Mylan Pharmaceuticals, Inc. v. United States Food and Drug Administration
454 F.3d 270 (2006)
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Rule of Law:
The 180-day market exclusivity period granted to the first generic drug manufacturer to file a Paragraph IV Abbreviated New Drug Application (ANDA) under the Hatch-Waxman Act prevents the Food and Drug Administration (FDA) from approving subsequent ANDAs, but it does not empower the FDA to prohibit the pioneer drug company from marketing an 'authorized generic' version of the drug under its own approved New Drug Application (NDA).
Facts:
- Procter & Gamble Pharmaceuticals, Inc. (P&G) held an approved New Drug Application (NDA) for a drug to treat urinary tract infections, which it sold under the brand name Macrobid.
- Mylan Pharmaceuticals, Inc. was the first company to file an Abbreviated New Drug Application (ANDA) with a Paragraph IV certification, seeking approval to market a generic version of Macrobid called nitrofurantoin.
- In anticipation of competition from an authorized generic, Mylan filed a citizen petition with the Food and Drug Administration (FDA) requesting a rule to prohibit the marketing of authorized generics during the 180-day exclusivity period.
- The FDA approved Mylan's ANDA on March 22, 2004.
- Mylan began commercially marketing its generic drug on March 23, 2004, which triggered its 180-day statutory exclusivity period.
- On the same day, Watson Pharmaceuticals, Inc., under a license from P&G, began selling an 'authorized generic' version of Macrobid.
- The direct competition from the authorized generic caused Mylan to lose tens of millions of dollars in potential sales revenue.
Procedural Posture:
- The FDA denied Mylan's citizen petition, concluding the Hatch-Waxman Act did not grant it authority to prohibit the marketing of authorized generics during the 180-day exclusivity period.
- Mylan (Plaintiff) sued the FDA (Defendant) in the U.S. District Court for the Northern District of West Virginia, challenging the agency's denial under the Administrative Procedure Act.
- The FDA filed a motion to dismiss for failure to state a claim upon which relief could be granted.
- The district court granted the FDA's motion to dismiss.
- Mylan (Plaintiff-Appellant) appealed the dismissal to the U.S. Court of Appeals for the Fourth Circuit.
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Issue:
Does the 180-day market exclusivity provision of the Hatch-Waxman Act, 21 U.S.C. § 355(j)(5)(B)(iv), grant the Food and Drug Administration (FDA) the authority to prohibit the holder of an approved New Drug Application (NDA) from marketing an 'authorized generic' version of its drug during the exclusivity period enjoyed by the first applicant to file a Paragraph IV Abbreviated New Drug Application (ANDA)?
Opinions:
Majority - Michael, Circuit Judge
No. The 180-day market exclusivity provision of the Hatch-Waxman Act does not grant the FDA the authority to prohibit an NDA holder from marketing an authorized generic. Applying the Chevron framework, the court found the statutory language of 21 U.S.C. § 355(j)(5)(B)(iv) to be plain and unambiguous. The statute's text only restricts the FDA from making effective a 'subsequent application'—referring to a later-filed ANDA—during the 180-day period. It makes no mention of, and places no restrictions on, drugs marketed under a pre-existing, approved NDA, such as an authorized generic. Because the statutory command is straightforward, the court declined to consult legislative history or defer to Mylan's arguments about congressional intent. The court also rejected Mylan's argument that the FDA's decision was inconsistent with a prior agency position, holding that the statute's unambiguous language is controlling and, in any event, the prior case dealt with a different issue (what triggers the exclusivity period) rather than what conduct is prohibited during it.
Analysis:
This decision solidifies a significant strategic option for brand-name pharmaceutical companies, allowing them to mitigate the financial impact of patent expiration by launching their own 'authorized generic.' By affirming that the 180-day exclusivity period is not a true market monopoly for the first ANDA filer, the ruling substantially diminishes the economic incentive for generic companies to undertake the risk and expense of patent litigation. This outcome potentially weakens a key purpose of the Hatch-Waxman Act, which was to encourage such challenges to bring lower-cost drugs to market sooner. The court's strict textualist interpretation places the burden on Congress to amend the statute if it wishes to close this 'loophole' and restore the full intended value of the exclusivity period.
