Perrigo Research & Dev. Co. v. U.S. Food & Drug Admin.
Opinion
AMY BERMAN JACKSON, United States District Judge
Plaintiff Perrigo Research & Development Company ("Perrigo") brings this action against defendant United States Food and Drug Administration ("FDA") under the Administrative Procedure Act ("APA"),
Because Perrigo has failed to allege a violation of the APA, defendant's motion to dismiss Count I will be granted. And without a viable claim under the APA and in the absence of a case or controversy, the Court lacks subject matter jurisdiction to issue a declaratory judgment under Count II, so that count will also be dismissed.
BACKGROUND
I. Statutory Background
The FDCA requires all new drugs to be approved by the FDA before they are introduced into interstate commerce.
Congress added the truncated ANDA approval process to the FDCA as part of the 1984 Hatch-Waxman amendments, which sought "to make available more low cost generic drugs" by providing a pathway that was less costly and time consuming than the NDA process. Serono Labs., Inc. v. Shalala ,
To protect the patent rights of the makers of the listed drugs, ANDA applicants must provide one of four "certifications" for "each patent which claims the listed drug ... or which claims a use for such listed drug for which the application is seeking approval." § 355(j)(2)(A)(vii) ; see also Andrx Pharms., Inc. v. Biovail Corp. Int'l ,
(I) that such patent information has not been filed,
(II) that such patent has expired,
(III) of the date on which such patent will expire, or
(IV) that such patent is invalid or will not be infringed by the manufacture, *56use, or sale of the new drug for which the application is submitted.
§ 355(j)(2)(A)(vii)(I)-(IV). FDA may approve an ANDA containing either of the first two certifications effective immediately, § 355(j)(5)(B)(i), and it may approve an ANDA containing the third type of certification to be effective as of the relevant patent's expiration date. § 355(j)(5)(B)(ii). But the filing of the fourth type of certification-referred to as a "paragraph IV certification"-is an act of patent infringement on the part of the ANDA applicant, see
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AMY BERMAN JACKSON, United States District Judge
Plaintiff Perrigo Research & Development Company ("Perrigo") brings this action against defendant United States Food and Drug Administration ("FDA") under the Administrative Procedure Act ("APA"),
Because Perrigo has failed to allege a violation of the APA, defendant's motion to dismiss Count I will be granted. And without a viable claim under the APA and in the absence of a case or controversy, the Court lacks subject matter jurisdiction to issue a declaratory judgment under Count II, so that count will also be dismissed.
BACKGROUND
I. Statutory Background
The FDCA requires all new drugs to be approved by the FDA before they are introduced into interstate commerce.
Congress added the truncated ANDA approval process to the FDCA as part of the 1984 Hatch-Waxman amendments, which sought "to make available more low cost generic drugs" by providing a pathway that was less costly and time consuming than the NDA process. Serono Labs., Inc. v. Shalala ,
To protect the patent rights of the makers of the listed drugs, ANDA applicants must provide one of four "certifications" for "each patent which claims the listed drug ... or which claims a use for such listed drug for which the application is seeking approval." § 355(j)(2)(A)(vii) ; see also Andrx Pharms., Inc. v. Biovail Corp. Int'l ,
(I) that such patent information has not been filed,
(II) that such patent has expired,
(III) of the date on which such patent will expire, or
(IV) that such patent is invalid or will not be infringed by the manufacture, *56use, or sale of the new drug for which the application is submitted.
§ 355(j)(2)(A)(vii)(I)-(IV). FDA may approve an ANDA containing either of the first two certifications effective immediately, § 355(j)(5)(B)(i), and it may approve an ANDA containing the third type of certification to be effective as of the relevant patent's expiration date. § 355(j)(5)(B)(ii). But the filing of the fourth type of certification-referred to as a "paragraph IV certification"-is an act of patent infringement on the part of the ANDA applicant, see
The FDCA provides an incentive and reward to generic drug applicants willing to expose themselves to the litigation risk. It grants the "first applicant"-the applicant that is first to file a substantially complete ANDA that contains and lawfully maintains a paragraph IV certification to a listed patent-an opportunity to be the only generic product in the market competing with the listed drug for a period of time. See §§ 355(j)(5)(B)(iv)(II)(aa), (bb). During this 180-day period of marketing exclusivity, FDA may not approve any competing generic version of the drug if the ANDA for the subsequent applicant also contains a paragraph IV certification. See § 355(j)(5)(B)(iv)(I). The 180-day period begins to run when the first applicant begins marketing the product. See
But an applicant can forfeit its 180-day exclusivity period, thereby opening the market to other generic drug manufacturers. See § 355(j)(5)(D). A first applicant forfeits its eligibility for 180-day generic exclusivity if it fails to market the drug within certain time periods prescribed in the statute. § 355(j)(5)(D)(i)(I). Under the FDCA, a forfeiture event occurs if a first applicant fails to market the drug by the later of two dates. The parties agree that the only date relevant to this dispute is the second "bookend" date, which is defined as follows:
(bb) with respect to the first applicant or any other applicant (which other applicant has received tentative approval),1 the date that is 75 days after the date as of which, as to each of the patents with respect to which the first applicant submitted and lawfully maintained a certification qualifying the first applicant for the 180-day exclusivity period ... at least 1 of the following has occurred:
(AA) In an infringement action brought against the applicant with respect to the patent or in a declaratory judgment action brought by that applicant with respect to the patent, a court enters a final decision from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) has been or can be taken that the patent is invalid or not infringed.
(BB) In an infringement action or a declaratory judgment action described in subitem (AA), a court signs a settlement order or consent decree that enters a final judgment that includes a *57finding that the patent is invalid or not infringed.
§ 355(j)(5)(D)(i)(I)(bb).2
The specific provision at issue in this dispute is (bb)(BB), under which a first generic applicant can forfeit its 180-day exclusivity period if it fails to market the drug within 75 days of a consent decree in the second applicant's lawsuit against the patent holder.
II. Factual Background
On March 30, 2012, Perrigo submitted an ANDA for approval to market a generic version of AstraZeneca's Prilosec OTC Delayed-Release Tablets. Compl. ¶ 4. Perrigo's ANDA included paragraph IV certifications for both U.S. patents listed in the Orange Book3 for AstraZeneca's drug.
On June 16, 2016, FDA granted tentative approval to a second ANDA filed by Aurobindo Pharma Limited and Aurobindo Pharma Inc. (collectively, "Aurobindo") for Omeprazole Magnesium Tablets (OTC). Compl. ¶ 8. Aurobindo's application cannot receive final approval "until the expiration of Perrigo's 180-day generic exclusivity, unless Perrigo forfeits that exclusivity."
On August 18, 2016, Aurobindo filed an action against AstraZeneca in the United States District Court for the District of New Jersey under
The court entered a Consent Judgment and Decree in the Aurobindo lawsuit on September 20, 2017, which ordered, adjudged and decreed:
In light of the license granted under Article 5 of the Settlement Agreement, the Court enters final judgment in Civil Action No. 3:16-cv-07330-MLC-TJB that the making, having made, using, selling, offering to sell, importing or distributing of the Aurobindo Product by *58Aurobindo or any of its Affiliates, successors and assigns does not infringe the AstraZeneca Patents.
Ex. 2 to Compl. [Dkt. # 1-3] ¶ 3 ("Consent Judgment and Decree"); see also Compl. ¶ 12. Perrigo did not become aware of this order until October 10, 2017 because it had originally been filed under seal. See Compl. ¶ 9.
On October 18, 2017, Perrigo sent FDA a letter, requesting a "formal-and prompt-decision from FDA with respect to forfeiture of eligibility of 180-day exclusivity under the so-called 'failure-to-market provisions.' " Ex. 3 to Compl. [Dkt. # 1-4] ("Perrigo Letter") at 1. It asked the agency to confirm that the Consent Judgment and Decree obtained by Aurobindo "is wholly insufficient to trigger the 75-day period under" the FDCA, and that Perrigo would not forfeit its exclusivity eligibility 75 days after the date of the Consent Judgment and Decree (on or about December 4, 2017) if it failed to begin commercial marketing of the drug product approved under its ANDA. Perrigo Letter at 1-2; Compl. ¶ 13. Given the urgency of the situation, Perrigo asked FDA to respond to its letter within two weeks. See Perrigo Letter at 2.
FDA responded on November 17, 2017. Ex. 1 to Compl. [Dkt. # 1-2] ("FDA Letter") at 1. Citing its "longstanding policy and practice," FDA told Perrigo that it "does not intend to decide [Perrigo's] forfeiture question at this time, and will do so, if necessary, if and when [FDA is] ready to approve a subsequent [ANDA] for omeprazole magnesium."
One reason for this practice is to avoid expending limited agency resources on exclusivity and forfeiture decisions when subsequent events may render those decisions moot. For example, a forfeiture decision would become moot if no other ANDA applicant is ready for approval until the 180-day exclusivity period has expired. As another example, a decision that a consent judgment falls within section 355(j)(5)(D)(i)(I)(bb)(BB) would become moot if the first-filed applicant were to begin marketing the product within 75 days of the consent judgment.
FDA Letter at 2 (internal citations omitted).
III. Procedural History
On November 21, 2017, Perrigo filed this lawsuit against FDA. See Compl. Plaintiff also filed a motion for a temporary restraining order that would (1) enjoin FDA from finding that based on the September 20, 2017 Consent Judgment and Decree, Perrigo could forfeit its eligibility for a 180-day period of generic drug marketing exclusivity on December 4, 2017, and (2) enjoin FDA from granting final approval to Aurobindo's ANDA for Omeprazole Magnesium Delayed-release Tablets, or any other ANDA from a generic drug applicant with a pending application for omeprazole magnesium tablets. Appl. for TRO [Dkt. # 2]. The Court held a telephonic conference on November 22, 2017 with Perrigo, FDA, and Aurobindo, a potential intervenor in the case, to discuss a briefing schedule. After the telephonic conference, the Court consolidated the application for injunctive relief with the merits under Federal Rule of Civil Procedure 65(a)(2) and it denied the motion for temporary restraining order as moot. See Min. Order (Nov. 22, 2017).
Plaintiff's complaint contains two counts. Count I alleges that "FDA has unlawfully failed to render a determination whether the September 20 Consent Judgment meets the statutory requirements to trigger the 75-day failure-to-market period." Compl. ¶ 33. Count II seeks a declaratory judgment from the Court that the Consent *59Judgment and Decree "did not trigger the 75-day period under the statute for Perrigo to commence marketing by December 3 or forfeit eligibility for 180-day generic exclusivity."
On November 28, 2017, FDA filed a motion to dismiss both counts in the complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), and to dismiss Count II for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). Def.'s Mot. to Dismiss [Dkt. # 5] ("Def.'s Mot."); Mem. in Supp. of Def.'s Mot. & Opp. to Pl.'s Req. for Injunctive & Declaratory Relief [Dkt. # 5-1] ("Def.'s Mem."). On the same day, Aurobindo filed a motion to intervene in the case, which the Court granted, as well as an opposition to Perrigo's application for temporary restraining order. See Notice of Mot. to Intervene [Dkt. # 6]; Min. Order (Nov. 28, 2017); Aurobindo's Mem. of Law in Opp. to Pl.'s Appl. for TRO [Dkt. # 9] ("Aurobindo's Mem.").4 Perrigo filed its opposition to defendant's motion to dismiss on November 29, 2017. Perrigo's Omnibus Opp. to Def.'s Mot. & Aurobindo's Mem. [Dkt. # 13] ("Pl.'s Opp.").5
STANDARD OF REVIEW
In evaluating a motion to dismiss under either Rule 12(b)(1) or 12(b)(6), the Court must "treat the complaint's factual allegations as true and must grant plaintiff 'the benefit of all inferences that can be derived from the facts alleged.' " Sparrow v. United Air Lines, Inc. ,
I. Subject Matter Jurisdiction
Under Rule 12(b)(1), the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. See Lujan v. Defs. of Wildlife ,
When considering a motion to dismiss for lack of jurisdiction, unlike when deciding a motion to dismiss under Rule 12(b)(6), the court "is not limited to the allegations of the complaint." Hohri v. United States ,
II. Failure to State a Claim
"To survive a [ Rule 12(b)(6) ] motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal ,
A claim is facially plausible when the pleaded factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."
When considering a motion to dismiss under Rule 12(b)(6), the Court is bound to construe a complaint liberally in the plaintiffs favor, and it should grant the plaintiff "the benefit of all inferences that can be derived from the facts alleged." Kowal v. MCI Commc'ns Corp. ,
ANALYSIS
The APA authorizes judicial review where "[a] person suffer[s] legal wrong *61because of agency action, or [is] adversely affected or aggrieved by agency action within the meaning of a relevant statute."
The APA provides two methods by which a plaintiff may seek relief. A court may (1) "compel agency action unlawfully withheld or unreasonably delayed,"
I. The Court will dismiss Count I because plaintiff has failed to state a claim under the APA.
To state a claim under section 706(1), a plaintiff must ask the Court to "compel agency action," and the agency must be statutorily required to take that action. Plaintiff has not alleged sufficient facts to meet either requirement here.
As an initial matter, the complaint does not contain any request that the Court "compel agency action," but instead it asks the Court to step into FDA's shoes and decide the exclusivity issue itself. See Compl. ¶ 34 ("Because FDA has failed to render a timely decision, this Court should address the issue that FDA will not-and has refused to-address."). So plaintiff's claim under section 706(1) fails on this ground alone.
Moreover, a claim under section 706(1)"can proceed only where a plaintiff asserts that an agency failed to take a discrete agency action that it is required to take ." Norton ,
*62Plaintiff has also failed to state a claim under section 706(2) that FDA's agency action was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law," because plaintiff has not alleged that FDA took a "final agency action." See
The Supreme Court established a two-part test for determining whether an agency action qualifies as final so as to be subject to judicial review:
First, the action must mark the consummation of the agency's decisionmaking process-it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow.
Bennett v. Spear ,
FDA's letter to Perrigo itself illustrates that FDA's refusal to decide the exclusivity issue did not qualify as final agency action under the Supreme Court's two-part test. When the agency gives an indication that its decision is subject to further consideration or possible modification, its action is not final. See FTC v. Standard Oil Co. ,
More important, FDA's failure to answer Perrigo's question on the forfeiture issue did not determine either party's legal rights or obligations. See *63Bennett ,
Absent final agency action to review, any claim under section 706(2) is premature. Therefore, the Court will grant defendant's motion and dismiss Count I.
II. The Court will dismiss Count II seeking a declaratory judgment.
Perrigo also seeks a declaration that the "Consent Judgment and Decree does not meet the requirements of the [FDCA] and did not trigger the 75-day period under the statute for Perrigo to commence marketing by December 3 or forfeit eligibility for 180-day generic exclusivity." Compl. ¶ 37. However, plaintiffs have not alleged a cognizable cause of action and therefore have no basis upon which to seek declaratory relief. See Ali v. Rumsfeld ,
The Declaratory Judgment Act provides that "[i]n a case of actual controversy within its jurisdiction," a court "may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought."
Plaintiff insists nonetheless that it has alleged the existence of an actual controversy which the Court may resolve under the Declaratory Judgment Act. But the complaint does not articulate an actual controversy between the parties, see McManus v. Dist. of Columbia ,
CONCLUSION
For the foregoing reasons, the Court will grant defendant FDA's motion to dismiss. A separate order will issue.
290 F. Supp. 3d 51 (Perrigo Research & Dev. Co. v. U.S. Food & Drug Admin.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.