Teva Challenges the FDA Over its First-Applicant Interpretation

October 22, 2018

Teva Pharmaceutical USA, Inc. filed a Complaint and Motion for Preliminary Injunction in the U.S. District Court for the District of Columbia, alleging that the FDA’s recent interpretation of the definition of “first applicant” is unlawful. Specifically, Teva seeks to protect “tens of millions of dollars” in expected revenue from its planned generic version of the dry-eye drug Restasis, arguing that the revenue is put at risk by an FDA Letter Decision changing the long-standing position of when a generic drug manufacturer is a “first applicant” entitled to 180-day exclusivity.

FDC Act Section 505(j)(5)(B)(iv)(II)(bb) defines the term “first applicant” to mean: an applicant that, on the first day on which a substantially complete application containing a Paragraph IV certification is submitted for approval of a drug, submits a substantially complete application that contains and lawfully maintains a Paragraph IV certification for the drug. In a July 2018 Letter Decision relating to the opioid dependence drug Suboxone, the FDA stated that the “first applicant” is the first company to submit a substantially complete generic-drug application that challenges patents for a brand-name drug. According to Teva, the Letter Decision disregards the additional, well-established requirement that the applicant also notify the brand drug manufacturer of its challenge. Specifically, Teva alleges that until now, the “FDA consistently maintained that eligibility for 180-day exclusivity hinges on a generic applicant submitting a legally valid challenge to the innovator’s patents that complies with all statutory requirements for such challenges—including the requirement to notify the brand manufacturer of any such challenge so that it can evaluate whether to sue the generic applicant for patent infringement.”

In its court filings Teva indicates that, if applied to the generic version of Restasis, the FDA’s Letter Decision will “vitiate Teva’s right to 180-day marketing exclusivity.” The reason being that another company developing generic Restasis was the first to challenge the Restasis patent, but it never notified the brand company of its challenge. According to Teva, it therefore did not obtain the 180-day exclusivity, but because it would it would be deemed the “first applicant” under the FDA’s Letter Decision, no other company can be awarded the exclusivity.

Teva is seeking declaratory and injunctive relief on the merits, including a declaration that the FDA’s Letter Decision “was issued without observance of procedure required by law” because it should not take effect without formal notice-and-comment rulemaking. Teva argued that the “FDA’s attempt to jettison [the notice] rule in the context of a quasi-adjudicatory proceeding is ... as procedurally defective as it is substantively baffling.” Restasis earns over $1 billion a year and no generic versions have been approved, so this case will be interesting to follow.