November 16, 2001
Andrx Pharmaceuticals, Inc.
Attention: Diane Servello
4955 Orange Drive
Fort Lauderdale, Florida 33314
Dear Ms. Servello:
This letter refers to your abbreviated new drug application dated March 17, 1998, submitted pursuant to Section 505(j) of the Federal Food, Drug, and Cosmetic Act (the Act) for Omeprazole Delayed-release Capsules, 10 mg, 20 mg, and 40 mg. Specifically, this letter addresses the matter of 180-day exclusivity under section 505(j)(5)(B)(iv) of the Federal Food, Drug, and Cosmetic Act (the Act) for abbreviated new drug applications (ANDAs) referencing AstraZeneca's Prilosec (omeprazole), 10 mg and 20 mg.1 As you know, there are multiple patents listed in "Approved Drug Products with Therapeutic Equivalence Evaluations" (the Orange Book) for this listed drug. Moreover, different applicants, including Genpharm, Inc. and Andrx Pharmaceuticals, have been the first to file ANDAs containing paragraph IV certifications for some of these patents. Therefore, the question of who receives 180-day exclusivity is quite complex.
The statutory provision governing 180-day exclusivity reads:
- If the application contains a certification described in subclause IV of paragraph (2)(A)(vii) and is for a drug for which a previous application has been submitted under this subsection [containing] such a certification, the application shall be made effective not earlier than one hundred and eighty days after-
(I) the date the Secretary receives notice from the applicant under the previous application of first commercial marketing of the drug under the previous application, or
II) the date of a decision of a court in action described in clause (ii) holding the patent which is the subject of the certification to be invalid or not infringed,
whichever is earlier.
FDA's regulations at 21 CFR § 314.107(c)(1) & (2) address the beginning of 180-day exclusivity as follows:
- If an abbreviated new drug application contains a certification that a relevant patent is invalid, unenforceable, or will not be infringed and the application is for a generic copy of the same listed drug for which one or more substantially complete abbreviated new drug applications were previously submitted containing a certification that the same patent was invalid, unenforceable, or would not be infringed, approval of the subsequent abbreviated new drug application will be made effective no sooner than 180 days from whichever of the following dates is earlier:
(i) The date the applicant submitting the first application first commences commercial marketing of its drug product; or
- (ii) The date of a decision of the court holding the relevant patent invalid, unenforceable, or not infringed.
The "applicant submitting the first application" is the applicant that submits an application that is both substantially complete and contains a certification that the patent was invalid, unenforceable, or not infringed prior to the submission of any other application for the same listed drug that is both substantially complete and contains the same certification.
In an August 2, 1999, response to petitions from two generic drug firms addressing this issue with respect to approval of ANDAs for cisplatin, FDA stated that these regulations must be interpreted, at least in the situation with cisplatin, to base eligibility for 180-day exclusivity on who filed the first paragraph IV certification for each listed patent. (Docket No. 99P-1271/PSA1 and PSA2). Therefore, multiple applicants may be eligible for periods of exclusivity for a single drug product. Based upon the statements in the petition response, and FDA's actions in approving ANDAs for cisplatin, the agency's approach has been to use a patent-based analysis in determining eligibility for exclusivity. In other words, the first applicant with a paragraph IV certification for each listed patent has been separately eligible for 180-day exclusivity based on that patent. Note that, in the case of cisplatin, one of the patents upon which eligibility for exclusivity was based had expired by the time any of the ANDAs eligible for exclusivity could be approved, so the agency's interpretation did not result in a delay in approvals of ANDAs.
The agency has recognized, however, that if eligibility for exclusivity were patent-based, without regard to the facts and circumstances of each matter, the agency could be paralyzed in approving ANDAs referencing a particular drug product by multiple conflicting exclusivities. This issue is discussed in some detail in the preamble to the proposed rule addressing changes to the ANDA approval regulations. 64 Fed. Reg. 42873, 42875-6 (August 6, 1999). In that proposed rule, FDA outlined an interpretation of the statute that in all cases would grant only one period of exclusivity per drug product. The applicant submitting the first paragraph IV certification to any of the listed patents would be the only applicant eligible for exclusivity for that drug product.
FDA received significant negative comment on this aspect of its proposal. Many of these comments questioned whether there is adequate statutory support for granting only one 180-day exclusivity period per drug product. Therefore, the agency does not expect to adopt this approach to 180-day exclusivity.
The situation with ANDAs referencing Prilosec illustrates how untenable the patent-based multiple exclusivity approach can be in certain situations. There are currently 12 patents listed in the Orange Book for Prilosec (NDA 19-810). There are three different strengths for this product. Under the approach articulated in the cisplatin petition response, different ANDA applicants would be eligible for exclusivity with respect to different patents listed for the reference listed drugs.
The last patent blocking approval (U.S. Patent 4,255,431 - with the addition of six-month pediatric exclusivity) expired on October 5, 2001. There are no 30-month stays barring approval of the Andrx or Genpharm ANDAs. Therefore, FDA has had to address the question of how to administer 180-day exclusivity with respect to these ANDAs for omeprazole. If the patent-based approach to exclusivity were used for the 10 and 20 mg strengths, Andrx's and Genpharm's first applicant status with respect to different patents would result in a stand-off: Andrx could not be given final approval until Genpharm's exclusivity for certain patents had run; but Genpharm could not be given final approval until Andrx's exclusivity for other patents had run. Without the possibility of a final approval, neither party could market its drug and, thus, the commercial marketing trigger for exclusivity would not be available. The only trigger to begin the running of each exclusivity would be a court decision on each of the multiple relevant patents.
To date there have been no court decisions on any of the patents that would trigger the running of exclusivity, and there have been no lawsuits filed with respect to the four most recently listed patents. Because, under the patent-based exclusivity approach, Andrx's ANDA could not be approved until Genpharm's exclusivity had expired and Genpharm's ANDA could not be approved until Andrx's exclusivity had expired, to clear the way for the approval of the Andrx and Genpharm ANDAs, (1) the agency would need to await court decisions in all of the cases now pending (despite the expiration of the 30-month stays), AND (2) one or more ANDA applicants would have to bring declaratory judgment actions that result in decisions that trigger the start of exclusivity with respect to the patents for which the innovator did not bring a lawsuit. Then FDA would have to wait until 180 days after the last court decision for all the patents to which one of the applicants certified first to be able to approve the other applicant's ANDA. Then the approved applicant would begin its exclusivity, either by commercially marketing its drug or by waiting for the last decision on its patent litigation. Only after that applicant had its 180 days of exclusivity could the applicant whose cases were decided earlier get approval. Whether either applicant would be the sole marketer for any period of time would depend entirely on the order and timing of the court decisions.
This result is dramatically at odds with both the narrow purpose of the 180-day exclusivity provision and the broader purposes of 1984 Drug Price Competition and Patent Term Restoration Act (the Hatch-Waxman Amendments). Court decisions, including Mova Pharmaceutical Corp., v. Shalala, 140 F.3d 1060, 1074 (D.C.Cir. 1998), observe that the 180-day exclusivity period is intended as a reward to the ANDA applicant who challenges a listed patent. Such a challenge may make it possible for generic drugs to be approved before the expiration date of the challenged patent. The exclusivity stand-off would prevent the ANDA applicants who are eligible for the exclusivity from benefiting in any meaningful way from the exclusivity, and would substantially and indefinitely delay the availability of lower cost drugs for consumers. Andrx and Genpharm would be hamstrung by the very provision intended to provide them a benefit, and competition would be stifled by the very provision intended to encourage it. The only beneficiary of this interpretation would be the innovator who - despite the expiration of the 30-month stays on ANDA approval and its own recognition that other listed patents are not infringed by the generics' drugs - would see an indefinite extension of its monopoly market in a manner inconsistent with the intent of the Hatch-Waxman Amendments.
To avoid results that cannot be reconciled with the purposes of the 180-day exclusivity provision in particular and the Hatch-Waxman Amendments in general, the agency has sought an approach to 180-day exclusivity that hews as closely as possible to the statutory language and is consistent with the goals of the legislation. It seems clear that Congress did not anticipate, and therefore did not address, this factual situation in drafting the 180-day exclusivity provisions of the Act. Certainly FDA did not contemplate it in promulgating the regulations now in effect. As noted in the cisplatin petition response, these regulations were adopted when the agency interpreted the statute to require that an ANDA applicant had to be sued and win its patent litigation to qualify for exclusivity. The chances of two applicants, each of whom was first for a different patent, winning their patent litigation was extremely low. Response at 3-4.3
The text of the Act does not address the situation in which two ANDA applicants' eligibility for exclusivity will create a standoff in approvals. The legislative history is similarly unilluminating. Accordingly, the agency is construing the statute to further the purposes of the statute.
Alternatively, even if the statute did address this situation, with the result being an exclusivity standoff, the agency should reject that interpretation as producing an absurd result. It is well established that "interpretations of a statute which would produce absurd results are to be avoided if alternative interpretations consistent with the legislative purpose are available." Phillips v. Saratoga Harness Racing, Inc., 240 F.3d 174, 179 (2d Cir. 2001)
Under either analysis, an interpretation of the statutory language that grants exclusivity to first applicants on a patent-by-patent basis, with the resulting exclusivity standoff, should be rejected. That interpretation is not mandated by the language of the statute because the statute is silent on its application to these facts. Such an interpretation would also be inconsistent with the purpose of the statute.
Once the exclusivity standoff interpretation has been rejected, the choice appears to be between rewarding all applicants who filed a first paragraph IV ANDA by giving them the chance to market during the exclusivity period, or rewarding the very first applicant to challenge any patent by giving that applicant the entire exclusivity period to itself. Which applicant receives the exclusivity, and when, would turn upon when the relevant ANDAs may be approved.
Under the usual application of the 180-day exclusivity provision, the agency would approve the ANDA eligible for exclusivity whenever it was ready for approval. That exclusivity would begin to run independent of the approval, with the commercial marketing of that drug product, or with a court decision on the patent. However, when two or more applicants are eligible for exclusivity that blocks one another, the approval of the eligible ANDAs (and thus the possibility of the commercial marketing trigger coming into play) cannot occur without some resolution of the stand-off.
The agency has reviewed two approaches to resolving the question of which ANDA(s) may be approved, and when. An approach that shares the exclusivity among all of the first ANDA applicants ("shared exclusivity") would reward the first applicant to file a paragraph IV certification with respect to each patent. It is therefore consistent with the most natural reading of the statutory text, which refers to the paragraph IV certification for the patent.4 Obviously, this approach may deprive any one applicant of the chance to be the sole competitor to the NDA holder. But the exclusivity is already structured in such a way that eligibility for exclusivity does not guarantee 180 days as the sole marketed generic drug (the court decision trigger could start exclusivity before the ANDA is approved, uncertainty over the patent could result in no marketing until an affirmance in the Federal Circuit of a district court win). Sharing exclusivity would give each first applicant some part of the benefit from removing the multiple patents as barriers to approval, when any one of those patents could have delayed approval of ANDAs. There is also a clear benefit to consumers if FDA were to approve more than one ANDA: with multiple ANDAs approved, it is more likely that the exclusivity period will be triggered and at least one of the generic drugs will reach the market during the exclusivity period. Past experience has shown that first generics who are the sole applicants eligible for exclusivity often find it in their interest not to begin the exclusivity period.
The "one first applicant" approach would give all the exclusivity to the very first ANDA applicant to file a patent challenge to any patent listed for the innovator drug.5 It would reward the first applicant to begin to clear the path to ANDA approvals by challenging a listed patent. However, the agency believes that this approach would be less consistent with the statutory language than the shared exclusivity option, because this approach would be based upon a challenge to only one listed patent (the one for which the earliest paragraph IV certification was submitted). As noted above, the statute appears to apply exclusivity specifically with respect to an ANDA containing a paragraph IV certification for a patent for which a previous paragraph IV certification has been received for the same patent. Also, although promptness in challenging patents listed early in the Orange Book is important, it is not adequate to remove the barriers to approval posed by later listed patents. Finally, by vesting the power to begin the exclusivity and the marketing of the drug in the hands of only one applicant, this approach would hold the potential for delays in the approval of generic drugs because the sole first applicant might not begin commercial marketing of its drug product. As a result, the 180-day exclusivity period would not begin to run, and the availability of multiple generic drugs could be substantially delayed.
The agency believes the "shared exclusivity" approach is more consistent with the statutory language, and with the intent of both the 180-day exclusivity provision and the Hatch-Waxman Amendments. Therefore, FDA will approve both the Andrx and the Genpharm ANDAs for 10 and 20 mg omeprazole as soon as they are otherwise eligible for approval (all patents with a paragraph III certification have expired, no 30-month stay, ANDA meets other 505(j) approval requirements, etc.). The approval of the ANDAs will not trigger the beginning of exclusivity. Exclusivity will begin to run with the first marketing of either product or a court decision on any of the patents for which either applicant was first to file a paragraph IV certification. During the 180-day exclusivity period only Andrx and Genpharm may market their omeprazole drug products. Once the 180 days of exclusivity expires, FDA may approve any other ANDAs for omeprazole that are otherwise eligible for approval.
Please note that this letter is being sent to both Andrx Pharmaceuticals and Genpharm, Inc. If you have any questions regarding this letter, please contact Ms. Cecelia Parise, Regulatory Policy Advisor to the Director, Office of Generic Drugs, at 301-827-5845.
Office of Generic Drugs
Center for Drug Evaluation and Research
Daniel E. Troy, OCC
Scott Lodin, Esq., General Counsel for Andrx
Drafted: L. Dickinson 10/23/01
2. The referenced provision governing paragraph IV certifications at section 505(j)(2)(a)(vii)(IV) states that an ANDA must contain a certification, the opinion of the applicant and to the best of his knowledge, with respect to each patent which claims the listed drug referred to in clause (i) or which claims a use for such listed drug for which the applicant is seeking approval under this subsection and for which information is required to be filed under subsection (b) or (c) -
(IV) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted....
4. "Shared Exclusivity" Approach: When different applicants have submitted first paragraph IV ANDAs for different listed patents, FDA will approve the ANDAs that are first for any listed patent as soon as they are otherwise eligible for approval. Exclusivity for all the ANDAs will be shared and will be triggered by either first commercial marketing of any first applicant or a court decision on any one of the patents that qualified any applicant for exclusivity. During that "shared" exclusivity period, FDA may approve any ANDA eligible for exclusivity, but no other ANDAs. This may result in no applicant having a period when it is the only generic product on the market, but it will limit the number of ANDAs approved during the exclusivity period to the number of "first" applicants.
5. "One First Applicant" Approach: FDA would approve only the ANDA of the applicant who filed the first paragraph IV certification for any patent, regardless of the patent for which it was submitted. That applicant's exclusivity would then begin to run with first marketing or a court decision on the patent that is the subject of the first certification. During the exclusivity period the agency would approve no other ANDA for the listed drug. When the exclusivity expired, all subsequent applicants would be eligible for approval if they otherwise met the approval requirements.