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Schering Corp. v. Food and Drug Admin.

filed: April 3, 1995.

SCHERING CORPORATION, APPELLANT
v.
FOOD AND DRUG ADMINISTRATION



Appeal from the United States District Court for the District of New Jersey. (D.C. Civ. No. 93-cv-03493).

Before: Mansmann, Hutchinson and McKEE, Circuit Judges.

Author: Mansmann

Opinion OF THE COURT

MANSMANN, Circuit Judge.

The issue before us, brought in the context of a pioneer drug*fn1 manufacturer's challenge to the propriety of FDA approval of non-systemically effective generic drugs pursuant to an abbreviated approval process, is one of first impression in the courts of appeals. We must determine whether the bioequivalence requirements, set forth in section 355(j)(7)(B) of Title I of the Drug Price Competition and Patent Term Restoration Act of 1984 (the "Act"), Pub. L. No. 98-417, 98 Stat. 1585 (1984), otherwise known as the "Hatch-Waxman Amendments" to the Food, Drug and Cosmetic Act (the "FDCA"), are the exclusive means for determining the bioequivalence of generic drugs approved pursuant to the abbreviated new drug application procedure ("abbreviated application" or "ANDA") embodied in that Act. 21 U.S.C.A. § 355(j) (West Supp. 1994). A bioequivalent generic drug is one that the FDA has determined to be as safe and effective as the pioneer drug it copies.

We decide this issue in the context of a challenge by Schering Corporation, a research-based manufacturer and distributor of pharmaceutical products, to the Food and Drug Administration's final regulation implementing the ANDA provisions of the Act. The FDA regulation at issue, codified at 21 C.F.R. § 320.1(e) (1994), was promulgated in 1992 to implement the bioequivalence requirements for generic drugs approved under the abbreviated application procedure. Schering charges that the FDA impermissibly broadened the exclusive statutory definition of bioequivalent by substituting the statutorily prescribed measurement of drug "absorption" with a measurement which calculates when the drug becomes "available at the site of drug action." See 21 U.S.C.A. § 355(j)(7)(B) (West Supp. 1994); 21 C.F.R. § 320.1(e) (1994).

The district court entered summary judgment in favor of the FDA, holding that section 355(j)(7)(B) is not the exclusive means for determining the bioequivalence of a generic drug to its pioneer drug counterpart. On Schering's appeal, we find the language of 21 U.S.C.A. 355(j)(7)(B) (West Supp. 1994) ambiguous and consistent with Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984), we hold that the FDA regulation at 21 C.F.R. § 320.1(e) (1994) is a permissible construction of that statute. Accordingly, we will affirm the judgment of the district court.

I.

To receive approval under an abbreviated new drug application, a generic drug manufacturer must establish that its drug is the bioequivalent of a pioneer drug. 21 U.S.C.A. § 355(j)(2)(A)(iv) (West Supp. 1994). The Act provides:

A drug shall be considered to be bioequivalent to a listed drug*fn2 if--

(i) the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug when administered at the same . . . dose of the therapeutic ingredient under similar experimental conditions in either a single dose or multiple doses; or

(ii) the extent of absorption of the drug does not show a significant difference from the extent of absorption of the listed drug when administered at the same . . . dose of the therapeutic ingredient under similar experimental conditions . . . and the difference from the listed drug in the rate of absorption of the drug is intentional, is reflected in its proposed labeling, is not essential to the attainment of effective body drug concentrations on chronic use and is considered medically insignificant for the drug.

21 U.S.C.A. § 355(j)(7)(B) (West Supp. 1994). The FDA regulation at issue implementing subpart (i) of this statutory provision defines bioequivalence in relevant part as "the absence of a significant difference in the rate and extent to which the active ingredient . . . becomes available at the site of drug action when administered at the same . . . dose under similar conditions in an appropriately designed study." 21 C.F.R. § 320.1(e) (1994). Schering does not challenge the regulation implementing subpart (ii) of the above-quoted provision regarding intended differences in the rate of availability from a listed drug.

Schering manufactures and distributes the pioneer drugs Proventil (R), an aerosol metered-dose asthma inhaler, and Lotrimin (R), an antifungal cream, both of which are non-systemically effective drugs ("NSEDs"). NSEDs are products that derive their effectiveness from application directly at the site of drug action, such as by application of an ointment to the skin or inhalation of a drug-containing mist into the lungs, rather than through systemic absorption into the bloodstream. Schering challenges the regulatory definition of bioequivalence as impermissibly substituting the statutory reference to the rate and extent of drug absorption with a reference to the rate and extent to which a drug becomes available at the site of drug action. Schering argues that section 355(j)(7)(B) unambiguously sets forth the exclusive definition of bioequivalence; therefore, all generic drugs seeking approval pursuant to the ANDA process must meet one of the two criteria set forth in section 355(j)(7)(B) to establish bioequivalence, both of which require absorption*fn3 data.

The FDA disputes that absorption data is required to establish the bioequivalence of generic NSEDs. Bioequivalence occurs when two drugs possess the same efficacy. The FDA argues that bioequivalence can be measured by using one of several methodologies, including absorption; however, the appropriate method used depends on the type of drug under consideration for approval. The FDA, therefore, views section 355(j)(7)(B) as delineating a "safe harbor" or circumstances when the FDA must recognize a generic drug as the bioequivalent of a pioneer drug, but not as a limitation on the criteria the FDA may use to ascertain bioequivalence.

In 1989, Copley Pharmaceutical, Inc., filed an abbreviated application pursuant to section 355(j) to manufacture and market a generic copy of Proventil (R) . On December 4, 1989, Schering filed a Citizen Petition with the FDA, pursuant to 21 C.F.R. § 10.25 (1990), seeking inter alia a declaration that section 355(j)(7)(B) set forth the exclusive means for determining bioequivalence in terms of the rate and extent of drug absorption and that absorption data could not as a practical matter be provided for NSEDs such as Proventil (R) or its generic counterpart because they do not depend on absorption to achieve their desired effect. The FDA responded to Schering's Citizen Petition on June 29, 1990, denying the requested relief. The FDA stated its position that a generic drug may satisfy the statutory bioequivalence requirement even if it does not meet the absorption criteria set forth in section 355(j)(7)(B). This constituted final agency action from which relief could be sought in a United States District Court. See 21 C.F.R. § 10.45(d) (1990).

Schering thus sought review of the FDA's response to its Citizen Petition in the United States District Court for the District of Columbia. While cross-motions for summary judgment were pending, the FDA approved Copley's ANDA to manufacture and market a generic version of Proventil (R) . Schering immediately filed a motion for preliminary injunction to enjoin the FDA's approval of the generic version of Proventil (R), which the district court denied. The district court granted the FDA's motion for summary judgment, concluding that section 355(j)(7)(B) did not set forth the exclusive means for determining bioequivalence and that the FDA's interpretation of the statute as permitting alternative methodologies to establish bioequivalence was reasonable. Schering Corp. v. Sullivan, 782 F. Supp. 645, 650 (D.D.C. 1992), vacated as moot sub nom, Schering Corp. v. Shalala, 302 U.S. App. D.C. 35, 995 F.2d 1103 (D.C. Cir. 1993).

Schering appealed the district court's judgment to the United States Court of Appeals for the District of Columbia Circuit, challenging the legal Conclusion that the FDA is not limited to the absorption criteria set forth in section 355(j)(7)(B) to determine the bioequivalence of a generic drug to its pioneer drug counterpart. During the pendency of the appeal, the FDA issued final regulations regarding the ANDA process, including its definition of the term bioequivalence. 57 Fed. Reg. 17,949 - 18,001 (1992). The court of appeals determined that the newly promulgated 1992 regulations rendered moot Schering's appeal based on the FDA's Citizen Petition Response and, therefore, vacated the district court opinion. Schering Corp. v. Shalala, 302 U.S. App. ...


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