On May 27, 2015, the U.S. District Court for the District of Maryland granted FDA and the Defendant-Intervenors summary judgment against Otsuka Pharmaceutical Co., Ltd. Otsuka Pharmaceutical Development and Commercialization, Inc., and Otsuka America Pharmaceutical, Inc. (collectively “Otsuka”), holding that FDA appropriately interprets the Food, Drug, and Cosmetic Act (“FD&C Act”) when it grants abbreviated new drug applications (“ANDAs”) by carving out information that is protected by orphan drug exclusivity from the ANDA labeling, so long as the drug “remains safe and effective for the remaining non-protected conditions of use” without the carved-out language.

As previous discussed (see the most recent blog here), Otsuka sought to stop the approval of generic versions of Abilify® (aripiprazole) by arguing that 21 U.S.C. § 355a(o) permits FDA to allow generic drugs to omit pediatric labeling in only two scenarios: a) when the branded drug is protected by a patent and b) when the drug has non-orphan drug exclusivity. Abilify®’s blocking Patent No. 5,006,528 (“the ’528 patent”) expired on April 20, 2015, and Otsuka had already attempted to enjoin generic entry based on some of its other patents, but had so far been unsuccessful.

Neither the Court, nor FDA, has been sympathetic to Otsuka’s argument. First, on April 28, 2015, FDA issued a letter decision to Otsuka, concluding that it would grant ANDA applications for generic Abilify® and permit applicants to carve out the labeling information relating to Otsuka’s orphan drug exclusivity. That same day, the FDA also granted ANDA approval to four generic companies. Notably, FDA granted ANDA approval only 8 days after it filed its Opposition to Plaintiff’s Motion for Temporary Restraining Order (“TRO”) or Preliminary Injunction (“PI”), which argued that Otsuka’s argument was unripe because no ANDAs had been approved. Second, on April 29, 2015, the Court denied Otsuka’s motion for a TRO or PI.

Following the Court’s order, the parties filed cross motions for summary judgment. After the Court heard argument on May 20, 2015, the Court denied Otsuka’s motion for summary judgment and granted FDA’s and the Defendant-Intervenors’ motions. The Court’s decision is not surprising: It relied upon the U.S. Supreme Court’s two-step process under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., which is highly differential to agency interpretation of their laws. Under the Chevron standard, unless a court finds that 1) Congress’ intent in enacting the statute in question is clear and 2) the agency’s interpretation of the statute is obviously impermissible based on Congress’ intent, then the court cannot overturn an agency’s decision.

Looking at legislative history, prior case law, and FDA’s prior decisions in similar circumstances, the Court found that FDA’s interpretation of 21 U.S.C. § 355a(o) was not foreclosed. Rather, the Court determined that:

[T]he FDA’s construction of the statute that allows it to carve out an indication or other information from ANDA labeling when that indication or information is protected by orphan drug exclusivity as long as the ANDA with that carved out label remains safe and effective for the remaining non-protected conditions of use [was well supported].

Moreover, the Court found that Otsuka’s interpretation of the statute “would nullify the limitation expressly written into [21 U.S.C §] 360cc,” which provides exclusivity only for a given “disease or condition.” The Court emphasized that the exclusivity granted under the statutory framework is not based on the drug, but the indication, and thus Otsuka’s reading of the statute was overbroad and self-contradicting.

Overall, although Otsuka’s argument was creative, Otsuka’s attempt only provided it 8 days of generic-free competition after the ‘580 patent expired (presuming that FDA delayed granting ANDA approvals to the generic applicants otherwise ready for approval after April 20, 2015, in view of the lawsuit). It is unclear if Otsuka plans to make additional attempts to prevent generic entry via the court system. In the meantime, it appears Otsuka will need to assess its prior lifecycle projections and reevaluate how Abilify®’s imminent generic entry it will impact Otsuka’s bottom line.