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District Court Exceeded Its Authority in Shortening Thirty-Month Stay Under ANDA

January 17, 2002

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Last Month at the Federal Circuit - February 2002

Judges: Dyk (author), Bryson, and Linn

In Andrx Pharmaceuticals, Inc. v. Biovail Corp., No. 01-1650 (Fed. Cir. Jan. 17, 2002), the Federal Circuit vacated and remanded a lower court’s order (1) shortening the statutory thirty-month delay of FDA approval of Andrx Pharmaceuticals, Inc.’s (“Andrx”) Abbreviated New Drug Application (“ANDA”), and (2) ordering that the FDA approve the ANDA.

Under the Hatch-Waxman Amendments, a pioneer drug manufacturer having an approved New Drug Application (“NDA”) must notify the FDA of all patents claiming the drug covered by the NDA. The FDA lists these patents in the “Orange Book.”

A generic drug manufacturer can submit an ANDA, as opposed to a full NDA, if the manufacturer can show the generic drug’s bioequivalence with an FDA-approved drug that had previously satisfied safety and efficacy requirements. Concerning the Orange Book, however, the generic drug manufacturer must certify that: (1) patent information has not been submitted to the FDA; (2) any such patent has expired; (3) the patent will expire on a certain date; or (4) 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 (“paragraph I, II, III, and IV certifications”). 21 U.S.C. § 355(j)(2)(A)(vii)(I-IV). After filing a paragraph IV certification, the generic drug manufacturer must notify the patentee and NDA holder and explain why the patent is not infringed, invalid, or unenforceable. Approval of the ANDA is effective unless the patentee sues for patent infringement within forty-five days of the notice. If such a suit is filed, the FDA must stay approval of the ANDA until after expiration of the patent, resolution of the suit, or the passing of thirty months after the notice. The court overseeing the suit can order a shorter or longer stay if “either party to the action fail[s] to reasonably cooperate in expediting the action. . . .” 21 U.S.C. § 355(j)(5)(B)(iii).

Biovail Corporation (“Biovail”) owns U.S. Patent No. 5,529,791 (“the ‘791 patent”) and holds an NDA directed to “Tiazac,” an antihypertension drug with diltiazem hydrochloride as the active ingredient. Andrx subsequently filed an ANDA and certified that Andrx did not infringe the ‘791 patent and that the ‘791 patent was invalid. Biovail timely filed a patent infringement suit against Andrx, thus triggering the thirty-month stay of approval of Andrx’s ANDA.

Biovail also holds an exclusive license for U.S. Patent No. 6,162,463 (“the ‘463 patent”), which claims an extended release formulation of diltiazem. Shortly after the ‘463 patent was issued, Biovail changed its manufacturing process for Tiazac in accordance with the ‘463 patent claims and asserted to the FDA that this change did not affect the safety and efficacy of Tiazac. The FDA required Biovail to supplement its current NDA, which the FDA would review prior to allowing Biovail to sell the drug prepared by the new manufacturing process.

Upon the listing of the ‘463 patent in the Orange Book, the FDA notified Andrx that it would not approve Andrx’s ANDA. Andrx then sued Biovail, seeking a DJ that it did not infringe the ‘463 patent. Andrx further asserted that Biovail should not be granted a second thirty-month stay for the ‘463 patent, after obtaining a first thirty-month stay for the ‘791 patent. The district court granted SJ in favor of Andrx, stating that by changing its manufacturing process with regard to the ‘463 patent, Biovail had impeded or delayed expeditious resolution of the patent infringement suit. The district court ordered that the statutory stay end on September 27, 2001, as opposed to August 8, 2003, when the second statutory stay would have ended. The district court also ordered the FDA to approve Andrx’s ANDA.

On appeal, the Federal Circuit held that the district court had erred in shortening the stay due to Biovail’s conduct, based on an overly broad reading of the statute. The Court noted that a district court’s authority to shorten the stay must be based on actions that delay resolution of the patent infringement suit. Biovail’s actions, however, were directed to obtaining approval of its NDA before the FDA, which did not come within the realm of delaying patent suit resolution. Thus, the Federal Circuit found that the district court had exceeded its authority to shorten the thirty-month stay based on Biovail’s allegedly improper conduct before the FDA.

With regard to the district court’s order that the FDA approve Andrx’s ANDA, the Court found that Andrx did not bring a claim under the Administrative Procedure Act (“APA”) for judicial review of the FDA’s actions. Andrx had filed an amended complaint asserting an APA claim, but the district court found that Andrx’s complaint failed to allege any wrongdoing by the FDA and dismissed the FDA as a party. Because the Government was no longer a party, the Federal Circuit found the APA claim invalid and vacated the district court’s order.