[00:00:00] Speaker 07: Case number 25-5137, Norwich Pharmaceuticals Inc. [00:00:05] Speaker 07: Appellate versus Robert F. Kennedy Jr. [00:00:07] Speaker 07: in his official capacity as Secretary of Health and Human Services at all. [00:00:11] Speaker 07: Mr. Prince for the Appellant, Mr. Schoenfeld for the Federal Appellees, Mr. Killian for the Appellees Cellular Pharmaceuticals Inc., and Mr. Burgess for Appellee Teva Pharmaceuticals USA Inc. [00:00:24] Speaker 00: Morning, Your Honors. [00:00:25] Speaker 00: Good to see you again. [00:00:27] Speaker 00: As we've been discussing, Norwich has spent more than five years trying to bring this generic to market, including by securing patent court judgments that none of the uses for which it is seeking approval in this other ANDA that everybody told us we should file are protected by valid [00:00:43] Speaker 00: patents, but FDA has refused to approve this one because of a so-called 180-day exclusivity held by a different generic manufacturer, Actavis, who settled its patent litigation unlike us and agreed to remain off the market for a decade. [00:01:00] Speaker 00: According to FDA, that forecloses the entire generic market in the meantime, even for unpatented uses of the drug. [00:01:08] Speaker 00: FDA misapplied the statute and should have concluded that Actavis forfeited its exclusivity on two different grounds. [00:01:15] Speaker 00: And the consequences of this, just so you know, are pretty severe. [00:01:18] Speaker 00: A 14-day course treatment of this drug for IBSD is $3,000. [00:01:24] Speaker 00: So if you agree with us in this case, we would respectfully request that you do so quickly and issue the mandate forthwith so we can fix this problem, which we're prepared to do right away. [00:01:37] Speaker 00: Unless the court has a different preference, I plan to start with actually the second issue in our brief, the failure to obtain tentative approval issue, because I think it's the most straightforward opinion you could write in our favor. [00:01:50] Speaker 00: ACTAVUS forfeited the 180-day exclusivity by failing to obtain tentative approval within 30 months. [00:01:58] Speaker 00: There's a single exception to that Brightline forfeiture rule which is if the failure is caused by a change in or review of the requirements for approval. [00:02:08] Speaker 00: FDA excused that forfeiture because in March 2017 it required sponsors to conduct comparative dissolution testing [00:02:17] Speaker 00: and was still reviewing the results of that as of the June 18 days. [00:02:22] Speaker 00: But that was error because they simply applied the wrong legal standard. [00:02:25] Speaker 00: The correct one is the default one, which is but for causation. [00:02:30] Speaker 00: And under that standard, nobody contends that we're wrong that there was a forfeiture. [00:02:35] Speaker 00: And for good reason, because as Bostock instructs, to determine if comparative dissolution testing is the but for cause of the failure to obtain tentative approval, you just remove it from the factual world and see whether the same result would have occurred. [00:02:53] Speaker 00: And the answer here is obviously yes, because Actavis's application was deficient from the moment it was filed and remained deficient for years after the deadline. [00:03:03] Speaker 00: The record clearly shows that there were two unrelated deficiencies that prevented approval, specifically serious quality deficiencies with the drug and a missing clinical endpoint study that FDA had required sponsors to conduct as early as 2012. [00:03:19] Speaker 00: And I believe that's undisputed. [00:03:21] Speaker 00: The information is under seal, so I don't want to go too much into that. [00:03:26] Speaker 04: I think I might be on board with the argument you're making. [00:03:30] Speaker 04: There's a part of it that gives me some pause, and that is the possibility that there is going to be an effect with no cause. [00:03:38] Speaker 04: Because it seems like the deficient application was alone enough to doom success within 30 months. [00:03:49] Speaker 04: Yes. [00:03:50] Speaker 04: even if the application had been perfect, seems like the FDA's change in requirements was alone enough to doom approval within 30 months. [00:04:03] Speaker 04: That's at least kind of assumed for the sake of this argument. [00:04:05] Speaker 04: Is that right? [00:04:06] Speaker 00: Yes. [00:04:06] Speaker 00: So there are basically multiple sufficient costs. [00:04:09] Speaker 04: Right. [00:04:10] Speaker 04: And so you're saying, well, the change in requirements wasn't [00:04:14] Speaker 04: the cause because there's another sufficient cause. [00:04:17] Speaker 04: But of course, the same thing could be said for the deficient, the deficiencies in the application that we could say they're not the cause because the change in requirements was sufficient to be a cause. [00:04:28] Speaker 04: So if the change in requirements are not a cause, it seems like the deficient application should not be a cause either for the same reasons. [00:04:36] Speaker 04: And now you're left with an effect failure of the application that has no cause. [00:04:40] Speaker 00: Well, I have a few answers to that, Your Honor. [00:04:42] Speaker 00: First of all, the exception to but for causation for multiple sufficient causes is not itself the federal default. [00:04:49] Speaker 00: I mean, that's the Supreme Court's debate in the Nassar case between the majority and the minority. [00:04:54] Speaker 00: And FDA's view that this is somehow a multiple sufficient cause case lost. [00:04:59] Speaker 00: But I'll just take it on its own terms, OK? [00:05:02] Speaker 00: They're applying the multiple sufficient cause requirement [00:05:06] Speaker 00: In the back, they're applying it upside down. [00:05:08] Speaker 00: They're applying it backwards. [00:05:10] Speaker 00: The context here is critical. [00:05:12] Speaker 00: And as Nasser explains, you need to understand the context to apply a multiple sufficient cause analysis. [00:05:18] Speaker 00: This is a forfeiture provision, right? [00:05:20] Speaker 00: It is a, Congress added it to prevent the problem of first applicants filing deficient applications and then bottlenecking the approval of other applicants while they take years to actually do the work to actually get the approval process. [00:05:36] Speaker 00: FDA correctly recognizes at JA580 that Congress's purpose was to prevent first applicants that do not meet the substantive requirements for approval from delaying other ANDAs. [00:05:48] Speaker 00: So the general rule, which FDA describes elsewhere as a bright line rule, is harsh. [00:05:53] Speaker 00: You've got 30 months or you're done. [00:05:55] Speaker 00: And that applies, by the way, even if FDA is just being really slow. [00:06:00] Speaker 00: The clause we're talking about is a limited exception to that harsh rule, because Congress did not want to penalize good faith manufacturers who had good applications for situations outside their control. [00:06:12] Speaker 00: Under FDA's standard, a manufacturer with a blatantly deficient application gets out of jail free card, just because by happenstance, FDA changed a review requirement that, even if that never happened, never would have made a difference for their application. [00:06:29] Speaker 00: And if that's the standard, FDA needs to identify textual or contextual support for it. [00:06:36] Speaker 00: And there's absolutely no such support for that here. [00:06:39] Speaker 00: In fact, all the support cuts exactly the wrong way. [00:06:45] Speaker 00: Does it matter? [00:06:46] Speaker 01: I was just going to say that given the potential multiplicity of causes, wouldn't the presumption go the other way? [00:06:52] Speaker 01: If they meant it to be but for cause, you would expect them to have so said, in Congress, to have so said. [00:07:00] Speaker 00: I don't think so at all. [00:07:02] Speaker 00: Congress used the word caused by, which the Supreme Court in Barrage has specifically said is means but for causation. [00:07:10] Speaker 00: My friends say that Barrage interpreted results from, and that's true enough, but it's specifically equated in the opinion itself, results from to caused by. [00:07:21] Speaker 00: It literally drew the comparison. [00:07:23] Speaker 00: And so the default presumption is but for causation unless they can show contextual or textual support that some other rule applies. [00:07:31] Speaker 00: Their other argument is that that's limited to the tort and criminal context, but that's also not true because this court, including in an opinion that you joined the panel on, Judge Pillard in Sinclair v. EPA, has applied it in the context of reviewing an agency's interpretation of its enabling statute. [00:07:50] Speaker 00: So the burden is on them to demonstrate the standard is different. [00:07:53] Speaker 00: And they've come nowhere close to showing that Congress would have intended some sort of get out of jail free card for deficient applicants. [00:08:02] Speaker 00: It doesn't really make any sense. [00:08:05] Speaker 06: I suspect, at least in the briefs, the main case the other side is citing is Kilburn. [00:08:10] Speaker 06: And I wonder if you would [00:08:12] Speaker 06: So there's a lot of things I can say about Kilburn. [00:08:18] Speaker 00: So Kilburn was decided a decade before Barrage. [00:08:21] Speaker 00: So I'll note that where again in Barrage, the Supreme Court explained what the ordinary meaning of causes. [00:08:28] Speaker 00: So this court didn't have the benefit of that. [00:08:31] Speaker 00: But that's also the context in that statute is [00:08:34] Speaker 00: for example, one of the reasons why you would sometimes apply an exception to but for causation. [00:08:40] Speaker 00: It was a jurisdictional statute essentially trying to sweep within it terrorist related activities and the court declined to apply but for causation because it said it would be inconsistent with the structure of the statute in multiple ways. [00:08:57] Speaker 00: including that the statute substantively penalized material support for terrorism, which sort of indicates if all you need to do is provide material support to be liable, it indicates that Congress might not want to but for cause. [00:09:12] Speaker 00: But the other point it noted in that opinion was that [00:09:16] Speaker 00: Because it's just a jurisdictional statute, it makes sense for it to sweep broadly because the underlying causes of action have their own causation requirements that could sweep more narrowly. [00:09:26] Speaker 00: So it makes sense to be more over inclusive in that context. [00:09:30] Speaker 00: There's cases subsequent to Kilbran, by the way, including Owens. [00:09:37] Speaker 00: First of all, what Kilbran said is proximate causation was the standard there. [00:09:42] Speaker 00: But my friends are not applying proximate causation. [00:09:45] Speaker 00: They're not even applying that standard. [00:09:47] Speaker 00: They're applying a caused in part by standard, which appears as far as I can tell to be completely plucked out of thin air. [00:09:53] Speaker 00: It's not even a normal [00:09:55] Speaker 00: causation standard. [00:09:56] Speaker 00: The Department of Justice in its brief has attempted to reframe it, Judge Walker, kind of how you were thinking about it as a multiple sufficient cause sort of standard. [00:10:07] Speaker 00: They probably have a chennery problem there but whatever, I don't want to press that but that argument doesn't work for the the same reason I said before which is they're applying it backwards. [00:10:18] Speaker 00: When multiple sufficient causes applies, it operates to punish sufficient wrongful conduct, even when there's an innocent conduct or even perhaps multiple wrongful conducts. [00:10:31] Speaker 00: That's when you apply that to impose, to prevent a wrongdoer from escaping liability. [00:10:37] Speaker 00: Here they're literally applying it upside down to excuse the wrongdoer, right? [00:10:42] Speaker 00: And that's the distinction. [00:10:44] Speaker 00: If there's no more question on that, I do want to make sure I can get to our failure to market claim. [00:10:50] Speaker 00: And this part of the statute is admittedly notoriously complex. [00:10:55] Speaker 00: But our basic point is simple, and that's that a first applicant forfeits its exclusivity by failing to timely come to market when another generic demonstrates that it's possible to obtain immediate approval for unpatent uses of the drug. [00:11:10] Speaker 00: the text structure in history of the statute foreclosed FDA's position that 180-day exclusivity confers on a first applicant a right to exclude that is far broader than the brand holder's patents themselves allow, allowing here the first applicant to exclude all uses of the drug, even unpatented uses, for a decade. [00:11:35] Speaker 00: And again, this relates to the separate issue in that FDA is just ignoring the structure of the statute. [00:11:40] Speaker 00: To determine a generic's approval date, the statute applies a series of timing rules to each certification made by the generic and calculates the date associated with each and uses the last applicable date. [00:11:53] Speaker 00: Timing rule four is what causes the 180-day delay and it applies only when a first and subsequent applicant have made a paragraph four certification [00:12:03] Speaker 00: to the same patent. [00:12:05] Speaker 00: We explained at length in our brief why that has to be right, and I'm happy to answer questions about it. [00:12:11] Speaker 06: One of the reasons that maybe the FDA's view has to be right is that it seems like under your rule, because forfeiture [00:12:22] Speaker 06: Take as given for the moment that the statute does not allow a limited one-off forfeiture as to one subsequent applicant. [00:12:29] Speaker 06: The consequence of your position would be that if the first applicant [00:12:39] Speaker 06: It might make sense as to your application, but the consequence would be forfeiture as to all subsequent applicants. [00:12:46] Speaker 06: And that's the reason why when we ask what are the qualifying certifications, we have to look at the first applicant certifications. [00:12:53] Speaker 00: So, we have not taken a position on whether the forfeiture would apply to all everybody else, but I'll just assume it will because frankly, I think that probably is the better reading of the statute. [00:13:05] Speaker 00: I don't actually see why that's a problem for us because what Congress is saying to the first applicant is when someone demonstrates that you can launch, you can't just sit on your hands. [00:13:16] Speaker 00: You need to launch. [00:13:17] Speaker 06: But wouldn't that mean if there was the first applicant says, I want to use this drug for IBSD, not HE, and you come in and you say, I want to use it for HE. [00:13:27] Speaker 06: You would then have affected a forfeiture of their exclusivity period as to the IBSD use also. [00:13:34] Speaker 06: How does that make sense? [00:13:35] Speaker 00: Well, not in not in that case because we would have been certifying to different patents. [00:13:39] Speaker 00: So, we wouldn't even be applying the timing rule in the first place but I. Well, that yeah. [00:13:44] Speaker 00: But but assume we did have assume we did have a patent in common, right? [00:13:49] Speaker 00: Which I think gets to your hypothetical. [00:13:50] Speaker 00: So, we both had product patents. [00:13:53] Speaker 00: We certified to the HE or we certified to IBSD and they certified to H to [00:14:00] Speaker 00: to AG. [00:14:02] Speaker 00: I think we would be able to launch in that circumstance. [00:14:06] Speaker 06: And then everyone else can launch as to IBSD. [00:14:11] Speaker 00: potentially that could be correct. [00:14:15] Speaker 00: But that situation itself is going to be extremely rare where the first applicant would have one product patent and one method of use patent. [00:14:26] Speaker 00: We would have a product patent and then an entirely different method of use patent. [00:14:30] Speaker 00: I'm not aware of any circumstance where that's ever occurred. [00:14:35] Speaker 00: If you believe us that the statute requires matching certifications, which again FDA does not fight us on appeal and they interpreted the same language the same way which Congress reenacted, I think the rest of our argument just falls naturally into place. [00:14:53] Speaker 00: the statute when it's determining whether there is a forfeiture event under BB is asking what are the certifications qualifying the first applicant for the 180-day exclusivity period. [00:15:06] Speaker 00: They argue that it has to be the certifications qualifying the first applicant as the first applicant. [00:15:12] Speaker 00: But that's not at all what Congress said. [00:15:15] Speaker 00: It said qualifying the first applicant for the 180-day [00:15:18] Speaker 00: exclusivity period. [00:15:20] Speaker 00: And the only place that you can look in the statutes determines what qualifies you for the 180-day exclusivity period is the operational provision of timing rule 4 itself. [00:15:32] Speaker 00: Again, requiring matching certifications. [00:15:35] Speaker 00: FDA's view is just reading language out of the statute and wishing it away. [00:15:41] Speaker 00: I think we also win on very solid, our interpretation is also consistent with the purpose of the statute. [00:15:48] Speaker 00: I don't think anybody disputes that in 2003 Congress was trying to rein in the scope of exclusivity at that time when the statute operated [00:15:59] Speaker 00: You know, in some sense how we're saying it operates now, which is it blocks matching certifications. [00:16:04] Speaker 00: But the problem at that time was that Congress FDA had interpreted the statute. [00:16:09] Speaker 00: So there are multiple sequential periods of 180 day exclusivity. [00:16:14] Speaker 00: Congress fixed that, but it fixed it by defining the term first applicant and making one single period of exclusivity tied to when they market. [00:16:23] Speaker 00: It didn't change anything about this patent by patent approach. [00:16:27] Speaker 00: And the perverse result of what FDA is doing here is it's saying [00:16:32] Speaker 00: forfeiture provision blocks more broadly than the timing rule itself, which doesn't really make any sense. [00:16:38] Speaker 00: And in fact, the scope of that exclusivity is way, way, way broader than it was prior to 2003, such that it's blocking unpatented uses of the drug. [00:16:48] Speaker 00: It makes no sense that Congress would have intended that. [00:16:52] Speaker 01: Isn't that comparing apples and oranges? [00:16:54] Speaker 01: I'm not going to be able to aptly describe why, but the one is sequential, multiple sequential, and the other is to the extent there's a 180-day period, what's its scope? [00:17:09] Speaker 01: And that seems like those aren't necessarily inconsistent. [00:17:12] Speaker 01: If the [00:17:14] Speaker 01: prolongation shouldn't be available with respect to different indications of one drug. [00:17:21] Speaker 01: Go ahead. [00:17:22] Speaker 00: I agree. [00:17:23] Speaker 00: And that's the fundamental point. [00:17:25] Speaker 00: And this is where, if you're asking me what went wrong here, I mean, again, FDA agrees that under the 2003 version of the statute, as far as I can tell, we would prevail. [00:17:33] Speaker 00: because it only blocks matching certifications. [00:17:36] Speaker 00: And what had happened at that time is FDA called its general approach to the statute, including matching certifications, including that there can be different periods of exclusivity. [00:17:48] Speaker 00: It called all of that patent-based exclusivity. [00:17:51] Speaker 00: And Congress, people complained about it. [00:17:54] Speaker 00: There were court decisions about it. [00:17:56] Speaker 00: And Congress changed it and said, we're no longer going to have patent-based exclusivity. [00:18:00] Speaker 00: We're instead going to have product-based exclusivity. [00:18:03] Speaker 00: This isn't in the statute. [00:18:04] Speaker 00: This is all informal industry lingo. [00:18:07] Speaker 00: And I think FDA said, oh, no more patent-based exclusivity. [00:18:10] Speaker 00: That means the whole part of the statute requiring matching certifications no longer matters. [00:18:15] Speaker 00: But that's not what Congress was doing. [00:18:17] Speaker 00: Congress was shutting down the sequential periods of exclusivity. [00:18:21] Speaker 01: But if it's patent-based, [00:18:23] Speaker 01: then doesn't that or if it's relational, then don't you have different 180 day period? [00:18:34] Speaker 01: They can't extend past 180 days, but you have different activities with respect to different [00:18:39] Speaker 00: There's a single period of exclusivity, because that period is measured from the first 180 days of marketing. [00:18:45] Speaker 00: But this goes to the question you were asking before, which it goes to the scope. [00:18:49] Speaker 00: Because the exclusivities are still tied to specific patents, but they all start and stop at the same time. [00:18:55] Speaker 00: It's one period. [00:18:56] Speaker 00: So it's an issue of the scope of that exclusivity. [00:18:58] Speaker 01: Why are you emphasizing this relational idea then? [00:19:01] Speaker 00: Because that's how you know what the qualifying certifications are, right? [00:19:07] Speaker 00: The idea that there's a first applicant, there's an exclusivity in the abstract is not how the statute's structured, right? [00:19:15] Speaker 00: It's structured effectively as a computer algorithm. [00:19:17] Speaker 00: I mean, there's sort of an evil genius way to it about this. [00:19:21] Speaker 00: And it's running the 180-day exclusivity provision on each certification made in our application. [00:19:29] Speaker 00: right it runs it it's going to run it many many times on an application why isn't it running i thought it was just running it on the drug uh no so we have an app we have an application right the statute instructs fda to look at each certification made in that application and apply a series of timing rules to it um the 180 day exclusivity is timing rule four and so it's going to apply that provision [00:19:56] Speaker 00: multiple times. [00:19:57] Speaker 00: It's going to apply it to every paragraph for certification we have made in our application to see if it's blocked. [00:20:04] Speaker 00: Everything is nested under a colon where the statute is specifically instructing FDA to apply it to each certification. [00:20:12] Speaker 00: FDA never responds to that. [00:20:14] Speaker 00: They just simply ignore it or act like Congress did it by accident. [00:20:18] Speaker 00: But Congress did it that way in 2003 when it amended this provision. [00:20:23] Speaker 00: So that's when it all happened. [00:20:26] Speaker 00: happened. [00:20:28] Speaker 00: I hope I can persuade you if you look at the statute that that's how it works. [00:20:32] Speaker 01: This is where you have that chart in your brief. [00:20:36] Speaker 01: Yes. [00:20:37] Speaker 00: The statute literally says you apply the following rules to each certification made. [00:20:44] Speaker 00: All of our certifications. [00:20:45] Speaker 00: And that's why you know what the qualifying certifications are. [00:20:52] Speaker 00: Thank you. [00:21:15] Speaker 03: Good morning and may it please the court, Gabriel Schoenfeld for the government. [00:21:27] Speaker 03: FDA applied the correct legal standards to determine that activists, a first applicant that qualified as eligible for exclusivity by submitting an ANDA for Rifaximin four years faster than Norwich did, had not forfeited that eligibility and that Norwich's subsequent application could not be approved as a result. [00:21:44] Speaker 03: It's worth emphasizing at the outset, Your Honors, what isn't in dispute today. [00:21:47] Speaker 03: There's no dispute that activists is a first applicant, and there's no dispute that so long as it remains eligible for exclusivity, that that eligibility would operate to block Norwich from approval via the effectiveness of application provision that you were just discussing with my colleague a moment ago. [00:22:02] Speaker 03: And I think it's worth starting [00:22:04] Speaker 03: where my colleague ended with the failure to market forfeiture provision, Your Honors, because I recognize this is a complicated and reticulated scheme, and I think I want to catch you. [00:22:14] Speaker 03: Please just pull it. [00:22:14] Speaker 01: Let me just ask you a threshold question. [00:22:16] Speaker 01: Has activist amended its ANDA to include paragraph four certifications to the new RBSD indication patents that Salix acquired that are the subject of the New Jersey case 912 and 571? [00:22:32] Speaker 03: My understanding, Your Honor, is that the 370 AMDA does contain paragraph four certifications of those patents, which is why Salix has been able to bring that litigation in New Jersey over them. [00:22:44] Speaker 01: And is that not relevant to the forfeiture analysis, even under Norwich's theory? [00:22:51] Speaker 01: In other words, if an activist shares paragraph four certifications to the same patents as Norwich's 370 and they haven't experienced a forfeiture event because they're being actively litigated, is that an additional reason [00:23:08] Speaker 01: that a failure to market forfeiture has not occurred? [00:23:13] Speaker 03: It's not, Your Honor, because the patents that qualify an applicant for exclusivity, that qualify it as a first applicant, are only the ones that it's certified to on day one, because these are later issued patents. [00:23:25] Speaker 03: They don't matter. [00:23:26] Speaker 03: But I think that this does get into an important distinction that Norwich's position is really built on a lighting, which is the distinction between [00:23:35] Speaker 03: whether a first applicant is eligible for exclusivity, whether it has qualified for the single 180-day exclusivity period that is applicable as to all subsequent applicants, and whether that period, in fact, operates to block a subsequent applicant based on the specific contents of its subsequent HANDA. [00:23:55] Speaker 03: So the provision that you were just discussing with Mr. Prince about whether it contains such an application, it's true that that provision is applied on a certification by certification basis as to each subsequent applicant. [00:24:09] Speaker 03: The problem is that that's not the provision of subparagraph B4 that says when a first applicant has qualified for exclusivity. [00:24:16] Speaker 03: And that's what forfeiture turns on. [00:24:18] Speaker 03: Forfeiture doesn't turn on the contents of a subsequent applicant's [00:24:22] Speaker 03: which might affect the scope of the exclusivity's blocking effect, you might say. [00:24:26] Speaker 01: A reveal its scope? [00:24:28] Speaker 01: Does it affect its scope, or does it just reveal its scope? [00:24:30] Speaker 03: I think the fairest way to read the statute, Your Honor, is that it is a reveal, it is a matter of revealing the scope, or it is a matter, excuse me, it is a matter of the scope of the eligibility's blocking effect as to a specific ANDA, rather than whether the eligibility exists as a threshold matter. [00:24:52] Speaker 03: Remember, Your Honor, that the relevant statutory language talks about the patents that are qualifying for the 180-day exclusivity period. [00:25:00] Speaker 03: And the 180-day exclusivity period is a defined term in the statute. [00:25:04] Speaker 03: You can find it on page 12 of the addendum to the government's brief. [00:25:07] Speaker 03: This is at Roman 2 under subparagraph 4. [00:25:11] Speaker 03: The 180-day exclusivity period is defined in generic terms. [00:25:15] Speaker 03: It's not defined in terms that vary based on the contents of a subsequent applicant's enda. [00:25:20] Speaker 03: It's the 180-day period, the ending on the day before the date on which an application submitted by an applicant other than a first applicant could become effective. [00:25:30] Speaker 03: So the qualification, rather the existence of 180-day exclusivity period, doesn't depend on the existence of a subsequent ANDA. [00:25:38] Speaker 03: The period exists whether a subsequent ANDA asks FDA to consider whether that period is blocking or not. [00:25:44] Speaker 03: And that definition of the 180-day exclusivity period only contains one qualification, one precedent requirement that has to be satisfied in order for that period to come into existence. [00:25:57] Speaker 03: And that's being a first applicant. [00:25:59] Speaker 03: The qualifications for being a first applicant, I think nobody disputes here, are then set out in subsection BB, also under Roman 2 of paragraph B4, and it explains that it's submitting a substantially complete ENDA that contains paragraph 4 certifications on the first day. [00:26:14] Speaker 06: Do you agree if there was no matching certification at all? [00:26:20] Speaker 06: between the first applicant and Norwich, they just wouldn't be blocked. [00:26:24] Speaker 06: That's the FDA's position. [00:26:26] Speaker 03: But the reason that's not an issue here and the reason that FDA didn't reach the question of whether such a certification post 2003 requires matching certifications is because everybody agrees there are four matching certifications that's one to the IBSD patent [00:26:40] Speaker 03: So maybe more accurately, the FDA hasn't taken a position on that question. [00:26:44] Speaker 03: That's correct. [00:26:44] Speaker 03: Because this case doesn't present it. [00:26:45] Speaker 03: Exactly. [00:26:46] Speaker 03: And that's why we believe that this court should likewise not reach the question of whether such a certification requires matching certifications. [00:26:56] Speaker 03: And if the court doesn't have any additional questions on the fit. [00:27:00] Speaker 03: Yes, Josh Piller. [00:27:01] Speaker 01: Thanks, Josh. [00:27:01] Speaker 01: I'm sorry. [00:27:02] Speaker 03: If the court doesn't have any additional questions on failure to market, I'm happy to address failure to obtain tentative approval as well. [00:27:11] Speaker 01: Yeah, go ahead. [00:27:13] Speaker 03: So first, I want to emphasize at the outset, Your Honors, that FDA does not concede that there would be a forfeiture under the but for cause standard that Norwich proposes or under any other causal standard this court might see fit to instruct FDA to use. [00:27:29] Speaker 03: The standard remedy for when an administrative agency applies the wrong legal standard would apply here, just like in any other case. [00:27:35] Speaker 03: The court would inform the agency the way in which the standard applied was wrong. [00:27:39] Speaker 03: It would remand for reconsideration of this, I think, complicated factual question if it's a but-for-cost standard under the appropriate standard. [00:27:48] Speaker 03: But more importantly, Your Honor, the FDA's... And why is... Why would it be a need for a remand? [00:27:55] Speaker 04: And maybe I can ask it this way. [00:27:58] Speaker 04: You're not... If there had never been a change in the FDA requirements or rules post application, [00:28:07] Speaker 04: According to you, we don't know whether activists' deficient application would have been corrected and then approved before the 30-month deadline. [00:28:20] Speaker 03: That's exactly right, Your Honor. [00:28:21] Speaker 03: I think this gets to a real problem with the but for cause standard that Norwich is urging this court to adopt, which is that it would require the agency to construct a completely impenetrable hypothetical counterfactual world of if FDA had not asked the applicant to invest additional resources in addressing this change to requirement, [00:28:42] Speaker 03: How would that have played out both before and frankly after the 30-month date? [00:28:47] Speaker 03: Because for example, what if there was an inspection that in the real world happened after the 30-month date? [00:28:52] Speaker 04: That may be a downside of their tests. [00:28:55] Speaker 04: If we're going to talk about downsides, it seems like a downside to your test is it gives activists a get out of jail free card for forever. [00:29:05] Speaker 03: I don't think that's the right way to frame it, Your Honor. [00:29:07] Speaker 03: I think the way to understand it is that if there's one thing that Congress was clear on when it wrote this particular exception to the forfeiture provision is that it wanted to ensure that applicants which were unable to obtain tentative approval as of the 30-month date [00:29:23] Speaker 03: through no fault of their own, or at least through no fault of their own or under a specific set of circumstances, where it was FDA that moved the regulatory goalposts, so to speak, wouldn't forfeit exclusivity as a result. [00:29:35] Speaker 04: But under your theory, activists makes an application on January 1st, 2000. [00:29:41] Speaker 04: And then on January 2nd, the FDA changes some requirements. [00:29:48] Speaker 04: Now it's January 1st, 2050. [00:29:53] Speaker 04: They still haven't gotten approval. [00:29:56] Speaker 04: That's excused because the FDA made a change on the second day. [00:30:00] Speaker 03: Certainly not automatically, Your Honor. [00:30:01] Speaker 03: The question would be, as of the 30-month date, first, was the applicant still working on the deficiency that FDA had? [00:30:10] Speaker 03: Was the applicant still working, excuse me? [00:30:12] Speaker 06: Right. [00:30:12] Speaker 06: So imagine they were barreling towards a forfeiture, and the day before the 30-month mark, they're just sitting there. [00:30:19] Speaker 06: Gosh, we're about to forfeit. [00:30:20] Speaker 06: And the day before, out of nowhere, FDA changes requirement X that no one was even thinking about. [00:30:26] Speaker 06: That's the get out of jail concern with your rule. [00:30:31] Speaker 03: I would push back on the characterization of it. [00:30:33] Speaker 03: That is how the rule as FDA currently applies it would operate. [00:30:37] Speaker 03: I'd push back on the characterization of that as a get out of jail free card. [00:30:40] Speaker 06: Your honor, it's a matter of- It is an entirely a windfall from the perspective of the first applicant who had a [00:30:51] Speaker 06: Fatal deficiency, let's just assume, because this is the rule you're advancing on requirement A, and they are going to be denied. [00:31:00] Speaker 06: They're not going to be approved by the 30 months. [00:31:03] Speaker 06: And from their perspective, it is entirely fortuitous. [00:31:07] Speaker 06: And they are let off the hook because of something that doesn't change the fact that they never would have been approved anyway. [00:31:14] Speaker 06: It does seem, as Mr. Prince put it, completely backwards. [00:31:18] Speaker 03: I think the way to understand this, Your Honor, is a little bit through the lens of a question that Judge Walker asked my colleague earlier, and understanding which way Congress intended to answer a particular question. [00:31:29] Speaker 03: So as Judge Walker noted, the classic reason, or this is a classic example of multiple sufficient causes for one thing. [00:31:36] Speaker 03: And the reason we generally don't apply but for cause in those situations is because you end up with a situation where effectively all of the causes are excused from having a particular effect. [00:31:46] Speaker 03: And here, Your Honor, if I can finish for a moment, the one cause that Congress identified as the cause it wanted to make sure wasn't excused for the effect it would have on preventing the application from being approved was FDA changing requirements. [00:32:01] Speaker 06: Well, I do think this is the whole question as to statutory context. [00:32:04] Speaker 06: It's essentially who's the wrongdoer? [00:32:08] Speaker 06: What is the wrong thing? [00:32:10] Speaker 06: And is this provision, is the dominant thing it's saying that a bad product that can't get approval by 30 months, that that product should not hold up the rest of the market? [00:32:22] Speaker 06: Seems like a pretty strong argument. [00:32:24] Speaker 06: That's what they had in mind. [00:32:25] Speaker 06: Or were they more concerned with the possibility that someone with a bad product [00:32:31] Speaker 06: But now they've also got to do some extra work for the FDA that they want to make sure that person is off the hook for liability. [00:32:39] Speaker 06: If you think of this the other way, I think it's quite clear that Congress would want the independent failure of activists to get approval being a sufficient cause to be enough to warrant the consequence of forfeiture. [00:32:59] Speaker 06: If you look at it from that perspective, it's hard for me to see why in this, the hypothetical activists, I know this isn't the facts, why they are the ones this provision is sympathetic to as opposed to everyone they're holding up. [00:33:12] Speaker 03: It's telling, I think, Your Honor, that Congress didn't more generally carve out situations where the agency could in some way be thought of as the wrongdoer at fault. [00:33:22] Speaker 03: Maybe it simply took a long time. [00:33:25] Speaker 03: Somebody was out on vacation in an opportune moment. [00:33:28] Speaker 03: But Congress carved out a specific circumstance where an action by the agency through no fault of the applicants [00:33:36] Speaker 03: would cause the applicant to not obtain approval by a certain date and Congress specifically called out that instance as when it wanted to excuse forfeiture. [00:33:45] Speaker 03: And FDA, since it began applying this provision, this is its contemporaneous and continuous interpretation, has always treated that [00:33:54] Speaker 03: as airing on the side of treating, to borrow your phrase, treating FDA as the wrongdoer whose act we don't want to excuse the consequences of here. [00:34:05] Speaker 04: If you were Congress and you had to disincentivize one of two possibilities, the first possibility is deficiencies in an application, and the second possibility is FDA improving the requirements in their application process. [00:34:19] Speaker 04: seems like you would want to disincentivize the first of them because a deficiency in application is all cost, no benefit. [00:34:28] Speaker 04: On the other hand, the second of those, FDA improving their requirements has some benefit, the improvement, although admittedly it comes with the cost of delaying the application. [00:34:38] Speaker 04: Wouldn't Congress have wanted to disincentivize the thing that's all cost and no benefit rather than the thing that's part cost, part benefit? [00:34:45] Speaker 04: I'm not entirely sure I'm following your question. [00:34:49] Speaker 04: If Congress had to choose between something that's all bad or something that's kind of bad and kind of good, wouldn't Congress have preferred the thing that's kind of bad and kind of good? [00:34:58] Speaker 03: And in your view, I'm sorry that I think I lost the thread. [00:35:01] Speaker 04: FDA improving the requirements of an application, that's kind of good and kind of bad. [00:35:10] Speaker 04: activists having a deficiency in its application, that deficiency is all bad, no good. [00:35:20] Speaker 04: So Congress would prefer to, if it's gonna disincentivize one of those, it would want to disincentivize the deficiency in the application, the thing that's all bad, and not FDA improving the requirements of an application process, which is partly bad, partly good. [00:35:38] Speaker 01: So, therefore, recognizing that in causal terms, that you don't get the you. [00:35:51] Speaker 01: Forfeit if your application is deficient, even if the FDA changes tune. [00:35:56] Speaker 04: Yeah, yes. [00:35:57] Speaker 04: Yes, thank you. [00:36:01] Speaker 03: Especially in the Hatch-Waxman context, Your Honor, where Congress is striking complicated balances in a policy area where I think a lot of reasonable minds could disagree about what the right path forward is, I think it's really important to resist the urge to reason backwards into the legal rule from what our intuition might be about a particular case. [00:36:22] Speaker 03: And here, Congress wrote a statute that uses a term caused by that this court has not previously held, has previously said it doesn't, require but for cause of its own force. [00:36:34] Speaker 03: And the strongest contextual signal that the court has in front of it is FDA's unbroken contemporaneous interpretation of erring on the side of ensuring that the specific FDA action that Congress called out doesn't [00:36:51] Speaker 03: pause a forfeiture that then the first applicant cannot get back. [00:36:55] Speaker 06: So if we assume the case turns on contextual indications as to whether Congress wanted this rule to be but for or sufficient cause, it seems like so far in favor of sufficient cause, you've highlighted administrability concerns, which may be meaningful. [00:37:14] Speaker 06: And second, [00:37:15] Speaker 06: that this is the FDA's long-standing interpretation. [00:37:18] Speaker 06: Is there another contextual reason that you think favors? [00:37:21] Speaker 06: Those might be sufficient. [00:37:22] Speaker 06: I just want to make sure I have all the argument. [00:37:24] Speaker 03: The third contextual reason, I think this is the weakest of the three, candidly, is just the fact that Congress did call out this one specific type of agency action that would prevent an approval as the one to excuse forfeiture and did not write a broader, any time you can point to the agency and say... But you appreciate that that's set up [00:37:45] Speaker 06: does follow sort of the plain text structure of this provision, which is the default is forfeiture. [00:37:51] Speaker 06: And what you would expect to come after the unless is you might expect it to be a narrow exception, not a broad one. [00:37:58] Speaker 06: And a narrower exception would be served by requiring that to be a but for cause. [00:38:04] Speaker 03: I think it's narrow in the scope as compared to the scope of all of the ways that FDA's actions could, through no fault of an applicant's, prevent approval by giving. [00:38:12] Speaker 03: Which is another way of saying this generally is a very harsh forfeiture provision. [00:38:15] Speaker 03: Yes, I think generally it's quite a harsh forfeiture provision. [00:38:19] Speaker 03: But I think that generally it's quite a harsh forfeiture provision. [00:38:23] Speaker 03: But in some ways, Your Honor, we're not necessarily interpreting the full breadth of the harsh forfeiture provision. [00:38:28] Speaker 03: We're interpreting the specific point where Congress intended to be the forfeiture provision to be less harsh. [00:38:34] Speaker 03: We're interpreting the scope of the excuse provision, where Congress called out a specific instance. [00:38:38] Speaker 03: And this is in addition to the other two contextual reasons you identified, which frankly I think are stronger ones. [00:38:43] Speaker 06: I'll try one last time to just [00:38:45] Speaker 06: So take as given, Congress thought it was a good excuse if you are delayed because FDA changed a requirement. [00:38:56] Speaker 06: What we're talking about is should that person be off the hook where the good excuse made no difference? [00:39:04] Speaker 06: Would Congress want that person off the hook where the good excuse or not they were going to forfeit? [00:39:11] Speaker 03: This is why, Your Honor, I think the point that we were just discussing is the weakest of the three contextual reasons that we've discussed. [00:39:16] Speaker 03: There'd be massive administrability problems in terms of an agency trying to construct that but for world, which largely, frankly, turns on information that an agency doesn't have access to about the amount of slack resources an applicant had, how clever that applicant's management might have been in reallocating resources and applicants' general sophistication. [00:39:34] Speaker 03: And second, [00:39:36] Speaker 03: the unbroken contemporaneous FDA interpretation, which even in a post-slope or bright world is a powerful indication where the text is admittedly not fully determinate in a vacuum, is a powerful indication of what Congress would have meant. [00:39:51] Speaker 01: Can you talk about this longstanding interpretation? [00:39:55] Speaker 01: Is there a regulation you can point to? [00:39:59] Speaker 01: How do we know what memorializes? [00:40:02] Speaker 01: When did FDA adopt that and what memorializes it? [00:40:06] Speaker 03: So I'm informed by my clients that this has been FDA's approach since the MMA was adopted in 2003. [00:40:14] Speaker 03: Because the MMA grandfather's in free 2003 applications, it didn't actually begin applying the approach until it got applications to which the new law applied some time later. [00:40:25] Speaker 03: But there's a public advisory that sets out the agency's interpretation of the statute. [00:40:30] Speaker 03: I don't, there's certainly, there's a, [00:40:34] Speaker 03: There's a district court decision from the District of Columbia, I believe 2003, called Mylan, which is cited in Teva's briefing, in which a district judge in this circuit upheld FDA's. [00:40:47] Speaker 06: It doesn't involve a challenge to that standard, and it doesn't analyze the statute, though. [00:40:51] Speaker 03: It reflects that it exists, I see. [00:40:54] Speaker 03: Yes, Your Honor, that's exactly my point. [00:40:57] Speaker 03: And if the court has no further questions, we'd ask that you affirm the judgment below. [00:41:04] Speaker 01: Hello again, Mr. Killian. [00:41:14] Speaker 02: Hello again, Your Honor. [00:41:15] Speaker 02: I'd just like to make a few quick points about the failure to market forfeiture. [00:41:20] Speaker 02: So Norwich frames the failure to market forfeiture as a dispute over which patents need to have forfeiture events. [00:41:26] Speaker 02: Is it those that activists peep forward or is it those that Norwich peep forward in its application? [00:41:33] Speaker 02: Our position is that it's a red herring, that question, because either way the statute's interpreted, there have not been sufficient forfeiture events. [00:41:40] Speaker 02: If you go with what we think is the correct interpretation of the statute, then Norwich certifications shouldn't matter because the forfeiture provision for failure to market forfeiture refers to the first applicant's qualifying certifications. [00:41:55] Speaker 02: And a qualifying certification and the ordinary meaning of qualifying is it makes someone eligible or meets the criteria to obtain something. [00:42:04] Speaker 02: And so the qualifying certifications naturally read would be the certifications that the first applicant submits on day one. [00:42:13] Speaker 02: And that's an important distinction because I think as one of your honors noted, it is possible that subsequent to the initial filing, the brand will post or put new patents into the Orange Book and the [00:42:26] Speaker 02: first applicant may submit P4s for those subsequent hands. [00:42:31] Speaker 02: And so there may very well be, at the date of approval, a bundle of first day P4s and a bundle of subsequent P4s. [00:42:38] Speaker 02: And it's the first day P4s that qualify the first applicant for the 180-day exclusivity. [00:42:45] Speaker 02: That's the reference that we think the statute means. [00:42:48] Speaker 02: And so it's not a reference to activists. [00:42:51] Speaker 02: certifications. [00:42:52] Speaker 02: In no sense, no way does it make sense that activist's certifications would qualify. [00:42:56] Speaker 02: I'm sorry, I misspoke. [00:42:58] Speaker 02: I'm going to unwind that. [00:42:59] Speaker 02: In no sense, it doesn't make sense for Norwich's certifications because Norwich's certifications can't qualify activists for the exclusivity. [00:43:08] Speaker 02: Now, Judge Garcia, you asked a question about earlier whether if two applications, the first and a subsequent, don't have any matching P4s, [00:43:18] Speaker 02: would we still be in the situation? [00:43:20] Speaker 02: And I think the answer is possibly if they both have P4s, because that's how the coverage provision, eligibility provision, J5B4 is written. [00:43:29] Speaker 02: If the first applicant has such a certification, which is a reference to P4, and the subsequent applicant has a P4. [00:43:37] Speaker 06: I understand that plain text argument. [00:43:39] Speaker 06: Why would that be a rule that makes sense? [00:43:41] Speaker 06: In that you would allow a prior, and I understand it's also not this case, but you would allow the first applicant the benefits of a broader sort of blocking force without taking on the burden of certifying to those patents. [00:43:56] Speaker 02: I think, Your Honor, the point is that the first applicant is strongly incentivized to bring as many P4s as possible. [00:44:01] Speaker 02: So I don't know that this scenario could come up all that often, but be that as it may, it would make sense that the first applicant who put itself out there brought all the patent infringement litigation and got itself to the point, as this Court has said, of, you know, it's a pro-consumer device, this 180-day exclusivity. [00:44:18] Speaker 02: It is a reward in an extent. [00:44:19] Speaker 02: Now, I'd just like to turn briefly to the second point that I made, which is that even if Norwich's interpretation is correct and we look at Norwich's certifications only, there still have not been forfeiture events for the polymorph patents. [00:44:32] Speaker 02: And that's because [00:44:33] Speaker 02: While a second applicant can trigger failure to market forfeiture, the second applicant needs to have two things in order to do that. [00:44:41] Speaker 02: It needs to have a tentative approval of its ANDA, and it needs to have a finding that that ANDA doesn't infringe. [00:44:47] Speaker 02: And here, the problem is Norwich hasn't gotten both of those things for the polymorph patents. [00:44:51] Speaker 02: And this gets back to the stipulation that we talked about earlier and which we raised again in our brief here. [00:44:56] Speaker 02: What has been tentatively approved was the amended 369 ANDA. [00:45:01] Speaker 02: But the amended 369 ANDA is not covered by the stipulated judgment because the stipulated judgment says it only applies to the ANDA if it's never amended. [00:45:11] Speaker 02: And so the congruence of having both a tentative approval and a judgment that that ANDA doesn't infringe is missing even on Norwich's interpretation. [00:45:22] Speaker 01: And does anything hinge on the tentative approval part of that? [00:45:27] Speaker 02: Yeah, in the sense that they have a tentative approval, but it is for the amended ANDA, which the terms of the stipulated judgment do not cover. [00:45:35] Speaker 02: The stipulated judgment says this applies. [00:45:37] Speaker 01: So your argument is just the final judgment of non-imprisonment isn't binding here because of the amendment and the limitation on the stipulation? [00:45:45] Speaker 02: Yeah, I wouldn't say isn't binding. [00:45:46] Speaker 02: I would say isn't applicable because by the way it is written, it applies to something else. [00:45:52] Speaker 02: So either way, your honor, I think our point is simply that the runway isn't clear under the failure to market provision. [00:45:58] Speaker 02: Salix's patents, the HE patent, which is certified in activist's ANDA, and even the IBSD and plymorph patents, which even on Norwich's view we think don't have sufficient forfeiture events, they remain obstacles to marketing. [00:46:10] Speaker 02: And so there hasn't been a failure to market. [00:46:14] Speaker 03: Thank you. [00:46:25] Speaker 05: Morning, your honor, Brian Burgess for Teva Pharmaceuticals. [00:46:28] Speaker 05: I'm going to jump right into the tentative approval and causation issue, but I'm happy to entertain the court's questions on any topic. [00:46:34] Speaker 05: We don't think but for is the right standard. [00:46:35] Speaker 05: And I also want to be clear that we don't think that there were independent deficiencies that would have blocked the approval of our application, or at least that that's not established in this record or decided by it. [00:46:45] Speaker 05: I don't want to. [00:46:45] Speaker 05: I don't get too drawn into the particulars of that, but I do think that those things work together because it shows in practice how difficult it is to disentangle the issues. [00:46:54] Speaker 05: One thing that was identified by Norwich's council was an inspection issue. [00:46:58] Speaker 05: Well, there wasn't an inspection on the 30-month deadline. [00:47:01] Speaker 05: That happened well after. [00:47:02] Speaker 05: We don't know what the inspection would have been on the 30-month day, and in fact, in the earlier notice too, [00:47:08] Speaker 05: activists at a time where the agency was noting its new qualifications, there was no inspection issue identified there. [00:47:15] Speaker 05: So it becomes speculative and counterfactual. [00:47:18] Speaker 05: We also think the issue with the clinical studies, that's not separate from the change that occurred. [00:47:24] Speaker 05: FDA adopted broad new standards with respect to bioequivalence in 2017 that were certainly involved with dissolution studies but weren't limited to that, included a whole new option one, option two framework for when things were going to be required. [00:47:38] Speaker 04: All this goes to if we think the FDA got but four causation wrong, we should vacate and remand for them to consider all these things. [00:47:46] Speaker 05: I think it goes, it certainly confirms that, but I think it also shows why but for is not an administrative standard in this context and it's not what you would have expected Congress to have intended here. [00:47:57] Speaker 05: The question of whether an inspection would have occurred and whether issues would have come up, it's just unknowable and it's asking the agency to engage in speculation. [00:48:06] Speaker 05: Here there was an inspection, but in many instances the agency won't even have engaged in an inspection if it finds there was a sufficient reason to preclude approval of the ANDA based on another reason which could [00:48:16] Speaker 05: solely be based on its change. [00:48:18] Speaker 01: So if it's not but for causation, is there any quantum of causation that is required under your interpretation? [00:48:27] Speaker 05: I think it's sufficient cause, which I do think is the interpretation that the agency has announced. [00:48:31] Speaker 01: Doesn't that raise puzzling counterfactual questions? [00:48:34] Speaker 05: I mean, there could be puzzling counterfactual questions in either direction. [00:48:38] Speaker 05: Judge Garcia, you're asking for contextual clues about why one versus the other here. [00:48:43] Speaker 05: We certainly agree with the ones the government put forward. [00:48:46] Speaker 05: Another one that I think is important is you could have multiple changes, for example, by the agency. [00:48:52] Speaker 05: It changes a requirement as to bioequivalence, and it changes it as to product manufacturing. [00:48:58] Speaker 05: Imagine that those two changes are independently sufficient to block the approval. [00:49:02] Speaker 05: They could be the only changes. [00:49:04] Speaker 05: Otherwise, the applicant would have been on a glide path to approval. [00:49:07] Speaker 05: I think on their view, there would be forfeiture here because you do have the two sufficient clauses. [00:49:13] Speaker 05: And I think that's a real problem. [00:49:16] Speaker 05: Even in the hypothetical example where you do the windfall question you're asking Judge Garcia, I [00:49:23] Speaker 05: I think the problem is it's very difficult to know that in the abstract, whether there is going to be a deficiency. [00:49:29] Speaker 05: And so the question is whether Congress would have expected FDA to undertake that kind of inquiry here. [00:49:34] Speaker 06: Administrability reason is really going to be what decides this. [00:49:37] Speaker 06: I mean, just even deciding the record here shows, defining it was a sufficient cause is sometimes difficult. [00:49:43] Speaker 06: You have to show that you were diligently addressing the requirement. [00:49:47] Speaker 06: You can't sit on it. [00:49:48] Speaker 06: It's going to involve factual questions either way. [00:49:51] Speaker 05: It certainly will involve factual questions either way. [00:49:54] Speaker 05: The agency, and to answer a question earlier, the agency has set this out in guidance how it applies the standard in 2017. [00:50:01] Speaker 05: You can also see it in the joint appendix at I think 168. [00:50:05] Speaker 01: They look at questions about... Is that guidance cited, the 2017 guidance you just mentioned, is that cited? [00:50:13] Speaker 01: Do we have... [00:50:14] Speaker 05: Yeah, no, it's in the record. [00:50:15] Speaker 01: We've cited it. [00:50:16] Speaker 05: 168. [00:50:16] Speaker 05: I'm sorry. [00:50:17] Speaker 05: You can see it at Joint Appendix 168. [00:50:20] Speaker 05: It spans a few different pages. [00:50:23] Speaker 05: But this has been the agency's long-settled interpretation. [00:50:26] Speaker 05: As to the question of what's administrative or not, the agency has been doing this for over a decade and has found that this standard is workable. [00:50:34] Speaker 05: And it's going to consider questions about whether the applicant was acting with diligence, what kind of change it was. [00:50:41] Speaker 06: That's a version of the question that I think Judge Walker and I were both asking, which is essentially that I read every single case and every restatement and treatise to say, you shift from but for to sufficient cause when it's necessary to do so, so that a wrongdoer doesn't get off the hook. [00:51:02] Speaker 06: So Kilburn, Burrage, Barrage, every other case. [00:51:07] Speaker 06: So it seems to me if that's the way to think about this case, then it matters whether I think from the statute's perspective, the applicant that was going to not receive approval [00:51:22] Speaker 06: if the FDA hadn't changed anything, is the wrongdoer. [00:51:25] Speaker 06: And it's really hard for me to see a contextual purpose, common sense argument that from the perspective of this harsh forfeiture provision, that's not the wrongdoer. [00:51:37] Speaker 06: I'm not assigning blame. [00:51:38] Speaker 05: No, sure. [00:51:38] Speaker 06: I hope you understand the question. [00:51:39] Speaker 05: Yeah. [00:51:40] Speaker 05: I mean, I think it's difficult to transpose the wrongdoer concept that applies in tort, where you're going to have an adjudication of cause, which is not applicable in this administrative context. [00:51:49] Speaker 06: Same thing in Kilburn. [00:51:50] Speaker 06: We're not going to say every state sponsor of terrorism is immune because there was more than one involved. [00:51:58] Speaker 06: There's no necessary cause. [00:52:00] Speaker 06: And that's not necessarily in a tort context. [00:52:05] Speaker 05: Well, right. [00:52:06] Speaker 05: But a court didn't apply but for there, and nor did it consider it to be the default standard. [00:52:10] Speaker 05: It looked as to whether there were contextual indications that nonetheless it should apply but for. [00:52:17] Speaker 05: Whereas I think where it's a default is in the adjudicative context, where you're going to have to have a fact finder make these decisions based on discovery. [00:52:25] Speaker 05: These questions about when FDA counterfactually might have approved a product, it litigated in other contexts, like in antitrust cases, about whether there is a delay in generic approval. [00:52:34] Speaker 04: In addition to the reasons that Judge Garcia was giving, there's a reason we haven't talked about yet, late as it is, and that matters to me. [00:52:47] Speaker 04: You can tell me why it shouldn't. [00:52:49] Speaker 04: If an applicant has a deficiency in their initial application, and then later the FDA changes the requirements for an application, [00:53:00] Speaker 04: The sequence of those things seems to cut against you. [00:53:09] Speaker 04: And here's an analogy that I'm thinking of, and I promise the last sports analogy for me for the day. [00:53:16] Speaker 04: But imagine we're trying to figure out the cause of a missed field goal in football. [00:53:25] Speaker 04: As soon as the kicker kicks the ball, it's clearly going in the wrong direction. [00:53:30] Speaker 04: There's no way it's going to go through the field balls. [00:53:33] Speaker 04: That to me is analogous to a deficient application submitted on day one. [00:53:38] Speaker 04: Imagine if while the ball's in the air, someone moves the field goal back a bit so that the distance is longer than the kicker kicked. [00:53:47] Speaker 04: I don't think any of us would think that it was the moving of the field goal back that caused the kick to be missed when the kick was already going to be missed because it was in the wrong direction. [00:53:57] Speaker 05: I think the problem with that is that the approval process isn't a one-time event. [00:54:01] Speaker 05: It's over a 30-month period where the applicant and the agency are engaged in an active dialogue. [00:54:06] Speaker 05: It is not the typical case that an application is fully approvable as submitted. [00:54:12] Speaker 05: That's just not how it works in this industry. [00:54:15] Speaker 05: There's often a back and forth. [00:54:17] Speaker 05: And so the question is, [00:54:18] Speaker 05: outside of the whole framework being changed because the agency has adopted new requirements during the course of the approval process, would the applicant have been able to meet the 30 month deadline? [00:54:29] Speaker 05: Not was it pristine on day one when it filed it, but whether it was gonna be able to work with the agency to get it. [00:54:36] Speaker 05: And I just think it's unknowable when you have the agency changing the framework in a way that has cascading effects throughout the approval process that might have, because these things aren't happening separate. [00:54:46] Speaker 05: It's not just that you check one box and then move on. [00:54:49] Speaker 05: Everything interacts with each other. [00:54:51] Speaker 04: I think related to that, but also related to what our remedy would be here if we disagree with you on but for causation. [00:55:00] Speaker 04: I think I may have erred in how I read the briefs coming into this argument because I thought there was an understanding from the briefs, kind of a unanimous agreement, that activists would have failed to meet the 30-month deadline independent of the FDA rule change. [00:55:18] Speaker 05: No, I don't agree with that. [00:55:19] Speaker 05: I think if you look at, for example, page 363 of the Joint Appendix, the agency, when it's engaged with this question, is saying, because under our test, it was a sufficient reason that made it impossible for activists to secure approval by the 30-month deadline. [00:55:34] Speaker 05: Under our test, our analysis stops. [00:55:36] Speaker 05: So it didn't consider whether there were additional potential changes that were implicated in activists' inability to get it. [00:55:44] Speaker 04: That page is not a page of the brief. [00:55:48] Speaker 04: I'm not saying that what you said isn't a winning argument on that point. [00:55:53] Speaker 04: But if Mr. Prince gets back up here on rebuttal and he can point to a page in the FDA brief and the TEPA brief and the Salix brief that all [00:56:04] Speaker 04: concede that activists would have failed to meet the 30-month deadline, independent of the FDA rule change, you're not going to have a chance to give back. [00:56:13] Speaker 04: I understand. [00:56:14] Speaker 04: What would your brief, would you point to disprove that? [00:56:17] Speaker 04: It's kind of an unfair question because you don't know what he's going to say. [00:56:19] Speaker 05: Yeah, I mean this of course was the backup argument that they were making in their brief and we devoted a corresponding amount of space to it. [00:56:25] Speaker 05: I don't think we ever conceded that that we would lose under but for we just said it didn't matter that the right way to approach this question is that a sufficient condition is satisfies caused by under the ordinary meaning of that term and to respond [00:56:42] Speaker 05: I think to the concerns about, I guess, a windfall or that it's a get out of jail free card and you're never going to have an issue. [00:56:50] Speaker 05: The provision doesn't operate in isolation. [00:56:52] Speaker 05: There are other bases for forfeiture that can come into play here. [00:56:57] Speaker 05: For example, the applicant has to diligently pursue its application. [00:57:02] Speaker 05: That argument was made to the agency. [00:57:04] Speaker 05: It decided at 384 of the joint appendix. [00:57:07] Speaker 05: Norwich initially raised it in litigation and then dropped it when it saw the administrative record and evidently thought there was adequate support for the agency's determination on that. [00:57:16] Speaker 05: There's also, of course, the failure to market provision. [00:57:18] Speaker 05: I think an important context to keep in mind is the question of whether activists has tentative approval is not actually affecting whether activists can get... [00:57:26] Speaker 05: into the market at the moment because there's independently a patent barrier on the application that we filed. [00:57:32] Speaker 05: We were the first applicant. [00:57:34] Speaker 05: We engaged in litigation and were able to secure a settlement that lets us onto the market almost two years before the expiry of the last patent. [00:57:41] Speaker 05: Norwich, if it had succeeded in the challenge to that patent, could have forced a forfeiture under failure to market. [00:57:46] Speaker 05: It didn't. [00:57:47] Speaker 05: And it's still currently embroiled in litigation about whether it's ANDA is going to be able to be approved or whether it infringes the patent, whereas activists has taken on the burden and is able to get onto the market earlier to the extent [00:58:01] Speaker 05: we're unable to do that or there's another ground for forfeiture, then the norms would have a free pass. [00:58:06] Speaker 05: But we don't think that that's true here. [00:58:08] Speaker 05: And I also think it's important to note that the question of what happens after the 30 month date and is there ever an end point to this is not something that is really solved by the but for versus the sufficient cause issue. [00:58:21] Speaker 05: You could have a but for cause that takes an applicant years to address. [00:58:24] Speaker 05: you could have something that was the but for cause at the 30-month date and then something new arises because the agency has changed its standards again or there is an inspection issue that wouldn't have existed previously. [00:58:35] Speaker 05: This is a dynamic process. [00:58:36] Speaker 04: I thought it was a problem that is caused by interpreting the caused by a text the way that you interpret it. [00:58:46] Speaker 04: Say that again. [00:58:47] Speaker 04: I'm sorry, your honor. [00:58:47] Speaker 04: I've said I [00:58:50] Speaker 04: I understood the problem to be that if we take your interpretation of the text caused by, then it creates the problem that [00:59:04] Speaker 04: the process may play out for years and years and years and years with no negative consequence to the applicants who is causing it to play out much, much longer than it would have with or without the FDA requirements changing. [00:59:22] Speaker 04: And I did a 50-year hypothetical earlier, but even this case, we don't have to do a huge hypothetical. [00:59:28] Speaker 04: I mean, this case [00:59:29] Speaker 04: I think your application was filed in what year? [00:59:33] Speaker 04: 2015? [00:59:34] Speaker 04: That's right. [00:59:35] Speaker 04: And here we are nine years later and I don't know how much longer. [00:59:38] Speaker 05: Well, as I said, that fact has no real-world implication about whether we're able to commercialize the product because we are barred by the patent. [00:59:46] Speaker 05: There are other reasons that there could be a forfeiture. [00:59:48] Speaker 05: If there truly was a clear path on the patents to which we had certified, then failure to market would come in. [00:59:53] Speaker 05: And if we don't get on the market within 75 days, then we forfeit in that instance. [00:59:58] Speaker 05: We're eight years past the FDA rule change, right? [01:00:03] Speaker 05: Right. [01:00:04] Speaker 05: But I think there's no way you can read a tolling rule into the statute. [01:00:08] Speaker 04: And the point I was- We're just trying to figure out what Congress intended by caused by. [01:00:12] Speaker 04: And I mean, you think they intended- Well, I guess the point I was making is that the but for versus sufficient clause is just orthogonal to that. [01:00:20] Speaker 05: It doesn't get at it because you could have a change that is undisputedly a but for cause at the 30-month date that then takes the applicant many years to address. [01:00:29] Speaker 05: And this is just an on-off switch the way [01:00:32] Speaker 06: It seems like the more common thing that would happen is that they change requirement B, and you've got a huge problem on requirement A, and 30 months comes and goes. [01:00:42] Speaker 06: So this basis for forfeiture evaporates, and we're here six years later while you're trying to meet requirement A. [01:00:49] Speaker 05: Well, I guess my point is that it evaporates regardless. [01:00:52] Speaker 05: It is an on-off switch at that time. [01:00:54] Speaker 05: And reasonable minds can disagree about how, as we noted in the final page of our brief, there have been legislative proposals to have an option for subsequent applicants to potentially get on the market just based on the passage of time rather than having an exception for changes in requirements. [01:01:13] Speaker 05: The agency, I believe, has supported that. [01:01:15] Speaker 05: The trade association for generics has strongly opposed it. [01:01:18] Speaker 05: I think that they would have a pretty good idea of what on the whole is good for the industry rather than individual applicants because they think it would dilute the 180-day exclusivity incentive. [01:01:28] Speaker 05: And I guess maybe I'll close with that. [01:01:31] Speaker 05: Judge Walker, you asked the question about there's [01:01:33] Speaker 05: On one side, we have this negative consequence. [01:01:35] Speaker 05: On the other side, there's nothing on the balance. [01:01:38] Speaker 05: I just don't think that's correct because it suggests that the 180-day exclusivity is something Congress wanted to limit and that it's pernicious and should be narrowed as much as it can be. [01:01:48] Speaker 05: And I don't think that's consistent with the courts. [01:01:50] Speaker 04: They wanted to use it to incentivize [01:01:54] Speaker 04: non-deficient applicants to submit non-deficient applications. [01:01:59] Speaker 05: They did, but for the 180-day exclusivity to work, it needs to be predictable and certain. [01:02:04] Speaker 05: And when you have a complicated causal question that is going to be very difficult to know how the agency might come out on a but-for scenario, it will have the effect of diluting the value of that 180-day exclusivity, which is what Congress adopted as the tool to promote generic entry earlier overall in the aggregate. [01:02:24] Speaker 05: Thank you. [01:02:25] Speaker 01: Thank you. [01:02:27] Speaker 01: And I think we get to hear one more time from Mr. Prince. [01:02:35] Speaker 00: Just a few points. [01:02:37] Speaker 00: Thank you, your honor. [01:02:38] Speaker 00: So, we totally acknowledge that there could be difficult cases in teasing out causation. [01:02:43] Speaker 00: I think those concerns are overstated. [01:02:46] Speaker 00: Remember, FDA is always going to be looking at this backwards. [01:02:50] Speaker 00: It's going to know whether it would have approved the application or not. [01:02:53] Speaker 00: And it does a similar [01:02:54] Speaker 00: but for causation analysis, for example, when it's applying 355Q of the statute, which is the other provision that's asking if there's been a delay due to a citizen petition. [01:03:06] Speaker 00: So it's already familiar with doing but cause. [01:03:09] Speaker 00: But whatever difficulty there could be in some other case, I mean, this is not it. [01:03:14] Speaker 00: Judge Walker, you asked like if we clearly teed up that this wasn't approvable regardless. [01:03:18] Speaker 00: And the answer [01:03:19] Speaker 00: is yes at page 50 to 52 of our opening brief. [01:03:24] Speaker 00: ACTAVAS acknowledges that at page 45 of its brief and never contest it. [01:03:31] Speaker 00: And the answer why they never contest it is blindingly obvious in this case. [01:03:35] Speaker 00: FDA told them in 2017, this is a JA507512, complete response letter, your application is unapprovable at this time. [01:03:45] Speaker 00: And I don't want to go into the details a lot, but one of them was a microbial issue and the other was the missing clinical endpoint study that FDA had required since 2012, the site for that. [01:03:59] Speaker 00: is at JA385. [01:04:03] Speaker 00: Then again, Tavis fought very hard not to have to fix those things. [01:04:09] Speaker 00: And it tried to get around them. [01:04:11] Speaker 00: And you can see this through the record documents, which I can give you every one if you want. [01:04:14] Speaker 00: But [01:04:15] Speaker 00: It suffices to point out to JA 565 which is the 2018 complete approval letter issued shortly after the forfeiture deadline had passed and FDA says it's still unapprovable for the same reasons it's unapprovable and then [01:04:32] Speaker 00: It's years later today, and guess what? [01:04:35] Speaker 00: They still don't have approval because their application is unapprovable. [01:04:38] Speaker 00: There's no argument at all that this change in requirements had anything to do at all with their failure. [01:04:45] Speaker 06: From our perspective, those might be reasons you will win straight away when it goes back to the FDA. [01:04:49] Speaker 06: But the counter, at least on what we would do if we agree with your legal test is to say, this is an APA case. [01:04:57] Speaker 06: The FDA made a legal error, but it has not yet applied the but-for test. [01:05:02] Speaker 06: We set aside its action and send it back to the agency. [01:05:05] Speaker 00: I certainly acknowledge that you could do that, Your Honor. [01:05:08] Speaker 00: I think when the record is absolutely clear and there's only one outcome on remand and the issue hasn't been disputed, and I think if you read the briefs carefully, you'll actually see that it hasn't been, you can conclude that there's been a tentative approval. [01:05:22] Speaker 00: And what we don't want to do, again, this is critically important to get this drug on the market, and we've been running around in circles now for years. [01:05:29] Speaker 00: And if you just remand, we're going to be back in a black hole for some period of time. [01:05:34] Speaker 00: So I could understand why you would do it that way. [01:05:38] Speaker 00: You applied the wrong legal standard. [01:05:40] Speaker 00: But if you do, we would ask that you set a short deadline for FDA to act on remand so that we can move this forward. [01:05:46] Speaker 00: There's no other questions. [01:05:48] Speaker 00: I appreciate the court's time. [01:05:50] Speaker 01: Thank you. [01:05:51] Speaker 01: The case is submitted.