Generic Pharmaceutical Exclusivity Period Ends With Patent Expiration

July 22, 2011 – Blog Post

On July 6, the New Jersey District Court filed an opinion denying the injunctive relief sought by Nostrum Pharmaceuticals LLC regarding the FDA’s decisions on the statutory exclusivity period for Nostrum’s ANDA on carbamazepine 300 mg extended-release capsules. Specifically, Nostrum challenged (1) the FDA’s application of the “holding-on-the-merits” standard used to determine a court decision trigger and (2) the FDA’s interpretation that the 180-day exclusivity period terminates with the expiration of the patent relied upon.

Nostrum’s ANDA contained paragraph IV certifications for two patents, U.S. Patent No. 5,912,013 and U.S. Patent No. 5,326,570, both listed in the Orange Book for Shire Development Inc.’s carbamazepine extended-release capsules, marketed under the brand name Carbatrol. Nostrum’s ANDA received FDA approval on May 20, 2011. Under the Hatch-Waxman Amendments, a 180-day exclusivity period commences upon the earlier of (1) the commercial marketing of the generic by a first ANDA filer or (2) “a decision of a court that on its face evidences a holding on the merits that a patent is invalid, not infringed, or unenforceable.”

The FDA claimed that Nostrum’s eligibility for the 180-day exclusivity period would only be founded upon the ‘570 patent as the exclusivity period for the ‘013 patent had been triggered by a 2009 decision in Shire Labs, Inc. v. CorePharma, LLC, a patent infringement suit which resulted in the granting of a motion for summary judgment and final judgment in support of defendant CorePharma. Nostrum subsequently began marketing its product upon approval, triggering the exclusivity period as to the ‘570 patent. However, the ‘570 patent expires on July 23, 2011, before the conclusion of the 180-day exclusivity period. The FDA contended that upon the expiration of the ‘570 patent, any later-filed carbamazepine ANDA may be approved. Nostrum challenged the FDA’s positions.

As to the ‘013 patent’s exclusivity period being triggered by the CorePharma decision, Nostrum argued that the FDA incorrectly applied the relevant standard. Following a 2006 decision in Teva Pharmaceuticals USA, Inc. v. FDA, the FDA has interpreted 21 U.S.C. § 355(j)(5)(B)(iv)(II), providing that exclusivity starts on the date of a court decision holding the patent at issue to be invalid or not infringed, to require “a decision of a court that on its face evidences a holding on the merits that a patent is invalid, not infringed, or unenforceable.” The FDA determined that the final judgment in CorePharma triggered the exclusivity as to the ‘013 patent. Nostrum argued that because the CorePharma court judicially estopped Shire from arguing that CorePharma’s product infringed the ‘013 patent after Shire previously conceded non-infringement, a holding on the merits was not performed and thus the decision was analogous to a dismissal for lack of jurisdiction rather than a decision on the merits of infringement. However, the District Court was not persuaded by Nostrum’s argument. The District Court stated that “[t]he court must determine whether there exists a genuine dispute of material fact and whether the undisputed facts entitle a party to judgment as a matter of law.” TheCorePharma court concluded that there were no facts from which infringement could be established and entered a judgment regarding the ‘013 patent. The FDA’s reliance on the face of the CorePharma decision was appropriate and “[t]he FDA need not look any further than that.”

In regard to the ‘570 patent’s expiration truncating the 180-day exclusivity period, the FDA’s position was that an applicant with a pending carbamazepine ANDA including a paragraph IV certification would be required to amend its application to include a paragraph II certification reflecting the status of the ‘570 patent. As the Hatch-Waxman Amendments permit the FDA to delay approval only for applications with paragraph IV certifications, an ANDA with a paragraph II certification should be allowed to proceed. Nostrum argued that the plain language of the exclusivity portion of the Hatch-Waxman Amendments does not restrict exclusivity to patent terms. Again, the District Court was not convinced. The District Court stated that “[t]he statutory provision entitling Nostrum to exclusivity, by its terms, applies only to paragraph IV certifications, ‘which cease to exist upon patent expiration.’” Applying the framework established by the Supreme Court’s decision in Chevron U.S.A. Inc. v. Natural Res. Def. Council, the District Court found that “the FDCA unambiguously supports the FDA’s determination that it is not prohibited by [the statute] from approving later-filed ANDAs upon expiration of the ‘570 patent.”

Nostrum has filed a notice to appeal the decision to the U.S. Court of Appeals for the Third Circuit.

The Hatch-Waxman Amendments created the 180-day marketing exclusivity period as an incentive for generic drug manufacturers to challenge a brand name drug’s questionable patents. However, this decision, if it withstands appeal, requires the early termination of the exclusivity period if the patent expires during that timeframe.