely the opposite position from the one taken in its MMA regulations,” the FDA was required to (and did not) engage in notice-and-comment rulemaking. The Supreme Court, however, has held that the allegation of “a bare procedural violation, divorced of any concrete harm,” does not “satisfy the injury-in-fact requirement of Article III.” Here, the “essential injury” to Teva’s “own interest” is the potential loss of exclusivity. And, as explained above, the Court has concluded that the “chain of causation” between the FDA’s Suboxone Letter Decision and Teva’s alleged loss of exclusivity “is speculative at best.” The Court, accordingly, holds that Teva’s asserted procedural injury also fails to satisfy the constitutional minimum for standing to sue.