The FDA Approves an ANDA Despite An Appeals Court Stay, And Another Appeals Court Approves

By Thomas Carey.

September 2009 IP Update

Seldom does a single controversy result in dueling opinions from two federal courts of appeals, but the ongoing litigation involving Sanofi-Aventis’s colon cancer drug Eloxatin (oxaliplatin) has done it. This dispute has resulted in a ruling on a novel question, affirmed by the D.C. Circuit Court of Appeals, and viewed skeptically by at least one judge in the Federal Circuit.

The case involves the accelerated new drug applications (ANDAs) filed by several generic drug makers who filed paragraph IV certifications, essentially disputing the validity of the patent listed in the Orange Book covering Eloxatin. Sanofi-Aventis, the US licensee of that patent, filed suit against the generic drug companies, thereby invoking the Hatch-Waxman Act’s 30-month stay on the FDA’s ability to approve the ANDAs.

However, the statute provides that the 30-month period may be terminated if a court decides that the patent is invalid or not infringed. In such an instance, the approval may be made effective when the court “enters a judgment” reflecting that decision.

On June 18, 2009, the federal district court for the District of New Jersey concluded that the Sanofi patent was not infringed because it was based upon a “product by process” claim, and because the generic drug makers used a different process to make the product. That court entered a judgment to that effect on June 30, 2009.

The next day, Sanofi appealed to the Federal Circuit and was granted a temporary stay of the enforcement of the lower court judgment. The generic drug companies were concerned that the wording of the stay was unclear and, on July 16, sought emergency clarification of whether the stay constituted an injunction preventing the Food and Drug Administration from approving the ANDAs. On July 24, the Federal Circuit stated that the stay was clear enough, but failed to address specifically whether it affected the ability of the FDA to approve the ANDAs.

The FDA had its own ideas on the subject, ideas that it had published in a March 2000 guidance document.  The statutory language that the FDA reviewed at that time was slightly different because it stated that the FDA could approve an ANDA “on the date of the court decision.”  The FDA considered the meaning of this term and concluded that the agency would be free to act once “the district court enters its decision,” using words that would be added to the statute in 2003.

The guidance further states: “Neither a stay nor a reversal of a district court decision … will have an effect on the approval of the ANDA ….  Should the … patent owner wish to prevent an applicant with an approved ANDA from marketing its product during the course of an appeal, it must obtain an injunction from the court.”

In the Sanofi case, the FDA was faced for the first time with the problem that its March 2000 guidance document anticipated: A judgment had been entered, but its enforcement had been stayed. The FDA’s position had not changed since 2000. The FDA approved the ANDA on August 7, 2009, notwithstanding the stay.

Sanofi then commenced a war on two fronts. It filed an emergency motion with the Federal Circuit, seeking to enforce the existing stay against the FDA; and it filed suit in the District of Columbia, seeking injunctive relief that would require the FDA to rescind its approval of the ANDAs.

August 11th was a bad day for Sanofi. First, the Federal Circuit denied Sanofi’s emergency motion, and then the D.C. District Court issued a memorandum opinionand an order affirming the FDA’s right to approve the ANDAs.

Sanofi moved for reconsideration of the Federal Circuit’s denial, but on August 13th the court issued an order denying that motion. Judge Moore concurred because Sanofi had not pled its case properly. Judge Moore said that, had Sanofi focused on seeking to enjoin the generic drug companies’ patent infringement rather than seeking to reverse the FDA’s approval of the ANDAs, it might have met with greater success.

But, she added, a motion to enforce a stay, unsupported by such evidence, could not be the basis for directing the FDA to rescind its approval of the ANDAs. Judge Moore nonetheless characterized as “illogical” and “dubious at best” the FDA’s position that a stay could not prevent it from approving an ANDA once a district court had entered a judgment of patent invalidity.

On August 18th, the D.C. Circuit Court of Appeals upheld the D.C. District Court’s ruling, confirming that the FDA could approve the ANDAs once the lower court judgment had entered, notwithstanding any later stay. That order has not been published, so the court’s reasoning is unknown.

To add irony to the mix, the Federal Circuit, in a non-precedential opinion dated September 10, 2009, reversed the lower court’s finding of non-infringement, ruling that the patent claims in question are product claims, not product-by-process claims, and that therefore the process used by the defendants to make the product is irrelevant. Thus, Sanofi is still fighting to enforce its patent, but without the benefit of the 30-month stay normally accorded by the Hatch-Waxman Act.

This litigation has resulted in a D.C. Circuit Court affirmation of the FDA’s March 2000 guidance document: Entry of a judgment of patent invalidity by a district court is sufficient to permit the FDA to approve an ANDA, even if the 30-month period normally allowed by the Hatch-Waxman Act has not run. Neither a pending appeal, nor a stay, nor even a reversal of that judgment will deprive the FDA of the power to approve the ANDA.

Judge Moore’s concurrence instructs that the patent holder should not rely exclusively upon the 30-month stay, but seek an injunction against the generic drug makers to prevent them from marketing their drugs. Sanofi has now done just that, and October 19 has been set for a ruling on its motion for an injunction. Meanwhile, several generic drug makers are marketing generic Eloxatin, even though the original ruling of patent invalidity has been reversed and the 30-month period of the Hatch-Waxman Act will not conclude until December 2009.

Both the FDA and Judge Moore advise the pioneer drug company to protect its interests by pursuing an injunction against the generic drug manufacturers. The time to do this, it would seem, is when the infringement case is first filed. But the logic of such a motion is suspect. If the pioneer succeeds at the district court level, it has the benefit of the 30-month stay, so why is there a need for an injunction?  And if it loses, what of the requirement that the movant demonstrate the probability of success on the merits?

It seems clear that the suggestion made by the FDA and Judge Moore will always leave the pioneer drug company at risk of a generic launch if the district court erroneously rules the patent to be invalid or not infringed. The FDA interprets the Hatch-Waxman Act to allow this result. This interpretation has now been upheld by one Court of Appeals and questioned by another. For now, the challenge before pioneer drug companies is to obtain an injunction against the ANDA filers and preserve it while an appeal of a lower court defeat is pending. This is a tall task.