October 6, 2016
Authored and Edited by Yoonhee Kim; Paul W. Browning, Ph.D.
On October 6, 2016, FDA published a final rule, Abbreviated New Drug Applications and 505(b)(2) Applications, implementing Title XI of the MMA, and amending 21 CFR §§ 314 and 320. Among other things, this final rule, which went into effect December 5, 2016, codified certain policies of FDA relating to the termination of 30-month stays in the wake of dismissals of patent litigation.
In Hatch-Waxman litigation, a 30-month stay of FDA approval of an ANDA or 505(b)(2) application may be available if the patentee files suit within 45 days of receiving a notice letter challenging one or more patents listed in the FDA’s Orange Book. This stay protects the patentee and owner of the reference branded product from the harm that could otherwise result from FDA approval of a potentially infringing drug product. Notably, the FDA’s final rule introduced § 314.107(b)(3)(viii) and detailed new circumstances whereby the patentee may lose this valuable 30-month stay of approval. This new provision states that the 30-month stay will be terminated if the court enters an order of “dismissal, with or without prejudice, without a finding of infringement in each pending suit.” Thus, it appears that FDA will terminate 30-month stays even in cases where an infringement suit is dismissed without any substantive determination on the merits of the patent infringement claim.
This position is arguably inconsistent with the controlling statute, section 505(c)(3)(C) of the FDCA, which permits the FDA to terminate a 30-month stay only upon the court’s “substantive determination that there is no cause of action for patent infringement or invalidity.” In the course of issuing the new rule, however, FDA indirectly addressed this apparent discrepancy by explaining that the new rule reflects the agency’s “policy” consistent with the “statutory purpose” of the stay to allow time for the litigation to run its course prior to FDA approval. FDA explained that if the plaintiff dismisses its case by court order, “there should be no further delay of approval of a 505(b)(2) application or ANDA otherwise eligible for approval.” See 80 FR 6802, 6864 (Feb. 6, 2015) (proposed rule); 81 FR 69580, 69627 (Oct. 6, 2016) (final rule).
FDA has also indicated that, consistent with this policy-based approach, it will not terminate the 30-month stay where litigation continues notwithstanding the dismissal of an infringement action. For example, in a memorandum prepared while the rulemaking was in progress, FDA declined to terminate the stay where the case was initially dismissed for lack of personal jurisdiction but later reinstated when the dismissal order was vacated. FDA reasoned that dismissal for lack of personal jurisdiction or venue is not the type of “substantive determination” under the statute that dictates the termination of the stay. See Memorandum, NDA 208090, Xtampza ER (oxycodone extended-release) Capsules: Status of 30-Month Stay of Approval, 6-7 (Oct. 30, 2015), in Approval Package for NDA 208090, 103 (2016), available here.
Similarly, in formulating the final rule, FDA revised certain language in response to a public comment concerning so-called “protective suits.” A protective suit is a second lawsuit filed in another jurisdiction, as a fallback in case the initial lawsuit filed in the patentee’s jurisdiction of choice is dismissed. Patentees will file protective suits if they are concerned that the lawsuit filed in the preferred forum may be dismissed, typically for lack of personal jurisdiction or improper venue. The final rule makes clear that the 30-month stay will not be terminated if a protective suit remains pending in another jurisdiction after the dismissal of the primary suit for lack of personal jurisdiction or any other reasons. See 81 FR 69580, 69627 (Response to Comment 59).
Thus, while FDA appears to state that 30-months stays will be terminated whenever a suit is dismissed, for whatever reason, in past practice it has taken a more flexible approach. Nevertheless, given FDA’s expansive “policy” stance on its authority to terminate a 30-month stay, practitioners and patentees should consider filing a protective suit if there is uncertainty in defending personal jurisdiction or venue or any other potential motions to dismiss.
new drug application (NDA), 505(b)(2) application, Food and Drug Administration (FDA), drugs, generic drug, Hatch-Waxman Act, Orange Book
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