Canadian Provincial Governments Actively Redirecting Patients to Biosimilar Drugs to Save Money

Noel Courage

By Noel Courage

Biologics are drugs which contain an active medicinal ingredient that is derived from living cells. They are generally proteins, which are larger and more complex than the chemically synthesized small molecule pharmaceuticals (acetaminophen etc.) that have for decades made up the bulk of drugs on the market. Biosimilars are competitor versions that attempt to “copy” the originally approved biologic drug. Biosimilars are approved for marketing by the short-cut of showing to regulators they are sufficiently similar to a biologic reference drug that is already approved for sale. This biosimilarity standard is less strict than the bioequivalence standard which applies to conventional generic pharmaceutical drugs. Showing biosimilarity allows biosimilar manufacturers to rely largely on the innovator drug’s clinical data, thereby dramatically reducing the time and expense otherwise required to obtain market authorization.

We have previously reported on biosimilar drug approvals increasing in Canada. Despite the lower cost of biosimilars, patient uptake has not been as significant as some provincial governments would like. For conventional, small molecule pharmaceutical drugs, provincial governments have typically required substitution of the more expensive brand name drug with a less expensive (bioequivalent) generic drug. This practice of mandatory substitution was not initially extended to biosimilars. Biosimilars were relatively new, so there were lingering safety and efficacy concerns, particularly with respect to switching patients already accustomed to the brand name biologic drug. Since the biosimilar is similar, but not bioequivalent, the government formularies took a wait and see approach. In the meantime, provincial drug expenditures increased annually, for a variety of reasons, which created a cost pressure on the government.

Health care providers and patients tend to be cautious, and are not highly motivated to switch from the brand biologic drug to the biosimilar on their own. Most patients would prefer, and in some cases need, to have their choice of drug, the cost of which may be largely paid for by the government or private insurance. For certain drugs, governments have tried to require new patients to start on the biosimilar for at least certain indications, to avoid the switching issue. The rheumatoid-arthritis drug, Remicade (common name: infliximab), is one example where most provinces stopped paying for the drug for new patients for certain indications. The new patients had to accept the biosimilar version of infliximab from the start, or pay out-of-pocket for the brand name drug (very few patients on a government insurance plan are likely to self-fund medications). In 2017, the Quebec provincial government also stopped funding the brand name Remicade for new patients for certain indications. Patients already using Remicade could continue on. Earlier this year, the Quebec Court of Appeal struck down this arrangement, on the basis that the government decision lacked procedural fairness. The government may still eventually move to stop paying, but it is required to first give the drugmaker, Janssen, notice and an opportunity to respond. The Quebec government has, at least temporarily, reinstated coverage for Remicade.

The British Columbia provincial government is now effectively requiring dispensing of certain biosimilar drugs to both new and existing patients, for certain indications. The government will no longer pay for the brand name drug for those indications after November 2019. These drugs include entanercept, infliximab and glargine, for certain indications. Patients that do not switch will have to pay for the drug entirely out-of-pocket, or apply for a discretionary exemption for medical reasons. This change applies to patients with government drug coverage, not other patients that get coverage from private insurance plans.

Using Remicade/infliximab as an example, there have been recent, promising clinical studies where patients switch to biosimilars. However, it is also not difficult to find literature that recommends caution and patient-specific consideration. Brand name companies and biosimilar companies are both spreading their own messages. The brands focus on safety of established treatment and risks of switching. The biosimilar manufacturers emphasize safety of their products, and are pushing for interchangeability.

The British Columbia government is arguably conducting a bit of a science experiment by requiring all patients to switch to biosimilar drugs this year. The government emphasized the cost savings it plans to achieve through requiring the use of biosimilars. To the extent there are patient risks, the government message is essentially requiring patients to plead their case one-by-one or else accept the risks. The success or failure of this approach will have significant implications for other biosimilar drugs.

FDA Issues Discussion Paper on Artificial Intelligence and Machine Learning in Medical Devices

Lynn Tyler

By Lynn C. Tyler[1]

The FDA recently issued a discussion paper and request for feedback titled, “Proposed Regulatory Framework for Modifications to Artificial Intelligence/Machine Learning [AI/ML]-Based Software as a Medical Device.” The challenge AI and ML present to FDA device regulation is straight-forward. The FDA must approve or clear devices as safe and effective, yet some forms of artificial intelligence or machine learning software can adapt and change as they obtain new data or otherwise gain experience. How can the FDA determine a product is safe and effective when the product by its nature is expected to change after the determination is made?

Indeed, the discussion paper concedes that “the traditional paradigm of medical device regulation was not designed for adaptive AI/ML technologies.” In the paper, the FDA proposes to address this challenge by adopting “a new, total product lifecycle (TPLC) regulatory approach that facilitates a rapid cycle of product improvement and allows these devices to continually improve while providing effective safeguards.”

The FDA’s proposed approach is summarized in the following graphic:

Describing this graphic, the paper states that the FDA’s proposed TPLC approach is based on the following general principles that balance the benefits and risks, and provide access to safe and effective AI/MLbased SaMD:

  1. Establish clear expectations on quality systems and good ML practices (GMLP);
  2. Conduct premarket review for those SaMDs that require premarket submission to demonstrate reasonable assurance of safety and effectiveness and establish clear expectations for manufacturers of AI/ML-based SaMD to continually manage patient risks throughout the lifecycle;
  3. Expect manufacturers to monitor the AI/ML device and incorporate a risk management approach and other approaches outlined in the “Deciding When to Submit a 510(k) for a Software Change to an Existing Device” Guidance in development, validation, and execution of the algorithm changes; and
  4. Enable increased transparency to users and the FDA using postmarket real-world performance reporting for maintaining continued assurance of safety and effectiveness.

The discussion paper is careful to explain that it is just a baby-step in the direction of formulating a regulatory framework for AI/ML-based SaMD: “This discussion paper describes an innovative approach that may require additional statutory authority to implement fully. The proposed framework is being issued for discussion purposes only and is not a draft guidance. This document is … instead meant to seek early input from groups and individuals outside the Agency prior to development of a draft guidance.” Throughout the paper, the FDA sprinkled specific questions on which it seeks outside input.

The FDA has requested comments by June 3, 2019. Given the complexity of the issues, it would not be surprising to see the FDA extend this date.

[1] Lynn Tyler is a partner and registered patent attorney in the Indianapolis office of Barnes & Thornburg LLP. He concentrates his practice in patent litigation and FDA counseling.

Amgen v. Samsung Bioepis – More Issues with the BPCIA’s Patent Dance

Lynn Tyler

By Lynn C. Tyler[1]

At the first seminar I attended after the enactment of the Biosimilar Price Competition and Innovation Act (BPCIA), one of the panelist’s described the BPCIA as “the statute most likely to be repealed or amended.” Although that prediction has not proven true, the underlying premise remains accurate. The statute is chock full of ambiguities and is a litigator’s dream or nightmare, depending on your perspective.

Amgen, Inc. v. Samsung Bioepis[2] is a recently-filed case that may explore more issues under the BPCIA. Amgen alleged that Samsung Bioepis (“Bioepis”) filed an abbreviated Biologics License Application (aBLA) under the BPCIA for Amgen’s ENBREL® (etanercept).[3] Bioepis thereby allegedly infringed five patents, three owned by Immunex, an Amgen subsidiary, and two owned by Roche and exclusively licensed to Immunex.[4] Bioepis did not provide Amgen the confidential information (its aBLA and manufacturing process) described by the BPCIA at 42 U.S.C. § 262(l)(2). In the first, and so far only, Supreme Court case to address the BPCIA, the Court held that the failure to disclose that information cannot be remedied by injunction. Sandoz, Inc. v. Amgen, Inc., 137 S. Ct. 1664, 1691, 198 L. Ed. 2d 114, 127 (2017).

Amgen further alleged that on April 25, 2019, the FDA had approved Bioepis’s aBLA but Bioepis had not provided the 180-day notice of commercial marketing (either before or after the approval) required by § 262(l)(8)(A). Based on these facts, in Count I of its Complaint Amgen alleges:

  1. On information and belief, Bioepis is prepared imminently to begin to use, offer, [sic] for sale, and sell in the United States, and import into the United States, its etanercept biosimilar product.
  2. Immunex/AML and Roche are entitled to injunctive relief preventing Bioepis from commercial marketing consistent with the notice period provided by that statute.

Earlier, to further support its right to an injunction, Amgen alleged:

  1. Based on Bioepis’s failure to provide Immunex with the application and information required under § 262(l)(2)(A), it is reasonable to infer that Bioepis might not provide notice to Immunex in accordance with § 262(l)(8)(A). Bioepis should be prohibited from beginning commercial marketing of its biosimilar product for at least 180 days from the date Bioepis provides such notice to Immunex.

So, one issue that may be explored is whether these facts will support an injunction against marketing a biosimilar. In other words, is the failure to provide the application and manufacturing process information, coupled with a failure to give pre-approval notice of commercial marketing, sufficient to support an inference that the biosimilar applicant intends to launch the product without ever giving the notice? If not, what further evidence is necessary?

It is unclear from the docket whether Amgen has filed a motion for preliminary injunction. There is no docket entry denominated as such. Entry no. 7 is a sealed letter to the Court which may request such relief. The author confesses insufficient familiarity with practice in the federal courts of New Jersey to know if injunctive relief may be sought by letter. The local rules did not provide a clear answer. The letter could also seek expedited discovery. By the time of a preliminary injunction hearing, Amgen may or may not have additional evidence to support its request for injunctive relief.

Another interesting issue or set of issues will be what happens if Bioepis does launch its biosimilar without giving the 180-day notice. Would an actual launch support an immediate injunction? If not and if Amgen prevails on liability, what damages will result? There is another approved biosimilar for ENBREL®, Sandoz’s ERELZI. It appears Amgen and Sandoz are awaiting the ruling from a bench trial held in September, 2018, before Sandoz decides if it will begin selling ERELZI in the US.[5] The availability of multiple ENBREL® biosimilars could impact Amgen’s ability to recover lost profits, though Amgen may argue that none of them is a non-infringing alternative and/or a market share analysis based on State Indus., Inc. v. Mor-Flo Indus., Inc.[6] may still be possible. If lost profits are not available, could an at-risk launch be a profitable strategy? Will enhanced damages and/or attorneys’ fees be available?

Stay tuned!

[1] Lynn Tyler is a partner and registered patent attorney in the Indianapolis office of Barnes & Thornburg LLP. He concentrates his practice in patent litigation and FDA counseling.

[2] 2:19-cv-117555-CCC-MF (D.N.J. Apr. 30, 2019).

[3] ENBREL® is approved for rheumatoid arthritis, polyarticular juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, and plaque psoriasis.

[4] This article refers to the plaintiffs collectively as “Amgen.”

[5] Immunex Corp. v. Sandoz, Inc., Case No. 2:16-cv-01118-CCC-MF (D.N.J.).

[6] 883 F.2d 1573, 1577-78 (Fed. Cir., 1989), cert. denied, 493 U.S. 1022 (1990).

FTC v. Shire ViroPharma: Start with a Bang, Finish with a Whimper

Lynn TylerBy Lynn C. Tyler

With considerable publicity, in February 2017, the Federal Trade Commission (“FTC) filed a complaint against Shire ViroPharma, Inc. (“Shire”) in Delaware, alleging that Shire had committed an unfair method of competition in violation of § 13(b) of the FTC Act, 15 U.S.C. § 53(b) (“the Act”).  The basis for the allegations was that Shire had abused the FDA’s citizen petition process and filed other papers in an effort to delay competition for Vancocin, a highly-profitable drug for treating a life-threatening gastrointestinal infection.  The district court dismissed the complaint, however, because the FTC did not allege Shire was currently violating the Act or was about to violate the Act. The FTC appealed to the Third Circuit.

Shire acquired Vancocin in 2004. From then until 2009, Vancocin was responsible for all of Shire’s net revenue and accounted for 53% of Vancocin’s net revenue in 2011.  Almost immediately, Shire became concerned that the FDA would allow the approval of a generic version of Vancocin based on in vitro dissolution testing and in vivo pharmacokinetic studies (the original basis for approval), rather than traditional bioequivalence studies.  In November 2005, Shire hired a consultant who confirmed its fears and recommended filing a citizens’ petition supported by clinical data.  In February 2006, the FDA advised a generic manufacturer that it could show bioequivalence for Vancocin by in vitro dissolution testing.  The FDA also shared this guidance with other generic manufacturers.  In March 2007, the first generic manufacturer submitted its ANDA for Vancocin and two other generic manufacturers followed suit later that year.

Between March 2006 and April 2012, Shire submitted forty-three (43!) filings to the FDA and instituted three federal court proceedings.  The FTC alleged these filings were made to delay the approval of generic Vancocin capsules by convincing the FDA to require ANDA applicants to conduct in vivo clinical endpoint studies.  Shire’s FDA filings included a citizen’s petition and amendments thereto, as well as public comments on other manufacturers’ ANDAs.

In April 2012, the FDA denied Shire’s citizen’s petition and also approved three generic versions of Vancocin.  Within a few months, Shire lost 70% of its sales of Vancocin.  Shire divested itself of Vancocin in 2014.  Nonetheless, as noted above it was not until February 2017 that FTC filed the suit over Shire’s actions, alleging that the filings were shams and thus not protected by the First Amendment.

Section 13(b) of the FTC Act authorizes the FTC to seek relief against an unfair method of competition when the defendant “is violating” or “is about to violate” the Act.  The Third Circuit began its analysis by considering whether § 13(b) is jurisdictional. [2]  Citing Arbaugh v. Y&H Corp., 546 U.S. 500, 503 (2006), the Third Circuit wrote that the Supreme Court “has instructed us to assume that statutory limitations are non-jurisdictional unless Congress provides otherwise.” [3] The court saw no indicia in § 13(b) suggesting that Congress intended to “rank a statutory limitation … as jurisdictional.” [4]  Rather, the FTC’s claim arose under a law of the United States and thus fell within the district court’s original jurisdiction under 28 U.S.C. § 1331. [5]

Nonetheless, the Third Circuit affirmed the district court’s dismissal of the FTC’s complaint.  After noting that § 13(b) was added to the FTC Act to allow the FTC to seek immediate relief in court, rather than having to slog through its own slow administrative process, the court wrote:

Section 13(b) requires that the FTC have reason to believe a wrongdoer “is violating” or “is about to violate” the law. Id. § 53(b)(1). We conclude that this language is unambiguous; it prohibits existing or impending conduct. Simply put, Section 13(b) does not permit the FTC to bring a claim based on long-past conduct without some evidence that the defendant “is” committing or “is about to” commit another violation. [6]

The court added that § 13(b)’s history reinforced the plain language. The section was not added to afford the FTC a remedy against hypothetical conduct, but rather to afford immediate access to the enforcement powers of the courts pending the completion of its own administrative process. “In short, we reject the FTC’s contention that Section 13(b)’s ‘is violating’ or ‘is about to violate’ language can be satisfied by showing a violation in the distant past and a vague and generalized likelihood of recurrent conduct.” [7]

It remains to be seen whether the FTC will seek rehearing en banc or file a petition for certiorari with the Supreme Court. Otherwise, it appears that if the FTC wants to challenge alleged abuse of the FDA’s citizen’s petition process, it will have to either pursue its own administrative process first and/or go to court while the alleged abuse is ongoing, not years after it has been completed.

[1] Lynn Tyler is a partner and registered patent attorney in the Indianapolis office of Barnes & Thornburg LLP. He is chair of the firm’s Food, Drug & Device Group and concentrates his practice in intellectual property litigation and FDA counseling.

[2] FTC v. Shire ViroPharma, Inc., Case No. 18-1807, 2019 WL 908577, *4 (3d Cir. Feb. 24, 2019).

[3] Id.

[4] Id. at *5.

[5] Id.

[6] Id. at *7.

[7] Id. at *9.

What’s In a Name? Apparently Quite a Bit

Lynn Tyler By Lynn C. Tyler [1]

A rose by any other name may smell as sweet, but will a biosimilar by another name sell as well? That appears to be the question in light of the controversy FDA’s proposal for naming biosimilars has generated. The controversy is likely to continue after the FDA recently issued an “Update” [2] to its 2017 draft guidance on biologic product naming.
The Update announces three main points. In the 2017 guidance on naming biosimilars, FDA stated that it intended to add an arbitrary four-letter suffix to the names of the reference (originator) products and all biosimilars. The first point of the Update is that no longer intends to modify the proper names of biological products that were licensed under the PHS Act without an FDA-designated suffix in their proper names. In other words, FDA will not add the arbitrary four-letter suffix to the proper names of previously-licensed biologics. FDA also does not intend to apply the naming convention to the proper names of transition biological products. Transition products are defined as biological products that are the subject of an approved application under § 505 of the FD&C Act as of March 23, 2020, that will be deemed to be a biologics license application (BLA) under § 351 of the PHS Act on March 23, 2020.
Second, vaccines were originally subject to the 2017 draft guidance and would have included the arbitrary four-letter suffix. The Update states that FDA is reconsidering that approach and evaluating whether current systems are sufficient to ensure safe dispensing and pharmacovigilance.
Third, FDA has decided to apply the arbitrary four-letter suffix to biosimilars designated as interchangeable, stating that it believes a distinguishing suffix is necessary to achieve adequate pharmacovigilance for these products.
FDA does not intend to finalize the Update itself. Rather, interested parties are encouraged to submit comments on the Update to the docket on the draft guidance, Nonproprietary Naming of Biological Products, FDA-2013-D-153. The comment period expires on May 7, 2019.

[1] Lynn Tyler is a partner and registered patent attorney in the Indianapolis office of Barnes & Thornburg LLP. He is chair of the firm’s Food, Drug & Device Group and concentrates his practice in intellectual property litigation and FDA counseling.
[2] Guidance for Industry: Nonproprietary Naming of Biological Products, March 2019.

FDA Commissioner’s Statement on Plans for the Orange Book

O'Quinn_Ryan_Medium.jpg                                    Cyr_Shana_Medium.jpg

By Ryan P. O’Quinn, Ph.D., J.D.[1], and Shana K. Cyr, Ph.D., J.D.[2]

After dropping hints in recent months that he intended to use creative policy efforts to promote competition in the American pharmaceutical industry, U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb issued an official statement on January 30, 2019,[3] setting a policy agenda for the coming year that includes enhancing the utility of the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations Publication, known as the “Orange Book.”

The Commissioner noted “the important benefits of a modern, up-to-date Orange Book” for patients, healthcare providers, and generic drug developers.[4]  To that end, he unveiled “several new steps” that the FDA would be putting in place to ensure that the Orange Book “provides as much utility as possible to aid manufacturers as they allocate resources towards the development of new generic drug products.”[5]

I. January 2019 Draft Guidance

The first of these Orange Book-related actions is new draft guidance from the FDA, entitled “Marketing Status Notifications Under Section 506I of the Federal Food, Drug, and Cosmetic Act; Content and Format.”[6]  This January 2019 draft guidance stemmed from the FDA Reauthorization Act of 2017, or FDARA, which required NDA and ANDA holders for the first time to provide the FDA with (1) written notice 180 days before withdrawing a drug from sale; (2) written notice when an FDA-approved drug would not be available for sale within 180 days of FDA approval; and (3) a one-time report for all NDA and ANDA holders by February 14, 2018, stating whether the holder’s drug(s) in the “active” section of the Orange Book were available for sale, had been withdrawn from sale, or were never available for sale.[7]

The draft guidance provided the FDA’s current thinking on the definition of “withdrawn from sale” for purposes of the FDARA reporting requirements.  Citing a 1989 proposed rule amending the ANDA regulations, the agency described its policy regarding withdrawal as “if the applicant has ceased its own distribution of the drug, whether or not it has ordered recall of previously distributed lots of the drug.  A routine, temporary interruption in the supply of a drug product would not be considered a withdrawal from sale, however, unless triggered by safety or effectiveness concerns.”[8]  Withdrawal is interpreted to include “any decision to discontinue marketing of [that] product,” whether permanent or not.[9]  Notification to the FDA that the product is not being marketed by the NDA or ANDA holder is considered a withdrawal.[10]  The draft guidance also provides preferred formats for the written notifications for withdrawal from sale and unavailability for sale.[11]

The FDA intends to provide enhanced transparency and accuracy in the Orange Book with regard to the drugs for which generic competition is lacking.[12]  For drugs that are no longer truly “active,” they can be moved to the “discontinued” section of the Orange Book, or if removed from sale due to lack of safety or effectiveness, taken out of the Orange Book altogether.[13]  Without these notices, the value of the information Orange Book would decay rather quickly;  the FDA expects to receive approximately 523 withdrawal notices per year, and 30 “unavailable for sale” notices per year under the FDARA reporting requirements.[14]  The FDA also received 10,319 of the mandated one-time reports due in February 2018.[15]

Commissioner Gottlieb also highlighted the importance of the written notices and the updated Orange Book to FDA policymaking, noting that the information “helps us also better understand circumstances where generic medicines are being approved, but not marketed so that we can better consider any policy reasons why this may be occurring.”[16]  This echoed the Commissioner’s remarks on January 8, 2019, at the annual J.P. Morgan Healthcare Conference in San Francisco, CA that “[o]ne of my growing concerns [is] we’re approving a lot of drugs, but not seeing a commensurate number of drugs launched.”[17], [18]  In conjunction with the U.S. Patent and Trademark Office, Commissioner Gottlieb stated that the FDA would look at updating the Orange Book so that the two agencies could determine “how we can facilitate more generic drug launches, not just approvals.”[19]

II. Two More Expected Draft Guidances in 2019

The FDA plans to issue two more Orange Book-related FDA draft guidance in the coming months.  The first expected draft guidance will be directed to industry, and will describe how the FDA evaluates therapeutic equivalence and assigns therapeutic equivalence codes, which appear in the Orange Book for a given drug product.[20]  According to the Commissioner, the intended draft guidance will “increase transparency” around the agency’s policies concerning requests for therapeutic equivalence, including those via the 505(b)(2) pathway.[21]  The Statement hints that “the agency is developing policy for how manufacturers can acquire a therapeutic equivalence rating to allow for full substitutability” for products developed via the 505(b)(2) pathway, and that this could provide more competition for “harder-to-copy complex drugs.”[22]

The second expected future draft guidance sounds like it will be a resource for applicants and approved application holders from the FDA on how to use the Orange Book, including answers to “commonly asked questions.”[23]

III.  Expected Request for Public Comments

In addition, the FDA will solicit public comments on the Orange Book, how it is used, and how it can be improved, including input on which patents should be listed for a given drug product.[24]  The Commissioner specifically identified products that have been approved in conjunction with a digital application, such as a mobile app or other software product, stating that the FDA will seek public comments on whether patents involving these applications should be listed in the Orange Book for the associated drug products.[25]  According to the Commissioner, “listing such patents could help generic developers to assess all intellectual property assertions related to the product that could potentially block generic entry and determine its approach to these patents.”[26]  In turn, this listing “could allow generic competitors to better assess which products they choose to develop and provide better clarity as to the path to market.”[27]

The Commissioner’s statement closes with a reinforcement of the FDA’s stated goal of “enhanced competition,” and confirms that these Orange Book initiatives are only the beginning of a series of transparency-related initiatives relating to drug policy over the next year.  Stakeholders in the pharmaceutical industry should monitor these developments and seek legal counsel as appropriate.

[1] Dr. O’Quinn is an associate in the Reston, Virginia office of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.

[2] Dr. Cyr is a partner in the Reston, Virginia office of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.

[3] Scott Gottlieb, M.D., “Statement from FDA Commissioner Scott Gottlieb, M.D., on the agency’s efforts to enhance the utility of the Orange Book to foster drug competition,” Jan. 30, 2019, (“Statement”), available at

[4] Statement, supra note 3.

[5] Id.

[6] “Marketing Status Notifications Under Section 506I of the Federal Food, Drug, and Cosmetic Act; Content and Format,” Draft Guidance for Industry (January 2019) (“Draft Guidance”), available at


[7] See Statement, supra note 3; see also Draft Guidance, supra note 6, at 2:56-68; FDA Reauthorization Act of 2017, codified in relevant part at 21 U.S.C. § 356i (2018).

[8] Draft Guidance, supra note 6, at 3:73-80 (quoting “Abbreviated New Drug Application Regulations,” proposed rule, 54 Fed. Reg. 28872, 28907 (July 10, 1989)).

[9] Id. at 3:70-72 (quoting “Abbreviated New Drug Application Regulations,” final rule, 57 Fed. Reg. 17950,17956 (Apr. 28, 1992) (alteration in original)).

[10] Id. at 3:82-83 (citing Orange Book Preface (38th ed., 2018) at xxiv).

[11] Id. 3:96 – 5:143.

[12] Statement, supra note 3.

[13] See Draft Guidance, supra note 6, at 3:85-90.

[14] Marketing Status Notifications Under Section 506I of the Federal Food, Drug, and Cosmetic Act; Content and Format; Draft Guidance for Industry; Availability, 84 Fed. Reg. 749, 751-52 (Jan. 31, 2019).

[15] Id.

[16] Statement, supra note 3.


[18] See Alaric DeArment, “In JPM interview, Gottlieb outlines FDA efforts to promote biopharma competition,” MedCity News, Jan. 8, 2019, 5:30 PM, available at

[19] See id.

[20] Statement, supra note 3.

[21] Id.

[22] Id.

[23] Id.

[24] Id.

[25] Id.

[26] Id.

[27] Id.

FDA Responds in Teva Pharmaceuticals Suit Alleging Unlawful Interpretation of “First Applicant” Definition under Hatch-Waxman Act

john hamiltonBy John A. Hamilton [1]

On October 17, 2018, generic drug producer Teva Pharmaceuticals (“Teva”) filed a Complaint and Motion for Preliminary Injunction (“PI Motion”) in the US District Court for the District of Columbia. Teva alleges that the US Food and Drug Administration (“FDA”) unlawfully changed its policy regarding eligibility for 180-day marketing exclusivity for generic drugs, potentially irreparably harming Teva’s right to such exclusivity for its generic version of Allergan’s Restasis® (cyclosporine ophthalmic emulsion.) [2] Teva further asserts that it was the first applicant that complied with the Hatch-Waxman Act [3] (“the HWA”) requirements [4] for challenging at least one of the Restasis® patents. [5] FDA responded on November 2, 2018, with a Motion to Dismiss and supporting Memo also opposing Teva’s PI Motion.

Under the HWA, an abbreviated new drug application (“ANDA”) that “contains a [Paragraph IV] certification and is for a drug for which a first applicant has submitted an application containing such a certification,…shall be made effective on the date that is 180 days after the date of the first commercial marketing of the drug (including the commercial marketing of the listed drug) by any first applicant.” [6] A Paragraph IV filing comprises a certification that any patents listed in the FDA “Orange Book” covering the relevant brand-name drug is invalid, unenforceable, or will not be infringed by the generic drug product. The HWA defines the term “first applicant” to mean an applicant that, [i] on the first day on which a substantially complete application containing a [Paragraph IV certification] is submitted for approval of a drug, [ii] submits a substantially complete application that contains and [iii] lawfully maintains’ the certification for the drug. [7] A “first applicant”, however, can forfeit eligibility for exclusivity if “[a]ll of the patents as to which the applicant submitted a certification qualifying it for the 180-day exclusivity period have expired.” [8]

FDA sought comments on HWA 180-day exclusivity issues relating to Restasis® through a July 2015 “Dear Applicant Letter”. [9] With respect to Restasis®, two patents originally listed in the Orange Book expired in 2009 (U.S. Pat. No. 4,839,342, “the ‘342 patent”) and mid-2014 (U.S. Pat. No. 5,474,979, “the ‘979 patent”), respectively. A third patent (U.S. Pat. No. 8,629,111, “the ‘111 patent”), was listed in January 2014. One or more ANDAs or patent amendments containing Paragraph IV certifications to the ‘979 patent were filed after expiration of the ‘342 patent and before listing of the ‘111 patent, potentially qualifying the sponsor(s) as a “first applicant”. However, the ‘979 patent expired before FDA issued an Acknowledgement Letter to any of such applicants, and before any sponsor had the opportunity to provide notice of the Paragraph IV certification. In light of this fact pattern, FDA sought comment on two issues: (1) was each sponsor of a substantially complete ANDA containing a Paragraph IV certification to the not-yet expired second patent eligible “first applicants”, and (2) whether 180-day exclusivity for Restasis® generics forfeited in May 2014 upon expiration of the ‘979 patent, such that no ANDA applicant is eligible.

In a July 13, 2018, letter decision regarding Suboxone® (buprenorphine and naloxone) sublingual film generics (“the Suboxone Letter”), FDA adopted a 180-day exclusivity eligibility determination approach distinct from the previously applied approach. Under the new rationale, exclusivity for certain strengths of generic Suboxone® was forfeited for all applicants. FDA asserted in the Suboxone Letter that its “First Effective” approach to determining 180-day exclusivity prior to enactment of the 2003 Medicare Modernization Act (“the MMA”) that added the “first applicant” definition to the HWA, under which eligibility is found for the first applicant that submits a substantially complete ANDA (amendment or supplement) and makes it “effective” by providing patent notice in a timely manner, is problematic in that a more senior applicant who fails to provide timely notice could lose eligibility if a junior applicant gives notice first. FDA concluded that the “First Effective” approach was inconsistent with the definition of “first applicant” added by the MMA and adopted a new “First Submitted Interpretation” approach. Under the “First Submitted” interpretation, the definition of “first applicant” is read such that element [i] above (the “when” prong) refers to a single specific date on which an application was submitted to qualify its sponsor as a “First Applicant”; whereas the [ii] “submit” and [iii] “lawfully maintain” elements “describe requirements for specific applications submitted on this single fixed date to maintain eligibility for exclusivity. Under this reading of the statute, there can only ever be one “first day on which a substantially complete application containing a paragraph IV certification [or an amendment to a substantially complete application with a paragraph IV certification] is submitted,” regardless of whether the applicant that submits its application (or an amendment or supplement to its application) on that “first day” gives or fails to give timely notice of and/or otherwise lawfully maintains its paragraph IV certification.” [10]

Teva’s Complaint challenges, as the asserted first generic applicant that complied with the HWA’s requirements for challenging at least one of the patents (the ‘111 patent) covering Restasis®, FDA’s revised definition of “first applicant” and ruling depriving Teva of its right to 180-day marketing exclusivity. [11] Teva argues that FDA has violated procedural rules of the Administrative Procedures Act (“the APA”) in two ways. First, it ignores applicants’ “reliance interests” upended by reversing nearly two decades of taking precisely the opposite interpretation to the one announced in the Suboxone Letter. Secondly, it overturned “legislative rules promulgated through the notice-and-comment process without undertaking a new round of notice-and-comment rulemaking.” [12] Teva also argues that FDA’s decision conflicts with the substance of MMA’s text and structure, in that the FDA’s new interpretation writes the requirement to [iii] “lawfully maintain” the Paragraph IV certification out of the HWA.[13] Teva is seeking a declaration that FDA’s Suboxone Letter is “arbitrary, capricious, an abuse of discretion and not in accordance with law,” that Teva’s ANDA is entitled to exclusivity, and to bar the FDA from approving any other ANDAs for Restasis® generics. [14]

On November 2, 2018, FDA responded with a Motion to Dismiss and Memo in support thereof and in opposition to Teva’s PI Motion. FDA argues dismissal under Rue 12(b)(1) is proper because Teva has not pleaded facts that would establish standing or ripeness, nor shown a substantial likelihood of success on the merits. [15] FDA asserts that “Teva has yet to obtain FDA’s approval of its application – or even a “tentative approval” – which is a necessary predicate for Teva’s proposed product to meet the statutory criteria to be eligible for a 180-day exclusivity period” and is, thus “baseless and premature”. [16] FDA suggests that Teva could forfeit eligibility for exclusivity if any of multiple events outlined in the HWA occur, citing failure to obtain tentative ANDA approval within 3o months of filing, and uncertainty that Teva’s successful district court invalidation of the Restasis® patents will survive appeal or that marketing will begin by 75 days after an final invalidity decision. [17] FDA further asserts that the Suboxone Letter interpretation passes muster under the two-step framework established in Chevron U.S.A. v. Natural Resources Defense Council, 467 US 837 (1984) (“Chevron”) and the APA standard of review. FDA argues that the definition of “first applicant”, as amended by the MMA, does not provide for the circumstance in which a Paragraph IV certification is made but notice is not perfected, and thus FDA’s “First Submitted” policy interpretation is not unambiguously foreclosed upon under Chevron step one. [18] With regard to the second step of the Chevron analysis, FDA states that the Suboxone Letter sets forth extensive reasoning and explanation behind FDA’s interpretation that easily passes muster to be granted agency deference. [19]

[1] John Hamilton is a 12-year veteran of the FDA, registered patent attorney and sole proprietor of the Law Office of John A. Hamilton LLC located west of Boston. He concentrates his practice in patent prosecution, IP transactions, and FDA counseling.
[2] Teva Pharmaceuticals USA, Inc.’s Memorandum of Points and Authorities in Support of its Motion for a Preliminary Injunction, October 17, 2018, U.S. District Court for the District of Columbia, 1:18-cv-02394, at p. 1.
[3] Public Law 98-417.
[4] FDC Act § 505(j)(5)(B)(iv).
[5] Teva Memo, at p. 1.
[6] FDC Act § 505(j)(5)(B)(iv)(I).
[7] FDC Act § 505(j)(5)(B)(iv)(II)(bb).
[8] FDC Act § 505(j)(5)(D)(vi), as amended by the 2003 Medicare Modernization Act, which also sets forth events under which a “first applicant” would forfeit its eligibility for 180-day exclusivity, the events including (I) Failure to Market, (II) Withdrawal of Application, (III) Amendment of Certification, (IV) Failure to Obtain Tentative Approval, (V) Agreement with Another Applicant, the Listed Drug Holder, or a Patent Owner, and (VI) Expiration of All Patents.
[9] Docket No. FDA-2015-N-2713.
[10] Suboxone Letter, at pp. 9-10.
[11] Teva Memo, at p. 10.
[12] Id., at p. 25.
[13] Id., at p. 31.
[14] Teva Pharmaceuticals USA, Inc.’s Complaint for Declaratory and Injunctive Relief, October 17, 2018, U.S. District Court for the District of Columbia, 1:18-cv-02394, at p. 4.
[15] FDA Memo, at p. ii.
[16] Id., at pp. 1-2.
[17] Id., at pp. 14-15.
[18] Id., at p. 25.
[19] Id., at p. 26.