Mylan Pharma. Inc. v. Sebelius

Case Name:  Mylan Pharma. Inc. v. Sebelius, C.A. No. 12-524 (ESH), 2012 U.S. Dist. LEXIS 56178 (D.D.C. Apr. 23, 2012) (Huvelle, J.)

Drug Product and Patent(s)-in-Suit: Provigil® (modafinil); U.S. Patent Nos. RE37,516 ("the '516 patent) and 7,297,346 ("the '346 patent")

Nature of the Case and Issue(s) Presented:  The issue here was whether the Food and Drug Administration ("FDA") properly awarded Teva Pharmaceuticals U.S.A., Inc. ("Teva USA") 180-day exclusivity to market generic modafinil when Teva USA and the NDA holder for Provigil, Cephalon, were both subsidiaries of the same parent company, Teva Pharmaceuticals Industries Ltd. ("Teva Ltd.).  The '516 and the '346 patents covered Provigil.  In 2002, Mylan and Teva USA timely filed ANDAs including Paragraph IV notices for the '516 patent, which prompted litigation with Cephalon.  In late 2005 and early 2006, Cephalon settled the litigation with Mylan and Teva USA, which included a payment to Mylan and Teva USA to refrain from selling modafinil until April 6, 2012, even though generic modafinil could have been marketed as early as June 2005.  In November 2007, Cephalon obtained a second patent, the '346 patent, covering Provigil.  Teva USA timely filed an amended ANDA with a Paragraph IV notice against the '346 patent, as did the other generic manufacturers.  Mylan did not file its amended ANDA until 2011.  In 2011, Teva USA's parent company, Teva Ltd. purchased Cephalon.  The FTC approved the merger with a condition that Par Pharmaceuticals be allowed to market modafinil for two years starting on April 6, 2012.

After some discussion with the FDA on which company was entitled to the 180-day exclusivity period for modafinil, the FDA determined - under pre-MMA law - that Teva USA was entitled to the exclusivity period because it was the only company that was the first filer against both the '516 and '346 patents.  Mylan sought a preliminary injunction ordering the FDA to find that Mylan was entitled to the exclusivity period.  Mylan's main argument was that Teva USA was no longer adverse to Cephalon as both were owned by the same parent company.  Mylan also argued that Teva USA abandoned its ANDA.

Why Teva USA Prevailed:  The Court found that the Hatch-Waxman Act does not require an adversarial nature to exist between NDA and ANDA filers.  Here, Teva USA and Cephalon were adverse to each other when Teva USA filed its ANDA for the '516 patent.  Moreover, Paragraph IV certifications are not invalidated when the patent owner and ANDA applicants reach a license agreement, and such agreements do not vitiate the exclusivity rights of the ANDA applicant.  The Court rejected Mylan's argument that Paragraph IV certifications require a controversy in order for the district court to have jurisdiction by finding that the purpose of Paragraph IV was to provide a mechanism for parties to determine the scope of patent rights, but not necessarily to create litigation. 

The Court also addressed Mylan's concern that Teva USA would not take advantage of the exclusivity period as it was not ready to manufacture and distribute modafinil and that Teva USA did not have incentive to make a generic available at the cost of sales to Cephalon, a related company.  The Court rejected this argument because the controlling law of the case allowed a generic manufacturer to "park" its exclusivity rights, since the MMA amendments to the Hatch-Waxman Act related to the issue of not exercising one's exclusivity rights did not apply in this case. Moreover, there were no facts to support Mylan's accusation.

Finally, the Court rejected Mylan's argument that Teva USA was not actively pursing approval with the FDA.  The facts showed that the FDA did consider the possibility that Teva USA was not pursing approval, and issued a letter outlining the steps Teva USA needed to take to obtain approval.  Teva USA responded to the letter, and the FDA decided that Teva USA was actively pursing approval after receiving Teva USA's letter.  Furthermore, the Court did not find any evidence that the FDA's decision was arbitrary or capricious.

As for the irreparable harm prong, the Court rejected Mylan's argument that it would suffer irreparable harm because any harm Mylan would suffer was economic.  In addition, the Court noted that Mylan would not have been the sole generic manufacturer of modafinil, so its economic harm would be mitigated.