Spectrum Pharmaceuticals, Inc v. Sylvia Burwell

824 F.3d 1062, 423 U.S. App. D.C. 51, 2016 U.S. App. LEXIS 10095, 2016 WL 3126834
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 3, 2016
Docket15-5166
StatusPublished
Cited by7 cases

This text of 824 F.3d 1062 (Spectrum Pharmaceuticals, Inc v. Sylvia Burwell) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spectrum Pharmaceuticals, Inc v. Sylvia Burwell, 824 F.3d 1062, 423 U.S. App. D.C. 51, 2016 U.S. App. LEXIS 10095, 2016 WL 3126834 (D.C. Cir. 2016).

Opinion

GRIFFITH, Circuit Judge:

In this case, Spectrum Pharmaceuticals claimed that the Food and Drug Administration’s approval of a cancer drug violated *1064 Spectrum’s exclusive marketing rights. The district court granted summary judgment against Spectrum, and we affirm.

I

Levoleucovorin is better known by the brand-name Fusilev, which Spectrum has sold since 2008 for the purpose of counteracting liver damage during a type of chemotherapy known as methotrexate therapy (the “Methotrexate Indications”). Fusilev is an “orphan drug,” so called because it is designed to treat a rare disease or condition that historically received little attention from pharmaceutical companies, and hence became “orphaned” because the comparatively small demand for treatment left little motive for research and development. Pub. L. No. 97-414, § 1(b), 96 Stat. 2049 (1983). Under the Orphan Drug Act amendments to the Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 360aa-ee, intended to increase incentives for companies to develop new orphan drugs, Spectrum received exclusive marketing rights to the Methotrexate Indications for seven years. In other words, because Spectrum was the first to develop levoleucovorin as an orphan drug for methotrexate therapy, no other company could sell a generic version of the drug for that purpose until 2015.

In 2011, Spectrum received approval from FDA to market Fusilev for an altogether new use: helping patients with advanced colorectal cancer to manage their pain (the “Colorectal Indication”). Spectrum has exclusive marketing rights for the Colorectal Indication until 2018.

On March 7, 2015, Spectrum’s exclusivity period expired for the Methotrexate Indications. Two days later, Sandoz Inc. received FDA approval to market a generic version of levoleucovorin for the Metho-trexate Indications, having had its application expedited in 2012 to address a drug shortage. Unlike Fusilev, which is sold in a freeze-dried powder that must be mixed with another chemical before it can be used, Sandoz sells its generic drug in a ready-to-use form. Pursuant to FDA regulations, Sandoz’s label contains only the Methotrexate Indications and makes no mention of the Colorectal Indication. Shortly after Sandoz launched its product, Spectrum filed suit to enjoin FDA’s approval of Sandoz’s drug.

Spectrum argued to the district court that Sandoz’s sole intended use of the generic was to treat patients with colorectal cancer, even though the label provided for use only in patients undergoing methotre-xate therapy. Spectrum urged that FDA was willfully blind to the fact that the generic drug would not be used for counteracting liver damage, but for managing pain, which is Spectrum’s exclusive domain. This intended use made the agency’s approval of the generic unlawful, argued Spectrum, because it violated Spectrum’s exclusive marketing rights for the Colorec-tal Indication.

Spectrum’s argument focused largely on Sandoz’s vial sizes. The record shows the standard dose of levoleucovorin for the Methotrexate Indications is 7.5 mg, although some patients need a 75 mg or 85 to 90 mg dose in certain rare situations. In contrast, the Colorectal Indication regularly requires a much larger dose of 150 mg. Spectrum sells Fusilev in 50 mg vials, but Sandoz sells its generic in 175 mg and 250 mg vials, sizes that Spectrum argues are intended to treat the Colorectal Indication despite being labeled for only the Metho-trexate Indications. 1

Spectrum also challenged FDA’s approval on two additional grounds: Spectrum urged that the approval was arbitrary and *1065 capricious, in violation of the Administrative Procedure Act, because FDA changed its position on the safety and efficacy of large vials of levoleucovorin without explanation. Finally, Spectrum contended that it was entitled to notice before FDA expedited review of Sandoz’s generic drug.

The district court granted summary judgment against Spectrum, holding that FDA’s approval of Sandoz’s generic drug was lawful. The district court reasoned that the Orphan Drug Act allows FDA to approve Sandoz’s drug so long as the generic’s label omits the Colorectal Indication. The district court rejected Spectrum’s remaining arguments as well, holding that the agency did not improperly change positions without explanation, and any error in expediting the agency’s review of the generic was harmless.

Spectrum appeals the judgment of the district court. We have jurisdiction under 28 U.S.C. § 1291.

II

Our review is de novo. Purepac Pharm. Co. v. Thompson, 354 F.3d 877, 883 (D.C. Cir. 2004) (reviewing the district court’s grant of summary judgment); Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1319 (D.C. Cir. 1998) (reviewing the district court’s statutory and regulatory interpretations). Because Spectrum challenges the decision of an administrative agency, de novo review means that we will “review directly the decision of the [agency].” Purepac, 354 F.3d at 883 (quoting Lozowski v. Mineta, 292 F.3d 840, 845 (D.C. Cir. 2002)). Accordingly, we will uphold FDA’s approval of Sandoz’s generic drug under the Administrative Procedure Act unless that decision was “ ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’ ” Id. (quoting 5 U.S.C. § 706(2)(A)).

A

Spectrum’s primary argument on appeal is that FDA violated Spectrum’s exclusive marketing rights by ignoring that doctors and patients would use Sandoz’s generic for the Colorectal Indication.

The Food, Drug, and Cosmetic Act governs FDA’s approval of a pharmaceutical drug. AstraZeneca Pharm. LP v. FDA, 713 F.3d 1134, 1136 (D.C. Cir. 2013). To secure FDA approval to market a new drug, a company files a new drug application (NDA) that triggers a process through which FDA approves new drugs shown to be safe and effective. 21 U.S.C. § 355(a)-(j). In its application, the company specifies what the drug will be used for and the volume in which it will be sold. Id. § 355(b). FDA’s approval of an NDA allows the company to sell the drug at the proposed volume and with a label indicating the proposed purpose. Id. § 355(a). The first drug to be approved for a particular use through the NDA process is called a “pioneer.”

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824 F.3d 1062, 423 U.S. App. D.C. 51, 2016 U.S. App. LEXIS 10095, 2016 WL 3126834, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spectrum-pharmaceuticals-inc-v-sylvia-burwell-cadc-2016.