Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 1 of 19

IN THE UNITED STATES DISTRICT COURT

CASE NO. 1:19-CV-22425-BLOOM/LOUIS

CATALYST PHARMACEUTICALS, INC.,

v.

ALEX AZAR, Secretary of Health and

Defendants, and

JACOBUS PHARMACEUTICAL COMPANY, INC.,

Intervenor-Defendant.
___________________________________________/

REPORT AND RECOMMENDATIONS

THIS CAUSE comes before the Court upon Plaintiff Catalyst Pharmaceuticals, Inc’s

Motion for Summary Judgment (ECF No. 38);1 Intervenor-Defendant Jacobus Pharmaceutical

Company, Inc’s Cross-Motion for Summary Judgment (ECF No. 46).2 Defendants Alex Azar,

Secretary of Health and Human Services, United States Department of Health and Human

Services, Norman Sharpless, and United States Food and Drug Administration (“Federal

Defendants”) cross-moved for Summary Judgment and opposed Plaintiff’s Motion for Summary

Judgment (ECF No. 47). After briefing was complete, the Parties were permitted to supplement

their memoranda following oral argument and the undersigned’s order granting Plaintiff’s motion

to add to the record (ECF Nos. 75, 76). These matters have been referred to the undersigned by

the Honorable Beth Bloom, United States District Court Judge (ECF No. 29) for a Report and

1
Filed under seal without redaction at ECF No. 51.
2
Intervenor-Defendant Jacobus Motion for Summary Judgment raises the same arguments as are raised in Defendants’
Motion for Summary Judgment, as such, I address only Defendant’s Motion.

1
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 2 of 19

Recommendations. Upon consideration of the Motions, Responses, supplementation, and review

of the record as a whole, the undersigned recommends that Plaintiff’s Motion be denied, and

Defendants’ Motion be granted, as explained below.

I. BACKGROUND

This Administrative Procedures Act (“APA”) case arises out of Catalyst Pharmaceutical,

Inc.’s (“Catalyst”) complaint challenging the Federal Drug Administration’s (“FDA”) approval of

Intervenor-Defendant Jacobus Pharmaceutical Company, Inc.’s (“Jacobus”) drug, Ruzurgi, despite

Catalyst’s drug, Firdapse, already receiving approval for seven-year market exclusivity. Plaintiff’s

claims implicate the FDA’s interpretation of the Orphan Drug Act, Pub. L. 97-414, 96 Stat. 2049

(1983); 21 U.S.C. § 360ee(b)(2)(1).

a. Regulatory Framework

The FDA was created in 1938 by Congress through the Federal Food, Drug, and Cosmetic

Act (“FDCA”). 21 U.S.C. § 371. Under this Act, the FDA was granted general authority to

promulgate regulations for the efficient enforcement of the FDCA. In 1983, Congress passed

amendments to the FDCA through the Orphan Drug Act to incentivize the development of “orphan

drugs”—those developed to treat rare diseases affecting small numbers of individuals in the United

States. Orphan Drug Act, Pub. L. 97-414, 96 Stat. 2049 (1983). The main incentive for

development of these drugs under the Orphan Drug Act is a grant of seven-year marketing

exclusivity. Pursuant to the Orphan Drug Act, once the FDA approves a drug under the Act the

FDA is prohibited from approving the “same drug for the same disease or condition . . . until the

expiration of seven years from the date of the approval.” 21 U.S.C. § 360cc(a).

During the development stage of a drug, a manufacturer or sponsor may request that the

FDA designate its drug as one for use in a rare disease or condition under 21 U.S.C. § 360bb. The

2
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 3 of 19

designation, however, under 21 U.S.C. § 360bb does not dictate the use or indication for which an

orphan drug may ultimately be approved for marketing. The purpose of designation under §360bb

is to allow the manufacturer or sponsor to qualify for tax incentives and federal assistance in the

form of grants to defray the costs of qualified testing in the process of obtaining marketing

approval. Later in development, after testing has occurred, the sponsor proposes a particular use

or uses for a drug in its new drug application, which is then reviewed by the FDA to determine

whether the application establishes that the drug is safe and effective for the proposed use or uses.

See 21 U.S.C. § 355(d); 21 C.F.R. § 314.50(a)(1) (requiring a new drug application to include the

new drug’s proposed indications for use).

Many of the provisions of the Orphan Drug Act direct the FDA to promulgate regulations

to implement the Act. See e.g., 21 U.S.C. §§ 360aa(b); 360bb(d); 360cc(d). Consistent with that

authority, in 1991 the FDA proposed regulations to implement the Orphan Drug Act amendments

to the FDCA. See 56 Fed. Reg. 3338 (Jan. 29, 1991). The proposed regulations sought to codify

the agency’s administrative practices and followed a two-day public workshop about how best to

implement the new statutory grant from Congress. Id. at 3343. Therein, the FDA specifically

recognized that “[a]n indication for treatment of a specific disease or condition could involve all

patients with that disease or condition or a specified subpopulation of those with the disease or

condition.” Id. The FDA continued “[e]xclusive approval for a disease subset would not bar

approval of the same drug for the larger population or other subsets of populations by different

sponsors.” Id. at 3339.

In 2011, the FDA proposed changes to the regulations “to clarify certain regulatory

language in the current orphan drug regulations and to propose areas of minor improvement.” 76

Fed. Reg. 64868 (Oct. 19, 2011). One of the areas addressed by the FDA was “eligibility for

3
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 4 of 19

multiple orphan-drug exclusive approvals when a designated orphan drug is separately approved

for use in different subsets of the rare disease or condition.” Id. at 64869. The FDA explained that

when it designates a drug as an orphan drug, it generally does so for use by all persons with the

rare disease or condition and expects that a sponsor will seek approval of the drug for all persons

with the rare disease or condition. Id. at 64870. However, the agency recognized that ultimate

approval will only be granted for those for which there is adequate data and information, which

may be “limited to subsets of patients with the orphan disease or condition.” Id. The FDA reiterated

that it has interpreted orphan drug exclusivity to be “limited to the approved indication or use, even

if the underlying orphan designation is broader.” Id.

In 2013, the FDA finalized the current scope of orphan-drug exclusivity as follows:

“effective on the date of FDA approval as stated in the approval letter of a marketing application

for a sponsor of a designated orphan drug, no approval will be given to a subsequent sponsor of

the same drug for the same use or indication for 7 years. . . . A designated drug will receive orphan-

drug exclusive approval only if the same drug has not already been approved for the same use or

indication.” 21 C.F.R. § 316.3(b)(12).

b. Factual Background of Plaintiff’s Claims

Catalyst is the developer of Firdapse, a medication indicated to treat Lambert-Eaton

Myasthenic Syndrome (“LEMS”), a rare autoimmune disease that affects the “neuromuscular

junction” where the nerve connects with muscle impeding nerve cells from sending signals to

muscle cells (R. 983).3 There are approximately 950 to 1,300 individuals diagnosed with LEMS

in the United States (id. at 875).

In 2005, the FDA designated Catalyst’s drug Firdapse as an “orphan drug” for the treatment

3
Citations to the Administrative Record are designated by the letter “R.” followed by the page number. The
Administrative Record can be found at ECF No. 62-1.

4
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 5 of 19

of LEMS (R. 771). In 2015, Catalyst submitted a new drug application for Firdapse (R. 556-95).

In that application, Catalyst sought approval to market Firdapse for the treatment of LEMS in

adults (id.). After an initial review, the FDA determined the application was insufficient to grant

approval and refused to file the application in February of 2016 (R. 596-600). Catalyst resubmitted

its application in March of 2018 (R. 652-655). In November of 2018, Catalyst received approval

to market Firdapse for the treatment of LEMS in adults (R. 2414-16, 1002-08).

Jacobus received “orphan drug” status for its drug, Ruzurgi, in December of 1990 (R.126).

Ruzurgi contains the same active moiety, similar to that of the active ingredient, as Catalyst’s

Firdapse, as such the parties agree that the two drugs are the same.4 After Jacobus received orphan

drug status, Jacobus started supplying its drug, including to pediatric patients, under an

Investigational New Drug Application (“IND”). Jacobus submitted its New Drug Application in

August of 2017 seeking approval to market Ruzurgi for the treatment of LEMS patients in both

pediatric and adult patients (R. 60-63). Upon its initial review, the FDA also found Jacobus’

application incomplete and refused to file it in January of 2018 (R. 67-75). Jacobus resubmitted its

application in June of 2018, which was accepted for filing in August 2018 (R. 83-86). Again, its

application sought approval to market Ruzurgi for the treatment of LEMS in pediatric and adult

patients (R. 3668-97).

Upon approval of Catalyst’s drug in November of 2018 for the treatment of adult LEMS

patients, the FDA administratively divided Jacobus’ application into two parts, one for the

treatment of LEMS in pediatric patients, and the other for the treatment of LEMS in adults to allow

for “independent actions in these populations.” (R. 444-73). FDA received and reviewed data

submitted by Jacobus in its application which included a clinical trial in adults and dosing and

4
This is admitted in Federal Defendants’ Answer. ECF No. 22 ¶ 6.

5
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 6 of 19

safety information for the use of Ruzurgi in pediatric patients. The FDA determined based on that

information that the drug was safe and effective for patients as young as six-years old up to

seventeen-years old and approved it for being marketed to that subpopulation (R. 428, 444-473).

Prior to approving Jacobus drug, the FDA considered whether Catalyst’s exclusivity

blocked Jacobus’ application and referred the decision to its Center for Drug Evaluation and

Research’s Exclusivity Board, a group established to provide oversight and recommendations

regarding exclusivity determinations. The Exclusivity Board recommended that Jacobus’ drug not

be approved for treatment of LEMS in adults because of Catalyst’s exclusivity but concluded that

LEMS in adults is not the same disease or condition as LEMS in children and recommended that

Ruzurgi be approved for the treatment of LEMS in pediatric patients (R. 418-27). The

recommendations of the board were accepted by the FDA, as reflected in its letter approving

Ruzurgi (R. 484-92).

Catalyst then instituted this lawsuit alleging four violations of the Administrative

Procedures Act. In Count I, Catalyst avers that the FDA’s approval of Jacobus’ labeling was

arbitrary and capricious because it was false or misleading as it implied and suggested that it was

approved for adult populations (ECF No. 1 at ¶¶ 60-67). Counts II-IV allege that the FDA acted

in an arbitrary and capricious manner in its approval of Ruzurgi in light of Firdapse’s exclusivity

(ECF No. 1 ¶¶ 68-89). Count II alleges that the FDA’s approval and regulations are inconsistent

with the Orphan Drug Act, while Counts III and IV allege that Ruzurgi’s approval was arbitrary

and capricious. Plaintiff challenges the FDA’s conclusion, that LEMS in adults is not the same

disease or condition as LEMS in children, as contradicted by the administrative record and accuses

the FDA of inventing a new disease in order to defeat its exclusivity. Plaintiff also contends that

Defendants caved to external pressure by politicians concerned about the price of its drug.

6
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 7 of 19

II. STANDARD OF REVIEW

The Parties have cross-moved for summary judgment in this Administrative Procedures

Act Appeal. Summary Judgment is appropriate “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of

law.” Fed. R. Civ. P. 56(c). Summary judgment is appropriate in cases in which a court is asked

to review a decision rendered by a federal administrative agency. U.S. Steel Corp. v. Astrue, 495

F.3d 1272, 1279 (11th Cir. 2007).

Even in the context of summary judgment, an agency is entitled to great deference. Id.

Courts reviewing agency action under the APA apply the “arbitrary and capricious standard,” and

are required to uphold an agency action unless it is contrary to law, an abuse of discretion or

arbitrary and capricious. 5 U.S.C. § 706(2)(A); Nat’l Parks Conservation Ass’n, Inc. v. U.S. Army

Corps of Engineers, 446 F. Supp. 2d 1322, 1336 (S.D. Fla. 2006). This standard is highly

deferential to the agency. Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971).

Agency administrative decisions are entitled to a presumption of validity. Florida Power

& Light Co. v. Lorion, 470 U.S. 729, 743 (1985); Camp v. Pitts, 411 U.S. 138, 142 (1973). Courts

may not substitute their judgment for that of the agency and can set aside an agency’s decision

only if the agency relied on improper factors, failed to consider important relevant factors, or

committed a clear error of judgment that lacks a rational connection between the facts found and

the choice made. Arango v. United States Dep’t of Treasury, 115 F.3d 922, 928 (11th Cir. 1997).

It is also important that a reviewing court only review information that was before the

agency at the time of its decision in assessing whether the decision was permissible. United States

v. Guthrie, 50 F.3d 936, 944 (11th Cir. 1995) (“a court does not consider any evidence that was

7
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 8 of 19

not in the record before the agency at the time that it made the decision or promulgated the

regulation.”).

III. DISCUSSION

a. Orphan Drug Act Claim

Plaintiff avers that the FDA violated the clear terms of the Orphan Drug Act by approving

Ruzurgi because the statutory text is plain and unambiguous and prohibits the FDA from approving

a second, same drug for the same disease or condition. Plaintiff cites to the statutory language in

21 U.S.C. § 360cc(a) which states that once the FDA approves a drug under the Act the FDA is

prohibited from approving the “same drug for the same disease or condition . . . until the expiration

of seven years from the date of the approval.” 21 U.S.C. § 360cc(a). Plaintiff avers that this

statutory language sets out a clear and unambiguous “if-then” test: if the FDA approves a drug that

has been designated for a rare disease or condition, then it may not approve another application

for the same drug for the same disease or condition for seven years (ECF No. 40 at 14).

Defendants urge the Court to defer to its interpretation of the FDCA pursuant to Chevron,

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Under Chevron, a

court reviewing an agency’s interpretation first considers “whether Congress has directly spoken

to the precise question at issue.” Id. at 842. If the statute is “silent or ambiguous with respect to

the specific issue,” the Court proceeds to the second step of Chevron, where the “question for the

court is whether the agency’s answer is based on a permissible construction of the statute.” Id. at

843. The court need not find that the agency construction was the only one it permissibly could

have adopted; so long as the agency’s reading was permissible, it must be sustained. Id. at 843-44,

n.11. The Supreme Court has “long recognized that considerable weight should be accorded to an

executive department’s construction of a statutory scheme it is entrusted to administer.” United

8
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 9 of 19

States v. Mead Corp., 533 U.S. 218, 227-28 (2001) (quoting Chevron, 467 U.S. at 844). An agency

reading of an ambiguous rule that reflects its “fair and considered judgment” is entitled to

deference. Auer v. Robbins, 519 U.S. 452, 462 (1997).

i. “Disease and Condition”

The first question before the Court is whether Congress directly addressed the precise

question at issue. If the intent of Congress is clear, that is the end of the matter for the court.

Chevron, 467 U.S. at 842. If, however, the Court determines Congress has not directly addressed

the precise question at issue, the court does not simply impose its own construction on the statute,

but rather examines whether the agency’s answer is based on a permissible construction of the

statute. Id. at 843.

In Chevron, the Supreme Court explained that Congress’ “intent to delegate” rulemaking

authority to the agency is manifest when the statute leaves the agency room “to fill any gap left,

implicitly or explicitly, by Congress.” 476 U.S. at 843. Other courts have further clarified that

“Congress leaves gaps in [a] program, either explicitly by authorizing the agency to adopt

implementing regulations, or implicitly by enacting an ambiguously worded provision that the

agency must interpret[.]” Nat’l Fuel Gas Supply Corp. v. FERC, 811 F.2d 1563, 1569 (D.C. Cir.

1987). Accordingly, in order to proceed to Chevron step two, an agency must affirmatively identify

either an explicit or implicit gap in the statutory scheme that is indicative of congressional intent

to provide that agency with the power to interpret the statute.

The Orphan Drug Act has two relevant components: once a drug obtains exclusivity, the

FDA may not for seven years approve the “same drug” for the “same disease or condition.” The

first component here is easily satisfied as there is no dispute as to Firdapse and Ruzurgi being the

“same drug.” It is the second component at issue and under review: whether LEMS in adults and

9
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 10 of 19

pediatric patients constitutes the same “disease or condition.”

Defendants aver that the phrase “same disease or condition” leaves such a gap in the

statutory scheme because it is unclear whether that phrase refers to the use for which a drug is

approved after it submits its new drug application, including subpopulations and subgroups, or the

disease or condition for which it has received orphan designation, which occurs much earlier in

the process before it has undergone qualified testing. Defendants state that the temporal structure

of the statute reinforces this gap because the FDA may designate a drug as an orphan drug under

§ 360bb early in the development of the drug before data is generated to support the uses of the

drug that will ultimately be proposed in the new drug application.

During the development stage, a drug manufacturer or sponsor may request that FDA

designate its drug as one for use in a rare disease or condition. 21 U.S.C. § 360bb. A drug so

designated is considered an “orphan drug” and is eligible for tax incentives and federal assistance

in the form of grants and contracts to defray expenses of “qualified testing.” 26 U.S.C. § 45C; 21

U.S.C. § 360ee. “Qualified testing” includes studies and other analyses conducted to assist in the

understanding of the “natural history of a rare disease or condition and in the development of a

therapy, including studies and analyses to . . . ‘understand the full spectrum of the disease

manifestations, including describing genotypic and phenotypic variability and identifying and

defining distinct subpopulations affected by a rare disease or condition.’” 21 U.S.C. §

360ee(b)(1)(C)(ii). Thus, if the statute is read to be based on approval of the disease or condition

on which the orphan drug designation is based, it would be for the entire disease, exclusive of

subgroups and subpopulations because such subgroups have yet to be identified. However, if the

statute is read to be based on the approval for marketing, which comes much later in the

development process, it could be for only a subpopulation or subgroup because these have now

10
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 11 of 19

been identified and established by the FDA. As such, the statute as written is silent as to what the

same “disease or condition” actually means: that disease or condition which the drug received

orphan drug designation, or that disease or condition for which it was ultimately approved for

marketing.

Plaintiff cites to Eagle Pharm., Inc. v. Azar, CV 16-790 (TJK), 2018 WL 3838265 (D.D.C.

June 8, 2018), aff'd, 952 F.3d 323 (D.C. Cir. 2020), for the proposition that the statutory text of §

360cc is clear. There, the court addressed whether the text prohibited serial exclusivity, that is

whether the FDA could grant successive approvals of orphan-drug exclusivity for the “same drug”

to treat the same disease after the first orphan drug’s exclusivity period had expired. Id. at 2. In

that case, the FDA refused to grant a second drug manufacturer orphan-drug exclusivity after a

previous manufacturer’s grant had expired because it determined the second drug was not

“clinically superior.” Id. at *6. The court there found that because the text did not contain a

provision relating to clinical superiority, the FDA was not free to invent one. Id. While the court

did find the statute was unambiguous in this context, it noted that the statute does not explain when

two “drugs” are the same or different, even though that distinction controls the scope of the

statute’s exclusivity provision. Id. at *2. As such, the court did not make a blanket rule, as Plaintiff

avers, that the statute is unambiguous; rather in the specific facts applicable in that case, the court

found the plain reading of the statute relating to serial exclusivity was unambiguous. Additionally,

here, the statute does not explain when two “diseases or conditions” are the same or different.

Additionally, Plaintiff cites to Depomed, Inc. v. United States Dep’t of Health & Human

Servs., 66 F. Supp. 3d 217, 231 (D.D.C. 2014) for the same proposition, that is that the statute is

clear and unambiguous and leaves no room for the FDA to impose additional limitations on

exclusivity. This case too is distinguishable. There, the court addressed whether the FDA could

11
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 12 of 19

refuse to grant exclusivity to a drug when another drug with the same active ingredient, whose

manufacturers had not sought orphan drug designation, was already on the market for that disease.

The court found that because the FDA had designated plaintiff’s drug for the rare disease or

condition and granted it marketing approval, it was entitled to exclusivity, regardless of the fact

that there were other drugs being marketed for the same disease or condition because those drugs

had not been designated orphan drugs. It concluded that the FDA could not require a showing of

clinical superiority to grant such exclusivity. Here, however, the FDA is not imposing an additional

condition, that is it is not requiring Catalyst or Jacobus to demonstrate anything additional, rather

it is interpreting the permissible scope of exclusivity afforded under the statute. The Court notes

that in both Eagle Pharm. and Depomed, both cases resulted in the court requiring the FDA to

grant exclusivity to the drug in question and neither dealt with whether one drug’s exclusivity

could prohibit the granting of another’s exclusivity.

Because the statute is silent and does not provide whether the same “disease or condition”

refers to that disease or condition for which the drug was designated as an orphan drug or the

disease or condition for which it ultimately received marketing approval, I find that Congress has

not “directly spoken to the precise question at issue,” and therefore proceed to step two. Chevron,

467 U.S. at 842-43.

ii. The FDA’s Interpretation is Reasonable

In the absence of clear intent in the statutory language, the Court must determine whether

the FDA’s interpretation is “a permissible construction” of the Orphan Drug Act. See Chevron,

467 U.S. at 843. As the Supreme Court has noted, the reasonableness standard is a generous one,

requiring deference “even if the agency’s reading differs from what the court believes is the best

statutory interpretation.” Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967,

12
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 13 of 19

980 (2005).

First, FDA’s reading of the statute fits closely with the statute’s text. See Abbott Labs. v.

Young, 920 F.2d 984, 988 (D.C. Cir. 1990) (recognizing that the reasonableness of an agency’s

interpretation turns in part on the “construction’s ‘fit’ with the statutory language”). As the Fourth

Circuit reasoned in Sigma-Tau Pharmaceuticals, Inc. v. Schwetz, 288 F.3d 141, 145 (4th Cir.

2002), “the statute as written protects uses, not drugs for any and all uses. Congress could have

written § 360cc(a) more broadly by prescribing that the FDA ‘may not approve another application

. . . for such drug,’ but it chose not to draft the statute in that way.” The statute creates limits on

the approval of an “application,’ which by implication directs the FDA to evaluate what is written

on the application. An application will necessarily include only stated indications, thus the FDA’s

interpretation comes close to the statutes text.

Second, FDA’s interpretation conforms to the statutory purposes of the Orphan Drug Act.

See Abbott Labs., 920 F.2d at 988 (recognizing that an interpretation’s “conformity to statutory

purposes” affects its reasonableness). Plaintiff does not assert any reason why the FDA’s

interpretation would be antithetical to the goals of the Orphan Drug Act. Instead, it focuses on

what it claims are impermissible considerations the FDA relied on in making its decision, which

will be discussed below. However, the FDA’s interpretation does conform to the statutory purposes

of the Orphan Drug Act. As stated above, the point of the Orphan Drug Act is to expand drug

access to individuals with rare diseases. Under the FDA’s interpretation, manufacturers are

rewarded for developing drugs for individuals who do not have access to such medications.

The FDA’s interpretation recognizes the need to encourage sponsors to continue to develop

a drug for subpopulations or indications within a rare disease or condition. See Spectrum Pharm.,

Inc. v. Burwell, 824 F.3d 1062, 1067-68 (D.C. Cir. 2016) (finding the FDA’s interpretation of the

13
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 14 of 19

Orphan Drug Act reasonable when it “accommodate[d] both interests allowing generic producers

to enter the market for certain purposes, while, at the same time, protecting a company’s right to

market its pioneer drugs for exclusive uses.”). As the Supreme Court said in Chevron, an agency’s

“reasonable accommodation of conflicting policies that were committed to the agency’s care by

the statute” should control unless Congress would not have approved of its choice. 467 U.S. 845.

As such, the Court finds that the FDA’s interpretation is reasonable and aligns with the purpose of

the Orphan Drug Act.

b. Other Attacks on Approval

Catalyst also raises two other attacks on the FDA’s approval of Ruzurgi. First, it avers that

the FDA’s approval of Ruzurgi violates the FDCA’s labeling requirements. Second it avers in its

supplement (ECF No. 75), that the FDA’s approval should be remanded because the FDA

improperly relied on materials on which it was not permitted to rely, specifically pricing.

i. The FDA’s Approval of Ruzurgi’s Labeling Does Not Violate FDCA

Catalyst avers that the FDA’s approval of Ruzurgi should be reversed and remanded

because it claims Ruzurgi’s approved labeling is false and misleading. Ruzurgi’s approved labeling

reads: “INDICATIONS AND USAGE RUZURGI is indicated for the treatment of Lambert-

Eaton myasthenic syndrome (LEMS) in patients 6 to less than 17 years of age.” (R. 494).

Defendants challenge Plaintiff’s standing to challenge the FDA’s approval under the

FDCA for allegedly violating its own regulations because there is no private right of action to

enforce the FDCA. See 21 U.S.C. §337(a) (“[A]ll such proceedings for enforcement, or to restrain

violations, of this chapter shall be by and in the name of the United States.”). Instead, FDA’s

regulations require the agency to exercise its judgment and expertise in reviewing proposed

labeling against the statutory and regulatory labeling standards. See 21 C.F.R. § 201.57.

14
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 15 of 19

Nonetheless, Plaintiff avers that because Jacobus only conducted clinical trials in adults,

approval for pediatric use without studies in children violates FDA’s regulation which provides

that it is false or misleading for labeling to discuss a “clinical study” in a manner that “impl[ies]

or suggest[s] indications or uses” that are not approved. 21 C.F.R. §§ 201.57(c)(2)(iv) and 15(i).

Defendants however aver that it was within its Congressionally-delegated expertise to approve the

labeling.

Where an agency is operating within its area of Congressionally-delegated expertise,

review by a court under the APA is under the “deferential ‘arbitrary and capricious’ standard.” See

Dep’t of Commerce v. New York, 139 S. Ct. 2551, 2569 (2019). A court’s scope of review under

this standard is narrow, and the court’s job is only to determine whether the agency examined the

relevant data and articulated a satisfactory explanation for its decision. Id. The court must not

substitute its judgment for that of the agency’s but instead must confine itself to ensuring that the

agency remained “within the bounds of reasoned decisionmaking.” Id.

The administrative record reflects that the FDA, including multiple groups and divisions

within it, carefully reviewed several versions of Ruzurgi’s proposed labeling for several different

reasons as part of its consideration of Jacobus’ application. For instance, the record shows that the

Division of Medication Error and Prevention and Analysis reviewed the carton label and

determined it was acceptable from a medication error perspective (R. 694-95). Additionally, the

record reflects that Sharon W. Williams, MSN, BSN, RN, a senior patient labeling reviewer in the

Division of Medical Policy Programs reviewed the labeling including the Medication Guide and

Instructions for use and determined that it was acceptable (R. 700-01). Furthermore, the record

reflects that the Office of Prescription Drug Promotion within the FDA reviewed the label for

Ruzrugi after the application had been split for pediatric patients and adults and concluded that it

15
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 16 of 19

was not misleading for pediatric patients. (R. 715-16). The record shows that the FDA applied its

judgment and expertise to the data in the new drug application and made determinations about

what to include and what to exclude. Several different departments and divisions of the FDA

reviewed, commented on, and ultimately contributed to the approval of the approved Ruzurgi drug

label. The parties do not dispute that it is within the FDA’s statutory powers to approve labeling

for pharmaceuticals in the United States. The FDA has advanced sufficient evidence to

demonstrate that it adequately considered and articulated a sufficient rationale for approving

Ruzurgi’s labeling. As such, deference is required to the agency’s interpretation and

implementation of the statute.

ii. The FDA Did Not Inappropriately Consider Drug Pricing

Plaintiff last avers that the Defendants’ decision should be reversed and remanded or

vacated because the FDA inappropriately considered a prohibited factor in its approval of Ruzurgi:

the cost of the drug. A procedural aside is necessary to frame this issue. During the course of this

litigation, Catalyst discovered documents that were not part of the administrative record pursuant

to a separate Freedom of Information Act lawsuit. Plaintiff moved to expand and complete the

record to include these documents. The undersigned granted the motion, in part, and found that the

FDA had considered some of the documents (and Defendants agreed as to other documents at issue

that they should be part of the record). The Court ultimately allowed three sets of documents to be

added to the administrative record: first, emails and a background memorandum relating to the

FDA’s Center for Drug Evaluation and Research’s Exclusivity Board’s meeting at which the Board

considered whether Catalyst’s orphan drug exclusivity blocked approval of Jacobus’ drug; second,

an email chain relating to the scheduling of that meeting; and third, a letter to the FDA from

Senator Bernard Sanders.

16
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 17 of 19

While the Court agreed that the FDA had considered the documents at issue, the Order

granting Plaintiff’s Motion observed that this alone would not suffice to evidence that the agency

relied upon the contents of the documents: “While the standard of review in deciding whether the

agency’s actions were arbitrary and capricious turns on whether the documents were relied on, for

purposes of completing the record, the agency must include all documents it considered . . .” See

ECF No. 74 at 9 (quoting Georgia Dep’t of Ed. v. United States Dep’t of Ed., 883 F.3d 1311, 1314

(11th Cir. 2014). Indeed, Plaintiff had advanced additional documents to be supplemented to the

record because, Plaintiff averred, those documents were indicative of improper behavior by the

agency. The undersigned rejected Plaintiff’s argument, noting that “Plaintiff’s contention that the

records, taken as a whole, demonstrate improper agency action falls below the threshold necessary

for supplementation[.]” (ECF No. 74 at 11).

Plaintiff’s supplemental briefing (ECF No. 75) continues to advance the argument that the

FDA considered the documents, however, this alone is insufficient to evidence that the agency

relied on the contents in considering an impermissible factor. Review of the record as a whole,

including those documents that have been added, fails to reveal that the FDA relied on relative

cost of the drugs in reaching its exclusivity determination. Rather, and despite outside sources’

observations about the cost of Firdapse, the record demonstrates that the agency recognized that it

did not have authority to take price into consideration. The examples on which Plaintiff rests its

argument fails to show that the reference to cost indicates reliance by the agency on cost in

reaching its determination, as follows.

The first set of documents is an email chain that contains a background memorandum

relating to FDA’s Center for Drug Evaluation and Research’s Exclusivity Board’s upcoming

meeting at which the Board was set to discuss Catalyst’s orphan drug exclusivity and its impact

17
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 18 of 19

on approval of Ruzurgi. The background memorandum includes an “Additional Background”

section that notes the public controversy regarding the high price of drugs. In this pre-meeting

document, the limited mention of cost in a section titled “Additional Background,” does not

support the inference that it was a direct consideration of the Board.

The second document is a letter from Senator Bernard Sanders to Defendant Azar and Scott

Gottlieb, Commissioner of the FDA, in which Senator urges the FDA to announce that it would

not enforce action against manufacturers who were previously providing LEMS medication in

favor of Catalyst’s exclusivity approval of Firdapse. The record reflects that members of the FDA

were aware of this letter, as well as other published articles reporting on the high cost of Firdpase.

While the undersigned recognized that these documents “might have influenced the agency’s

decision,” and thus were necessary to include in the record, there is no evidence that the concerns

raised outside of the FDA regarding Firdapse’s cost did in fact influence the agency’s decision.

See Amfac Resorts, L.L.C. v. United States Dep’t of the Interior, 143 F. Supp. 2d 7, 12 (D.D.C.

2001).

The third set of documents is an email chain which relates to the scheduling of the

Exclusivity Board meeting. Therein, one of the emails notes that Catalyst’s drug, Firdapse, is the

subject of Congressional interest and states “our exclusivity discussions, while technical and

legalistic as they always are, will by necessity have to occur against this backdrop.”5 Again, while

the emails were added because they evidenced discourse by the decisionmakers on the issue, no

evidence has been adduced to demonstrate reliance on the cost of the drug in reaching the agency’s

decision.

While the FDA may have been aware of the public and private interests involved in its

5
FDACDER000485, found at ECF No. 70-2 at 7.

18
Case 1:19-cv-22425-BB Document 93 Entered on FLSD Docket 07/30/2020 Page 19 of 19

approval of Ruzurgi, Plaintiff has failed to adduce evidence to show that the FDA relied on

improper factors in rendering its decision.

IV. CONCLUSION

For the foregoing reasons, I respectfully recommend:

1. Plaintiff Catalyst Pharmaceuticals, Inc’s Motion for Summary Judgment (ECF No. 38) be

DENIED;

2. Intervenor-Defendant Jacobus Pharmaceutical Company, Inc’s Cross-Motion for

Summary Judgment (ECF No. 46) is GRANTED;

3. and Federal Defendants Alex Azar, Secretary of Health and Human Services, et al.’s Cross-

Motion for Summary Judgment and Opposition to Plaintiff’s Motion for Summary

Judgment (ECF No. 47) be GRANTED and the case dismissed.

Pursuant to Local Magistrate Rule 4(b), the Parties have fourteen (14) days from the date

of this Report and Recommendation to serve and file written objections, if any, with the Honorable

Beth Bloom, United States District Judge. Failure to timely file objections shall bar the Parties

from de novo determination by the District Judge of any factual or legal issue covered in the Report

and shall bar the parties from challenging on appeal the District Judge’s Order based on any

unobjected-to factual or legal conclusions included in the Report. See 28 U.S.C. § 636(b)(1); 11th

Cir. Rule 3-1; Patton v. Rowell, 2017 WL 443634 (11th Cir. Feb. 2, 2017); Cooley v.

Commissioner of Social Security, 2016 WL 7321208 (11th Cir. Dec. 16, 2016).

RESPECTFULLY SUBMITTED in Chambers this 30th day of July, 2020.

LAUREN LOUIS
UNITED STATES MAGISTRATE JUDGE

19