# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 21, 2013 Decided April 26 , 2013

No. 12

- 5227

A STRA Z ENECA P HARMACEUTICALS LP,

A PPELLANT

v.

F OOD & D RUG A DMINISTRATION

, ET AL

., A PPELLEES

Appe al from the United States District Court

for the District of Columbia (No. 1:12

- cv

- 00472)

Robert A. Long Jr. argued the cause for appellant. With

him on the briefs were Timothy C. Hester

, Benjamin C. Block

, and Matthew J. Berns

.

Gerald C. Kell , Se nior Trial Counsel, U.S. Department of Justice, argued the cause for appellees. With him on the brief

were Stuart F. Delery , Principal Deputy Assistant Attorney General, Maame Ewusi

- Mensah Frimpong , Deputy Assistant Attorney General, William B. Schultz , A cting General Counsel, U.S. Department of Health and Human Services, and Eric M. Blumberg , Deputy Chief Counsel, Litigation.2

Before: R OGERS and T ATEL

, Circuit Judges , and

S ENTELLE

, Senior Circuit Judge

.

Opinion for the Court filed by Senior Circuit Ju dge

S ENTELLE

.

S ENTELLE

, Senior Circuit Judge : AstraZeneca

Pharmaceuticals LP , a manufacturer of pharmaceutical products, appeals from the district court’s grant of summary judgment in an action praying a declaratory judgment that the Food and Drug Admini stration (“FDA”) could not approve generic versions of its Seroquel product and seeking to

restrain the FDA from approving abbreviated new drug applications (“ANDAs”) for such competing products until the expiration of a period of exclusivity. The distric t court granted summary judgment in favor of the FDA, and AstraZeneca appealed. For the reasons set forth below, we agree with the district court that the FDA reasonably determined that AstraZeneca was not entitled to such period of exclusivity. We there fore affirm the grant of summary judgment.

I. BACKGROUND

A. Statutory Framework

The Federal Food, Drug, and Cosmetic Act ( “ FDCA ” ) governs the drug approval process for new and generic drugs.

See 21 U.S.C. §§ 301

– 99. A drug manufacturer

, such as

AstraZene ca, seeking to introduce a new, or pioneer, drug must file a new drug application (“NDA”) with the FDA. Id. § 355(b)(1). If the FDA approves the application, the statute
entitles the manufacturer to a period of marketing exclusivity during which the FDA cannot approve bio equivalent generic3

drugs

. See id. § 355( j )( 5 ) (F)

. Once the exclusivity period has expired , the FDA can approve generic drugs bio equivalent to the pioneer drug through an abbreviated new drug application

. See id. § 355(j). ANDAs need n ot include new clinical studies demonstrating the generic drug’s safety or efficacy, but must propose the same basic labeling as approved for the pioneer drug. See id. § 355(j) (2)(A)(v); see also 21 C.F.R. § 314.94(a)(8)(iv).

The FDCA provides for additi onal periods of exclusivity for pioneer drugs based on medical studies completed after the initial approval process if such studies support new

indications of the drug s , which typically means that the drug s can be used in new patient populations or to trea t different conditions. 21 U.S.C. § 355(j)(5)(F); s ee AstraZeneca

Pharm. LP v. FDA , 872 F. Supp. 2d 60, 64 (D.D.C. 2012)

. Drug manufacturers can apply for this additional exclusivity through a supplemental new drug appl ication (“sNDA”). The

statutory pr ovision govern ing such sNDAs provides :

If a supplement to an application . . . contains reports of new clinical investigations (other than bioavailability studies) essential to the approval of the supplement and conducted or sponsored by the person

submit ting the supplement, the Secretary may not make the approval of an application submitted under this subsection for a change approved in the supplement effective before the expiration of three years from the date of the approval of the supplement

. . . .

21 U.S.C. § 355(j)(5)(F)(iv). Therefore, as provided in FDA regulations, the FDA cannot approve an ANDA for three years following the approval of a n sNDA if the ANDA “relies on . . . information supporting a change approved in the4

supplemental new drug ap plication.” 21 C.F.R. § 314.108(b)(5)(ii). An amendment makes this exclusivity period “three years and six months rather than three years” in some circumstances where the manufacturer provides pediatric studies that the FDA requests. 21 U.S.C

. § 355a(c) (1)(A)(i)(II). The statute leaves the word “supplement,” along with man y of its other terms, undefined.

T he FDA has promulgated extensive regulations setting forth the application process and defining the statutory terms. See 21 C.F.R. § § 314.3, 314.50

, 314.60, 314.70.

B. Factual and Procedural Background

AstraZeneca has marketed Seroquel, an atypical antipsychotic medication used to treat disorders such as schizophrenia, since 1997

, largely without generic competition

. Based on various sNDAs, t he FD A has given supplemental exclusivity to AstraZeneca when it added indications to Seroquel

. AstraZeneca has made other label changes which did not add indications to Seroquel, but only added safety information. With respect to these safety

- related

label c hanges, the FDA has not granted any additional period of exclusivity. AstraZeneca , 872 F. Supp. 2d at 67.

One side effect of drugs like Seroquel is hyp erglycemia, or high blood sugar. T he FDA has added information about observed changes in blood sugar l evels to labeling on all antipsychotic drugs. O n June 26, 2008, in response to a request from the FDA, AstraZeneca submitted metabolic data regarding observed changes in blood sugar levels among patients taking Seroquel or Seroquel XR, an extended releas e version of Seroquel . The data came from fifteen clinical trials, all conducted for reasons other than generating this particular data and none conducted on pediatric patients.5

Separately, AstraZeneca submitted two sNDAs in support of new pediatric in dications of Seroquel on October 28, 2008

, requesting three years of exclusivity for the new indications

. The FDA considered those sNDAs while it was continuing

review of the blood sugar labeling question. C orrespondence

between AstraZeneca and the FDA e stablishes that they

discussed those two subjects and other s in the same letters. On October 16, 2009, the FDA asked for a table summarizing

the previously submitted glucose data, which AstraZeneca supplied, along with other labeling changes. This table,

referred to as Table 2, is the basis of the current litigation.

On December 2, 2009, the FDA approved the pediatric sNDAs as well as the proposed labeling changes, including Table 2. The FDA sent AstraZeneca a single letter reflecting these approvals.

On September 2, 2011, AstraZeneca filed two citizen petition s with the FDA requesting exclusivity for Table 2

based on the clinical trials that provided the relevant data

. The FDA denied the petition s without responding to AstraZeneca’s request by, as t he district court put it, “conveniently” ignoring the le gal question regarding Table

2 ’s eligibility for exclusivity

. AstraZeneca , 872 F. Supp. 2d

at 74. AstraZeneca filed suit and mov ed for a preliminary injunction. T he district court dismissed that ac tion as unripe and denied the motion for a preliminary injunction because

the FDA had not yet decided whether to grant ANDAs that included Table 2 in the labeling for generic versions of Seroquel and Seroquel XR. See AstraZeneca Pharm

. LP v.

FDA , 850 F. S upp. 2d 230 , 249

– 51 (D.D.C. 2012). Four days

after the district court’s decision , on March 27, 2012, the FDA approved ANDAs for generic versi ons of Seroquel with Table 2 included as part of the labeling.6

The FDA issued a letter to AstraZeneca on the sa me day explaining its decision that Table 2 was not entitled to a period of exclusivity. The letter points out that “changes in labeling that involve the addition of warnings or other similar risk information are generally not entitled to 3

- year exclusivi ty.” Public Joint Appendix 304. It goes on to explain that Table 2 contains only “generally applicable safety information” and thus is not protected by any exclusivity. Id. In addition, the letter states that Table 2 does not include data from any indi cations for which Seroquel still had exclusivity, including the pediatric indications. Id. at 306. Finally, according to the letter, it was purely “coincidental” that the FDA approved Table 2 “in the course of approving” the pediatric sNDAs

. The FDA’s l etter explicitly stated that “there is no relationship between the exclusivity for pediatric

indications . . . and the data in Table 2.” Id.

AstraZeneca again filed suit

, seeking a temporary restraining order and further relief . The district court den ied the motion for a temporary restraining order and later granted summary judgment in favor of the FDA, holding that the

statute is ambiguous and the FDA’s interpretation is

reasonable

. AstraZeneca filed this appeal

.

II. DISCUSSION

A. Mootness

The F DA first argues that we should dismiss this case as moot. Article III of the Constitution gives federal courts jurisdiction to decide cases and controversies. This provides federal courts jurisdiction to decide only “actual, ongoing

controversies.” See

, e.g. , Honig v. Doe , 484 U.S. 305, 317 (1988). “Even where litigation poses a live controversy when filed, the mootness doctrine requires a federal court to refrain7

from deciding it if events have so transpired that the decision will neither presently aff ect the parties’ rights nor have a

more

- than

- speculative chance of affecting them in the future.” LaRoque v. Holder , 679 F.3d 905, 907 (D.C. Cir. 2012) (quoting Clarke v. United States , 915 F.2d 699, 701 (D.C. Cir. 1990) (en banc)). According to the FDA, this case is now moot because any period of exclusivity attached to Table 2 would have expired by December 2, 2012 , three years after the FDA approved the addition of Table 2 to Seroquel’s labeling

. See 21 U.S.C. § 355(j)(5)(F)(iv).

However, the FDA is not correct that the possibility of relief has been extinguished. As we noted above, the period of exclusivity can be extended beyond three years for an

additional six months if the FDA requests and receives pediatric studies from the manufacturer. See i d. § 355a(c)(1)(A)(i)(II). If applicable in this case, the longer period of exclusivity would not expire until June 2, 2013. The FDA argues that AstraZeneca waived this claim of longer exclusivity by failing to specifically argue it below

. This is

not, however, dispositive on the particular facts of this case.

As the FDA concedes, it would have to consider the pediatric exclusivity period “if AstraZeneca prevails in its request for

three

- year exclusivity for Table 2.” Appellees’ Br. at 48.

B ecause Ast raZeneca has submitted some pediatric studies regarding Seroquel, if AstraZeneca were to prevail on the merits of its claim, exclusivity through June 2, 2013

, might be

available. See AstraZeneca , 872 F. Supp. 2d at 65 n.4. Therefore, our decision will af fect AstraZeneca’s actual rights, and the case is not moot. Thus, w e must determine the merits of the summary judgment.8

B. Summary Judgment

Under the Federal Rules of Civil Procedure, grant of summary judgment is appropriate where “there is no genu ine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56 (a) . Our review of the district court’s grant of summary judgment is de

novo

. Se e, e.g. , Calhoun v. Johnson , 632 F.3d 1259, 1261 (D.C. Cir. 2011). We therefore undertake the same examination as the district court to determine the presence or absence of genuine disputes of material fact and legal entitlement to judgment of the movant, in this case the FDA. Sherley v. Sebelius , 689 F.3d 776, 780 (D.C. Cir. 2012). When summary judgment is at issue in a case of administrative review under the APA, we, like the district court, are required to “hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capri cious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). Under the applicable standard the district court, and now this court, must allow summary judgment for the agency (in this case, the FDA), unless the appellants can demonstrate by record evidence that “a genuine dispute” exists as to some material fact supporting the proposition that the FDA’s actions under review were “arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law.” See Sherley , 689 F.3d

at 780.

There being no genuine dispute as to the facts of record,

see id. , our analysis is limited to the validity of the FDA’s interpretation and application of the statute. Since the determinative issue is one of an agency’s interpr etation of a statute, we apply the familiar test of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837 (1984). See Mylan Labs., Inc. v. Thompson , 389 F.3d 1272,9

1279

– 80 (D.C. Cir. 2004) (applying Chevron to FDA decision letters). “If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.”

Chevron , 467 U.S. at 842

– 43. If the statute is ambiguous, “the question for t he court is whether the agency ’ s answer is based on a permissible construction of the statute.” Id. at 843.

AstraZeneca contends that it should prevail at the first step of the Chevron test. That is, it contends that the statute clearly provides the ex clusivity it seeks based on Table 2. AstraZeneca relies on the statutory language that provides for exclusivity where a supplement “contains reports of new clinical investigation s . . . essential to the approval of the supplement .” 21 U.S.C. § 355(j)(5)( F)(iv).

AstraZeneca argues that the statute clearly entitles Table 2 to exclusivity on two grounds. First, Table 2 was “a change approved in” the pediatric supplement s , and the supplement s included “ reports of new clinical investigations . . . essentia l to the approval of the supplement [s]

. ” Id. Second, some of the clinical studies that provided the data for Table 2 were “new clinical investigations” “essential to the approval” of the labeling changes so as to independently warrant exclusivity

. Eithe r way
, AstraZeneca claims, Table 2 is entitled to exclusivity , so the FDA’s approval of ANDAs incorporating

Table 2 prior to June 2, 2013, was contrary to the statute. Because we disagree that the statute mandates exclusivity in

these circumstances , and b ecause we consider the FDA’s interpretation reasonable, we affirm the district court’s grant of summary judgment

.

At the core of this dispute is the statutory language that limits exclusivity to “a change approved in the supplement” and requires that “the supplement contain [] reports of new10

clinical investigations . . . essential to the approval of the supplement.” 21 U.S.C. § 355(j)(5)(F)(iv). This language is permeated by ambiguities that, under Chevron , leave discretion in the FDA to adopt reasonable interpretations of

the application process outlined by the statute.

The statute leaves to the FDA the interpretation of a “supplement” to a drug application. Under the statute , the

FDA has power to implement the entire application and approval process, which necessarily gives the FDA discretion

to determine the requirements of “applications” and “supplements” and how to handle changes that are not

contained in such applications or supplements

. Because the

statute includes these ambiguities, the languag e “constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.” FDA v. Brown & Williamson Tobacco Corp. , 529 U.S. 120, 159 (2000).

The fundamental problem with both of AstraZeneca’s arguments is that the FDA has mainta ined that Table 2 was not “a change approved” in any supplement

, and only changes approved in a supplement are entitled to a statutory period of exclusivity. See Public Joint Appendix 306; 21 U.S.C. § 355(j)(5)(F)(iv). The FDA has exhaustive regulations detailing the parameters of the application process, including

how to amend pending supplements and applicati ons

. S ee 21 C.F.R. §§ 314.50, 314.60 , 314.70

. AstraZeneca makes no attempt to show that these procedures are contrary t o the

statute

. Nor has A straZeneca shown that t he FDA’s application of the law to the relevant facts was arbitrary or capricious.

The supplements here dealt with new pediatric indications of Seroquel. AstraZeneca submitted the data for

Table 2 in letters coded as general corres pondence (not11

supplements) prior to even filing those supplemental applications. See Public Joint Appendix 298. Further, no

data for Table 2 was derived from the pediatric studies at issue in the supplements , and AstraZeneca cited only the pediatric stud ies in support of its request for exclusivity

. Table 2 is only contained in the “A dult ” section of Seroquel’s labeling. Finally, though AstraZeneca makes much of the fact that the FDA approved the pediatric supplements and Table 2 at the same time, the F DA explained that the “this timing was only coincidental, and there is no relationship between the exclusivity for the pediatric indications earned on December 2, 2009, and the data in Table 2.” Id. at 306. We see nothing arbitrary or capric ious about th e FDA’s reasoned explanation

for its actions

.

We have examined the remainder of the administrative record and find nothing that contradicts the FDA’s position that it considered Table 2 as separate from the pediatric supplements

. As the district court explained, “the administrative record shows that the pediatric supplements were approved on their own merits based upon clinical investigations unrelated to the Table 2 labeling change, which standing alone does not entitle AstraZeneca to exclusivity.”

As traZeneca , 872 F. Supp. 2d at 83. The fact that

AstraZeneca titled its eventual submission of Table 2 an “Amendment to a Pending Application” does not require the

FDA to consider that submission an actual amendment to a completely unrelated supplemental a pplication

.

Therefore, the labeling changes in Table 2 were neither “a change approved” in the pediatric supplements nor submitted as a separate supplement. AstraZeneca states that Table 2 could have been submitted as a separate efficacy supplement, but AstraZeneca does not claim it ever was

.12

Because the statute only provides exclusivity for changes approved as part of a supplement , AstraZeneca’s claims fail

.

AstraZeneca attempts to establish that the FDA was arbitrary or capricious by directing us to prior grants of exclusivity to label changes approved in supplements. See Public Joint Appendix 119

– 22. However, the FDA’s explanation that it considered Table 2 independently of a supplemental application su fficiently distinguishes this case to
defeat that claim. The consistency of the FDA’s denial of exclusivity in this case with prior FDA actions is strikingly underscored by the fact that the agency did not extend exclusivity in seven other recent labeling changes for drugs in Seroquel’s class. See AstraZeneca , 872 F. Supp. 2d at 86.

Because the FDA reasonably considered Table 2 as

s eparate from the pediatric supplements

, Table 2 was not “a change approved in the supplement,” and therefore the statute does not entitle AstraZeneca to exclusivity for Table 2

.

III. CONCLUSION

For the foregoing reasons, the decision of the district

court is

Affirmed

.