                              UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF COLUMBIA


                                               )
APOTEX, INC., et al.                           )
                                               )
                Plaintiffs,                    )
                                               )
        v.                                     )      Civil Action No. 10-517 (RMC)
                                               )
KATHLEEN SEBELIUS, Secretary,                  )
Department of Health and Human                 )
Services, et al.,                              )
                                               )
                Defendants.                    )
                                               )


                                  MEMORANDUM OPINION

                The question presented is whether the U.S. Food and Drug Administration (“FDA”)

was arbitrary and capricious when it applied the reasoning of a recent D.C. Circuit opinion, with

which the FDA disagrees, to the facts of the instant dispute when time is of the essence and the

Solicitor General has not yet decided whether to move for rehearing.

                Plaintiffs in this consolidated case, Apotex, Inc. (“Apotex”), and Roxane

Laboratories, Inc. (“Roxane”), are two manufacturers of generic drugs. They assert that it is the

height of arbitrariness for the FDA to explain its own reading of the “clear” language of the statute

and then apply the contrary reasoning of the Circuit, with the effect of allowing a third generic drug

manufacturer to get 180 days of marketing exclusivity starting, perhaps, as early as April 6, 2010.

The Court disagrees. On this record and with these facts, the FDA recognized that it is bound to

follow the Circuit opinion until and unless it gets that opinion modified or reversed. The parties’

recourse is to the Circuit.
                                        I. BACKGROUND

                A quick summary of a lot of litigation should suffice to present the current

controversy. Readers are directed to the Circuit’s decision, Teva Pharms. USA, Inc. v. Sebelius, 595

F. 3d 1303 (D.C. Cir. 2010), for details.

                Teva Pharmaceuticals USA, Inc., is a generic drug manufacturer. It filed an

abbreviated new drug application (“ANDA”) with the FDA and claimed that its generic versions of

Cozaar and Hyzaar (losartan) did not infringe the ’075 patent held by Merck, the brand name drug

manufacturer.     Because Teva’s ANDA contained a certification pursuant to 21 U.S.C.

§ 355(j)(2)(A)(vii)(IV), if the FDA approved the ANDA, Teva would have 180 days of marketing

exclusivity for its generic drugs immediately upon expiration of Merck’s last related patent. See

id. § 355(j)(5)(B)(iv)(I). Instead of suing Teva for patent infringement, Merck responded by

“delisting” the patent with the FDA. See id. § 355(j)(5)(D)(i)(I)(bb)(CC). As interpreted by the

FDA, the Food, Drug, and Cosmetic Act, as amended (codified in relevant part at 21 U.S.C. § 355),

provides for forfeiture of exclusivity if the first ANDA filer (here, Teva) fails to market its product

within a specified time after patent delisting. See Teva Pharms. USA, Inc., v. Sebelius, 638 F. Supp.

2d 42, 48 (D.D.C. 2009), rev’d and remanded by 595 F. 3d 1303 (D.C. Cir. 2010). It is undisputed

that Teva did not go to market within that time period after Merck delisted the ’075 patent, since the

FDA had not approved Teva’s ANDA and FDA did not publicize that Merck had withdrawn the

patent from FDA’s list. The FDA determined that Teva had thus forfeited its right to exclusivity and

this Court agreed. See generally id.

                The Circuit did not. Holding that the structure of the Act does not permit the

unilateral action of a patent holder to deprive a first ANDA applicant of its short-term marketing


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exclusivity, the Circuit reversed and directed this Court to give relief to Teva. Teva, 595 F.3d at

1319 (“We therefore reverse the judgment of the district court, but, as the court has yet to address

the appropriateness of each form of relief that Teva has sought, we remand for further proceedings

. . . .”).

               On remand, the FDA informed the Court that it had learned that the Merck ’075

patent had actually expired prior the filing of Teva’s lawsuit, due to Merck’s failure to pay

maintenance fees to the U.S. Patent and Trademark Office after it “delisted” the patent. FDA argued

that patent expiration is another and separate basis on which, under the Act, it might be found that

Teva had forfeited marketing exclusivity. See 21 U.S.C. § 355(j)(5)(D)(i)(VI). FDA advised the

Court that it had posted a notice at www.regulations.gov in Docket No. FDA-2010-N-0134, and was

receiving comments on how it should interpret § 355(j)(5)(D)(i)(VI), under which exclusivity may

be forfeited if a patent expires. FDA promised to make its determination no later than March 26,

2010. FDA urged the Court to withhold its remedy order for Teva until after FDA decided the

question of statutory interpretation. However, because Teva had persuaded the Circuit to expedite

its appeal and the mandate, in light of the anticipated expiration of the last Merck patent on April

6, 2010 (except for Merck’s failure to maintain the patent), this Court issued its order on relief on

March 16, 2010. See Dkt. # 28. On the FDA’s motion to amend the order, the Court issued its final

order on March 26, 2010. See Dkt. # 33.

               On March 26, 2010, as predicted, FDA issued a letter to ANDA applicants and

notified them that, while it disagreed with the Circuit opinion, it had applied the Circuit’s reasoning

to answer “no” to the question of whether a brand name drug manufacturer could unilaterally cause

its patent to expire and, thus, force a forfeiture of a first ANDA applicant’s right to marketing


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exclusivity for 180 days. See Dkt. # 34. Therefore, the FDA announced, it would not prevent the

first ANDA applicant, Teva, from enjoying its 180-day marketing exclusivity for its generic losartan

drugs, and would not approve any other ANDA application during that time period. Id. The

consolidated petitions for a preliminary injunction immediately followed in an attempt to prevent

FDA’s approval of Teva’s ANDA.

                Apotex and Roxane are both generic drug manufacturers who compete with Teva.

Each Plaintiff has a pending ANDA for generic versions of Cozaar and Hyzaar and each has been

preparing to begin marketing after April 6, 2010. Apotex participated as amicus curiae in the Teva

suit; it was granted intervenor status on remand. Apotex filed the instant complaint on March 30,

2010, along with a proposed very short briefing schedule, with which the FDA agreed. Teva filed

a motion to intervene on the same day. The Court adopted the briefing schedule and granted Teva

intervenor status. Roxane filed its separate suit on March 30; it agreed to the same briefing schedule

and moved, without opposition, to consolidate the cases. The Court granted both motions. This

abbreviated opinion recognizes the parties’ need for a quick decision.

                                    II. LEGAL STANDARDS

                There are four familiar factors that govern whether preliminary injunctive relief

should be awarded and they are analyzed on a sliding scale. In other words, the stronger the case on

one point, the lesser the evidence needs to be on another. In order to obtain a preliminary

injunction, a party must demonstrate that: (1) it has a likelihood of success on the merits; (2) it will

suffer irreparable injury in the absence of preliminary relief; (3) other interested parties will not be

substantially injured if the requested relief is granted; and (4) granting such relief would serve the

public interest. See Katz v. Georgetown Univ., 246 F.3d 685, 687-88 (D.C. Cir. 2001); Biovail Corp.


                                                  -4-
v. FDA, 448 F. Supp. 2d 154, 155 (D.D.C. 2006). The likelihood of success requirement is the most

important of these factors. Id. “Without any probability of prevailing on the merits, the Plaintiffs’

purported injuries, no matter how compelling, do not justify preliminary injunctive relief.” Am.

Bankers Ass’n v. Nat’l Credit Union Admin., 38 F. Supp. 2d 114, 140 (D.D.C. 1999). “[A] party

seeking a preliminary injunction must demonstrate . . . ‘a likelihood of success on the merits,’” not

merely the existence of “questions ‘so serious, substantial, difficult and doubtful, as to make them

fair ground for litigation.’” Munaf v. Geren, 128 S. Ct. 2207, 2219 (2008).

               Review of final agency action is conducted under the Administrative Procedure Act,

5 U.S.C. § 551 et seq. FDA’s March 26, 2010 letter to ANDA applicants for generic versions of

Cozaar and Hyzaar (losartan) drug products constituted final agency action as it relates to Plaintiffs

and is, therefore, subject to court review. The FDA does not argue otherwise. Under the APA, a

court will uphold agency action unless it is arbitrary or capricious or inconsistent with the law. See

5 U.S.C. § 706(2)(A); Tourus Records, Inc. v. DEA, 259 F.3d 731, 736 (D.C. Cir. 2001).

                                         III. ANALYSIS

               The Court cannot find that the FDA was arbitrary or capricious when it politely

expressed its disagreement with a D.C. Circuit decision that had ruled against the agency, but

nonetheless applied the reasoning of the Circuit to a different but, on these facts, closely related

question. Given the facts and law in this record, the Court finds that Plaintiffs have a very slim

chance of success on the merits. This factor does not support issuance of a preliminary injunction.

               The irreparable harm predicted by Plaintiffs is not to be ignored. Their drug products

would be precluded from competing with Teva’s for 180 days and, according to Plaintiffs, that head

start would have a multi-million dollar consequence that could not be recovered. FDA points out


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that “[m]ere injuries, however substantial, in terms of money, time and energy necessarily

expended,” do not constitute irreparable harm. Wis. Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir.

1985). “[F]inancial harm alone cannot constitute irreparable injury unless it threatens the very

existence of the movant’s business,” Sociedad Anonima Vina Santa Rita v. Dep’t of Treasury, 193

F. Supp. 2d 6, 14 (D.D.C. 2001), a standard neither Plaintiff meets. Plaintiffs also argue, however,

that consumers will suffer from significantly higher prices if Teva’s generics do not have immediate

generic competition. This latter argument is forestalled by the Circuit’s finding that the structure of

the Act indicates a clear pro-consumer congressional intent to reward a first ANDA applicant that

challenges a brand manufacturer’s patent with short-term marketing exclusivity, as a matter of law

and public policy. This factor counsels against an injunction.

                As to harm to others, an injunction as sought by Plaintiffs would certainly injure Teva

and would prevent public access to any generic of these drugs. This factor does not support issuance

of an injunction.

                The fourth factor to consider is the public interest. Plaintiffs argue that consumers

are entitled to brisk competition among generic drug manufacturers so that they will enjoy lower

prices. The argument is contrary to the teaching of Teva, where the Circuit described the structure

of the statute as pro-consumer because the first ANDA filer is encouraged by the reward of

exclusivity to hurry generic drugs to market. Teva, 595 F.3d at 1318 (“The statute’s grant of a 180-

day delay in multiple generic competition for the first successful paragraph IV filer is a pro-consumer

device . . . . The statute thus deliberately sacrifices the benefits of full generic competition at the first

chance allowed by the brand manufacturer’s patents, in favor of the benefits of earlier generic

competition, brought about by the promise of a reward for generics that stick their necks out . . . .”).


                                                    -6-
Thus, this factor also fails to support preliminary injunctive relief.

                                        IV. CONCLUSION

               The Court will deny Plaintiffs’ motions for a preliminary injunction [Dkt. # 4 in No.

10-517; Dkt. # 4 in No. 10-521]. The Court agrees that FDA properly followed the logic of the D.C.

Circuit’s decision in Teva Pharms. USA, Inc. v. Sebelius, 595 F.3d 1303. A memorializing order

accompanies this memorandum opinion.



Date: April 2, 2010                                                    /s/
                                                        ROSEMARY M. COLLYER
                                                        United States District Judge




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