[00:00:02] Speaker 03:
Ms.

[00:00:04] Speaker 03:
Patterson for the Federal Defendants' Appellant, Mr. Gore for the Appellee.

[00:00:37] Speaker 05:
Let's wait until the courtroom clears.

[00:00:52] Speaker 05:
All right.

[00:00:52] Speaker 05:
Good morning.

[00:00:53] Speaker 01:
May it please the court, Melissa Patterson, for the federal appellants.

[00:00:58] Speaker 04:
Speak up a bit.

[00:00:59] Speaker 01:
Oh, of course.

[00:00:59] Speaker 01:
Is that better, Your Honor?

[00:01:02] Speaker 01:
Yeah.

[00:01:03] Speaker 01:
As it did in many parts of the Food, Drug, and Cosmetic Act,

[00:01:06] Speaker 01:
Congress in the Orphan Drug Act set up a basic quid pro quo.

[00:01:11] Speaker 01:
You do something in the public interest and you get some financial rewards.

[00:01:15] Speaker 01:
And there are a range of financial rewards in the act.

[00:01:19] Speaker 01:
And Congress was pretty clear that it was going to hand out those rewards for developing new orphan drugs, drugs for rare diseases for which there were not yet adequate treatments.

[00:01:31] Speaker 01:
And the question here is whether a drug manufacturer, EGLE,

[00:01:35] Speaker 01:
can get all of the act's rewards even though it fails to deliver on the basic quid pro quo.

[00:01:41] Speaker 01:
It does not actually develop a meaningful new drug for an orphan disease.

[00:01:47] Speaker 01:
And EGLE says that it automatically gets all of the rewards on a reading of the act that creates an indeterminate and potentially infinite series of exclusivity periods, blocking generics, blocking others from entering

[00:02:04] Speaker 01:
the free market to provide patients with a choice of manufacturers of these.

[00:02:09] Speaker 04:
The reasoning of the district court was that the statute was unequivocal, unambiguous to use the technical chevron term.

[00:02:21] Speaker 04:
So don't you have to get over that hump first?

[00:02:26] Speaker 04:
I don't know if there's really much debate on your policy arguments.

[00:02:34] Speaker 04:
Are you over the hump in terms of showing that there's ambiguity in the statute?

[00:02:39] Speaker 01:
I agree, Your Honor, that whether or not the statute is ambiguous is the central fight here.

[00:02:44] Speaker 01:
And I think the only way you get to equals reading is if you zoom in and you read in isolation the first provision of 360 CC.

[00:02:54] Speaker 01:
But we think you have to look at the statute as a whole.

[00:02:57] Speaker 01:
And in particular, if you go to the very next subsection, if you go to 360 CC subsection B,

[00:03:05] Speaker 01:
I think it shows that Congress thought there was only going to be one exclusivity holder supplying this market to the drug, not that there was going to be sort of exclusivity holder one and then exclusivity holder one emeritus plus exclusivity holder two plus three.

[00:03:22] Speaker 04:
Could you spell out that argument in terms of B1?

[00:03:26] Speaker 01:
So if you look at B1,

[00:03:29] Speaker 01:
It says that there are two conditions for the FDA sort of breaking an exclusivity period.

[00:03:36] Speaker 01:
And it says if the holder of the approved application cannot assure the availability of sufficient quantities of the drug, then the FDA can go ahead and approve another manufacturer.

[00:03:49] Speaker 01:
Now the holder of the approved application is the holder referenced in subsection A, the one who holds the application that enjoys exclusivity, that's barring others from getting into the market.

[00:04:01] Speaker 01:
Now it does not make sense for Congress to say you only look at whether or not the holder of the approved application to supply the market, if in fact there were going to be a series of exclusivity holders supplying that market.

[00:04:15] Speaker 01:
We all agree that under either reading,

[00:04:19] Speaker 01:
that the first comer gets to stay in the market.

[00:04:24] Speaker 01:
On EGLE's reading, the second comer gets to enjoy what the district court called a duopoly.

[00:04:30] Speaker 01:
You both get to be in the market.

[00:04:32] Speaker 01:
But this provision does not make sense if there are multiple suppliers, this sort of series of exclusivity holders supplying the market.

[00:04:39] Speaker 01:
Similarly, with B2, that's the second condition,

[00:04:43] Speaker 01:
for breaking exclusivity.

[00:04:45] Speaker 01:
Congress also referred only to such holder being able to waive their exclusivity.

[00:04:53] Speaker 01:
Now think about Eagle's theory.

[00:04:54] Speaker 01:
Eagle's theory is that as soon as you get designation, you get designated as an orphan drug manufacturer,

[00:05:01] Speaker 01:
you know it is automatic that if you ever get approval for that drug, you are going to get some form of exclusivity period.

[00:05:08] Speaker 01:
Maybe not the first one, but you're going to get either the second or the third or the fourth.

[00:05:12] Speaker 01:
Remember, their theory is indefinite here.

[00:05:15] Speaker 01:
But on this theory, somebody who could have legitimately expected to enjoy a duopoly as soon as the first exclusivity holder had had its seven years of monopoly

[00:05:25] Speaker 01:
That first holder could destroy that expectation by simply waiving its exclusivity, allowing the FDA to let a whole bunch of generics rush into the market.

[00:05:37] Speaker 01:
That doesn't make sense if Congress actually was trying to set up the sort of expectation Eagle says this language unambiguously commands.

[00:05:48] Speaker 01:
Why would Congress have allowed a first exclusivity holder to destroy those legitimate expectations?

[00:05:54] Speaker 04:
The better reading of this language... I'm sorry, the first exclusivity... I thought you were talking about the second exclusivity holder.

[00:06:03] Speaker 01:
In my hypothetical, Your Honor, imagine there's a first exclusivity holder, as there was in this case.

[00:06:08] Speaker 01:
Teva Pharmaceuticals.

[00:06:10] Speaker 01:
And then you have somebody who maybe simultaneously had tried to develop this drug.

[00:06:15] Speaker 01:
But they hadn't gone across the finish line first.

[00:06:17] Speaker 01:
So they're waiting in the wings, and they think, OK, I didn't get years 1 through 7.

[00:06:21] Speaker 01:
Those are Tevas.

[00:06:22] Speaker 01:
But I'm going to get years 8 through 14, where my only competitor is going to be Teva.

[00:06:26] Speaker 01:
It's going to be me and Teva.

[00:06:28] Speaker 01:
On Eagle's reading of this statute, under B2, Teva

[00:06:34] Speaker 01:
could have vitiated that second exclusivity holder's expectation by simply going to the FDA and saying, I waive my exclusivity rights.

[00:06:44] Speaker 01:
You can let anybody you want to into this market, or even more nefariously, and this actually

[00:06:49] Speaker 01:
happened here, the first exclusivity holder can cut a deal with a second exclusivity holder, which is what Teva and Eagle actually did.

[00:06:59] Speaker 01:
They were fighting over the patent rights related to this drug, and as part of that settlement, Teva waived exclusivity to let Eagle get approved before Teva's seven years expired.

[00:07:14] Speaker 02:
Now, Ms.

[00:07:15] Speaker 02:
Patterson, though, I mean, these peculiar results maybe that would, you know, these scenarios you suggest might result from section B. I mean, do they somehow, though, undermine what is the very plain language of A, which sets up a pretty clear structure that if you're designated and approved, you get a seven-year exclusivity period?

[00:07:33] Speaker 02:
I mean, how do these somewhat, I mean, are these results so peculiar to,

[00:07:37] Speaker 02:
to undermine the very plain language of A or arguably plain language of A?

[00:07:42] Speaker 01:
Well, I want to push back on the idea that A is the sort of unequivocal command that that question is presupposing.

[00:07:49] Speaker 01:
And we think that comes from the references both in A and B to the expiration of a seven-year period.

[00:07:56] Speaker 01:
Now, expire can just mean the end of one period, but we also think that it can connote sort of just an ordinary usage

[00:08:03] Speaker 01:
way that that period, that seven year period, referred to in both A and B, can expire and not be revived.

[00:08:11] Speaker 01:
And in fact, we know that this is how Congress read its own handiwork.

[00:08:14] Speaker 01:
Because in 1990, Congress passed legislation premised on the idea

[00:08:20] Speaker 01:
that only the first manufacturer to get approval for a particular drug got any sort of exclusivity award.

[00:08:27] Speaker 01:
Now, Eagle says these are floor statements.

[00:08:29] Speaker 01:
This is post-enactment legislative history.

[00:08:32] Speaker 01:
That is not the case.

[00:08:34] Speaker 01:
This was a bill passed by Congress and presented to the president.

[00:08:38] Speaker 01:
And the president vetoed it.

[00:08:39] Speaker 01:
The president vetoed it because the president, like Congress, said, no, we want only the first manufacturer to enjoy exclusivity.

[00:08:49] Speaker 01:
Now maybe that doesn't mean that this provision can only be read that way, but that type of formal legislative action by both Congress's part and the President's part in vetoing this bill certainly shows that this language can be read in the way FDA has always read it.

[00:09:09] Speaker 01:
Congress read it that way.

[00:09:11] Speaker 01:
The president read it that way.

[00:09:12] Speaker 02:
But is your best argument that A is clearly in favor of your view, the resting on the word expiration?

[00:09:20] Speaker 01:
Yes, we think expiration is the source of the ambiguity in A. That in subsection B, Congress's other textual indicators show that they thought that there would be only one exclusivity period that would then expire and not be able to be doled out to second comers who developed no new orphan drugs.

[00:09:39] Speaker 01:
So we think the combination of those two things, and I know I'm running into my rebuttal time here, I do want to save a little bit of time, but just looking at the FDA writ large, as of course the Supreme Court has instructed us to do, we don't, courts don't construe provisions, they construe statutes.

[00:09:57] Speaker 01:
There are a lot of exclusivity periods in the act.

[00:10:00] Speaker 01:
None of them are indeterminate.

[00:10:03] Speaker 01:
And Congress has shown very clearly that when it wanted that seven-year period to be extended, it used very clear and very different language.

[00:10:12] Speaker 01:
If you get the extra exclusivity because you do the infectious disease study, it said that seven-year period shall be extended by five years.

[00:10:21] Speaker 01:
If you do extra pediatric studies, it said the seven-year period shall be deemed seven years at six months.

[00:10:28] Speaker 01:
That's the type of clear statement.

[00:10:30] Speaker 01:
to extend an exclusivity, to take something away from the public, to not let generics into this market.

[00:10:36] Speaker 01:
That shows Congress intended to do that.

[00:10:39] Speaker 01:
This language here does not.

[00:10:41] Speaker 01:
It is ambiguous, and the FDA's resolution was reasonable.

[00:10:44] Speaker 01:
I'd like to reserve any time.

[00:10:46] Speaker 05:
Before you sit down, am I right that another situation like this cannot come up?

[00:10:52] Speaker 05:
In other words, because of the amendment in 2017,

[00:11:01] Speaker 05:
An orphan drug manufacturer, in order to get the exclusivity now, has to have a clinically superior drug, which means it's not the same such drug under the statute.

[00:11:12] Speaker 01:
That is our understanding, but this case is not limited to its facts.

[00:11:15] Speaker 01:
There are a number, I think we count at least 11 drugs that fall into the same category of being both designated and approved for a drug that is not clinically superior before the effective date of those 2017 amendments.

[00:11:29] Speaker 01:
And of course, each of those 11 drugs could have untold numbers of ANDAs, of follow-on drugs, of generics who want to, or in fact, already have entered the market.

[00:11:40] Speaker 05:
Do you know the last date of the end of the seven-year exclusivity for these other 11 drugs?

[00:11:46] Speaker 01:
I don't know, but I assume that it would be seven days from the day before the enactment of FDARA in August 2017.

[00:11:52] Speaker 01:
So it could extend out some time.

[00:11:55] Speaker 05:
So 2024.

[00:11:56] Speaker 01:
I believe that's right, Your Honor.

[00:11:58] Speaker 01:
Thank you very much.

[00:12:02] Speaker 01:
Mr. Garner?

[00:12:06] Speaker 05:
Can I ask you before you get started?

[00:12:08] Speaker 05:
Yes, Your Honor.

[00:12:08] Speaker 05:
When Teva and Eagle entered into this settlement agreement, and Teva started commercially marketing Bendeka, and then Eagle asked for the seven-year exclusivity, what was Eagle doing?

[00:12:27] Speaker 05:
marketing the Vendetta as well.

[00:12:30] Speaker 00:
It had yet to come on the market, Your Honor, and I think that's an important point to address, the notion that we somehow had engaged in this nefarious behavior by entering into this licensing arrangement with Teva.

[00:12:44] Speaker 00:
First, to be clear, in terms of the way the statute operates, Section 360 CCB12 gives FDA the discretion

[00:12:55] Speaker 00:
to grant exclusivity, to allow another product to come on if a current exclusivity holder consents to that.

[00:13:05] Speaker 00:
But it doesn't require the FDA to do that.

[00:13:07] Speaker 00:
So my friend's suggestion that FDA was somehow bound to do this and that companies could collude into the situation is wrong.

[00:13:14] Speaker 00:
FDA simply has the discretion to grant an exception in that.

[00:13:17] Speaker 00:
a waiver in that circumstance.

[00:13:19] Speaker 00:
Second, as to the circumstances here, Eagle was a relatively small company that had invested millions of dollars in bringing onto the market, developing and trying to bring onto a market a product that it believed

[00:13:31] Speaker 00:
was clinically superior and substantially improved over Trianda for patients with this rare disease, particularly insofar as it reduced the administration time for this chemotherapy, as well as the volume of sodium that patients endured.

[00:13:48] Speaker 00:
And so we believed it was a better drug.

[00:13:50] Speaker 00:
FDA ultimately concluded otherwise.

[00:13:53] Speaker 00:
But what happened during the course of the development is FDA, in an unprecedented if not unusual move, retroactively granted Trianda exclusivity on another indication, which essentially left Eagle with no option but to enter into a licensing arrangement with Eagle, with Teva.

[00:14:12] Speaker 00:
So the circumstances were unusual.

[00:14:14] Speaker 00:
They were driven by market considerations.

[00:14:16] Speaker 00:
They were in no way nefarious.

[00:14:18] Speaker 00:
And none of this, of course,

[00:14:20] Speaker 00:
gives the court license to disregard the unambiguous language of the statute.

[00:14:24] Speaker 04:
Well, I mean, we have cases, and you cite, actually, engine manufacturers.

[00:14:28] Speaker 04:
Right.

[00:14:29] Speaker 04:
But you don't cite the language which says that if the apparent meaning of a particular clause leads to, as the court said, an odd result, I take it it means a quite odd result, then you have ambiguity.

[00:14:48] Speaker 04:
particularly the fit of this with B1 seems to me clearly an odd result.

[00:14:56] Speaker 00:
Well, I don't think that there's an odd result here.

[00:14:59] Speaker 00:
I mean, first I would quarrel with the notion that that in itself creates

[00:15:02] Speaker 00:
but I don't think that this result is odd.

[00:15:05] Speaker 04:
I mean, you're dealing with our precedent, which we have to deal with, too.

[00:15:09] Speaker 00:
I appreciate that, Your Honor, but just in terms of the notion that this is odd, the central incentive created by the statute was exclusivity.

[00:15:18] Speaker 00:
Having the possibility of additional companies to get subsequent exclusivity increases that incentive, allow companies to go in, develop products that they believe are exclusive.

[00:15:27] Speaker 04:
Yeah, I understand that.

[00:15:29] Speaker 04:
I understand that.

[00:15:30] Speaker 04:
the counsel at the FDA pointed to the strange relationship in B1 in that the granting of the license for another would turn entirely upon the deficiency in the second firm

[00:15:53] Speaker 04:
now the holder of the exclusivity's ability to meet the market, while it might be the case that the original firm could easily satisfy the market.

[00:16:06] Speaker 00:
Well, first of all, Your Honor, again, this is a discretionary provision.

[00:16:10] Speaker 00:
B is discretionary.

[00:16:12] Speaker 04:
It's a discretionary, but it says that the

[00:16:14] Speaker 04:
The secretary may authorize this additional firm.

[00:16:23] Speaker 04:
But why would it do that if there's actually no problem when you're looking at the substantive goal of the statute in terms of getting an adequate supply out there?

[00:16:33] Speaker 00:
Well, the question could come up in different scenarios, including where there's only one drug that enjoys exclusivity.

[00:16:39] Speaker 00:
And B is framed, Your Honor, in terms of the current

[00:16:42] Speaker 00:
holder of exclusivity.

[00:16:44] Speaker 00:
I mean, that follows from reading A and B together.

[00:16:46] Speaker 00:
And so it makes sense that Congress would use the singular in B1 rather than the plural because it's talking about a situation... Yeah, but consider what the Secretary is doing under this.

[00:17:00] Speaker 04:
He lets in, he may, he, she may let in an additional firm simply because

[00:17:10] Speaker 04:
The second firm to come into the market and now holding the exclusivity, which of course isn't exclusivity because we have the first firm, but anyway, is unable to supply it.

[00:17:22] Speaker 04:
That seems crazy.

[00:17:24] Speaker 04:
You're saying a sensible secretary wouldn't do it.

[00:17:31] Speaker 04:
I agree with you.

[00:17:31] Speaker 00:
Congress gave the flexibility, Your Honor.

[00:17:35] Speaker 04:
Why would Congress give that flexibility?

[00:17:39] Speaker 04:
Even if we assume that a sensible secretary would not essentially apply this in an inane way,

[00:17:48] Speaker 04:
Why would Congress authorize an inane application?

[00:17:52] Speaker 00:
I don't think it's an inane, Your Honor.

[00:17:54] Speaker 00:
I think that the situation where it would be needed is where you have one drug that has exclusivity.

[00:17:58] Speaker 00:
That drug is unable to meet patient need.

[00:18:01] Speaker 00:
And this statute, Congress sensibly gave the Secretary the discretion to grant additional exclusivity in that period.

[00:18:09] Speaker 04:
You're saying B1

[00:18:11] Speaker 04:
makes sense only in the instance which you regard as sort of one of the possible things that may flow from the statue, but not the particular one you're advocating.

[00:18:21] Speaker 00:
I think it makes sense that Congress would include it for that situation.

[00:18:26] Speaker 00:
It could arise in other situations.

[00:18:28] Speaker 00:
You could have multiple holders of exclusivity, one that's expired and a subsequent one and still not be able to meet patient needs.

[00:18:35] Speaker 00:
I mean, that's certainly possible.

[00:18:37] Speaker 04:
Yeah, but why would the Secretary be directed to look only at the production of the exclusivity holder?

[00:18:43] Speaker 00:
Well, again, I think Congress can have different situations in mind.

[00:18:47] Speaker 00:
And I think the situation where this is most needed is where there's one exclusivity holder, and that exclusivity holder is unable to meet.

[00:18:54] Speaker 04:
And Congress seems to be- So you would acknowledge then it's at least a bad fit for the situation where there are two or more firms in the market already.

[00:19:04] Speaker 00:
I wouldn't, Your Honor.

[00:19:04] Speaker 00:
I don't think it is.

[00:19:05] Speaker 00:
And I don't think it creates ambiguity.

[00:19:07] Speaker 00:
Ambiguity, you've got to show.

[00:19:10] Speaker 00:
two plausible readings of the statute.

[00:19:12] Speaker 00:
Now, what's missing from FDA's argument here and is missing from their briefs is any actual grounding in the statute.

[00:19:18] Speaker 00:
They pointed to B1 here.

[00:19:20] Speaker 00:
You're looking only at one clause.

[00:19:22] Speaker 04:
Yes.

[00:19:23] Speaker 04:
That engine manufacturers and other cases direct us to look at the entire statutory context.

[00:19:29] Speaker 00:
We agree, Your Honor.

[00:19:30] Speaker 00:
We agree.

[00:19:30] Speaker 04:
But I don't think that... It seems to me what you're saying is we have here in B1

[00:19:36] Speaker 04:
a clause that works as it's written, only for one scenario, out of the multiplicity that you say the statute creates.

[00:19:45] Speaker 00:
Your Honor, it works in the situation of subsequent exclusivities as well, because in that situation, the Secretary can exercise his discretion not to grant the exception under B1.

[00:19:57] Speaker 00:
I mean, it works perfectly in that situation.

[00:19:59] Speaker 04:
He can't, but you're... You are explaining why Congress would give him

[00:20:05] Speaker 04:
discretion to do it in those circumstances.

[00:20:08] Speaker 04:
You say he may be very sensible and not do it in those circumstances.

[00:20:13] Speaker 04:
You aren't explaining the wording.

[00:20:15] Speaker 00:
Well, I think Congress's choice of may instead of shall is itself significant.

[00:20:19] Speaker 00:
Congress could have said and be that the Secretary shall grant a waiver in that situation.

[00:20:23] Speaker 04:
You have a greater problem then.

[00:20:24] Speaker 04:
I agree.

[00:20:25] Speaker 00:
Right?

[00:20:26] Speaker 00:
And so that wording itself from the secretary hasn't explained it.

[00:20:30] Speaker 00:
We've been using the word exclusivity.

[00:20:33] Speaker 04:
And in fact, 355 FA uses the word exclusivity, period.

[00:20:42] Speaker 04:
But in your scenario, after the initial period, Firm 1, we have a succession of special entitlements, which are not exclusivity.

[00:20:55] Speaker 04:
All of them are duopoly, triopoly, tetraopoly, and so forth.

[00:21:01] Speaker 04:
It's not exclusivity at that point.

[00:21:05] Speaker 00:
The exclusivity is the right to hold it during the expiration of the seven years, the orphan drug exclusivity.

[00:21:12] Speaker 00:
It isn't an exclusive.

[00:21:15] Speaker 04:
Under the FDA's reading of the statute, the seven-year period is an exclusivity period.

[00:21:22] Speaker 00:
Under your reading, it is not exclusive.

[00:21:24] Speaker 00:
You're right.

[00:21:26] Speaker 00:
I mean, the other drug could continue to sell, Your Honor.

[00:21:28] Speaker 00:
But in terms of the period of seven years, the subsequent holder enjoys that period in that respect.

[00:21:34] Speaker 04:
But you don't think we should attach any importance to Congress as having used the term exclusivity period?

[00:21:42] Speaker 00:
The court would consider that as well.

[00:21:43] Speaker 00:
But I mean, I think you've got to start with 360 CCA, Your Honor.

[00:21:47] Speaker 00:
And that creates a very clear if-then rule.

[00:21:50] Speaker 04:
Well, let's go to A.

[00:21:54] Speaker 04:
Now, the first holder is put in a special position by that.

[00:22:01] Speaker 04:
It says that, let me find it, yes, this is the granting approval for a person who was not the holder of the approved application

[00:22:21] Speaker 04:
So the person who is the holder of the initially approved application is in a special position, and it would appear that looking at, this is the language after two in 360 CCA, the initial holder could apply for a new period, use the vernacular, call it exclusivity,

[00:22:50] Speaker 04:
And there would be no problem with that.

[00:22:54] Speaker 00:
Any sense at all?

[00:22:56] Speaker 00:
Your Honor, they would have to go through the designation and approval requirements.

[00:23:00] Speaker 04:
They already got the designation.

[00:23:02] Speaker 00:
And I think in that situation, I think FDA would have a stronger argument that they had enjoyed the exclusivity period and that that period would expire.

[00:23:11] Speaker 00:
But FDA, the central ambiguity arguments that they pointed to this morning, and their position has evolved over time, which is itself, I think,

[00:23:20] Speaker 04:
telling an indication that under Chevron column one it seems to me positions can evolve.

[00:23:25] Speaker 04:
They can, Your Honor.

[00:23:27] Speaker 00:
They've thrown a lot of mud up, and they continue to do so.

[00:23:30] Speaker 00:
And with respect, nothing sticks.

[00:23:32] Speaker 00:
I mean, the notion that the use of expiration itself creates ambiguity.

[00:23:37] Speaker 00:
The district court here and the district court in Diplomate correctly rejected that.

[00:23:40] Speaker 04:
You insist on resolving the ambiguity issue solely on the basis of one clause.

[00:23:47] Speaker 00:
Well, I don't think so.

[00:23:48] Speaker 04:
That's not what our precedent says.

[00:23:50] Speaker 00:
We don't insist on that at all, Your Honor.

[00:23:52] Speaker 00:
We would look first to 360 CC.

[00:23:55] Speaker 00:
A, that's part of the analysis.

[00:23:57] Speaker 00:
B, the fact that Congress has granted exceptions for particular situations indicate that it didn't want an exception for other situations.

[00:24:06] Speaker 00:
I mean, the central question under Chevron step one for this court is where FDA has

[00:24:13] Speaker 00:
has found that a drug meets the statutory requirements of designation and approval, is that drug entitled to exclusivity, the seven-year exclusivity period?

[00:24:21] Speaker 00:
And A, answers that question in the affirmative.

[00:24:25] Speaker 00:
B, grants two situations where FDA can grant exceptions, neither of which apply to the added clinical superiority exclusivity stage requirement that FDA has added here and that's at issue.

[00:24:36] Speaker 04:
The fact that Congress has expressed particular exceptions but not the one that FDA is asking for here is another indication that Congress... Yeah, but you would at least agree that the wording of the exceptions can shed light on the meaning of the rule to which they are accepted.

[00:24:52] Speaker 00:
We do, and we don't think that it creates any ambiguities for the reasons that I gave earlier, Your Honor.

[00:24:57] Speaker 00:
I think the Court can also look at the purpose of the statute.

[00:25:00] Speaker 00:
One of the central purposes, as my friend indicated this morning, was to create an incentive for the developments of this

[00:25:06] Speaker 00:
these drugs, and our position does just that.

[00:25:09] Speaker 00:
The fact that multiple companies can be developing something and continue to have an interest, a statutory incentive to continue to develop it, knowing that it's possible that the other drug will get designation and approval first, but even in that situation, you can continue to develop it and go onto the market later.

[00:25:26] Speaker 00:
There's always going to be incentive to differentiate and make a better drug.

[00:25:30] Speaker 00:
And here, just to keep in mind, the reason why we're in the position that we're in

[00:25:34] Speaker 00:
is that Congress initially designated Bendeka as a drug that provided a plausible, a medically plausible basis for concluding that it is clinically superior.

[00:25:45] Speaker 00:
We then went forward and we proved

[00:25:47] Speaker 00:
The reasons that we said it was clinically superior, the significant reduction in administration time for patients, which is a huge factor for patients undergoing this type of chemotherapy, significant reduction in sodium involved in that, which is important particularly for kidney, people with kidney problems.

[00:26:03] Speaker 05:
But didn't the FDA concede that convenience of patients with Bendeka was a

[00:26:11] Speaker 05:
a benefit.

[00:26:12] Speaker 05:
They absolutely did, Your Honor.

[00:26:14] Speaker 05:
I recognize there was something better about Bendeka.

[00:26:17] Speaker 05:
It was more convenient to patients.

[00:26:19] Speaker 00:
They absolutely did, and I believe that's on page 70 of the JA, Your Honor.

[00:26:23] Speaker 00:
And they ultimately concluded that we didn't meet the clinical superior requirement at the back end, but that's only because of the moving target that they've applied to us.

[00:26:31] Speaker 00:
And that's one of the things that Congress addressed in the 2017 amendments.

[00:26:35] Speaker 00:
And those are significant, Your Honor.

[00:26:37] Speaker 00:
I think usually that the court is familiar with agencies coming before it and saying that all sorts of bad things will happen if you adopt this interpretation.

[00:26:45] Speaker 00:
Well, they were free to present those arguments to Congress.

[00:26:48] Speaker 00:
Congress acted, it updated the statute as it saw fit, and it determined that it would apply only on a prospective basis.

[00:26:55] Speaker 04:
We don't have any clue why it made that decision, Ryan.

[00:26:59] Speaker 00:
We don't, but we do have language in the statute that makes it express... Oh, no, I know, I understand that that's the law.

[00:27:05] Speaker 00:
Right, absolutely, Your Honor.

[00:27:07] Speaker 00:
And what FDA ultimately is, and the courts had done what they were supposed to do up to this point in the defamant case in the district court below, which was to give effect to the law that Congress wrote and put the impetus on Congress to change it if the FDA is right, that the statute created a problem.

[00:27:22] Speaker 00:
And Congress did that, and the FDA is now asking this court,

[00:27:26] Speaker 00:
to go back, rewrite the statute as it existed before the 2017 amendments, effectively render those amendments superfluous, and disregard Congress's express intent to make those amendments perspective only.

[00:27:41] Speaker 00:
We would encourage the court not to do that, to affirm the decision below.

[00:27:45] Speaker 00:
I'd be happy to answer any other questions your audience has.

[00:27:50] Speaker 05:
I've got a question.

[00:27:53] Speaker 05:
They gave you until 2022.

[00:27:55] Speaker 00:
That's correct.

[00:27:56] Speaker 05:
And do you, do you consider yourself, I can't figure out if FDA considers you the first licensee.

[00:28:07] Speaker 05:
You're not.

[00:28:08] Speaker 00:
I mean... Well, it considers us to be the same drug as Triana.

[00:28:12] Speaker 05:
Okay, so if somebody, if I'm a drug manufacturer and I have something that is not clinically superior, I can't

[00:28:22] Speaker 05:
I can't get it anyway, because the statute has been amended.

[00:28:27] Speaker 00:
Well, that's correct.

[00:28:28] Speaker 00:
I mean, under the priority, you'd have to come forward and show that your drug is clinically superior, and that's always the way the statute is.

[00:28:34] Speaker 05:
All right.

[00:28:34] Speaker 05:
And then it wouldn't be the same drug, so it wouldn't be out of that.

[00:28:38] Speaker 00:
Right.

[00:28:38] Speaker 00:
Because that's a question of the scope of exclusivity.

[00:28:40] Speaker 05:
All right.

[00:28:41] Speaker 05:
And do you agree, frankly, I think Judge Kelly's opinion reads like a roadmap.

[00:28:47] Speaker 05:
It covers all the

[00:28:50] Speaker 05:
issues do you agree with him I think you do that the exclusivity is after the first seven year exclusivity there's a duopoly and then yes then the gates open but for that initial applicant who would have been Tiva you couldn't have Eagle couldn't have done what it did without exception

[00:29:21] Speaker 05:
B2 without Teva saying we're waving.

[00:29:25] Speaker 00:
Well, yes here, Your Honor, but only because of the unique situation that EGLE was put in because of FDA's virtually unprecedented retroactive approval.

[00:29:35] Speaker 00:
I mean, I think certainly we went forward.

[00:29:38] Speaker 00:
We tried to show that we were a clinically superior drug.

[00:29:41] Speaker 00:
FDA acknowledged at the designation stage that we had presented a medically possible hypothesis for that.

[00:29:47] Speaker 00:
It was only at the end that they determined that even though they acknowledged our benefits, we weren't clinically superior.

[00:29:53] Speaker 00:
So I think you're right.

[00:29:55] Speaker 00:
under B2 for one of the indications that exception was invoked, FDA approved it.

[00:30:00] Speaker 00:
It didn't have to.

[00:30:00] Speaker 00:
I mean, if it truly had thought that this was so nefarious, it could have refused to acknowledge that consent.

[00:30:08] Speaker 00:
You know, these sorts of situations are unlikely to rise again.

[00:30:12] Speaker 00:
There may be a few other people in this situation, but obviously Congress has

[00:30:16] Speaker 00:
address the situation as it saw fit.

[00:30:19] Speaker 00:
It didn't adopt FDA's position across the board.

[00:30:21] Speaker 00:
It provided important protections to companies as well who are developing these drugs, requiring FDA to provide notice of the reasons that it's making clinical superiority determinations, because that was one of the real problems with the prior statute.

[00:30:35] Speaker 00:
But this is a situation

[00:30:36] Speaker 00:
where the court, for better or worse, doesn't have to worry about these policy circumstances.

[00:30:43] Speaker 00:
Congress has addressed them.

[00:30:44] Speaker 00:
The court's role, we would respectfully submit, is to give effect to the law that Congress enacted.

[00:30:50] Speaker 00:
And we think that the district court below and Judge Jackson before it, in the diplomat case, correctly concluded this is the situation where Congress expressed intent, unambiguously resolves the question before the court.

[00:31:02] Speaker 00:
Thank you.

[00:31:03] Speaker 05:
Thank you, Your Honor.

[00:31:07] Speaker 05:
Does she have any time?

[00:31:09] Speaker 05:
Why don't you take two minutes?

[00:31:10] Speaker 01:
Thank you very much, Your Honor.

[00:31:14] Speaker 01:
First, there's been a lot of talk about how FDA could use its discretion to prevent some of the anomalies that Eagle says Congress intended unambiguously to permit.

[00:31:23] Speaker 01:
And I want to point out the evergreening situation, which is actually what's happening in a case called United Therapeutics that's in DDC right now.

[00:31:31] Speaker 01:
It's state pending the resolution of this appeal, where there is a self-evergreening situation happening.

[00:31:38] Speaker 01:
And how this works is you are the first exclusivity holder.

[00:31:42] Speaker 01:
You were the first one to create an orphan drug.

[00:31:45] Speaker 01:
But before your exclusivity period expires, you say, wait a minute, I can make a better version of this drug.

[00:31:52] Speaker 01:
I can reformulate it.

[00:31:54] Speaker 01:
I have a new formulation.

[00:31:55] Speaker 01:
And you can be designated.

[00:31:57] Speaker 01:
Again, we don't want to ratchet up the designation standards.

[00:32:00] Speaker 01:
So then you get approved because the drug, your variation is safe and effective.

[00:32:05] Speaker 01:
Under our reading of the statute, we can say, this is not actually a clinically superior version of the drug.

[00:32:12] Speaker 01:
We're sorry.

[00:32:13] Speaker 01:
The exclusivity period for what is essentially the same drug has already expired.

[00:32:17] Speaker 01:
You don't get another seven years of exclusivity for the same drug.

[00:32:22] Speaker 01:
But on EGLE's reading, we would not have the discretion to do that.

[00:32:26] Speaker 01:
Because 360 CCA only bars us for approving an application for the same drug for someone who is not the holder of approved exclusivity.

[00:32:39] Speaker 01:
So we would have no basis in that scenario, no discretion, to say you don't get another seven years.

[00:32:47] Speaker 05:
Well, why wouldn't they have to show it was clinically superior now under the 2017 amendment?

[00:32:52] Speaker 01:
They would now, but I think this leads me to my second point, which is that we have, you know, EECO is just here saying you don't have to worry about any problems.

[00:33:01] Speaker 01:
We think you have to look at the pre-2017 version of the statute as it stood.

[00:33:06] Speaker 01:
The 2017 amendments had a rule of construction that said nothing in them should affect what came before.

[00:33:12] Speaker 01:
And we think that respecting that rule of construction means that they don't get to use it to say, hey, everything's fixed.

[00:33:18] Speaker 01:
And we don't get to use it to say, hey, they like the regime that we had before.

[00:33:22] Speaker 01:
Neither side should get to use it.

[00:33:23] Speaker 01:
We think Judge Kelly was right about that.

[00:33:26] Speaker 02:
And finally, I do want to note that- The evergreening situation, I mean, again, that's a policy consideration.

[00:33:34] Speaker 02:
It might be, even if evergreening,

[00:33:36] Speaker 02:
seems like an undesirable policy.

[00:33:38] Speaker 02:
It doesn't mean it's excluded by 360 CCA.

[00:33:42] Speaker 01:
I think that when you look to the entirety of the statute, though, did Congress unambiguously mandate that result, especially against the larger backdrop of the FDCA, especially against the backdrop of the 1990 amendments?

[00:33:57] Speaker 02:
They don't have to mandate that result.

[00:33:59] Speaker 02:
They just have to mandate a regime that may have inadvertently or maybe inadvertently allowed such a situation.

[00:34:06] Speaker 01:
Well, I think what they mandated, Your Honor, is a seven-year period of exclusivity.

[00:34:11] Speaker 01:
But this reading gets you to an indefinite period of exclusivity.

[00:34:16] Speaker 01:
I think that's a plaintext hook for saying, no, when Congress said seven years, it meant seven years.

[00:34:21] Speaker 01:
It did not mean 7, 14, 21, 28.

[00:34:23] Speaker 01:
The Court has no further questions.

[00:34:27] Speaker 01:
We ask it to reverse.

[00:34:30] Speaker ?:
Thank you.