Novartis Pharms. Corp. v. Kennedy

Sara W. Koblitz & Anne K. Walsh*

Why This Case Made the List

FDA has long permitted Abbreviated New Drug Application (ANDA) applicants to “carve-out” patent-protected uses from product labeling, resulting in differences between the Reference Listed Drug (RLD) and the ANDA, but Novartis v. Kennedy explores what happens when an ANDA sponsor attempts to add language to its labeling.[1] This is significant because the statute only speaks to the “omission” of language from labeling, without reference to a potential addition of language, leaving to the courts to decide whether any deviation from the original labeling is appropriate. In one of the first cases on appeal challenging FDA’s authority under the Administrative Procedure Act (APA) since the landmark decision in Loper Bright v. Raimondo,[2] the D.C. Circuit deferred to FDA’s scientific expertise in this case, showing that deference to Agency interpretation is not dead.

Discussion

Legal Background

Under the Federal Food, Drug, and Cosmetic Act (FDCA), initially enacted in 1938, FDA has the statutory authority to oversee the safety of food, drugs, medical devices, and cosmetics.[3] To do so, the FDCA since 1962 has required FDA to review and approve all new drugs for safety and efficacy prior to introduction into interstate commerce.[4] FDA authorizes the sale of new drugs through a New Drug Application (NDA), which requires the submission of clinical trial data establishing the proposed new drug’s safety and efficacy for its intended use under the conditions of its proposed labeling.[5]

When a drug is approved, the FDCA requires the drug’s sponsor to file with FDA “the patent number and expiration date of each patent for which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner of the patent engaged in the manufacture, use, or sale of the drug . . . .”[6] The statute then obligates FDA to “publish” a list of all such patent data,[7] which it does in FDA’s Orange Book.

The FDCA also provides an “abbreviated” pathway to market for “follow-on” or generic versions of previously approved drug products. Specifically, the FDCA authorizes FDA to approve an ANDA if a sponsor demonstrates that the proposed generic drug contains the same active ingredient(s) in the same dosage form, using the same route of administration, in identical strength or concentration, and is bioequivalent to the previously approved drug that FDA already has found to be safe and effective for its intended use, called the  reference listed drug (RLD).[8] In other words, an ANDA must be “pharmaceutically equivalent” and “therapeutically equivalent” to its RLD. “Pharmaceutical[ly] equivalent” drugs contain identical amounts of the identical active drug ingredients, defined for these purposes as “the same salt or ester of the same therapeutic moiety.”[9] The therapeutic or “active moiety” is “the molecule or ion . . . responsible for the physiological or pharmacological action of the drug substance.”[10] “Therapeutic equivalents” are bioequivalent pharmaceutical equivalents that “can be expected to have the same clinical effect and safety profile when administered to patients under the conditions specified in the labeling.”[11]

Typically, ANDAs must have the same labeling as the RLD.[12] However, the statute allows “changes required . . . because the new drug and the listed drug are produced or distributed by different manufacturers.”[13] Such changes include “omission of an indication or other aspect of labeling protected by patent.”[14] Those changes may not “render the proposed drug product less safe or effective than the listed drug for all remaining, nonprotected conditions of use.”[15]

ANDA applicants may duplicate the RLD, but not without addressing the patents listed in the Orange Book for the RLD it is referencing.[16] Indeed, an ANDA applicant may rely on FDA’s findings of safety or efficacy for an approved product as long as the ANDA applicant certifies to such patents in one of the following ways:

(i)        the required patent information has not been filed;

(ii)       the listed patent has expired;

(iii)      the listed patent has not expired but will expire on a particular date and approval is sought after patent expiration; or

(iv)      the listed patent is invalid or will not be infringed by the new product.

If a Paragraph IV certification is selected (i.e., the applicant asserts that the RLD patent is invalid or will not be infringed), the ANDA applicant must provide notice of the application and patent certification to the RLD holder within 45 days so that the RLD holder has the opportunity to bring patent litigation prior to the approval of the application.[17] If such an infringement suit is filed during the requisite timeline, approval of that ANDA is stayed for 30 months as the patent litigation is resolved.[18]

Importantly, however, not all patents listed in the Orange Book require a certification. “Method of use” patents might instead trigger a “section viii statement,” which informs FDA that the proposed ANDA does not seek approval for the use covered by a listed method-of-use patent, as detailed in the “use code” selected by the RLD sponsor.[19] In that situation, the ANDA applicant “carves-out” from its product labeling the language that the NDA sponsor lists in the “use code” for that patent, resulting in labeling for the RLD and the ANDA that are not identical. An applicant adding language to its labeling to effectuate a carve-out, however, is not anticipated by the statute or implementing regulations.

Factual Background

Novartis’ Entresto (sacubitril; valsartan), marketed since July 2015, “contains a complex comprised of anionic forms of sacubitril and valsartan, sodium cations, and water molecules.”[20] At approval, Entresto was indicated “to reduce the risk of cardiovascular death and hospitalization for heart failure in patients with chronic heart failure (NYHA Class II-IV) and reduced ejection fraction.”[21] Novartis performed additional studies with Entresto, which resulted in updates to the product labeling. In 2019, for example, Novartis added to the labeling a modified dosing regimen for patients not taking angiotensin-converting enzyme inhibitors (ACE inhibitors) or angiotensin II receptor blockers (ARBs).[22] Further, Novartis performed studies in patients with preserved ejection fractions, and in 2021 received approval for chronic heart failure more generally.[23] Specifically, the indication statement for Entresto was updated to read: “ENTRESTO is indicated to reduce the risk of cardiovascular death and hospitalization for heart failure in adult patients with chronic heart failure. Benefits are most clearly evident in patients with left ventricular ejection fraction (LVEF) below normal.”[24]

At approval and with each of these changes, Novartis listed patents in the Orange Book, including a formulation patent and five method-of-use patents.[25] These method-of-use patents were associated with two use codes relevant here: “treatment of heart failure with preserved ejection fraction” and “treating chronic heart failure with reduced ejection fraction in patients not taking an ACE inhibitor or an ARB or previously taking low doses of these agents, by titrating up from half the usually recommended starting dose.”[26]

By 2019, Entresto had attracted generic competition. In July 2018, 18 sponsors submitted ANDAs to FDA seeking approval to market a generic version of Entresto. Those filers included MSN Pharmaceuticals, whose proposed label omitted Novartis’ patented dosing regimen for patients not taking ACE inhibitors or ARBs and chronic heart failure in patients with preserved ejection fraction.[27] Further, the MSN product also stated that the generic drug “contains anionic forms of sacubitril and valsartan, and sodium cations”—omitting the complex including water molecules.[28]

Novartis, however, filed a Citizen Petition in 2019 asking FDA to require any generic version of Entresto to use the same chemical structure as Entresto, and a second Petition in 2022 requesting that FDA refuse to approve “any generic version of Entresto carving out its patented uses from the label.”[29] Novartis argued that “carving out the modified dosage for patients not taking ACE inhibitors or ARBs would . . . render the generic version less safe and effective than Entresto” and that “carving out use of Entresto to treat patients with a preserved ejection fraction would require impermissibly adding words to Entresto’s existing label.”[30] FDA denied both petitions and approved MSN’s ANDA in 2024.[31]

Lower Court Decision

Novartis immediately filed suit in the U.S. District Court for the District of Columbia against FDA seeking to set aside the petition denials and the approval of the MSN ANDA.[32] Novartis argued that FDA’s approval of the MSN ANDA and denial of the Novartis petitions violated the APA, the FDCA, and the agency’s implementing regulations.[33] After cross-motions for summary judgment, the District Court found that “MSN’s generic drug is consistent with FDA regulatory and statutory requirements that require a generic drug to have the same label and active ingredients as the reference drug” and that “FDA did not act arbitrarily by excluding part of Entresto’s dosing regimen from MSN’s generic drug label.”[34] Specifically, the court explained, “[i]t cannot be said that the agency applied the wrong standard, inadequately explained its decision, or rendered ‘a clear error of judgment.’”[35] And “FDA’s determination on chemical identity sameness reflects its reasoned ‘scientific analysis,’ which deserves ‘a high level of deference.’”[36] Novartis appealed.

Appellate Court Decision

On appeal, Novartis made two main arguments: that the MSN generic labeling “impermissibly deviates from the Entresto label,” and that FDA erred when it concluded that MSN’s generic had the same active ingredients as Entresto.[37]

Turning first to the labeling, the D.C. Circuit Court of Appeals explored the differences between the Novartis and MSN labeling. After explaining that the FDCA “permits ‘changes required . . . because the new drug and the listed drug are produced or distributed by different manufacturers,’” like MSN made here to avoid Novartis’ patents, the court took each labeling difference in turn.[38] First, the court looked at the omission of the modified dosing regimen for patients not taking ACE inhibitors or ARBs.[39] While Novartis claimed that the omission rendered the generic version “less safe or effective” than Entresto in violation of FDA’s implementing regulations, the court deferred to FDA’s “expertise in evaluating the clinical significance of drug studies,” which it would not “lightly second-guess.”[40] Because FDA’s interpretation of the titration study Novartis used to add the modified dosing regimen to the labeling never changed—FDA was always skeptical—and because FDA’s initial finding that Entresto is safe and effective with the modified dosing regimen does not foreclose an interpretation that the generic is not less safe or effective without that dosing regimen, the court rejected Novartis’s allegation that FDA impermissibly changed its position without explanation.[41]

Next, the court looked at the indication differences adopted to avoid Novartis’s method-of-use patent covering the treatment of heart failure in patients with a preserved ejection fraction. The Entresto label states that the drug “is indicated to reduce the risk of cardiovascular death and hospitalization for heart failure in adult patients with chronic heart failure. Benefits are most clearly evident in patients with left ventricular ejection fraction (LVEF) below normal.”[42] The MSN label, on the other hand, stated that the drug is “indicated to reduce the risk of cardiovascular death and hospitalization for heart failure in adult patients with chronic heart failure and reduced ejection fraction.”[43] Though Novartis contended that the MSN indication “impermissibly tracks the original, superseded Entresto label,” which was indicated only for patients with a reduced ejection fraction, the court found that FDA “plainly compared it to Entresto’s current label.”[44] “[I]t is entirely unsurprising that the label for a generic drug would resemble a superseded version of the label,” said the court, as it “reflects the intended operation of a scheme that permits the generic’s label to contain changes required because the brand-name drug and the generic equivalent are sold ‘by different manufacturers’” and “‘omit[] . . . an indication . . . protected by patent.’”[45]

Novartis also contended that the addition of words to labeling contradicted FDA’s regulations, which allow for only omissions.[46] The court found that that argument puts form over substance. The regulation allows for the omission “of an indication,” and the addition of words allowed MSN to omit that indication.[47]

The court next turned to the question of active ingredients sameness. Novartis argued that its product is in a “complex” and a co-crystal while MSN’s is not and therefore the active ingredients differ.[48] The court rejected this argument too, explaining that “longstanding FDA regulations and guidance make clear that drugs can have the same active ingredients even if they have different solid-state physical forms or crystal structures.”[49] Further, FDA had examined the science and determined that the structure has nothing to do with the product’s chemical composition or pharmacological effects. There was, in other words, “no reason to question the FDA’s expert judgment . . . .”[50]

Impact of the Decision

While the direct impact of this case is fairly limited—it applies in the narrow circumstance in which an ANDA differs from its RLD—this case is significant as a reaffirmation of FDA’s scientific authority after the landmark Loper Bright case.[51] In Loper Bright, the Supreme Court commanded that the courts—not a federal agency—interpret ambiguous statutes, stripping an agency of some of its deference authority.[52] Indeed, after Loper Bright, judges now consider—but not necessarily defer to—agency interpretations of their governing statutes. While this case did not directly address Loper Bright because neither party argued that this was a case of statutory interpretation, it shows that the absence of broad deference does not inherently doom an agency’s position.

In Novartis v. Kennedy, the D.C. Circuit unambiguously deferred to FDA’s expertise, noting that the case “gives us no reason to question the FDA’s expert judgment regarding these scientific issues.”[53] This quells fears that courts will substitute their own judgment for an agency’s. Even after Loper Bright, courts will continue to defer to FDA on matters of science, as the D.C. Circuit did here, recognizing the agency’s decades of experience interpreting the relevant active ingredient and the safety and effectiveness of a product after certain changes to labeling.

Also, an important aspect of this case is its preservation of the “chubby label.” Legal challenges to “omissions” from labeling—the carve-out—are not new.[54] There has been an increase in the assertion that carve-outs induce infringement, arguing that ANDA manufacturers induce infringement by promoting their carved-out generics as AB-rated or therapeutically-equivalent to the fully-labeled RLDs. The same argument could be made of “chubby labels,” where language is added to avoid a patent. But, largely because of the way the case was argued, the D.C. Circuit addressed this from a purely FDA regulatory standpoint, allowing the chubby label to escape the intellectual property-based arguments that may undermine the skinny label’s existence.

Another interesting and important aspect of this decision is the reasoning the court gave behind permitting the carve-in. Though the statute is clear that “omissions” are permissible, there is no such language that supports the addition of wording to labeling in order to facilitate that omission. The court had no patience for an argument that puts form over substance. As the court explained, the label may add four words, “but does so to eliminate the patent-protected use of the drug to treat patients with a preserved ejection fraction,” which is precisely “how this scheme is supposed to work; an ANDA applicant may ‘propose labeling for the generic drug that ‘carves out’ from the brand’s approved label the still-patented methods of use.’”[55]

 

* Sara W. Koblitz is a Director at Hyman, Phelps & McNamara, P.C., where she advises drug and device manufacturers on applicable regulatory requirements under the Federal Food, Drug, and Cosmetic Act and Public Health Service Act, with a specific focus on the Hatch-Waxman Act, the Orphan Drug Act, and the Biologics Price Competition and Innovation Act. Anne K. Walsh is a Director at Hyman, Phelps & McNamara, P.C., where she focuses on guiding companies through high-stakes challenges at the intersection of FDA law and government investigations. Before joining the firm, Anne served as Associate Chief Counsel at FDA’s Office of Chief Counsel.

[1]   Novartis Pharms. Corp. v. Kennedy, 156 F.4th 626, 629 (D.C. Cir. 2025).

[2]   Administrative Procedure Act, Pub. L. 79–404, 60 Stat. 237 (1946); Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024).

[3]   Kefauver Harris Drug Amendments Act of 1962, Pub. L. No. 87–781, 76 Stat. 780 (1962); Federal Food, Drug, and Cosmetic Act, Pub. L. No. 75–717, 52 Stat. 1040 (1938).

[4]   See 21 U.S.C. § 355.

[5]   Id.

[6]   21 U.S.C. § 355(b)(1)(viii); see also 21 C.F.R. § 314.50(h).

[7]   21 U.S.C. § 355(j)(7)(A)(i)-(iii); see also id. § 355(c)(2).

[8]   Id. § 355(j)(2)(A).

[9]   21 C.F.R. § 314.3(b).

[10] Id.

[11] Id.

[12] 21 U.S.C. § 355(j)(2)(A)(v).

[13] Id.

[14] 21 C.F.R. § 314.94(a)(8)(iv)

[15] Id. § 314.127(a)(7).

[16] 21 U.S.C. § 355(b)(2)(A); id. § 355(j)(2)(A)(vii).

[17] Id. § 355(c)(3)(C); id. § 355(j)(5)(B)(iii).

[18] Id.

[19] 21 U.S.C. § 355(b)(2)(B), (j)(2)(A)(viii); 21 C.F.R. § 314.94(a)(12)(iii); 21 C.F.R. § 314.53(f)(1)(i)(B).

[20] Novartis, 156 F.4th at 628.

[21] Entresto (sacubitril; valsartan), NDA 207620, Prescribing Information § 1 (July 2015).

[22] Entresto (sacubitril; valsartan), NDA 207620/S-013, Prescribing Information § 1 (Oct. 2019).

[23] Novartis, 156 F.4th at 629.

[24] Entresto (sacubitril; valsartan), NDA 207620/S-018, Prescribing Information § 1 (Feb. 2021).

[25] Orange Book: Approved Drug Products with Therapeutic Equivalence Evaluations, at ADA 383-84 (U.S. Dept. of Health and Human Servs., 45th ed. 2025).

[26] Id. at ADB 182, 186.

[27] Novartis, at 156 F.4th at 629.

[28] Id.

[29] Id.

[30] Id.

[31] Id.

[32] Id.; Novartis Pharms. Corp. v. Becerra, No. 24-cv-02234, 2024 U.S. Dist. LEXIS 186818 (D.D.C. Oct. 15, 2024).

[33] Novartis, 2024 U.S. Dist. LEXIS 186818 at *1.

[34] Id. at *19.

[35] Id. at *31 (citing Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

[36] Id. at *34 (citing Pharm. Mfg. Rsch. Servs., Inc. v. FDA, 446 U.S. App. D.C. 362, 370 (2020)).

[37] Novartis, 156 F.4th at 629.

[38] Id. at 630.

[39] Id.

[40] Id.

[41] Id. at 630–31.

[42] Id. at 631.

[43] Id.

[44] Id.

[45] Id.

[46] Id.

[47] Id.; see also 21 C.F.R. § 314.94(a)(8)(iv).

[48] Id. at 632.

[49] Id.

[50] Id.

[51] Loper Bright, 603 U.S. 369.

[52] Id. at 398.

[53] Novartis, 156 F.4th at 632.

[54] See, e.g., GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., 7 F.4th 1320, 1327 (Fed. Cir. 2021); Amarin Pharma, Inc. v. Hikma Pharms. USA Inc., 104 F.4th 1370 (Fed. Cir. 2024).

[55] Novartis, 156 F.4th at 631 (citing Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 406 (2012)).