Catalyst Pharm., Inc. v. Becerra

14 F.4th 1299

CATALYST PHARMACEUTICALS, INC., Plaintiff - Appellant,

v.Xavier BECERRA, Secretary of Health and Human Services, U.S. Department of Health and Human Services, Janet Woodcock, Acting Commissioner of the Food and Drug Administration, U.S. Food and Drug Administration, Defendants – Appellees,Jacobus Pharmaceutical Company, Inc., Intervenor-Defendant – Appellee.

No. 20-13922

United States Court of Appeals, Eleventh Circuit.

September 30, 2021

Philip Perry, Ryan Baasch, Cherish Alise Drain, Monica C. Groat, John R. Manthei, Andrew Prins, Latham & Watkins, LLP, Washington, DC, Michael Constantine Marsh, Attorney, Ryan Alan Roman, Akerman, LLP, Fort Lauderdale, FL, for Plaintiff-Appellant.

Brian James Springer, Scott R. McIntosh, U.S. Attorney General's Office, Washington, DC, Ann F. Entwistle, U.S. Department of Justice, Civil Division, Washington, DC, for Defendants-Appellees Alex Azar, Secretary of Health and Human Services.

Brian James Springer, Scott R. McIntosh, U.S. Attorney General's Office, Washington, DC, for Defendants-Appellees U.S. Department of Health and Human Services, Norman Sharpless, Acting Commissioner of Food and Drugs, U.S. Food and Drug Administration.

Marisa Maleck, Joel L. McElvain, Gabriel Krimm, King & Spalding, LLP, Washington, DC, Jarred Lee Reiling, King & Spalding, LLP, Chicago, IL, for Defendant-Appellee Jacobus Pharmaceutical Company, Inc.

Before LAGOA, ANDERSON, and MARCUS, Circuit Judges.

LAGOA, Circuit Judge:

This appeal asks us to determine whether the statutory phrase "same disease or condition" contained in the Orphan Drug Act, see 21 U.S.C. § 360cc, is ambiguous. It is not. By finding this statutory phrase ambiguous and then deferring to the U.S. Food and Drug Administration's interpretation of it, the district court erred. We therefore reverse the district court's grant of summary judgment in favor of the Defendants ¹ and Jacobus, and remand with instructions to grant summary judgment in favor of Catalyst.

I. FACTUAL AND PROCEDURAL HISTORY

A. The Orphan Drug Act

In 1983, Congress enacted the Orphan Drug Act, thereby amending the Federal Food, Drug, and Cosmetic Act ("FDCA"). See Pub. L. 97-414, 96 Stat. 2049 (codified as amended at 21 U.S.C. §§ 360aa – 360ee ). The Orphan Drug Act incentivizes pharmaceutical companies to develop "orphan drugs"—drugs for rare diseases that affect such a small portion of the population that there otherwise would be no financial incentive to research and develop treatments. One such incentive is to grant market exclusivity to the manufacturer of an FDA-approved orphan drug for a seven-year period. The framework established by the Orphan Drug Act is fairly straightforward: designation as an orphan drug followed by FDA approval results in market exclusivity. Each of these steps is governed by a separate part of the Orphan Drug Act.

1. Designation

Pursuant to 21 U.S.C. § 360bb(a)(1), a drug manufacturer may request the FDA to designate a drug as an orphan drug—one that "is being or will be investigated for a rare disease or condition." Section 360bb(a)(2) defines a "rare disease or condition" as one that "(A) affects less than 200,000 persons in the United States, or (B) affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug." Designation allows the manufacturer to take advantage of certain resulting financial benefits—such as tax credits—while testing for safety and efficacy continues. See, e.g. , 26 U.S.C. § 45C.

2. Approval

Before any new drug—orphan or otherwise—can be brought to market, it must be approved by the FDA. See 21 U.S.C. § 355(a) – (b). The Orphan Drug Act expressly requires approval pursuant to § 355 before market exclusivity arises. See id. § 360bb(a). When the manufacturer files a new drug application ("NDA"), it must include clinical data demonstrating that the drug is safe for use and effective in use. See id. § 355(b)(1)(A). The manufacturer must identify the new drug's "proposed indications for use," see 21 C.F.R. § 314.50(a)(1), and, if approved by the FDA, see § 355(c)(1), the manufacturer may market the drug solely for the specific indications² for which the FDA approved it, see Ironworkers Local Union 68 v. AstraZeneca Pharms., LP , 634 F.3d 1352, 1356 n.5 (11th Cir. 2011). "The process of submitting an NDA is both onerous and lengthy," Mut. Pharm. Co. v. Bartlett , 570 U.S. 472, 476–77, 133 S.Ct. 2466, 186 L.Ed.2d 607 (2013), and it involves significant "risk and expense," Ethypharm S.A. Fr. v. Abbott Labs. , 707 F.3d 223, 226 (3d Cir. 2013).

3. Exclusivity

To incentivize the development of orphan drugs, upon designation and FDA approval of the orphan drug, the manufacturer of the orphan drug is granted market exclusivity for a defined period of time. Specifically, the Orphan Drug Act provides:

Except as provided in subsection (b), if the Secretary--

(1) approves an application filed pursuant to section 355 of this title, or

(2) issues a license under section 262 of Title 42

for a drug designated under section 360bb of this title for a rare disease or condition, the Secretary may not approve another application under section 355 of this title or issue another license under section 262 of Title 42 for the same drug for the same disease or condition for a person who is not the holder of such approved application or of such license until the expiration of seven years from the date of the approval of the approved application or the issuance of the license.

21 U.S.C. § 360cc(a) (emphasis added). The Orphan Drug Act does not define "same disease or condition," the statutory phrase that is the subject of this dispute.³

B. Statutory Exceptions to Market Exclusivity for Orphan Drugs

There are three statutory exceptions to the seven-year period of exclusivity. The first two are found in 21 U.S.C. § 360cc(b).⁴ First, the FDA can abrogate the manufacturer's exclusivity and approve another manufacturer's NDA if the FDA finds "that during such period the holder of the exclusive approval or licensure cannot ensure the availability of sufficient quantities of the drug." Id. § 360cc(b)(1). Second, a drug manufacturer can waive its exclusivity by written consent. Id. § 360cc(b)(2).

Third, as part of the 2017 reauthorization and statutory overhaul of the Orphan Drug Act,⁵ Congress codified the concept of "clinical superiority" to § 360cc(c) and (e). Under these provisions, during the statutory exclusivity period, a different manufacturer of the same drug can obtain approval of an NDA to use the drug to treat the same disease or condition—effectively abrogating the original manufacturer's exclusivity—if that second manufacturer demonstrates that its drug "provides a significant therapeutic advantage over and above an already approved or licensed drug in terms of greater efficacy, greater safety, or by providing a major contribution to patient care." § 360cc(c)

C. LEMS and the Competing Drugs Firdapse and Ruzurgi

Lambert-Eaton Myasthenic Syndrome ("LEMS") is a rare autoimmune disease that causes the immune system to attack the body's own tissues. It is considered an "orphan disease" with less than 0.001% of the population affected—diagnosed cases in the United States range from roughly 950 to 1,300. And the number of pediatric cases is infinitesimal—believed to be a "couple of dozen" nationwide. From all indications in the record evidence, LEMS affects adults and children equally—the disease mechanism, the pathophysiology, the clinical symptoms, the treatment regimens, and even adverse events all point to the same diagnosis, prognosis, and treatment of LEMS for both adults and children.

LEMS is treatable with the chemical amifampridine. Catalyst developed Firdapse (generic name: amifampridine phosphate ) for the treatment of LEMS. On November 12, 2009, the FDA designated Firdapse as an orphan drug for the treatment of LEMS pursuant to § 360bb, and there is nothing in the FDA's designation that limits the "rare disease or condition" to subsets of people (e.g., adults or children) suffering from LEMS. Catalyst filed its first NDA in December 2015, which the FDA rejected as "not sufficiently complete to permit a substantive review." In March 2018, Catalyst re-filed its NDA, and the FDA approved Firdapse for the treatment of LEMS "in adults" on November 28, 2018. Consistent with the Orphan Drug Act, the FDA granted Catalyst exclusivity through November 28, 2025. See § 360cc(a).

Jacobus developed its own drug—Ruzurgi (generic name: amifampridine)—for the treatment of LEMS. In fact, the FDA had designated Ruzurgi as an orphan drug to treat LEMS in 1990—nineteen years prior to Catalyst's designation. Like the agency's designation of Firdapse, the FDA's designation of Ruzurgi is not limited to specific groups or subsets of individuals suffering from LEMS, i.e., the "rare disease or condition." While Jacobus continued its development and testing for more than two decades, physicians at the Mayo Clinic and Duke University have used Ruzurgi to treat patients with LEMS for free since at least January 1993 under the FDA's "compassionate use" program. Jacobus submitted its first NDA for Ruzurgi in August 2017, which the FDA rejected. In June 2018, Jacobus re-filed its NDA. In its NDA, Jacobus included the following label for Ruzurgi:

Safety and effectiveness of RUZURGI have been established in patients 6 to less than 17 years of age. Use of RUZURGI in patients 6 to less than 17 years of age is supported by evidence from adequate and well-controlled studies of RUZURGI in adults with LEMS.

In reviewing Jacobus's NDA, the FDA recognized that Catalyst, through Firdapse, had exclusivity "for the treatment of LEMS in adults that could potentially block approval of amifampridine (Ruzurgi) in that population." Because of this, the FDA "administratively...