Orange Book Blog

At the intersection of Patent and FDA Law

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  • In re: Tamoxifen Citrate Antitrust Litigation, Another “Reverse Payments” Case, Appealed to Supreme Court

    The plaintiffs in In re: Taxmoxifen Citrate Antitrust Litigation (who include pharmaceutical consumers, third party payors, and a health care advocacy group) have filed a Petition for Writ of Certiorari asking the Supreme Court to review the Second Circuit’s decision affirming the dismissal of this antitrust case.  The plaintiffs alleged antitrust violations based on a $21 million payment from AstraZeneca (the tamoxifen NDA holder) to Barr Labs (the ANDA filer) in exchange for Barr’s promise to withdraw its Paragraph IV certification and abandon its challenge of the tamoxifen patent.

    Plaintiffs’ cert petition presents the following question:

    Under what circumstances is an agreement by a brand pharmaceutical manufacturer (and patent holder) to share a portion of its future profits with a generic market entrant (and alleged patent infringer), in exchange for the generic’s agreement not to market its product, a violation of the antitrust laws?

    The most recent such "reverse payments" case appealed to the Supreme Court, FTC v. Schering-Plough, was turned away this past summer.  In that case, the Court asked the Solicitor General whether cert should be granted, and the Solicitor General recommended denial.

    The Tamoxifen cert petition acknowledges that the legal issue is the same as that in Schering, but suggests that the case is more appropriate for Supreme Court review:

    In Schering, the United States (by the Solicitor General) recognized the importance of the issues raised, but opposed the FTC petition for certiorari because of factual findings unique to that particular case.  The same important issues are raised in this case without the complications that caused the Solicitor General to oppose certiorari in Schering.

    A number of parties filed briefs in support of and in opposition to the Schering petition, and I would expect the same to happen here.  The Court may once again ask the Solicitor General to file a brief as well.

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  • Pharmacies sue Astra Zeneca for unlawful monopolization of Prilosec/Nexium market

    A group of pharmacies led by Walgreen Co. recently filed suit in the U.S. District Court for the District of Columbia, alleging that Astra Zeneca (AZ) illegally monopolized the market for its proton pump inhibitor drugs Prilosec, Nexium, and their AB-rated generic equivalents, by engaging in a scheme to convert the prescription drug market for Prilosec to Nexium.  Proton pump inhibitors are widely used for the treatment of persistent heartburn.  In its complaint, the pharmacy group alleges that the scheme was enacted solely for the purpose of impeding generic competition for Prilosec, allowing AZ to continue charging monopoly prices for its proton pump inhibitor drugs free from generic competition.

    The active ingredient in Prilosec is omeprazole, a racemate of R and L enantiomers, while the active ingredient in Nexium is esomeprazole, the L enantiomer of omeprazole.  By 1999, sales of Prilosec were more than $4 billion dollars per year.  The Orange Book-listed patents for Prilosec expired in October of 2001.  The pharmacy group alleges that, in anticipation of huge losses in sales due to generic competition, AZ came up with a scheme to maintain its monopoly in the lucrative proton pump inhibitor prescription drug market by carrying out the following steps designed to convert the prescription market for Prilosec to Nexium:

    • Introducing Nexium as a replacement for Prilosec, even though AZ knew that Nexium provided no advantage over Prilosec; since the active ingredient in Nexium is not the same as that in Prilosec, generic Prilosec would not be AB rated to Nexium (and thus pharmacists could not dispense generic Prilosec to a customer presenting a prescription for Nexium);
    • Engaging in a false and misleading advertising campaign to convince physicians that Nexium is superior to Prilosec, thereby converting Prilosec prescriptions to Nexium prescriptions;
    • Withdrawing branded Prilosec from the market and applying for over the counter (OTC) status, which was designed to cause managed care organizations (MCOs) to stop covering the cost of generic prescription Prilosec; and
    • Selling its OTC Prilosec (which was granted 3 year exclusivity in 2003) as a 14 day or less regimen and advising customers to consult their physician if symptoms persisted for more than 14 days; the pharmacy group alleged that this was designed to encourage physicians to prescribe Nexium to OTC Prilosec customers, since MCOs would be unlikely to cover the cost of generic prescription Prilosec.

    Generic Prilosec was introduced to the market in December of 2002, and the pharmacy group alleges that AZ's unlawful monopolization and attempts to monopolize the Prilosec/Nexium/AB-rated generic equivalent market resulted in increased costs of more than $2 billion dollars to direct purchasers of Prilosec and Nexium.  The complaint does not provide any specifics regarding price differences between generic prescription Prilosec, OTC Prilosec, and Nexium.

  • Federal Circuit Temporarily Enjoins Sandoz and Upsher-Smith from Selling Generic Oxandrin

    In a dramatic turn of events in Savient Pharma’s patent litigation against Sandoz and Upsher-Smith, late this afternoon the Court of Appeals for the Federal Circuit granted Savient’s emergency appeal and temporarily enjoined Sandoz and Upsher-Smith from marketing their generic versions of Oxandrin (oxandrolone).  The Federal Circuit’s order came just before a district court’s Temporary Restraining Order was set to expire.

    On December 1st, the FDA denied two Savient citizen petitions relating to Oxandrin and granted final approval to Sandoz and Upsher-Smith’s ANDAs for generic oxandrolone tablets.  On December 4th, Savient sued Sandoz and Upsher-Smith in the District of New Jersey, alleging infringement of five method of use patents relating to oxandrolone.  At the same time, Savient moved for a TRO and preliminary injunction.  The next day, Judge Peter G. Sheridan granted Savient’s request for temporary relief, ordering Sandoz and Upsher-Smith to stop efforts to market their generic products and ordering Savient to ensure that Watson Labs would not launch an authorized generic of Oxandrin.  In the next two days, both parties submitted briefs, and on December 8th Judge Sheridan reversed course and ordered the temporary restraints to be lifted as of 5:00 p.m. today.  He also granted permission for Savient to appeal to the Federal Circuit.

    Unfortunately, neither Judge Sheridan’s opinion lifting the TRO nor the Federal Circuit’s order are publicly available at this time.  However, a declaration submitted by Sandoz and a reply brief filed by Savient reveal several interesting facts.  Apparently, at the time Sandoz and Upsher-Smith filed their ANDAs, the Orange Book did not contain any patent information for Oxandrin.  Accordingly, they filed with Paragraph I certifications.  Later, Savient listed its method of use patents, but Savient late-listed four of the patents and therefore Sandoz and Upsher-Smith were not required to certify to those patents.  Savient timely listed the fifth patent, U.S. Patent No. 6,828,313, but Sandoz and Upsher-Smith carved out from their ANDAs the indication claimed in that patent and informed the FDA accordingly.  The defendants later carved out the indications claimed in Savient’s other patents.

    It appears that Sandoz and Upsher-Smith are currently approved to market generic oxandrin only for two very specific indications:  (1) to offset protein catabolism associated with prolonged administration of corticosteroids and (2) for the relief of bone pain accompanying osteoporosis.  Meanwhile, Barr Labs recently filed an ANDA to sell Oxandrin for all approved uses (and Savient responded by suing for patent infringement).  The primary indication for Oxandrin is the promotion of weight gain following extensive surgery, chronic infection, or severe trauma.  Oxandrin has annual sales of approximately $60 million.

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  • Federal Circuit Affirms Preliminary Injunction in Plavix Case

    Last Friday, a unanimous panel of the U.S. Court of Appeals for the Federal Circuit affirmed a district court decision that granted a preliminary injunction against Apotex in the Plavix case.  The result is not a surprise, given that the Federal Circuit took over five weeks to release its opinion.  The court heard the appeal on an expedited schedule and likely would have released an opinion sooner had it reversed the district court.

    Apotex conceded that its generic version of Plavix infringes Sanofi’s U.S. Patent No. 4,847,265, leaving the validity and enforceability of the ‘265 patent as the key issues.  In a twenty-seven page opinion written by Judge Lourie, the Federal Circuit methodically discusses each of Apotex’s invalidity arguments (anticipation, obviousness, and obviousness-type double patenting) and its unenforceability argument (inequitable conduct), and concludes that the district court properly disposed of each one.

    Apotex’s lead argument was that Sanofi’s own U.S. Patent No. 4,529,596 anticipated the ‘265 patent and rendered it obvious.  Apotex argued that claim 2 of the ‘596 patent, directed to the free base of a compound the parties called "MATTPCA," inherently anticipated claim 3 of the ‘265 patent, directed to the d-enantiomer of the bisulfate salt of MATTPCA (clopidrogel bisulfate, the active ingredient in Plavix).  The Federal Circuit, however, determined that the district court correctly found that "a person of ordinary skill in the art would not be led to the bisulfate salt."  The court likewise found that the district properly rejected Apotex’s obviousness argument, noting "the extensive time and money Sanofi spent developing the racemate before redirecting its efforts toward the enantiomer, and the unpredictability of salt formation."

    Thus, the Federal Circuit agreed with the district court that Sanofi had satisfied the first of four factors required to obtain a preliminary injunction:  likelihood of success on the merits.  The second factor, whether there would be irreparable harm if an injunction did not issue, is often presumed in patent cases upon a showing of liklihood of success.  Interestingly, in this case Apotex suggested that the district erred by applying a presumption of irreparable harm, arguing that such a presumption directly conflicts with the Supreme Court’s recent decision in eBay v. MercExchange.  However, the Federal Circuit sidestepped this argument, concluding that the district court properly found several kinds of irreparable harm in any event, including irreversable price erosion.

    The next stage of the case will be a trial before Judge Sidney H. Stein of the U.S. District Court for the Southern District of New York, the same judge who granted the preliminary injunction against Apotex back in August.  The trial is scheduled to begin on January 22, 2007.

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  • Overseas Sales and Cancer Treatments Drive Pharma’s Future

    This week's issue of Chemical and Engineering News features a year-end summary of what many believe has been a dismal year for the pharmaceutical industry (click here for article).  Despite Wall Street's gloom, the report predicts a solid future for pharma.

    Sales in 2006 continued to grow at a 6% clip in the United States.  Growth figures for Western Europe and Japan showed similar single-digit increases.  But China, Brazil, Korea, India, Russia, and Turkey all showed double-digit growth.  China and Turkey are likely the brightest stars in this emerging class of pharmaceutical consumers.  Of course, much of the growth potential in these countries depends on their ability to develop stable and fair health care systems.

    The oncology market, though, has increased 22% within the past year.  Much of this is due to the increased ability to manage cancer over a patient's lifetime.  Oncology drugs are already the top class of sellers in Japan and Europe.  The market for these treatments should continue growing in the United States.  But demand is not the only factor in the equation.  Sales growth will also depend on changes in the system's manner of delivering cancer care and the payers' demands for affordability.

    The article also points out that we are far from seeing the end of blockbuster drugs.  Several key products, notably Pfizer drugs Norvasc and Zyrtec, will likely lose patent protection within the coming year.  Nevertheless, analysts project that 2007 will see 112 blockbuster drugs–eleven more than in 2006.

    Robert Dailey, Ph.D. is a physical chemist and a third-year law student at the University of North Carolina at Chapel Hill.  Dr. Dailey was a member of the 2006 class of summer associates at McDonnell Boehnen Hulbert & Berghoff.

  • Federal Circuit Vacates Rilutek Decision, Remands Case Between Impax and Aventis to District Court

    On November 20, 2006, the U.S. Court of Appeals for the Federal Circuit handed down its decision in Impax's case against Aventis related to Rilutek, which is marketed by Aventis for the treatment of Lou Gehrig's Disease (amyotrophic lateral sclerosis or ALS).  In the twelve months preceding August, 2006, Rilutek (riluzole) had U.S.sales approaching $37 million dollars.  Rilutek is the only FDA-approved treatment for ALS.

    Impax filed an ANDA on March 16, 2001, to market a generic version of Rilutek and during the course of the approval process became aware of Aventis's U.S. Patent No. 5,527,814.  At the time, the '814 patent was not listed in the Orange Book, and thus Impax filed a declaratory judgment action seeking a declaration that it had not infringed the patent and asserting that the patent was invalid and unenforceable.

    The Federal Circuit affirmed the district court's holding that the '814 patent was not unenforceable due to inequitable conduct, but vacated the lower court's holding that claims 1-5 of the '814 patent were anticipated by Aventis's own U.S. Patent No. 5,236,940, and remanded the case.

    The lower court had found that even though the '940 patent disclosed riluzole as a member of a broad class of compounds, the '940 patent did not show riluzole's effectiveness in treating ALS and therefore it was not anticipatory.  Impax Labs v. Aventis Pharms., 333 F. Supp.2d 365 (D. Del. 2004).  The Federal Circuit disagreed with the lower court.  Citing Rasmusson v. SmithKline Beecham, the Federal Circuit stated that a prior art reference need not show utility in order to be anticipatory:

    Under Rasmusson, the effectiveness of the prior art is not relevant . . . .  Rather, the proper issue is whether the '940 patent is enabling in the sense that it describes the claimed invention sufficiently to enable a person of ordinary skill in the art to carry out the invention.

    Thus, the Federal Circuit remanded the case to the district court in Delaware for further proceedings under this statement of the test.

    Interestingly, Judge Rader concurred with the majority on all points except the anticipation determination.  Judge Rader wrote:

    While the trial court referred to effectiveness, its findings go beyond that narrow ruling and suffice to uphold its judgment.  For example, the district court noted first that formula I [of the '940 patent] encompasses a particularly large number of compounds.  In addition, the district court examined the specification of the '940 patent and determined that riluzole was not meaningfully discussed . . . .  Thus, I read the district court to have found that the '940 disclosure did not put one of skill in the art in possession of the invention at all.  When it found that the disclosure leaves 'substantial uncertainty,' the trial court sufficiently supported its holding.  The '940 disclosure does not make [riluzole] a potential treatment in any way.

    Thus, Judge Rader was inclined to affirm the district court's ruling on all counts.

  • FDA Delay in Reviewing Ditropan XL Citizen Petition Helps Alza, Hurts Mylan and Impax

    Mylan and Impax were the first generic drug companies to file substantially complete ANDAs for generic versions of Ditropan XL (oxybutynin chloride, extended release), an incontinence treatment with annual sales of about $400 million.  Mylan was the first to file for the 5 mg and 10 mg dosage strengths and Impax was the first to file for the 15 mg strength.

    As we previously reported, on September 6th the Court of Appeals for the Federal Circuit affirmed the invalidity of Alza’s patent on Ditropan XL.  Ordinarily, one would have expected the FDA to grant final approval of Mylan and Impax’s ANDAs shortly thereafter (both companies had already received tentative approval), but in this case FDA review of a citizen petition caused final approval to be delayed for over two months.

    On August 29, 2005, shortly before the district court invalidated Alza’s patent on Ditropan XL, Ortho-McNeil filed a citizen petition asking the FDA to demand additional data from any companies filing ANDAs for generic Ditropan XL.  Both Ortho-McNeil and Alza are subsidiaries of Johnson & Johnson.  Ortho-McNeil’s citizen petition asked FDA (1) to require that standard bioequivalence criteria be applied separately to oxybutynin and its active metabolite, desethyloxybutynin, to ensure that approved generic versions of Ditropan XL are both bioequivalent and clinically equivalent to the innovator product; (2) to apply bioequivalence criteria to the R- and S-enantiomers of oxybutynin and desethyloxybutynin; and (3) to require that all bioequivalence studies be conducted under both fasting and fed conditions.

    On November 9th of this year, FDA responded to the citizen petition, granting it in part but denying most of its requests.  On the same day, FDA granted final approval to Mylan and Impax for generic versions of Ditropan XL and the two companies launched their generic products immediately.  Thus, FDA’s delay in ruling on Ortho-McNeil’s citizen petition appears to have resulted in an extra two months of market exclusivity for Alza.

    Even worse for Mylan (and Impax too, presumably) is that FDA’s delay in ruling on the citizen petition appears to have cost it two months of its 180-day exclusivity.  While FDA’s approval letter to Mylan asks Mylan to submit correspondence indicating when its exclusivity began to run, it seems pretty clear that Mylan’s exclusivity began with the September 6th appeals court decision.  Mylan filed its ANDA before enactment of the Medicare Modernization Act (MMA), and therefore the "court decision" trigger applies to Mylan’s ANDA.

    It seems particularly important for FDA to expedite its review of citizen petitions in situations such as this, where a portion of the 180-day marketing exclusivity period may be lost through no fault of the ANDA filer.

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  • Federal Circuit Affirms Finding That Mayne Pharma Infinges Abraxis Bioscience’s Patent on Diprivan

    Last week the U.S. Court of Appeals for the Federal Circuit affirmed a district court's finding that Mayne Pharma's ANDA for generic Diprivan (propofol) infringes Abraxis Bioscience's U.S. Patent No. 5,714,520 (and two other related patents).  The '520 patent covers improved formulations of Diprivan, an injectable drug used to induce and maintain general anesthesia and sedation in patients.  Specifically, the patent claims a propofol formulation containing edetate, an antimicrobial preservative.  Mayne filed its ANDA for a propofol formulation containing a different preservative, the calcium trisodium salt of pentetate (also referred to as DTPA), and obtained a patent on the formulation.

    In an opinion written by Judge Lourie for a unanimous panel, the Federal Circuit affirmed the district court's finding of infringement under the doctrine of equivalents (DOE).  The most interesting aspect of the opinion addressed Mayne's argument that the district court improperly defined the "way" prong of the familiar function-way-result test of DOE infringement.  The district court found that the "way" edetate works is by metal ion chelation.  Mayne asserted that the proper definition of "way" was narrower: one that incorporates the specific metal ions that are chelated, the strength of the bonds that are formed during chelation, and stability constants.

    According to the Federal Circuit:

    "What constitutes equivalency must be determined against the context of the patent, the prior art, and the particular circumstances of the case."  [citing Graver Tank] . . . Here, the district court properly assessed the "way" edetate works by referring to the patent and the evidence presented at trial.  The record evidence supports the conclusion that the "way" in which both edetate and calcium trisodium DTPA perform as an antimicrobial agent is by metal ion chelation.

    While the Federal Circuit reversed the district court's claim construction as to the term "edetate" and its finding of literal infringement, its affirmance of the lower court decision under the doctrine of equivalents was sufficient to doom Mayne Pharma's case.  It appears that Mayne must now wait until expiration of the patents in suit before it can market its generic propofol product.

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  • D.C. Circuit Agrees That FDA Improperly Delisted Merck’s Zocor Patents From Orange Book, Unlawfully Denying Teva and Ranbaxy of Simvastatin Exclusivity

    The Court of Appeals for the D.C. Circuit today affirmed a district court decision finding that the FDA wrongly delisted two Merck patents on Zocor (simvastatin), which in turn unlawfully denied Teva and Ranbaxy from 180 days of marketing exclusivity on generic simvastatin.  FDA appealed the district court decision but did not request a stay.  FDA then granted final approval of Teva and Ranbaxy’s ANDAs in June, after which the two companies launched their generic simvastatin products.

    In today’s D.C. Circuit opinion, written by Judge Ginsburg for a unanimous panel, the court upheld the district court’s finding that FDA’s interpretation of the statue was contrary to the clear intent of Congress.  FDA’s policy was to allow delisting when a generic drug maker had filed an ANDA containing a paragraph IV certification and the NDA holder had not filed a lawsuit to contest the certification, as occured in the Zocor case.

    The appeals court framed the question at issue as "whether the FDA may delist a patent upon the request of the NDA holder after a generic manufaturer has filed an ANDA containing a paragraph IV certification so that the effect of delisting is to deprive the applicant of a period of marketing exclusivity."  In striking down FDA’s policy, the court reasoned:

    Not only does the statute not require litigation to preserve a generic applicant’s eligibility for exclusivity . . . such a requirement is inconsistent with the structure of the statute because, if the patent is delisted before a pending ANDA is approved, then the generic manufacturer may not initiate a period of marketing exclusivity.

    By thus reducing the certainty of receiving a period of marketing exclusivity, the FDA’s delisting policy diminishes the incentive for a manufacturer of generic drugs to challenge a patent listed in the Orange Book in the hope of bringing to market a generic competitor for an approved drug without waiting for the patent to expire.  The FDA may not, however, change the incentive structure adopted by the Congress.

    This case appears to require FDA to set a new policy, whereby it should refuse to delist a patent if a generic manufacturer has filed an ANDA containing a paragraph IV certification with respect to the patent.

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  • Apotex Sues FDA Over Decision on Generic Zofran, Challenging FDA’s Interpretation of “Court Decision” Trigger Again

    Apotex filed a complaint and motion for preliminary injunction against the FDA in the U.S. District Court for the District of Columbia last week, alleging that the FDA unlawfully refused to acknowledge that the dismissal of its patent infringement suit against GlaxoSmithKline over generic Zofran was a "court decision" triggering the first ANDA filer’s 180 day period of exclusivity.  The dismissal order was entered May 25, 2005, and therefore Apotex claims that the 180 day exclusivity period expired in November, 2005.  Apotex would like to launch its generic Zofran next month, when the last of GSK’s patents expire.  Unless the FDA changes its position, however, Apotex will have to wait until at least 180 days later.

    Apotex had previously challenged the FDA’s interpretation of a "court decision" sufficient to trigger a 180 day exclusivity period, in a declaratory judgment action involving generic Pravachol.  In that case, FDA decided that the dismissal of a patent suit was not such a court decision; instead, a court must issue a holding on the merits of the suit.  FDA explained in a November 3rd letter to counsel for Apotex that its "holding-on-the-merits" standard "is equally applicable to affirmative patent suits," such as the Zofran case.  Apotex filed its lawsuit against the FDA shortly after receiving the letter.

    The impact of this case will be relatively limited because the Medicare Modernization Act of 2003 got rid of the "court decision" trigger entirely.  For ANDAs filed after December 8, 2003, if no other ANDAs containing a paragraph IV certification for the listed drug were filed prior to December 8, 2003, a court decision no longer triggers the 180-day exclusivity period.  Instead, the exclusivity period does not begin until the first commercial marketing of the generic drug.

    NOTE:  Thanks to Kurt Karst for bringing this case to my attention.