Ranbaxy Laboratories, Ltd. v. Burwell

82 F. Supp. 3d 159, 2015 U.S. Dist. LEXIS 29459, 2015 WL 1218933
CourtDistrict Court, District of Columbia
DecidedMarch 11, 2015
DocketCivil Action No. 2014-1923
StatusPublished
Cited by5 cases

This text of 82 F. Supp. 3d 159 (Ranbaxy Laboratories, Ltd. v. Burwell) 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
Ranbaxy Laboratories, Ltd. v. Burwell, 82 F. Supp. 3d 159, 2015 U.S. Dist. LEXIS 29459, 2015 WL 1218933 (D.D.C. 2015).

Opinion

MEMORANDUM OPINION

BERYL A. HOWELL, United States District Judge

A subsidiary of the plaintiffs, Ranbaxy Laboratories, Ltd. and Ranbaxy, Inc. (collectively, “Ranbaxy” or the “plaintiffs”), paid, in 2013, what was then the “largest drug safety settlement” in history, amounting to $500 million, in connection with criminal charges for falsifying data and manufacturing adulterated drugs at two of its facilities in India. U.S. Dep’t of Justice, “Generic Drug Manufacturer Ran- *163 baxy Pleads Guilty and Agrees to Pay $500 Million to Resolve False Claims Allegations, cGMP Violations and False Statements to the FDA,” May 13, 2013, available at http://www.justice.gov/opa/pr/ generic-drug-manufacturer-ranbaxy-pleads-guilty-and-agrees-pay-500-million-resolve-false. During the course of the investigation into the plaintiffs’ (now) admitted wrongdoing, the Federal defendants in this case — the Secretary of Health and Human Services, the Commissioner of the U.S. Food and Drug Administration (“FDA”), and the FDA — granted “tentative approval” to five Abbreviated New Drug Applications (“ANDAs”) submitted by -the plaintiffs for the manufacture of certain generic drugs at the same facilities involved in the plaintiffs’ subsidiary’s criminal case. See Defs.’ Mem. Opp’n Pis.’ Mot. Prelim. Inj. and Supp. Defs.’ Mot. Summ. J. (“Defs.’ Mem.”) at 10-17, ECF No. 52.

Years after the grant of those ANDAs, when two of these tentative approvals were preventing other drug manufacturers from coming to market with generic versions of costly medications, the FDA reexamined and revoked two of those five tentative approvals, for esomeprazole and valganciclovir, stating the approvals had been granted “erroneously.” Defs.’ Mem. at 3; Compl. ¶ 38, ECF No. 1; Administrative Record (“AR”) at 1 (Letter from FDA to plaintiffs regarding esomeprazole and valganciclovir ANDAs, Nov. 4, 2014 (the “Rescission Letter”)). This agency action prompted the plaintiffs to file the instant suit, contending that the Federal defendants had no authority, statutory or otherwise, to correct their egregious error and rescind the tentative approvals. See generally Compl. Now pending before the Court is the plaintiffs’ Motion for Preliminary Injunction (the “Pis.’ Mot.”), ECF No. 41; the Federal defendants’ Motion for Summary Judgment (the “Defs.’ Mot.”), ECF No. 51; and the Motions for Summary Judgment from four other generic drug manufacturers, Dr. Reddy’s Laboratories (“Dr.Reddy’s”), Endo Pharmaceuticals, Inc. (“Endo”), Ivax Pharmaceuticals, Inc. (“Ivax”), and Teva Pharmaceuticals USA, Inc. (“Teva”), 1 which have each been granted leave to intervene in this matter as defendants, ECF Nos. 53 and 73. 2 Although the FDA’s practices, which apparently led to these errors, raise grave concerns, the Federal defendants’ interpretation of the relevant portions of the Food, Drug, and Cosmetics Act (the “FDCA”) as permitting the rescission of the erroneously issued tentative approvals is reasonable. Consequently, the Federal defendants’ and defendant-intervenors’ motions are granted and the plaintiffs’ motion is denied. 3

*164 I. BACKGROUND 4

The statutory regime under which generic drug applications, such as those at issue here, are approved, is complex. Thus, a brief summary of the regulations governing ANDAs and their approval is provided before turning to the history of the plaintiffs’ applications, the concurrent investigations into the plaintiffs’ manufacturing processes by the FDA, and the procedural background of the instant matter.

A. The Statutory Regime

All pharmaceutical manufacturers wishing to sell their products in interstate commerce must first seek approval from the FDA in compliance with 21 U.S.C. § 355. New drug applications (“NDAs”) are subject to rigorous application protocols under which the applicant must prove the drug is safe and effective. See 21 U.S.C. § 355(b); Defs.’ Opp’n Pis.’ Mot.. Temp. Restraining Order (“Defs.’ TRO Opp’n”) at 5, ECF No. 22-1. The applicant must also provide information about patents used in the drug, or for using the drug, “to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug.” 21 U.S.C. § 355(c)(2).

1. The Hatch-Waxman Amendments

Between 1962 and 1984, companies wishing to manufacture generic versions of drugs already approved for use had to follow the same rigorous steps as in a new drug application before the drug could be approved and sold, even though the generic equivalent was effectively identical to a brand name drug. 5 H.R Rep. No. 98-857, pt. 1, (Report of the House Committee on Energy and Commerce on Drug Price Competition and Patent Term Restoration Act) at 14-15 (1984). In 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, codified in 21 U.S.C. § 355. Colloquially known as the “Hatch-Waxman Amendments,” the amendments created a process by which generic drugs could be approved on the basis of an “abbreviated” new drug application, an ANDA, by “piggy-back[ing]” on the studies already completed by the pioneer drug manufacturer. FTC v. Actavis, Inc. (Actavis), — U.S. —, 133 S.Ct. 2223, 2228, 186 L.Ed.2d 343 (2013); see Mylan Labs, Inc. v. Thompson, 389 F.3d 1272, 1274-75 (D.C.Cir.2004).

This statutory change removed a major expense for generic drug manufacturers, since “[ujnlike an NDA, an ANDA need not contain clinical evidence of the safety or efficacy of the drug.” See Teva Pharm. Indus. Ltd. v. Crawford, 410 F.3d 51, 52 (D.C.Cir.2005). Its purpose is “to speed the introduction of low-cost generic drugs to market,” Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S (Caraco), — U.S. —, 132 S.Ct. 1670, 1676, 182 L.Ed.2d 678 (2012), thus increasing competition and, theoretically, lowering prices, Teva Pharms. USA Inc. v. Sebelius, 595 F.3d 1303, 1305 (D.C.Cir.2010). To further this goal, the Hatch-Waxman Amendments included the “so-called paragraph IV certifi *165 cation.” Carneo, 132 S.Ct. at 1677. Since “the FDA cannot authorize a generic drug that would infringe a patent,” id. at 1676, Congress required ANDA applicants, in 21 U.S.C. § 355(j)(2)(A)(vii), to certify that the generic drug would not infringe upon any valid patents.

2. Paragraph IV Certification

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Bluebook (online)
82 F. Supp. 3d 159, 2015 U.S. Dist. LEXIS 29459, 2015 WL 1218933, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ranbaxy-laboratories-ltd-v-burwell-dcd-2015.