Fourth Circuit Reaffirms Legality of Authorized Generics

The Court of Appeals for the Fourth Circuit today affirmed a district court decision dismissing a lawsuit brought by Mylan Pharmaceuticals against the FDA, in which Mylan asserted that the FDA did not have the authority to approve an authorized generic of Proctor & Gamble's Macrobid (nitrofurantoin).  The decision is consistent with Teva v. Crawford, which was decided last year by the Court of Appeals for the D.C. Circuit.

In the case decided today, Mylan held rights to the 180 day exclusivity period for marketing generic nitrofurantoin, a drug used to treat urinary tract infections, with annual sales of $80 million.  A third party licensed by Procter & Gamble launched an authorized generic just as Mylan began marketing its own generic version of Macrobid.

In the opinion, written by Judge M. Blane Michael for a unanimous panel, the court first observed:

Mylan concedes that the language of section 355 (j)(5)(B)(iv) is plain.  The provision makes no mention of drugs under approved NDAs.  It speaks only about the rights of the paragraph IV ANDA applicant who files first as against all subsequent paragraph IV ANDA applicants.

The court thus held that it was not arbitrary or capricious for the FDA to allow marketing of authorized generic drugs, and therefore the district court correctly dismissed the case for failure to state a claim upon which relief can be granted.  The Fourth Circuit concluded:

Although the introduction of an authorized generic may reduce the economic benefit of the 180 days of exclusivity awarded to the first paragraph IV ANDA applicant, section 355(j)(5)(B)(iv) gives no legal basis for the FDA to prohibit the encroachment of authorized generics on that exclusivity.