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Law360 (May 21, 2020, 6:06 PM EDT) --
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| Geoff Biegler |
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| Megan Chacon |
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| Madelyn Mccormick |
A unique concern with Hatch-Waxman litigation is the impact of the pandemic on generic drug launches and the resolution of litigation relative to the U.S. Food and Drug Administration's 30-month stay of approval of abbreviated new drug applications provided for by the Hatch-Waxman Act.[2]
The Hatch-Waxman Act does not allow the FDA to grant final approval for an ANDA for which the generic drug manufacturer made a Paragraph IV certification until (1) the generic drug manufacturer satisfies the requirements for FDA approval and (2) either any infringement action brought by a branded drug manufacturer under U.S. Code Title 35 Section 271(e)(2) is resolved or the 30-month stay expires.[3]
If the 30-month stay expires without resolution of the underlying litigation, the FDA might give final approval to the ANDA product, raising the possibility of the generic drug manufacturer trying to launch "at-risk," i.e., without a decision whether it will incur liability for doing so.
This article addresses questions Hatch-Waxman litigants may have about the potential impact of the COVID-19 pandemic on these issues, including the effect of the pandemic on Hatch-Waxman litigation, possible options for addressing the impact of the COVID-19 pandemic on 30-month stays, and whether COVID-19 will affect FDA approval of ANDAs.
How are courts handling COVID-19-related delays in light of upcoming 30-month stay deadlines?
Hatch-Waxman litigation is far from immune to the COVID-19 pandemic's effect on civil litigation. One aspect of Hatch-Waxman litigation — trials — may be less subject to delays than other patent litigation, but litigants can expect longer case schedules and discovery-related delays in the lead-up to trial.
Hatch-Waxman litigations typically involve bench trials and, thus far, courts appear willing to adjust schedules and work to push Hatch-Waxman bench trials forward despite COVID-19-related delays. For example, in the U.S. District Court for the District of Delaware, a common forum for Hatch-Waxman litigation, Chief U.S. District Judge Leonard Stark expressed his willingness to try a Hatch-Waxman case on afternoons, nights and weekends if needed for timely resolution.[4]
A number of courts have also been receptive to conducting bench trials remotely in both Hatch-Waxman litigations and patent litigations generally. For example, on April 23, in the U.S. District Court for the Eastern District of Virginia, U.S. District Judge Henry Coke Morgan Jr. issued an order denying an objection to conducting a trial entirely by videoconference where the parties agreed to waive participation of a jury. The court noted, "[t]he protection of intellectual property is of paramount concern and the Court seeks to resolve the matter with a sense of urgency."[5]
As another example, from the U.S. District Court for the Southern District of New York, after first adjourning a bench trial, Chief U.S. District Judge Colleen McMahon issued an order stating that she "fully intend[s] to try this case starting May 26 — or no later than a week [or] two after that" because she "can take testimony in writing ... and listen to cross examination conducted remotely."[6] Given Hatch-Waxman litigations are typically bench trials, some courts may be willing to proceed with "trial by Zoom" and greater reliance on the papers in order to address the urgency attendant with the intellectual property rights of drug companies and the 30-month stay.
On the other hand, the lead-up to trial in Hatch-Waxman cases will be subject to the same, if not greater, delays than other patent litigation. In-person proceedings, like depositions and oral arguments, are all but impossible in light of health concerns and stay-at-home orders. Travel of any kind is difficult, if even possible, and virtual proceedings, like remote depositions, may not be realistic for large-scale, multiparty discovery. Moreover, normally routine discovery tasks, like document collection and review, may be delayed or rendered impossible by COVID-19-related restrictions.
These concerns may be amplified in Hatch-Waxman litigations because the litigants are often based outside the United States. And even when COVID-19 related restrictions relax, courts may need to prioritize criminal matters instead of civil patent litigation.
These delays and priorities will likely push case schedules back and may make the resolution of litigation prior to the 30-month stay more difficult.
If COVID-19 makes resolution of litigation impossible prior to expiration of a 30-month stay, what options do the parties have to maintain the status quo?
While the global pandemic continues to cause uncertainty, branded drug manufacturers need not face at-risk launch if the parties are unable to resolve Hatch-Waxman litigation prior to the expiration of 30-month stay due to COVID-19-related delays. Courts and parties have multiple options for avoiding an at-risk launch in the event of delays. Below are a few of those options.
Agreement Among Parties to Maintain the Status Quo
The simplest option is for the parties to agree to maintain the status quo to give the court time to resolve Hatch-Waxman litigation. Maintaining the status quo may be desirable for all parties and the court. For branded drug manufacturers, it prevents irreversible damage to the market for the branded drug if a generic drug launches prematurely. For generic drug manufacturers, it protects against the liability associated with launching at-risk and a later finding of infringement, and it avoids the cost of litigating a potential preliminary injunction motion. It may also appeal to generic drug manufacturers if they are experiencing delays in FDA approval and/or ability to launch their generic product in light of the COVID-19 pandemic (see below). Further, courts will likely look favorably upon an agreement that allows the court sufficient time to resolve litigation without the clock to generic launch ticking.
Indeed, in at least one recent case, Mitsubishi Tanabe Pharma Corporation v. Sandoz Inc., the branded and generic drug manufacturers agreed to maintain the status quo in light of the COVID-19 crisis to give the court time to issue its decision.[7] In agreeing to extend the regulatory stay, the parties avoided the need for preliminary injunction proceedings, which would have likely added further expense and delay to the ongoing litigation. The Delaware federal court then issued an order extending the regulatory stay of FDA approval of the generic drug manufacturer's ANDAs until 120 days after trial and allowed for postponement of the May 2020 trial.[8]
Seek a Court-Ordered Extension of the 30-Month Stay
In some scenarios, branded drug manufacturers may be able to seek an extension of the 30-month stay. In Hatch-Waxman litigation, courts have the power to shorten or lengthen the 30-month stay if "either party to the action failed to reasonably cooperate in expediting the action."[9]
In this context, there are a few ways a court may grant an extension of the 30-month stay of FDA approval. For example, if the branded drug manufacturer continually suggests working around COVID-19-related discovery issues (e.g., conducting remote depositions, remote hearings, paper discovery instead of live testimony), but the generic drug manufacturer remains uncooperative or unable to comply (e.g., employees are unavailable for deposition, unable to produce documents), a district court may have a basis for extending the 30-month stay.
For example, in Bayer Healthcare Pharmaceuticals Inc. v. River's Edge Pharmaceuticals LLC, the U.S. District Court for the Northern District of Georgia extended the regulatory stay twice: first, for seven months because of defendant's failure to expedite the action, namely its "failure to cooperate during discovery with respect to the ownership and manufacturer of the ANDA," and then for three more months (until after the court entered final judgement) in response to the grant of defendant's emergency motion to extend pretrial deadlines and the parties' inability to subsequently come to an agreement on extending the statutory stay as requested by the court.[10]
Additionally, if generic drug manufacturers are unable to meet litigation deadlines or experience FDA-approval delays, the district court has additional grounds for extending the 30-month stay.[11] For example, in Novartis Corporation v. Dr. Reddy's Laboratories Ltd., the defendant requested a stay of the litigation pending the completion of the FDA's reevaluation of the safety and efficacy of the defendant's product. The U.S. District Court for the Southern District of New York ordered tolling of the 30-month stay period where defendant "cannot feasibly argue that it is reasonably cooperating in expediting the action when it has asked the court to stay the proceedings."[12]
Court-Issued Injunction
If the parties cannot agree to maintain the status quo and a court ordered extension of the 30-month stay is not appropriate, branded drug companies can seek a preliminary injunction and/or temporary restraining order. A court can fashion a PI or TRO to prevent a generic drug manufacturer from launching at risk if trial has yet to take place and the court has yet to issue an opinion on the merits.[13] If trial is delayed due to the COVID-19 pandemic and the expiration of the 30-month stay is quickly approaching, PIs and TROs offer a path to protect against at-risk launches.
Will COVID-19 pandemic-related delays affect generic drug launch?
An open question raised by the COVID-19 pandemic is whether generic drug manufacturers will be ready to launch their products, whenever they are legally allowed to do so. Delays in launch have the potential to affect the parties' positions on settlement, trial strategy, and whether to seek emergency relief (e.g., a PI or TRO). The added uncertainty caused by COVID-19 leaves many Hatch-Waxman litigants wondering how to factor in the potential for delayed ANDA approvals for both ongoing and future litigations.
Near term, a potential source of delay is the FDA's postponement of inspections of foreign manufacturing facilities. In March 2020, the FDA announced that it would postpone most foreign facility inspections.[14] This is potentially significant to final approval of ANDAs because many generic drug manufacturers make their drug products outside of the United States,[15] and in order for the FDA to approve an ANDA, it must conduct on-site inspections of the firms listed in the "chemistry, manufacturing and controls" section of an ANDA (preapproval inspections).[16]
These firms subject to preapproval inspections include active pharmaceutical ingredient manufacturers, primary packaging and labeling sites, finished dosage manufacturers, and finished dosage and API testing sites.[17] The FDA's delay of preapproval inspections could delay final approval of ANDAs submitted by companies with foreign chemistry, manufacturing and controls firms and thus set-back a foreign manufacturer's plans for generic product launch.
To be sure, the FDA currently has not stopped approving ANDAs.[18] Nonetheless, other potential causes of delay may unfold as the pandemic continues. For example, the FDA appears to be devoting many of its resources to COVID-19 related work, including approving new COVID-19 tests and updating guidance for a myriad of COVID-19 related issues.
Given these potential issues due to the ongoing COVID-19 pandemic, branded drug manufacturers will want to ensure they seek discovery related to ongoing communications and submissions between the ANDA applicant and the FDA. Further, any ANDA approval delays will likely elevate the importance of early settlement discussions, trial timing, and protecting the 30-month stay through party agreement, court order or emergency relief.
A previous version of this article did not list author Madelyn McCormick. The error has been corrected.
Geoff Biegler and Megan A. Chacon are principals, and Madelyn McCormick is an associate, at Fish & Richardson PC.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] See, e.g., https://www.ded.uscourts.gov/node/76557, In Re: Court Operations Under The Exigent Circumstances Created By COVID-19: Revised Standing Order, April 17, 2020 (ordering, among other things, all civil and criminal jury selections and jury trials scheduled to begin before May 31, 2020 continued pending further Order of the Court); https://www.njd.uscourts.gov/covid-19-orders-procedures-and-changes, Standing Order 2020-09 at ¶ 7, April 17, 2020 (ordering, among other things, filing and discovery deadlines in civil matters falling between May 1 and May 31, 2020 are extended by 30 days).
[2] See 21 U.S.C. § 355(j)(5)(B)(iii).
[3] See id.
[4] Adverio Pharma GmbH et al. v. MSN Laboratories Private Limited et al., 1:18-cv-00073-LPS (D. Del. March 30, 2020), Dkt. No. 154 (30-month stay expires April 2021).
[5] Centripetal Networks, Inc. v. Cisco Systems, Inc., 2:18-cv-00094-HCM-LRL (E.D. Va. April 23, 2020), Dkt. No. 406.
[6] Ferring Pharmaceuticals Inc. et al v. Serenity Pharmaceuticals, LLC et al., 1:17-cv-09922 (S.D.N.Y. April 23, 2020), Dkt. No. 678. On April 24, 2020, the parties requested "that the start of trial be adjourned for a short period so as to allow more certainty moving forward" in light of "stay at home orders and/or directives through at least May 15." See id. at Dkt. No. 680. In light of the parties' joint request, the court ordered trial adjourned to July 6, 2020. See id.
[7] Mitsubishi Tanabe Pharma Corporation, et al. v. Sandoz Inc., et al., 3:17-cv-5319-FLW-DEA (D. Del. April 24, 2020), Dkt. No. 155 (extending FDA statutory stay of approval of Zydus's ANDAs from September 29, 2020 to 120 days from the conclusion date of the trial).
[8] See id.
[9] 21 U.S.C. § 355(j)(5)(B)(iii); see, e.g., Eli Lilly & Co. v. Teva Pharm. USA, Inc.
, 557 F.3d 1346, 1350 (Fed. Cir. 2009).[10] Bayer Healthcare Pharm. v. River's Edge Pharm., 11-CV-01634-HLM-RLV (N.D. Ga. April 26, 2013), Dkt. No. 167; Dkt. No. 360 (May 1, 2014).
[11] Novartis Corp. v. Dr. Reddy's Labs., Ltd.
, No. 04 CIV.0757 SAS, 2004 WL 2368007, at *3 (S.D.N.Y. Oct. 21, 2004).[12] Id.
[13] See Alcon Labs., Inc. v. Akorn, Inc.
, No. 15-CV-285 (RMB/JS), 2016 WL 99201, at *2 (D.N.J. Jan. 8, 2016) (staying Hatch-Waxman litigation for IPR proceeding while failing to extend 30-month stay, noting plaintiff "will have the opportunity to seek an injunction to prevent an at-risk launch"); Grunenthal Gmbh et al. v. Actavis Elizabeth LLC et al., 2:13-cv-04507-CCC-MF, Dkt. No. 537 (enjoining defendants one day prior to expiration of 30-month stay from launching their generic product "in order to maintain the status quo until the Court enters final judgment").[14] Coronavirus Disease 2019 (COVID-19) Update: Foreign Inspections (March 10, 2020), https://www.fda.gov/news-events/press-announcements/coronavirus-disease-2019-covid-19-update-foreign-inspections.
[15] See, e.g., The World's Pharmacy: India's Generic Drug Industry (February 12, 2020), https://www.gbreports.com/article/the-worlds-pharmacy-indias-generic-drug-industry.
[16] FDA's Pre-Approval Inspection (PAI) Program and How to Prepare for a Successful Outcome (Fall 2015), https://www.fda.gov/media/94064/download, last visited May 13, 2020.
[17] See id. at slides 6-7.
[18] Drugs@FDA: FDA-Approved Drugs, Recent New and Generic Drug Approvals, https://www.accessdata.fda.gov/scripts/cder/daf/index.cfm?event=report.page, last visited May 13, 2020 (listing "Recent New and Generic Drug Approvals").
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