FDA Nonacquiescence Strategy Fails In Evergreening Case

• Published date: 20 May 2020
• Author: Mr James Beck
• Subject Matter: Food, Drugs, Healthcare, Life Sciences, Food and Drugs Law
• Law Firm: Reed Smith

One of the advantages that the FDA (and other government agencies) have over other litigants is that it gets to ignore court decisions it doesn't like, in hopes of trying again later in what the Agency considers a more favorable forum. Here's how one court described the same policy by a different agency:

Understood in the most charitable light, not acquiescing to a given circuit's diverging legal interpretation until the Supreme Court has the last word puts two roles in harmony ? the [administrative agency's] role of national say in what [administrative] law should be, and the judicial department's emphatic province and duty to say what the law is. . . .

To that end, nonacquiescence allows for an issue's "percolation" among the circuits; generating a circuit split that can improve the likelihood of certiorari being granted. But, nonacquiescence is justifiable only as a means to judicial finality, not agency aggrandizement. . . . [N]onacquiescence is divorced from its purpose when an agency asserts it with no stated intention of seeking certiorari.

Heartland Plymouth Court MI, LLC v. NLRB, 838 F.3d 16, 21-22 (D.C. Cir. 2016) (citations, quotation marks, and footnote omitted). FDA uses nonaquiescence as do other federal agencies. We believe that the FDA's failure to appeal United States v. Caronia, 703 F.3d 149 (2d Cir. 2012), is an example of this policy. So far the FDA's gotten away with it. The First Amendment/off-label promotion issue hasn't reached any other circuit, and the FDA can do what it wants in all other circuits.

However, it doesn't always work out that way, and FDA took one on the chin recently in Eagle Pharmaceuticals, Inc. v. Azar, 952 F.3d 323 (D.C. Cir. 2020). The issue in Eagle Pharmaceuticals was marketing exclusivity under an FDA "orphan drug" approval. Orphan drugs are those that treat rare diseases. Development of such drugs is problematic "because the comparatively small demand for treatment left little motive for research and development." Id. at 325 (citation and quotation marks omitted).

Congress passed the Orphan Drug Act to provide incentives to overcome this barrier, one of which is "a seven-year period of exclusive approval rights during which time the FDA may not approve another" competing drug "for a person who is not the holder of" the original application. Id. (citing 21 U.S.C. '360cc(a)). The FDA added its own gloss to the statute:

[T]he FDA considers a drug the same as a previously-approved drug if it shares the same...