The Hatch-Waxman Act requires a drug manufacturer wishing to market a new brand-name drug to first submit a New Drug Application (“NDA”) to the federal Food and Drug Administration (“FDA”), and then undergo a long, complex, and costly testing process. See 21 U.S.C. § 355(b)(1) (requiring, among other things, “full reports of investigations” into safety and effectiveness; “a full list of the articles used as components”; and a “full description” of how the drug is manufactured, processed, and packed); see also F.T.C. v. Actavis, Inc., 133 S. Ct. 2223, 2228-29 (2013) (describing the statutory framework). If this process is successful, the FDA will grant the drug manufacturer approval to market the brand-name drug.

On February 24, 2023, the Federal Circuit held that Jazz Pharmaceuticals, Inc. (Jazz) must delist U.S. Patent No. 8,731,963 (the ’963 Patent) from the U.S. Food and Drug Administration’s (FDA’s) “Orange Book” because the claims in the ’963 Patent to a method of Risk Evaluation and Mitigation Strategies (REMS) to control access of Jazz’s Xyrem® did not qualify as “a method of using [the] drug for which approval is sought” under 21 U.S.C. § 355(b).Jazz Pharms., Inc. v. Avadel CNS Pharms., LLC, 60 F.4th 1373 (Fed. Cir. 2023).BackgroundJazz manufactures and sells sodium oxybate under the brand name Xyrem®, an FDA-approved drug for treating cataplexy and excessive daytime sleepiness associated with narcolepsy. Sodium oxybate is the sodium salt ofgamma-hydroxybutyric acid (GHB). Because of known abuse of GHB, the FDA conditioned its approval of Xyrem® on the implementation of a REMS to control the access and distribution of Xyrem®. Jazz subsequently pursued and was granted patent claims to the REMS. The relevant claim in Jazz’s ’963 Patent recites:1.A computer-implemented systemfor treatment of a narcoleptic patient with a prescription drug that has a potential for misuse, abuse, or diversion, comprising:one or more computer memoriesfor storing a single computer database having a database schema that contains and inter- relates prescription fields, patient fields, and prescriber fields…a data processorconfigured to…said identifying

d Cosmetic Act (“Paragraph IV Certification”) file settlement agreements with the FTC and DOJ.[5] Recent amendments to the MMA extended this filing requirement to include settlement agreements between a “biosimilar biological product applicant who has submitted a biosimilar biological application and a brand name drug company."[6]As amended (with the amendments shown in bold below), section 1112(a) of the MMA now requires filing of settlement agreements that are directed to the following subject matter:“The manufacture, marketing, or sale of the brand name drug that is the listed drug in the ANDA or the reference product in the biosimilar biological product application involved;” “The manufacture, marketing, or sale of the generic drug for which the ANDA was submitted or of the biosimilar biological product for which the biosimilar biological product application was submitted; or”“The 180-day period referred to in section 505(j)(5)(B)(iv) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 355(j)(5)(B)(iv)] as it applies to such ANDA or to any other ANDA based on the same listed drug; or”“Any of the time periods referred to in section 351(k)(6) of the Public Health Service Act [42 U.S.C. 262(k)(6)] as such period applies to such biosimilar biological product application or to any other biosimilar biological product application based on the same reference product.” [7]Section 1112(c)(2) also now mandates that parties required to file an agreement under the act must also file any agreements that are not described in the filed agreement and are “contingent upon, provide a contingent condition for, were entered into within 30 days of, or are otherwise related to an agreement that is required” by another section of the MMA.

The same is true here, and this Court should likewise reject Boehringer’s attempt to unduly extend its patent term. [(Internal citations omitted)]Because the statute is unclear as to the meaning of “initially submitted,” says FDA citing Wyeth, the Agency’s determination must be considered under Chevron Step Two, where a court determines whther or not an agency interpretation is reasonable. And FDA says the Agency’s decision is quite reasonable, relying in part on the same House Report relied on by Boehringer:An “application” for purposes of this provision must be “submitted . . . under”—and thus contain the information required by—the cross-referenced subsection of the FDCA, namely, 21 U.S.C. § 355(b). . . . An application with inadequate sections that cannot be substantively reviewed is not enough. . . . In order words, to count as “the application . . . submitted . . . under subsection (b) of section 505 [of the FDCA, codified at 21 U.S.C. § 355(b)],” “the application” must be sufficiently complete and capable of being reviewed. . . . [A]n “application” is “initially submitted” under 21 U.S.C. § 355(b) when the sponsor has provided FDA with all the elements required by Section 355(b) and the corresponding regulations to make an approval decision.

and Novo Nordisk A/S surrounding Caraco’s generic version of Novo Nordisk’s Prandin® repaglinide product. Earlier this year the Supreme Court held that 21 USC § 355(j)(5)(C)(ii)(I) provides Caraco with a mechanism for challenging the use code associated with Novo Nordisk’s Orange Book listed patent. In this appeal, Novo Nordisk challenged the district court’s injunction requiring Novo Nordisk to replace the use code with specific language.

elevance of patent information published in the Orange Book, which will result in the FDA sending the statement of dispute to the NDA holder. The NDA holder then has 30 days to withdraw or amend the listings or certify under penalty of perjury that the listings comply with applicable statutory and regulatory requirements. In its November 7th Notice Letters, the FTC utilized the FDA’s regulatory dispute process to challenge the Orange Book listing of the patents at issue as improperly or inaccurately listed. However, the FTC stated that it retained the right to take further action, including investigating conduct as an unfair method of competition under Section 5 of the FTC Act, 15 U.S.C. § 45.https://www.ftc.gov/system/files/ftc_gov/pdf/p239900orangebookpolicystatement092023.pdfhttps://www.ftc.gov/legal-library/browse/warning-letters/81927 In re Restasis (Cyclosporine Ophthalmic Emulsion) Antitrust Litig., 333 F. Supp. 3d 135, 149 (E.D.N.Y. 2018). U.S.C. § 355(b)(1)(A)(viii). See also 21 U.S.C. §§ 355(c)(2), 21 C.F.R. § 314.53 (submission of patent information). Only the patent information submitted under section §355(c)(2) is listed in the Orange Book. A patent that is identified as claiming a method of using such drug shall be filed pursuant to section §355(c)(2) for listing in the Orange Book only if the patent claims a method of use approved in the application. 21 C.F.R. § 314.53, and subsection (c)(2)(ii)(R). 21 U.S.C. at § 355(j)(2)(A)(vii)(III). 21 U.S.C. at § 355(j)(2)(A)(vii)(IV). 21 U.S.C. § 355(j)(5)(B)(iii).https://www.ftc.gov/news-events/news/press-releases/2023/11/ftc-challenges-more-100-patents-improperly-listed-fdas-orange-book

itate the acquisition of an FDA-approved ANDA because the two processes are distinct and ultimately separate.”21 Indeed, sometimes no ANDA infringement suit is ever filed, and when it is, although the ANDA litigation can delay the timing of the FDA’s approval, it does affect the FDA’s scientific review of the ANDA, which relates to the safety and efficacy of the proposed generic drug product.22 Thus, as the court noted, “[n]othing prevents a generic manufacturer from commercially marketing its approved drug under the cloud of patent litigation, as long as it has an effective FDA-approved ANDA.”23 That is true even though any such “launch at risk” may subject the generic manufacturer to damages if the patentholder ultimately prevails in the ANDA suit.24 Accordingly, because defending ANDA litigation is not a part of seeking FDA approval, a generic drug manufacturer may properly “deduct as ordinary and necessary business expenses the legal fees it incur[s]” in its defense.25FootnotesSee 21 U.S.C. § 355(j).F.T.C. v. Actavis, Inc., 570 U.S. 136, 142 (2013) (cleaned up).In re Lipitor Antitrust Litig., 855 F.3d 126, 134–35 (3d Cir. 2017) (cleaned up).See Caraco Pharm. Lab’ys, Ltd. v. Novo Nordisk A/S et al., 566 U.S. 399, 406 (2012); 21 U.S.C. § 355(b); 21 U.S.C. § 355(j)(2)(A)(vii)(IV); 21 U.S.C. § 355(j)(2)(A)(viii).Mylan Inc & Subsidiaries v. Commissioner of Internal Revenue, Nos. 22-1193, 22-1194, and 22-1195 (3d Cir. July 27, 2023) (slip opinion) at 8 (citing 21 U.S.C. § 355(j)(2)(A)(vii)(I)-(IV)).21 U.S.C. § 355(j)(2)(B).Mylan Inc & Subsidiaries v. Commissioner of Internal Revenue, Nos. 22-1193, 22-1194, and 22-1195 (3d Cir. July 27, 2023) (slip opinion) at 22.Id.Id.Id.See id. at 23.Id. at 24.See id. (citing 26 C.F.R. § 1.263(a)-4(b)(1)(v), (d)(1), (d)(5)(i)).See id. (citing 26 C.F.R. § 1.263(a)-4(e)(1)(i).Id. at 16.Id. at 24.Id. at 24–25.Id. at 16 (citing Commissioner v. Heininger, 320 U.S. 467, 471–72 (1943)).Id. at 17 (quoting Schillinger v. United States, 155 U.S. 163, 169 (1894)

del then countersued Jazz and sought a delisting of the ’963 patent from the Orange Book.The District Court ruled in favor of Avadel and held “the ’963 patent claims a system and thus does not claim an approved method of use.”12 Thus, the “district court subsequently ordered Jazz to ask the FDA to delist the ’963 patent.”13 Jazz appealed the decision, and the Federal Circuit “issued a temporary stay pending resolution of the concurrent district court motion.”14 The district court then denied Jazz’s motion and the Federal Circuit extended the stay pending the appeal.SYSTEM VS. METHOD OF USE ANAYLSISFirst, the Panel addressed whether the district court correctly determined that the ’963 patent’s claims are not method of use claims. In doing so, the Panel considered two questions: “(1) what does the patent claim, and (2) is the patented invention either ‘the drug for which the application was approved’ or ‘an approved method of using the drug?’”15What Does the Patent Claim?As required in 21 U.S.C. § 355(b), Orange Book-listed patents must, inter alia, “claim[s] a method of using [the] drug for which approval is sought or has been granted in the application.”16 The district court determined that the ’963 patent’s claims are to a system, and not a method of use.Both Jazz and Avadel agreed that the ’963 patent claims describe “elements of the REMS-based procedure to ensure that Xyrem® can be safely prescribed.”17 However, the parties disagreed about whether this constituted a method of use. Ultimately, the Panel determined that the claims of the ’963 patent describe a “‘computer-implemented system’ that comprises ‘one or more computer memories’ and a ‘data processor.’”18 The Panel noted that these are not claims for a method of use because such “method claims require the performance of steps; claims that describe physical components of a whole are system, or apparatus, claims.”19 Thus, the Panel found that the district court properly construed the claims to be system claims, and not method

2023) is an appeal by Jazz Pharmaceuticals, Inc. (Jazz) from a District of Delaware order granting a motion for an injunction brought by Avadel CNS Pharmaceuticals, Inc. (Avadel). The injunction directed Jazz to ask the FDA to delist U.S. Patent No. 8,731,963 (the ’963 Patent) from the Orange Book. The Federal Circuit affirmed.FactsJazz markets the narcolepsy drug XYREM® with the active ingredient sodium gamma-hydroxybutyrate (GHB), which is subject to Risk Evaluation and Mitigation Strategies (REMS) protocols due to misuse of the drug. XYREM® has heavily sedating effects and is dosed twice nightly. XYREM®’s REMS program originally restricted distribution of the drug to a single-pharmacy system. The ’963 Patent relates to Jazz’s single-pharmacy distribution system, which controls access to abuse-prone prescription drugs through a computer tracking system implemented by pharmacies. In 2014, Jazz listed the ’963 Patent in the Orange Book as covering a method of using XYREM® pursuant to 21 U.S.C. § 355(b)(1)(A)(viii).In December 2020, Avadel submitted an NDA for GHB-based drug FT218 pursuant to 21 U.S.C. § 355(b)(2) with a proposed REMS. Avadel’s proposed product uses multiple pharmacies and databases to ensure proper drug handling and avoid misuse or diversion, and is dosed once nightly. The FDA required Avadel to submit a certification regarding the ’963 Patent as part of its 505(b)(2) application, and Jazz subsequently sued Avadel for infringement in response to Avadel’s Paragraph IV certification. Avadel then responded to Jazz’s infringement claim with a counterclaim seeking to delist the ’963 patent for failing to claim a drug or method of use. The district court ultimately found that, as a matter of claim construction, the ’963 patent claims a system and thus does not claim an approved method of use. Avadel sought an injunction, and in its decision, the district court ordered Jazz to ask the FDA to delist the ’963 Patent.HoldingFirst, the Court addressed whether the district court erred in d

For antitrust purposes, however, such an assumption would be economically unreasonable.[112] [1]FTC v. Watson Pharms., Inc., 133 S. Ct. 787 (2012).[2] 21 U.S.C. §355 et seq.[3]See In re Schering-Plough (Opinion of the Comm'n), FTC Dkt. No. 9293, 136 F.T.C. 956, 988 (Dec. 8, 2003) ("Absent proof of other offsetting consideration, it is logical to conclude that the quid pro quo for the payment was an agreement by the generic to defer entry beyond the date that represents an otherwise reasonable litigation compromise.")