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D.C. Circuit Rejects FDAs Interpretation of "Failure to Market" Forfeiture Provisions

March 03, 2010

By David M. Conca and Anthony Michael

On March 2, 2010, in Teva Pharmaceuticals USA, Inc. v. Sebelius, the D.C. Circuit rejected the FDAs interpretation of the failure to market forfeiture provisions of the 2003 Medicare Modernization Act amendments (2003 MMA amendments) to the Hatch-Waxman Act. Appeal No. 09-5281 (D.C. Cir. Mar. 2, 2010). The FDA had applied its interpretation in two prior instances to trigger a generic companys exclusivity when a branded company delisted an Orange Book patent for which a Paragraph IV certification had been filed. In Teva, the court ruled that the FDAs plain language statutory interpretation was erroneous.

The D.C. Circuit had previously interpreted the Hatch-Waxman Act as it existed before the 2003 MMA amendments to prohibit the FDA from delisting an Orange Book patent for which a Paragraph IV certification had been filed because an FDA policy that allowed brand manufacturers to strategically delist challenged patents, thereby unilaterally stripping generic manufacturers of marketing exclusivity, was inconsistent with the structure of the statute. Ranbaxy Labs. Ltd. v. Leavitt, 469 F.3d 120, 125 (D.C. Cir. 2006).

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