Health Law Daily Wrap Up, GENERIC DRUGS—D.C. Cir.: Norwich wins partial appeal over rifaximin exclusivity dispute; court orders FDA reconsideration, (Aug 28, 2026)

By Patricia K. Ruiz, J.D.

The court upheld the agency action on one forfeiture theory but said the wrong causation standard was applied to another.

The U.S. Court of Appeals for the District of Columbia Circuit has partially revived Norwich Pharmaceuticals, Inc.'s challenge to the Food and Drug Administration's decision to withhold final approval of its abbreviated new drug application for generic rifaximin tablets, holding that the agency correctly rejected one forfeiture theory but applied the wrong legal standard to another. The court affirmed the FDA's determination that Actavis Laboratories FL, Inc., a subsidiary of Teva Pharmaceuticals USA, Inc., did not forfeit its 180-day exclusivity for failure to market. However, it reversed the district court's ruling on a separate forfeiture provision concerning failure to obtain tentative approval and directed that the matter be remanded to the FDA for further proceedings (Norwich Pharmaceuticals, Inc., v. Kennedy, No. 25-5137 (D.C. Cir. Aug. 25, 2026)).

Background. The decision marks the latest development in long-running litigation involving generic versions of rifaximin, which is marketed by Salix Pharmaceuticals, Inc. under the brand name Xifaxan. At issue was whether Actavis forfeited first-applicant exclusivity that continued to block final approval of Norwich's ANDA.

Norwich challenged the FDA's January 2025 decision granting only tentative approval to its ANDA for rifaximin tablets. The FDA concluded that Actavis retained 180-day exclusivity as the first applicant for a generic 550 mg rifaximin product, preventing final approval of Norwich's application. The district court subsequently granted summary judgment to the FDA, Teva and Salix, rejecting Norwich's arguments that Actavis had forfeited exclusivity through both failure to market and failure to obtain tentative approval (see FDA, Teva, Salix prevail in Norwich lawsuit about long-delayed rifaximin tablet final approval, Apr. 24, 2025).

Actavis submitted the first ANDA for 550 mg generic rifaximin in December 2015. Norwich later submitted separate rifaximin ANDAs and became involved in patent litigation with Salix. After the FDA determined in January 2025 that Norwich's ANDA met the ordinary requirements for approval, it nevertheless granted only tentative approval because it concluded Actavis's exclusivity remained in effect.

Failure-to-market ruling affirmed. The appeals court agreed with both the FDA and the district court that Actavis did not forfeit exclusivity under the statute's failure-to-market provision.

The dispute centered on which patent certifications qualified Actavis for 180-day exclusivity. Norwich argued that only certifications corresponding to patents also identified in Norwich's own application should count, while the FDA and Actavis maintained that all Paragraph IV certifications lawfully maintained in the first applicant's ANDA qualified for exclusivity.

The court adopted the FDA's interpretation. It held that all Paragraph IV certifications contained and lawfully maintained in the first applicant's ANDA are certifications that qualify the applicant for exclusivity. Because Actavis's application included a Paragraph IV certification relating to Salix's hepatic encephalopathy patent and all parties agreed that no triggering forfeiture event had occurred with respect to that patent, Actavis had not forfeited exclusivity for failure to market.

In reaching that conclusion, the court rejected Norwich's argument that exclusivity and forfeiture should be evaluated on what Norwich characterized as a matching-certifications basis. The court said the statutory scheme provides for a single, indivisible exclusivity period and contains no mechanism for the type of partial forfeiture theory advanced by Norwich.

Court rejects FDA's causation standard. The appeals court reached a different conclusion with respect to the forfeiture provision addressing a first applicant's failure to obtain tentative approval within 30 months after filing an ANDA. Actavis did not obtain tentative approval by the applicable June 2018 deadline. The FDA nonetheless found that Actavis had not forfeited exclusivity because the delay was caused by a 2017 change in product-specific guidance for rifaximin applications that required additional dissolution studies. The agency concluded that the guidance was "one of the causes" of the delay and took the position that but-for causation was not required.

The court disagreed. It held that the statutory phrase exempting delays "caused by" changes in or reviews of approval requirements is best read to require but-for causation. According to the court, the FDA's interpretation improperly relied on a multiple-sufficient-causes theory under which a regulatory change could excuse a failure to obtain timely approval even if other independent deficiencies would themselves have prevented approval. Applying a but-for standard better reflects the statutory text and ensures that a first applicant would avoid forfeiture only when it would have obtained timely tentative approval absent the relevant FDA change or review.

Remand to FDA required. Although Norwich urged the court to resolve the causation issue itself, the court declined to do so. Instead, it ordered the case remanded so the FDA can apply the correct legal standard in the first instance.

The court noted that once the FDA concluded that the 2017 guidance was a cause of Actavis's delay, the agency found it unnecessary to determine whether any other changes in or reviews of approval requirements could independently support non-forfeiture. As a result, the agency had not conducted a but-for causation analysis under the standard adopted by the appeals court.

The court further observed that the administrative record before it related to Norwich's application and did not include the complete record for Actavis's ANDA, making remand appropriate.

The case is No. 25-5137.

Judge: Garcia, B.

Attorneys: Andrew D. Prins (Latham & Watkins LLP) for Norwich Pharmaceuticals, Inc. Joshua Dos Santos, U.S. Department of Justice, for Robert F. Kennedy, Jr.

Companies: Norwich Pharmaceuticals, Inc.

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