The US Court of Appeals for the Second Circuit held that a pharmaceutical manufacturer failed to state a Sherman Act Section Two claim because the court could not plausibly infer that a competitor filed a sham citizen petition when the citizen petition was denied on the same day the manufacturer’s abbreviated new drug application (ANDA) received approval from the US Food and Drug Administration (FDA). Apotex Inc. v. Acorda Therapeutics, Inc., N. 12-4353-cv (2d Cir., May 16 2016) (Jacobs, C.J.)

Apotex and Acorda are rival manufacturers for tizanidine (generic Zanaflex®) tablets and capsules, a drug that treats spasticity in patients with multiple sclerosis and Parkinson’s Disease. Acorda acquired the rights to Zanaflex tablets and capsules in July 2004 and within a year, launched Zanaflex capsules. In 2007, Apotex filed an ANDA for tizanidine capsules in order to provide generic competition to Acorda’s Zanaflex capsules. Acorda then initiated a patent infringement suit against Apotex in which a district court found Apotex’s patent was invalid. Shortly thereafter, Acorda filed a citizen petition with the FDA objecting to Apotex’s ANDA application because Apotex’s product was allegedly not bioequivalent to Acorda’s reference listed drug and included allegedly misleading or false statements on its label. Ultimately, the FDA denied Acorda’s citizen petition on the same day it approved Apotex’s ANDA.

Apotex brought Sherman Act Section Two claims against Acorda, claiming Acorda attempted to monopolize the market for tizanidine capsules by delaying Apotex’s entry into the market. A district court found Apotex failed to show that Acorda’s citizen petition was objectively baseless and granted Acorda’s motion to dismiss. It reasoned that reliance on the temporal proximity of the FDA’s decisions on the ANDA and citizen petition alone was insufficient to state a Sherman Act claim in light of recent legislation directing the FDA not to delay the ANDA process because of a citizen petition, as well as narrowing the grounds on which the FDA could delay an ANDA. The court affirmed and reasoned that the recent legislation undermined past precedent which inferred that the “mere simultaneity of ANDA and citizen petition decisions is indicative of the delay of one by reason of pendency of the other.” The court explained that because recent FDA guidance states it is preferable to issue a decision on an ANDA before issuing a decision on a citizen petition, the mere simultaneity of the decisions alone cannot prove that the citizen petition was an “anticompetitive weapon” and a sham. Rather, a claimant must show the citizen petition was “objectively baseless” to demonstrate that the citizen petition was an attempt to directly interfere with competition. The court further explained that it is not enough to show that the citizen petition was ultimately unsuccessful; instead, a claimant must show the arguments advanced in the competitor’s petition were false, not that they simply “fail[ed] to move the FDA.”

Practice Note

Pharmaceutical manufacturers bringing antitrust claims alleging a competitor filed a sham citizen petition to delay the manufacturer's competition to the market must plead facts beyond (1) the coincidental timing of the FDA's decision regarding the ANDA and the citizen petition, and (2) the ultimately fruitless nature of the citizen petition.