Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-02-05410/USCOURTS-caDC-02-05410-0/pdf.json

Parties Involved:
Apotex, Inc.
Appellant
Lester M. Crawford Jr.
Appellee
Purepac Pharmaceutical Company
Appellee
Tommy G. Thompson
Appellee
Torpharm, Inc.
Appellant

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 25, 2003 Decided January 20, 2004

No. 02-5410

PUREPAC PHARMACEUTICAL COMPANY,

APPELLEE

v.

TOMMY G. THOMPSON,

SECRETARY OF HEALTH AND HUMAN SERVICES, AND

LESTER M. CRAWFORD JR., DEPUTY COMMISSIONER OF

FOOD AND DRUGS,

APPELLEES

TORPHARM, INC. AND APOTEX, INC.,

APPELLANTS

Consolidated with

03-5121

Appeals from the United States District Court

for the District of Columbia

(No. 02cv01657)

(No. 03cv00254)

–————

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #02-5410 Document #798020 Filed: 01/20/2004 Page 1 of 22
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William A. Rakoczy argued the cause for appellants. With

him on the briefs were Hugh S. Balsam and Arthur Y. Tsien.

Hugh L. Moore, Jacqueline H. Eagle, and Matthew O. Brady

entered appearances.

Andrew E. Clark, Attorney, U.S. Department of Justice,

argued the cause for the federal appellees. With him on the

brief were Peter D. Keisler, Assistant Attorney General;

Eugene M. Thirolf, Director; Alex M. Azar II, General

Counsel, U.S. Department of Health & Human Services;

Daniel E. Troy, Chief Counsel; and Karen E. Schifter,

Associate Chief Counsel. Christine N. Kohl, Attorney, U.S.

Department of Justice; Douglas N. Letter, Litigation Counsel; and Howard S. Scher, Attorney, entered appearances.

Charles J. Raubicheck argued the cause for appellee Purepac Pharmaceutical Company. With him on the brief was

Steven M. Amundson. James M. Webster, Mark C. Hansen,

and Richard H. Stern entered appearances.

Before: GINSBURG, Chief Judge, and EDWARDS and TATEL,

Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge: To encourage the marketing of lowcost generic drugs, the 1984 Hatch-Waxman amendments to

the Food, Drug, and Cosmetic Act grant companies that

successfully challenge drug patents the right to sell their

generic drugs without competition for 180 days. In this case,

two companies, each seeking to market a generic drug, competed for the right to exclusivity. The Food and Drug

Administration ruled that neither company could earn exclusivity by challenging the first of two patents, but it awarded

exclusivity to one of the companies based on that company’s

challenge to the second patent. The district court rejected

challenges to these two decisions, and the company denied

exclusivity now appeals. Finding no error in the district

court’s two thorough and well-reasoned opinions, we affirm in

all respects.

USCA Case #02-5410 Document #798020 Filed: 01/20/2004 Page 2 of 22
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I.

The Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301–99

(FDCA), provides that a company wishing to market a new

brand-name drug must submit a New Drug Application,

known as an NDA, to the Food and Drug Administration.

See id. § 355(b)(1) (2000 & Supp. III 2003). Usually quite

lengthy, NDAs must include, among other things, evidence of

the drugs’ safety and effectiveness, as well as information

about patents that cover or might cover the drugs. Id.

In 1984, Congress passed the ‘‘Hatch-Waxman’’ amendments to the FDCA. See The Drug Price Competition and

Patent Term Restoration Act of 1984, Pub. L. No. 98–417, 98

Stat. 1585 (1984) (codified in scattered sections of titles 21, 35,

and 42 U.S.C.). Enacted to expedite the process by which

companies gain approval to sell generic versions of alreadyapproved brand-name drugs, the amendments allow companies seeking such approval to submit Abbreviated New Drug

Applications, known as ANDAs, that ‘‘piggyback’’ on the

safety-and-effectiveness information that the brand-name

manufacturers submitted in their NDAs. See 21 U.S.C.

§ 355(j)(2)(A); 21 C.F.R. § 314.94(a)(3) (2003). ‘‘The result

[is] to make practical the manufacture of generic copies which

theretofore had been uneconomical.’’ Mead Johnson Pharm.

Group v. Bowen, 838 F.2d 1332, 1333 (D.C. Cir. 1988).

Like NDAs, ANDAs must address patents that cover or

might cover the relevant drugs. For each patent, companies

can satisfy this requirement by including in their ANDAs one

of several ‘‘certifications’’ that explain why the FDA should

approve the application despite the patent’s claim on the

drug. 21 U.S.C. § 355(j)(2)(A)(vii). The certification at issue

in this case—a ‘‘paragraph IV certification,’’ named for the

subsection of the law that describes it—states ‘‘that such

patent is invalid or will not be infringed by the manufacture,

use, or sale of the new drug.’’ Id. § 355(j)(2)(A)(vii)(IV). In

USCA Case #02-5410 Document #798020 Filed: 01/20/2004 Page 3 of 22
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essence, applicants use paragraph IV certifications to challenge the validity of brand-name manufacturers’ patents.

An applicant that includes one or more paragraph IV

certifications in its ANDA must inform both the patent holder

and the company that submitted the NDA on which the

ANDA ‘‘piggybacks.’’ Id. § 355(j)(2)(B)(i). Once an applicant gives notice, the FDA must wait forty-five days before

approving the ANDA, thereby giving the patent holder that

much time to file a patent-infringement suit. Id.

§ 355(j)(5)(B)(iii); 21 C.F.R. § 314.107(f)(2). If the patent

holder sues, the FDA must wait thirty months from the

notice date before approving the ANDA unless the applicant

wins the suit sooner or the court hearing the suit shortens the

thirty-month period. 21 U.S.C. § 355(j)(5)(B)(iii).

In order to encourage paragraph IV challenges, thereby

increasing the availability of low-cost generic drugs, the

FDCA provides that the first company to win FDA approval

of an ANDA containing a paragraph IV certification has the

right to sell its drug without competition for 180 days. Id.

§ 355(j)(5)(B)(iv). The statute and the implementing regulation create this exclusivity period by prohibiting the FDA

from approving any other ANDA that contains a paragraph

IV challenge to the same patent until 180 days after the first

company markets its drug or 180 days after the first company

wins a patent-infringement suit involving that patent, whichever comes first. Id.; 21 C.F.R. § 314.107(c)(1).

Paragraph IV certifications are not the only way for ANDA

applicants to satisfy their obligation to address all relevant

patents. Applicants can instead submit one or more ‘‘section

viii statements,’’ named, again, after the relevant FDCA

subsection—section 505(j)(2)(A)(viii). A section viii statement

indicates that a patent poses no bar to approval of an ANDA

because the applicant seeks to market the drug for a use

other than the one encompassed by the patent. See 21 U.S.C.

§ 355(j)(2)(A)(viii). For example, if a brand-name manufacturer’s patent covers a drug’s use for treating depression, and

the ANDA applicant seeks approval to use the drug to treat

any other condition, then a section viii statement would be

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appropriate. Thus, whereas applicants use paragraph IV

certifications to challenge the validity of admittedly applicable

patents, they use section viii statements to assert that patents

do not apply. The FDA has long required that for every

patent ANDA applicants use either a paragraph IV certification or a section viii statement—they may not use both. As

the FDA puts it, ‘‘either the applicant is seeking approval for

the use claimed in the patent, or it is not.’’ TorPharm, Inc. v.

Thompson, 260 F. Supp. 2d 69, 77 (D.D.C. 2003) (quoting the

record in that case) (internal quotation marks omitted).

Paragraph IV certifications and section viii statements have

quite different consequences. Applicants submitting section

viii statements have no obligation to provide notice, nor must

they wait thirty months for FDA approval. As the district

court explained, ‘‘the FDA may [thus] approve a section viii

application immediately, making it an attractive route for

generic manufacturers, even though a section viii statement

does not entitle a successful applicant to the 180–day period

of exclusivity bestowed on paragraph IV applicants.’’ Purepac Pharm. Co. v. Thompson, 238 F. Supp. 2d 191, 195

(D.D.C. 2002).

In order to determine what patents cover existing brandname drugs and hence whether any paragraph IV certifications or section viii statements are needed, applicants look in

the ‘‘Orange Book,’’ an FDA publication that includes all

patent information that companies have submitted to the

agency. ‘‘Method-of-use patents’’—which cover specific uses

for drugs—can be included in the Orange Book only if they

cover drug uses that the FDA has approved. 21 C.F.R.

§ 314.53(b). In other words, companies cannot use the

Orange Book to claim protection for uses that the FDA has

not approved. The FDA, however, does not evaluate patent

information that companies submit to it; it just passively

publishes information it receives. This means that if one

company submits patent information that a second company

believes is false or violates the FDA’s regulation prohibiting

the listing of unapproved-use patents, the second company—

after having the FDA verify the information’s accuracy with

the first company—must go to court to resolve the dispute.

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Meanwhile, the second company must, if it submits an ANDA,

treat the disputed patent as valid. In other words, it must

include in its ANDA either a paragraph IV certification or a

section viii statement.

This case involves gabapentin, a drug sold by Pfizer, Inc.

that the FDA has approved for treating epilepsy. In 1998,

appellee Purepac Pharmaceutical Company submitted an

ANDA seeking permission to sell a generic version of Pfizer’s

brand-name drug, Neurontin. Purepac’s ANDA listed three

patents that Warner-Lambert Company, which later assigned

Pfizer the rights to the drug, had included in its gabapentin

NDA. One of the three—the only one relevant to this case—

was No. 5,084,479 (the ’479 patent), a method-of-use patent.

Seeking to sell its drug as a treatment for epilepsy, Purepac

submitted a section viii statement about this patent because

as it read the Orange Book, the patent covered gabapentin’s

unapproved use for treating neurodegenerative diseases.

That is, Purepac asserted that the ’479 patent posed no bar to

FDA approval of its ANDA because the patent covered a use

other than the one for which Purepac sought permission.

Given that under FDA regulations, only approved-use method-of-use patents may be listed in the Orange Book, Purepac’s interpretation of the ’479 patent would, if true, have

meant that the patent’s inclusion in the Orange Book was

improper.

About a month after Purepac submitted its ANDA, appellant TorPharm, Inc. filed its own ANDA, similarly seeking

permission to market a generic version of Neurontin. Unlike

Purepac, TorPharm submitted both a paragraph IV certification and a section viii statement regarding the ’479 patent.

By doing so, TorPharm effectively hedged its bets on whether

the information that Warner-Lambert had submitted to the

FDA showed that the patent covered gabapentin’s use for

treating epilepsy or for treating neurodegenerative diseases.

TorPharm’s notice to Warner-Lambert, however, indicated

that TorPharm agreed with Purepac’s interpretation of what

use the ’479 patent covered: the notice stated that TorPharm’s generic drug posed no danger of infringement because ‘‘[a]ll of the claims of the ’479 patent are directed to a

method of using gabapentin and its derivatives in the treatUSCA Case #02-5410 Document #798020 Filed: 01/20/2004 Page 6 of 22
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ment of neurodegenerative diseases.’’ Warner-Lambert Co.

v. Apotex Co., No. 98 C 4293, 2001 WL 1104618, at *2 (N.D.

Ill. Sept. 14, 2001) (quoting the record in that case) (internal

quotation marks omitted).

The FDA initially informed Purepac that because WarnerLambert claimed that the ’479 patent covered gabapentin’s

use for treating epilepsy, Purepac should have filed a paragraph IV certification. Purepac protested that this represented a reversal by the FDA, pointing out that when the

agency first listed the patent in the Orange Book, the concomitant ‘‘use code’’—the code the FDA assigns to identify

the use that a patent covers—bore the title ‘‘treatment of

neurodegenerative diseases.’’ By contrast, the use code that

the FDA gave to another of the patents that WarnerLambert had mentioned in its NDA was entitled ‘‘epilepsy.’’

Since the FDA acknowledges that ‘‘in assigning use codes it

relies exclusively on the NDA holder’s statements regarding

a patent’s coverage,’’ Purepac, 238 F. Supp. 2d at 198 n.10,

Purepac argued that the FDA’s choice of use code indicated

that the agency had previously decided that according to

Warner-Lambert, the ’479 patent covered gabapentin’s use

for treating neurodegenerative diseases rather than epilepsy.

According to Purepac, it therefore needed to file a section viii

statement.

Unconvinced, the FDA informed Purepac that the company

would have to add a paragraph IV certification before its

ANDA could be approved. Purepac did not follow this instruction. Instead, perhaps recognizing that complying with

the FDA’s demand would mean that TorPharm would receive

the 180–day exclusivity as the first company to submit an

approvable ANDA containing all necessary paragraph IV

certifications, Purepac sued the FDA in the United States

District Court for the District of Columbia, arguing that the

FDA’s rejection of its section viii statement and the agency’s

insistence that the company submit a paragraph IV certification were arbitrary and capricious.

The district court, through Judge Huvelle, ruled for Purepac, holding that the FDA should have concluded on the basis

USCA Case #02-5410 Document #798020 Filed: 01/20/2004 Page 7 of 22
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of the evidence before it that the ’479 patent covered gabapentin’s use for treating neurodegenerative diseases. Because Purepac sought approval for a different use, the district

court directed the FDA to accept the company’s section viii

statement. See Purepac, 238 F. Supp. 2d at 212. The court’s

ruling did not entitle Purepac to exclusivity, however, as only

paragraph IV certifications can earn exclusivity. It simply

required the FDA to accept Purepac’s ANDA as of the date

the company originally submitted it, which occurred before

TorPharm filed its ANDA. That was important because both

Purepac’s and TorPharm’s ANDAs contained paragraph IV

challenges to other patents, and whichever company first

submitted its ANDA would be eligible for exclusivity based on

those other challenges.

Although the district court required the FDA to accept

Purepac’s section viii statement, it declined to decide what the

agency should do about TorPharm’s paragraph IV certification. Noting that the FDA had long insisted that paragraph

IV certifications and section viii statements were mutually

exclusive, the court observed that the agency ‘‘has not taken a

definitive position as to whether equitable considerations

might ultimately persuade it to TTT approve TorPharm’s

application with a paragraph IV certification to the ’479

patent even if the Court were to direct the agency to accept

Purepac’s application with a section viii statement.’’ Id. at

211. This question was critical, for if the FDA allowed

TorPharm to submit a paragraph IV certification, then TorPharm would be entitled to exclusivity as the first applicant

to win FDA approval for an ANDA containing a paragraph

IV challenge to the ’479 patent. The district court decided to

allow the FDA to address that issue on remand. The FDA

did not appeal.

On remand, the FDA stood by its position that paragraph

IV certifications and section viii statements are mutually

exclusive, ruling TorPharm’s paragraph IV certification as to

the ’479 patent improper. At approximately the same time,

the FDA asked Pfizer to consent to the removal of the patent

from the Orange Book, pointing out that the patent claimed

protection for a use that the agency had yet to approve.

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When Pfizer consented, the FDA removed the patent from

the Orange Book. As a consequence, neither TorPharm nor

any other company that had submitted a gabapentin-related

application had any obligation to address the ’479 patent in its

ANDA. In fact, the FDA instructed all applicants to amend

their ANDAs by removing any section viii statements or

paragraph IV certifications about the patent. This meant

that no company would enjoy the 180–day exclusivity period

based on the ’479 patent because no company could submit a

proper paragraph IV certification regarding it.

TorPharm then sued the FDA, challenging the removal of

the patent from the Orange Book and the agency’s refusal to

accept the company’s paragraph IV certification. Again

speaking through Judge Huvelle, the district court rejected

TorPharm’s claim, concluding ‘‘that the FDA acted reasonably in not departing from its well-settled rule that a section

viii statement and paragraph IV certification cannot be filed

as to the same patent, [and that] the agency’s corresponding

conclusion that no applicant was entitled to exclusivity on

the ’479 patent must be upheld.’’ TorPharm, 260 F. Supp. 2d

at 85.

In its decision, the district court also addressed the FDA’s

ruling about the other gabapentin-related patent at issue in

this case, No. 6,054,482 (the ’482 patent). Whereas the ’479

patent is a method-of-use patent, the ’482 patent is a ‘‘drugproduct’’ patent, covering the drug’s overall composition and

formulation. Warner-Lambert first submitted information

about the ’482 patent to the FDA after TorPharm and

Purepac filed their ANDAs, at which point both companies

amended their ANDAs by adding paragraph IV challenges to

the ’482 patent. Although the FDCA requires applicants to

provide notice ‘‘when’’ they file their amended ANDAs, 21

U.S.C. § 355(j)(2)(B)(iii), and although the implementing regulation requires notice ‘‘at the same time’’ as filing, 21 C.F.R.

§ 314.95(d), Purepac did not send notice to Warner-Lambert

about its paragraph IV certification until June 13, 2000, some

two-and-a-half weeks after the FDA received, and deemed

filed, Purepac’s amended ANDA on May 26. TorPharm also

sent its notice to Warner-Lambert on June 13, the same day

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it mailed its amended ANDA to the FDA. The FDA, however, deemed TorPharm’s ANDA to have been filed on June 16,

the day it received the ANDA. This meant that Purepac,

despite the lag between its filing with the FDA on May 26

and its notice to Warner-Lambert on June 13, completed both

tasks first. The FDA thus awarded the 180–day exclusivity

period to Purepac.

In the district court, TorPharm argued that the FDA’s

award of exclusivity to Purepac effectively eliminated the

statutory and regulatory requirements of simultaneous notice.

The district court disagreed, concluding that neither the

statute nor the regulation specify the penalty for failing to

notify immediately and ruling that the FDA had reasonably

filled that gap by stating that if a company waits to provide

notice, it runs the risk that another company will both file and

provide notice first, thereby winning exclusivity. TorPharm,

260 F. Supp. 2d at 79–81. The district court also rejected

TorPharm’s challenge to the FDA’s decision to use a date-ofreceipt rule rather than a mailbox rule, seeing nothing arbitrary or capricious in the agency’s choice. See id. at 81–82.

Appealing both district court decisions, TorPharm argues

that the court erred by (1) reversing the FDA’s determination

about the claimed scope of the ’479 patent (Purepac), (2)

upholding the FDA’s decision to ‘‘delist’’ the ’479 patent and

deny exclusivity based on that patent (TorPharm), and (3)

sustaining the FDA’s award of exclusivity to Purepac based

on Purepac’s challenge to the ’482 patent (also TorPharm).

‘‘Because the district court entered a summary judgment, we

review its decision de novo and therefore, in effect, review

directly the decision of the [agency].’’ Lozowski v. Mineta,

292 F.3d 840, 845 (D.C. Cir. 2002). We will set aside an FDA

decision only if it is ‘‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’’ 5 U.S.C.

§ 706(2)(A) (2000). FDA interpretations of the FDCA receive deference, Serono Labs, Inc. v. Shalala, 158 F.3d 1313,

1319 (D.C. Cir. 1998), as do its interpretations of its own

regulations, id. at 1320.

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II.

We start our analysis with the district court’s Purepac

decision. In that case the court had to answer the following

question: According to the information that Warner-Lambert

submitted to the FDA, what use of gabapentin did the ’479

patent cover? In other words, setting aside the question of

what use the patent actually covered—a question the FDA

leaves to the courts—what use did Warner-Lambert say the

patent covered? As noted, the FDA told Purepac that according to Warner-Lambert the patent covered gabapentin’s

use for treating epilepsy. This meant that Purepac, like

TorPharm, had to include a paragraph IV challenge to the

patent in its ANDA. It also meant that TorPharm, as the

first to have submitted a paragraph IV challenge to the

patent, would be eligible to earn exclusivity.

We agree with the district court that the FDA’s conclusion

about the claimed coverage of the ’479 patent was arbitrary

and capricious. In the Orange Book, the FDA assigned the

patent a use code corresponding to neurodegenerative diseases. Having thus concluded that Warner-Lambert asserted

that the patent covered gabapentin’s use for treating such

diseases, the FDA, when evaluating Purepac’s and TorPharm’s ANDAs, could not change course and decide that

Warner-Lambert claimed that the patent covered the drug’s

use for treating epilepsy. Yet in rejecting Purepac’s section

viii statement, the FDA did just that. Because this unexplained reversal represents the height of arbitrary and capricious decision making, the district court rightly disallowed it.

As we have said, ‘‘[w]hile the scope of review under the

arbitrary and capricious standard is narrow and a court is not

to substitute its judgment for that of the agency, neither may

a court sanction agency action when the agency TTT fails to

justify seeming inconsistencies in its approach.’’ Prof’l Pilots

Fed’n v. FAA, 118 F.3d 758, 771 (D.C. Cir. 1997) (internal

quotation marks omitted).

TorPharm argues that the FDA’s choice of use code has no

relevance because ‘‘use codes are not required by statute TTT

[or] by the controlling regulation.’’ Appellant’s Reply Br. at 5

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(internal quotation marks omitted). This misses the point.

That use codes are not required by statute has nothing

whatsoever to do with the fact that the FDA has given no

reason for making one decision for purposes of selecting a use

code and a different decision for purposes of determining

whether ANDA applicants had to submit paragraph IV certifications or section viii statements.

In fact, the FDA’s action was doubly flawed. Not only did

the agency make inconsistent decisions, but evidence before

the FDA did not support its conclusion that Warner-Lambert

claimed that the ’479 patent covered gabapentin’s use for

treating epilepsy. As the district court pointed out, WarnerLambert repeatedly told the FDA that the patent ‘‘covers a

method for treating neurodegenerative diseases with gabapentin.’’ At no time did Warner-Lambert tell the FDA that

the patent covered a method of treating epilepsy. As the

district court aptly put it, ‘‘[t]he agency TTT tried to construct

a legal fiction about the scope of the ’479 patent and to use

that construct to ignore crucial facts (i.e. what WarnerLambert actually said) about that patent’s reach, facts that

reveal the ultimate falsity of the agency’s fiction.’’ Purepac,

238 F. Supp. 2d at 208.

TorPharm points out that in each of the documents in

which Warner-Lambert stated that the patent covered neurodegenerative diseases, the company also said that the patent

covered ‘‘the use’’ of Neurontin. According to TorPharm,

because Neurontin has only one approved use—the treatment

of epilepsy—and because FDA regulations permit listing

approved uses only, the phrase ‘‘the use’’ must have referred

to the approved use, epilepsy. But as the district court

explained, the fact that an FDA regulation allows the listing

of only approved-use method-of-use patents does not prove

that every method-of-use patent in the Orange Book actually

covers an approved use. The reason is obvious: the FDA

does not evaluate information that applicants submit about

patents, but simply accepts that information passively. Thus,

we have no reason to believe that because applicants are

supposed to submit information about approved uses only,

they in fact do so. Such a benign view, the district court

concluded, ‘‘represents the triumph of hope over reality.’’ Id.

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Here, moreover, Warner-Lambert’s repeated claims that the

patent covered neurodegenerative diseases gave the FDA

ample reason to suspect that the company had chosen to

ignore the regulations. The FDA’s ‘‘decision [wa]s thus

factually unsupportable and irreconcilable with the language

and intent of the FDCA. For these reasons, it violate[d] the

APA.’’ Id. at 212.

TorPharm also calls our attention to a letter that Pfizer

sent to the FDA ‘‘confirm[ing] that the ’479 patent was

properly listed in the Orange Book.’’ Appellant’s Reply at 4

(citing the record). But Pfizer did not say that the patent

belonged in the Orange Book because it covered the only

approved use of gabapentin. Rather, Pfizer stated that the

patent belonged in the Orange Book because in the company’s

opinion, the FDA regulation limiting the Orange Book to

approved uses violated the FDCA. Undermining TorPharm’s

position, moreover, the letter includes the following statement: ‘‘Pfizer agrees that the ’479 patent does not claim

methods of use for which Neurontin has been approved.

Pfizer reconfirms that neither Pfizer nor Warner-Lambert

ever represented to FDA that the ’479 patent claimed an

approved use.’’

In essence, then, TorPharm argues that the FDA rightly

ignored Warner-Lambert’s repeated explicit assertions about

neurodegenerative diseases in favor of oblique references to

‘‘the use’’ and other unhelpful statements. Perhaps recognizing the weakness of this position, TorPharm asserts that

Warner-Lambert’s express statements ‘‘were not required by

statute or any FDA regulation and therefore had no regulatory significance.’’ Appellant’s Br. at 25. This argument is no

more convincing than the company’s similar claim regarding

use codes. Obligated like any agency to base its decisions on

the entire record, see Achernar Broad. Co. v. FCC, 62 F.3d

1441, 1446 (D.C. Cir. 1995) (‘‘Failure to weigh the entire

record would constitute reversible errorTTTT’’), the FDA may

not ignore some evidence before it just because an entity

submitted that evidence despite the absence of a legal requirement to do so.

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In sum, we agree with the district court that ‘‘the FDA’s

determination that the ’479 patent claims the use of treating

epilepsy ‘runs counter to the evidence before the agency,’ and

is thus arbitrary and capricious.’’ Purepac, 238 F. Supp. 2d

at 210 (quoting Sinclair Broad. Group, Inc. v. FCC, 284 F.3d

148, 159 (D.C. Cir. 2002)). According to TorPharm, this

conclusion contravenes the FDA’s longstanding policy under

which it refuses to determine independently what use a

patent covers and instead accepts at face value the use

claimed by the patent holder. But the district court did not

decide that the FDA should have scrutinized the claimed use,

nor did it address what the patent actually covered. The

court simply deemed the FDA’s conclusion regarding what

Warner-Lambert claimed about the patent to be unjustified.

Under the district court’s analysis, what use the patent

actually covered had no relevance, and properly so.

Having considered TorPharm’s other challenges to Purepac

and finding them without merit, we will affirm the judgment

of the district court.

III.

We next consider the district court’s rulings about the ’479

patent in TorPharm. In that case, the court reviewed the

FDA’s post-Purepac decision against making an exception to

its longstanding rule that for every patent only one of two

approaches—a section viii statement or a paragraph IV certification—is appropriate. Although the FDA had indicated in

Purepac that on remand it would consider granting an exception to this rule by accepting TorPharm’s paragraph IV

certification, the agency ultimately decided against such an

exception, deeming the certification improper. The district

court found this decision neither arbitrary nor capricious,

explaining that the refusal ‘‘to make an equitable exception

from this rule was within the FDA’s discretion, and TorPharm has pointed to nothing in the statute or regulations to

cast doubt on the rule itself.’’ TorPharm, 260 F. Supp. 2d at

84. Recognizing the narrow scope of review, the district

court concluded that the FDA’s rule deserved judicial deferUSCA Case #02-5410 Document #798020 Filed: 01/20/2004 Page 14 of 22
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ence ‘‘in the absence of some indication that it conflicts with

any of the constraints on the agency’s regulatory authority, is

inconsistent with the agency’s own prior pronouncements, or

is otherwise poorly reasoned or unpersuasive. There are no

such indications here.’’ Id. (citation omitted). TorPharm

gives us no basis for questioning the district court’s sound

reasoning.

This, however, does not end our task, for the FDA did

more than simply deny TorPharm an exception to the agency’s rule. With Pfizer’s consent, it also removed the ’479

patent from the Orange Book. At that time, TorPharm was

defending against an infringement lawsuit that WarnerLambert had filed against it in response to its paragraph IV

challenge to the ’479 patent. Before delisting the patent,

therefore, the FDA had to determine, as required by its

regulation, whether to delay such action because TorPharm

had the potential to earn exclusivity by prevailing in the

already-initiated lawsuit. See 21 C.F.R.

§ 314.94(a)(12)(viii)(B) (‘‘A patent that is the subject of a

lawsuit [charging infringement] shall not be removed from

the list until FDA determines TTT that no delay in effective

dates of approval [of other ANDAs] is required TTT as a

result of the lawsuitTTTT’’).

The FDA concluded that the regulation posed no bar to the

delisting. The district court’s opinion in Purepac combined

with Pfizer’s post-Purepac letter to the FDA stating that ‘‘at

all times, Warner-Lambert and Pfizer made clear to FDA

that the ’479 patent claimed the use of gabapentin (Neurontin) for treating neurodegenerative diseases,’’ convinced the

agency that it had erred in believing that Warner-Lambert

claimed that the ’479 patent covered epilepsy. The FDA thus

decided that it should never have listed the patent in the

Orange Book and that no ANDA applicant had to submit, or

could maintain, either a section viii statement or a paragraph

IV certification regarding that patent. This meant that even

if TorPharm won its infringement lawsuit, it would not be

entitled to exclusivity. The FDA therefore decided that its

regulation did not prevent it from delisting the patent.

USCA Case #02-5410 Document #798020 Filed: 01/20/2004 Page 15 of 22
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Attacking this conclusion, TorPharm focuses on the fact

that the FDA, in explaining its view that it had to remove the

patent from the Orange Book, cited not only Purepac and

Pfizer’s letter, but also the Federal Circuit’s decision in

Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348 (Fed.

Cir. 2003), the suit that Warner-Lambert filed against TorPharm. The Federal Circuit held that because the ’479

patent covered gabapentin’s use for treating neurodegenerative diseases—a fact the two parties agreed about—WarnerLambert could not win an infringement suit against TorPharm, which sought to sell its drug as a treatment for

epilepsy. See id. at 1362 (‘‘Because [TorPharm] is not submitting an application to sell a drug for treatment of neurodegenerative diseases, which is the only use covered by the

patent involved in this case, we conclude that [TorPharm] is

entitled to summary judgment of noninfringement.’’ (emphasis added)). According to TorPharm, the FDA’s use of

Warner-Lambert’s failed infringement lawsuit as a basis for

delisting the ’479 patent—and, more important, for denying

exclusivity—had the effect of eviscerating the incentive structure established by the FDCA. Pointing out that the Act

created the exclusivity period precisely to encourage companies to have infringement lawsuits brought against them,

TorPharm argues that it is absurd to tell a company which

won such a lawsuit that because its victory established the

challenged patent’s invalidity and hence that the patent never

needed to be challenged, the company was entitled to no

exclusivity.

The district court agreed, deeming the FDA’s reliance on

the Federal Circuit’s decision ‘‘problematic.’’ TorPharm, 260

F. Supp. 2d at 83 n.15. According to the court, however, the

other two bases on which the FDA rested its conclusion—the

court’s ruling in Purepac and Pfizer’s letter to the FDA

confirming that ‘‘neither Pfizer nor Warner-Lambert ever

represented to FDA that the ’479 patent claimed an approved

use’’—were enough to support that conclusion. Because

these other bases eliminated or greatly ameliorated the danger of upsetting the FDCA’s incentive structure, the district

court concluded, the FDA properly delisted the patent. See

id. at 83–84.

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Disagreeing with the district court, TorPharm argues that

reliance on either Purepac or Pfizer’s letter to the FDA

would still risk undermining the FDCA’s incentive structure

because both were tainted by Warner-Lambert’s lawsuit

against TorPharm. Although acknowledging, as it must, that

Purepac and the letter predated the Federal Circuit’s decision, TorPharm points out that they did not predate the

Illinois district court decision that the Federal Circuit affirmed. In that decision, the district court noted that the ’479

patent covered gabapentin’s use for treating neurodegenerative diseases. See Warner-Lambert Co., 2001 WL 1104618, at

*1. TorPharm insists that both Purepac and Pfizer’s letter

were influenced by that ruling, after which the district court

here ‘‘had no choice but to conclude that the ’479 patent

claims an unapproved use.’’ Appellant’s Reply at 16.

TorPharm misreads the TorPharm decision. The district

court in that case did not conclude that the ’479 patent

claimed an unapproved use. Rather, the court found that

given the evidence the FDA had before it at the time it made

its decision, it was arbitrary and capricious for the agency to

have found that Warner-Lambert claimed the ’479 patent

covered gabapentin’s use for treating epilepsy. Nothing in

the Illinois district court’s decision compelled that holding;

rather, the evidence before the FDA and the agency’s earlier

choice of use code compelled it. Had the evidence before the

FDA been different, or had the agency not given the patent a

use code corresponding to neurodegenerative diseases, it

would have been entirely possible for the district court here

to sustain the FDA’s initial decision despite the Illinois district court’s ruling. Put another way, the two district courts

answered different questions: the Illinois district court considered whether Warner-Lambert could win an infringement

lawsuit against TorPharm given that the ’479 patent covered

neurodegenerative diseases and given that TorPharm wanted

to sell an epilepsy drug, while the district court here considered whether the FDA’s conclusion about what WarnerLambert claimed the ’479 patent covered ran counter to the

evidence before the agency.

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TorPharm also contends that the FDA could not rely on

Purepac because the case was wrongly decided. This makes

no sense. Not only did the FDA have no authority to ignore

Purepac, but as we have explained, the decision is unassailable. See supra pages 11–14. Because Purepac provided an

adequate basis for the FDA’s post-remand decision to delist

the ’479 patent, the agency’s reference to the Federal Circuit’s ruling, as the district court concluded, did not fatally

undermine its decision.

TorPharm’s view of this issue—and, to a certain extent, of

this entire case—rests on its belief that ‘‘TorPharm played by

the rules, [while] Purepac didn’t.’’ Appellant’s Br. at 21. It

‘‘played by the rules,’’ it says, because it filed a paragraph IV

certification about the ’479 patent, thereby inviting an infringement lawsuit, whereas Purepac filed a section viii statement and then sued the FDA when the agency rejected that

statement. But no ‘‘rules’’ required Purepac (or anyone else)

to accept everything the FDA did, regardless of the lawfulness of the agency’s actions. Put simply, Purepac acted quite

properly: it (1) interpreted the ’479 patent as covering neurodegenerative diseases, as has every court to have looked at

the issue, the patent holder, and (eventually) the FDA; (2)

accordingly filed a section viii statement; and (3) refused to

accept the FDA’s unlawful rejection of that statement, a

refusal that subsequent events have vindicated. The fact that

TorPharm chose a different—and ultimately unsuccessful—

legal strategy means neither that Purepac flouted the rules

nor that TorPharm deserved exclusivity. Indeed, one might

well think that the equities, which TorPharm frequently

invokes, actually favor Purepac, the party that pursued the

correct legal strategy even though that strategy required it to

take on the heavy burden of charging the FDA with arbitrary

and capricious behavior.

For its final argument, TorPharm claims that the FDA’s

actions following the Purepac remand reveal an inconsistency

with the agency’s actions regarding the drug mirtazapine.

Having nothing to add to the district court’s sound reasons

for rejecting this argument, see TorPharm, 260 F. Supp. 2d

at 85–86, we will affirm.

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IV.

This brings us finally to the ’482 patent. Recall that the

FDA awarded exclusivity to Purepac even though Purepac

delayed sending notice to Warner-Lambert until June 13,

2000, eighteen days after the FDA received Purepac’s paragraph IV certification, whereas TorPharm mailed both its

certification to the FDA and its notice to Warner-Lambert on

the same day—June 13, 2000—the day Purepac finally sent

notice. TorPharm argues that the district court improperly

sustained this award of exclusivity. It also contends that the

court erroneously upheld the FDA’s decision to use a receipt

date rather than a mailing date in deciding when TorPharm

had submitted its amended ANDA.

As to the first argument, TorPharm insists that the FDA

should have declared that Purepac’s delay in providing notice

rendered the company’s certification invalid. Had the FDA

done so, TorPharm would have been entitled to exclusivity, as

it would have been the first applicant to have submitted an

ANDA containing a valid certification. Instead, the FDA

ruled that if an applicant fails to provide notice at the same

time that it files its amended ANDA, the certification becomes effective only when the applicant ultimately provides

notice, rather than when the applicant files its amended

ANDA. Under this rule, applicants who do not immediately

give notice run the risk that another company will file a

certification and provide notice first, thereby winning the

right to exclusivity. By failing to give immediate notice,

moreover, such applicants delay FDA approval of their ANDAs, meaning that they must wait longer before they can

market their drugs. According to TorPharm, the FDA’s

decision to impose this penalty, instead of declaring Purepac’s

certification invalid for exclusivity purposes, effectively reads

the requirement of simultaneous notice and filing out of both

the statute and the regulation. We disagree.

As the district court pointed out, the statute (as well as the

regulation, we note) ‘‘is in fact silent on the issue of what

follows from an applicant’s failure to follow the mandate of

simultaneity.’’ TorPharm, 260 F. Supp. 2d at 80. Put anothUSCA Case #02-5410 Document #798020 Filed: 01/20/2004 Page 19 of 22
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er way, the FDA recognized that Congress could have added

either of two equally plausible sentences to the statute: one

would have said ‘‘failure to provide simultaneous notice shall

render the paragraph IV certification invalid,’’ while the other

would have said ‘‘failure to provide simultaneous notice shall

delay the certification’s effective date until notice is provided.’’ That TorPharm would have preferred the FDA to fill

this gap by adopting the first approach hardly makes the

agency’s decision to adopt the second arbitrary or capricious.

The district court correctly and appropriately noted this

court’s longstanding recognition that ‘‘the breadth of agency

discretion is, if anything, at zenith when the action assailed

relates primarily not to the issue of ascertaining whether

conduct violates the statute, or regulations, but rather to the

fashioning of policies, remedies and sanctions.’’ Niagara

Mohawk Power Corp. v. Fed. Power Comm’n, 379 F.2d 153,

159 (D.C. Cir. 1967), quoted in TorPharm, 260 F. Supp. 2d at

80.

TorPharm insists that the FDA’s choice of sanction violates

the FDCA because the statute links the simultaneity requirement to the award of exclusivity. ‘‘Certification, notice, and

exclusivity TTT are all bound up together in the statutory

scheme.’’ Appellant’s Reply at 22. Not so. Nothing in the

statute says that applicants earn exclusivity by simultaneously filing and providing notice. In fact, the simultaneity

requirement and the provisions regarding exclusivity appear

in different provisions of the statute. The simultaneity requirement appears in FDCA section 505(j)(2), which lays out

the required elements of an ANDA. See 21 U.S.C.

§ 355(j)(2)(B)(iii). The exclusivity provisions are in FDCA

section 505(j)(5), which addresses FDA approval of ANDAs.

See id. § 355(j)(5)(B)(iv). The district court thus properly

concluded that the FDA’s choice of penalty permissibly filled

a statutory gap.

As to the second issue, TorPharm argues that the FDA’s

decision to use mailing dates rather than receipt dates is

inconsistent with the agency’s use of mailing dates for materials submitted to its Dockets Management Branch. The FDA

persuasively points out, however, that ‘‘materials relating to

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NDAs and ANDAs are submitted to the agency’s Center for

Drug Evaluation and Research TTT , and [these] have consistently been governed by the ‘date of receipt’ rule.’’ FDA Br.

at 30 n.7.

Equally without merit is TorPharm’s assertion that the use

of receipt dates is arbitrary and capricious. TorPharm, the

district court noted, ‘‘points to nothing in the statute that

precludes the FDA’s date-of-receipt rule, or that mandates an

alternative mailbox rule.’’ TorPharm, 260 F. Supp. 2d at 81.

Although it is true that ‘‘[n]either the statute nor the regulation—neither of which even mentions ‘receipt’ dates—requires’’ the FDA’s approach, Appellant’s Br. at 48 (citations

omitted), that (again) misses the point. The question is

whether either the statute or the regulation precludes the

FDA’s approach. Neither does. Each uses the verb ‘‘submitted,’’ which the FDA reasonably interprets to mean ‘‘received’’ rather than ‘‘mailed.’’ Moreover, the FDA’s rationale

for using receipt dates—to avoid ambiguity that might arise

with mailing dates because of, for example, a conflict between

the date on the ANDA itself and the date of the postmark—

seems perfectly reasonable to us. We thus agree with the

district court that TorPharm has offered no basis for overturning the FDA’s reliance on receipt dates.

TorPharm argues that the FDA’s use of receipt dates gave

Purepac ‘‘an unfair advantage’’ and that upholding the agency’s approach creates an incentive ‘‘to game the system by

certifying first.’’ Id. at 47. TorPharm is right about the

incentive. An applicant that completes its amended ANDA

before completing its notice—as often happens because certifications are simple one-page documents whereas notices are

typically quite long—can avoid a lag in the effective date of

its ANDA by sending the ANDA immediately rather than

waiting until it completes the notice. By not waiting, the

applicant increases the chance that the FDA will have received the ANDA (including the paragraph IV certification)

when the applicant notifies, in which case the certification will

become effective as soon as the applicant mails the notice.

(The FDA relies on mailing dates for notices because applicants send their notices to the patent holder rather than to

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the FDA.) If the applicant instead waits to send its ANDA

until it completes its notice and can mail that as well, then the

certification will only become effective a day or more later,

when the FDA receives the ANDA in the mail. For this

reason, the FDA’s approach gives applicants an incentive to

disregard the statutory and regulatory mandates to provide

notice ‘‘when’’ and ‘‘at the same time’’ that they file their

amended ANDAs.

Contrary to TorPharm’s argument, however, the existence

of this incentive does not mean that the FDA’s approach is

unlawful. As we explained, the FDA imposes a penalty on

those who notify after they filed their amended ANDAs, i.e.,

certifications become effective only upon notification. See

supra page 19. This penalty creates an incentive for companies to notify patent holders as soon as possible after filing

their ANDAs. In other words, the FDA’s penalty acts as a

counterweight to the incentive that TorPharm describes, encouraging companies to file ANDAs and provide notice ‘‘at

the same time.’’ Given the scope of the FDA’s discretion and

the benefits that the agency’s approach provides, any incentive to delay that companies might have despite this counterweight provides no basis for invalidating the FDA’s approach.

As to the contention that the FDA’s reliance on receipt

date creates an ‘‘unfair advantage,’’ TorPharm’s counsel acknowledged at oral argument that the advantage existed only

as between TorPharm and Purepac, and that with the FDA’s

approach now clarified, every company will have the same

incentives and opportunities. Purepac’s ‘‘advantage,’’ which

derived simply from the fact that the FDA agreed with

Purepac’s interpretation of the statute rather than with TorPharm’s, hardly warrants setting aside the FDA’s decision.

V.

The district court’s judgments are affirmed in all respects.

So ordered.

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