D.C. Circuit Raises Bar for Generic Drug Exclusivity

The Washington, DC Court of Appeals appears to have raised the bar for generic drugmakers seeking to preserve 180-day marketing exclusivity after missing its FDA-mandated approval deadline. In Norwich Pharmaceuticals Inc. v. Kennedy, the court ruled that a first generic applicant can avoid forfeiting its exclusivity for missing the 30-month tentative-approval deadline only when an FDA change in approval requirements was the “but-for” cause of the delay. The opinion rejects the agency’s longstanding position that an agency change need only be one of several sufficient causes of a missed deadline, according to an analysis by the law firm Polsinelli.

The case concerns generic rifaximin, the active ingredient in Salix Pharmaceuticals’ Xifaxan. Teva Pharmaceuticals’ Actavis Laboratories was the first ANDA filer for a 550-milligram formulation in 2015. Its 30-month deadline expired in June 2018, but FDA did not grant approval until March 2026.

FDA had determined that a 2017 revision to its rifaximin guidance, which called for additional testing, was one cause of the delay and therefore preserved Actavis’ exclusivity.

The D.C. Circuit disagreed, sending the issue back to FDA to determine whether Actavis would have obtained tentative approval on time “but for” the agency’s change.

The court separately upheld FDA’s determination that Actavis had not forfeited exclusivity under the statute’s “failure to market” provision. The court said the analysis turns on the patents for which the first filer submitted qualifying Paragraph IV certifications, rather than the certification strategy adopted by later applicants.

The court also rejected the possibility of partial forfeiture, finding that the statute does not allow a first filer to lose exclusivity against one later applicant while retaining it against others.

Additionally, the opinion rejected FDA's argument that its longstanding interpretation and regulatory expertise warranted deference. Citing the Supreme Court's Loper Bright decision, the appeals panel said courts do not defer to an agency's interpretation of statutory language when the agency's technical expertise has little bearing on the meaning of the term at issue.

The decision could make forfeiture more likely for first generic applicants that miss the 30-month deadline and could affect how both first and later ANDA filers approach patent certifications.

The case now returns to FDA for further analysis under the court’s but-for causation standard.