Mallinckrodt District Court Decision Dated 05.29.20

Case 1:19-cv-01471-TFH Document 49 Filed 06/01/20 Page 1 of 40
USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 1 of 40

APPEAL,CLOSED,TYPE−D
U.S. District Court
District of Columbia (Washington, DC)
CIVIL DOCKET FOR CASE #: 1:19−cv−01471−TFH
MALLINCKRODT ARD LLC v. VERMA et al Date Filed: 05/20/2019

Assigned to: Judge Thomas F. Hogan Date Terminated: 03/13/2020
Cause: 05:0706 Judicial Review of Agency Actions Jury Demand: None
Nature of Suit: 899 Administrative
Procedure Act/Review or Appeal of
Agency Decision
Jurisdiction: U.S. Government Defendant
Plaintiff
MALLINCKRODT ARD LLC represented by Catherine Emily Stetson
formerly known as HOGAN LOVELLS US LLP
MALLINCKRODT ARD INC. 555 Thirteenth Street, NW
Washington, DC 20004
(202) 637−5491
Fax: (202) 637−5910
Email: cate.stetson@hoganlovells.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
Kyle Mitchell Druding

HOGAN LOVELLS US LLP
555 Thirteenth Street, NW
(202) 637−6842
Fax: (202) 637−5910
Email: kyle.druding@hoganlovells.com
LEAD ATTORNEY
Susan Margaret Cook

(202) 637−6684
Fax: (202) 637−5910
Email: susan.cook@hoganlovells.com
LEAD ATTORNEY
V.
Defendant
SEEMA VERMA represented by Kevin Matthew Snell
in her official capacity as Administrator, U.S. DEPARTMENT OF JUSTICE
1

Centers for Medicare & Medicaid Civil Division, Federal Programs Branch
Services 1100 L Street, NW
(202) 305−0924
Fax: (202) 616−8460
Email: kevin.snell@usdoj.gov
LEAD ATTORNEY
Defendant
ALEX M. AZAR, II represented by Kevin Matthew Snell
in his official capacity as Secretary, (See above for address)
United States Department of Health and LEAD ATTORNEY
Human Services ATTORNEY TO BE NOTICED
Date Filed # Page Docket Text

05/20/2019 1 COMPLAINT against ALEX M. AZAR, II, SEEMA VERMA ( Filing fee $
400 receipt number 0090−6135346) filed by MALLINCKRODT ARD LLC.
(Attachments: # 1 Civil Cover Sheet, # 2 Summons Barr, # 3 Summons Verma,
# 4 Summons Azar, # 5 Summons Liu, # 6 Exhibit 1, # 7 Exhibit 2, # 8 Exhibit
3, # 9 Exhibit 4, # 10 Exhibit 5, # 11 Exhibit 6, # 12 Exhibit 7, # 13 Exhibit 8, #
14 Exhibit 9, # 15 Exhibit 10, # 16 Exhibit 11, # 17 Exhibit 12)(Stetson,
Catherine) (Entered: 05/20/2019)
05/20/2019 2 LCvR 26.1 CERTIFICATE OF DISCLOSURE of Corporate Affiliations and
Financial Interests by MALLINCKRODT ARD LLC (Stetson, Catherine)
(Entered: 05/20/2019)
05/20/2019 3 NOTICE of Appearance by Susan Margaret Cook on behalf of
MALLINCKRODT ARD LLC (Cook, Susan) (Entered: 05/20/2019)
05/22/2019 4 MOTION for Preliminary Injunction by MALLINCKRODT ARD LLC
(Attachments: # 1 Memorandum in Support, # 2 Declaration, # 3 Notice to
Counsel/Party, # 4 Text of Proposed Order)(Stetson, Catherine) (Entered:
05/22/2019)
05/23/2019 Case Assigned to Judge Amy Berman Jackson. (zef, ) (Entered: 05/23/2019)
05/23/2019 5 SUMMONS (4) Issued Electronically as to ALEX M. AZAR, II, SEEMA
VERMA, U.S. Attorney and U.S. Attorney General. (Attachments: # 1 Notice
and Consent)(zef, ) (Entered: 05/23/2019)
05/23/2019 6 NOTICE of Appearance by Kyle Mitchell Druding on behalf of
MALLINCKRODT ARD LLC (Druding, Kyle) (Entered: 05/23/2019)
05/23/2019 Set/Reset Hearings: An on the record Telephone Scheduling Conference is set
for 5/24/2019 at 10:00 AM in Courtroom 3 before Judge Amy Berman Jackson.
The parties will be notified, in a separate email, by the Court's Deputy Clerk of
both the toll free dial in telephone number and pass code to allow them access
to the call. (jth) (Entered: 05/23/2019)
05/23/2019 7 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed as
to the United States Attorney. Date of Service Upon United States Attorney on
2

5/23/2019. Answer due for ALL FEDERAL DEFENDANTS by 7/22/2019.
(Stetson, Catherine) (Entered: 05/23/2019)
05/23/2019 8 NOTICE of Appearance by Kevin Matthew Snell on behalf of All Defendants
(Snell, Kevin) (Entered: 05/23/2019)
05/24/2019 Minute Entry for proceedings held before Judge Amy Berman Jackson:
Telephone Scheduling Conference call held on 5/24/2019. Pursuant to Federal
Rule of Civil Procedure 65(a)(2), and with the consent of the parties, the Court
will consolidate the motion for a preliminary injunction ("PI") with the merits.
The Court hereby adopts the parties' proposed schedule: the Administrative
Record must be transmitted by June 7, 2019; the government must file its
opposition to the P.I. combined with its cross−motion for summary judgment by
June 14, 2019; plaintiff's opposition to the cross−motion for summary judgment
combined with its reply in support of its P.I. motion is due June 24, 2019; the
government's reply in support of its cross−motion for summary judgment is due
July 3, 2019. The Court will hold a hearing on the motions on July 23, 2019 at
10:00 am in Courtroom 3. Defendant is excused from filing an answer to the
complaint while these motions are pending. The Court will hold a telephonic
status conference on May 29, 2019 at 10:00 am. SO ORDERED. By Judge
Amy Berman Jackson. (Court Reporter: Elizabeth Saint−Loth) (jth) (Entered:
05/24/2019)
05/29/2019 Minute Entry for proceedings held before Judge Amy Berman Jackson:
Telephone Conference Call held on 5/29/2019. (Court Reporter: Janice
Dickman). (jth) (Entered: 05/29/2019)
06/03/2019 9 TRANSCRIPT OF PROCEEDINGS, before Judge Amy Berman Jackson, held
on 5−24−2019; Page Numbers: 1 − 13. Date of Issuance: 6−03−2019. Court
Reporter/Transcriber: Elizabeth SaintLoth; Telephone number: 202−354−3242,
Transcripts may be ordered by submitting the <a
href="http://www.dcd.uscourts.gov/node/110">Transcript Order
Form</a>For the first 90 days after this filing date, the
transcript may be viewed at the courthouse at a public terminal or purchased
from the court reporter referenced above. After 90 days, the transcript may be
accessed via PACER. Other transcript formats, (multi−page, condensed, CD or
ASCII) may be purchased from the court reporter.NOTICE RE
REDACTION OF TRANSCRIPTS: The parties have twenty−one days to file
with the court and the court reporter any request to redact personal identifiers
from this transcript. If no such requests are filed, the transcript will be made
available to the public via PACER without redaction after 90 days. The policy,
which includes the five personal identifiers specifically covered, is located on
our website at www.dcd.uscourts.gov. Redaction Request due
6/24/2019. Redacted Transcript Deadline set for 7/4/2019. Release of Transcript
Restriction set for 9/1/2019.(Saint−Loth, Elizabeth) (Entered: 06/03/2019)
06/06/2019 10 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed
on United States Attorney General. Date of Service Upon United States
Attorney General May 29, 2019. (Druding, Kyle) (Entered: 06/06/2019)
06/06/2019 11 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed.
ALEX M. AZAR, II served on 5/29/2019 (Druding, Kyle) (Entered:
06/06/2019)
3

06/06/2019 12 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed.
SEEMA VERMA served on 5/28/2019 (Druding, Kyle) (Entered: 06/06/2019)
06/06/2019 13 MOTION for Extension of Time to Schedule (Urgent) by ALEX M. AZAR, II,
SEEMA VERMA (Attachments: # 1 Text of Proposed Order)(Snell, Kevin)
(Entered: 06/06/2019)
06/07/2019 MINUTE ORDER granting 13 Motion for Extension of Time. The
Administrative Record must be transmitted by June 28, 2019; the government
must file its opposition to the P.I. combined with its cross−motion for summary
judgment by July 5, 2019; plaintiff's opposition to the cross−motion for
summary judgment combined with its reply in support of its P.I. motion is due
July 15, 2019; and the government's reply in support of its cross−motion for
summary judgment is due July 24, 2019. The Motions Hearing scheduled for
July 23, 2019 is hereby VACATED and rescheduled for July 30, 2019 at 10:00
am in Courtroom 3. In light of the representations in defendants' motion, it is
ORDERED that defendant will refrain from locking Mallinckrodt out until three
business days after the Court has entered judgment on the merits in the case or
the matter is otherwise resolved. SO ORDERED. Signed by Judge Amy
Berman Jackson on 6/7/2019. (lcabj2) (Entered: 06/07/2019)
06/28/2019 14 NOTICE of Filing a Certified List of Contents of Administrative Record by
ALEX M. AZAR, II, SEEMA VERMA (Attachments: # 1 Certified List of
Contents of Administrative Record)(Snell, Kevin) (Entered: 06/28/2019)
07/04/2019 15 Joint MOTION for Leave to File Defendants' Brief Under Seal by
MALLINCKRODT ARD LLC (Attachments: # 1 Text of Proposed
Order)(Stetson, Catherine) (Entered: 07/04/2019)
07/05/2019 16 SEALED MOTION FOR LEAVE TO FILE DOCUMENT UNDER SEAL
filed by ALEX M. AZAR, II, SEEMA VERMA (This document is SEALED
and only available to authorized persons.) (Attachments: # 1 Text of Proposed
Order (on motion to seal), # 2 Exhibit Sealed Statement of Points and
Authorities in Support of Defendants' Motion for Summary Judgment and in
Opposition to Plaintiff's Motion for a Preliminary Injunction)(Snell, Kevin)
(Entered: 07/05/2019)
07/05/2019 17 MOTION for Summary Judgment by ALEX M. AZAR, II, SEEMA VERMA
(Attachments: # 1 Text of Proposed Order)(Snell, Kevin) (Entered: 07/05/2019)
07/08/2019 MINUTE ORDER granting 16 Defendant's Sealed Motion for Leave to File
Document Under Seal. The Clerk of Court is directed to file under seal [16−2]
Statement of Points and Authorities in Support of Defendants' Cross−Motion
for Summary Judgment and in Opposition to Plaintiff's Motion for Preliminary
Injunction. It is ORDERED that the parties shall cooperate in preparing
redactions and defendants shall file a redacted public version of its brief by July
12, 2019. Signed by Judge Amy Berman Jackson on 7/8/19. (DMK) (Entered:
07/08/2019)
07/08/2019 Set/Reset Deadlines: Defendants shall file a redacted public version of its brief
by 7/12/2019. (jth) (Entered: 07/09/2019)
07/08/2019 18 SEALED DOCUMENT(Statement of Points and Authorities)filed by ALEX M.
AZAR, II, SEEMA VERMA. re 17 MOTION for Summary Judgment filed by
SEEMA VERMA, ALEX M. AZAR, II. (This document is SEALED and only
4

available to authorized persons.)(ztd) (Entered: 07/10/2019)
07/08/2019 19 SEALED OPPOSITION Memorandum in opposition to re 4 MOTION for
Preliminary Injunction filed by ALEX M. AZAR, II, SEEMA VERMA. (ztd);
(Combined Sealed Document. See docket entry no. 18 ) (Entered: 07/10/2019)
07/12/2019 20 REDACTED DOCUMENT− Statement of Points and Authorities in Support of
Defendants' Cross−Motion for Summary Judgment and in Opposition to
Plaintiff's Motion for a Preliminary Injunction by ALEX M. AZAR, II, SEEMA
VERMA. (Snell, Kevin) (Entered: 07/12/2019)
07/15/2019 21 Memorandum in opposition to re 17 MOTION for Summary Judgment filed by
MALLINCKRODT ARD LLC. (Attachments: # 1 Text of Proposed
07/15/2019 22 MOTION for Summary Judgment by MALLINCKRODT ARD LLC
(Attachments: # 1 Memorandum in Support, # 2 Text of Proposed
07/22/2019 23 Case directly reassigned to Judge Thomas F. Hogan by consent. Judge Amy
Berman Jackson is no longer assigned to the case. (ztnr) (Entered: 07/22/2019)
07/23/2019 MINUTE ORDER relocating the motion hearing scheduled to take place on
July 30, 2019 at 10:00AM. The hearing will now take place in Courtroom 26A,
which is on the Fourth Floor of the Annex. Signed by Judge Thomas F. Hogan
on July 23, 2019. (JK) (Entered: 07/23/2019)
07/23/2019 Set/Reset Hearings: Motion Hearing set for 7/30/2019 at 10:00 AM in
Courtroom 26A before Judge Thomas F. Hogan. (hs) (Entered: 07/23/2019)
07/24/2019 MINUTE ORDER rescheduling the hearing that is currently set to take place on
Tuesday, July 30, 2019 at 10:00am. The hearing shall now take place on Friday,
August 2, 2019 at 10:00am in Courtroom 26A. Signed by Judge Thomas F.
Hogan on July 24, 2019. (JK) (Entered: 07/24/2019)
07/24/2019 24 SEALED MOTION FOR LEAVE TO FILE DOCUMENT UNDER SEAL
filed by ALEX M. AZAR, II, SEEMA VERMA (This document is SEALED
and only available to authorized persons.) (Attachments: # 1 Text of Proposed
Order, # 2 Exhibit Sealed Combined Reply in Support of Defendants'
Cross−Motion for Summary Judgment and Memorandum in Opposition to
Plaintiff's Motion for Summary Judgment, # 3 Exhibit Proposed Order (for
Defendants' Opposition))(Snell, Kevin) (Entered: 07/24/2019)
07/24/2019 Minute Entry; for proceedings held before Judge Thomas F. Hogan: Telephone
Conference held in chambers on 7/24/2019. (Court Reporter Jeff Hook) (hs)
(Entered: 07/25/2019)
07/25/2019 Set/Reset Hearings: Motion Hearing reset for 8/2/2019 at 10:00 AM in
Courtroom 26A before Judge Thomas F. Hogan. (hs) (Entered: 07/25/2019)
07/29/2019 MINUTE ORDER granting 24 Defendants' Sealed Motion for Leave to File
Under Seal. The Clerk of Court is directed to file under seal 24 Defendants'
Combined Reply in Support of Defendants' Cross−Motion for Summary
Judgment and Memorandum in Opposition to Plaintiff's Motion for Summary
Judgment, which was submitted to the Court on July 24, 2019. It is also
ORDERED that the parties shall cooperate in preparing redactions and the
5

defendants shall file a redacted public version of its brief on or before July 31,
2019. Signed by Judge Thomas F. Hogan on July 29, 2019. (JK) (Entered:
07/29/2019)
07/29/2019 Set/Reset Deadlines: Defendant's Redacted Public Brief due by 7/31/2019. (hs)
(Entered: 07/29/2019)
07/29/2019 29 SEALED REPLY TO OPPOSITION filed by ALEX M. AZAR, II, SEEMA
VERMA re 17 MOTION for Summary Judgment (This document is SEALED
and only available to authorized persons.)(zjf) (Entered: 08/12/2019)
07/29/2019 30 SEALED OPPOSITION filed by ALEX M. AZAR, II, SEEMA VERMA re 22
MOTION for Summary Judgment (zjf) (Entered: 08/12/2019)
07/31/2019 25 REDACTED DOCUMENT− Combined Reply in Support of Defendants'
Cross−Motion for Summary Judgment and Memorandum in Opposition to
Plaintiff's Motion for Summary Judgment by ALEX M. AZAR, II, SEEMA
VERMA. (Attachments: # 1 Text of Proposed Order)(Snell, Kevin) (Entered:
07/31/2019)
08/02/2019 Minute Entry; for proceedings held before Judge Thomas F. Hogan: Oral
Argument held on 8/2/2019 re 22 Plaintiff's MOTION for Summary Judgment,
4 MOTION for Preliminary Injunction filed by MALLINCKRODT ARD LLC
and 17 MOTION for Summary Judgment filed by SEEMA VERMA, ALEX M.
AZAR, II. Motions taken Under Advisement. (Court Reporter Nancy Meyer)
(hs) (Entered: 08/02/2019)
08/02/2019 MINUTE ORDER directing the parties to submit short supplemental legal
briefs addressing the following: 42 U.S.C. § 1396r−8(k)(7)(iv) defines "single
source drug" in relevant part to mean a covered outpatient drug that is produced
or distributed "under a new drug application approved by the Food and Drug
Administration." The FDA's regulations define "new drug application, or NDA"
to mean in relevant part "the application described under § 314.50, including
all... supplements to the application." 21 C.F.R. § 314.3(b). That definition
further states that "[a]n NDA refers to 'stand−alone' applications submitted
under section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act and to
505(b)(2)." 21 C.F.R. § 314.3(b). Furthermore, that same regulation defines
"efficacy supplement" to mean a supplement "to an approved application NDA
proposing to make one or more related changes from among the following
changes to product labeling: (1) Add or modify an indication." 21 C.F.R. §
314.3(b). The record reflects no dispute that the "application" associated with
NDA number 022432 was an efficacy supplement. Accordingly, the parties
shall address whether the "application" associated with NDA number 022432
otherwise satisfies the definition of a "new drug application" as set forth in 21
C.F.R. § 314.3(b). The parties shall file their supplemental legal briefs, which
shall be no longer than five pages, on or before Friday, August 9, 2019. Signed
by Judge Thomas F. Hogan on August 2, 2019. (JK) (Entered: 08/02/2019)
08/05/2019 26 TRANSCRIPT OF PROCEEDINGS before Judge Thomas F. Hogan held on
08/02/2019; Page Numbers: 1−60. Date of Issuance:08/03/2019. Court Reporter
Nancy J. Meyer, Telephone No. (202) 354−3118, Tape Number: N/A.
Transcripts may be ordered by submitting the <a
href="http://www.dcd.uscourts.gov/node/110">Transcript Order
Form</a>For the first 90 days after this filing date, the
6

transcript may be viewed at the courthouse at a public terminal or purchased
from the court reporter referenced above. After 90 days, the transcript may be
accessed via PACER. Other transcript formats, (multi−page, condensed, CD or
ASCII) may be purchased from the court reporter.NOTICE RE
REDACTION OF TRANSCRIPTS: The parties have twenty−one days to file
with the court and the court reporter any request to redact personal identifiers
from this transcript. If no such requests are filed, the transcript will be made
available to the public via PACER without redaction after 90 days. The policy,
which includes the five personal identifiers specifically covered, is located on
our website at www.dcd.uscourts.gov. Redaction Request due
8/26/2019. Redacted Transcript Deadline set for 9/5/2019. Release of Transcript
Restriction set for 11/3/2019.(Meyer, Nancy) (Entered: 08/05/2019)
08/09/2019 27 SUPPLEMENTAL MEMORANDUM to re 22 MOTION for Summary
Judgment , 17 MOTION for Summary Judgment filed by MALLINCKRODT
ARD LLC. (Stetson, Catherine) (Entered: 08/09/2019)
08/09/2019 28 SUPPLEMENTAL MEMORANDUM to re 4 MOTION for Preliminary
Injunction , 22 MOTION for Summary Judgment , 17 MOTION for Summary
Judgment filed by ALEX M. AZAR, II, SEEMA VERMA. (Attachments: # 1
Exhibit 2012 Orange Book excerpt)(Snell, Kevin) (Entered: 08/09/2019)
12/06/2019 31 NOTICE of Recent Decision from the U.S. Court of Appeals for the D.C.
Circuit by ALEX M. AZAR, II, SEEMA VERMA (Attachments: # 1 Exhibit 1
− Ipsen Biopharmaceuticals v. Azar et al.)(Snell, Kevin) (Entered: 12/06/2019)
12/11/2019 32 RESPONSE re 31 Notice (Other) filed by MALLINCKRODT ARD LLC.
(Stetson, Catherine) (Entered: 12/11/2019)
03/03/2020 33 NOTICE /Praecipe by MALLINCKRODT ARD LLC (Stetson, Catherine)
(Entered: 03/03/2020)
03/03/2020 34 RESPONSE re 33 Notice (Other) filed by ALEX M. AZAR, II, SEEMA
VERMA (Snell, Kevin) Modified on 3/4/2020 to correct docket event/text
(zeg). (Entered: 03/03/2020)
03/13/2020 35 MEMORANDUM OPINION, Signed by Judge Thomas F. Hogan on
3/13/2020. (hs) Modified on 3/17/2020 pursuant to minute order filed on
3/16/2020 (eg). (Entered: 03/13/2020)
03/13/2020 36 ORDER; denying 4 Plaintiff's Motion for Preliminary Injunction; granting 17
Defendant's Motion for Summary Judgment; denying 22 Plaintiff's Cross
Motion for for Summary Judgment. A joint proposed redacted version of the
Memorandum Opinion shall be filed on or before 5/13/2020, Signed by Judge
Thomas F. Hogan on 3/13/2020. (hs) (Entered: 03/13/2020)
03/16/2020 37 Emergency MOTION for Reconsideration re 36 Order on Motion for
Preliminary Injunction,, Order on Motion for Summary Judgment,,,, Set/Reset
Deadlines, 35 Sealed Memorandum Opinion , MOTION to Stay re 36 Order on
Motion for Preliminary Injunction,, Order on Motion for Summary Judgment,,,,
Set/Reset Deadlines, 35 Sealed Memorandum Opinion by MALLINCKRODT
ARD LLC (Attachments: # 1 Memorandum in Support, # 2 Exhibit 1, # 3
Exhibit 2, # 4 Text of Proposed Order)(Stetson, Catherine). Added MOTION
for Injunction on 3/18/2020 (znmw). (Entered: 03/16/2020)
7

03/16/2020 MINUTE ORDER. The parties shall appear for a teleconference to take place
on Tuesday, March 17, 2020 at 10:30AM before Judge Thomas F. Hogan.
Signed by Judge Thomas F. Hogan on March 16, 2020. (JK) (Entered:
03/16/2020)
03/16/2020 38 NOTICE to the Court by ALEX M. AZAR, II, SEEMA VERMA (Snell, Kevin)
(Entered: 03/16/2020)
03/17/2020 MINUTE ORDER. With the parties' consent the Court hereby ORDERS the
Clerk of the Court to unseal the 35 Memorandum Opinion that was issued on
Friday, March 13, 2020. Signed by Judge Thomas F. Hogan on March 17, 2020.
(JK) (Entered: 03/17/2020)
03/17/2020 39 TRANSCRIPT OF TELEPHONE CONFERENCE before Judge Thomas F.
Hogan held on March 17, 2020. Page Numbers: 1 − 15. Date of Issuance:
March 17, 2020. Court Reporter: Jeff Hook. Telephone number:
202−354−3373. Transcripts may be ordered by submitting the Transcript Order
Form
For the first 90 days after this filing date, the transcript may be viewed at the
courthouse at a public terminal or purchased from the court reporter refe renced
above. After 90 days, the transcript may be accessed via PACER. Other
transcript formats, (multi−page, condensed, CD or ASCII) may be purchased
from the court reporter.
NOTICE RE REDACTION OF TRANSCRIPTS: The parties have

twenty−one days to file with the court and the court reporter any request to
redact personal identifiers from this transcript. If no such requests are filed, the
transcript will be made available to the public via PACER without redaction
after 90 days. The policy, which includes the five personal identifiers
specifically covered, is located on our website at www.dcd.uscourts.gov.
Redaction Request due 4/7/2020. Redacted Transcript Deadline set for

4/17/2020. Release of Transcript Restriction set for 6/15/2020.(Hook, Jeff)
(Entered: 03/17/2020)
03/17/2020 Minute Entry; for proceedings held before Judge Thomas F. Hogan: Telephone
Conference held on 3/17/2020. (Court Reporter Jeff Hook.) (hs) (Entered:
03/24/2020)
03/30/2020 40 Memorandum in opposition to re 37 Emergency MOTION for Reconsideration
re 36 Order on Motion for Preliminary Injunction,, Order on Motion for
Summary Judgment,,,, Set/Reset Deadlines, 35 Sealed Memorandum Opinion
MOTION to Stay re 36 Order on Motion for Preliminary Injunction,, Order on
Motion for Summary Judgment,,,, Set/Reset Deadlines, 35 Sealed
Memorandum Opinion MOTION for Preliminary Injunction filed by ALEX M.
AZAR, II, SEEMA VERMA. (Attachments: # 1 Text of Proposed Order)(Snell,
Kevin) (Entered: 03/30/2020)
04/06/2020 41 REPLY to opposition to motion re 37 Emergency MOTION for
Reconsideration re 36 Order on Motion for Preliminary Injunction,, Order on
Motion for Summary Judgment,,,, Set/Reset Deadlines, 35 Sealed
Memorandum Opinion MOTION to Stay re 36 Order on Motion for
8

Deadlines, 35 Sealed Memorandum Opinion MOTION for Preliminary
Injunction filed by MALLINCKRODT ARD LLC. (Stetson, Catherine)
(Entered: 04/06/2020)
04/08/2020 42 MOTION for Leave to File Sur−Reply in Opposition to Plaintiff's Emergency
Motion for Reconsideration and Stay of Entry of Judgment Pending
Reconsideration Or, Alternatively, Injunction Pending Appeal by ALEX M.
AZAR, II, SEEMA VERMA (Attachments: # 1 Exhibit Proposed sur−reply, # 2
Text of Proposed Order)(Snell, Kevin) (Entered: 04/08/2020)
04/09/2020 43 RESPONSE re 42 MOTION for Leave to File Sur−Reply in Opposition to
Plaintiff's Emergency Motion for Reconsideration and Stay of Entry of
Judgment Pending Reconsideration Or, Alternatively, Injunction Pending
Appeal filed by MALLINCKRODT ARD LLC. (Stetson, Catherine) (Entered:
04/09/2020)
04/10/2020 MINUTE ORDER granting the defendants' 42 Motion for Leave to File
Surreply. Accordingly, the Clerk of the Court is directed to docket the
defendants' surreply, which is attached to this motion as Exhibit 1. Signed by
Judge Thomas F. Hogan on April 10, 2020. (JK) (Entered: 04/10/2020)
04/10/2020 44 SURREPLY to re 37 Emergency MOTION for Reconsideration re 36 Order on
Motion for Preliminary Injunction,, Order on Motion for Summary Judgment,
Set/Reset Deadlines, 35 Sealed Memorandum Opinion MOTION to Stay re 36
Order on Motion for Preliminary Injunction,, Order on Motion for Summary
Judgment,,,, Set/Reset Deadlines, 35 Sealed Memorandum Opinion MOTION
for Preliminary Injunction filed by ALEX M. AZAR, II, SEEMA VERMA.
(zed, ) (Entered: 04/13/2020)
05/08/2020 45 NOTICE (Joint) by MALLINCKRODT ARD LLC (Stetson, Catherine)
(Entered: 05/08/2020)
05/29/2020 46 MEMORANDUM OPINION. Signed by Judge Thomas F. Hogan on May 29,
2020. (JK) Modified on 5/29/2020 to correct description (JK). (Entered:
05/29/2020)
05/29/2020 47 ORDER denying 35 Mallinckrodt ARD LLC's Emergency Motion for
Reconsideration and Stay of Entry of Judgment Pending Reconsideration or,
Alternatively, Injunction Pending Appeal. Signed by Judge Thomas F. Hogan
on May 29, 2020. (JK) (Entered: 05/29/2020)
06/01/2020 48 NOTICE OF APPEAL TO DC CIRCUIT COURT as to 36 Order on Motion for
Deadlines, 47 Order by MALLINCKRODT ARD LLC. Filing fee $ 505, receipt
number ADCDC−7179011. Fee Status: Fee Paid. Parties have been notified.
(Druding, Kyle) (Entered: 06/01/2020)
9
Case
Case1:19-cv-01471-TFH
1:19-cv-01471-TFH Document
Document49
48 Filed
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40

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
MALLINCKRODT ARD LLC, )
)
Plaintiff, )
)
v. ) Civil Action No. 19-cv-1471-TFH
)
SEEMA VERMA, )
in her official capacity as )
ADMINISTRATOR, CENTERS FOR )
MEDICARE & MEDICAID SERVICES, )
)
and )
)
ALEX M. AZAR II, )
in his official capacity as SECRETARY, )
UNITED STATES DEPARTMENT OF )
HEALTH AND HUMAN SERVICES, )
)
Defendants. )
)
PLAINTIFF’S NOTICE OF APPEAL
Notice is hereby given that Plaintiff Mallinckrodt ARD LLC is appealing to the United
States Court of Appeals for the District of Columbia Circuit from the Court’s final orders in this
case, entered on March 13, 2020 (ECF No. 36) and May 29, 2020 (ECF No. 47).
Dated: June 1, 2020 Respectfully submitted,
/s/ Catherine E. Stetson

Catherine E. Stetson (D.C. Bar No. 453221)
Susan M. Cook (D.C. Bar No. 462978)
Kyle M. Druding (D.C. Bar No. 1044631)
Harrison G. Kilgore (D.C. Bar No. 1630371)
Washington, D.C. 20004
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Phone: (202) 637-5491
Fax: (202) 637-5910
cate.stetson@hoganlovells.com
Counsel for Mallinckrodt ARD LLC
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UNITED STATES DISTRICT COURT
MALLINCKRODT ARD LLC,
Plaintiff,
Civil Action No. 19-cv-1471 (TFH)
v.
SEEMA VERMA, et al.,
Defendants.
ORDER
Upon consideration of Mallinckrodt ARD LLC’s Emergency Motion for Reconsideration
and Stay of Entry of Judgment Pending Reconsideration or, Alternatively, Injunction Pending
Appeal, ECF No. 37, the responses thereto, the Administrative Record, and the entire record in
this case, and for the reasons set forth in the accompanying Memorandum Opinion, it is
ORDERED that Mallinckrodt ARD LLC’s Emergency Motion for Reconsideration and
Stay of Entry of Judgment Pending Reconsideration or, Alternatively, Injunction Pending
Appeal, ECF No. 37, is DENIED.
SO ORDERED.
March 29, 2020 ___________________________________

Thomas F. Hogan
SENIOR UNITED STATES DISTRICT JUDGE
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UNITED STATES DISTRICT COURT
MALLINCKRODT ARD LLC,
Plaintiff,
v. Civil Action No. 19-cv-1471 (TFH)
SEEMA VERMA, et al.,
Defendants.
MEMORANDUM OPINION
Pending before the Court is plaintiff Mallinckrodt ARD LLC’s (Mallinckrodt’s)
Emergency Motion for Reconsideration and Stay of Entry of Judgment Pending Reconsideration
or, Alternatively, Injunction Pending Appeal, ECF No. 37. Mallinckrodt invokes Rules 59, 60,
and 62(c) of the Federal Rules of Civil Procedure, along with Rule 8(a)(1) of the Federal Rules
of Appellate Procedure, to request that the Court do the following three things: (1) reconsider its
March 13, 2020, memorandum opinion granting summary judgment in favor of defendants
Seema Verma, Administrator of the Centers for Medicare & Medicaid Services (CMS), and Alex
M. Azar II, Secretary of the United States Department of Health and Human Services (HHS);
(2) stay the entry of judgment pending reconsideration; and (3) issue an injunction prohibiting
CMS from “locking” Mallinckrodt out of the Drug Data Reporting for Medicaid (DDR) system
or otherwise enforcing the judgment before Mallinckrodt can litigate an appeal. Mem. of P. &
A. in Support of Pl.’s Emergency Mot. 1, ECF No. 37-1 (hereinafter cited as “Mallinckrodt’s
Br.”). Mallinckrodt contends that these judicial actions are warranted because the Court
“fundamental[ly] misread[]” the controlling statute and the company faces an “existential threat”
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of financial ruin if CMS locks the company out of the Drug Data Reporting for Medicaid system
before an appeal is resolved. Mallinckrodt’s Br. 3. The defendants oppose the motion.
Because the Court holds that Mallinckrodt failed to carry its burden of establishing that
reconsideration is appropriate, that it is likely to succeed on the merits of an appeal, or that it is
likely to be irreparably harmed absent a stay pending appeal, the Court will deny Mallinckrodt’s
motion for the reasons that follow.
DISCUSSION 1
I. MALLINCKRODT FAILED TO ESTABLISH THAT RECONSIDERATION IS

WARRANTED
Mallinckrodt’s motion is titled as one for “reconsideration” but, aside from vague first-
paragraph citations to Rules 59 and 60 of the Federal Rules of Civil Procedure, Mallinckrodt
never identifies the relevant provisions of these rules that it believes authorize reconsideration,
the legal standards associated with those provisions, or how it believes it has satisfied those
standards. See Mallinckrodt’s Mot. 1; Mallinckrodt’s Br. 1, 3–12; Mallinckrodt’s Reply Br. 1–
10, ECF No. 41. Because Mallinckrodt failed to specify the relevant provisions of the rules that
it is relying on, the Court is left to assume that they are Rule 59’s subparagraph (e) and Rule 60’s
subparagraph (b), although it is unclear which of subparagraph (b)’s enumerated provisions
Mallinckrodt is advancing. Regardless, reconsideration under either Rule 59(e) or Rule 60(b) is
considered “extraordinary” and unwarranted when a litigant simply recycles legal arguments that
were previously considered and rejected by a court, as is the case here. See, e.g., Leidos, Inc. v.
Hellenic Republic, 881 F.3d 213, 217 (D.C. Cir. 2018) (stating that reconsideration under Rule
59(e) is an “extraordinary measure” that cannot be used to reargue matters a court already
1
This opinion assumes that the reader is familiar with the facts of the case, which are discussed
at length in the Court’s March 13, 2020, memorandum opinion. See Mem. Op., ECF No. 35.
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considered); Kramer v. Gates, 481 F.3d 788, 790 (D.C. Cir. 2007) (“[R]elief under Rule 60(b)(6)
is appropriate only in ‘extraordinary circumstances.’” (quoting Ackermann v. United States, 340
U.S. 193, 199 (1950))); Howard v. U.S. Dep’t of Educ., 756 F. Supp. 2d 72, 74 (D.D.C. 2010)
(rejecting reconsideration under Rule 60(b) when a plaintiff “rehash[ed] the same argument”
made in a prior motion).
A. Rule 59(e) of the Federal Rules of Civil Procedure
Addressing Rule 59(e) first, this rule permits a court to exercise the discretion to alter or
amend a judgment when (1) the controlling law has changed, (2) new evidence has become
available, or (3) the court needs to correct a clear error or prevent manifest injustice. Firestone v.
Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (per curiam); Fed. R. Civ. P. 59(e). Absent one
of these three circumstances, though, “[a] district court need not grant a Rule 59(e) motion.”
Mohammadi v. Islamic Republic of Iran, 782 F.3d 9, 17 (D.C. Cir. 2015). And it is well
established that the rule is not available to “relitigate old matters.” Exxon Shipping Co. v. Baker,
554 U.S. 471, 486 (2008) (quoting 11 C. Wright & A. Miller, Federal Practice and Procedure
§ 2810.1, pp. 127–128 (2d ed.1995)).
As the Court already noted, absent from Mallinckrodt’s motion and supporting legal
briefs is any discussion about the legal standards that apply to a Rule 59(e) motion or how
Mallinckrodt believes that it has satisfied them. See Mallinckrodt’s Mot.; Mallinckrodt’s Br.;
Mallinckrodt’s Reply Br., ECF No. 41. Mallinckrodt offers nothing in the way of an argument
hinting at the possibility that the controlling law has changed or that new evidence is available.
Moreover, a word search of Mallinckrodt’s motion, supporting legal brief, and reply brief reveals
that the terms “clear error” and “manifest injustice” are nowhere to be found. See id.
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At best, Mallinckrodt argues that the Court’s “construction of the [Medicaid Drug Rebate
Program] statute as focusing on whether the drug is ‘an entirely new drug’ is simply unfounded”
therefore “[r]econsideration should be granted in order to permit the Court to engage again with
the relevant statutory language, with the parties’ briefs, and with the transcript of the August 2,
2019 argument on this critical point of statutory interpretation.” Mallinckrodt’s Mot. 9. But the
Court’s opinion never focused on whether Acthar was an entirely new drug. Instead, it focused
on what the statute actually says, which is that the base date Average Manufacturer Price (AMP)
is set on the date the “covered outpatient drug” was “approved by” the United States Food and
Drug Administration (FDA) and “first marketed.” Mem. Op. 35–37, ECF No. 35.
The statute plainly does not contemplate that a covered outpatient drug’s base date AMP
can be “reset” later during that drug’s lifecycle, as CMS correctly cautioned Mallinckrodt in
2012, A.R. 617, absent, perhaps, FDA-approved new dosage forms or strengths, see 42 U.S.C.
§ 1396r-8(c)(2), which are not at issue here. And fatal to Mallinckrodt’s case are its concessions
that (1) the covered outpatient drug H.P. Acthar Gel® was “approved by” the FDA in 1952
under New Drug Application (NDA) number 008372 and (2) the only things the FDA approved
under defunct NDA number 022432 were the addition of an infantile spasm indication along
with other label revisions to a “decades-old drug.” 2 Verified Compl. ¶ 27, ECF No. 1;
2
Paragraphs 29 and 30 of Mallinckrodt’s Verified Complaint summarize the very facts that
reveal as a charade Mallinckrodt’s contention that the FDA approved a “distinct”—i.e., new—
drug under NDA 022432:
Questcor acquired H.P. Acthar Gel in 2001, and in 2006 sought to have the product
approved for the treatment of IS. The request for approval, which presented
information and data from published literature on the use of H.P. Acthar Gel for IS,
was submitted as a supplement to the existing NDA (sNDA). In May 2007, FDA
issued what is now called a “Complete Response Letter” (CRL), in which the
agency declined to approve Questcor’s sNDA, explaining that the company had not
4
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Mallinckrodt’s Reply Br. 5 (admitting that what the FDA approved in 2010 were label revisions
for a “decades-old drug product,” including adding an infantile spasm indication).
Divested of its reliance on sheer insistence, Mallinckrodt’s argument amounts to a bald
disagreement with the outcome that fails to establish, or even present, a clear error or manifest
injustice, neither of which can be “demonstrated by the disappointment of the losing party.” Oto
v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000). Upon careful consideration of
Mallinckrodt’s motion and supporting legal briefs, it is clear to the Court that the company
shown a sufficient nexus between the product and the relied-upon studies to meet
the standards for approval.
Consistent with FDA procedure, the sNDA remained pending while Questcor and
FDA reached agreement on how to address the asserted inadequacy, and the
company set about developing the necessary data. During this period, FDA
unilaterally converted the sNDA to a new, separate NDA, to which (consistent with
standard procedures) the agency assigned a distinct NDA number: NDA 022432.
The agency took this action because it concluded the IS indication was
fundamentally different from the other uses for which the product had been
approved, and required review by a different component within FDA than had to
date been responsible for the drug. The new NDA was classified as a “Type 6”
NDA, which was used for drug products that had already been approved or
marketed by the same applicant, but were intended for a new indication or claim.
Verified Comp. ¶¶ 29, 30 (emphases added). These paragraphs serve as an express admission
that no distinct “drug” was “approved by” the FDA under defunct provisional NDA number
022432; rather, NDA number 022432 served solely as a ministerial (and temporary) mechanism
for the FDA to facilitate another division reviewing what Mallinckrodt does not dispute was, in
fact, “a supplement to the existing NDA”—i.e., NDA number 008372. More to the point,
Mallinckrodt admits that NDA number 022432 involved a “drug product” that “had already been
approved or marketed” but was “intended for a new indication or claim,” Verified Compl. ¶ 30,
which means that there was no new (or, as Mallinckrodt seeks to characterize it, “distinct”) drug
that could qualify as a separate “covered outpatient drug . . . approved by” the FDA after October
1, 1990 for the purpose of resetting the base date AMP pursuant to 42 U.S.C. § 1396r-
8(c)(2)(A)(ii)(II), as amended by 42 U.S.C. § 1396r-8(c)(2)(B), see infra Part II(A). There is no
mistaking that the statute expressly requires that the FDA “approval” be of a “covered outpatient
drug” under 42 U.S.C. § 1396r-8(c)(2)(A)(ii)(II) and not simply be “approval” of an NDA, as
Mallinckrodt urges.
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“merely [takes] umbrage with the court’s ruling and rehashe[s] old arguments” without ever
establishing a legal basis for reconsideration under Rule 59(e). Id. As a result, Mallinckrodt
failed to carry its burden of demonstrating that reconsideration is warranted under that rule. See,
e.g., Schoenman v. F.B.I., 857 F. Supp. 2d 76, 80 (D.D.C. 2012) (stating that “[m]otions under
Rule 59(e) are disfavored and the moving party bears the burden of establishing extraordinary
circumstances warranting relief from a final judgment” (internal quotation marks omitted));
Niedermeier v. Office of Baucus, 153 F. Supp. 2d 23, 28 (D.D.C. 2001) (same).
B. Rule 60(b) of the Federal Rules of Civil Procedure
Turning to Rule 60(b), this rule is “intended to preserve the delicate balance between the
sanctity of final judgments . . . and the incessant command of the court’s conscience that justice
be done in light of all the facts.” Good Luck Nursing Home, Inc. v. Harris, 636 F.2d 572, 577
(D.C. Cir. 1980) (quotation marks omitted). Rule 60(b) sets forth six grounds upon which a
litigant may obtain relief from a final judgment, order, or proceeding, only two of which are
potentially relevant here. The first ground is Rule 60(b)(1), which provides that the court may
relieve a litigant from a final judgment, order, or proceeding for “mistake, inadvertence, surprise,
or excusable neglect.” Fed. R. Civ. P. 60(b)(1). The second ground is Rule 60(b)(6), which
allows the Court to relieve a litigant from a final judgment, order, or proceeding for “any other
reason that justifies relief.” Rule 60(b)(6). Mallinckrodt again neglects to identify which ground
it is invoking to seek relief and fails to argue—much less establish—that relief is warranted
under either.
Notwithstanding that Rule 60(b) “grants federal courts broad authority to relieve a party
from a final judgment upon such terms as are just,” Liljeberg v. Health Services Acquisition
Corp., 486 U.S. 847, 863 (1988), a litigant nevertheless “must clear a very high bar” to secure
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this relief, Kramer, 481 F.3d at 792. With respect to Rule 60(b)(1), relief resulting from mistake,
inadvertence, surprise, or excusable neglect is “rare” because district courts are permitted to
“correct only limited types of substantive errors.” Hall v. C.I.A., 437 F.3d 94, 99 (D.C. Cir.
2006). And as far as Rule 60(b)(6) is concerned, relief under that provision “is even more rare,
being available only in ‘extraordinary circumstances.’” Owens v. Republic of Sudan, 864 F.3d
751, 818 (D.C. Cir. 2017), certified question answered, 194 A.3d 38 (D.C. App. 2018) (quoting
Ackermann v. United States, 340 U.S. 193, 199 (1950)). Furthermore, the United States Court of
Appeals for the District of Columbia Circuit has noted that “a dispute over the proper
interpretation of a statute, by itself, does not likely justify relief under Rule 60(b)(6).” Id. at 818
n.11. Precedent also “makes clear that Rule 60(b)(6) is not an opportunity for unsuccessful
litigants to take a mulligan,” Kramer, 481 F.3d at 792, nor can it serve to “rescue a litigant from
strategic choices that later turn out to be improvident,” Good Luck Nursing Home, Inc., 636 F.2d
at 577.
Faced with insufficient legal arguments from which the Court can discern (1) which Rule
60(b) provisions Mallinckrodt is invoking and (2) whether relief is warranted under any such
provisions, the Court is deprived of any legal basis to grant the requested reconsideration.
C. Summary Conclusion
Whether Mallinckrodt intended to lend an air of mystery to its motion or to obfuscate an
argument it viewed as weak, the fact of the matter is that, as the Seventh Circuit aptly observed
nearly three decades ago, “[j]udges are not like pigs, hunting for truffles buried in briefs.”
United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991). The Court is not obligated to divine
from Mallinckrodt’s briefs a viable legal argument that it failed to adequately present. To the
contrary, the burden to demonstrate that reconsideration is warranted under either Rule 59 or
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Rule 60 belongs to Mallinckrodt. See, e.g., Schoenman, 857 F. Supp. 2d at 80; Niedermeier, 153
F. Supp. 2d at 28; Owens, 864 F.3d at 819.
Because Mallinckrodt failed to provide any legal discussion about how or why Rules 59
and 60 apply, it failed to carry its burden of supplying the “extraordinary” circumstances that
justify relief under either rule and, in any event, reconsideration is not available to reargue
grounds the Court already considered and found unconvincing. See, e.g., Leidos, 881 F.3d at
217; Kramer, 481 F.3d at 790; Howard, 756 F. Supp. 2d at 74. For all the foregoing reasons, the
Court will decline Mallinckrodt’s invitation to exercise judicial discretion by granting
reconsideration under either rule. Mallinckrodt’s motion for reconsideration will therefore be
denied.
II. A STAY PENDING APPEAL IS NOT WARRANTED
In addition to reconsideration, Mallinckrodt also seeks to stay the entry of judgment
pending reconsideration and enjoin the defendants from “locking” the company out of the federal
database that governs Medicaid rebates until the company can resolve an appeal of the Court’s
March 13, 2020, decision granting summary judgment in the defendants’ favor. Mallinckrodt’s
Mot. 1. On May 8, 2020, the parties filed a Joint Notice of Parties, ECF No. 45, which advised
the Court that the defendants “agreed to refrain from locking Mallinckrodt out of CMS’s online
data reporting system until June 14, 2020.” The Court commends the parties for collaborating to
reach this intermediate resolution without the need for judicial intervention. Although the
parties’ agreement and this opinion appear to moot Mallinckrodt’s requested stay of the Court’s
judgment pending reconsideration, see, e.g., Reporters Comm. for Freedom of Press v. Sampson,
591 F.2d 944, 950 (D.C. Cir. 1978) (“[A]n issue is moot if it has lost its character as a present,
live controversy.”), Mallinckrodt’s request for an injunction to prevent the defendants from
locking the company out of the database pending the resolution of an appeal remains a live issue.
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Mallinckrodt asserts that it is entitled to an injunction because it is likely to succeed on
the merits of an appeal and would suffer irreparable harm if during an appeal it is unable to
report or revise Acthar’s drug pricing in the Drug Data Reporting for Medicaid database, it is
subjected to civil monetary penalties, and its National Drug Rebate Agreement (NDRA) is
suspended. 3 Mallinckrodt’s Mot. 13. The defendants counter by arguing that, among other
points, “a stay would inflict immense harm upon the Government and the public,” Gov’t’s Opp’n
Br. 4, “equity clearly tips against permitting Mallinckrodt to continue course by withholding
payment pending appeal to the detriment of the Medicaid Program,” id. at 4–5, and the
“magnitude of the harm to the Government and public is severe and continuing to grow” given
that “Mallinckrodt has effectively retained an interest-free loan at taxpayers’ expense to date—
indeed, CMS may never be able to recover interest on Mallinckrodt’s past underpayment,” id. at
5. The defendants also challenge Mallinckrodt’s claim that if an injunction is not granted
Mallinckrodt’s immediate liability for approximately $600 million in Medicaid rebate
underpayments would threaten the company’s existence, id. at 6, particularly when the company
recently stated that 2019 was a successful year, id. at 6–7.
As an initial matter, Mallinckrodt’s request to prohibit CMS from “altering the status quo
by locking [Mallinckrodt] out of the Drug Data Reporting for Medicaid (DDR) system or taking
any other enforcement action pending appeal” is presented as an “alternative” request for an
3
Mallinckrodt argues that “because it is the NDRA that is the condition precedent to states’
obligation to cover a manufacturer’s covered outpatient drugs, when Mallinckrodt’s NDRA is
suspended, states will no longer be required to cover Mallinckrodt’s covered outpatient drugs,
including Acthar.” Mallinckrodt’s Mot. 13. The irony of this argument cannot elude
Mallinckrodt in light of its veiled threat to quit the Medicaid Drug Rebate Program in 2012. See
A.R. 142 (insinuating that Acthar’s ongoing participation in the program might be “untenable” if
CMS refused to reduce its rebate liability but that its departure was not “in the interest of CMS,
as we believe state Medicaid programs likely still will be required to cover Acthar’s use for
infantile spasms even if Questcor does exit the program”).
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“injunction.” Mallinckrodt’s Mot. 1. Mallinckrodt cites, however, Rule 62 of the Federal Rules
of Civil Procedure, which governs “stays” of judicial proceedings. Although an injunction “has
some functional overlap” with a stay pending appeal, the Supreme Court’s decision in Nken v.
Holder, 556 U.S. 418, 429 (2009), indicates that, in circumstances like this one where the
moving party is asking the Court to maintain the status quo by suspending the opposing party’s
authority to act—i.e., by suspending the Court’s March opinion and judgment—the appropriate
remedy is a stay, albeit the same legal standards apply to stays pending appeal and injunctions,
see Washington Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d 841, 842 n.1
(D.C. Cir. 1977) (noting that the factors to establish the stay of the administrative order at issue
in Virginia Petroleum Jobbers Ass’n v. Fed. Power Comm’n, 259 F.2d 921 (D.C. Cir. 1958),
“also apply to motions for preliminary injunctions and motions for stays of district court orders
pending appeal”).
The D.C. Circuit has characterized the legal standards to obtain a stay as “stringent” 4 and
identified the following four factors as determinative:
(1) Has the petitioner made a strong showing that it is likely to prevail on the merits
of its appeal? Without such a substantial indication of probable success, there would
be no justification for the court’s intrusion into the ordinary processes of
administration and judicial review. (2) Has the petitioner shown that without such
relief, it will be irreparably injured? . . . (3) Would the issuance of a stay
substantially harm other parties interested in the proceedings? . . . (4) Where lies
the public interest?
Washington Metro. Area Transit Comm’n, 559 F.2d at 842–43 (quoting Virginia Petroleum
Jobbers Ass’n, 259 F.2d at 925). Historically, courts in this jurisdiction applied a so-called
4
See, e.g., Advanta Bank v. F.D.I.C., No. 10-5051, 2010 WL 1050253, at *1 (D.C. Cir. Mar. 11,
2010) (per curiam) (referring to the “stringent standards required for a stay pending appeal”);
Kiyemba v. Bush, No. 08-5424, 2008 WL 4898963, at *1 (D.C. Cir. Oct. 20, 2008) (per curiam)
(same); Al-Bandar v. Bush, No. 06 5425, 2006 WL 3986241, at *1 (D.C. Cir. Dec. 29, 2006) (per
curiam) (same).
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“sliding scale” analysis to these factors whereby “a strong showing on one factor could make up
for a weaker showing on another.” Sherley v. Sebelius, 644 F.3d 388, 392 (D.C. Cir. 2011).
After the Supreme Court’s decision in Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7
(2008), however, the D.C. Circuit questioned this approach on the ground that “Winter could be
read to create a more demanding burden than the sliding-scale analysis requires.” Sherley, 644
F.3d at 392 (internal quotation marks omitted). The D.C. Circuit has not yet decided, however,
whether Winter requires that the sliding scale approach be “abandoned.” Archdiocese of
Washington v. Washington Metro. Area Transit Auth., 897 F.3d 314, 334 (D.C. Cir. 2018), cert.
denied, 140 S. Ct. 1198 (2020). At a minimum, though, the D.C. Circuit has stated that it
“read[s] Winter at least to suggest if not to hold that a likelihood of success is an independent,
free-standing requirement for a preliminary injunction.” Id. at 393.
Indeed, the Supreme Court made clear in Winter that a movant must establish that it is
“likely” both that he will succeed on the merits and that irreparable harm will follow if the
requested stay is withheld. 555 U.S. at 21–22. The Supreme Court rejected as “too lenient” a
standard according to which a movant who makes a “strong” showing that success on the merits
is “likely” would then be permitted to make a lesser showing that irreparable harm is merely
“possible.” Id. at 22; see also id. at 20 (stating that “[a] plaintiff seeking a preliminary injunction
must establish that the is likely to succeed on the merits” and “that he is likely to suffer
irreparable harm,” as well as “that the balance of equities tips in his favor” and “that an
injunction is in the public interest”). Because the movant must demonstrate both of these factors
to a degree of probability characterized as “likely,” there appears to be no room for the Court to
assess that a more robust showing of one opens the door to a lesser showing of the other, at least
to the extent that the lesser showing is something that falls below “likely.” See Davis v. Pension
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Ben. Guar. Corp., 571 F.3d 1288, 1296 (D.C. Cir. 2009) (Kavanaugh, J., concurring)
(“Importantly, the Winter Court rejected the idea that a strong likelihood of success could make
up for showing only a possibility (rather than a likelihood) of irreparable harm. In other words,
the Court ruled that the movant always must show a likelihood of irreparable harm.”).
Over the course of the dozen years or so since the Supreme Court’s decision in Winter,
however, the D.C. Circuit has not found an occasion to expressly resolve the fate of the sliding-
scale approach. See Archdiocese of Washington, 897 F.3d at 334 (stating that the case presented
no occasion to decide whether the sliding-scale approach has continuing vitality after Winter);
League of Women Voters of United States v. Newby, 838 F.3d 1, 7 (D.C. Cir. 2016) (same).
Instead, it has left the question open and avoided it in at least one case by holding that the
moving party failed to establish that injunctive relief was appropriate “even under the less
demanding sliding-scale analysis.” Sherley, 644 F.3d at 393; see also Aamer v. Obama, 742
F.3d 1023, 1043 (D.C. Cir. 2014) (stating that the fate of the sliding-scale approach “remains an
open question”). Applying the sliding-scale approach means that “in cases where the other three
factors strongly favor issuing an injunction, a plaintiff need only raise a ‘serious legal question’
on the merits” rather than demonstrating that success is “likely.” Aamer, 742 at 1043 (quoting
Sherley, 644 F.3d at 393, 398)). In any event, the Court need not attempt to reconcile the tension
between the Supreme Court’s decision in Winter and the D.C. Circuit’s sliding-scale approach
because Mallinckrodt cannot establish that the required factors favor a stay even if the sliding-
scale approach is applied.
The Court will address each of the factors in turn, beginning, as it must, with the
likelihood of success on the merits and irreparable harm, which the prior discussion foreshadows
as being “the most critical.” Nken, 556 U.S. at 434. If Mallinckrodt satisfies these two factors,
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“the traditional stay inquiry calls for assessing the harm to the opposing party and weighing the
public interest,” although “[t]hese factors merge when the Government is the opposing party,” as
is the case here. Id. at 435.
A. Likelihood of Success on the Merits
Mallinckrodt must demonstrate that it is likely to succeed on the merits of its appeal to
prevail on its motion for a stay. See Citizens for Responsibility & Ethics in Washington v. Fed.
Election Comm’n, 904 F.3d 1014, 1019 (D.C. Cir. 2018) (noting that when an appeal “shows
little prospect for success” that is “an arguably fatal flaw for a stay”); Apotex, Inc. v. Food &
Drug Admin., 449 F.3d 1249, 1253 (D.C. Cir. 2006) (dispensing with the need to consider the
other stay factors when success on the merits was unlikely). Mallinckrodt contends that it will
succeed on the merits of an appeal because the Court misinterpreted the provisions of the
Medicaid Drug Rebate Program statute that apply to “single source drugs” and “[t]here simply
can be no dispute at this point that under 42 U.S.C. § 1396r-8(c)(2)(A), if a drug product is a
distinct ‘single source drug,’ it is entitled to its own base date AMP—whether or not it is an
‘entirely new drug.’” Mallinckrodt’s Br. 4, 9 (quotation). Mallinckrodt also argues that the
Court “gave too short shrift to CMS’s own regulations,” id. at 9, and overlooked what
Mallickrodt views to be inconsistent explanations CMS advanced for initially authorizing the
company to set a new base date AMP for Acthar but then later negating that authorization, id. at
10. Mallinckrodt further challenges the Court’s determinations that CMS’s actions did not
violate principles of fair notice and retroactivity. Id. at 12.
Like Mallinckrodt’s request for reconsideration, its request for a stay reprises the same
arguments the company presented to the Court during the litigation of the parties’ motions for
summary judgment, which were considered and resolved in the Court’s March 13, 2020
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memorandum opinion. Mallinckrodt offers nothing new in the way of legal arguments and the
Court stands by the analyses set forth in that opinion, which explains why Mallinckrodt’s
arguments are unconvincing and forestalled by the Medicaid Drug Rebate Program statute’s
plain language. See Mem. Op. 30–49. Nevertheless, confronted by Mallinckrodt’s persistent
effort to convince the Court that the statute says something that it does not, the Court will walk
through some of the essential points of the analyses again.
To reiterate, the question in this case is whether CMS properly determined that
Mallinckrodt has been using the wrong base date AMP to calculate federally mandated rebates
that Mallinckrodt must pay for the H.P. Acthar Gel® pharmaceutical drug under the statutory
Medicaid Drug Rebate Program, which is part of the Medicaid Act, otherwise known as Title
XIX of the Social Security Act, 79 Stat. 343 (codified as amended at 42 U.S.C. §§ 1396–1396v).
Mallinckrodt agrees that the relevant section of the Medicaid Drug Rebate Program statute that
establishes how it must calculate Achtar’s rebates is 42 U.S.C. § 1396r-8(c), which is the section
that applies to “single source drugs.” See Mallinckrodt’s Br. 4. The statute currently defines the
phrase “single source drug” to mean in relevant part “a covered outpatient drug . . . which is
produced or distributed under a new drug application [NDA] approved by the Food and Drug
Administration.” 42 U.S.C. § 1396r-8(k)(7)(iv).
Mallinckrodt’s entire case is premised on convincing the Court that Acthar with the infantile
spasm indication qualifies as a “distinct” single source drug from the version of Acthar that the FDA
approved in 1952 under NDA number 008372. See Mallinckrodt’s Br. 4 (asserting that “because
Acthar constitutes a legally distinct ‘single source drug,’ it is entitled to a new base date AMP based
on the plain language of the statute”). To get there, Mallinckrodt claims that Acthar has been
“produced and distributed” under NDA number 022432, which was an efficacy supplement
application that started out as Supplement Number S-039 to NDA number 008372 but was later
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provisionally categorized as a “Type 6 NDA” by the FDA and assigned number 022432 solely as
a bureaucratic mechanism to secure the application’s review by a different FDA division from
the one that first evaluated it. 5 See supra n. 3; A.R. 157, 344, 856–57, 869. Importantly,
Mallinckrodt does not dispute that the Type 6 designation “was used for drug products that had
already been approved or marketed by the same applicant, but were intended for a new indication or
claim,” id. ¶ 30 (emphasis added). Equally important is the fact that Mallinckrodt has never disputed
that Acthar with the infantile spasm indication is not a new drug, see Mallinckrodt’s Reply Br. 5
(arguing that CMS “could not possibly have assumed that it was approving an ‘entirely new drug’”
based on “references” to Acthar’s history in the record), and that what the FDA approved in 2010
was the drug’s use for a new indication and revised labeling, see id. (conceding that the 2010
approval involved “a decades-old drug, approved for a new orphan indication under a distinct
NDA”).
Additionally, Mallinckrodt has never disputed the fact that, when the FDA approved the
efficacy supplement application that was provisionally assigned NDA number 022432, the agency
told Mallinckrodt’s predecessor, Questcor, to address all submissions “to the original NDA 008372
for this drug product” 6 and stop using NDA number 022432, A.R. 706 (stating “[i]n the future, do
5
The FDA explained that “[i]n the case of Acthar Gel, the parent NDA (008372) and all of its
supplements were reviewed by the Division of Metabolic and Endocrine Products” but “review
of the infantile spasms indication was conducted by the Division of Neurology Products.” A.R.
157. Mallinckrodt does not dispute that “[t]he agency took this action because it concluded the
IS [infantile spasm] indication was fundamentally different from the other uses for which the
product had been approved, and required review by a different component within FDA than had
to date been responsible for the drug.” Verified Compl. ¶ 30.
6
The Court noted in the memorandum opinion that the FDA’s October 15, 2010 letter approving
NDA number 022432 made clear that the agency viewed Acthar with the infantile spasm
indication to be the same drug product as the version of Acthar that was approved in 1952.
Mem. Op. 18 (quoting A.R. 312 (stating that “all ‘other submissions should be addressed to the
original NDA 008372 for this drug product, not to this NDA’” (emphasis added))), 35.
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not make submissions to this NDA [022432] except for the final printed labeling”) (emphasis added).
Thus, as of date the efficacy supplement application was approved in 2010, NDA number 022432
became obsolete and neither Questcor nor Mallinckrodt should have used it.
As the Court discussed in its memorandum opinion, absent Questcor’s and
Mallinckrodt’s self-interested acts of “producing and distributing” Acthar using NDA number
022432 in defiance of the FDA’s direction not to, the companies lack any plausible hook to
claim that Acthar with the infantile spasm indication is a new or distinct “single source drug.”
Mallinckrodt’s position is viable only if the Court either accepts or ignores the company’s
manipulation of the statute by producing and distributing Acthar using the defunct provisional
NDA number that the FDA told the company not to use—a manipulation that Mallinckrodt seeks
to further by applying a hyper-literal interpretation of the definition of “single source drug.”
Surely it is implicit in the statute that the covered outpatient drug at issue is legitimately and lawfully
being “produced or distributed” under the claimed “new drug application” and “what is . . . implied
in a statute . . . is as effectual as what is expressed.” Bd. of Sup’rs of Wood Cty. v. Lackawana Iron
& Coal Co., 93 U.S. 619, 624 (1876). Otherwise, the purposes of the Medicaid Drug Rebate
Program statute to provide medical assistance to the poor and facilitate that effort by minimizing
drug costs could be easily avoided and even preposterous scenarios would permit manufacturers to
lay claim to a new base date AMP.
For example, Mallinckrodt’s theory would accommodate a less than honest manufacturer
resetting a drug’s base date AMP by suddenly producing and distributing an existing drug using an
FDA-approved NDA number that applied to an entirely different drug. There might be other
regulatory mechanisms that make that scenario improbable if not impossible, but one can see the
point. By Mallinckrodt’s reckoning, such a scenario would satisfy the statute because all that is
required to set a new base date AMP, so Mallinckrodt argues, is a literal showing that a covered
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outpatient drug is being “produced or distributed” under a “new drug application approved by the
FDA”—and it does not matter whether that NDA involved the FDA approving something other than
a “drug” (such as a label revision, as is the case here), or that the application was rendered obsolete
upon approval so no drug could be “produced or distributed” under it (as is also the case here), or
that the application was for a different drug entirely (hypothetical). Mallinckrodt has reaped a true
windfall to the determent of both the nation’s poor and its taxpayers by adhering to this legally
untenable position. 7
Moreover, as the Court explained in its memorandum opinion, even if Mallinckrodt’s
interpretation of the “single source drug” definition could carry the day, it still cannot prevail on the
merits because a single source drug’s base date AMP is set based on when the relevant “covered
outpatient drug” was “approved by” the FDA and it is not, as Mallinckrodt insists, automatically set
based on whether a covered outpatient drugs qualifies as a “single source drug.” 8 Mem. Op. 32–42.
Contrary to Mallinckrodt’s position, this is what the Medicaid Drug Rebate Program statute
actually says about the additional rebate for single source drugs and, in particular, when the base
date AMP may be set:
7
The Court finds it noteworthy that Mallinckrodt has never come forward with an example of an
occasion when CMS authorized a new base date AMP for a drug based solely on the FDA
approving an efficacy supplement application for that drug, whether in the form of a “new drug
application” or otherwise.
8
Mallinckrodt characterizes this as a “different test.” Mallinckrodt’s Br. 4. The only test the
Court applied in this case, however, was a test that asked what the statute actually says. The
issue the Court “homed in on,” Mallinckrodt’s Br. 5, was whether the statutory definition of
“single source drug” can be satisfied when the FDA-approved NDA at issue does something
other than “approve” a “drug,” such as by approving a label revision, as is the case here, Mem.
Op. 40 (stating that “[n]owhere in the Medicaid Drug Rebate Program statute does it provide for
a single source drug’s base date AMP to be reset based solely on the FDA approving a so-titled
‘New Drug Application’ that does something other than ‘approve’ a ‘covered outpatient drug,’ as
occurred here”).
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(A) In general
The amount of the rebate specified in this subsection for a rebate period, with
respect to each dosage form and strength of a single source drug or an innovator
multiple source drug, shall be increased by an amount equal to the product of--
(i) the total number of units of such dosage form and strength dispensed
after December 31, 1990, for which payment was made under the
State plan for the rebate period; and
(ii) the amount (if any) by which--
(I) the average manufacturer price for the dosage form and
strength of the drug for the period, exceeds
(II) the average manufacturer price for such dosage form and
strength for the calendar quarter beginning July 1, 1990
(without regard to whether or not the drug has been sold or
transferred to an entity, including a division or subsidiary of
the manufacturer, after the first day of such quarter),
increased by the percentage by which the consumer price
index for all urban consumers (United States city average)
for the month before the month in which the rebate period
begins exceeds such index for September 1990.
(B) Treatment of subsequently approved drugs
In the case of a covered outpatient drug approved by the Food and Drug
Administration after October 1, 1990, clause (ii)(II) of subparagraph (A) shall be
applied by substituting “the first full calendar quarter after the day on which the
drug was first marketed” for “the calendar quarter beginning July 1, 1990” and “the
month prior to the first month of the first full calendar quarter after the day on which
the drug was first marketed” for “September 1990”.
42 U.S.C. § 1396r-8(c)(2).
The first highlighted subsection—§ 1396r-8(c)(2)(A)(ii)(II)—is the statutory base date
AMP for drugs that the FDA approved on or before October 1, 1990. 9 See, e.g., A.R. 1020
(National Drug Rebate Agreement). The second highlighted subsection—
9
Mallinckrodt contends that this provision merely “sets the time period during which the base
date AMP is calculated,” Mallinckrodt’s Br. 6 (emphasis in original), but the National Drug
Rebate Agreement, to which Mallinckrodt is a party, says otherwise and states that this provision
is the “base date AMP.” See A.R. 1020 (defining the term “base date AMP” to mean 42 U.S.C.
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§ 1396r-8(c)(2)(B)—amends the language of the base date AMP (i.e., it modifies § 1396r-
8(c)(2)(A)(ii)(II)) to cover outpatient drugs that the FDA approved after October 1, 1990. In
other words, for outpatient drugs that the FDA approved after October 1, 1990, § 1396r-
8(c)(2)(A)(ii)(II), as amended by § 1396r-8(c)(2)(B), states that the base date AMP is:
[T]he average manufacturer price for such dosage form and strength for the first
full calendar quarter after the day on which the drug was first marketed (without
regard to whether or not the drug has been sold or transferred to an entity, including
a division or subsidiary of the manufacturer, after the first day of such quarter),
increased by the percentage by which the consumer price index for all urban
consumers (United States city average) for the month before the month in which
the rebate period begins exceeds such index the month prior to the first month of
the first full calendar quarter after the day on which the drug was first marketed.
42 U.S.C. §§ 1396r-8(c)(2)(A)(ii)(II), (B) (emphases added).
Importantly, the language in the second highlighted subsection—§ 1396r-8(c)(2)(B)—
expressly states that a covered outpatient drug’s base date AMP is set in relation to when the
“covered outpatient drug” was “approved by” the FDA and “first marketed.” Thus, the plain
language of the statute cannot be harmonized with Mallinckrodt’s theory that the base date AMP
is tied to whether a drug satisfies the statutory definition of “single source drug” and, if so, then a
new base date AMP is automatic. Mallinckrodt’s Br. 4. That is simply not what the statute says.
Mallinckrodt’s argument might be viable if § 1396r-8(c)(2)(B) stated that “[i]n the case
of a single source drug approved by the Food and Drug Administration after October 1, 1990,
clause (ii)(II) of subparagraph (A) shall be applied by substituting ‘the first full calendar quarter
after the day on which the drug was first marketed’ for ‘the calendar quarter beginning July 1,
1990’ and ‘the month prior to the first month of the first full calendar quarter after the day on
which the drug was first marketed’ for ‘September 1990.’” But Congress omitted the phrase
§ 1396r-8(c)(2)(A)(ii)(II)).
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“single source drug” from § 1396r-8(c)(2)(B) and, instead, elected to use a different phrase—
“covered outpatient drug.” And it is well established that “[w]hen Congress uses explicit
language in one part of a statute to cover a particular situation and then uses different language in
another part of the same statute, a strong inference arises that the two provisions do not mean the
same thing.” Persinger v. Islamic Republic of Iran, 729 F.2d 835, 843 (D.C. Cir. 1984).
Congress could have used the phrase “single source drug” in § 1396r-8(c)(2)(B) but it chose not
to, and that has meaning. Id.
Consequently, even assuming for the sake of argument that Mallinckrodt was legitimately
producing and distributing Acthar under defunct and provisional Type 6 NDA number 022432,
the drug’s base date AMP nevertheless would still be tethered to the date the FDA approved
Acthar, which there is no dispute was 1952. See, e.g., A.R. 51; Mallinckrodt’s Br. 7 (conceding
that “the second NDA covered only two changes: (i) approval of the infantile spasm indication
and (ii) new labeling”); Mallinckrodt’s Reply Br. 5 (conceding that Acthar was a “decades-old
drug product”). That is what the Medicaid Drug Rebate Program statute’s plain and
unambiguous language demands.
Mallinckrodt cited no precedent, statutory provision, or any other authority to support its
self-serving theory that a new base date AMP is automatic if the definition of single source drug
is triggered and notwithstanding that the “new drug application” used to trigger it did something
other than seek FDA approval of a covered outpatient drug, see Mallinckrodt’s Br. 6 (arguing
without cited authority that “[t]he drug product itself need not somehow change physically in
order to count as a separate covered outpatient drug or qualify for a new base date AMP”). And,
as the Court stated in its memorandum opinion, Mallinckrodt’s theory flies in the face of the
Medicaid Drug Rebate Program statute’s legislative purpose, which is “to provide medical
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assistance to poor people,” Mem. Op. 7 (quoting Indiana Family & Soc. Servs. Admin. v.
Thompson, 286 F.3d 476, 477 (7th Cir. 2002)), and to accomplish this in part by minimizing
drug costs, see 42 U.S.C. § 1396r-8(b) (explaining that drug rebates serve to offset drug costs).
Mallinckrodt’s theory would not just circumvent the statute’s goal of minimizing drug costs—it
would defeat it.
The Medicaid Drug Rebate Program statute is technical and complex, but it is not
ambiguous or silent. A single source drug gets a new base date AMP when the relevant “covered
outpatient drug” is “approved by” the FDA and “first marketed” if that approval occurred after
October 1, 1990. The statute expressly provides that the base date AMP attaches only once
absent an FDA-approved new dosage form or strength. 42 U.S.C. § 1396r-8(c)(2). Again, it
remains undisputed that no covered outpatient drug was approved by the FDA in 2010 under
defunct and provisional NDA number 022432. To the contrary, in Mallinckrodt’s own words,
“the 2010 approval covered [1] a new IS indication; and [2] new labeling for a decades-old drug
product.” Mallinckrodt’s Reply Br. 5 (emphasis added).
From the outset, CMS properly adhered to the statute and told Mallinckrodt that it could
not change the base date AMP of a drug product during that drug product’s lifecycle, which is
entirely consistent and compliant with the statute’s plain language. 10 A.R. 617 (stating that the
10
Mallinckrodt claims that “the agency’s reference to replacing base date AMPs ‘midway
through the life of a product’—has nothing at all to do with how to set the base date AMP” and,
instead, “relates to its rejection of Questcor’s proposal that it be allowed to retain the same
National Drug Code (NDC) for Acthar after the new base date AMP was implemented.”
Mallinckrodt’s Br. 8. This is but one example of how Mallinckrodt appears to be dazzled by its
own litigation strategy much like the proverbial emperor who is wearing no clothes but is
convinced he is wearing a new suit that is invisible to the commoners. CMS’s letter allowing
Questcor to set a new base date AMP for Acthar with the infantile spasm indication stated that
the agency could not replace the “original” base date AMP for a drug product with a new base
date AMP midway through the life of a product. A.R. 617. That statement means exactly what
it says. It was made in the context of CMS explaining why Questcor could not keep the same
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base date AMP applies to “each single source or innovator multiple source drug approved by the
FDA before or after October 1, 1990” and that CMS lacked authority to “replace the original . . . base
date AMP with a new base date AMP midway through the life of a product”). And, as the Court
previously found, “[f]or the[] same reasons” that CMS’s decision complied with the statute it “also
complied with its agency regulations,” which follow the language of the statute. Mem. Op. 42; see
also 42 C.F.R. § 447.509.
The Court is not immune to the fact that, aside from the parties’ discussions of the legal
proceedings in Ipsen Biopharms., Inc. v. Price, No. 16-cv-2372 (DLF), the statutory question in
this case does not appear to have been tested by other federal courts, although that might be
because the statute is clear. At best, though, the potential novelty of the question inches the
probability of Mallinckrodt’s success on the merits closer to “possible,” but nowhere near
“likely,” as required to establish that a stay is warranted pending appeal, see Winter, 555 U.S. at
21–22. The Court simply cannot conclude on this record that Mallinckrodt raises issues “so
National Drug Code after setting a new base date AMP for Acthar, but its meaning is clear and
has everything to do with the agency’s view about when a new base date AMP could be set for a
drug product. CMS was telling Questcor that, because the existing National Drug Code
associated with Acthar was linked to Achtar’s original NDA number 008372, in order to set a
new base date AMP for the “recently approved Acthar Gel” (note that CMS did not say the
“recently approved label revision” or “recently approved addition of an infantile spasm
indication,” suggesting, again, that CMS was under the mistaken impression that Acthar with the
infantile spasm indication was approved as an entirely new drug product) Questcor would, as a
corollary, have to obtain a new National Drug Code to go with what CMS understood to be the
new NDA number—022432—because it could not change the base date AMP for NDA number
008372 during the lifecycle of that drug product. A.R. 617. At that point, Questcor was on
obvious notice that CMS interpreted the Medicaid Drug Rebate Program statute to permit the
calculation of a new base date AMP for Acthar with the infantile spasm indication only because
CMS viewed Acthar with the infantile spasm indication to be a different “drug product” from the
“original product,” based on the fact that Questcor had reported that the drug was approved
under a different NDA, in which case it would need a new National Drug Code associated with
the new NDA because the “original” drug product’s base date AMP could not be changed during
its lifecycle. A.R. 617 (distinguishing Acthar with the infantile spasm indication as different
“from the original product”).
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serious, substantial, difficult and doubtful, as to make them a fair ground for litigation and thus
for more deliberative investigation.” Washington Metro. Area Transit Comm’n v. Holiday
Tours, Inc., 559 F.2d 841, 844 (D.C. Cir. 1977). Finally, in light of the Court’s statutory analysis
and for the reasons set forth in the Court’s March 13, 2020 memorandum opinion, Mallinckrodt is
also not likely to prevail on its requests for relief pursuant to asserted fair notice and retroactivity
principles.
B. Irreparable Harm
With respect to Mallinckrodt’s requirement to establish that it will be irreparably harmed
unless the Court issues a stay of its judgment, Mallinckrodt claims that it faces an “existential
threat” posed by “significant financial, structural, and reputational harms to the company” if
CMS declares it to be out of compliance with the Medicaid Drug Rebate Program requirements,
which might occur if the defendants act to enforce the Court’s judgment and Mallinckrodt fails
to correct Acthar’s base date AMP. Mallinckrodt’s Br. 13. In particular, Mallinckrodt states that
it will (1) be unable to report or revise Acthar’s drug pricing data if CMS locks it out of the
federal database that administers the drug rebate program, (2) risk being subjected to civil
monetary penalties for its noncompliance, and (3) risk that its National Drug Rebate Agreement
will be temporarily suspended, which means states “will no longer be required to cover
Mallinckrodt’s covered outpatient drugs, including Acthar.” Id.
Moreover, even if Mallinckrodt alternatively elects to revise Acthar’s base date AMP to
comply with the statute, the company asserts that the revised based date AMP will trigger
irreparable injury in the form of liability for “more than $600 million in additional Medicaid
rebates that would come due to State Medicaid agencies almost immediately.” Id. Mallinckrodt
laments that this would cause a “cash-flow problem for the company” and, if paid, “would be
recoverable only very slowly, over many years, from State Medicaid agencies, because of how
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the recovery process works,” which would entail offsetting the rebate overpayments against
future Acthar rebate payments. Id. at 13–14.
The D.C. Circuit “has said time and again that the degree of proof required for
‘irreparable harm’ is ‘high,’ and that a failure to surmount it provides ‘grounds for refusing to
issue a preliminary injunction, even if the other three factors entering the calculus merit such
relief.’” Olu-Cole v. E.L. Haynes Pub. Charter Sch., 930 F.3d 519, 529 (D.C. Cir. 2019)
(quoting Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006)).
As the D.C. Circuit has explained:
Although the concept of irreparable harm does not readily lend itself to definition,
the courts have developed several well known and indisputable principles to guide
them in the determination of whether this requirement has been met.
First, the injury must be both certain and great; it must be actual and not theoretical.
Injunctive relief will not be granted against something merely feared as liable to
occur at some indefinite time . . .; the party seeking injunctive relief must show that
the injury complained of is of such imminence that there is a clear and present need
for equitable relief to prevent irreparable harm.
It is also well settled that economic loss does not, in and of itself, constitute
irreparable harm. As this court has noted:
The key word in this consideration is irreparable. Mere injuries,

however substantial, in terms of money, time and energy necessarily
expended in the absence of a stay are not enough. The possibility
that adequate compensatory or other corrective relief will be
available at a later date, in the ordinary course of litigation weighs
heavily against a claim of irreparable harm.
Virginia Petroleum Jobbers Ass’n v. FPC, 259 F.2d at 925. Recoverable monetary
loss may constitute irreparable harm only where the loss threatens the very
existence of the movant’s business.
Implicit in each of these principles is the further requirement that the movant
substantiate the claim that irreparable injury is “likely” to occur. Bare allegations
of what is likely to occur are of no value since the court must decide whether the
harm will in fact occur. The movant must provide proof that the harm has occurred
in the past and is likely to occur again, or proof indicating that the harm is certain
to occur in the near future. Further, the movant must show that the alleged harm
will directly result from the action which the movant seeks to enjoin.
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Wisconsin Gas Co. v. F.E.R.C., 758 F.2d 669, 674 (D.C. Cir. 1985) (per curiam) (citations and
internal quotation marks omitted, alterations adopted). To be sure, the harms must be “beyond
remediation” to qualify as “irreparable.” Chaplaincy of Full Gospel Churches v. England, 454
F.3d 290, 297 (D.C. Cir. 2006). Accordingly, the Court will assess whether Mallinckrodt’s
asserted harms are actual, certain, imminent, beyond remediation, and, because most of the
asserted harms are economic, threaten Mallinckrodt’s very existence.
The only support Mallinckrodt proffers to prove its alleged harms are (a) the Declaration
of Kathleen A. Schaefer in Support of Plaintiff’s Motion for Preliminary Injunction, ECF No. 4-
2, which was attached as Exhibit 2 to Mallinckrodt’s original motion for a preliminary
injunction, and (b) a transcript of Mallinckrodt’s 2019 fourth quarter earnings call for investors,
ECF No. 37-3, which was attached as Exhibit 3 to Mallinckrodt’s motion for reconsideration.
See Mallinckrodt’s Br. 15 (citing the declaration and transcript), 17, 18. Kathleen Schaefer is
Mallinckrodt’s President. Schaefer Decl. ¶ 3. Her declaration lays out the harms that
Mallinckrodt will suffer if CMS “declare[s] Mallinckrodt ‘out of compliance’ in the Drug Data
Reporting for Medicaid (DDR) system based on the dispute over the base date average
manufacturer price (AMP) for Acthar Gel® (repository corticotropin) injection (Acthar).”
Schaefer Decl. ¶ 3. Those harms include: financial losses and reputational damage to
Mallinckrodt if it is suspended from the Medicaid Drug Rebate Program, Schaefer Decl. ¶¶ 5, 6;
loss of research and development investments, marketing efforts, and workforce, Schaefer Decl.
¶ 6; negative credit ratings, investment ratings, and declining stock prices, Schaefer Decl. ¶¶ 7, 8;
reputational stigma and loss of good will among patients, healthcare professionals, and others,
Schaefer Decl. ¶ 10; and civil monetary penalties to the tune of $10,000 per day, Schaefer Decl.
¶ 13. If Mallinckrodt revises Acthar’s base date AMP to comply with the statute, Shaefer offers
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that “[t]hat presents its own risks and liabilities,” including “losses totaling in the hundreds of
millions of dollars for Mallinckrodt.” Schaefer Decl. ¶ 14.
With respect to the asserted economic harms, although Schaefer states that “CMS
therefore has put Mallinckrodt between the proverbial rock and a hard place,” Schaefer Decl.
¶ 14, nowhere does she state that the company’s demise is or would be imminent, whether
Mallinckrodt elects to correct Acthar’s base date AMP or not. As a result, her declaration fails to
corroborate the notion that Mallinckrodt will confront imminent demise absent a stay, and the
economic harms otherwise do not demonstrate “irreparable” harm under this Circuit’s precedent,
see, e.g., Wisconsin Gas Co., 758 F.2d at 674 (stating that “[r]ecoverable monetary loss may
constitute irreparable harm only where the loss threatens the very existence of the movant’s
business”).
Furthermore, Schaefer generally presents the reputational harms as possible, but not
necessarily certain, stating that losses related to CMS enforcing the statute “could impact
investor confidence” and prescribers and patients who switch to other treatments “may never
return to Acthar.” Schaefer Decl. ¶¶ 7, 10. Although she also states that a loss of investor
confidence has resulted in a stock price decline and the loss of goodwill “can never be
remedied,” she fails to back that up with evidence or an explanation showing how or why the
stock decline is irreversible or Mallinckrodt’s reputation is forever tarnished. Schaefer Decl.
¶¶ 7–10. As a consequence, the Schaefer declaration does not adequately support granting a stay
on the ground that Mallinckrodt will suffer irreparable harm without one. Trudeau v. Fed. Trade
Comm’n, 384 F. Supp. 2d 281, 297 (D.D.C. 2005), aff'd, 456 F.3d 178 (D.C. Cir. 2006) (stating
that “the showing of reputational harm must be concrete and corroborated, not merely
speculative”).
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The transcript of the 2019 fourth quarter earnings call with investors that Mallinckrodt
submitted fares no better and belies the notion that the company is facing imminent demise.
That transcript reveals that Mallinckrodt’s Vice President-Investor Relations and Investor
Relations Officer, Daniel Speciale, reported that, “[w]hile we are not providing specific guidance
due to the complexities of the settlement of financing in the Acthar CMS matter . . . [i]n general,
total net sales for 2020 are expected to be in line with present consensus” and “we expect
performance across the products to be weaker on a year-over-year basis in the first half of the
year and rebounding in the back half of the year.” Q4 2019 Earnings Call Tr. 2. Mallinckrodt’s
Chief Executive Officer, Mark Trudeau, was similarly equivocal but optimistic, referencing the
“strong fourth quarter and full-year 2019 results,” announcing a settlement of the opioid
litigation that “is financially manageable and removes a significant uncertainty related to our
business that will better enable us to move forward with our strategic plans and drive shareholder
value,” and stating that, while “there could be pressure on Acthar . . . [d]epending on the
outcome of the CMS” litigation he nevertheless “do[es] expect the business to, overall, continue
to generate significant cash flows.” 11 Q4 2019 Earnings Call Tr. 2–3, 16.
As demonstrated, Mallinckrodt’s two supplied sources of evidence offered to corroborate
that it will be harmed without a stay plainly fail to establish that the asserted harm rises to the
11
Mallinckrodt initially suggested that the potential $600 million rebate liability risked
“disrupting other efforts by the company to right its financial ship,” including the company’s
efforts to refinance its near-term debts. See Mallinckrodt’s Reply Br. 10–11. The risk of that
particular harm appears to have been resolved, however, at least in principle, by the company’s
reported negotiation of an exchange agreement to refinance nearly $500 million in debt. See
Surreply in Opp’n to Pl.’s Emergency Mot. 2, ECF No. 44 (providing a link to a Securities and
Exchange Commission (SEC) filing in which Mallinckrodt reported that the company entered
into an exchange agreement to refinance nearly $500 million in debt).
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level of “irreparable.” See, e.g., Wisconsin Gas Co., 758 F.2d at 674. As a result, the Court
cannot find that a stay is either warranted or appropriate under this factor.
C. Summary Conclusion
For all the foregoing reasons, the Court holds that Mallinckrodt has failed to establish
that either success on the merits of an appeal or irreparable harm absent a stay are likely, in
which case it cannot prevail regardless of whether the Court applies the legal standards set forth
in Winter, 555 U.S. at 21–22, or the D.C. Circuit’s sliding-scale approach, see, e.g., Sherley, 644
F.3d at 392. The Court therefore need not consider the remaining factors, CityFed Fin. Corp. v.
Office of Thrift Supervision, 58 F.3d 738, 747 (D.C. Cir. 1995), albeit suffice it to say that there
is a strong public interest in ensuring that pharmaceutical companies are not circumventing the
Medicaid Drug Rebate Program’s purpose of minimizing Medicaid—and thereby taxpayers’—
costs and diminishing the nation’s ability to provide the medical services to the poor that
Congress intended.
CONCLUSION
For the reasons set forth herein, the Court will deny Mallinckrodt ARD LLC’s
Emergency Motion for Reconsideration and Stay of Entry of Judgment Pending Reconsideration
or, Alternatively, Injunction Pending Appeal, ECF No. 37. An appropriate order will be filed
forthwith.
May 29, 2020 ___________________________________

Thomas F. Hogan
SENIOR UNITED STATES DISTRICT JUDGE
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40

Mallinckrodt District Court Decision Dated 05.29.20

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Case 1:19-cv-01471-TFH Document 49 Filed 06/01/20 Page 1 of 40

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 1 of 40

MALLINCKRODT ARD LLC v. VERMA et al Date Filed: 05/20/2019

Kyle Mitchell Druding

Susan Margaret Cook

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Date Filed # Page Docket Text

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NOTICE RE REDACTION OF TRANSCRIPTS: The parties have

Redaction Request due 4/7/2020. Redacted Transcript Deadline set for

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USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 10 of 40

PLAINTIFF’S NOTICE OF APPEAL

Dated: June 1, 2020 Respectfully submitted,

/s/ Catherine E. Stetson

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 11 of 40

Counsel for Mallinckrodt ARD LLC

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 12 of 40

MALLINCKRODT ARD LLC,

SEEMA VERMA, et al.,

Upon consideration of Mallinckrodt ARD LLC’s Emergency Motion for Reconsideration

Stay of Entry of Judgment Pending Reconsideration or, Alternatively, Injunction Pending

Appeal, ECF No. 37, is DENIED.

March 29, 2020 ___________________________________

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 13 of 40

MALLINCKRODT ARD LLC,

v. Civil Action No. 19-cv-1471 (TFH)

SEEMA VERMA, et al.,

Pending before the Court is plaintiff Mallinckrodt ARD LLC’s (Mallinckrodt’s)

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 14 of 40

reconsideration is appropriate, that it is likely to succeed on the merits of an appeal, or that it is

motion for the reasons that follow.

I. MALLINCKRODT FAILED TO ESTABLISH THAT RECONSIDERATION IS

subparagraph (b), although it is unclear which of subparagraph (b)’s enumerated provisions

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 15 of 40

is appropriate only in ‘extraordinary circumstances.’” (quoting Ackermann v. United States, 340

made in a prior motion).

A. Rule 59(e) of the Federal Rules of Civil Procedure

§ 2810.1, pp. 127–128 (2d ed.1995)).

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 16 of 40

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 17 of 40

for a “decades-old drug product,” including adding an infantile spasm indication).

Divested of its reliance on sheer insistence, Mallinckrodt’s argument amounts to a bald

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 18 of 40

Niedermeier v. Office of Baucus, 153 F. Supp. 2d 23, 28 (D.D.C. 2001) (same).

B. Rule 60(b) of the Federal Rules of Civil Procedure

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 19 of 40

Whether Mallinckrodt intended to lend an air of mystery to its motion or to obfuscate an

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 20 of 40

F. Supp. 2d at 28; Owens, 864 F.3d at 819.

Court will decline Mallinckrodt’s invitation to exercise judicial discretion by granting

II. A STAY PENDING APPEAL IS NOT WARRANTED

In addition to reconsideration, Mallinckrodt also seeks to stay the entry of judgment

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 21 of 40

Mallinckrodt’s immediate liability for approximately $600 million in Medicaid rebate

recently stated that 2019 was a successful year, id. at 6–7.

USCA Case #20-5154 Document #1845067 Filed: 06/01/2020 Page 22 of 40

identified the following four factors as determinative:

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