Wednesday, September 09, 2009

FDA Filing by Drug Company Was Not Sham Petitioning, Monopolization

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The federal district court in New York City has refused to disturb a jury's verdict that Sanofi-Aventis (Aventis) did not violate Section 2 of the Sherman Act by filing a petition with the Food and Drug Administration (FDA), purportedly in an effort to delay approval of generic competition to its rheumatoid-arthritis drug sold under the name “Aravae.”

Complaining wholesale drug distributors' motions for judgment as a matter of law—or, alternatively, for a new trial—were denied.

Citizen Petition

Shortly after Aventis' period of patent exclusivity for Aravae expired, the drug company filed a "Citizen Petition," asking the FDA to impose certain conditions on the approval of applications for generic versions of Aravae.

The FDA ultimately denied the petition and approved applications for six generic manufacturers to produce and sell generic leflunomide, including one manufacturer who did so pursuant to an agreement with Aventis to sell an "authorized generic" version of the drug.

In denying the petition, the FDA noted that Aventis' request for relief "seem[ed] to be based on a false premise." An action was later filed on behalf of a class of wholesale drug distributors who alleged they were injured by the delayed market entry of generic leflunomide that they claimed was the direct result of Aventis' petition, an alleged act of monopolization in violation of Sec. 2 of the Sherman Antitrust Act.

Noerr-Pennington Doctrine

Although the court had previously denied Aventis' motion for summary judgment based on the Noerr-Pennington doctrine (2008-2 Trade Cases ¶76,339), it upheld the jury's determination that the drug company's conduct was protected by the doctrine, which shields government petitioning activity from antitrust attack.

The first question of the two-pronged test for determining whether government petitioning was protected from antitrust attack by the Noerr-Pennington doctrine—or actionable under the sham exception—was whether the petitioning was objectively baseless. The jury concluded that the petition was not "objectively baseless."

The wholesale drug distributors argued that the petition was objectively baseless because it was not only contrary to FDA statutes, regulations, and practices, but also lacked medical or scientific basis. However, there was ample evidence introduced at trial that tended to show that the issues raised by the Citizen Petition, which concerned dosage strengths and labeling, were sufficiently novel and unsettled to permit an objectively reasonable drug company to perceive some likelihood that the FDA would grant the relief requested, according to the court.

The August 28 decision in Louisiana Wholesale Drug Co., Inc. v. Sanofi-Aventis will appear at 2009-2 Trade Cases ¶76,720.

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