The U.S. Court of Appeals for the District of Columbia Circuit ruled that Pfizer and other drug companies have the right to sell unbranded versions of their own drugs even if they undercut sales of generic competitors in a suit by Teva Pharmaceutical, which sought to stop Pfizer from selling its own generic version of the epilepsy drug Neurontin. (see

In Teva Pharmaceutical Industries Ltd. v.Lester M. Crawford, Jr., Acting Commissioner of Food And Drugs, et al. (No. 05-5004 , Decided June 3, 2005), Teva Pharmaceutical Industries sued to overturn the Food and Drug Administration’s denial of its “citizen petition” requesting that the agency prohibit Pfizer, Inc., the holder of the approved New Drug Application (NDA) for gabapentin, from marketing that drug in “generic” form during the 180-day exclusivity period provided by the Drug Price Competition and Patent Term Restoration Act, also known as the “Hatch-Waxman Amendments” to the Food, Drug, & Cosmetic Act. Because the exclusivity provision does not apply to the holder of an approved NDA, the district court entered a summary judgment for the FDA.

Section 355(j) of 21 U.S.C. provides that a drug manufacturer may submit an “Abbreviated New Drug Application” (ANDA) for approval to market a so-called “generic” drug, which is the bioequivalent to a “branded” drug previously approved pursuant to a NDA filed under 21 U.S.C. § 355(b). Unlike a NDA, an ANDA need not contain clinical evidence of the safety or efficacy of the drug.

The ANDA must certify either that the approved product is not protected by a patent or “that 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.” 21 U.S.C. § 355(j)(2)(A)(vii)(para. IV). The statute rewards the first generic applicant successfully to challenge the patent on an approved drug with a 180-day exclusivity period during which no other ANDA for the same drug may be approved.

The Federal Trade Commission, at the urging of three U.S. senators, is looking into whether authorized generics are anti-competitive. Under federal law, the first generic-drug maker to challenge patents on a drug wins six months of exclusive marketing rights. Teva argued that Pfizer, the world’s largest drug company, sought to thwart competition by undermining that incentive.

In the appellate case, Teva’s argument stemmed from the following premises: (1) the purpose of the 180-day exclusivity period was “to encourage generic companies to file Paragraph IV challenges to brand-drug patents”; (2) the marketing of a brand-generic competitor during that period will reduce the revenues going to the first to file an ANDA; and (3) such “brand-generic intrusion [into the exclusivity period] developed only recently as a routine brand-company business strategy.”

The Appeals Court held that:

..when Teva goes on to argue that because the Congress could not have anticipated brand-generic competition during the exclusivity period, adhering to the “literal” terms of the statute would lead to an absurd result, namely, that § 355(j)(5)(B)(iv) grants only a “meaningless” exclusivity against subsequent ANDA filers rather than a “commercially effective” exclusivity that runs against the NDA holder as well.

It does not follow, however, from the Congress having intended to create an incentive to challenge brand-drug patents –as it clearly did –that the incentive it created is without limitation. Rather, as even the formal name of the Hatch-Waxman Amendments (the Drug Price Competition and Patent Term Restoration Act) reflects, the Congress sought to strike a balance between incentives, on the one hand, for innovation, and on the other, for quickly getting lower-cost generic drugs to market. Because the balance struck between these competing goals is quintessentially a matter for legislative judgment, the court must attend closely to the terms in which the Congress expressed that judgment.

The DC Circuit affirmed stating that § 355(j)(5)(B)(iv) of the Act clearly does not prohibit the holder of an approved NDA from marketing, during the 180-day exclusivity period, its own “brand-generic” version of its drug.

Get the entire opinion here.

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