District Court Set to Decide Whether Ranbaxy Forfeited 180-Day Exclusivity on Generic Lipitor

Mylan Pharms. and Matrix Labs. v. FDA, No. 11-566 (D.D.C.)

Last month, Mylan filed suit against the FDA in the U.S. District Court for the District of Columbia, seeking a declaration that there is no applicable period of 180-day exclusivity for generic Lipitor (atorvastatin) that would block approval of Mylan's atorvastatin ANDA; and an injunction preventing FDA from withholding final approval of Mylan's ANDA on the basis of Ranbaxy's 180-day exclusivity.  Within days, Mylan filed a motion for preliminary injunction.  FDA and Ranbaxy (as Intervenor) then filed motions to dismiss Mylan's complaint.  Briefing on the motions was recently completed, and the briefs are available below.

The crux of Mylan's suit is that "FDA has arbitrarily, unreasonably, and unlawfully failed to decide whether the Agency will enforce the terms of its Application Integrity Policy ("AIP") against the atorvastatin ANDA application submitted by Ranbaxy."  According to the Complaint, "FDA found that Ranbaxy engaged in a pattern and practice of submitting to FDA drug applications containing false and unreliable data generated from Ranbaxy's Paonta Sahib, India manufacturing site, where, Ranbaxy markets its generic LIPITOR."  Mylan contends that "if FDA enforces the AIP against Ranbaxy's ANDA, then the plain language of the FDA Act and the AIP require FDA to deny Ranbaxy's ANDA, and terminate any period of 180-day marketing exclusivity originally provided to Ranbaxy."

According to Mylan, Ranbaxy cannot market generic Lipitor before November 2011 (due to a settlement with Pfizer), meaning that if Ranbaxy has 180-day exclusivity, other generic makers could not enter the market until May 2012.  But in the absence of Ranbaxy's 180-day exclusivity, Mylan could launch its generic Lipitor as early as June of this year.  Mylan further states that "upon market entry of generic LIPITOR, it is estimated that U.S. consumers, the government, and third party payors could save between $10.9 million and $18.6 million per day, which equates to between $3.97 billion and $6.8 billion in potential savings per year."

FDA, in its motion to dismiss, responds that Mylan lacks standing, because it has not (yet) been injured; Mylan's claims are not ripe, because its own ANDA is not ready for approval; FDA's enforcement discretion is not subject to judicial review; and Mylan fails to state a claim for unreasonable delay under the Administrate Procedure Act.

A hearing on the motions is scheduled for April 28th at 9:30 a.m.  The court should issue a decision shortly thereafter.

Filings:

• Mylan v. FDA Complaint
• Mylan Motion for Preliminary Injunction
• FDA Motion to Dismiss and Opposition to Motion for PI
• Ranbaxy Motion to Dismiss and Opposition to Motion for PI
• Mylan Reply i/s/o Motion for PI and Opposition to Motion to Dismiss
• FDA Reply i/s/o Motion to Dismiss
• Ranbaxy Reply i/s/o Motion to Dismiss
• Mylan Surreply in Opposition to Motion to Dismiss
  

Comments

[Vishal]

The decision could go either way, and I expect a 10% stock price movement in case of Ranbaxy either way . In such a case it would be wise to buy a straddle on Ranbaxy. The stock has underperformed the indian pharmaceutical peers, due to concerns over Lipitor exclusivity forfeiture.