Earlier this month, Mallinckrodt, Inc. (“Mallinckrodt”), a generic drug manufacturer, filed a complaint in the U.S. District Court for the District of Maryland challenging the U.S. Food and Drug Administration’s (“FDA”) decision to downgrade the Therapeutic Equivalence (“TE”) index of one of its primary products, generic CONCERTA, from “AB” to “BX.”  Although the FDA approved the company’s generic drug in 2012, its TE rating was downgraded after the FDA issued a revised Abbreviated New Drug Application (“ANDA”) bioequivalence guidance in early November.  Based on an analysis of adverse event reports and reexamination of previously submitted data, the FDA raised concerns that the generic drug may not produce the same therapeutic benefits as brand-name CONCERTA, and has required that the drug company either confirm bioequivalence of their product under the revised standards within six months, or agree to voluntary market withdrawal. 
The FDA’s decision to downgrade a generic drug’s TE rating can have devastating consequences for the generic drug manufacturer. Generally, a drug that is rated “A” is considered bioequivalent for purposes of substitution. A “B” rated drug is “presumed to be therapeutically inequivalent until the agency has determined that there is adequate information to make a full evaluation of therapeutic equivalence.” In most states, pharmacists cannot substitute a generic product that is “B” rated.  Mallinckrodt argues that the FDA’s decision to downgrade generic CONCERTA’s TE rating effectively takes the drug off the market. 
According to Mallinckrodt’s complaint, once an ANDA is approved, the FDA is authorized to take a drug off the market only through a statutorily-mandated process, as defined in 21 U.S.C. § 355(e), which requires “due notice and opportunity for hearing to the applicant.”  Mallinckrodt alleges that “there is no statutory mechanism by which the FDA can lawfully take a generic drug off the market without providing the applicant notice and an opportunity for a hearing…even in those instances in which it believes there is an imminent health risk.”  Mallinckrodt asserts that, when the FDA reclassified the drug, it destroyed the company’s property right in its ANDA by effectively taking the drug off the market. 
Mallinckrodt is not the first generic drug manufacturer to face this type of action. Recently, Watson Laboratories, Inc. and Impax Laboratories, Inc. faced similar challenges with their generic Wellbutrin, which was ultimately withdrawn from the market.  As Mallinckrodt waits for the slow wheels of the court to turn, it is clear that generic drug companies face a unique set of challenges in retaining access to the market and must relentlessly protect their property interest in existing ANDAs to remain competitive in the marketplace.
Brian King is a current student at DePaul University College of Law in Chicago. Dr. King holds a PharmD from Purdue University and is a practicing Pharmacist in the Chicago area. He will complete his law degree and certificate in health law in 2017.
 Kurt Karst, Mallinckrodt Sues FDA After Agency Downgrades Therapeutic Equivalence Rating for Generic CONCERTA, FDA Law Blog, (Nov. 19, 2014), http://www.fdalawblog.net/fda_law_blog_hyman_phelps/2014/11/mallinckrodt-sues-fda-after-agency-downgrades-therapeutic-equivalence-rating-for-generic-concerta.html.
 Draft Guidance on Methylphenidate Hydrochloride, US Food and Drug Administration (Nov. 2014), http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatory Information/Guidances/UCM320007.pdf.
 Karst, supra.
 Electronic Orange Book. Approved Products With Therapeutic Equivalence Evaluations, US Food and Drug Administration, http://www.fda.gov/Drugs/Development ApprovalProcess/ucm079068.htm (last visited 11/25/14).
 Mallinckrodt: Chart Documenting Generic Substitution Laws for 50 States Plus District of Columbia, FDA Law Blog (Nov. 17, 2014), http://www.fdalawblog.net/CONCERTA%20-%20Mallinckrodt%2050-State%20TE%20List.pdf.
 Karst, supra.
 Complaint. Mallinckrodt, Inc. v. United States Food and Drug Administration, FDA Law Blog (Nov. 17, 2014), http://www.fdalawblog.net/CONCERTA%20-%20Mallinckrodt%20Complaint%20TE%20Downgrade.pdf
 Karst, supra.
 Watson Laboratories, Inc.; Withdrawal of Approval of Bupropion Hydrochloride Extended-Release Tablets, 300 Milligrams, 79 Fed. Reg. 19696 (Apr. 9, 2014); Impax Laboratories, Inc.; Withdrawal of Approval of Bupropion Hydrochloride Extended-Release Tablets, 300 Milligrams, 78 Fed. Reg. 16685 (Mar. 18, 2013).