Federal Circuit Issues Biovail v. Andrx Decision:

February, 2002

The Federal Circuit's decision in Biovail v. Andrx Pharmaceuticals¹ -- the second decision on Orange Book listings issued by this court in less than three months² -- illustrates the lengths to which NDA applicants are prepared to go to keep patents listed in the FDA's Orange Book and ANDA applicants off the market for as long as possible.

Biovail had already been granted a 30-month stay under 21 U.S.C. §355(j)(5)(B)(iii) after it had sued Andrx for infringement based on an earlier patent listed in the Orange Book. Under this Hatch-Waxman section, FDA cannot approve the ANDA for 30-months or until earlier action by the court where the infringement action is pending. That section also gives the court a basis for shortening or lengthening this stay due to either party's failure to reasonably cooperate in expediting the action.

When Biovail listed another patent shortly before the stay expired, Andrx argued to the district court that Biovail should not be granted a second 30-month stay when Andrx was sued a second time by Biovail. Andrx argued that Biovail had deliberately changed the formulation of its drug, Tiazac® (dilitiazem hydrochloride), so that it would fall within the claims of the newly listed patent in order to qualify for listing in the Orange Book. The district court agreed that such change was done to impede or delay the resolution of patent suits resulting from the filing of Andrx's ANDA. The district court then shortened the new 30-month stay to coincide with expiration of the first 30 month stay, effectively eliminating it, and ordered FDA to approve Andrx's ANDA.

On appeal, the Federal Circuit vacated the district court's order. The Court found that the district court had erred in interpreting the 30-month stay provision and agreed with Biovail that the stay can be shortened only if the parties fail to expedite the infringement action once it has been filed. However, the Court also raised the possibility that the stay might be shortened: where an infringement suit was not filed expeditiously and, also, where a patent application was not filed and prosecuted expeditiously.

The Court also agreed with Biovail that the district court had erred in shortening the stay due to Biovail's conduct in changing the formulation, citing three reasons. First, the Court stressed that whether a patent claims the drug product actually being marketed is irrelevant to the question of whether a patent is properly listed in the Orange Book. Rather, the critical question, in the Court's view, is the relationship of the patent to the drug and drug substances covered by the NDA. Second, citing to its October decision in Mylan v. Thompson³, the Court noted that the district court had no authority in an infringement action to shorten the 30-month stay due to improper conduct before the FDA. Third, the Court found no legal basis for the district court's decision to shorten the stay based on the delay it would cause in resolving other patent disputes blocking final approval of Andrx's ANDA. The district court's authority under §355(j)(5)(B)(iii) was limited to the present infringement action.

The Court noted that Andrx could have brought an action to delist the new patent against FDA under the Administrative Procedure Act (APA), based on the grounds that the listing was arbitrary or capricious or otherwise not in accordance with the law. However, as Andrx had not properly pled such an action, the Court declined to express any opinion as to whether FDA's refusal to inquire into the correctness of listing of the new patent violated the APA.

To those who follow Hatch/Waxman Amendments cases closely, Biovail breaks no new ground. The district court's interpretation that NDA applicants and patent holders are entitled to only one 30-month stay, no matter how many patents are listed in the Orange Book, is contrary to the views of the FDA and the Hatch/Waxman bar⁴. Also, availability of direct actions against FDA to delist drugs from the Orange Book under the APA comes as no surprise. Biovail should be contrasted with the Watson v. Henney decision in which the district court found no violation of the APA⁵. In Watson, resolution of the listing dispute by FDA would have required expertise in patent law - a skill which the FDA has long disclaimed. By contrast, in Biovail the issue was whether the new formulation of Tiazac® was covered by the NDA - an issue squarely within FDA's expertise. As a result, in Biovail the FDA could be held to a higher standard of review⁶.

Endnotes

1. No. 01-1650, 02-1025 (Jan. 17, 2002)
2. See October 2001 and November 2001 Regulatory Updates for discussions of other Orange Book listings decisions. The November Regulatory Update discusses the D.C. Circuit's decision in another Orange Book listing case, American Bioscience v. Thompson.
3. See our October Regulatory Update
4. Indeed, the Federal Circuit quoted Fish & Richardson partner Terry Mahn's article in a recent Food and Drug Law Journal for the proposition that new listings in the Orange Book (triggering new 30-month stays) permit NDA holders to "evergreen" their patents.
5. Civ. No. 00-3516 (D. Md Jan. 17, 2001)
6. See our November Regulatory Update