Argued: September 16, 2016
allege that defendants-appellees delayed competitors from
marketing generic versions of a drug by falsely describing
two patents to the Food and Drug Administration, thereby
causing plaintiffs to pay monopoly prices for the drug in
violation of state-law analogs of the Sherman Act. The
district court (Abrams, J.) dismissed the complaint
for failure to plausibly allege that the false descriptions
caused the delay. The judgment of the district court is
AFFIRMED IN PART, VACATED IN PART, and REMANDED for further
proceedings consistent with this opinion.
D. Shadowen (Jayne A. Goldstein, Pomerantz LLP, Weston, FL;
Kenneth A. Wexler, Wexler Wallace LLP, Chicago, IL, on the
brief), Hilliard & Shadowen LLP, Austin, TX, for
K. Singla (Blanca F. Young, Munger, Tolles & Olson LLP,
San Francisco, CA; Jeffrey I. Weinberger, Adam R. Lawton,
Munger, Tolles & Olson LLP, Los Angeles, CA, on the
brief), Munger, Tolles & Olson LLP, San Francisco, CA,
M. Sobol, Davis S. Nalven, Gregory T. Arnold, Kristen A.
Johnson, Hagens Berman Sobol Shapiro LLP, Cambridge, MA;
Linda P. Nussbaum, Bradley J. Demuth, Nussbaum Law Group,
P.C., New York, NY, for amicus curiae Direct Purchasers in
support of no party.
Before: Jacobs and Livingston, Circuit Judges, and Rakoff,
RAKOFF, District Judge:
allege that the defendants-appellees (collectively
"Takeda") prevented competitors from timely
marketing a generic version of Takeda's diabetes drug
ACTOS by falsely describing two patents to the Food and Drug
Administration. Plaintiffs claim that these false patent
descriptions channeled Takeda's competitors into a
generic drug approval process that granted the first-filing
applicants a 180-day exclusivity period, which in turn acted
as a 180-day "bottleneck" to all later-filing
applicants. Of the ten generic applicants, nine took that
route. However, one generic manufacturer, Teva Pharmaceutical
Industries, Ltd. and Teva Pharmaceuticals USA, Inc.
(collectively "Teva"), sought approval via another
regulatory mechanism, but was thwarted when the FDA announced
that all generic manufacturers would be required to take the
bottlenecked route. The FDA's announcement was expressly
based on Takeda's representations that it had correctly
described its patents. Thereafter, Takeda settled pending
patent infringement suits with the three first-filing generic
manufacturers and Teva on terms that kept them out of the
market until August 2012 (though Teva, unlike the three
first-filing generics, could only enter the market as an
authorized distributor at that time), and with the other six
later-filing generic manufacturers on terms that kept them
out of the market for another 180 days after that,
i.e., until at least February 2013.
and the class they seek to represent are drug purchasers who
allege that they were wrongfully obliged to pay monopoly
prices for ACTOS from January 2011, when Takeda's patent
on the active ingredient in ACTOS expired, to at least
February 2013, when the mass of generic market entry
district court dismissed plaintiffs' antitrust claims for
failing to plausibly allege that Takeda's false patent
descriptions caused any delay in generic market entry. The
district court reasoned that, inter alia, plaintiffs
failed to identify a viable regulatory route for generic drug
approval that would have avoided the 180-day bottleneck, and
that even if they had, they failed to plausibly allege how
the generic manufacturers would have avoided Takeda's
infringement lawsuits, all of which were voluntarily settled.
extent plaintiffs' theory posits a delay in the marketing
of generic alternatives to ACTOS by all the generic
applicants other than Teva, we affirm, because
plaintiffs' theory presupposes that these applicants were
aware of Takeda's allegedly false patent descriptions
when they filed their applications, which is not supported by
well-pleaded allegations. However, because plaintiffs'
theory as to Teva does not require any knowledge of the false
patent descriptions, we reach other issues as to Teva and
find that plaintiffs plausibly alleged that Takeda delayed
Teva's market entry. We therefore vacate the judgment of
the district court to that limited extent.
the violations of which plaintiffs ultimately complain are
antitrust violations, they occur in the context of the
pharmaceutical regulatory scheme governed by the Federal
Food, Drug, and Cosmetic Act, as amended by the Drug Price
Competition and Patent Term Restoration Act of 1984, Pub. L.
No. 98-417, 98 Stat. 1585 (the "Hatch-Waxman Act"),
and various rules promulgated thereunder. We focus in this
appeal on two complementary aspects of that regulatory
scheme: an initial applicant's duty to inform the FDA of
patents covering a proposed new drug, and a subsequent
applicant's duty to assure the FDA that a proposed
generic version of the drug will not infringe those patents.
specifically, under the Hatch-Waxman Act, an initial or
"brand" manufacturer, before marketing a new drug,
must obtain approval from the FDA by filing a New Drug
Application ("NDA"). 21 U.S.C. §
355(b). An NDA must include, inter alia,
"the patent number and the expiration date of any patent
which claims the drug for which the applicant submitted the
application or which claims a method of using such drug and
with respect to which a claim of patent infringement could
reasonably be asserted if a person not licensed by the owner
engaged in the manufacture, use, or sale of the drug."
Id. § 355(b)(1). The NDA must classify these
patents as "drug" (or "drug substance"),
"drug product, " or "method of use"
patents. See 21 C.F.R. §§
314.53(c)(1)(ii), 314.53(b) (1999) & (2002).
publishes the brand applicants' patent submissions,
including the patent descriptions, in a tome titled Approved
Drug Products with Therapeutic Equivalence Evaluation,
commonly known as the "Orange Book." See Caraco
Pharm. Labs., Ltd. v. Novo Nordisk A/S, 132 S.Ct. 1670,
1676 (2012); 21 C.F.R. § 314.53(e). The FDA considers
its role in publishing the Orange Book to be purely
ministerial. See, e.g., aaiPharma Inc. v.
Thompson, 296 F.3d 227, 237 (4th Cir. 2002). Thus, it
does not review the brand applicants' patent submissions
for substantive accuracy; instead, it simply publishes them
as submitted. See Caraco, 132 S.Ct. at 1677.
new drug has been approved, an applicant seeking to market a
generic version may file an Abbreviated New Drug Application
("ANDA"). See 21 U.S.C. §
355(j)(2)(A). Among the many requirements a generic applicant
must fulfill is to "assure the FDA that its proposed
generic drug will not infringe the brand's patents."
See Caraco, 132 S.Ct. at 1676. Generic applicants
learn which patents they must address by consulting the
Orange Book, see id., and may satisfy their
obligation of assuring the FDA of non-infringement in several
different ways. See 21 U.S.C. §
355(j)(2)(A)(vii)-(viii). Of relevance here, when a generic
applicant wishes to market a drug in seeming competition with
one or more of an existing brand manufacturer's patents,
it has two choices:
option is to certify that each of the brand's patents
"is invalid or will not be infringed by the manufacture,
use, or sale of the new drug for which the application is
submitted." Id. § 355(j)(2)(A)(vii)(IV).
Filing such a "Paragraph IV certification" is a
justiciable act of patent infringement entitling the patent
holder to sue. See 35 U.S.C. § 271(e)(2)(A). To
encourage these certifications despite the risk of
litigation, the first generic filer that submits a Paragraph
IV certification and has its ANDA approved receives a
valuable 180-day window of exclusivity during which it alone
is permitted to market a generic version of the drug. 21
U.S.C. § 355(j)(5)(B)(iv); see also FTC v. Actavis,
Inc., 133 S.Ct. 2223, 2228-29 (2013). Before December 8,
2003, the Hatch-Waxman Act did not provide any mechanism by
which this 180-day exclusivity period could be lost. See
Teva Pharm. USA, Inc. v. Sebelius, 595 F.3d 1303,
1306-07 (D.C. Cir. 2010).
second option is available when a brand's patent covers a
method of using a drug. In that circumstance, an applicant
seeking to market a generic version of the drug for a
non-patented use can submit a "Section viii
statement" that "carves out" any patented uses
from its proposed label. 21 U.S.C. § 355(j)(2)(A)(viii).
This route "is typically used when the brand's
patent on the drug compound has expired and the brand holds
patents on only some approved methods of using the
drug." See Caraco, 132 S.Ct. at 1677. Filing a
Section viii statement is not a justiciable act of
infringement, so applicants that take this route are not
immediately vulnerable to suit. Moreover, while a successful
applicant is not entitled to an exclusivity period, it is
exempt from any other generic's exclusivity period
pursuant to ...