Eisai Inc. v. United States Food and Drug Administration

134 F. Supp. 3d 384, 2015 U.S. Dist. LEXIS 133222, 2015 WL 5728882
CourtDistrict Court, District of Columbia
DecidedSeptember 30, 2015
DocketCivil Action No. 2014-1346
StatusPublished
Cited by1 cases

This text of 134 F. Supp. 3d 384 (Eisai Inc. v. United States Food and Drug Administration) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eisai Inc. v. United States Food and Drug Administration, 134 F. Supp. 3d 384, 2015 U.S. Dist. LEXIS 133222, 2015 WL 5728882 (D.D.C. 2015).

Opinion

MEMORANDUM OPINION

RANDOLPH D. MOSS, United States District Judge

A company that obtains approval from the Food and Drug Administration (“FDA”) to market a drug, no active ingredient of which has been previously approved, is entitled to a five-year period of exclusivity during which would-be competí- *387 tors cannot apply for approval of generic versions of that drug. See 21 U.S.C. § 355(c)(3)(E)(ii). This exclusivity period creates an incentive for pharmaceutical companies to undertake the lengthy and expensive process of developing, testing, and obtaining approval of new drugs. On occasion, however, some drugs effectively receive periods of exclusivity shorter than the five year period authorized by statute. When the Drug Enforcement Administration (“DEA”) seeks to schedule a new drug under the Controlled Substances Act, it must request recommendations from the FDA; after the DEA receives the FDA’s recommendation, it engages in notiee-and-comment rulemaking culminating in a final rule that determines whether and at what level the drug will be scheduled. See 21 U.S.C. § 811. Because the FDA requires applicants for approval of new drugs to commit not to market those drugs until after the DEA makes its scheduling determination, the scheduling process can delay the entry of new.drugs into the market, sometimes by more than a year after their FDA approval. The central issue in this case is whether and under what circumstances the period of time drug manufacturers spend waiting for a final DEA scheduling determination counts against the five-year exclusivity period.

Plaintiff, Eisai, Inc. (“Eisai”), holds new drug approvals (“NDAs”) for two drugs caught in this regulatory limbo. It contends — not without force — that its effective loss of months of market exclusivity while it waited for the DEA to schedule these drugs is at odds with the balance that Congress struck between incentivizing the development of new drugs and making affordable medications more broadly available to patients when it enacted the Hatch-Waxman Amendments in 1984. On the one hand, Congress streamlined the procedure for approval of typically cheaper generic drugs. On the other, it granted five years of market exclusivity to the developers of sufficiently innovative drugs, improving the chance that they would see returns on the significant investments required to bring new drugs to market. As Eisai stresses, requiring manufacturers of scheduled drugs to lose months — or more — of exclusivity while they await scheduling determinations might upset this balance and discourage pharmaceutical companies from pursuing promising drugs that are likely to require scheduling under the Controlled Substances Act.

This case, however, turns on the meaning, not the wisdom, of an FDA regulation implementing the Hatch-Waxman Amendments. Under that regulation — the validity of which Eisai does not challenge — the exclusivity period for a new drug begins when the FDA issues its letter approving the drug, even if the drug’s manufacturer must await DEA’s scheduling determination before it can bring the drug to market. The regulation does provide for an exception under limited circumstances. But the FDA has interpreted that exception narrowly, and the Court is bound to defer to the agency’s reasonable interpretation of its own regulation. Because Ei-sai’s drugs do not qualify for the exception under the FDA’s interpretation of its regulation, the FDA and its co-Defendants are entitled to summary judgment.

I. BACKGROUND

A. The Statutory and Regulatory Regime

The Drug Price Competition and Patent Term Restoration Act, Pub.L. 98-417 (1984), commonly known as the Hatch-Waxman Amendments, “emerged from Congresses] efforts to balance two conflicting policy objectives: to induce name-brand pharmaceutical firms to make the investments necessary to research and develop new drug products, while simultaneously enabling competitors to bring *388 cheaper, generic copies of those drugs to market.” Abbott Labs. v. Young, 920 F.2d 984, 991 (D.C.Cir.1990). To achieve the first goal — encouraging investment in new drugs — the Hatch-Waxman Amendments provided a five-year period of market exclusivity for new drugs, no active ingredients of which have previously been approved. 21 U.S.C. § 355(c)(3)(E)(ii). Other companies are barred from seeking approval of generic versions of these new drugs — referred to as “New Chemical Entities” or “NCEs” — during this five-year window, which begins on “the date of the approval of the [New Chemical Entity] application.” Id. To achieve the second goal — making it easier for competitors to bring cheap generics to the market — Congress created the Abbreviated New Drug Approval process, which allows producers of follow-on drugs to rely on the safety and effectiveness trials conducted by a drug’s initial developer, streamlining the process of bringing generic drugs to market. See 21 U.S.C. 355(j).

The FDA has promulgated regulations implementing the Hatch-Waxman Amendments. Tracking the statute, these regulations bar manufacturers from applying for approval of follow-on drugs for “a period of 5 years from the date of approval of the first approved new drug application.” 21 C.F.R. § 314.108(b)(2). “Date of approval,” in turn, is defined as:

the date on the letter from FDA stating that the new drug application is approved, whether or not final printed labeling or other materials must yet be submitted as long as approval of such labeling or materials is not expressly required. “Date of approval” refers only to a final approval and not to a tentative approval that may become effective at a later date.

21 C.F.R. § 314.108(a).

The Controlled Substances Act creates five “schedules” for potentially addictive drugs or drugs that otherwise have “potential for abuse.” 21 U.S.C. § 812. It authorizes the Attorney General — who, in turn, has delegated this authority to the DEA — to add, remove, or reassign drugs through notice-and-comment rulemaking. Id. § 811; 28 C.F.R. § 0.100(b). When the FDA determines that a drug in the approval process “has an abuse potential,” it must forward that information to the DEA. 21 U.S.C. § 811(g).

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134 F. Supp. 3d 384, 2015 U.S. Dist. LEXIS 133222, 2015 WL 5728882, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eisai-inc-v-united-states-food-and-drug-administration-dcd-2015.