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					         Case 1:10-cv-01529-PLF Document 13               Filed 11/12/10 Page 1 of 37



                            UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

                                                         )
 VIROPHARMA INCORPORATED,                                )
                                                         )
         Plaintiff,                                      )
                                                         )
                 v.                                      ) No. 10-1529 (PLF)
                                                         )
 MARGARET A. HAMBURG, M.D.,                              )
 in her official capacity as Commissioner,               )
 Food and Drug Administration, et al.,                   )
                                                         )
         Defendants.                                     )
                                                         )

                                     MOTION TO DISMISS

       Defendants, the United States Food and Drug Administration, Margaret A. Hamburg,

M.D., in her official capacity as Commissioner of Food and Drugs, the United States Department

of Health and Human Services, and Kathleen Sebelius, in her official capacity as Secretary,

Department of Health and Human Services, respectfully move to dismiss this case pursuant to

Rules 12(b)(1) and (6) of the Federal Rules of Civil Procedure based upon lack of subject matter

jurisdiction and failure to state a claim upon which relief can be granted.

       The grounds for this motion are fully set forth in the accompanying Memorandum in

Support of Defendants’ Motion to Dismiss filed herewith.
        Case 1:10-cv-01529-PLF Document 13          Filed 11/12/10 Page 2 of 37



Of Counsel:                                         Respectfully submitted,

MARK B. CHILDRESS                                   TONY WEST
Acting General Counsel                              Assistant Attorney General

RALPH S. TYLER                                      EUGENE M. THIROLF
Associate General Counsel, Food and Drug Division   Director, Office of Consumer Litigation

ERIC M. BLUMBERG                                             /s/
Deputy Chief Counsel, Litigation                    ANDREW E. CLARK
                                                    Senior Litigation Counsel
MICHAEL K. STERN                                    Office of Consumer Litigation
Associate Chief Counsel                             U.S. Department of Justice
                                                    P.O. Box 386
U.S. Department of Health & Human Services          Washington, DC 20044
Office of the General Counsel                       Tel: (202) 307-0067
White Oak 31 Room 4525                              Fax: (202) 514-8742
10903 New Hampshire Avenue                          andrew.clark@usdoj.gov
Silver Spring, MD 20993-0002
(301) 796-8598

Dated: November 12, 2010




                                             2
        Case 1:10-cv-01529-PLF Document 13          Filed 11/12/10 Page 3 of 37



                           UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLUMBIA

                                                    )
 VIROPHARMA INCORPORATED,                           )
                                                    )
        Plaintiff,                                  )
                                                    )
                v.                                  ) No. 10-1529 (PLF)
                                                    )
 MARGARET A. HAMBURG, M.D.,                         )
 in her official capacity as Commissioner,          )
 Food and Drug Administration, et al.,              )
                                                    )
        Defendants.                                 )
                                                    )


      MEMORANDUM IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS




Of Counsel:                                          TONY WEST
                                                     Assistant Attorney General
MARK B. CHILDRESS
Acting General Counsel                               EUGENE M. THIROLF
                                                     Director, Office of Consumer Litigation
RALPH S. TYLER
Associate General Counsel, Food and Drug Division    ANDREW E. CLARK
                                                     Senior Litigation Counsel
ERIC M. BLUMBERG                                     Office of Consumer Litigation
Deputy Chief Counsel, Litigation                     U.S. Department of Justice
                                                     P.O. Box 386
MICHAEL K. STERN                                     Washington, DC 20044
Associate Chief Counsel                              Tel: (202) 307-0067
                                                     Fax: (202) 514-8742
U.S. Department of Health & Human Services           andrew.clark@usdoj.gov
Office of the General Counsel
White Oak 31 Room 4525
10903 New Hampshire Avenue
Silver Spring, MD 20993-0002
(301) 796-8598

Dated: November 12, 2010
            Case 1:10-cv-01529-PLF Document 13                                     Filed 11/12/10 Page 4 of 37



                                                   TABLE OF CONTENTS

                                                                                                                                     Page(s)

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

I.        Statutory and Regulatory Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

II.       Factual and Procedural Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

          A.         FDA recommended in vitro bioequivalence tests for acarbose
                     under limited circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

          B.         FDA has not finalized the recommended bioequivalence methodology for
                     vancomycin hydrochloride.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

          C.         FDA has not approved an ANDA for vancomycin hydrochloride
                     capsules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

          D.         Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

I.        The Court lacks subject-matter jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

          A.         ViroPharma lacks standing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

          B.         ViroPharma’s claims are not ripe.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

II.       ViroPharma fails to state a claim upon which relief can be granted. . . . . . . . . . . . . . . . . 19

          A.         Legal standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

          B.         Notice-and-comment rulemaking was not required before FDA
                     could issue an interpretive rule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

          C.         FDA correctly interpreted 21 C.F.R. § 320.24.. . . . . . . . . . . . . . . . . . . . . . . . . . . 24

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28


                                                                       i
            Case 1:10-cv-01529-PLF Document 13                                 Filed 11/12/10 Page 5 of 37




                                              TABLE OF AUTHORITIES

                                                     FEDERAL CASES


                                                                                                                              Page(s)
Abbott Laboratories v. Gardner,
   387 U.S. 136 (1967)................................................................................................... 16, 17, 19

*Air Transport Association of America, Inc. v. FAA ("ATA"),
   291 F.3d 49 (D.C. Cir. 2002). .................................................................................... 20, 22, 27

Alaska Professional Hunters Association v. FAA,
   177 F.3d 1030 (D.C. Cir. 1999). ............................................................................................ 22

*American Mining Congress v. Mine Safety & Health Administration,
   995 F.2d 1106 (D.C. Cir. 1993). ...................................................................................... 21, 23

Astellas Pharma US, Inc. v. FDA,
    642 F. Supp. 2d 10 (D.D.C. 2009). ........................................................................................ 25

Bell Atlantic Corp. v. Twombly,
    550 U.S. 544 (2007)............................................................................................................... 20

*Bristol-Myers Squibb Co. v. Shalala (“BMS”),
   923 F. Supp. 212 (D.D.C. 1996). ........................................................................... 1, 23, 24, 26

Conley v. Gibson,
   355 U.S. 41 (1957)............................................................................................................ 19-20

Devia v. NRC,
   492 F.3d 421 (D.C. Cir. 2007). ........................................................................................ 18, 19

Fisons v. Shalala,
   860 F. Supp. 859 (D.D.C. 1994). ........................................................................................... 25

Florida Audubon Society v. Bentsen,
   94 F.3d 658 (D.C. Cir. 1996). ................................................................................................ 14

Haase v. Sessions,
   835 F.2d 902 (D.C. Cir. 1987). .............................................................................................. 11


                      *Authorities upon which we chiefly rely are marked with asterisks

                                                                   ii
            Case 1:10-cv-01529-PLF Document 13                                 Filed 11/12/10 Page 6 of 37



Lewis v. Continental Bank Corp.,
   494 U.S. 472 (1990)............................................................................................................... 14

Lujan v. Defenders of Wildlife,
   504 U.S. 555 (1992)............................................................................................................... 14

Meijer, Inc. v. Biovail Corp.,
   533 F.3d 857 (D.C. Cir. 2008). ................................................................................................ 6

MetWest, Inc. v. Secretary of Labor,
   560 F.3d 506 (D.C. Cir. 2009). .............................................................................................. 22

National Association of Home Builders v. Defenders of Wildlife,
   551 U.S. 644 (2007)............................................................................................................... 27

*Northwest Airlines, Inc. v. FAA,
   795 F.2d 195 (D.C. Cir. 1986). ........................................................................................ 14, 17

*Ohio Forestry Association v. Sierra Club,
   523 U.S. 726 (1998)......................................................................................................... 18, 19

Orengo Caraballo v. Reich,
   11 F.3d 186 (D.C. Cir. 1993). ................................................................................................ 21

*Pfizer v. Shalala,
   182 F.3d 975 (D.C. Cir. 1999). ........................................................................................ 15, 19

Shalala v. Guernsey Memorial Hospital,
   514 U.S. 87 (1995)................................................................................................................. 22

Somerset Pharmaceuticals Inc. v. Shalala,
   973 F. Supp. 443 (D. Del. 1997)............................................................................................ 25

Summers v. Earth Island Institute,
   129 S. Ct. 1142 (2009)..................................................................................................... 14, 15

Teva Pharmaceuticals USA, Inc. v. Sebelius,
   595 F.3d 1303 (D.C. Cir. 2010). ............................................................................................ 16

Thomas Jefferson University v. Shalala,
   512 U.S. 504 (1994)............................................................................................................... 20

United States v. Students Challenging Regulatory Agency Procedures (“SCRAP”),
   412 U.S. 669 (1973)............................................................................................................... 14


                                                                   iii
             Case 1:10-cv-01529-PLF Document 13                                   Filed 11/12/10 Page 7 of 37



Whitmore. v. Arkansas,
   495 U.S. 149 (1990)............................................................................................................... 14


                                                    FEDERAL STATUTES

5 U.S.C. § 553 ............................................................................................................................. 20

5 U.S.C. § 553(b)(A) ............................................................................................................. 21, 23

5 U.S.C. § 704 ............................................................................................................................. 16

5 U.S.C. § 706(2)(A).................................................................................................................... 20

21 U.S.C. § 301 et seq.................................................................................................................... 2

21 U.S.C. § 355(b)(1). ................................................................................................................... 2

21 U.S.C. § 355(j)(2)(A) ................................................................................................................ 2

21 U.S.C. § 355(j)(2)(A)(iv) . ................................................................................................... 3, 22

21 U.S.C. § 355(j)(4)(F) . ......................................................................................................... 3, 22

21 U.S.C. § 355(j)(8)(B) . .............................................................................................................. 3

21 U.S.C. § 355(j)(8)(B)(ii) . ......................................................................................................... 3

*21 U.S.C. § 355(j)(8)(C) . .................................................................................................. 3, 9, 24


                                                FEDERAL REGULATIONS

21 C.F.R. § 10.30(d). ............................................................................................................... 8, 20

21 C.F.R. § 320.1(e)....................................................................................................................... 3

21 C.F.R. § 320.20 . ...................................................................................................................... 22

21 C.F.R. § 320.21. ........................................................................................................................ 4

21 C.F.R. § 320.21(b). ................................................................................................................... 5

21 C.F.R. § 320.21(f). .................................................................................................................... 5


                                                                      iv
            Case 1:10-cv-01529-PLF Document 13                                  Filed 11/12/10 Page 8 of 37



21 C.F.R. § 320.22. ............................................................................................................... passim

21 C.F.R. § 320.22(d)(3) .............................................................................................................. 26

21 C.F.R. § 320.22(e)........................................................................................................... 5, 9, 24

*21 C.F.R. § 320.24. ............................................................................................................. passim

21 C.F.R. § 320.24(a)............................................................................................................ passim

21 C.F.R. § 320.24(b). ............................................................................................................... 4, 5

21 C.F.R. § 320.24(b)(5)................................................................................................................ 4

21 C.F.R. § 320.24(b)(6)................................................................................................................ 4


                                                      FEDERAL RULES

Fed. R. Civ. P. 12(b)(1)......................................................................................................... passim

Fed. R. Civ. P. 12(b)(6) ........................................................................................................ passim




                                                                    v
         Case 1:10-cv-01529-PLF Document 13                 Filed 11/12/10 Page 9 of 37



                                         INTRODUCTION

        Fourteen years ago, Judge Urbina of this Court endorsed the Food and Drug

Administration’s (“FDA’s”) interpretation of a regulation governing the approval of generic

drugs. As the Court recognized in 1996, the regulation accords FDA broad discretion to accept

any approach it deems adequate to establish the “bioequivalence” of a generic drug, whether in

vivo (i.e., human) tests, in vitro (i.e., laboratory) tests, or both. 21 C.F.R. § 320.24; see Bristol-

Myers Squibb Co. v. Shalala (“BMS”), 923 F. Supp. 212, 217 (D.D.C. 1996). Now, ViroPharma

Incorporated (“ViroPharma”) seeks to undo that decision – and overturn FDA’s longstanding

interpretation of its regulation – in order to avoid facing generic competition.

        Because FDA has not approved any generic version of ViroPharma’s product, Vancocin

(vancomycin hydrochloride), ViroPharma is not currently facing any generic competition. But in

a preemptive bid to forestall the approval of future generic competitors, ViroPharma seeks to

challenge FDA’s 2008 response to a citizen petition concerning a different drug (acarbose) made

by a different company, in which the agency set forth the very interpretation that the Court

upheld in 1996. ViroPharma questions both the procedural validity and substantive correctness

of that interpretation – alleging that FDA should have promulgated its interpretation through

notice-and-comment rulemaking, and seeking inter alia a declaration that the interpretation is

contrary to the plain language of the regulations. Notably, ViroPharma does not allege that FDA

acted beyond its statutory authority. Nor does ViroPharma challenge the scientific merit of

FDA’s decision in the 2008 petition response to accept, under certain circumstances, in vitro

bioequivalence tests for generic acarbose.

        Because ViroPharma lacks standing to challenge FDA’s two-year-old response to another

company’s citizen petition, its complaint should be dismissed for lack of subject matter
           Case 1:10-cv-01529-PLF Document 13            Filed 11/12/10 Page 10 of 37



jurisdiction. Indeed, ViroPharma asks the Court to assume the occurrence of at least two

uncertain events in order to conclude that the interpretation expressed by FDA in that petition

response will cause ViroPharma actual injury. In addition, this dispute is unripe because FDA’s

interpretation has not yet been applied to a generic version of ViroPharma’s product.

ViroPharma also fails to state a claim because FDA’s interpretation of the regulation is correct as

a matter of law (as the Court previously recognized), and because an interpretive rule is exempt

from notice-and-comment rulemaking. Accordingly, ViroPharma’s complaint should be

dismissed under Fed. R. Civ. P. 12(b)(1) for lack of subject-matter jurisdiction, or, in the

alternative, under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be

granted.

                                         BACKGROUND

I.     Statutory and Regulatory Background

       Under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq. (“FDCA” or

“the Act”), a “pioneer” or “innovator” drug may not be marketed until FDA approves a new drug

application (“NDA”) that includes, among other things, reports from clinical studies that

establish the drug’s safety and effectiveness. 21 U.S.C. § 355(b)(1). An applicant may obtain

FDA approval of a generic version of a pioneer drug through an abbreviated new drug

application (“ANDA”) that relies upon FDA’s prior determination of safety and effectiveness for

the pioneer drug, and thus need not include all of the required information and data in an NDA.

Among other requirements, an ANDA must include information showing that the generic drug is

the same as the pioneer, or “reference listed drug,” in several specified ways. 21 U.S.C.

§ 355(j)(2)(A).


                                                 2
        Case 1:10-cv-01529-PLF Document 13                Filed 11/12/10 Page 11 of 37



       Of particular relevance here, an ANDA must include “information to show that the new

drug is bioequivalent to the listed drug . . . .” 21 U.S.C. § 355(j)(2)(A)(iv); see also 21 U.S.C.

§ 355(j)(4)(F). Bioequivalence is established where the rate and extent of absorption of the

proposed generic drug are not significantly different from the rate and extent of absorption of the

reference listed drug. 21 U.S.C. § 355(j)(8)(B).1, 2 The Act provides that where, as here, “a drug

. . . is not intended to be absorbed into the bloodstream, the Secretary may establish alternative,

scientifically valid methods to show bioequivalence if the alternative methods are expected to

detect a significant difference between the drug and the listed drug in safety and therapeutic

effect.” 21 U.S.C. § 355(j)(8)(C).



       1
         If there is a difference in the rate of absorption, bioequivalence may be satisfied where
such difference “is intentional, is reflected in [the drug’s] proposed labeling, is not essential to
the attainment of effective body drug concentrations on chronic use, and is considered medically
insignificant for the drug.” 21 U.S.C. § 355(j)(8)(B)(ii).
       2
           The FDA regulation implementing this statutory provision defines “bioequivalence” as
follows:

       [T]he absence of a significant difference in the rate and extent to which the active
       ingredient or active moiety in pharmaceutical equivalents or pharmaceutical
       alternatives becomes available at the site of drug action when administered at the
       same molar dose under similar conditions in an appropriately designed study.
       Where there is an intentional difference in rate (e.g., in certain extended release
       dosage forms), certain pharmaceutical equivalents or alternatives may be
       considered bioequivalent if there is no significant difference in the extent to which
       the active ingredient or moiety from each product becomes available at the site of
       drug action. This applies only if the difference in the rate at which the active
       ingredient or moiety becomes available at the site of drug action is intentional and
       is reflected in the proposed labeling, is not essential to the attainment of effective
       body drug concentrations on chronic use, and is considered medically
       insignificant for the drug.

21 C.F.R. § 320.1(e).


                                                  3
        Case 1:10-cv-01529-PLF Document 13                 Filed 11/12/10 Page 12 of 37



        The Act does not prescribe the precise methodology that an applicant must use to

establish bioequivalence. Accordingly, FDA retains broad discretion to make that determination,

as set forth in the governing regulation: “[B]ioequivalence may be demonstrated by several in

vivo [i.e. through human studies] and in vitro [i.e. laboratory] methods. FDA may require in

vivo or in vitro testing, or both, to . . . establish the bioequivalence of specific drug products.” 21

C.F.R. § 320.24(a) (emphasis added).3 The regulation further explains that “[t]he selection of the

method used to meet an in vivo or in vitro testing requirement depends upon the purpose of the

study, the analytical methods available, and the nature of the drug product.” Id.

        Subsection 320.24(b) sets forth several “in vivo and in vitro approaches, in descending

order of accuracy, sensitivity, and reproducibility, [that] are acceptable for determining the . . .

bioequivalence of a drug product.” 21 C.F.R. § 320.24(b). Those approaches include “[a]

currently available in vitro test acceptable to FDA (usually a dissolution rate test) that ensures

human in vivo bioavailability.” 21 C.F.R. § 320.24(b)(5). The list of acceptable approaches also

includes “[a]ny other approach deemed adequate by FDA to . . . establish bioequivalence.” 21

C.F.R. § 320.24(b)(6).

        FDA thus has discretion to require in vivo bioequivalence testing, in vitro testing, or both.

An applicant may seek a waiver of any requirement of in vivo testing pursuant to a procedure set

forth in Sections 320.21 and 320.22 of the agency’s regulations.

        Section 320.21 requires that an ANDA include either: (1) evidence demonstrating

bioequivalence, or (2) information to support a request that FDA waive any requirement of in

vivo testing:


        3
            Copies of 21 C.F.R. §§ 320.21, 320.22, and 320.24 are attached hereto as Exhibit 1.

                                                   4
        Case 1:10-cv-01529-PLF Document 13                 Filed 11/12/10 Page 13 of 37



               Any person submitting an abbreviated new drug application to
               FDA shall include in the application either:
               (1) Evidence demonstrating that the drug product that is the subject
               of the abbreviated new drug application is bioequivalent to the
               reference listed drug . . . or
               (2) Information to show that the drug product is bioequivalent to
               the reference listed drug which would permit FDA to waive the
               submission of evidence demonstrating in vivo bioequivalence as
               provided in paragraph (f) of this section.

21 C.F.R. § 320.21(b).4

       If an ANDA sponsor seeks to waive a requirement for in vivo testing, Section 320.21(f)

requires that the information submitted in support of that waiver request “shall meet the criteria

set forth in § 320.22.” 21 C.F.R. § 320.21(f).

       Section 320.22, in turn, provides that upon a sponsor’s request, FDA shall waive the

requirement for the submission of evidence of in vivo bioequivalence under three specified

circumstances set forth in subparagraphs (b) through (d), none of which is relevant here. Section

320.22(e) sets forth one additional circumstance under which FDA may waive a requirement for

in vivo bioequivalence tests:

               (e)       FDA, for good cause, may waive a requirement for the
                         submission of evidence of in vivo . . . bioequivalence if
                         waiver is compatible with the protection of the public
                         health . . . .

21 C.F.R. § 320.22(e).

       FDA develops recommendations for the appropriate methodology to use in demonstrating


       4
         This regulation does not expressly require in vivo testing in the absence of a waiver.
Unless FDA requires otherwise, 21 C.F.R. § 320.24(a) requires applicants to
“conduct . . . bioequivalence testing using the most accurate, sensitive, and reproducible
approach available among those set forth in” Section 320.24(b). Section 320.24(b), in turn, sets
forth several “in vivo and in vitro approaches, in descending order of accuracy, sensitivity, and
reproducibility,” starting with one type of in vivo test. 21 C.F.R. § 320.24(b).

                                                   5
           Case 1:10-cv-01529-PLF Document 13              Filed 11/12/10 Page 14 of 37



bioequivalence for certain specific products. Previously, FDA distributed such recommendations

directly to parties who requested them from the agency. See Guidance for Industry:

Bioequivalence Recommendations for Specific Products (“Final Process Guidance”), at 2 (cited

by Complaint ¶¶ 61-62) (attached hereto as Exhibit 2).5

        In May 2007, FDA issued a draft guidance proposing a new procedure for announcing

bioequivalence recommendations for certain specific products. See Draft Guidance for Industry:

Bioequivalence Recommendations for Specific Products (attached hereto as Exhibit 3).6 FDA

adopted the new procedure at that time, pending the issuance of the final process guidance in

June 2010. See Ex. 2, Final Process Guidance. Under the new procedure, FDA makes such draft

and final product-specific bioequivalence recommendations available on the Internet, and

publishes a notice in the Federal Register announcing the availability of such recommendations.

Id. at 3. A Federal Register notice for a draft bioequivalence recommendation specifies a period

for public comment. Id. FDA considers public comments in developing its final bioequivalence

recommendations. Id.




        5
            Available at:
http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/ucm072872.pdf.
On a motion to dismiss under Rule 12(b)(6), the Court may consider, in addition to the
allegations in the complaint, “‘matters incorporated by reference or integral to the claim, items
subject to judicial notice, matters of public record, orders, items appearing in the record of the
case, and exhibits attached to the complaint whose authenticity is unquestioned . . . without
converting the motion into one for summary judgment.’” Meijer, Inc. v. Biovail Corp., 533 F.3d
857, 867 (unnumbered footnote) (D.C. Cir. 2008) (quoting 5B Charles Alan Wright et al.,
Federal Practice and Procedure § 1357).
       6
            Available at http://www.regulations.gov (document number FDA-2007-D-0369-0015).

                                                   6
        Case 1:10-cv-01529-PLF Document 13                Filed 11/12/10 Page 15 of 37



II.     Factual and Procedural Background

        A.     FDA recommended in vitro bioequivalence tests for acarbose under limited
               circumstances

        In November 2007, counsel for Cobalt Laboratories Inc. and Cobalt Pharmaceuticals Inc.

(collectively, “Cobalt”) submitted to FDA a citizen petition (“CP”) and petition for stay of action

(“PSA”) regarding the bioequivalence requirements for generic versions of Precose (acarbose).

Complaint Ex. 2 (“CP Response”), at 1. At the time, acarbose was approved to lower blood

glucose in patients with type 2 diabetes mellitus, either as an adjunct to diet where diet alone was

insufficient to manage blood glucose levels, or in conjunction with certain other drugs. Id.

ViroPharma’s product, Vancocin (vancomycin hydrochloride), was not at issue in Cobalt’s

petitions.

        In its citizen petition, Cobalt asked FDA to (1) require all ANDAs for generic acarbose to

include in vivo bioequivalence evidence, (2) refrain from granting any in vivo bioequivalence

waiver for generic acarbose, and (3) require that the results of such in vivo studies sufficiently

establish bioequivalence. Complaint Ex. 1 (CP), at 2. Cobalt’s petition for stay of action

requested that FDA stay approval of any ANDA for generic acarbose tablets unless and until

such ANDA contains sufficient evidence and data from in vivo bioequivalence testing. See CP

Response, at 1.

        Cobalt argued that FDA could not waive a requirement for in vivo bioequivalence testing

under either FDA’s waiver regulations or an August 2000 FDA guidance document that

discusses the availability of a waiver for specific drug categories defined under a

Biopharmaceutics Classification System (“BCS”). CP at 3-9; see Guidance for Industry: Waiver



                                                  7
        Case 1:10-cv-01529-PLF Document 13                 Filed 11/12/10 Page 16 of 37



of In Vivo Bioavailability and Bioequivalence Studies for Immediate-Release Solid Oral Dosage

Forms Based on a Biopharmaceutics Classification System (attached hereto as Exhibit 4).7 Such

a waiver was unavailable under FDA’s waiver regulation, 21 C.F.R. § 320.22, Cobalt argued, in

the absence of three of the four potential circumstances under which the regulation authorized a

waiver. CP at 3-4. Cobalt further argued that acarbose’s properties (specifically, its low

permeability and potentially high solubility), made it a “Class 3” drug under the BCS, and thus

ineligible for a waiver of the requirement of in vivo bioequivalence evidence for acarbose, under

FDA’s guidance document. Id. at 8-9.

        In accordance with FDA’s citizen petition procedure, see 21 C.F.R. § 10.30(d), the

agency made Cobalt’s petitions available for review and comment by the public, but received no

comments (including none from ViroPharma). See Docket Number FDA-2007-P-0418

(available at http://www.regulations.gov). FDA responded to Cobalt’s petitions on May 7, 2008.

FDA explained that “[t]he statute, regulations, and case law give FDA and ANDA applicants

considerable flexibility in determining how [the] requirement for establishing bioequivalence can

be met.” CP Response, at 3. The agency further explained:

                  The regulations similarly make clear that although in vivo studies
                  may be the preferred method to demonstrate bioequivalence in
                  many cases, it is not the only permissible method. On the contrary,
                  under the regulations, “bioequivalence may be demonstrated by
                  several in vivo and in vitro methods” . . . Similarly, the waiver
                  provisions of the regulations provide that waivers of in vivo
                  bioequivalence may be given in many specific situations and, even




        7
            Available at
http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/ucm070246.pdf.

                                                   8
        Case 1:10-cv-01529-PLF Document 13               Filed 11/12/10 Page 17 of 37



               if none of those situations are present, in vivo bioequivalence may
               be waived “for good cause . . . if waiver is compatible with the
               protection of the public health.”

CP Response, at 4 (quoting 21 C.F.R. § 320.24(a) and 21 C.F.R. § 320.22(e)).

       FDA disagreed with Cobalt’s assertion that the agency could accept in vitro studies only

pursuant to the BCS Guidance or where certain waiver criteria were present. FDA reasoned that

the BCS Guidance does not address the bioequivalence criteria for drugs, like acarbose, that do

not act systemically (i.e. following absorption into the bloodstream). Id. at 6. FDA further

reasoned that “[u]nder section 355(j)(8)(C) of the Act and § 320.24 of the regulations, FDA has

the discretion to accept in vitro studies for a nonsystemically absorbed drug product such as

acarbose when such studies are determined to be a scientifically valid method of determining

bioequivalence.” Id. In a footnote, FDA explained that “[e]ven if a waiver of in vivo

bioequivalence is required before we can accept in vitro studies, as described in section II.B of

this response, for certain acarbose drug products such a waiver is compatible with the public

health under 21 C.F.R. § 320.22(e) and therefore permissible and appropriate.” Id. at 6 n.21.

       FDA concluded that in vitro testing is an appropriate means to demonstrate

bioequivalence for generic acarbose where the ANDA product is qualitatively and quantitatively

the same as the reference listed drug (“RLD”) with respect to active and inactive ingredients –

conditions that the agency described as Q1 (qualitative sameness) and Q2 (quantitative sameness).

Id. at 7. FDA cited the following factors for its conclusion:

               •       Acarbose is poorly absorbed with systemic bioavailability
                       of less than 2 percent, and it acts locally in the GI tract.
                       This low permeability assures minimal loss of
                       bioavailability due to absorption.
               •       The rate and extent of drug release to the site of action is


                                                 9
            Case 1:10-cv-01529-PLF Document 13           Filed 11/12/10 Page 18 of 37



                       affected by the in vivo dissolution of the acarbose tablets,
                       in addition to gastric emptying and GI motility.
                 •     High solubility and relatively fast dissolution ensure that
                       this product forms a solution and stays in solution, before it
                       reaches the site of action (small intestine). Therefore, once
                       dissolved, local distribution of acarbose in the GI tract
                       should be similar for a test (generic) product and the RLD.

Id. at 7.

        FDA recommended an in vivo study where an ANDA product is not qualitatively and

quantitatively identical to the RLD in terms of active and inactive ingredients, because in vitro

dissolution testing would not be adequate to ensure the absence of any unique interaction

between a different excipient, i.e. inactive ingredient (or different amount of an excipient), and

the mechanism of action of the active ingredient. Id. at 8.

        In the agency’s response to Cobalt’s petitions, FDA denied Cobalt’s requests that (1) all

ANDAs for generic acarbose be required to include the results of in vivo bioequivalence tests,

and (2) FDA not grant any in vivo bioequivalence waivers for ANDAs for generic acarbose. Id.

at 10-11. Because FDA concluded that in vivo bioequivalence tests would be required for

generic acarbose products that are not qualitatively and quantitatively identical to the RLD in

terms of active and inactive ingredients, FDA granted in part Cobalt’s request that ANDA

applicants conduct in vivo bioequivalence tests. Id. at 11. FDA denied Cobalt’s petition for a

stay of action because Cobalt failed to make the necessary showing that sound public policy

grounds supported a stay and delay was not outweighed by public health or other public interests.

Id.

        On the day that FDA responded to Cobalt’s petitions, the agency approved two ANDAs

for generic versions of acarbose. Id. at 1 n.2.


                                                  10
        Case 1:10-cv-01529-PLF Document 13                  Filed 11/12/10 Page 19 of 37



       B.        FDA has not finalized the recommended bioequivalence methodology for
                 vancomycin hydrochloride

       Unlike FDA’s bioequivalence recommendations for acarbose, the agency’s

recommendations for vancomycin hydrochloride8 remain a work in progress. In 1996, FDA

recommended that ANDA sponsors submit a clinical in vivo study to demonstrate bioequivalence

of generic vancomycin hydrochloride. See Draft Guidance on Vancomycin Hydrochloride

(“Draft Guidance”), at 3 (attached hereto as Exhibit 5).9

       After further scientific analysis, FDA revised its bioequivalence recommendations in

early 2006 to include in vitro dissolution studies as a method for demonstrating bioequivalence

for vancomycin hydrochloride. Id.10 In March 2006, ViroPharma filed a petition for stay of

action challenging FDA’s revised recommendation. Complaint ¶ 59.

       FDA continues to evaluate its draft recommendation for the appropriate bioequivalence

methodology for vancomycin hydrochloride. In December 2008, FDA requested public comment

on the most recent version of its Draft Guidance on Vancomycin Hydrochloride. See Ex. 5, Draft


       8
        In this memorandum, “vancomycin hydrochloride” refers only to the oral capsule form of
the drug.
       9
           Available at:
http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM082278.pdf.
The Court may consider material outside the pleadings in ruling on a Rule 12(b)(1) motion,
without converting the motion into one for summary judgment. Haase v. Sessions, 835 F.2d 902,
907-08 (D.C. Cir. 1987).
       10
          In accordance with its practice at the time, FDA provided its revised bioequivalence
recommendations to members of the public who had asked the agency to provide such
information as it became available. Ex. 5, Draft Guidance, at 3. By alleging that FDA
distributed the information through “private[] communicat[ions] to several third parties,”
including “a Canadian stock analyst,” see Complaint ¶ 23, ViroPharma implies that FDA acted
improperly. But any member of the public, including ViroPharma, had the opportunity to ask
FDA for updates on the agency’s bioequivalence recommendations.

                                                  11
            Case 1:10-cv-01529-PLF Document 13           Filed 11/12/10 Page 20 of 37



Guidance, at 3. That draft guidance document proposes two options for ANDA sponsors to

demonstrate bioequivalence for vancomycin hydrochloride: in vitro or in vivo studies. Id. at 1.

In a change from the 2006 recommendation, the document proposes that in vitro studies

demonstrating comparative dissolution be permitted only if the ANDA product has the same

inactive ingredients in the same quantities as Vancocin. Id. at 1, 3. Otherwise, clinical in vivo

studies would be recommended. Id. The Draft Guidance prominently states that it has not yet

been finalized and is not binding on the FDA or the public:

                 This draft guidance, once finalized, will represent the Food and
                 Drug Administration’s (FDA’s) current thinking on this topic. It
                 does not create or confer any rights for or on any person and does
                 not operate to bind FDA or the public. You can use an alternative
                 approach if the approach satisfies the requirements of the
                 applicable statute and regulations. If you want to discuss an
                 alternative approach, contact the Office of Generic Drugs.

Id. at 1.

        FDA continues to accept comments from the public on the draft guidance document, id.

at 3, and has not yet finalized it. Nor has the agency completed its response to ViroPharma’s

petition for a stay of action regarding FDA’s bioequivalence recommendations for vancomycin

hydrochloride.

        C.       FDA has not approved an ANDA for vancomycin hydrochloride capsules

        The Complaint alleges that FDA has received at least eleven ANDAs for vancomycin

hydrochloride capsules. Complaint ¶ 72. FDA has not approved any ANDA for vancomycin

hydrochloride capsules. Id. ¶ 65.




                                                 12
        Case 1:10-cv-01529-PLF Document 13                Filed 11/12/10 Page 21 of 37



       D.      Litigation

       On September 10, 2010, more than two years after FDA responded to Cobalt’s petitions,

and while FDA’s draft bioequivalence recommendations for vancomycin hydrochloride still

remain pending, ViroPharma filed the instant complaint. ViroPharma challenges FDA’s

interpretation of 21 C.F.R. § 320.24 in the acarbose petition response on both procedural and

substantive grounds. ViroPharma principally alleges that the agency’s interpretation amounts to

an amendment of the agency’s regulations that should have been subject to notice-and-comment

rulemaking. See Complaint ¶¶ 78-81 (Count I) & Prayer for Relief ¶¶ B, C. ViroPharma further

alleges that FDA’s interpretation is incorrect. See Complaint ¶¶ 37, 52 & Prayer for Relief ¶ A.

FDA now moves to dismiss the complaint under Rule 12(b)(1) for lack of standing and lack of

ripeness, or, in the alternative, under Rule 12(b)(6) for failure to state a claim upon which relief

can be granted.

                                           ARGUMENT

I.     The Court lacks subject-matter jurisdiction

       A.      ViroPharma lacks standing

       ViroPharma lacks standing because it will suffer no actual injury unless and until two

uncertain future events occur. First, FDA must approve a generic version of ViroPharma’s

product, vancomycin hydrochloride capsules, which the agency has not done. Second, any such

approval must rely upon a regulatory interpretation that FDA set forth in the context of an

entirely different drug, acarbose. As set forth below, a chain of hypothetical events like

ViroPharma presupposes cannot support a claim of standing.

       “Under Article III of the Constitution, federal courts may adjudicate only actual, ongoing


                                                 13
        Case 1:10-cv-01529-PLF Document 13                  Filed 11/12/10 Page 22 of 37



cases or controversies. To invoke the jurisdiction of a federal court, a litigant must have

suffered, or be threatened with, an actual injury traceable to the defendant and likely to be

redressed by a favorable judicial decision.” Lewis v. Cont’l Bank Corp., 494 U.S. 472, 477

(1990) (citations omitted); see also Summers v. Earth Island Inst., 129 S. Ct. 1142, 1148 (2009);

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). As the party invoking federal

jurisdiction, ViroPharma bears the burden of establishing these elements. Defenders of Wildlife,

504 U.S. at 561. Where, as here, “the plaintiff is not himself the object of the government action

. . . he challenges, standing is not precluded, but it is ordinarily ‘substantially more difficult’ to

establish.” Id. at 562 (citation omitted).

        The “actual injury” must be “concrete in both a qualitative and temporal sense.”

Whitmore. v. Arkansas, 495 U.S. 149, 155 (1990). The injury must be “distinct and palpable”

and “actual or imminent,” not “conjectural” or “hypothetical.” Id. (citations omitted); see also

Defenders of Wildlife, 504 U.S. at 560. To establish injury in fact, a “plaintiff must allege that he

has been or will in fact be perceptibly harmed by the challenged agency action, not that he can

imagine circumstances in which he could be affected by the agency’s action.” United States v.

Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 688-89 (1973);

see also Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 663 (D.C. Cir. 1996) (en banc) (“A

plaintiff must . . . show that the particularized injury is at least imminent”). The requirement of

injury in fact is not satisfied “simply because a chain of events can be hypothesized in which the

action challenged eventually leads to actual injury.” Nw. Airlines, Inc. v. FAA, 795 F.2d 195, 201

(D.C. Cir. 1986).




                                                   14
        Case 1:10-cv-01529-PLF Document 13                Filed 11/12/10 Page 23 of 37



       ViroPharma’s claimed injury is too speculative to support Article III standing.11

ViroPharma alleges that it “will be injured in the form of lost sales as a result of the approval of

vanomycin ANDAs based upon FDA’s amended regulations.” Complaint ¶ 76.12 But

ViroPharma will not experience that injury unless, and until, both of the following events occur:

(1) FDA approves an ANDA for vancomycin hydrochloride capsules, and (2) in approving that

ANDA, FDA relies upon the same interpretation of 21 C.F.R. § 320.24 that the agency set forth

in responding to Cobalt’s petitions regarding acarbose. Both events remain uncertain.

       The first event that ViroPharma anticipates – FDA’s approval of an ANDA for

vancomycin hydrochloride capsules – cannot be assumed to be a certainty. Many complex

scientific hurdles must be met for ANDA approval, any of which could prove insurmountable for

a particular applicant or drug. See Pfizer v. Shalala, 182 F.3d 975, 978 (D.C. Cir. 1999) (holding

a challenge to FDA’s denial of a citizen petition to be unripe where “[t]he critical fact remains

that the FDA may never approve” the ANDA, “whether because it decides in the end that the

dosage form of [the generic] drug is different from that of [the innovator] or for some entirely

different reason, such as a lack of bioequivalence.”).


       11
          ViroPharma’s allegation that FDA failed to use notice-and-comment rulemaking does
not eliminate the requirement that ViroPharma establish actual injury. As the Supreme Court
recently held, “deprivation of a procedural right without some concrete interest that is affected by
the deprivation – a procedural right in vacuo – is insufficient to create Article III standing.”
Summers v. Earth Island Inst., 129 S. Ct. 1142, 1151 (2009). Even if ViroPharma were to allege
that the absence of notice-and-comment rulemaking caused concrete injury, such procedures
were not required for the reasons set forth below in Section II.
       12
          To the extent that ViroPharma’s claim to standing relies upon a drop in the company’s
market capitalization following FDA’s 2006 release of draft bioequivalence recommendations
for vancomycin hydrochloride, see Complaint ¶ 24, ViroPharma has not alleged and cannot
establish that FDA caused that asserted injury. Moreover, any such past injury is not redressable
by the relief that ViroPharma seeks.

                                                 15
         Case 1:10-cv-01529-PLF Document 13                 Filed 11/12/10 Page 24 of 37



        Similarly, ViroPharma’s second anticipated event – FDA’s reliance, in approving an

ANDA for vancomycin hydrochloride, upon the interpretation of Section 320.24 that is set forth

in the acarbose petition response – also remains speculative. At present, FDA has not made a

final decision as to whether it will accept in vitro bioequivalence tests in lieu of in vivo tests; if

FDA decides to require in vivo tests, then it need not invoke the interpretation of Section 320.24

that ViroPharma wishes to challenge. FDA has not yet finalized its product-specific

bioequivalence recommendations for vancomycin hydrochloride.13 Those recommendations

remain in draft form and have evolved in response to public comments and FDA’s research

activities. See Draft Guidance, at 3. FDA continues to consider public comments, including

those that ViroPharma has submitted. Because FDA’s product-specific bioequivalence

recommendations for vancomycin hydrochloride remain a work in progress, this is not a case

where “[i]t is clear what the FDA will do absent judicial intervention.” Teva Pharms. USA, Inc.

v. Sebelius, 595 F.3d 1303, 1312 (D.C. Cir. 2010) (finding sufficient injury where, unlike here,

“there is . . . virtually no doubt, as a practical matter, what approach the agency will apply to

[plaintiff]”).14


        13
          In light of that status, any direct challenge to FDA’s recommendation of a
bioequivalence methodology for vancomycin hydrochloride would be premature in the absence
of a final agency action, see 5 U.S.C. § 704, and on ripeness grounds, see Abbott Labs. v.
Gardner, 387 U.S. 136 (1967).
        14
          In Teva, the D.C. Circuit held that a generic drug maker had standing to challenge
FDA’s interpretation of statutes governing the exclusivity period for generic drugs, even before
FDA had determined whether plaintiff’s product was entitled to exclusivity. Teva, 595 F.3d at
1315. The Court also held that the challenge was ripe. Id. at 1311. Teva is distinguishable from
this case. There, it was certain that upon approval of the ANDA, FDA would have to determine
whether plaintiff’s product was eligible for exclusivity, and would have to interpret the relevant
statutes in making that determination. Here, by contrast, it is by no means certain whether FDA
needs to interpret 21 C.F.R. § 320.24 if and when it approves an ANDA for vancomycin

                                                   16
           Case 1:10-cv-01529-PLF Document 13               Filed 11/12/10 Page 25 of 37



           Because ViroPharma’s alleged injury – if it occurs at all – would be the end result of an

uncertain “chain of events” that “can be hypothesized in which the action challenged eventually

leads to actual injury,” Northwest Airlines, 795 F.2d at 201, it cannot give rise to standing.

ViroPharma’s claims therefore should be dismissed under Rule 12(b)(1) for lack of standing.

           B.     ViroPharma’s claims are not ripe

           For similar reasons, ViroPharma’s claims are unripe before FDA has approved an ANDA

for vancomycin hydrochloride capsules in reliance upon the challenged interpretation of Section

320.24.

           The ripeness doctrine is intended

                  to prevent the courts, through avoidance of premature adjudication,
                  from entangling themselves in abstract disagreements over
                  administrative policies, and also to protect the agencies from
                  judicial interference until an administrative decision has been
                  formalized and its effects felt in a concrete way by the challenging
                  parties.

Abbott Labs., 387 U.S. at 148-49. To determine whether a dispute is ripe for judicial review, the

Court “evaluate[s] both the fitness of the issues for judicial decision and the hardship to the

parties of withholding court consideration.” Id. at 149. The Court considers the following three

factors:

                  (1) whether delayed review would cause hardship to the plaintiff[];
                  (2) whether judicial intervention would inappropriately interfere
                  with further administrative action; and


hydrochloride capsules. FDA first needs to make a fact-specific scientific determination as to the
appropriate bioequivalence methodology for vancomycin hydrochloride capsules. If the agency
determines that in vivo tests are required, then it need not interpret 21 C.F.R. § 320.24 in
connection with its approval of any such ANDA. This added layer of uncertainty is among the
factors that make ViroPharma’s claimed injury too speculative to support standing, and too
premature to be ripe.

                                                   17
        Case 1:10-cv-01529-PLF Document 13                Filed 11/12/10 Page 26 of 37



                (3) whether the courts would benefit from further factual
                development of the issues presented.

Ohio Forestry Ass’n v. Sierra Club, 523 U.S. 726, 733 (1998).

       Here, all three factors lead to the conclusion that ViroPharma’s claims are premature.

First, ViroPharma does not allege any hardship that will result if the Court defers judicial review

until FDA approves an ANDA for vancomycin hydrochloride based upon the challenged

interpretation of Section 320.24. See Devia v. NRC, 492 F.3d 421, 427-28 (D.C. Cir. 2007) (“In

order to outweigh institutional interests in the deferral of review, the hardship to those affected

by the agency’s action must be immediate and significant.”) (citation omitted). Nor can

ViroPharma claim any significant hardship from delay, because if and when FDA approves an

ANDA, ViroPharma can seek expedited consideration of the merits of its claims.

       Second, FDA has not completed its process of reviewing ANDAs for vancomycin

hydrochloride, and should be allowed to discharge the task that Congress has entrusted to the

agency. Were this case to proceed, FDA would be denied the opportunity to further consider the

challenged interpretation of Section 320.24 and whether to apply it to any ANDA for

vancomycin hydrochloride – an outcome inimical both to the integrity of the administrative

process and to judicial economy. See Ohio Forestry, 523 U.S. at 735-36 (“Hearing [plaintiff’s]

challenge now could interfere with the system that Congress specified for the agency to reach . . .

decisions.”).

       Finally, hearing ViroPharma’s challenge now would require the Court to consider the

merits in a context that lacks any relevance to ViroPharma’s product. ViroPharma’s claims

regarding FDA’s regulatory interpretation are properly heard, if at all, on a complete



                                                 18
        Case 1:10-cv-01529-PLF Document 13                 Filed 11/12/10 Page 27 of 37



administrative record relating to FDA’s approval of an ANDA for vancomycin hydrochloride –

not in relation to a two-year-old petition response for an entirely different product. Indeed,

depending upon FDA’s future actions, any judicial review prior to such ANDA approval “may

turn out to have been unnecessary.” Id. at 736; see also Devia, 492 F.3d at 425 (“if a plaintiff’s

claim, though predominantly legal in character, depends on future events that may never come to

pass, or that may not occur in the form forecasted, then the claim is unripe”); Pfizer, 182 F.3d at

978 (“A claim is not ripe for adjudication if its rests upon contingent future events that may not

occur as anticipated, or indeed may not occur at all.”) (citation omitted).

        All three factors thus confirm that this case is not justiciable in the current context and

both the Court and the parties would be ill-served by allowing it to proceed. Review of

ViroPharma’s claims at this juncture would result in the very harm the ripeness doctrine is

intended to prevent, entangling the Court “in abstract disagreements over administrative policies”

and interfering with FDA’s decisionmaking before “an administrative decision has been

formalized and its effects felt in a concrete way by the challenging parties.” Abbott Labs., 387

U.S. at 148-49. Because ViroPharma’s claims are manifestly unripe, the Court should dismiss

them for lack of subject-matter jurisdiction.

II.     ViroPharma fails to state a claim upon which relief can be granted

        A.      Legal standards

        Even if this Court had subject-matter jurisdiction, ViroPharma’s claims would be subject

to dismissal as a matter of law pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim

upon which relief can be granted. A complaint should be dismissed where it is clear that the

plaintiff can prove no set of facts in support of its claims that would entitle it to relief. Conley v.


                                                  19
        Case 1:10-cv-01529-PLF Document 13                 Filed 11/12/10 Page 28 of 37



Gibson, 355 U.S. 41, 45-46 (1957). Where, as here, “the allegations in a complaint, however

true, could not raise a claim of entitlement to relief, this basic deficiency should . . . be exposed

at the point of minimum expenditure of time and money by the parties and the court.” Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 558 (2007) (quotation omitted; ellipses in original).

        Under the Administrative Procedure Act (“APA”), an agency decision may be overturned

only if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with

law.” 5 U.S.C. § 706(2)(A). Moreover, an agency’s interpretation of its own regulations is

entitled to “substantial deference,” and must be upheld “unless it is plainly erroneous or

inconsistent with the regulation.” Air Transp. Ass’n of Am., Inc. v. FAA (“ATA”), 291 F.3d 49,

53 (D.C. Cir. 2002) (quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994)).

       In its complaint, ViroPharma purports to challenge both the procedural validity and

substantive correctness of FDA’s interpretation of its regulations. Neither theory can survive this

motion to dismiss.

       B.      Notice-and-comment rulemaking was not required before FDA could issue
               an interpretive rule

       Count I of the complaint alleges that FDA should have employed notice-and-comment

rulemaking before setting forth the agency’s interpretation of 21 C.F.R. § 320.24 in its response

to Cobalt’s citizen petitions. See Complaint ¶¶ 78-81 & Prayer for Relief ¶ C. This claim fails as

a matter of law. FDA’s petition response was properly issued pursuant to the agency’s citizen

petition procedure, which provides the opportunity for public comment, see 21 C.F.R. § 10.30(d),

rather than under the APA’s notice-and-comment rulemaking procedures, 5 U.S.C. § 553, which

are only required for legislative rules. Because the interpretation of 21 C.F.R. § 320.24 set forth



                                                  20
        Case 1:10-cv-01529-PLF Document 13                Filed 11/12/10 Page 29 of 37



in the Cobalt petition response constituted, at most, an interpretive rule, FDA was not required to

use notice-and-comment rulemaking and ViroPharma’s claim should, accordingly, be dismissed.

       An interpretive rule is not subject to the notice-and-comment procedures set forth in

Section 553 of the APA. 5 U.S.C. § 553(b)(A). “[A]n interpretive statement simply indicates an

agency’s reading of a statute or rule. It does not intend to create new rights or duties, but only

reminds affected parties of existing duties.” Orengo Caraballo v. Reich, 11 F.3d 186, 195 (D.C.

Cir. 1993) (quotation omitted). To be exempt from the notice-and-comment procedures, an

interpretive rule need not simply paraphrase statutory or regulatory language. Id. Instead, it may

“suppl[y] crisper and detailed lines than the authority being interpreted.” Am. Mining Cong. v.

Mine Safety & Health Admin., 995 F.2d 1106, 1112 (D.C. Cir. 1993).

       The D.C. Circuit examines four factors to determine whether a rule is interpretive (and

thus exempt from notice-and-comment procedures) or legislative (and thus subject to notice-and-

comment procedures). “If the answer to any of [the following] questions is affirmative, we have

a legislative, not an interpretive rule.” Am. Mining Cong., 995 F.2d at 1112.

               (1) whether in the absence of the rule there would not be an
               adequate legislative basis for enforcement action or other agency
               action to confer benefits or ensure the performance of duties,
               (2) whether the agency has published the rule in the Code of
               Federal Regulations,
               (3) whether the agency has explicitly invoked its general legislative
               authority, or
               (4) whether the rule effectively amends a prior legislative rule.

Id.

       Here, the answer to each of these questions is “no.” First, even in the absence of the

“rule” in question – FDA’s interpretation of 21 C.F.R. § 320.24 – the agency still would have



                                                 21
        Case 1:10-cv-01529-PLF Document 13                  Filed 11/12/10 Page 30 of 37



discretion to determine whether in vivo or in vitro testing, or both, are appropriate for a given

product. That authority stems from the plain language of 21 C.F.R. § 320.24 as well as from 21

U.S.C. §§ 355(j)(2)(A)(iv) and (j)(4)(F), which require an ANDA to include information

showing bioequivalence, but do not specify a required methodology.

        Second, FDA did not publish the challenged interpretation of Section 320.24 in the Code

of Federal Regulations. Instead, it appears in the agency’s response to Cobalt’s petitions.

        Third, FDA has not explicitly invoked its general legislative authority in support of its

interpretation of Section 320.24.

        Finally, FDA has not “effectively amend[ed]” a prior legislative rule through its

interpretation. As set forth above, FDA’s interpretation is consistent with the plain language of

Sections 320.20, 320.22, and 320.24. It does not “effect a substantive change in the regulations,”

nor does it “adopt[] a new position inconsistent with any of the Secretary’s existing regulations.”

Shalala v. Guernsey Mem’l Hosp., 514 U.S. 87, 100 (1995) (holding a Medicare reimbursement

guideline to be a valid interpretive rule). FDA’s interpretation therefore cannot reasonably be

construed to be an amendment of any existing regulations that would trigger the requirement for

notice-and-comment rulemaking. See id.

        Although notice-and-comment procedures may be required “‘[w]hen an agency has given

its regulation a definitive interpretation, and later significantly revises that interpretation,’” there

is no such definitive prior interpretation in this case. ATA, 291 F.3d at 56-58 (quoting Alaska

Prof’l Hunters Ass’n v. FAA, 177 F.3d 1030, 1034 (D.C. Cir. 1999), and holding that notice-and-

comment procedures were not required in the absence of any definitive prior interpretation); see

also MetWest, Inc. v. Sec’y of Labor, 560 F.3d 506, 509-511 (D.C. Cir. 2009) (same). The


                                                   22
        Case 1:10-cv-01529-PLF Document 13               Filed 11/12/10 Page 31 of 37



complaint alleges no such definitive interpretation by FDA of 21 C.F.R. § 320.24 that predates

the 2008 acarbose petition response, much less one that is inconsistent with the challenged

interpretation.

       In fact, there is nothing new about the interpretation that ViroPharma challenges. The

Court’s decision in BMS establishes that at least as early as 1996, FDA employed the same

interpretation of Section 320.24, and the Court agreed that Section 320.24 could provide a basis,

independent from the Section 320.22 waiver provision, for FDA’s acceptance of in vitro

bioequivalence tests. BMS, 923 F. Supp. at 217. Indeed, a related citizen petition response from

March 1996 sets forth the same interpretation of Section 320.24 that ViroPharma challenges

here: that the regulation “provide[s] [an] independent bas[i]s for the agency to accept in vitro

bioequivalence studies.” FDA Response to Bristol-Myers Squibb Citizen Petition, at 2 n.3

(attached hereto as Exhibit 6).15 In the absence of any definitive prior interpretation of Section

320.24 that is contrary to the challenged interpretation here, there is no “effective amendment”

that would require notice-and-comment rulemaking.

       Because the answer to all four of the American Mining Congress questions is “no,”

FDA’s interpretation of Section 320.24 is plainly not a legislative rule and FDA was not required

to engage in notice-and-comment rulemaking. See Am. Mining Cong., 995 F.2d at 1112; 5

U.S.C. 553(b)(A). ViroPharma’s procedural challenge to FDA’s interpretation of Section 320.24

therefore should be dismissed as a matter of law.




       15
            Available at http://www.regulations.gov (document number FDA-1993-P-0328-0004).

                                                 23
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       C.      FDA correctly interpreted 21 C.F.R. § 320.24

       To the extent ViroPharma purports to mount a substantive challenge to FDA’s

interpretation of 21 C.F.R. § 320.24, it fares no better because FDA’s interpretation is not

arbitrary and capricious, as the BMS Court has already held..16 See BMS, 923 F. Supp. at 217

(holding that Section 320.24 authorizes FDA to accept in vitro bioequivalence tests, independent

of the waiver provisions of Section 320.22).

       At issue is the following excerpt from FDA’s response to Cobalt’s citizen petitions,

which sets forth the agency’s interpretation of Section 320.24 :

               Under section 355(j)(8)(C) of the Act and § 320.24 of the
               regulations, FDA has the discretion to accept in vitro studies for a
               nonsystemically absorbed drug product such as acarbose when
               such studies are determined to be a scientifically valid method of
               determining bioequivalence (see, e.g., Bristol-Myers Squibb Co.,
               923 F. Supp. 212 (D.D.C. 1996)).21
               21
                 Even if a waiver of in vivo bioequivalence is required before we
               can accept in vitro studies, as described in section II.B. of this
               response, for certain acarbose drug products such a waiver is
               compatible with the public health under 21 CFR 320.22(e) and
               therefore permissible and appropriate.

CP Response, at 6.

       As FDA properly recognized, both the statute and the regulations accord the agency broad



       16
          The sole count of ViroPharma’s complaint alleges that FDA violated the APA by failing
to engage in notice-and-comment rulemaking and does not otherwise challenge the substance of
FDA’s regulatory interpretation. Despite the absence of a specific claim for relief, however,
ViroPharma’s Prayer for Relief seeks a declaration “that the plain reading of FDA’s regulation
requires an ANDA applicant seeking a waiver of the in vivo bioequivalence testing requirement
to first meet one of the criteria set forth in 21 C.F.R. § 320.22.” Complaint, Prayer for Relief
¶ A; see also Complaint ¶¶ 37, 52. Although the complaint plainly fails to state any claim that
would entitle it to such relief, to the extent ViroPharma purports to challenge the substantive
correctness of FDA’s interpretation, its claim is nonetheless meritless.

                                                24
        Case 1:10-cv-01529-PLF Document 13                 Filed 11/12/10 Page 33 of 37



discretion to require applicants to submit evidence of bioequivalence from in vivo tests and/or in

vitro tests, depending upon the specified factors:

               [B]ioequivalence may be demonstrated by several in vivo and in
               vitro methods. FDA may require in vivo or in vitro testing, or
               both, to . . . establish the bioequivalence of specific drug products .
               . . The selection of the method used to meet an in vivo or in vitro
               testing requirement depends upon the purpose of the study, the
               analytical methods available, and the nature of the drug product.

21 C.F.R. § 320.24(a) (emphasis added).

       Thus, Section 320.24 expressly permits FDA to use “any . . . approach deemed adequate

by [the agency] to measure bioavailability or establish bioequivalence.” Astellas Pharma US,

Inc. v. FDA, 642 F. Supp. 2d 10, 20 (D.D.C. 2009) (denying motion for preliminary injunction

where plaintiff challenged FDA’s decision not to require additional bioequivalency testing).

Indeed, this Court has recognized “the high level of deference that must be afforded to the FDA

in choosing which methodologies to employ to test bioequivalency for a given drug.” Id.17 In the

case of acarbose, FDA’s response identifies the unique characteristics of acarbose that weigh in

favor of requiring in vitro dissolution tests, instead of in vivo tests, under certain circumstances.

See CP Response, at 7-8.

       Notwithstanding the broad language of Section 320.24, ViroPharma contends that FDA

lacks discretion to require anything other than in vivo bioequivalency tests unless the criteria set



       17
         See also, e.g., Somerset Pharms., Inc. v. Shalala, 973 F. Supp. 443, 453 (D. Del. 1997)
(“the determination of which method is the most ‘accurate, sensitive, and reproducible’ for
measuring bioequivalence is a matter of scientific judgment, falling squarely within the FDA’s
discretion . . .The court may not substitute its scientific judgment for that of the FDA.”); cf.
Fisons v. Shalala, 860 F. Supp. 859, 863, 866-67 (D.D.C. 1994) (upholding waiver provision of
21 C.F.R. § 320.22(b); “the factual determination of how bioequivalence is determined properly
rests within the FDA’s discretion.”).

                                                  25
        Case 1:10-cv-01529-PLF Document 13               Filed 11/12/10 Page 34 of 37



forth in Section 320.22 are satisfied. See Complaint ¶ 52. But those criteria apply only to

waivers sought by applicants. They do not limit the agency’s authority to make independent

determinations of the appropriate bioequivalence methodology for a given drug, in the exercise

of its scientific judgment.

       The Court’s decision in BMS, 923 F. Supp. 212, confirms the correctness of FDA’s

interpretation of Section 320.24 in the acarbose petition response. There, a pioneer drug

manufacturer challenged FDA’s approval of a competing ANDA on the ground that the agency

lacked authority to determine bioequivalence solely on the basis of in vitro tests. The Court

rejected plaintiff’s argument that Section 320.22(d)(3) (which authorizes a waiver of in vivo tests

where an in vitro test has been correlated with in vivo data) provided the sole basis for FDA’s

acceptance of in vitro bioequivalence tests. Id. at 217. The Court reasoned that “a variety of

other agency regulations pertain to bioequivalence and under what circumstances the FDA may

conclude that a showing of bioequivalence has been made . . . For instance, Section 320.24

provides that to determine whether bioequivalence has been established, the FDA may use any

approach it deems adequate.” Id. (emphasis added). Because provisions other than Section

320.22 authorized the agency’s bioequivalence determination, the Court determined that “there is

no reason for the court to conclude that 21 C.F.R. § 320.22(d)(3) is the only basis pursuant to

which FDA could approve” the drug. Id. at 217. Accordingly, FDA could determine

bioequivalence based on in vitro testing, independent of the waiver provision set forth in Section

320.22. The Court concluded that FDA’s discretion to determine the appropriate bioequivalence

methodology was consistent with the Act and with legislative intent. Id.

       ViroPharma’s argument cannot be squared with BMS, and would render a nullity the


                                                26
        Case 1:10-cv-01529-PLF Document 13                Filed 11/12/10 Page 35 of 37



crystal-clear statement in 21 C.F.R. § 320.24(a) that FDA has discretion to determine the

appropriate bioequivalence methodology – whether in vivo, in vitro, or both. If FDA were

without authority to accept in vitro tests in the absence of a waiver under Section 320.22, as

ViroPharma supposes, then the following language from Section 320.24(a) would be rendered

meaningless: “FDA may require in vivo or in vitro testing, or both, to . . . establish the

bioequivalence of specific drug products.” ViroPharma’s interpretation thus runs afoul of the

maxim that a regulation should not be construed in a manner that renders a provision mere

surplusage. See Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 668-69

(2007) (declining to interpret a regulation in a way that would result in surplusage).

       Because FDA’s interpretation of Section 320.24 is not “plainly erroneous or inconsistent

with the regulation,” see ATA, 291 F.3d at 53, it should be sustained as a matter of law and

ViroPharma’s claims dismissed pursuant to Rule 12(b)(6).




                                                 27
        Case 1:10-cv-01529-PLF Document 13                Filed 11/12/10 Page 36 of 37



                                          CONCLUSION

       For the foregoing reasons, the Court should dismiss the complaint for lack of subject-

matter jurisdiction or, in the alternative, failure to state a claim upon which relief can be granted.

Of Counsel:                                                 Respectfully submitted,

MARK B. CHILDRESS                                           TONY WEST
Acting General Counsel                                      Assistant Attorney General

RALPH S. TYLER                                              EUGENE M. THIROLF
Associate General Counsel, Food and Drug Division           Director, Office of Consumer Litigation

ERIC M. BLUMBERG                                                     /s/
Deputy Chief Counsel, Litigation                            ANDREW E. CLARK
                                                            Senior Litigation Counsel
MICHAEL K. STERN                                            Office of Consumer Litigation
Associate Chief Counsel                                     U.S. Department of Justice
                                                            P.O. Box 386
U.S. Department of Health & Human Services                  Washington, DC 20044
Office of the General Counsel                               Tel: (202) 307-0067
White Oak 31 Room 4525                                      Fax: (202) 514-8742
10903 New Hampshire Avenue                                  andrew.clark@usdoj.gov
Silver Spring, MD 20993-0002
(301) 796-8598


Dated: November 12, 2010




                                                  28
       Case 1:10-cv-01529-PLF Document 13              Filed 11/12/10 Page 37 of 37



                               CERTIFICATE OF SERVICE

        I hereby certify that I caused a copy of the foregoing Motion to Dismiss and
Memorandum in Support of Defendants’ Motion to Dismiss to be served via the District Court’s
electronic filing (ECF) system upon:

       Thomas F. Cullen
       Fahad Habib
       Rosanna K. McCalips
       JONES DAY
       51 Louisiana Avenue, N.W.
       Washington, D.C. 20001
       Counsel for Plaintiff ViroPharma Incorporated

this 12th day of November, 2010.


                                                         /s/
                                                  Andrew E. Clark

				
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