KETANJI BROWN JACKSON, United States District Judge.
To incentivize the development and marketing of safe, effective, and affordable drug products, the Federal Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. § 321 et seq., provides a variety of benefits for drug manufacturers, including prescribed periods of "exclusivity" in the marketplace. Drug manufacturers that develop and get approval for drug products containing entirely new chemical entities — i.e., drugs in which "no active ingredient" has ever before been approved for marketing — receive a five-year period of exclusivity for marketing that drug product, during which time the Food and Drug Administration ("the FDA") is prohibited from approving applications for the marketing of certain other drugs. 21 U.S.C. § 355(c)(3)(E)(ii); see also 21 C.F.R. § 314.108(b)(2). Similarly, if a manufacturer submits an application for a drug product that contains a previously approved active ingredient, and if certain "new clinical investigations" are included in that application, that manufacturer can claim a three-year period of marketing exclusivity for the drug in that application. See 21 U.S.C. § 355(c)(3)(E)(iii); see also 21 C.F.R. § 314.108(a), (b)(4). These provisions and others demonstrate Congress's clear intent to establish a statutory and regulatory scheme that provides a substantial reward (marketing exclusivity) for those pharmaceutical companies that either invest in the development of entirely new drug substances or that study existing chemical compounds to demonstrate that they can be safe and effective when prescribed for use in a new way.
In the instant case, Plaintiff Otsuka Pharmaceuticals Company Limited (along with related entities, collectively referred to herein as "Otsuka") asserts that the FDA has improperly truncated its right to marketing exclusivity for its drug Abilify Maintena, which the FDA approved in 2013 for the treatment of schizophrenia in acutely relapsed patients. It is undisputed that Abilify Maintena and a related supplement received three-year periods of exclusivity under the FDCA; in the instant lawsuit, Otsuka maintains that the FDA ran afoul of the FDCA and its own regulations in October of 2015, when it approved Intervenor Alkermes's application for Aristada — a drug product that also treats schizophrenia and is administered in the same way as Abilify Maintena but that contains a different "active moiety" than Otsuka's drug. (See Compl., ECF No. 1, ¶ 52 ("FDA denied Otsuka's citizen petition and approved the Alkermes [new drug application] in derogation of Otsuka['s] exclusivity rights.").) Otsuka's three-count complaint, which it filed against the FDA and other associated official-capacity defendants (referred to herein, collectively, as the "FDA"), specifically asserts that the FDA's approval of Aristada within the three-year windows of exclusivity that were afforded to Abilify Maintena and its supplement violated the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-06, because that approval contravened the FDCA (Count One) and the agency's own regulations (Count Two), and because, without implementing the APA's notice-and-comment procedures, the agency essentially promulgated a new rule regarding
Before this Court at present are three cross-motions for summary judgment that the parties in this matter have filed. (See Pls.' Mot. for Summ. J. ("Pls.' Mot."), ECF No. 24; Defs.' Cross Mot. for Summ. J. ("Defs.' Mot."), ECF No. 26; Intervenor-Defs.' Mot. for Summ. J. ("Alkermes's Mot."), ECF No. 27.) Each motion first addresses a question of statutory interpretation regarding the meaning of the applicable exclusivity provisions of the FDCA, and in particular, the issue of whether or not the FDA may read that statute and its own regulations to establish an exclusivity bar that extends only to second-in-time applications for a drug with the same "active moiety" as the drug with exclusivity. This Court has applied the legal analysis established in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), and as explained fully below, it concludes that the FDCA does not unambiguously prevent the FDA from determining that the FDCA's three-year exclusivity bar blocks only subsequent applications for drugs with the same active moiety, and that it was not unreasonable for the FDA to have employed that interpretation when it considered the applications at issue here. Similar reasoning compels the Court to reject Otsuka's contention that the FDA violated its own regulations, and Otsuka's notice-and-comment claim also necessarily fails because it is premised on the faulty contention that, when the FDA decided to approve Aristada despite Abilify Maintena's exclusivity, the agency thereby amended a regulation that unambiguously required the opposite result. Consequently, the summary judgment motions that the FDA and Alkermes have filed will be
Originally enacted in 1938, the FDCA "governs the pharmaceutical drug approval process for both new and generic drugs." Veloxis Pharm., Inc. v. FDA, 109 F.Supp.3d 104, 107 (D.D.C. 2015) (citation omitted); see also Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 132 S.Ct. 2156, 2163 n.4, 183 L.Ed.2d 153 (2012). In 1984, Congress amended the statute via the Drug Price Competition and Patent Term Restoration Act ("Hatch-Waxman Amendments"), Pub. L. No. 98-417, 98 Stat. 1585, in a manner that strikes a balance between "`two competing interests in the pharmaceutical industry: (1) inducing pioneering research and development of new drugs[,] and (2) enabling competitors to bring low-cost, generic copies of those drugs to market[,]'" Takeda Pharm., U.S.A., Inc. v. Burwell, 78 F.Supp.3d 65, 68 (D.D.C. 2015) (quoting Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353, 1355 (Fed. Cir. 2008)). As mentioned, one critical aspect of this Hatch-Waxman balance is the period of marketing exclusivity that is afforded to pharmaceutical companies under certain circumstances, the primary purpose of which is to incentivize companies to invest substantial time and money into developing useful drug products. See, e.g., Abbott Labs. v. Young, 920 F.2d 984, 985 (D.C. Cir. 1990) (noting that the exclusivity provisions aim, in part, to protect "the interests of drug manufacturers who produce new drugs" by providing "greater incentives for the invention of new products"); see also Abbreviated New Drug Application Regulations; Patent and Exclusivity
The first step on the road to receiving marketing exclusivity is to seek and obtain FDA approval for the marketing of a "new" drug pursuant to a process that is set forth in the U.S. Code and that has been fully explained in several published opinions in this district. See, e.g., Takeda Pharm., 78 F.Supp.3d at 71-72 (discussing 21 U.S.C. § 355); see also Ferring Pharm., Inc. v. Burwell, 169 F.Supp.3d 199, 203-04 (D.D.C. 2016) (same).
Hatch-Waxman's subsection 505(b)(1) provides a detailed list of what a full NDA must include. See 21 U.S.C. § 355(b)(1). The only NDA requirement that is relevant to the instant case is located in subdivision (A): the application must include "full reports of investigations which have been made to show whether or not such drug is safe for use and whether such drug is effective in use[.]" 21 U.S.C. § 355(b)(1)(A); see also Warner-Lambert Co. v. Shalala, 202 F.3d 326, 327 (D.C. Cir. 2000).
The Section 505(b)(2) NDA pathway relates to a subset of new drug applications: those that are submitted "for a drug for which the investigations described in [subsection 505(b)(1)(A)] and relied upon by the applicant for approval of the application were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use[.]" 21 U.S.C. § 355(b)(2); see also Ferring Pharm., 169 F.Supp.3d at 203-04. A Section 505(b)(2) NDA applicant must include certain patent-related certifications "with respect to each patent which claims the drug for which such investigations were conducted or which claims a use for such drug for which the applicant is seeking approval[.]" 21 U.S.C. § 355(b)(2)(A). Thus, so long as the requisite patent certifications are provided, Section 505(b)(2) NDA applicants may discharge their duty to demonstrate the safety and efficacy of the drug for which they seek approval by relying upon investigations they did not conduct or have not licensed (hereinafter "unoriginal" investigations), which can include "clinical studies that were previously
Once a drug application is submitted to the FDA pursuant to the full NDA or Section 505(b)(2) NDA pathways and the agency approves it, the FDCA's separate exclusivity provisions — which are set forth and discussed at length infra Part III.A — can apply automatically to prevent the FDA from approving subsequent drug products for a specified number of years. See, e.g., 21 U.S.C. § 355(c)(3)(E)(ii)-(iv) (creating and demarcating five-year and three-year exclusivities). Notably, as explained below, the statutory exclusivity provisions specifically address the circumstances under which an approved new drug is entitled to exclusivity, as well as the circumstances under which subsequent products are to be deemed barred by that exclusivity. Thus, the FDCA itself delineates the scope of an approved drug product's exclusivity benefit.
In 2002, Otsuka submitted, and the FDA approved, a drug application for Abilify Tablets, an orally administered drug for the treatment of several mental disorders, most notably schizophrenia. (FDA Decision Rejecting Otsuka's Exclusivity Petition ("FDA Decision"), Ex. A to Compl., ECF No. 1-2, at 14-15; Abilify Tablet Original Approval Letter, AR 000373.)
Otsuka's five-year exclusivity period for Abilify Tablets has long since come and gone. The events giving rise to the exclusivities in question here took place in February of 2013, when the FDA approved an application for another Otsuka drug — Abilify Maintena — which has aripiprazole as its active moiety and active ingredient, just like Abilify Tablets. (See FDA Decision at 16; Abilify Maintena Approval Letter, AR 000487; Abilify Maintena Exclusivity Summary, id. 000600-01.) Abilify Maintena's novelty was that it is administered through extended-release injectable suspension rather than orally. (FDA Decision at 16; Abilify Maintena Approval Letter, AR 000487.) Otsuka established the efficacy of Abilify Maintena partly "on the basis of efficacy data from trials with the oral formulation of aripiprazole" (Abilify Maintena Original Labeling, AR 000530), and it also sponsored "new clinical investigations[,]" 21 U.S.C. § 355(c)(3)(E)(iii), without which the FDA would not have approved the drug for marketing (see Abilify Maintena Exclusivity Summary, AR 000602-05).
Thereafter, on December 5, 2014, the FDA approved an application supplement, which is also known as a "supplemental new drug application," for Abilify Maintena. (See Abilify Maintena Supplement Approval Letter, AR 000607-611; FDA Decision at 16 & n.55.) An application supplement is a filing that updates an already approved application in a new way, see 21 C.F.R. § 314.70 — e.g., with a different indication for the drug. See AstraZeneca Pharm. LP v. FDA, 713 F.3d 1134, 1136 (D.C. Cir. 2013); ViroPharma, Inc. v. Hamburg, 898 F.Supp.2d 1, 7 (D.D.C. 2012); Lietzan, supra, at 141-42. Pursuant to such a supplement, Otsuka updated its application for Abilify Maintena with "the results of a controlled clinical study treating adult patients with schizophrenia experiencing an acute relapse" (FDA Decision at 16 n.55 (internal quotation marks omitted)). And per what this Memorandum Opinion calls "romanette iv," Otsuka's application supplement received a separate three-year exclusivity period analogous to the one romanette iii provides, see 21 U.S.C. § 355(c)(3)(E)(iv); it is also undisputed that Otsuka's supplement was entitled to that exclusivity. (See Pls.' Mem. at 9-10; Defs.' Mem. at
What is at issue in the instant case is the scope of the exclusivities that were conferred to Abilify Maintena and its supplement by statute; the reach of the exclusivity benefit became a point of contention when, late in 2014, Alkermes submitted to the FDA a Section 505(b)(2) NDA for its drug Aristada. Aristada treats schizophrenia, and it is administered through an extended-release injectable suspension formula, like Abilify Maintena. (See Aristada Approval Letter, AR 001217; FDA Decision at 16.) However, Aristada's chemical structure differs from the Abilify line of drugs. Aristada's active ingredient is aripiprazole lauroxil — a substance that metabolizes in the body into N-hydroxymethyl aripiprazole, which is Aristada's active moiety. (See Active Moiety Determination For Aripiprazole Lauroxil, AR 000665-67, 000670; Pls.' Mem. at 16 n.7 (disclaiming any challenge to the FDA's determination on these points).) Furthermore, although some of the unoriginal investigations that Alkermes provided to establish the safety and effectiveness of Aristada were studies that Otsuka had sponsored with respect to Abilify Tablets (see FDA Decision at 17 ("The 505(b)(2) NDA for Aristada relied for approval, in part, on the [FDA's] finding of safety and effectiveness for the listed drug, Abilify (aripiprazole) Tablets[.]"); Memorandum: Division Director Summary Review of Aristada ("Division Director Review"), AR 001177 (same)), Alkermes did not rely on the new clinical investigations that Otsuka had undertaken with respect to Abilify Maintena. Instead, Alkermes conducted and submitted its own original studies to support the Section 505(b)(2) NDA for Aristada. (See FDA Decision at 17; Division Director Review, AR 001177 (observing that the FDA's "previous finding of safety and efficacy from oral aripiprazole tablets was considered as evidence," as well as "pharmacokinetic evidence from [Alkermes's] studies that demonstrate[d] similar serum concentrations for oral aripiprazole given daily at approved doses and aripiprazole lauroxil given monthly at the studied doses").)
Otsuka objected to Alkermes's Section 505(b)(2) drug application for Aristada in a citizen petition that it filed with the FDA on July 13, 2015. (See generally Otsuka's Citizen Petition, AR 000025-44.)
Otsuka's citizen petition maintained that the Aristada application fell within the scope of the bar clauses that pertained to Abilify Maintena's exclusivity periods, and that, thus, Aristada should not be approved. In this regard, Otsuka specifically asserted that Abilify Maintena's "conditions of approval" were the "treatment of schizophrenia using a once-monthly, long-acting injectable formulation of aripiprazole[,]" (Otsuka's Citizen Petition, AR 000033), and that the Aristada application was for Abilify Maintena's conditions of approval because it treated the same condition in a similar way and had relied on the same sort of clinical trials, despite the fact that Aristada and Abilify Maintena have different active ingredients and active moieties (see id. 000030, 000038-39.) Accordingly, and based solely on these allegedly overlapping "conditions of approval," Otsuka maintained that Abilify Maintena's romanette iii exclusivity should bar Aristada. (Id. 000039.) Similarly, Otsuka asserted that the "change" spoken of in romanette iv refers to changes in conditions of approval as addressed in a supplement, and thus, Otsuka argued, the exclusivity afforded to Abilify Maintena's supplement per romanette iv should have also precluded Aristada's approval because Aristada purports to treat schizophrenia in the way described in the supplement. (Id. 000034, 000036-37.)
The FDA disagreed that Aristada was barred. In a detailed letter decision issued on October 5, 2015, the FDA explained that, in its view, the FDCA's exclusivity provisions do not bar a second-in-time drug application if the drug with exclusivity and the drug for which approval is being sought have different active moieties. (See FDA Decision at 12 (explaining that the "FDA interprets [the statute] to mean that, for a single entity drug to be potentially barred by 3-year exclusivity for another single entity drug, the drug must contain the same active moiety as the drug with 3-year exclusivity").) The FDA explained that it interprets the phrase "for the conditions of approval of such drug in the approved subsection (b) application" in romanette iii, 21 U.S.C. § 355(c)(3)(E)(iii) (emphasis added), to mean that the FDA may not approve "a 505(b)(2) NDA for `such drug' (i.e., a drug containing the active moiety [of the drug with exclusivity]) for those same conditions of approval for 3 years after the approval" of the drug with exclusivity. (FDA Decision at 21). Thus, as the FDA reads the statute, "such drug" directs the agency to consider certain defining characteristics of the drug with exclusivity as compared to the drug in the second-in-time application (including the relative active moieties of these drugs), and that only a second-in-time application that relates to a drug with both the same active moiety ("such drug") and the same conditions of approval as the drug with exclusivity will be blocked. (See, e.g., id. at 21-22 (explaining that "any approval of Aristada will not be an approval of `such drug' (a drug containing the active moiety aripiprazole) and therefore will not be for the `conditions of approval of such drug'" in the Abilify Maintena application); see also id. at 21 ("[B]ecause the scope of the
The FDA's response letter applied similar logic to the exclusivity that pertains to supplements under romanette iv. According to the letter, the FDA does not permit active-moiety changes through supplemental new drug applications; thus, "a change approved in a supplement must [necessarily] be a change in conditions of approval for the same drug (active moiety) approved in the original NDA." (Id. at 13); see also Letter from Janet Woodcock, M.D., Director, CDER, FDA to William H. Carson, Otsuka and Ralph S. Tyler, Venable LLP, AR 000353 & n.43; Guidance for Industry — Submitting Separate Marketing Applications and Clinical Data for Purposes of Assessing User Fees, id. 001593; Otsuka's Citizen Petition, id. 000034 (agreeing that the "change referred to in [romanette iv] is simply a change in the conditions of approval" (internal quotation marks and footnote omitted).) As a result, the FDA concluded that a second-in-time application is only barred as being for "a change approved in [a] supplement" if the second-in-time application pertains to a drug that has the same active moiety as the drug that was the subject of the approved supplemental application. (FDA Decision at 13.) And based on the undisputed fact that Abilify Maintena and Aristada do not have the same active moiety, the FDA concluded that the Abilify Maintena supplement's exclusivity period did not bar the approval of a second-in-time application for Alkermes's Aristada. (See id. at 21.)
On October 15, 2015, Otsuka filed a complaint against the FDA in this Court, claiming that the agency's decision to approve Aristada violates the APA in three ways. First, Otsuka argues that the FDA "severely misconstrued the three-year exclusivity provisions" of the FDCA (Compl. ¶ 55), and thereby reached a conclusion with respect to the scope of Abilify Maintena's exclusivities that was arbitrary and capricious and "directly contrary to law" (id. ¶ 59). Second and similarly, Otsuka asserts that the FDA's decision arbitrarily and capriciously contradicted the agency's implementing regulations. (See id. ¶¶ 60-64.) Third and finally, Otsuka maintains that the FDA's decision to approve Aristada required notice and comment, because the agency effectively "amended" the terms of its exclusivity-related regulations by creating an inconsistent rule of future applicability. (See id. ¶¶ 65-74.)
This Court permitted Alkermes to intervene in the litigation on October 26, 2015 (see Order, ECF No. 11), after which Otsuka moved for summary judgment (see Pls.' Mot.; Pls.' Mem.). The FDA filed a brief in opposition and simultaneously moved for summary judgment in its favor. (See Defs.' Mot.; Defs.' Mem.) And, thereafter, Alkermes filed its own motion for summary judgment, agreeing with the FDA's position. (See Alkermes's Mot.; Alkermes's Mem.) This Court held a hearing regarding these motions on January 7, 2016, and took each of the cross-motions for summary judgment under advisement.
Although Federal Rule of Civil Procedure 56 provides the ordinary summary judgment standard, it is well established that, in cases "involving review of a final agency action[,] ... the standard set forth in [Rule 56] does not apply because of the limited role of a court in reviewing the administrative record." ViroPharma, Inc. v. Hamburg, 916 F.Supp.2d 76, 79 (D.D.C. 2013) (internal quotation marks omitted) (quoting Sierra Club v. Mainella, 459 F.Supp.2d 76, 89 (D.D.C. 2006)). The Court's function in administrative-law cases is solely "to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did." Id. (internal quotation marks and citation omitted). Moreover, as applicable here, the APA permits the Court to set aside agency action "only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Zevallos v. Obama, 793 F.3d 106, 112 (D.C. Cir. 2015) (internal quotation marks and citations omitted); see also 5 U.S.C. § 706(2)(A).
It is routine in this jurisdiction to analyze APA claims that arise out of the FDA's letter-decision interpretations of the FDCA under the familiar two-step framework of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), which applies to "an agency's interpretation of a statute that it administers[,]" W. Minn. Mun. Power Agency. v. FERC, 806 F.3d 588, 591 (D.C. Cir. 2015). See AstraZeneca Pharm., 713 F.3d at 1139 (applying Chevron to an FDA statutory interpretation contained in a letter decision); Mylan Labs., Inc. v. Thompson, 389 F.3d 1272, 1279-80 (D.C. Cir. 2004) (same, collecting cases). Step One directs that, if "Congress has directly spoken to the precise question at issue," the court must give effect to that "unambiguously expressed intent," Nat'l Treasury Emps. Union v. Fed. Labor Relations Auth., 414 F.3d 50, 57 (D.C. Cir. 2005) (internal quotation marks omitted) (quoting Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778), and the question is not whether the pertinent statutory terms are "in some abstract sense, ambiguous, but rather whether, read in context and using the traditional tools of statutory construction," the terms unambiguously mean what the party claiming victory at Step One says they mean. Cal. Indep. Sys. Operator Corp. v. FERC, 372 F.3d 395, 400 (D.C. Cir. 2004) (citation omitted); see also Sierra Club v. EPA, 551 F.3d 1019, 1027 (D.C. Cir. 2008) (explaining that the tools used to evaluate statutory provisions include an examination of the provision in its full context and, as appropriate, references to legislative history).
If the statute at issue "can be read more than one way" and thus is ambiguous, AFL-CIO v. FEC, 333 F.3d 168, 173 (D.C. Cir. 2003) (citation omitted), or if the statute is "silent" regarding the relevant question, see Van Hollen, Jr. v. FEC, 811 F.3d 486, 495 (D.C. Cir. 2016), then the Court proceeds to Step Two. At Step Two, the statutory ambiguity or silence is effectively deemed "`an implicit delegation from Congress to the agency to fill in the statutory gaps.'" Id. at 495 (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) (emphasis omitted)). Consequently, the court must "accept the
The deference framework that the Supreme Court recognized in Auer v. Robbins, 519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997), is also potentially applicable in the instant case, because Otsuka contends that the FDA's approval of Aristada not only contradicts the mandates of the FDCA but also transgresses the boundaries of the agency's own regulations. Under Auer, when an agency interprets "its own ambiguous regulation[s]," courts will defer to that interpretation unless it is "plainly erroneous or inconsistent with the regulation[s][,]" or there "is reason to suspect that the agency's interpretation does not reflect the agency's fair and considered judgment on the matter in question." Christopher, 132 S.Ct. at 2166 (internal quotation marks and citations omitted). Thus, "an agency's interpretation need not be the only possible reading of a regulation — or even the best one — to prevail." Decker v. Nw. Environ. Def. Ctr., 568 U.S. 597, 133 S.Ct. 1326, 1337, 185 L.Ed.2d 447 (2013). And courts have generally concluded that the Auer standard provides for "an even greater degree of deference" to the agency than the standard that Chevron establishes. Conservation Force v. Salazar, 919 F.Supp.2d 85, 91 (D.D.C. 2013) (internal quotation marks omitted) (quoting Consarc Corp. v. U.S. Treasury Dep't, Office of Foreign Assets Control, 71 F.3d 909, 915 (D.C. Cir. 1995)). Be that as it may, the clear corollary of the Auer rule is that deference to the agency's interpretation of its own regulations is not required if the meaning of the regulation is plain. See, e.g., Christensen v. Harris Cty., 529 U.S. 576, 588, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000) (declining to apply Auer deference where the regulation was unambiguous).
Finally, with respect to Otsuka's claim that the FDA violated the APA when it failed to employ notice-and-comment procedures, no special deference standard applies. Instead, whether an agency action necessitates the notice-and-comment process is a legal question that is subject to de novo review. See Mendoza v. Perez, 754 F.3d 1002, 1020 (D.C. Cir. 2014); Nat'l Min. Ass'n v. Jackson, 768 F.Supp.2d 34, 46 (D.D.C. 2011) (citing Cement Kiln Recycling Coal. v. EPA, 493 F.3d 207, 215 (D.C. Cir. 2007)). As a general matter, the agency is permitted to forgo notice-and-comment procedures if its act qualifies as an adjudication (formal or informal), see Blanca Tel. Co. v. FCC, 743 F.3d 860, 867 (D.C. Cir. 2014); Int'l Internship Program v. Napolitano, 718 F.3d 986, 988 (D.C. Cir. 2013)), or if it issues an "interpretative rule" under 5 U.S.C. § 553(b)(A), see Perez v. Mortg. Bankers Ass'n, ___ U.S. ___, 135 S.Ct. 1199, 1204, 191 L.Ed.2d 186 (2015). But other forms of rulemaking (e.g., legislative rulemaking) trigger the notice-and-comment requirements. See, e.g., Ass'n of Flight Attendants-CWA, AFL-CIO v. Huerta, 785 F.3d 710, 716-17 (D.C. Cir. 2015).
Otsuka's APA claims require this Court to evaluate the FDA's analysis regarding the scope of the exclusivity balance that Congress has struck in romanettes iii and iv. See 21 U.S.C. § 355(c)(3)(E)(iii), (iv). In essence, Otsuka maintains that the FDA was plainly prohibited from approving Alkermes's drug Aristada during the relevant time period, and thus the agency's authorization of the marketing of Aristada was arbitrary, capricious, and in violation of the law, because the three-year periods of marketing exclusivity that Abilify Maintena and its supplement received under romanettes iii and iv (and their accompanying regulations) were broad enough to block the approval of subsequent drug applications that have the same "conditions of approval." But the FDA has taken the position that the exclusivity provisions in the FDCA and the agency's regulations only prohibit approval of a subsequent new drug application that pertains to a drug that has the same active moiety as the drug that received exclusivity, regardless of any overlap with respect to the conditions of approval, and so, the FDA argues, because Aristada and Abilify Maintena have different active moieties, the agency was permitted to approve the Aristada NDA within Abilify Maintena's exclusivity periods.
As explained below, this Court has employed the familiar deference principles of Chevron and Auer and has reached several conclusions. First, the Court concludes that the FDCA's terms do not unambiguously preclude the FDA from viewing the exclusivity bar as pertaining only to drugs that contain the same active moiety as the drug with exclusivity, and, in fact, the Court finds that the FDA's interpretation of the FDCA's exclusivity provisions is entirely reasonable. Furthermore, to the extent that the FDA reads its own implementing regulations in the same way as it has interpreted the pertinent statutory provisions, this Court concludes that the agency's reading is not plainly erroneous and is entitled to deference. In this same vein, the Court also finds that the agency's resolution of the regulation's ambiguity through its active-moiety interpretation is not a "de facto" rulemaking, as Otsuka argues. Consequently, the summary judgment motions that the FDA and Alkermes have submitted must be granted; Otsuka's motion for summary judgment must be denied; and Otsuka's claims against the FDA will be dismissed.
As explained, per Chevron, this Court must begin by evaluating whether or not the bar clauses of romanettes iii and iv unambiguously required the FDA to reject the Aristada NDA as barred by Abilify Maintena's exclusivities, and if not, the Court must proceed to determine whether the FDA's interpretation of those statutory provisions as permitting approval of an application concerning a drug with a different active moiety than the drug with exclusivity is reasonable. See Vill. of Barrington, 636 F.3d at 659-60. Otsuka insists that romanettes iii and iv speak unambiguously to the matter of the scope of the exclusivities conferred upon Abilify Maintena, and that, when read along with other statutory provisions related to the submission of drug applications, the text makes crystal clear that the FDA could not approve Alkermes's drug Aristada within three years of the agency's approval of Abilify Maintena and its supplement (see Pls.' Mem. at 21-23). For the reasons that follow, this Court disagrees with Otsuka's assessment.
A careful parsing of the relevant statutory provisions is required in order to
The first part of romanette iii — the previously mentioned "eligibility clause," which is italicized below — establishes which of the many new drug applications that the FDA receives is entitled to claim a three-year period of marketing exclusivity upon approval. The second portion of romanette iii is the previously mentioned "bar clause" (underlined below); this language defines those subsequent new drug applications that are barred or blocked during the exclusivity period and thereby establishes the scope of the exclusivity that the eligibility clause confers. The full text of romanette iii is as follows:
21 U.S.C. § 355(c)(3)(E)(iii) (italics and underlining added). Both clauses of romanette iii mention "an application submitted under subsection (b)," which refers to the full NDAs and Section 505(b)(2) NDAs described in section 505(b) of the Hatch-Waxman Amendments and set forth at 21 U.S.C. § 355(b), see supra Part I.A, and when one recognizes this, romanette iii's directives begin to come into focus. That is, per the text of romanette iii's eligibility clause, three years of marketing exclusivity must be granted if a new drug application submitted per section 505(b) is approved, when two criteria are met: (1) the drug product for which the application was submitted includes an active ingredient that has previously been approved, and (2) the application contains reports of new clinical investigations essential to approval that the applicant itself conducted or sponsored. See 130 Cong. Rec. 24,425 (1984) (statement of Rep. Waxman) ("[A] 3-year period of exclusive market life is afforded to nonnew chemical entities approved after enactment of the bill which have undergone new clinical studies essential to FDA approval."); see also 21 C.F.R. § 314.108(b)(4). If a drug application satisfies these two criteria and is approved, thereby receiving a three-year period of marketing exclusivity, then the statute's bar clause directs the FDA to refrain from approving subsequent (herein called "second-in-time") new drug applications based on two other statutory criteria: (1) the second-in-time drug application must be "for the conditions of approval of such drug," and (2) the second-in-time drug application must rely at least in part upon
Romanette iv, which confers exclusivity for supplemental new drug applications, reflects, and builds upon, this framework:
21 U.S.C. § 355(c)(3)(E)(iv) (footnote omitted) (italics and underlining added). The italicized portion — what this Court will call the "supplement eligibility clause" — plainly grants exclusivity to supplemental new drug applications that update existing drug applications on the basis of new investigations conducted by the applicant. The "supplement bar clause" explains that this exclusivity bars a second-in-time Section 505(b)(2) application if that application is "for a change approved in the supplement[.]" 21 U.S.C. § 355(c)(3)(E)(iv). That is, those later applications are barred if (1) they are for a change approved in the supplement, and (2) the applicant relies on clinical investigations that the applicant did not conduct/sponsor or license.
Significantly for present purposes, the term "active moiety" does not appear on the face of either exclusivity provision, and in this limited sense, Congress obviously has not spoken directly to "the precise question[,]" Chevron, 467 U.S. at 842, 104 S.Ct. 2778, of whether new drug applications for drugs that have a different active moiety than the drug with exclusivity are blocked by the exclusivity benefit that romanettes iii and iv confer. At a different level of abstraction, however, a more substantial question of congressional intent emerges: whether the bar-clause criteria in romanettes iii and iv so unambiguously apply to the Aristada NDA that the FDA had no choice but to deny Alkermes' new drug application on the basis of its prior approval of Abilify Maintena and its supplement. See Vill. of Barrington, 636 F.3d at 659 (observing that Congress may speak directly to the precise question at issue "either by prescribing a precise course of conduct" for the agency or by setting forth a clearly delineated "range of interpretive discretion"); Depomed, Inc. v. U.S. Dep't of Health & Human Servs., 66 F.Supp.3d 217, 228 (D.D.C. 2014) (explaining that the mandate at Chevron Step One is to "give effect to the unambiguously expressed intent of Congress" (internal quotation marks omitted) (quoting Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778)). Put another way, the relevant Step One question is whether the requirements that Congress has listed in the statutory bar clauses — that the blocked application be a Section 505(b)(2) NDA that is "for the conditions of approval of such drug in the approved subsection (b) application[,]" 21 U.S.C. § 355(c)(3)(E)(iii), or one that is "for a
The first clue to the ambiguous nature of the provisions in question is that neither the FDCA's overarching definition section nor the particular section at issue here specifically defines the phrases "conditions of approval of such drug" or "change approved in the supplement." See generally 21 U.S.C. § 321 (FDCA's definition section); id. § 355 (FDCA's section governing "new drugs"). True, standing alone, "the absence of a statutory definition does not render a word ambiguous[,]" Petit, 675 F.3d at 781 (internal quotation marks and citation omitted), but the operative words in these statutory provisions have multiple potential meanings. For example, a "condition" can be (among other things) a "future and uncertain event on which the existence or extent of an obligation or liability depends[,]" or alternatively, a "state of being; an essential quality or status." Black's Law Dictionary 354, 356 (10th ed. 2014). And contextualizing the term in the context of the phrase "conditions of approval" does not help, because that phrase could reasonably be interpreted to mean all sorts of things in the drug-approval context, including the tasks that the FDA tells an applicant must be completed before the application's approval, or the diseases (the "conditions") for which the drug is approved as a treatment, or the particular circumstances that the FDA finds relevant to its determination that a drug should be approved for marketing, such as its method of delivery, the class of patients to whom it is to be delivered, or the nature of the chemical substance involved. Cf. Veloxis Pharm., 109 F.Supp.3d at 120 (observing that the parties "essentially concede[d] that [conditions of approval] is ambiguous" and proceeding to Chevron Step Two).
The phrase "such drug" — as in the "conditions of approval of such drug in the approved subsection (b) application[,]" 21 U.S.C. § 355(c)(3)(E)(iii) (emphasis added) — also has different potential meanings. To be sure, "such, when used as an adjective,... nearly always operates as a reference back to something previously discussed[,]" Takeda Pharm., 78 F.Supp.3d at 99 (internal quotation marks omitted) (citing, inter alia, United States v. Ashurov, 726 F.3d 395, 398-99 (3d Cir. 2013)), but, here, more than one drug is being referenced in the previous part of romanette iii because the text specifically mentions more than one subsection (b) application: there is the application that is "submitted under subsection (b) for a drug" that is presently eligible for exclusivity per the eligibility clause, and there is the application that was previously "approved under subsection (b)" that contained an active ingredient shared by the drug that is eligible for exclusivity. This renders "such drug" ambiguous when one attempts to ascertain what Congress meant when it used the phrase "conditions of approval of such drug."
What is more, it is also unclear from the statutory text what role "such drug" plays
And romanette iv presents similar ambiguities. The bar clause of that statutory provision states that "the Secretary may not make the approval of an application submitted under subsection (b) of this section for a change approved in the supplement[,]" 21 U.S.C. § 355(c)(3)(E)(iv) (emphasis added), but nowhere is the phrase "change approved in the supplement" defined. By their nature, supplements are additive; therefore, "change" likely refers to some new knowledge or utility brought into being via the supplement that is entitled to eligibility. See, e.g., ViroPharma, 898 F.Supp.2d at 7; Merriam-Webster's Collegiate Dictionary 206 (11th ed. 2003) (defining the noun change, inter alia, as "alteration" or "transformation"). But the nature and scope of the relevant change is not patently obvious, and one could imagine that Congress might intend for subsequent drug applications to be blocked under romanette iv only if the second-in-time application involves both the same chemical substance present in the drug product that was initially approved and then supplemented, and also the particular change that was approved in the supplement. Alternatively, the only concern of Congress might be whether the subsequent application involves the same change in circumstances that the approved supplement requested (e.g., where the supplement sought a change in the method of administration of a previously approved drug and the second-in-time application seeks approval for that same new method of administration), and thus, the active moiety or ingredients of the drug in the supplement versus that in the second-in-time application could be considered irrelevant to the application of the bar clause. Notably, the D.C. Circuit has already found analogous supplement-exclusivity language to be "permeated by ambiguities." AstraZeneca Pharm., 713 F.3d at 1139 (considering 21 U.S.C. § 355(j)(5)(F)(iv) and finding ambiguity in the phrase "a change approved in the supplement"). This Court sees no reason to believe that the meaning of "change" in the context of NDA-supplement exclusivity is any clearer.
All this means that, in this Court's reading, the plain text of the bar clauses of romanettes iii and iv "can support [multiple]
Otsuka's arguments to the contrary are wholly unpersuasive. The first questionable aspect of Otsuka's reasoning is its insistence that this Court should not focus so intently on the plain text of the bar clauses themselves, because the clear and unambiguous intent of Congress to prohibit approval of Aristada can be gleaned from reading the bar-clause provisions in conjunction with an entirely different set of statutory criteria with a dissimilar role — i.e., the criteria for successful submission of a Section 505(b)(2) application. (See Pls.' Mem. at 23 (arguing that the exclusivity provisions of romanettes iii and iv "must be interpreted together" with the section of the FDCA that establishes the pathways for submission of a Section 505(b)(2) NDA).) Otsuka never adequately explains how operative phrases in the pertinent provisions that are themselves rife with ambiguity (see supra Part III.A.1) can be deemed unambiguous because of how Congress defined the class of applications that romanettes iii and iv block. Nevertheless, according to Otsuka, romanettes iii and iv "can only be read so that a 505(b)(2) application cannot be approved for the conditions of approval of the drug it relies on to meet the FDCA's drug approval requirements" (Pls.' Mem. at 25-26 (emphasis added)), which, Otsuka says, means that the Aristada application was unambiguously barred because that application (1) relies on aripiprazole-related research that Otsuka submitted to support Abilify Tablets, and (2) has the same conditions of approval as Abilify Maintena (see id. at 31; Pls.' Reply at 9, 16).
To say that Otsuka's reasoning is difficult to follow is an understatement. But as far as this Court can tell, Otsuka's point appears to be that the FDA contravened romanettes iii and iv when it approved Alkermes's Section 505(b)(2) application for Aristada because that application relied upon clinical investigations that had originally supported Abilify Tablets (a drug approved pursuant to section 505(b)(1) of the Hatch-Waxman Amendments), and even though the five-year exclusivity period for Abilify Tablets has long expired, the bar clause related to the three-year exclusivity period for Abilify Maintena was triggered due to the fact that Aristada and Abilify Maintena have the same "conditions of approval" (romanette iii) and same "change" (romanette iv). (See Pls.' Mem. at 21, 25-26; Otsuka's Citizen Petition, AR 000033-34, 000039); see also Koretoff v. Vilsack, 707 F.3d 394, 398 (D.C. Cir. 2013) (per curiam) (explaining that a plaintiff challenging agency action in federal court may only make the "specific argument[s]" it made to the agency below).
This Court fully appreciates the considerable amount of creativity and effort that it took for Otsuka to craft a textual argument that transcends the plain text of romanettes iii and iv in an attempt to deliver Otsuka's desired result. Indeed, it requires considerable planning and foresight to proceed down the tortuous path that Otsuka constructs: it appears that one must, first, notice that romanettes iii and iv establish that the barred applications are of the Section 505(b)(2) variety and accept Otsuka's bald contention that "Sections 505(b)(2) and [romanettes iii & iv]
Only if one does all this, is it even remotely conceivable to reach the conclusion that Congress meant for Aristada to be blocked under romanettes iii and iv based on Alkermes's reliance on investigations that were submitted to support Abilify Tablets (a drug whose exclusivity period has expired), given that Abilify Maintena and Aristada allegedly have the same conditions of approval and notwithstanding the differences in active moiety. (Cf. id. at 30 (heralding "[t]he plain language reading of the statute set forth by Otsuka" as consistent with clear congressional intent because it "reward[s] drug manufacturers, like Otsuka, for engaging in research of already approved drugs (e.g., Abilify tablets) to create new products (e.g., Abilify Maintena)").) And while Otsuka repeatedly, and perhaps even earnestly, asserts that this interpretation of the bar clauses was Congress's obvious intent, never before has this Court seen a more convoluted reading of a statute's text to support the contention that its meaning is plain! Otsuka also seemingly (unwittingly) acknowledges that romanette iii is ambiguous as it struggles to explain what it contends is the only proper reading of the statutory text. (See, e.g., id. at 24-25 (arguing that the term "such drug" in romanette iii is broad enough to "include[] in its scope [both] what FDA has interpreted to mean active moiety and the `drug' in the 505(b)(1) application"(emphasis added)).) And it fails entirely to offer a developed, independent argument regarding romanette iv, presumably because, in Otsuka's view, success on
In the instant morass of text and arguments, at least one thing is abundantly clear: even if Otsuka is correct that romanettes iii and iv can be read to bar Aristada under the reasoning Otsuka puts forward, nothing in Otsuka's briefs or oral argument persuades this Court that the FDA was required to read the statute in this fashion (i.e., that romanettes iii and iv unambiguously direct Otsuka's desired result). Thus, contrary to Otsuka's contentions, these statutory provisions cannot be deemed to provide a single, definitive answer to the key question (for Chevron Step One purposes): "What are the relevant criteria for determining the applicability of the three-year exclusivity period under romanettes iii and iv?" And it certainly cannot be said that Congress's unambiguous response to that question is that the only things that matter are the second-in-time applicant's reliance on another drug and any similarity in the conditions of approval of the drug with exclusivity (or, for that matter, the drug upon which the applicant relied) and the drug in the second-in-time application, as Otsuka insists. This means that Otsuka has failed to demonstrate that its interpretation of romanette iii is the only viable reading of that provision, and its tag-along romanette iv contentions also necessarily fail.
Thus, Otsuka has not shown that "the statute unambiguously forecloses the [agency's] interpretation" in a manner that would preclude this Court's move to Chevron's Step Two. Vill. of Barrington, 636 F.3d at 661 (citation omitted) (emphasis omitted); see also Pharm. Research
Having concluded that romanettes iii and iv are ambiguous regarding the criteria that must be applied when the FDA determines whether or not a second-in-time NDA is barred by the exclusivity those provisions confer, this Court now turns to an evaluation of the reasonableness of the FDA's conclusion that only those second-in-time applications for drugs that have the same active moiety as a drug with exclusivity are barred. At Chevron Step Two, this Court must accept a reasonable agency construction of a statutory provision, even if it "differs from what the [C]ourt believes is the best statutory interpretation." Brand X, 545 U.S. at 980, 125 S.Ct. 2688 (citation omitted). This is so because ambiguity in a statute may properly be considered to be implicit authorization from Congress to the agency to deliver a reasonable interpretation that resolves it, see Van Hollen, Jr., 811 F.3d at 495, and the agency is "the authoritative interpreter (within the limits of reason)" of "an ambiguous statute [it] is charged with administering[.]" Brand X, 545 U.S. at 983, 125 S.Ct. 2688. Thus, at this stage in the review process, this Court's only task is to ensure that the FDA's interpretation is a permissible construction of the text of the statute, see Abbott Labs., 920 F.2d at 988 (explaining that the court must evaluate the "construction's `fit' with the statutory language as well as its conformity to statutory purposes"), and that the FDA has satisfied the strictures of reasoned decision making in selecting that interpretation, see Vill. of Barrington, 636 F.3d at 660 ("At Chevron step two we defer to the agency's permissible interpretation, but only if the agency has offered a reasoned explanation for why it chose that interpretation."
The FDA has determined that the unclear phrase "conditions of approval of such drug in the subsection (b) application" in romanette iii should be read to block only those second-in-time applications that, as a threshold matter, seek marketing approval for a drug that has the same active moiety as the drug with exclusivity. As applied to the instant circumstances, for example, the FDA has concluded that "any approval of Aristada will not be an approval of `such drug' (a drug containing the active moiety aripiprazole) and therefore will not be for the `conditions of approval of such drug'" in the Abilify Maintena application. (FDA Decision at 21-22). Courts employ "all the tools of statutory interpretation" when determining permissibility, Loving v. IRS, 742 F.3d 1013, 1016 (D.C. Cir. 2014) (citation omitted); PDK Labs. Inc. v. DEA, 438 F.3d 1184, 1190 (D.C. Cir. 2006) (noting that "[e]ven at Chevron's second step, we begin with the statute's language" (citing Abbott Labs., 920 F.2d at 988)), and this Court finds that the text and structure of romanettes iii and iv permit the FDA's reading, for several reasons.
First of all, per its plain text, romanette iii's bar clause expressly prohibits approval of subsequent Section 505(b)(2) applications "for the conditions of approval of such drug in the approved subsection (b) application[.]" See 21 U.S.C. § 355(c)(3)(E)(iii) (emphasis added). It is permissible to read "such drug" as referring back to the previous use of "drug" pursuant to the most natural reading of "such," see Takeda Pharm., 78 F.Supp.3d at 99, and the prior use of "drug" (in the eligibility clause) describes the drug product in the application that receives exclusivity. (See FDA Decision at 12 (reading "[t]he phrase `such drug in the approved subsection (b) application' in the bar clause [to] refer[] to the earlier use of the term `drug' in the eligibility clause").) Furthermore, the language of the bar clause clearly permits the agency's contention that the pertinent identifying characteristic of the drug that receives exclusivity is its active moiety. For approximately two decades now, the FDA has focused on the active moiety of a drug — i.e., "the molecule or ion, excluding [certain appended portions of the molecule,] responsible for the physiological or pharmacological action of the drug substance[,]" 1994 Rule, 59 Fed. Reg. at 50,368 (codified at 21 C.F.R. part 314) — to identify and distinguish different drugs, and Otsuka has not pointed to a characteristic that better defines a "drug" and, thus, better articulates the meaning of "such drug" as that phrase appears in romanette iii. Put another way, when a drug application is submitted for approval, the manufacturer must demonstrate that the substance it seeks to market "will have the effect it purports or is represented to have[,]" 21 U.S.C. § 355(d), and it is well established that the active moiety of a drug substance is the feature that makes the drug "go," insofar as it provides the drug substance's "physiological or pharmacological action[.]" 21 C.F.R. § 314.108(a). Thus, Congress's use of the phrase "such drug" is certainly amenable to an interpretation that relates to what the agency has long determined is a drug's distinguishing feature.
It is also clear that, in selecting this interpretation, the FDA plainly
At this point in time, the FDA's construction of romanette iv is the only live legal basis for Otsuka's claim that the FDA's approval of Aristada violates the exclusivity provisions of the FDCA. (See Compl. ¶¶ 51-59; see also Notice, ECF No. 36 (alerting Court that Abilify Maintena's romanette iii exclusivity has expired). In interpreting romanette iv, the FDA agrees with Otsuka that the "changes" in a supplement are adjustments to the conditions of approval of a preexisting NDA (see FDA Decision at 13; Otsuka's Citizen Petition, AR 000034); however, even prior to assessing Aristada's conditions of approval, the FDA determined that the exclusivity that attaches to Abilify Maintena's supplement did not preclude approval of Aristada because, in the FDA's view, a supplement's changes to the conditions of approval relate to a particular drug (i.e., a product with a particular active moiety) and thus, a second-in-time application for a drug with a different active moiety than the initially approved drug was not blocked by romanette iv's exclusivity. (See FDA Decision at 13 ("[A] change approved in a supplement must be a change in conditions of approval for the same drug (active moiety) approved in the original NDA.").) Notably, the text of romanette iv provides fewer concrete hooks for interpretation than romanette iii, and as a result, to a large extent, the FDA's construction of the former is rooted in its conclusions about the latter. That is precisely why this Court considered it necessary to analyze the permissibility and cogency of the "active moiety" interpretation that the FDA has employed with respect to romanette iii as a precursor to its discussion of the FDA's interpretation of romanette iv. See supra Part III.B.1. And in light of that prior analysis, this Court easily concludes that the FDA's interpretation of romanette iv satisfies Chevron's Step Two.
Specifically, as explained above, romanette iii plainly teaches that conditions of approval matter when the FDA determines whether a second-in-time application is barred by exclusivity, and although the phrase "conditions of approval" does not appear in romanette iv, there is no obvious reason why overlapping conditions of approval would be deemed significant when exclusivity is conferred to an
This Court explained above why the FDA's romanette iii reasoning satisfied the requirements of reasoned decisionmaking, and the justifications provided there were also offered to support the FDA's romanette iv reasoning. To begin with, the FDA is an expert agency charged with making precisely these sorts of highly technical determinations, and its interpretation of romanette iv is premised on "the agency's evaluations of scientific data within its area of expertise." Actavis Elizabeth LLC v. FDA, 625 F.3d 760, 766 (D.C. Cir. 2010) (internal quotation marks and citation omitted). What is more, the FDA has seamlessly situated its decision within the history of the Hatch-Waxman Amendments, and, specifically, the problems that Congress sought to solve. That history tells the story of a focused legislative effort to better harmonize innovation and competition, see Takeda Pharm., 78 F.Supp.3d at 68 — i.e., Congress unquestionably wanted to "provide incentives for new drug development," ViroPharma, 898 F.Supp.2d at 7 (internal quotation marks and citation omitted), while at the same time preserving the market's unique ability to ensure that low-priced drugs are provided to the public, see Teva Pharm., USA, Inc. v. Leavitt, 548 F.3d 103, 107 (D.C. Cir. 2008); Glaxo, Inc., 110 F.3d at 1568. As the FDA has noted, it was against that backdrop that marketing exclusivities were created (see FDA Decision at 4), and requiring that the exclusivity benefit be limited based on the active moieties of the relevant drugs — such that it is deemed to block only second-in-time drug applications that, in effect, concern the same drug —
Otsuka has trained all of its fire on the FDA's interpretation of romanette iii (see supra Part III.A.2) and makes little-to-no effort to mount an independent attack on the FDA's reading of romanette iv. Thus, only a small set of cross-over arguments is worth addressing here. With respect to Otsuka's contention that the FDA's active moiety construction leads to "absurd" results under the circumstances presented in this case because Aristada ultimately converts in the body to aripiprazole, which is the active moiety of the Abilify line of drugs (Pls.' Reply at 27-28), it suffices to note that the complex scientific endeavor of determining whether or not the drug in the second-in-time application is actually too similar to the drug with exclusivity to be deemed innovative is precisely the kind of determination that Congress most certainly intended to be left to the FDA. See Cmty. Care Found. v. Thompson, 318 F.3d 219, 225 (D.C. Cir. 2003) (observing heightened deference when the agency's interpretation "concerns... a complex and highly technical regulatory program" (internal quotation marks and citation omitted)).
Otsuka's suggestion that the FDA's explanation for the "active moiety" interpretation inexplicably contradicts its past practice fares no better. (See Pls.' Mem. at 33-35 (pointing to statements the FDA made in a prior letter in response to a citizen petition submitted by Pfizer relating to its product Xalatan)); see also King Broad. Co. v. FCC, 860 F.2d 465, 470 (D.C. Cir. 1988) (finding that an agency acts arbitrarily and capriciously if it issues a decision "inconsistent with its prior analysis in similar situations without any acknowledgement of the fact, or cogent explanation as to why"). Several years ago,
It seems that the real gravamen of Otsuka's complaint is the alleged unfairness of a statutory construction that permits "the true innovator that first engaged in the necessary trials to prove the beneficial effects of treating patients with a long-acting formulation of aripiprazole" to be "penalized by the entry to market of a drug that referenced aripiprazole to shortcut the drug approval requirements[.]" (Pls.' Reply at 28 (footnote omitted); see also Pls.' Mem. at 27 (complaining about the "absurd[ity]" of permitting Alkermes to rely on investigations associated with Abilify Tablets and "at the same time" avoid the exclusivity associated with Abilify Maintena).) This may very well prove to be a bad policy choice, but for the reasons explained, it does not defy rationality, and that is especially so given that Otsuka's alternative reading is transparently orchestrated to extend the marketing exclusivity of the initial innovator drug in perpetuity (see supra note 10), which, in this Court's view, is an even more absurd result.
The bottom line is this: the FDA has made the permissible and reasonable choice to consider the exclusivity conferred by romanette iv to be cabined by the active moiety of the drug that triggers it, and the agency has provided an adequate explanation of how and why it decided that this was the place to draw the exclusivity boundary line. (See, e.g., FDA Decision at 21-24, 27) (coupling the FDA's interpretive analysis of the role of "such drug" in understanding romanette iii (and by extension romanette iv) with its policy-based arguments); see also id. at 27 (asserting
The FDA's regulations regarding the three-year exclusivity benefit mirror romanettes iii and iv, and thus have a familiar structure. The regulation corresponding to romanette iii, which appears at 21 C.F.R. § 314.108(b)(4), states (in relevant part) that:
21 C.F.R. § 314.108(b)(4)(i)-(iv) (hereinafter referred to as "subdivision (b)(4)"). The regulation implementing romanette iv appears in the next subdivision, at 21 C.F.R. § 314.108(b)(5); it provides:
21 C.F.R. § 314.108(b)(5)(i)-(ii) ("subdivision (b)(5)"). The FDA has made clear that it views these regulations as dovetailing with the mandates of romanettes iii and iv and requiring the same result: that a second-in-time drug with a different active moiety is not barred by the three-year exclusivity period. (See Defs.' Mem. at 37; see also FDA Decision at 10-11 ("The statute and regulations for 3-year exclusivity describe which original NDAs and supplements (sNDAs) are eligible for [three-year] exclusivity and which are barred or blocked from approval by that exclusivity." (emphasis added)).) Otsuka argues here that the FDA somehow cannot do this due to (minor) wording differences between the text of the regulations and the statutes that implement them, and as a result of what Otsuka calls the overall "regulatory context." (Pls.' Mem. at 37; see also id. at 36-39.) This Court finds Otsuka's argument wholly unpersuasive.
With respect to Otsuka's threshold contention that these regulations "unambiguously prevent FDA from approving a [Section] 505(b)(2) application for the conditions of approval of the original application or a change, irrespective of the active moieties[,]" and thus that the FDA's contrary interpretation is not entitled to Auer deference (id. at 36 (internal quotation marks omitted)), Otsuka fails to demonstrate that the text of these regulations is any clearer than the text of the statutes upon which the regulations are based. See Christopher, 132 S.Ct. at 2166 (explaining that Auer requires courts to defer to an agency's "fair and considered" interpretation of an ambiguous regulation unless the interpretation is "plainly erroneous or inconsistent
Undaunted, Otsuka points out that subdivision (b)(4) expressly mentions "active moiety," but only with respect to the drug in the first-in-time application, as a criterion for determining eligibility for three-year exclusivity. See 21 C.F.R. § 314.108(b)(4)(iii). Meanwhile, Otsuka says, the regulation that relates to five-year exclusivity explicitly limits the scope of its exclusivity based on the active moiety of the drug in the application with exclusivity, see id. § 314.108(b)(2).
Otsuka's argument goes much too far for at least two reasons. First of all, it is clear to this Court that the FDA's use of "active moiety" in subdivision (b)(4)'s eligibility clause can be interpreted to leave precisely the opposite impression, insofar as the insertion of this language plainly underscores the agency's belief that the active moiety of the drug in the original application is related (perhaps inextricably) to the exclusivity period that is being conferred. Thus, instead of proving that active moiety makes no difference to the exclusivity inquiry (as Otsuka asserts), the express "active moiety" condition in subdivision (b)(4) arguably demonstrates that active moiety matters. Second, and even more important, it is not at all clear that the FDA references "active moiety" in the bar clause of the five-year exclusivity regulation
Nor can it be said that the FDA's interpretation of its regulations, which links the scope of the three-year exclusivities to the active moiety of the drug in the application that receives exclusivity, is "plainly erroneous or inconsistent with the regulation[.]" Christopher, 132 S.Ct. at 2166 (internal quotation marks and citation omitted). All that the Court has said before with respect to its analysis of romanettes iii and iv applies and leads inexorably to the conclusion that the FDA has not committed plain error or acted inconsistently with its regulations, and indeed, the fact that these regulations involve "a complex and highly technical regulatory program, in which the identification and classification of relevant criteria necessarily require significant expertise and entail the exercise of judgment grounded in policy concerns" makes deference to the FDA's interpretation "all the more warranted[.]" Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994) (internal quotation marks and citation omitted). These ambiguous regulations do not preclude the conclusion that an active-moiety overlap is needed in order for a second-in-time application to be "for" the "conditions of approval" of an earlier NDA regarding a drug, or "for" a "change approved" in a supplement regarding a drug with exclusivity. To the contrary, as already discussed, the use of active moiety in the eligibility clause of subdivision (b)(4) supports the FDA's interpretation, and the structure and purpose of the five-year exclusivity regulation actually furthers the FDA's view, because there is no logical reason that "the range of drugs blocked by exclusivity for a less innovative change" would be "broader than the range of drugs that are blocked by exclusivity for a more innovative change[.]" (FDA Decision at 23.)
Otsuka's final claim can be resolved in mercifully short order. Count Three of Otsuka's complaint contends that the FDA's decision to approve Aristada impermissibly evaded required notice-and-comment procedures. (See Compl. ¶¶ 65-74.) The central premise of this assertion is that the FDA's decision amounted to a "de facto" amendment of a duly promulgated regulation, insofar as it "changed significantly [the regulations] by effectively adding language to — and amending — [them]." (Pls.' Mem. at 40; see also Compl. ¶¶ 65-74; Pls.' Reply at 44-46.) But Otsuka can only rely on that premise if the FDA's pre-decision regulations had an unambiguous meaning that the FDA "altered" when it decided that the Aristada NDA should be approved. See Marseilles Land & Water Co. v. FERC, 345 F.3d 916, 920-21 (D.C. Cir. 2003). Anything short of that renders the FDA's action a mere clarification or interpretation of the existing rules. See Perez, 135 S.Ct. at 1208 (explaining that "[o]ne would not normally say that a court `amends' a statute when it interprets its text. So too can an agency `interpret' a regulation without `effectively amend[ing]' the underlying source of law" (second alteration in original)); see also id. at 1207 ("The act of `amending,' ... in both ordinary parlance and legal usage, has its own meaning separate and apart from the act of `interpreting.'" (citation omitted)). Therefore, this Court's prior rejection of Otsuka's argument that the three-year exclusivity regulations have an unambiguous meaning that foreclosed the FDA's "active moiety" interpretation and consequent approval of Aristada (see supra Part III.C), also compels the rejection of Otsuka's contention that the FDA transgressed the APA by improperly "amending" an unambiguous regulation. Accordingly, the Court need not parse the lines between rules and adjudications or between interpretative and legislative rules; Otsuka offers no authority for treating the FDA's unremarkable resolution of the regulation's ambiguities as an action requiring notice and comment, and the Court has found none.
This Court has resolved the instant dispute on the basis of indisputable first principles.
Accordingly, and as set forth in the order accompanying this opinion, Otsuka's motion for summary judgment is
21 C.F.R. § 314.108(b)(2) (emphasis added).
