Health Law Daily No irreparable harm to vasopressin manufacturer without stay of dismissal
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Monday, September 23, 2019

No irreparable harm to vasopressin manufacturer without stay of dismissal

By Nicole D. Prysby, J.D.

Any harm to the manufacturer is self-imposed because it took a business risk by producing a bulk-compounded vasopressin product without any assurance that the FDA would recognize a clinical need for vasopressin.

The manufacturer of vasopressin will not suffer irreparable harm in the absence of a stay of a court order dismissing the company’s claims against the FDA, a federal district held. In August 2019, the court dismissed all of Athenex Inc.’s claims against the FDA (brought after the FDA declined to place vasopressin on the clinical need list). Athenex sought a stay of the order, pending an appeal. However, the company failed to establish that it would suffer irreparable harm in the absence of a stay. Only two weeks and a day after launching its product, Athenex learned that the FDA was disinclined to place vasopressin on the clinical need list, thereby placing in grave doubt its ability to continue bulk compounding with vasopressin. Although Athenex may lose substantial revenue pending its appeal, any harm it faces is the product of taking business and litigation risks that did not pay off (Athenex Inc. v. Azar, September 6, 2019, Mehta, A.).

Plaintiff, Athenex Inc., produces a drug product using the bulk drug substance vasopressin. In March 2019, the FDA announced that vasopressin is not a bulk drug substance for which there is a clinical need, thereby foreclosing Athenex from compounding with that substance and selling its product. Athenex challenged the FDA’s method of determining whether there is a clinical need for a bulk drug substance. In August 2019, the court concluded that all of Athenex’s claims against the FDA fail, because the FDA properly interpreted "clinical need" to mean that that it must consider whether a finished bulk drug product containing vasopressin is necessary relative to FDA-approved products containing vasopressin, not merely whether the drug is needed for patient treatment. In addition, the court held that the FDA did not act in an arbitrary and capricious manner when it excluded excluding vasopressin from the "clinical need" list (see No ‘clinical need’ for finished bulk drug product containing vasopressin, August 5, 2019).

Athenex sought a stay pending appeal of the court’s August decision. The court declined, concluding that Athenex did not establish the presence of irreparable harm. Athenex argued that it will lose substantial revenue if the court refuses a stay. However, those costs are self-imposed. Athenex took a business risk by producing a bulk-compounded vasopressin product without any assurance that the FDA would recognize a clinical need for vasopressin. Athenex announced its product launch on August 13, 2018, only 15 days before the FDA issued its proposed determination that there was not a clinical need for vasopressin. Even after the FDA’s announcement, Athenex significantly grew its manufacture and sales, without any assurance that the FDA would reverse course and place vasopressin on the clinical need list. The balance of equities does not favor a stay, because whatever sales Athenex will lose in the absence of an injunction presumably will be gained by a competitor. And the public interest leans in favor of denying an injunction, because the public interest favors the FDA carrying out its statutory functions, instead of facing an extended period of uncertainty that would arise from a stay.

The case is No. 1:19-cv-00603-APM.

Attorneys: Christopher H. Marraro (Baker & Hostetler LLP) for Athenex Pharma Solutions, LLC., Athenex Pharmaceutical Division, LLC and Athenex, Inc. James William Harlow, U.S. Department of Justice, for Alex M. Azar, II.

Companies: Athenex Pharma Solutions, LLC; Athenex Pharmaceutical Division, LLC; Athenex, Inc.

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