Ipsen Biopharmaceuticals, Inc. v. Xavier Becerra (REISSUED PUBLIC OPINION)

Court of Appeals for the D.C. Circuit·Decided July 25, 2024·No. 23-5142·Published

Opinion

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 1, 2024 Decided July 9, 2024 Reissued July 25, 2024

No. 23-5142

IPSEN BIOPHARMACEUTICALS, INC., APPELLANT

v.

XAVIER BECERRA, IN HIS OFFICIAL CAPACITY AS SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL., APPELLEES

Appeal from the United States District Court for the District of Columbia (No. 1:22-cv-00860)

Catherine E. Stetson argued the cause for appellant. With her on the briefs were Susan M. Cook, Marlan Golden, and Dana A. Raphael.

Urja Mittal, Attorney, U.S. Department of Justice, argued the cause for federal appellees. With her on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, Daniel Tenny, Attorney, and Samuel R. Bagenstos, General Counsel, U.S. Department of Health & Human

Services. Anna O. Mohan, Senior Counsel, U.S. Department of Justice, entered an appearance.

Brian T. Burgess argued the cause for appellee InvaGen Pharmaceuticals, Inc. With him on the brief was Gerard J. Cedrone.

Before: WILKINS, KATSAS and RAO, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILKINS.

WILKINS, Circuit Judge: In 2007, the Food and Drug Administration (“FDA”) approved Ipsen Biopharmaceuticals, Inc.’s application to sell Somatuline Depot as a drug product under the Federal Food, Drug, and Cosmetic Act (“FDCA”). This approval gave Somatuline Depot a period of market exclusivity, and the FDA did not authorize any competing generic forms of the drug for over a decade.

That changed in 2021 when the FDA approved an application filed by InvaGen Pharmaceuticals, Inc., one of Ipsen’s competitors, to sell a generic version of Somatuline Depot under the FDCA. This approval ended Somatuline Depot’s era of market exclusivity. At the heart of this dispute, is Ipsen’s belief that Somatuline Depot should still enjoy market exclusivity.

Here, Ipsen argues that the FDA’s classification of its product violated the Administrative Procedure Act (“APA”). In Ipsen’s view, Somatuline Depot is not a drug product subject to the FDCA; it is a biologic and must be regulated under the Public Health Service Act (“PHSA”). Had the FDA correctly regulated Somatuline Depot, Ipsen further argues, the FDA could not have approved InvaGen’s application under the FDCA.

Two of Ipsen’s prayers for relief are relevant to this appeal:

(1) declaratory judgment that the FDA’s refusal to reclassify Somatuline Depot as a biologic was arbitrary, capricious, and contrary to law in violation of the APA, and (2) vacatur of the FDA’s approval of InvaGen’s application to sell a generic version of Somatuline Depot. The District Court rejected Ipsen’s arguments and granted summary judgment to the government and InvaGen, which intervened to defend its interest in keeping the generic Somatuline Depot on the market. We agree with the result and, for reasons explained in the opinion, affirm.

I. A.

This case involves two statutory schemes, and a few regulations, that establish the processes for obtaining FDA approval of drug products and biological products. Both drugs at issue in this case (Ipsen’s and InvaGen’s, respectively) were approved under the FDCA, which governs drugs. But Ipsen wants the FDA to reclassify its drug, Somatuline Depot, as a biologic subject to the PHSA. If such a reclassification were to occur, the FDA’s approval of InvaGen’s generic version of Somatuline Depot could be jeopardized. The difference in the statutory schemes explains why.

We begin with the FDCA. It forbids the sale of “any new drug” without FDA approval. 21 U.S.C. § 355(a). This approval is conditioned on the FDA evaluating the application to sell the drug and, ultimately, concluding that the drug is safe and effective for its intended uses. Id. § 355(b)(1)(A), 355(d)(2). Two of the FDCA’s three pathways to FDA approval are relevant here: the innovator pathway and the generic pathway.

Ipsen took the innovator pathway: it filed a New Drug Application and included its own clinical data that demonstrated Somatuline Depot’s efficacy and safety. See id. § 355(b)(1). After receiving FDA approval, Ipsen, as an innovator, enjoyed a period of market exclusivity where it sold Somatuline Depot without having to compete with any generic forms of the drug.

InvaGen, however, took a generic pathway that became available once Ipsen’s exclusivity period concluded. In taking this route, InvaGen’s application demonstrated that its product had the same “active ingredient, route of administration, indication, dosages and strengths” of Somatuline Depot. J.A. 28. Because Somatuline Depot served as the reference product, InvaGen was able to show its product’s efficacy and safety by relying on the same clinical research that Ipsen provided to the FDA. See 21 U.S.C. § 355(b)(2).

We can now turn to the PHSA, which shares some similarities with the FDCA. See 42 U.S.C. § 262. Similar to approval under the FDCA, one pathway to approval under the PHSA requires the manufacturer to demonstrate that its product is “safe, pure, and potent” and its production facility is “designed to assure that the biological product continues to be safe, pure, and potent.” 42 U.S.C. § 262(a)(2)(C)(i)(I)–(II). The PHSA’s other approval pathway is, likewise, similar to the FDCA in that it permits a manufacturer to show that its product is “highly similar to the reference product” by submitting data that shows that “there are no clinically meaningful differences between the biological product and the reference product in terms of … safety, purity, and potency.” Id. § 262(i)(2). We note a final similarity between the two approval processes: when determining what the product is (a drug or biologic) the FDA analyzes the product’s “active ingredient,” defined as “any component that is intended to furnish pharmacological

activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease.” 21 C.F.R. § 314.3(b).

But there is also a significant difference in the two approval processes. Under the PHSA, unlike the FDCA, manufacturers must conduct their own clinical studies. This distinction in approval processes sits at the crux of this case. If Somatuline Depot were regulated under the PHSA, then InvaGen’s generic product would not have been able to use Ipsen’s clinical studies to achieve FDA approval. The PHSA does not permit piggybacking.

The difference in approval processes makes sense.

Biologics are “a type of drug derived from natural, biological sources such as animals or microorganisms. Biologics thus differ from traditional drugs, which are typically synthesized from chemicals.” Sandoz, Inc. v. Amgen Inc., 582 U.S. 1, 6 (2017). Indeed, a “biological product” is narrowly defined under the PHSA as a “virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein, or analogous product … applicable to the prevention, treatment, or cure of a disease or condition of human beings.” 42 U.S.C. § 262(i)(1). Whereas the FDCA defines a “drug” more broadly as an “article[] intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man” or “intended to affect the structure or any function of the body of man.” 21 U.S.C. § 321(g)(1)(B), (C).

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