Otsuka Pharmaceutical Co., Ltd. v. Burwell

Case Name: Otsuka Pharmaceutical Co., Ltd. v. Burwell, Civ. No. GJH-15-852, 2015 U.S. Dist. LEXIS 68230 (D. Md., May 27, 2015) (Hazel, J.)

Drug Product and Patent(s)-in-Suit: Abilify® (aripiprazole); N/A

Nature of the Case and Issue(s) Presented: The issue here concerns whether the FDA was precluded from approving generic versions of Abilify® until its orphan drug exclusivity expires in December 2021 because 21 U.S.C. § 355a(o) does not permit such pediatric information to be omitted from a generic drug’s label.

Otsuka first obtained approval from the FDA to manufacture and market Abilify on November 15, 2002. At that time, the drug was approved by the FDA to treat schizophrenia. The drug has subsequently been approved to treat schizophrenia in adolescents, acute treatment of manic and mixed episodes associated with Bipolar I Disorder in both adult and pediatric patients, irritability associated with autistic disorder in pediatric patients, and as an add-on treatment for depression in adults. In 2006, Otsuka sought, and was granted, an orphan drug designation for Abilify in relation to the treatment of Tourette’s syndrome in children and adolescents. In seeking that designation, Otsuka would be eligible for a seven-year exclusivity period. Otsuka submitted an sNDA to the FDA establishing the safety and efficacy of the drug for the new pediatric indication. Otsuka’s sNDA was approved by the FDA and Otsuka obtained approval for a pediatric Tourette’s Disorder indication for Abilify that is protected by orphan drug exclusivity.

Based on the seven year period of exclusivity for orphan drugs, Otsuka argued that the law precludes the FDA from approving any generic version of aripiprazole for any of its FDA-approved indications. On April 28, 2015, the FDA approved ANDAs for several generic versions of aripiprazole. Otsuka immediately filed suit against the FDA and moved for a temporary restraining order (“TRO”) to prevent the FDA from issuing additional ANDAs and a stay in relation to the ones that had already been approved. On that same date, the FDA sent Otsuka a letter informing the company that ANDA applicants would be permitted to market their drugs so long as the generic labelling carved out the pediatric Tourette’s Disorder indication. The court denied Otsuka’s request for a TRO. The parties then filed cross-motions for summary judgment. The court denied Otsuka’s motion for summary judgment and granted FDA’s cross motion for summary judgment.

Why Burwell Prevailed: According to Otsuka, 21 U.S.C. § 355a(o) permits the FDA to approve generic drugs that omit pediatric labelling in two specific, limited instances: (i) when that information was protected by patent; and (ii) when that information was protected by three-year new clinical study exclusivity. The ANDA applicants in this case did not fall into one of these two limited exceptions, and were instead seeking carve out approval in relation to Otsuka’s pediatric orphan drug exclusivity. Thus, Otsuka argued that the FDA was precluded from approving an ANDA for aripiprazole for any of its approved indications because section 355a(o) did not permit the omission of this type of pediatric information from the generic drug’s label.

The first step in the court’s Chevron analysis was to determine Congress’s intent in passing the relevant statute. As noted previously, this statute provided the two limited circumstances where a generic drug label would not be considered ineligible for approval. According to Otsuka, because the seven-year pediatric orphan drug period was not one of the two conditions set forth in the statute, the FDA could not approve the drug labels with the proposed carve out. The court disagreed, finding that neither the actual text of the statute nor a suggested alternative to it suggested by Otsuka would tell the FDA when it may not approve an ANDA. It also noted that Congress had provided examples of areas where Congress specifically and affirmatively directed the FDA’s ability to approve an ANDA, which stood in contrast to the language of section 355a(o)(1), where Congress had provided examples where it may not disapprove an ANDA. Accordingly, Otsuka could not turn a provision limiting the FDA’s disapproval authority into a provision limiting its approval authority. The court also pointed to the fact that the reasoning behind the passage of section 355a(o) involved what Congress identified as a loophole that allowed brand drug manufacturers to unfairly gain a three-year period of exclusivity on both adult and pediatric indications for a drug when the manufacturer should have been eligible for only a three-year period of exclusivity for the pediatric indication, and not the adult indication. This resulted in an unfair barrier for generics that sought to enter the market. A congressman involved in the drafting the legislation noted that the statute was passed because it “closes this potential loophole by instructing the FDA to approve generic drugs without proprietary pediatric labeling awarded to product sponsors under the Hatch-Waxman Act.” Based on this stated rationale, the court found that it would defy logic to believe that in enacting this measure to prevent a three-year exclusivity from becoming a fundamental abuse of the system that harmed consumers, Congress nonetheless intended to permit the seven-year exclusivity Otsuka currently sought. Because it was unclear whether section 355a(o) clearly proscribed the FDA’s ability to omit from a generic’s label information pertaining to pediatric orphan drug exclusivity, the court moved to Chevron step two.

Under Chevron, the court was only permitted to overturn the FDA’s interpretation if the statute unambiguously foreclosed the agency’s statutory interpretation. The FDCA provides the FDA broad authority to approve ANDAs that carved out exclusivities, including orphan drug exclusivity. That authority, the court noted, did not appear to be abrogated by section 355a(o), which, by its terms, constrained the FDA’s authority to refrain from approving an ANDA, instead of, as Otsuka argued, constraining its authority to approve ANDAs. The legislative history of the Hatch-Waxman Amendments demonstrated Congress’s desire to permit ANDA applicants to carve out from their labels otherwise protected information. Likewise, the court found that the Orphan Drug Act further confirmed the FDA’s authority to approve ANDAs that carved out an orphan drug exclusivity. The court specifically noted that the Fourth Circuit had upheld the right of an ANDA applicant to carve out an indication protected by orphan drug exclusivity as a permissible difference between the generic’s label and the pioneer's label due to a difference in manufacturer. The FDA had, on multiple occasions over the previous decade, approved ANDA drug products during the NDA-holder’s seven-year period of orphan drug exclusivity, despite the fact that the orphan indication covered a pediatric use.

Otsuka’s final argument involved the FDA’s alleged violation of its own pediatric labelling regulation, known as the Physician Labeling Rule which spelled out certain general requirements for labelling in pediatric populations. This provision, Otsuka argued, required all prescription drugs to contain pediatric labelling and specified that drugs without the labelling would be considered misbranded. The court disagreed, finding that the case did not involve general requirements for pediatric information in labelling, but instead turned on the FDA’s statutory authority to approve ANDAs that carve out an entire protected orphan pediatric indication, a permissible practice which the Physician Labeling Rule did not change.

In conclusion the court found that the FDCA, its legislative history, the case law, and the FDA's regulations all supported the FDA's construction of the statute.

The articles on our Website include some of the publications and papers authored by our attorneys, both before and after they joined our firm. The content of these articles should not be taken as legal advice.