By Kevin E. Noonan --
On April 14th, the Federal Circuit
rendered a decision construing statutory language in a rather straightforward
and unremarkable (albeit not unanimous) opinion. But the statutory language at issue involved the 2003
Medicare Prescription Drug Improvement and Modernization Act, which amended the
1984 Drug Price Competition and Patent Term Restoration Act (colloquially known
as the Hatch-Waxman Act), thus raising the opinion's significance .
The statutory provisions at issue involve the requirements for listing patents claiming drug products or their uses in the Orange Book. The statute requires an innovator and approved New Drug Application (NDA) holder to identify these patents by patent number and expiration date. For patents claiming uses (more properly, methods of use) of a regulated drug, the FDA proscribes "use codes" which are published in the Orange Book as well.
For a use not covered by an Orange Book listed
patent, a generic drug manufacturer who files an Abbreviated New Drug
Application (ANDA) must submit a proposed label for the unpatented use as well
as a statement under 21 U.S.C. § 355(j)(2)(A)(viii) (a "Section viii"
statement) that the use does not infringe any listed patent. Approval of the ANDA requires that the
proposed label does not overlap with any patented method (a "carve-out") .
As part of the litigation provisions of the Hatch-Waxman Act, an ANDA filer can file a counterclaim in ANDA litigation that challenges the accuracy of the patent information submitted by the innovator, on two grounds -- either that the patent doesn't claim the approved drug or an approved method for using the drug (which is defined by the use codes and the innovator drug label). This part of the law was enacted as part of the MMA amendments, in response to a Federal Circuit decision as discussed in the opinion and below, and is codified as 21 U.S.C. § 355(j)(5)(c)(ii)(I):
[The ANDA] applicant may assert a counterclaim seeking an order requiring the holder to correct or delete the patent information submitted by the holder under subsection (b) or (c) of this section on the ground that the patent does not claim either--
(aa) the drug for which the application was approved; or
(bb) an approved method of using the drug.
The case involves Novo Nordisk's repaglinide drug product marketed as PRANDIN®. Novo listed two patents in the Orange Book associated with this drug: Reissue Patent No. RE37,035, which claims repaglinide drug product itself; this patent expired March 14, 2009. The other patent, U.S. Patent No. 6,677,358, claims the method of using repaglinide in combination with metformin; this patent expires June 12, 2018. There are two other approved uses for PRANDIN®: as monotherapy and in combination with thiazolidinediones (TZD's); neither of these indications is claimed in any Orange Book listed patent. All indications are for treating Type 2 (adult-onset) diabetes.
Caraco filed an ANDA for generic repaglinide having a Paragraph III certification regarding the '035 patent and a Paragraph IV certification for the '358 patent, the latter leading to ANDA litigation pursuant to 35 U.S.C. § 271(e)(2). During the litigation, Caraco stipulated in that action that its ANDA would infringe the '358 patent if it included a label describing the combination of repaglinide and metformin, and at the same time submitting an amended ANDA with a Paragraph IV certification and a Section viii statement that its ANDA would not seek approval for the repaglinide + metformin combination. The "carve-out" label was acceptable to FDA.
However, at that time the FDA changed the use code associated with Novo's PRANDIN® product. The original use code, U-546, specified the combination of repaglinide + metformin to lower blood glucose. The FDA changed this use code to U-968, for a method for improving glycemic control in adults with Type 2 diabetes." This use code was not limited to the specific repaglinide + metformin combination, and indeed was not expressly limited to Novo's drug (i.e., it could encompass metformin monotherapy). (There was some dispute between the majority and the concurring opinion, the concurrence asserting that the FDA changed the use code sua sponte which was not asserted in the majority opinion.)
This change in the use code caused the FDA to reject Caraco's Section viii certification and "carve-out" label, requiring Caraco to include the rapaglinide + metformin combination on its label. Since Caraco stipulated that this combination was an infringement, the FDA's decision essentially mandated judgment for Novo absent a finding at trial of invalidity or unenforceability.
In response to the FDA's determination, Caraco counterclaimed for an injunction to return the use code to U-546. The District Court granted summary judgment on this issue, granting Caraco the requested injunction. Specifically, the Court's injunction ordered Novo to request the FDA to change the use code in the Orange Book for Prandin® from U-968 to its former U-546 listing.
The Federal Circuit granted Novo an expedited appeal and briefing schedule, and stayed the injunction pending the appeal. In its opinion, by Judge Rader joined by Judge Clevenger (with concurring opinions by Judge Clevenger and a dissenting opinion by Judge Dyk), the CAFC held that the statute contained no provisions permitting an ANDA defendant to request or a district court to grant such an injunction, reversing the decision and vacating the injunction.
The Federal Circuit characterizes the question as whether the statutory language of "an approved method" means "any approved method" (Novo) or "all approved methods" (Caraco). Novo contended that reciting one of the patented uses was sufficient to preclude the statutory counterclaim, while Caraco contended that reciting any unpatented use permits an ANDA defendant to assert the counterclaim.
In finding for Novo, the Court found "no ambiguity" in the language of the statute:
When an indefinite article is preceded and qualified by a negative, standard grammar generally provides that "a" means "any." See, e.g., American Heritage Dictionary of the English Language 1 (4th Ed. 2006).
The Court also says Caraco improperly focuses on its proposed uses:
[T]he statutory language "an approved method of using the drug" refers to the approved methods of using the listed drug, PRANDIN. This language cannot refer to the methods of using Caraco's generic drug, because the FDA has not yet approved Caraco's ANDA.
Thus, the Court concluded that Caraco can assert its counterclaim only if no patent listed in the Orange Book claims "any approved methods of using the listed drug." That was not the case here.
The opinion also references the legislative history "to make sure that it does not contain any clear intent to the contrary." It did not: the Court says that the counterclaim provisions of the statute addressed the Court's own interpretation of the Hatch-Waxman Act to be devoid of a "private cause of action to delist an allegedly irrelevant patent from the Orange Book." See Mylan Pharms. Inc. v. Thompson, 268 F.3d 1323 (Fed. Cir. 2001). This intent was ascertained by the panel due to the use in the statute of "exact language" from the Mylan decision, the Court concluding that "[t]his choice of legislative language suggests that the 2003 Amendment sought to correct the specific issue raised in Mylan, i.e., to deter pioneering manufacturers from listing patents that were not related at all to the patented product or method." Accordingly, the opinion found this legislative history to be consistent with its interpretation that "an approved method" means "any approved method," because this interpretation "bears a direct relation to the purpose of Orange Book listings."
The opinion also asserts that, under its interpretation, the combination of a Section viii certification and ANDA litigation will "ensure that a generic drug [approved] for non-patented purposes will not be used for patented purposes via a simple section viii certification." This is consistent , the court contends, with the Hatch-Waxman Act's purpose of striking "a balance [between] the pioneering and generic manufacturers' interests."
Finally, the Court held that the statute has no provisions permitting a generic drug maker to obtain an order from a court, like the injunction here, to compel a patent holder to change or modify its use code. The plain language of the statute authorizes the generic drug maker to "request an order compelling the 'holder to correct or delete the patent information submitted by the holder'." (The Court notes that "the patent information" under the statute is "the patent number and the expiration date.") (emphases in original). Put simply, "the patent information" does not include the use code narrative according to the plain language of the statute, and thus does not grant an ANDA challenger to obtain the injunction granted by the district court below.
This analysis is complicated by an FDA requirement, promulgated before passage of the amendments in 2003, that "a pioneering manufacturer . . . submit not only the patent number and the expiration date, but also the use code narratives and other patent-related information" on specific FDA forms. The panel refused to conclude that the regulation "change[d] the ordinary meaning of the statutory use of the term 'patent information,'" citing the Court's opinion in Wyeth v. Kappos that clear statutory meaning trumps any agency regulatory interpretation. And the Court reminds us all that "no deference is due to agency interpretations at odds with the plain language of the statute itself," citing Pub. Employees Ret. Sys. v. Betts, 492 U.S. 158, 171 (1989). Here, the legislative intent sheds no light on any relevance of the agency provisions to the plain meaning discerned by the panel.
Judge Clevenger concurred with the Court's judgment, but in his view Novo merely reacted to a request by the FDA, and changed its use code narrative to match the new FDA use code. "FDA, acting independently, gummed up the works," according to the judge.
Judge Dyk (at left) dissented, believing that the construction is contrary to the "manifest purpose" of the statute, allowing "the same manipulative practices" the statute was passed to prevent, i.e., "delay[ing] the onset of competition from generic drug manufacturers." The dissent has a thorough explication of the Hatch-Waxman act and the 2003 Amendments, particularly with regard to what Judge Dyk characterizes as efforts by NDA filers to "block generic competition by making unwarranted claims to patent coverage, for example, by listing in the Orange Book a patent for a drug or method of use when in fact the patent was clearly inapplicable."
Since the FDA "repeatedly declined to police Orange Book listings," and the Federal Circuit refused to let ANDA filers use declaratory judgment jurisdiction to do so (Mylan Pharms Inc. v. Thompson), Congress intervened by passing the 2003 amendments, including the Section viii certification provisions thereof.
Judge Dyk disagrees with majority on construing the term "patent information" to be limited to patent number and expiration date. According to Judge Dyk, this information is not required "in the abstract"; "the statute on its face contemplates that the scope of the patent must be accurately described and that the patent must be related to the drug or method of use for which the NDA application is submitted."
In context, the statute "contemplates the description of the scope of the patent and of the relationship between the patent and the drug or the method of use; the description of that scope and relationship is itself 'patent information.'"
At least one source of the majority's error, in Judge Dyk's view, is their erroneous understanding of the Orange Book:
[T]he majority's description of the Orange Book likely bears no relationship to the actual document. The Orange Book is not a list of patents from which a particular patent could be excised. The Orange Book is a list of NDAs that associates particular patents with approved drugs or methods of use. Correction of an Orange Book listing does not strike a patent from a list, it strikes (or corrects) the listing that associates the patent with a particular NDA, approved drug, or method of use.
Judge Dyk also disagreed with the majority's treatment of the FDA's regulations promulgated six months before enactment of the 2003 Amendments, stating that "Congress was well aware of this regulatory interpretation of 'patent information' when it enacted the counterclaim provision," and citing portions of the legislative history illustrating this awareness (e.g., Senator Schumer's statement that "[t]he bill provides a critical complement to the work the FDA has done in clarifying its regulations on patent listing, but it goes much further." Legislative and Regulatory Responses to the FTC Study on Barriers to Entry in the Pharmaceutical Marketplace: Hearing Before the S. Comm. on the Judiciary, 108th Cong. 19 (2003)). Judge Dyk believes that under circumstances where "Congress was specifically aware of the agency's interpretation of a statutory term at the time the statute was enacted, this is compelling evidence of legislative adoption of the agency's interpretation," citing Supreme Court precedent to this effect (including United States v. Bd. of Comm'rs of Sheffield, Ala., 435 U.S. 110, 131-35 (1978); Cammarano v. United States, 358 U.S. 498, 510 (1959); and Hartley v. Comm'r, 295 U.S. 216, 220 (1935)).
Judge Dyk also rejected the majority's interpretation of the term "any" in the statute, citing (ironically in view of his Merck v. Integra decision) Justice Scalia's admonition that, in construing a statute, '[u]ltimately context determines meaning,'" citing Johnson v. United States, No. 08-6925, slip op. at 5 (U.S. Mar. 2, 2010). He illustrates this objection with the following hypothetical:
Under the majority's view, no correction of erroneous Orange Book information is permitted so long as the patent covered any approved method of use covered by the NDA. The patent can be listed in the Orange Book as erroneously covering approved use A, despite the fact that the patent actually covers approved use B, and the counterclaim provision provides no mechanism for correction. This cannot be what Congress intended.
Judge Dyk's dissent adds more confusion to the history of the change in use code for PRANDIN®; consistent with his view that NDA holders attempt to manipulate FDA rules to maximize the time generic drug manufacturers are kept off the market, in his description of the underlying facts Novo asked the FDA for the change in use codes, and Caraco submitted its "carve-out" labeling proposal at FDA's behest. According to Judge Dyk:
Here, the patentee did exactly what was expressly forbidden. For the proposed use code description submitted on the FDA Form 3542, Novo submitted the following: "A method for improving glycemic control in adults with type 2 diabetes mellitus." J.A. 673. It thus utilized that portion of PRANDIN's label that refers to the use of repaglinide standing alone to treat diabetes (an unpatented use), not to the use of repaglinide together with metformin (a patented use). There is no justification for using a portion of the label referring to an unpatented use to describe a patented use.
The manipulative nature of Novo's actions is confirmed not only by the lack of justification for the change, but also by the timing of the change (two years after the labeling change was initiated by the FDA and immediately after the FDA approved Caraco's section viii carve-out), and by its own admission that preventing approval of Caraco's ANDA was part of the motivation for changing the use code. At oral argument, Novo conceded that the decision to change the use code was in part "a response to the section viii ruling . . . in December '08 from FDA." Oral Arg. at 3:43-4:03.
"In summary, the majority's crabbed view of the statute sanctions an unjustified manipulation of the Orange Book," according to Judge Dyk. Perhaps hoping to provoke Supreme Court review, in the final portion of the dissent, Judge Dyk characterizes as "notably inconsistent" the majority's view and the views of the D.C. Circuit court regarding what constituted whether the counterclaim is available under these circumstances.
Novo Nordisk A/S v. Caraco Pharmaceutical Laboratories, Ltd. (Fed. Cir. 2010)
Panel: Circuit Judges Rader, Clevenger, and Dyk
Opinion for the court by Circuit Judge Rader; concurring opinion by Circuit Judge Clevenger; dissenting opinion by Circuit Judge Dyk