The U.S. Court of Appeals for the DC Circuit, in Teva Pharmaceuticals v. FDA and Apotex (05-5401 & 05-5460), held that in a suit challenging agency action, the courts are not to choose between competing meanings of an ambiguous statute when the agency hasn’t weighed in first.

The Food, Drug, and Cosmetic Act grants a 180-day exclusive marketing period to the first generic drug manufacturer to file an Abbreviated New Drug Application (“ANDA”) that contains a challenge to the patents protecting a brand name drug. This exclusivity period begins to run either upon “notice [to the FDA] of the first commercial marketing of the drug” or on “the date of a decision of a court . . . holding the patent [to the branded drug] to be invalid or not infringed, whichever is earlier.” [Note: Congress eliminated the court decision trigger in 2003 but the application was filed before the amendment entered into force.]

Bristol-Myers Squibb Co. manufactures and sells Pravachol (pravastatin sodium), a cholesterol-reducing medication and owns or holds licenses to four patents covering Pravachol. The patent on the molecule itself (the “product patent”) expires on April 20, 2006. Teva Pharmaceuticals filed the first application to market generic pravastatin sodium and certified that it would not market its generic version of Pravachol until after the product patent expired.

Teva challenged the remaining patents by filing a certification that they are “invalid or will not be infringed” by the generic product. This paragraph IV certification is a form of patent infringement and triggers statutory notice requirements to allow the patentholder to bring suit. But, Bristol-Myers did not sue Teva or any of the other seven generic drug manufacturers that filed applications containing the identical patent certifications.4

Apotex then sued Bristol-Myers seeking a declaratory judgment that Bristol-Myers’s three patents covering Pravachol’s formulation and method of use were invalid or not infringed by Apotex’s generic pravastatin sodium product. Bristol-Myers did not answer the complaint; it instead moved to dismiss the complaint for lack of subject matter jurisdiction.

The parties then entered stipulation and order stated that because “[Bristol-Myers] repeatedly represented and assured Apotex that, notwithstanding any disagreement on the scope or interpretation [of the disputed patents], it had no intention to bring suit against Apotex for infringement,” Apotex stipulated that its complaint be dismissed “for lack of subject matter jurisdiction.”

Apotex then asked the Food and Drug Administration to rule that Apotex’s litigation produced a “decision of a court” that triggered Teva’s exclusivity period for generic pravastatin sodium. The FDA concluded that the Apotex “stipulation and order” qualified as a “decision of a court” and that Teva’s period of exclusivity therefore began to run on the date the stipulation and order became final.

Teva challenged the FDA’s decision and the district court granted Teva’s requests for a declaration that the FDA’s conclusions were contrary to law and for injunctive relief preventing the FDA from approving any other generic pravastatin sodium application sooner than 180 days after Teva begins marketing its product. The district court concluded that the voluntary dismissal of Apotex’s declaratory judgment action did not meet the statutory definition of a “decision of a court.”

The Court of Appeals held that although the court stated that the statute could be interpreted to include dismissals of declaratory judgment actions as triggering events, it left the final decision to the FDA:

In a suit challenging agency action, “it is not for the court ‘to choose between competing meanings’” of an ambiguous statute when the agency charged with its administration has not weighed in first. PDK Labs., Inc. v. DEA, 362 F.3d 786, 798 (D.C. Cir. 2004) (quoting Alarm Indus. Commc’ns Comm. v. FCC, 131 F.3d 1066, 1072 (D.C. Cir. 1997)). When a statute is ambiguous, Congress has left a gap for the agency to fill. See Chevron USA Inc. v. Natural Res. Def. Council, 467 U.S 837, 843-44 (1984). A court’s interpretation prevails only if it “follows from the unambiguous terms of the statute and thus leaves no room for agency discretion.” Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 125 S. Ct. 2688, 2700 (2005). We therefore generally remand for an agency to make the first interpretation of an ambiguous statutory term when it has failed to do so previously.

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