Court Opinion

ID: 2664415
Source: CourtListenerOpinion
Date Created: 2014-04-04 03:59:10.849791+00
Date Added: 2024-06-11T13:04:40.064353
License: Public Domain

UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

                                                      )
VIROPHARMA, INCORPORATED,                             )
                                                      )
               Plaintiff,                             )
                                                      )
               v.                                     )        Civil Action No. 10-1529 (ESH)
                                                      )
MARGARET A. HAMBURG, M.D.,                            )
in her official capacity as Commissioner,             )
Food and Drug Administration, et al.,                 )
                                                      )
               Defendants.                            )
                                                      )

                                  MEMORANDUM OPINION

       Plaintiff ViroPharma Incorporated (“ViroPharma”) brings this action against the Food

and Drug Administration (“FDA”) and the Department of Health and Human Services, seeking

review under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701-706. Specifically,

ViroPharma claims that that FDA failed to conduct notice-and-comment rulemaking prior to

what plaintiff claims was a decision by the FDA to change its regulations regarding the

permissible methods by which an applicant for an Abbreviated New Drug Application

(“ANDA”) can demonstrate that the drug is the “bioequivalent” of a previously approved drug.

Defendants has moved to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and

12(b)(6) on the grounds that this Court has no subject matter jurisdiction because of lack of

standing and ripeness and that plaintiff has failed to state a claim upon which relief can be

granted. For the reasons explained herein, the Court will grant defendants’ motion on the basis

of a lack of standing.
                                         BACKGROUND

I.     STATUTORY AND REGULATORY FRAMEWORK

       Under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., a “pioneer” or

“innovator” drug may not be marketed until the FDA has approved a new drug application

(“NDA”) that includes, inter alia, reports from clinical studies establishing the safety and

effectiveness of the drug. 21 U.S.C. § 355(b)(1). An applicant may obtain FDA approval to

market generic copies of an FDA-approved brand-name drug, known as the “reference listed

drug” (“RLD”), by submitting an Abbreviated New Drug Application (“ANDA”). 21 U.S.C. §

355(j). In order to rely upon a RLD’s record of safety and effectiveness for approval, an ANDA

must include information demonstrating that the generic drug is the same as the RLD in a

number of specified ways. 21 U.S.C. § 355(j)(2)(A). Of particular relevance here, the ANDA

must demonstrate that the generic is the “bioequivalent” of the RLD, and is therefore absorbed

into the body at the same rate and to the same extent as the innovator drug. 21 U.S.C. §

355(j)(2)(A)(iv). Where, as here, “a drug . . . is not intended to be absorbed into the

bloodstream, the Secretary may establish alternative, scientifically valid methods to show

bioequivalence if the alternative methods are expected to detect a significant difference between

the drug and the [RLD] in safety and therapeutic effect.” 21 U.S.C. § 355(j)(8)(C).

       Depending on the circumstances and the particular drug in question, the FDA may

require an applicant use one or more of a variety of different methodologies in order to

demonstrate bioequivalence. In general, however, methodologies for demonstrating

bioequivalence may be classified as either in vivo (i.e., through human testing) or in vitro (i.e.,

laboratory testing). The requirements for demonstrating bioequivalence are the subject of a

number of regulations, the correct interpretation of which is at the crux of the parties’ dispute.

According to ViroPharma, 21 C.F.R § 320.21(b) sets forth a general requirement that

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bioequivalence be demonstrated through in vivo testing, unless the drug product meets one of the

waiver criteria set forth in 21 C.F.R. § 320.22. (Compl. ¶¶ 35-37.) The FDA, however, argues

that there is no such “default requirement for in vivo data to establish bioequivalence.” (Reply at

15.) Instead, the FDA relies on language in 21 C.F.R. § 320.24, which states that “FDA may

require in vivo or in vitro testing, or both, to . . . establish the bioequivalence of specific drug

products.” FDA therefore asserts that it has discretion to determine, on a case-by-case basis,

whether it will require in vivo testing, in vitro testing, or both in order to establish the

bioequivalence of a drug product. According to ViroPharma, however, 21 C.F.R. § 320.24

merely lists the various methods for establishing either in vivo or in vitro bioequivalence,

depending on which of those two types of testing is otherwise required by the regulations.

(Compl. ¶ 39.)

II.     FACTUAL HISTORY

        A.       Acarbose

        On November 9, 2007, Cobalt Laboratories Inc. and Cobalt Pharmaceuticals

(collectively, “Cobalt”) submitted a citizen petition and petition for stay of action regarding the

bioequivalence requirements for generic versions of the locally acting GI drug Precose

(acarbose). (Id. ¶ 49 & Ex. 1.) This petition asked FDA to require all ANDAs for generic

acarbose to include in vivo bioequivalence studies. (Id.) FDA responded to Cobalt’s petitions on

May 7, 2008, denying the request for a stay of action. (Id. ¶ 50.) In its to the acarbose petition,

FDA asserted that under “§ 320.24 of the regulations, FDA has the discretion to accept in vitro

studies for a nonsystemically absorbed drug product such as acarbose when such studies are

determined to be a scientifically valid method of determining bioequivalence.” (Id. ¶ 51 & Ex.

2.) ViroPharma claims that this response “effectively amended [FDA] regulations” by

“interpret[ing] the list of bioequivalence methods provided in 21 C.F.R. § 320.24 as a separate

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and sufficient regulatory basis for waiving in vivo bioequivalence requirements independent of

21 C.F.R. § 320.22.” (Id. ¶ 52.)

       B.      Vancomycin

       ViroPharma, a small pharmaceutical company headquartered in Exton, Pennsylvania,

acquired the exclusive right to the prescription drug Vancocin in the United States from Eli Lilly

and Company in 2004. (Id. ¶¶ 7, 13.) Vancocin is the trade name for the FDA-approved drug

vancomycin hydrochloride capsules (“vancomycin”) and is used to treat life-threatening

gastrointestinal infections such as C. difficile (“CDI”). (Id. ¶¶ 14, 15.) Vancocin is one of only

two drugs that ViroPharma markets and is the primary source of ViroPharma’s revenue. (Id. ¶

20.)

       In 1996, FDA recommended that ANDA sponsors submit a clinical in vivo study to

demonstrate bioequivalence of generic vancomycin. (Mot. at Ex. 5.) FDA revised these

bioequivalence recommendations in early 2006 to include data generated by in vitro methods for

demonstrating bioequivalence. (Id.; Compl. ¶ 23.) In March 2006, ViroPharma filed a petition

for stay of action challenging FDA’s revised recommendation. (Compl. ¶ 59.) The FDA has yet

to complete its response to this petition. (Mot. at 12.) In December 2008, FDA revised its draft

recommendation for the appropriate bioequivalence methodology for vancomycin, requesting

public comment on the most recent version. (Id. at Ex. 5.) FDA continues to accept comments

from the public on the draft guidance document (id.), and has not yet finalized it. (Id. at 12).

       ViroPharma alleges that the FDA has received at least eleven ANDAs for vancomycin.

(Compl. ¶ 72), but FDA has yet to approve any ANDA. (Id. ¶ 65.)

       C.      Procedural History

       On September 10, 2010, ViroPharma filed the instant complaint, challenging the FDA’s

interpretation of 21 C.F.R. § 320.24 in the acarbose petition response. ViroPharma alleges that

                                                 4
the acarbose petition response amounts to an amendment of FDA regulations that should have

been subject to notice-and-comment rulemaking. (Compl. ¶¶ 52-55, 78-81.) FDA has moved to

dismiss under Rule 12(b)(1) for lack of standing and lack of ripeness, or, in the alternative, under

Rule 12(b)(6) for failure to state a claim upon which relief can be granted.

                                            ANALYSIS

I.     STANDARD OF REVIEW

       A.      Motion to Dismiss for Lack of Jurisdiction

       On a motion to dismiss pursuant to Rule 12(b)(1), plaintiff bears the burden of

establishing by a preponderance of the evidence that the court has subject matter jurisdiction.

See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). The Court must accept all factual

allegations in the complaint as true and give plaintiff the benefit of all reasonable inferences

from the facts alleged. See Jerome Stevens Pharms., Inc. v. Food & Drug Admin., 402 F.3d

1249, 1253-54 (D.C. Cir. 2005). A court may dismiss for lack of subject matter jurisdiction only

if “‘it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim

which would entitle him to relief.’” Richardson v. United States, 193 F.3d 545, 549 (D.C. Cir.

1999) (quoting Caribbean Broad. Sys., Ltd. v. Cable & Wireless PLC, 148 F.3d 1080, 1086

(D.C. Cir. 1998)). Moreover, where a court’s subject matter jurisdiction is called into question,

the court may consider matters outside the pleadings to ensure it has power over the case. Teva

Pharms., USA, Inc. v. U.S. Food & Drug Admin., 182 F.3d 1003, 1008 (D.C. Cir. 1999).

       B.      Standing

       Article III of the United States Constitution limits the judicial power to deciding ‘Cases

and Controversies.’” In re Navy Chaplaincy, 534 F.3d 756, 759 (D.C. Cir. 2008) (quoting U.S.

Const. art. III, § 2). “[T]he core component of standing is an essential and unchanging part of

the case-or-controversy requirement of Article III.” Lujan, 504 U.S. at 560. In order to satisfy

                                                  5
the “irreducible constitutional minimum of standing,” a plaintiff must demonstrate: (1) that it has

suffered injury in fact, an actual or imminent invasion of a legally protected, concrete and

particularized interest; (2) a causal connection between the alleged injury and the defendant’s

conduct at issue; and (3) that it is “likely,” not “speculative,” that the court can redress the injury.

Id. at 560-61. “Where plaintiffs allege injury resulting from violation of a procedural right

afforded to them by statute and designed to protect their threatened concrete interest, the courts

relax—while not wholly eliminating—the issues of imminence and redressability, but not the

issues of injury in fact or causation.” Ctr. for Law & Educ. v. Dep’t of Educ., 396 F.3d 1152,

1157 (D.C. Cir. 2005) (citing Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 664-65 (D.C. Cir.

1996) (en banc); Lujan, 504 U.S. at 572-73 & nn.8-9).

II.     VIROPHARMA LACKS STANDING

        ViroPharma alleges two general types of injury that will result or has already resulted

from the FDA’s 2008 acarbose petition response: future lost profits from generic competition to

Vancocin and current harms to ViroPharma’s ongoing business operations as a result of the

FDA’s actions. The Court will address each seriatim.

        A.      Future Lost Profits from Generic Competition

        As the D.C. Circuit has repeatedly held, “a procedural-right plaintiff must demonstrate

standing by ‘show[ing] not only that the defendant’s acts omitted some procedural requirement,

but also that it is substantially probable that the procedural breach will cause the essential injury

to the plaintiff’s own interest.’” Ctr. for Law & Educ., 396 F.3d at 1159 (quoting Fla. Audubon

Soc’y, 94 F.3d at 664-65). The chain of causation between the procedural violation and the

concrete interest may not be merely “speculative.” See id.; Fla. Audubon Soc’y, 94 F.3d at 667-

68.

                                                   6
       In order to demonstrate standing, ViroPharma must therefore demonstrate that it is

“substantially probable” that the FDA’s actions in issuing the 2008 acarbose petition response

will cause injury to plaintiff in the form of future lost profits from generic competition. This has

not been done.

       ViroPharma alleges that the 2008 acarbose petition response effectively amended the

FDA’s bioequivalence regulations without notice and comment, which it claims will result in

“lost sales as a result of the approval of vancomycin ANDAs” based on the allegedly amended

regulations. (Compl. ¶ 76.)

       As the FDA points out, however, ViroPharma will not suffer that injury unless, and until,

two events occur: (1) the FDA must actually approve an ANDA for vancomycin and (2) such

approval must be based upon the same interpretation of Section 320.24 set forth by the FDA in

its acarbose petition response. (Mot. at 13.)

       Although ViroPharma has alleged that there are currently at least eleven ANDAs for

generic vancomycin that have been under review by the FDA for at least two years (see Opp. at

Ex. 11), this fact does not make it “substantially probable” that the FDA will ultimately approve

these ANDAs. The Court cannot assume from the mere fact of FDA acceptance of an ANDA for

processing that the FDA will ultimately approve the drug. See Pfizer v. Shalala, 182 F.3d 975,

978 (D.C. Cir. 1999) (“The critical fact remains that the FDA may never approve [the ANDA]

—whether because it decides in the end that the dosage form of [the generic] is different . . . or

for some entirely different reason, such as a lack of bioequivalence.”).

       Moreover, if and when the FDA ultimately approves an ANDA for vancomycin, it cannot

be assumed that it will rely upon the challenged interpretation of Section 320.24 used in the

acarbose petition response. If the FDA ultimately concludes that it will require in vivo tests for

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generic vancomycin, then the agency’s interpretation of Section 320.24 will be irrelevant and

will in no way cause injury to ViroPharma. Although FDA issued a draft bioequivalence

recommendation in 2006 that included in vitro studies as a method for demonstrating

bioequivalence for vancomycin (Mot. at 11; Compl. ¶ 23), 1 FDA has not yet finalized these

recommendations. Indeed, in 2008 FDA requested public comment on a revised version of its

Draft Guidance on Vancomycin Hydrochloride (Mot. at Ex. 5), and the 2006 recommendation

has since evolved as a result. For instance, a change from the 2006 version, the 2008 draft

guidance proposed in vitro studies be permitted only if the ANDA product contains the same

inactive ingredients in the same quantifies as Vancocin. (Id.) Otherwise, in vivo studies would

be required. (Id.) FDA continues to accept comments from the public on this draft guidance.

(Id. at 3). In light of this current situation, the Court cannot conclude that it is substantially

probable that, if and when FDA ultimately approves an ANDA for vancomycin, it will rely upon

the challenged interpretation of Section 320.24. 2

        B.      Current Harms to ViroPharma’s Ongoing Business Operations

        In addition to the alleged future lost profits from generic competition to Vancocin,

ViroPharma also claims that the FDA’s actions have had present effects on its ongoing business

operations. These, too, are insufficient to confer standing.

1
  In March 2006, ViroPharma filed a petition for a stay of action challenging these
recommendations. (Compl. ¶ 59.) The FDA has not completed its response to this petition.
(Mot. at 12.)
2
 Nor can ViroPharma overcome these hurdles by arguing that the FDA’s interpretation of 21
C.F.R. § 320.24 has “increased the risk” that the company will be harmed by lost sales of
Vancocin. (See Opp. at 29, 31, 33.) “Outside of increased exposure to environmental harms,
hypothesized ‘increased risk’ has never been deemed sufficient ‘injury.’ . . . Indeed, were all
purely speculative ‘increased risks’ deemed injurious, the entire requirement of ‘actual or
imminent injury’ would be rendered moot, because all hypothesized, non-imminent ‘injuries’
could be dressed up as ‘increased risk of future injury.’” Ctr. for Law & Educ., 396 F.3d at
1161.

                                                   8
       Through the declaration of one of its Vice Presidents, Thomas F. Doyle, ViroPharma

asserts that the FDA’s actions have altered its operations in a variety of ways. (Opp. at Ex. 16.)

Specifically, plaintiff claims that the FDA’s regulatory change generally “impacts ViroPharma’s

operations, investment decisions, and strategic planning” (id. ¶ 9); that as a result of the FDA

action, ViroPharma reduced or eliminated various educational, promotional, and marketing

activities (id. ¶¶ 10-13); that ViroPharma “has eliminated plans to invest in any additional

clinical development of Vancocin” (id. ¶ 14); that ViroPharma has been “forced” to invest in

developing a “distribution channel for an authorized generic version of Vancocin” so that

ViroPharma will be better prepared to compete (id. ¶ 15); that ViroPharma’s “ability to construct

strategic plans” has been “impacted” by FDA’s actions “as a result of cash flow uncertainties”

(id. ¶ 16); and that the “uncertainty” associated with FDA’s actions has caused ViroPharma’s

stock price to be lower that it otherwise would be. (Id. ¶ 17).

       ViroPharma’s allegations present a number of problems, each of which would be

sufficient to undercut its rationale for standing. ViroPharma complains that its operations have

been variously changed or “impacted,” that it has cut back on some investments while increasing

investments in other areas, and that it suffers from “uncertainties” regarding the future regulatory

and competitive environment. 3 These “harms” are highly nebulous in both character and degree,

and are a far cry from the type of “concrete and particularized” injury required for Article III

standing.

       Furthermore, ViroPharma has failed to demonstrate a causal connection between FDA’s

actions and the changes the company has made to its business practices. While Mr. Doyle

3
 Indeed, plaintiff’s frequent references to the “uncertainty” associated with the FDA’s actions
only highlights the speculative nature of any future injury ViroPharma may suffer due to FDA’s
actions in issuing the acarbose petition response. See supra II.A.

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variously claims that the FDA’s actions “required” or “forced” ViroPharma to take certain steps

(see id. ¶¶ 10, 15), plaintiff fails to explain how these changes were in fact required or mandated

by the FDA. In reality, nearly all of the “harms” complained of by Mr. Doyle represent actions

that ViroPharma elected to take in response to its own predictions about what the FDA may do in

the future, presumably in order to better position itself should these predictions prove accurate. 4

Perhaps these steps will prove to be wise business decisions. Perhaps they will not. Either way,

they are not “harms” that can be said to have been caused by the FDA. 5

        Even if the various modifications ViroPharma has made to its current business practices

can be said to rise to the level of injury in fact, this injury is not “fairly traceable” to the 2008

acarbose petition response at issue in this case. See Lujan, 504 U.S. at 560 (“[T]here must be a

causal connection between the injury and the conduct complained of . . . .”). Doyle attributes the

company’s alleged injury to the “FDA’s regulatory change.” (Opp. Ex. 16 ¶¶ 9, 10, 16, 17.) But

according to Doyle, the “change” occurred not in 2008, but in 2006 when “the FDA dramatically

changed course, and stated that it would consider in vitro bioequivalence testing methods for

generic [ANDA] versions of Vancocin.” (Id. ¶ 3; Compl. ¶¶ 23-25.) This action by the FDA did

not go unnoticed by ViroPharma, which that same year filed a petition for stay of action

4
  These steps also appear to include diversifying the company’s revenue stream to become less
reliant upon sales of Vancocin, which now accounts for 60% of the company’s total revenues,
compared with nearly 100% a few years ago. (See Compl. ¶ 7.)
5
  ViroPharma’s reliance on Clinton v. City of New York, 524 U.S. 417 (1998) is misplaced. In
Clinton, the City of New York “suffered an immediate, concrete injury the moment that the
President used the Line Item Veto . . . and deprived [it] of the benefits of the [vetoed] law.” Id.
at 430. The fact that the City had the right to try to secure a waiver of the tax liability it owed
did not, in the Supreme Court’s view, extinguish its injury. Id. Clinton does not, however, stand
for the proposition that any potential future harm, no matter how speculative, can be transformed
into a legally cognizable injury in fact.

                                                   10
regarding the new draft bioequivalence standards. (Compl. ¶ 59.) The FDA actions challenged

in this case, however, did not occur until two years later.

       Because ViroPharma has not demonstrated that it is “substantially probable” that the

2008 acarbose petition response will result in future lost profits to the company, nor that it is

currently suffering from a concrete, particularized harm that is traceable to the acarbose petition

response, it has failed to satisfy the “irreducible constitutional minimum of standing.” Lujan,

504 U.S. at 560. 6

                                          CONCLUSION

       For the foregoing reasons, the Court grants defendants’ motion to dismiss. A separate

order accompanies this Memorandum Opinion.

                                                                   /s/
                                                       ELLEN SEGAL HUVELLE
                                                       United States District Judge

Date: April 15, 2011

6
  Although the Court need not resolve defendants’ ripeness challenge, it is mindful that, as is
often the case, standing and ripeness are closely related in this case, and “indeed [are] not always
clearly separable” from each other. Wyo. Outdoor Council v. U.S. Forest Serv., 165 F.3d 43, 48
(D.C. Cir. 1999). In particular, ViroPharma’s ability to make the necessary showing of hardship
sufficient to overcome the FDA’s interest in postponing review until such time that it actually
approves an ANDA turns on similar considerations to those that the Court has addressed in the
context of standing.

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