FDA Extends Comment Period for the Proposed Rule on Nutritional Labeling on Menus

The U.S. Food and Drug Administration (FDA) is extending the comment period until July 5, 2011 for the proposed requirements for providing nutritional information on menus at chain restaurants and similar retail food establishments. As we previously blogged, the comment period for the proposed rule for chain restaurant menu labeling was set to expire on June 6, 2011. As we previously blogged (here, here, here, and here), the proposed rule involves a provision of the Patient Protection and Affordable Care Act (“PPACA”), the 2010 Healthcare Reform Law, which requires that chain restaurants and similar retail food establishments that are part of a chain with 20 or more locations doing business under the same name and offering the same menu items, provide calorie information directly on the menu and have nutritional information available upon request.

The FDA stated in todays Federal Register Notice that it has received several requests to extend the comment period. The additional time is needed, according to the requesters, for a number of reasons, “including a need for time to assess the effect of the proposal on the industry; a desire to conduct consumer research to support comments on the proposal; and the complexities of the proposed rule.”

For more information regarding labeling of food products and how the PPACA will impact your business, please contact us at contact@fidjlaw.com.

The Internal Revenue Service Considers Taking a Closer Look at Political Donations

According to a recent Wall Street Journal article, the Internal Revenue Service is looking to “retroactively tax top donors to political advocacy groups” following the Supreme Courts Citizens United ruling reversing certain campaign finance laws. Specifically, donations made during the 2010 elections to IRC § 501(c)(4) nonprofit groups are being considered. Groups classified as IRC § 501(c)(4) can support candidates and legislation, but cannot be primarily political in nature. According to the IRS, large donations to these groups should have been subject to the gift tax, although enforcement has been lax in the past. Currently, individual donors can contribute $13,000 annually ($26,000 for couples), subject to a lifetime maximum of $5 million, before a 35% tax rate takes effect. In 2013 the lifetime exempted amount drops to $1 million.

Reports in the press indicate that at least five donors have been contacted by the agency for not filing gift tax returns, a requirement for large political donations. In a statement, IRS spokeswoman Michelle Eldrige wrote, “[t]hese examinations were started by employees of the Estate and Gift Tax Unit at the IRS as part of their increased efforts in the area of non-filing of gift and estate tax returns” and is not political in nature. The statement continues, “[a]ll of the decisions involving these cases were made by career civil servants without any influence from anyone outside the IRS.”

The Los Angeles Times reports that “[i]n 2010, nonprofit groups, many of them [IRC §] 501(c)(4)s, disclosed nearly $300 million in spending on midterm election campaigns, much of it to elect Republicans.” A similar article in the New York Times states, “Democrats have embraced the model, too. Bill Burton, Mr. Obamas former deputy press secretary, was skewered by critics of these groups for creating Priorities USA Action to help Democrats.” Experts predict that “broad IRS action against donors could slow the groups funding streams as the 2012 presidential election nears.”

The attorneys at Fuerst Ittleman have extensive experience in the areas of tax law and tax law litigation and will continue to monitor the changes made or considered by the Internal Revenue Service. If you have any questions regarding IRC § 501 or any other Internal Revenue Code section, do not hesitate to contact us as contact@fidjlaw.com.

Department of Justice Prosecutes US Taxpayer For Failing to Report HSBC Bank Account in Bermuda

On May 19, 2011, a criminal information was filed in the U.S. District Court for the District of Massachusetts charging Michael F. Schiavo with one count of willfully violating the Foreign Bank Account Reporting Requirements of 31 U.S.C. sections 5314 and 5322(a).

Of particular interest is the following paragraphs of the information:

11. A “silent disclosure” occurs when a U.S. taxpayer with an undeclared account files FBARs and amended returns and pays any related tax and interest for previously unreported offshore income without notifying the IRS of the undeclared account through the Voluntary Disclosure Program. A silent disclosure does not constitute a voluntary disclosure. On its website, the IRS strongly encourages taxpayers to come forward under the Voluntary Disclosure Program and warns them that taxpayers who instead make silent disclosures risk being criminally prosecuted for all applicable years.

18. On or about October 6, 2009, following widespread media coverage of UBS’s disclosure to the IRS of account records for undeclared accounts held by U.S. taxpayers and the IRS’s Voluntary Disclosure Program, Schiavo made a “silent disclosure” by preparing and filing FBARs and amended Forms 1040 for tax years 2003 to 2008, in which he reported the existence of his previously undeclared account at HSBC Bank Bermuda. He made such filings notwithstanding the availability of the Voluntary Disclosure Program. Schaivo reported on the amended individual income tax returns the interest income that he earned from the previously undeclared account he held at HSBC Bank Bermuda but did not report on the 2006 return the income earned that he earned from Headway Partners.

19. On or about October 27, 2009, a Special Agent from the IRS attempted to interview Schiavo at his home.

20. On or about October 29,2009, Schiavo prepared and executed a second amended individual income tax return for tax year 2006 on which he reported the income earned that he earned from Headway Partners and that had been deposited into his previously undeclared account at HSBC Bank Bermuda.

A full copy of the information is available here.

What is interesting is that the criminal charges do not contain any violations of the Internal Revenue Code (Title 26), but instead only contain violations of the Bank Secrecy Act. The Bank Secrecy Act requires individuals to file Form TD 90.22-1. A copy of the form is available here.

Further, the U.S. Department of Justice has issued a press release on the matter available here.

The attorneys at Fuerst Ittleman, PL have extensive experience in addressing undeclared foreign bank accounts, undeclared income and voluntary disclosures. You can contact an attorney by emailing us at contact@fidjlaw.com.

Drug Company Immunity A Possibility In North Carolina

The North Carolina legislature is currently considering a bill that would provide immunity from lawsuits for drug companies in cases where the drug product in question had received FDA approval. If passed, North Carolina would be only the second state to provide such immunity for drug manufacturers. Michigan, which passed a similar law in 2005, was the first state to do so.

Prior to bringing a drug to market, drug manufacturers must receive FDA approval. During this approval process, the burden of establishing the safety and effectiveness of a drug is on the drug manufacturer. Traditionally, even after a drug has been approved for use, the law, both state tort law as well as federal regulatory law through the FDCA, has placed a continuing duty upon drug companies to warn its consumers of any potentially harmful effects of its products. Recent Supreme Court precedent has echoed this principle.

In Wyeth v. Levine, 129 S Ct 1187 (2009), the issue of whether FDA approval of a drug product was intended to preempt and prohibit contemporaneous state tort lawsuits was addressed by the United States Supreme Court. In Wyeth, the plaintiff filed tort action for negligence and strict product liability against a drug manufacturer in Vermont State Court alleging that the drug company had failed to include an adequate warning label describing the possible injuries which could occur from the injection of its drug product. In response, the drug manufacturer argued that the Plaintiffs failure-to-warn claims were preempted by federal law because: 1) it had received FDA approval for its products drug label; and 2) any state-law duty to provide stronger warnings would obstruct the purposes of the FDCA and federal drug labeling regulations because it would substitute a lay jurys decision about drug labeling for the expert judgment of the FDA.

In rejecting the drug manufacturers argument, the Court found that the FDCAs purpose was to bolster consumer protection and that Congress did not provide for federal remedies for consumers harmed by unsafe/ineffective drugs because state common law rights of action were already available. Further, unlike medical devices, Congress did not specifically provide for preemption of claims for drugs. Therefore, the Court found that “Congress did not intend FDA oversight to be the exclusive means of ensuring drug safety and effectiveness.”

However, if passed, HB 542 would provide immunity to drug manufacturers and sellers from product liability suits related to any drug sold or manufactured which first received FDA approval prior to production and sale. The only exceptions under the proposed bill are for cases where FDA approval was obtained through fraud or bribery. Such a law will have dramatic effects not only on the ability of consumers to hold drug companies accountable for selling dangerous or defective drugs but also on the State government itself bringing related claims.

An example of the likely effects of such legislation can be seen in a recent decision of the Michigan Court of Appeals interpreting a similar immunity statute under Michigan law. In Michigan v. Merck & Co. Inc., the Michigan Court of Appeals held that where the drug in question was approved by the FDA, the states suit to recover Medicaid money premised on fraud by the drug company in its representations regarding the safety and efficacy of the drug was barred under Michigan law. In that case, the court found that, though the suit was based on the Michigan Medicaid False Claims Act, the underlying allegations of the Complaint qualified the suit as a “product liability action” under Michigan law. As such, because 1) the States suit constituted a “product liability action” under Michigan law, 2) Mercks drug received FDA approval, and 3) that approval was not obtained through fraud or bribery, Merck qualified for immunity and the Court of Appeals remanded the case with orders to dismiss.

For more information regarding the drug approval process or for any questions regarding how your company can maintain FDA regulatory compliance, please contact us at contact@fidjlaw.com.

DOJ Will No Longer Seek Chevron Deference for Revenue Rulings and Revenue Procedures

On May 7, 2011, the Department of Justice announced it will no longer argue for Chevron deference to apply to revenue rulings and revenue procedures. The announcement comes in the wake of the Supreme Courts recent decision in Mayo Found. for Med. Educ. & Research v. U.S., 131 S. Ct. 704 (2011) in which the Court held all regulations should be analyzed using Chevron deference regardless of the agency which promulgated them.

A basic principle of administrative law is that, generally, courts will tend to defer to an agencys interpretation of the statute that it administers. The Supreme Court expanded upon this idea in Chevron U.S.A. Inc. v. Natural Resource Defense Counsel, 467 U.S. 837 (1984). In Chevron, the Court established a two part test to determine whether to grant deference to an administrative agencys interpretation of a statute. First, the Court will look to see if Congress has directly spoken to the matter at issue. If so, the Courts analysis is complete and the administrative agencys interpretation is not entitled to deference. However, if the Court determines that issue is ambiguous, the Court will proceed to step two of the Chevron analysis. Under step two, the question for the court is whether the agency’s interpretation is based on a permissible construction of the statute. So long as the agencys interpretation is a permissible construction, the Court will not substitute its own judgment for that of the administrative agency and will uphold the agencys interpretation.

Not all agency actions are entitled to the highly deferential standard of Chevron deference. While Chevron deference applies to agency interpretations contained within properly promulgated regulations, interpretations such as those in opinion letters and interpretations contained in policy statements, agency manuals, and enforcement guidelines — all of which lack the force of law — do not warrant Chevron deference. Instead, they are “entitled to respect,” but only to the extent that they are persuasive. See Skidmore v. Swift & Co., 323 U.S. 134 (1944). Revenue rulings, which are official pronouncements of the IRS addressing the application of the Internal Revenue Code (“I.R.C.”) and regulations to particular factual situations, and revenue procedures, which are official statements of a procedure that affect the rights or duties of taxpayers under the law, would fall into this latter category.

Prior to the Mayo decision, debate raged as to whether Treasury regulations were to be analyzed under the highly deferential Chevron standard or whether the older, less deferential. multi-factored analysis of National Muffler Dealers. Assn., Inc. v. United States, 440 U.S. 472 (1979), used by the Court previously to analyze tax regulations, still governed. Under National Muffler, when evaluating a regulations validity, the Court looked to numerous factors to determine whether the Commissioners interpretation of the statute in question should receive deference including: 1) whether the regulation was promulgated contemporaneously with the statute in question; 2) the length of time the regulation had been in effect; 3) the reliance placed on the regulation by the Commissioner; 4) the consistency of the Commissioners interpretation over time; and 5) the degree of scrutiny Congress has devoted to the regulation during subsequent reenactments of the statute. National Muffler Dealers Assn., Inc., 440 U.S. at 477. As a result, while a regulation could pass muster as being a permissible construction under the Chevron test, “[u]nder National Muffler, . . ., a court might view an agencys interpretation of a statute with heightened skepticism when it has not been consistent over time, when it was promulgated years after the relevant statute was enacted, or because of the way the regulation evolved.” Mayo Found. for Med. Educ. & Research, 131 S. Ct. 104.

Moreover, prior to Chevron, the Court emphasized that rules passed pursuant to the Treasury Departments “general authority” under 26 U.S.C. § 7805(a), such as the rule in Mayo, were entitled to less deference than those rules under a specific grant of authority to define a statutory term or prescribe a method of executing a statutory provision. See Rowan Cos. v. United States, 452 U.S. 247 (1981); United States v. Vogel Fertilizer Co., 455 U.S. 16 (1982). As a result of these Pre-Chevron decisions, the deference afforded to the Commissioners interpretation of ambiguous IRC provisions varied depending on not only the multiple National Muffler considerations but also the authority under which the regulation was promulgated.

In Mayo, the Court found that as a result of Chevron and its progeny, the administrative law landscape had changed substantially since National Muffler, Rowan, and Vogel. The Court found that the underlying principles of Chevron applied to the tax context and that the Court in previous decisions had recognized the importance of maintaining a uniform approach to the judicial review of administrative agency actions. Therefore, the National Muffler analysis was no longer appropriate and the more deferential Chevron deference applied. Additionally, as a result of Mayo, all regulations promulgated by the Commissioner, regardless of whether promulgated under a specific grant of authority, will be analyzed under Chevron and entitled to the same deference.

The attorneys at Fuerst Ittleman, PL have extensive experience dealing with tax matters, administrative law, and regulatory compliance. You can reach at attorney by emailing us at contact@fidjlaw.com.

Senate passes Food Safety Crime Bill with greatly enhanced penalties

The United States Senate recently passed a food safety crime bill sponsored by Senator Patrick Leahy that will significantly strengthen criminal penalties for companies and persons that knowingly violate food safety standards and place tainted products on the market. The legislation, known as the Food Safety Accountability Act, will create a new criminal offense in Title 18 of the United States Code, and will have significant criminal penalties of up to 10 years imprisonment for committing certain food offenses “knowingly and intentionally to defraud or misleadand with conscious or reckless disregard or a risk of death or serious bodily injury.” The Senates version will now go to the House of Representatives for consideration. This bill evidences the Governments increased focus on food safety and adds teeth into the new Food Safety Modernization Act, passed last year to increase the regulatory powers and oversight of the Food & Drug Administration.

The FDA is ramping up criminal enforcement of the nations food and drug laws. We have previously blogged about the unsuccessful prosecution of the general counsel of GlaxoSmithKline, a large pharmaceutical company for obstruction of justice, here. We have also recently blogged here on the new emphasis by the FDA on bringing Park doctrine prosecutions, where corporate executives can be convicted of crimes even if they have no knowledge of or intent to commit a crime. Our lawyers are monitoring the progress of this bill and are ready to advise clients on how to navigate the FDAs regulatory minefield.

Induced Pluripotent Stem Cell Treatment Suffers a Setback

In a study published in Nature, researchers report that tissues made from induced pluripotent stem cells, or iPS cells, might be rejected by a patients immune system, even when the tissue is transplanted into the same person from which the cells were made. Induced pluripotent stem cells are adult stem cells that have been genetically reprogrammed to have the pluriopotency character of embryonic stem cells. This means the iPS cells can theoretically be reprogrammed to grow into different types of tissue, such as nerve, heart, liver, or other types of tissue.

When initially invented in 2007, iPS cells held promise for the regenerative medicine field because they held advantages over embryonic stem cells and other adult stem cells. The two major advantages over embryonic stems cells were that these cells were not controversial because they were adult stem cells and did not require the destruction of human embryos and it was assumed that the tissues created from the patients own iPS cells would not be rejected by that patients immune system. The pluripotency character of these cells created the advantage over other adult stem cells. This study has finally tested the latter assumption.

The study was led by Yang Xu, a molecular biologist at the University of California, San Diego. When Xus team transplanted the iPS cells into genetically identical mice, the iPS cells made from mouse skin cells were rejected by the immune systems of those mice. It is not clear if the same results would hold true in humans, but other scientists assume they would.

Although this study may create a setback for regenerative medicine, iPS cells are still a valuable research tool. Many scientists are using iPS cells to create cells (for example, nerve cells from someone with Parkinsons disease) that can be used to study diseases and treatments in the laboratory.

Fuerst Ittleman recognizes the promise that stem cells hold for regenerative medicine. We will continue to monitor future studies with iPS cells and other stem cells. For more information the regulatory oversight of stem cells, contact us at contact@fidjlaw.com.

Former in-house counsel for GlaxoSmithKline acquitted

In another stunning and surprising ruling to come out of the prosecution of Lauren Stevens, a former in-house counsel for GlaxoSmithKline, for obstructing an FDA investigation into off-label marketing, the Court granted Ms. Stevens motion for a judgment of acquittal after the end of the presentation of the governments case at trial. Essentially, the Court found the evidence legally insufficient to have a jury consider it. The transcript of that decision can be found here. We previously blogged about the Stevens prosecution here and here.

What is notable about the Courts decision to acquit Ms. Stevens is not only the rarity of such acquittals before a jury gets to deliberate, but what the Court stated about the importance of the attorney-client privilege. Ms. Stevens was prosecuted for conduct during the course of her work responding to an FDA investigation as an in-house lawyer for a major pharmaceutical company. The Court found that many of the documents used as evidence by the government should never have been provided to it under the attorney-client privilege. Those documents were provided by GlaxoSmithKline under an exception to the attorney-client privilege involving cases where a lawyer is retained specifically to assist a client to commit a crime or a fraud. The Court found that Ms. Stevens was never retained or appointed for that purpose, but to provide representation to the corporation and to gather information. Therefore, the exception to the attorney-client privilege was inapplicable, and the government should never have had access to otherwise privileged documentation.

The Court also expressed a concern regarding possible abuses in permitting the prosecution of a lawyer for providing legal guidance. The Court stated that it had sentenced a number of lawyers who actually committed crimes or assisted others in committing crimes. This was not one of those cases. The Court stated that lawyers, “should never fear prosecution because of the advice that he or she has given to a client”, and that “a client should never fear that its confidences will be divulged unless its purpose in consulting the lawyer was for the purpose of committing a crime or a fraud”. This decision is important to businesses and individuals alike, in that it reaffirms that the government cannot invade the space between a lawyer and his or her client except under very narrow circumstances, none of which were applicable in the case of Ms. Stevens.

The Court also clearly rejected the governments theory of prosecution”that Ms. Stevens acted to obstruct justice. Instead, the Court reviewed Ms. Stevens conduct in zealously representing her client and placed it in the most favorable light in the investigation. Also, the Court found that the allegedly false statements to the FDA attributed to Ms. Stevens were taken out of context and were made under the advice of numerous lawyers for the company. The Court stated that “only with a jaundiced eye and with an inference of guilt thats inconsistent with the presumption of innocence could a reasonable jury ever convict this defendant”.

The government, including the FDA, has made it a priority to prosecute not just corporations, but also individuals in regard to the commission of strict liability criminal violations of regulatory laws. These so-called “Park” prosecutions have been discussed in our blogs here and here. The Stevens prosecution was not a “Park” prosecution because it alleged intentional, willful conduct, but it highlights the governments goal of prosecuting and convicting more individuals, not just companies, of criminal violations of regulatory laws. Our White Collar Criminal Practice group continues to monitor these cases in our effort to keep our clients informed and out of harms way.

Second Patient Receives Embryonic Stem Cell Treatment in Gerons Clinical Trial

Geron Corp. has announced, as part of its landmark Phase I clinical trial, that a second patient has received an embryonic stem cell injection. The patient, who recently suffered a severe spinal cord injury, received the injection at Northwestern Memorial Hospital and will undergo rehabilitation at the Rehabilitation Institute of Chicago. In August, 2010, we reported that the U.S. Food and Drug Administration (FDA) announced the “go ahead” for the worlds first authorized human trial of an embryonic stem cell treatment.

The purpose of the trial is to establish the safety of the embryonic stem cells, in addition to establishing that the cells will effectively travel to the site of a recent spinal cord injury and help restore the damaged nerves. The team will look to see if the stem cells improve the patients control or sensation in the trunk or legs.

The first patient to undergo the procedure, over six months ago, has not had any serious side effects. However, it is still too early to determine whether the patients control or sensation has improved.

Court Dismisses Mylan Pharmaceuticals Lawsuit Over Lipitor Generic ANDAs On Standing and Ripeness Grounds

On May, 2, 2011, the United States District Court for the District of Columbia granted the FDAs Motion to Dismiss a lawsuit brought by Mylan Pharmaceuticals (“Mylan”) seeking injunctive and declaratory relief for alleged violations of the Administrative Procedure Act (“APA”) by the FDA in the approval process of several Abbreviated New Drug Applications (“ANDA”) for the brand-name drug Lipitor. A copy of the Courts decision can be read here.

The decision contains a helpful and educational summary of the FDA approval process for generic drugs. As explained within the opinion, once a brand-name or “pioneer drug” has received approval, manufacturers of generic versions of these drugs may seek approval of the FDA to market their generic versions by filing an ANDA.

Within the ANDA, a generic drug manufacturer must demonstrate that the generic is the “bioequivalent” of the pioneer drug, i.e. the new generic drug can be expected to have the same therapeutic effect as the pioneer drug when administered to patients. Additionally, for each “Orange Book” patent of the pioneer drug that is implicated by the generic drug, the generic manufacturer must certify as to whether the proposed generic would infringe on that patent. If an ANDA applicant seeks to market its generic drug prior to the expiration of the patents for the brand name drug, it must make a “paragraph IV” certification stating “such patent is invalid or will not be infringed by the manufacture, use, or sale, of the new drug. . . .” 21 U.S.C. § 355(j)(2(A)(vii)(IV).

However, once a generic drug manufacturer has filed an ANDA with a paragraph IV certification, it has by law infringed on the underlying patents and the brand-name drug manufacturer may bring a patent infringement suit. As a result, challenging patents can be costly for generic manufacturers. To encourage the production of generic drugs, federal law provides the first generic drug manufacturer who files an ANDA containing a paragraph IV certification, whose ANDA is ultimately approved by the FDA, a 180 day exclusivity period in which it may manufacture its generic version free from competition from other generic manufacturers. 21 U.S.C. § 355(j)(5)(B)(iv).

The Mylan case stems from competing ANDAs for the production of a generic equivalent of Lipitor. Plaintiff, Mylan Pharmaceuticals, through its subsidiary Matrix labs, filed an ANDA for its generic of Lipitor two years ago and, at the time of the suit, the FDA was still evaluating its application for approval. Mylan argued that its generic should be eligible for approval and marketing by June 28, 2011 when the exclusivity on Lipitor patents begin to expire.
In this case, Mylan also alleged that a competitor, Ranbaxy Laboratories, Ltd. (“Ranbaxy”), whose own ANDA for a generic equivalent of Lipitor was filed nine years prior to the suit, was the first generic manufacturer to file an ANDA with a paragraph IV certification for Lipitor, therefore making Ranbaxy eligible for the 180 exclusivity period should its product become approved. Mylan further alleged that Lipitors manufacturer Pfizer and Ranbaxy reached a patent infringement settlement that prohibits the production of a generic equivalent by Ranbaxy until November 2011.

As a result of this settlement, and the additional 180 exclusivity period that Ranbaxy would be entitled to should its ANDA be approved, Mylan would be unable to market is product until May 2012. Mylan further argued that Ranbaxy should be stripped of its 180 day exclusivity period for violations of the FDA application integrity policy (“AIP”). The AIP was developed by the FDA to ensure validity of data submissions called into question by the agency’s discovery of wrongful acts such as fraud, untrue statements of material fact, bribery, and illegal gratuities and to withdraw approval of, or refuse to approve, applications containing fraudulent data. More information on the FDAs AIP can be found on the FDAs website here.

The case addressed whether drug manufacturers can sue the FDA and force the agency to take action on pending ANDAs filed by their competitors. Mylan brought its action against the FDA alleging two counts: 1) the FDA violated the APA by unreasonably or unlawfully delaying a determination that Ranbaxy violated the integrity policy; and 2) the FDAs failure to approve Mylans ANDA on the basis of Ranbaxys 180 exclusivity violated the APA because it is arbitrary and capricious. In response, the FDA Filed a Motion to Dismiss for lack of subject matter jurisdiction.

In rejecting Mylans arguments and granting the FDAs Motion to Dismiss, the Court focused on standing and ripeness, two basic requirements lawsuits. Put simply, standing is the right of a person to bring a case. In order to establish standing, a plaintiff must demonstrate: 1) that it has suffered an injury in fact, which is an actual or imminent invasion of a legally protected, concrete and particularized injury; 2) causation, i.e. the alleged injury must have been caused by the defendants conduct at issue; and 3) redressability, i.e. the court can provide a remedy to rectify the injury. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561 (1992).

In determining that Mylan lacked standing, the Court found that because Mylans ANDA had yet to be approved it faced no imminent injury from the FDAs possible approval Ranbaxys ANDA and 180 day exclusivity period. Further, the Court found that no case within the D.C. Circuit has ever granted standing to a drug manufacturer who was a subsequent ANDA filer and who has not yet received FDA approval to compel the FDA to take action on a competitors ANDA.

Additionally, the Court went on to find that even if Mylan could assert an imminent injury, it still lacked standing because its injury could not be redressed by the relief it requested. As stated above, Mylans own ANDA has not yet been approved by the FDA. Therefore, even if the Court granted the relief Mylan requested, denying Ranbaxys ANDA and extinguishing its 180 day exclusivity period, Mylan could be no more certain that its own generic could begin being marketed in June 2011.

The Court went on to hold that even if Mylan could establish standing to sue the FDA, the case must still be dismissed because it was not ripe. The ripeness concept is closely related to the idea of standing to sue. In order to determine whether a controversy is ripe, the court must “evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.” Texas v. United States, 523 U.S. 296, 301 (1998).

Here, the Court found that the case was not ripe for two reasons. First, because Mylans own ANDA had not yet received approval from the FDA, factual uncertainty remained. As stated by the Court, “a claim is not ripe for adjudication if it rests upon contingent future events that may not occur as anticipated.” Further, the Court found that because the FDA has not yet acted, there was no final agency action, which is a required element for review under the APA. Finally, the Court found that any hardship Mylan might suffer by a delayed exclusivity determination was hypothetical because Mylans ANDA has not yet been approved. However, the Court did note that “nothing prevents Mylan from seeking judicial recourse if and when the FDA renders a final exclusivity decision that is not to Mylans liking.”

This decision places Mylan in a very difficult position. We will monitor this case as it makes its way to the D.C. Circuit Court of Appeals and will report when and if this decision is upheld on appeal. For more information regarding the ANDA generic drug approval process or for any questions regarding how your company can maintain FDA regulatory compliance, please contact us at contact@fidjlaw.com.