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Teva Racks Up Outside Support for Redo of Skinny Label Ruling

Dec. 31, 2020, 11:00 AM

Generic drug makers, nonprofit groups, professors, and a former congressman behind the Hatch-Waxman Act have lined up in support of Teva Pharmaceutical Industries Ltd.‘s request for the full Federal Circuit to review a drug labeling decision.

In October, a divided panel of the U.S. Court of Appeals for the Federal Circuit reinstated a $235 million verdict against Teva for infringing GlaxoSmithKline Plc‘s patent on the heart drug Coreg. The label on Teva’s generic version specifically carved out the patented uses of the drug, but the majority held the company induced doctors to infringe.

Chief Judge Sharon Prost dissented, arguing the majority nullified the Hatch-Waxman Act’s provision for skinny labels, meant to shield generics from liability for induced infringement.

Teva asked the full Federal Circuit to review the decision, which it argued makes the carve-out statute “a dead letter.” Eight amicus briefs were filed in support of rehearing, arguing that the availability of affordable drugs is at stake.

The court invited GSK to respond to the petition, indicating at least one judge is interested in the case. The response is due Jan. 29.

Rehearing Petition

Glaxo sued Teva for infringing its patent on using the compound carvedilol to lessen the chance of death from congestive heart failure, even though Teva was only selling the generic version to treat hypertension.

The majority of a three-judge Federal Circuit panel agreed with Glaxo that Teva marketed the drug as the same as Coreg regardless of the skinny label. Judge Pauline Newman, joined by Judge Kimberly A. Moore, said that circumstantial evidence like press releases and marketing materials show that Teva induced doctors to infringe Glaxo’s patent.

Teva argued in its en banc petition that it followed the special pathway Congress created for generics to enter the market while steering clear of method-of-use patents.

“Congress authorized carve-outs for a crucial purpose: ensuring that one patented use will not foreclose marketing a generic drug for other unpatented ones,” Teva argues.

Sponsor Weighs In

Former Rep. Henry Waxman (D-Calif.), who cosponsored the statute that created the modern generic drug industry, argued that the majority’s decision “is flatly inconsistent with the language of the Act and congressional intent.”

If the decision is left in place, “it will have a devastating impact on the Hatch-Waxman Act’s generic drug program, which has saved patients, the federal government, and other payers trillions of dollars,” he said in an amicus brief in support of Teva.

The act represented a “grand compromise” between the interests of innovative drug makers who want to enforce their patents and generic makers delayed from selling cheaper drugs by regulatory requirements, he said.

Generic drugs have saved the U.S. nearly $2.2 trillion over the last 10 years, “but if the majority’s decision stands, name-brand companies like GlaxoSmithKline will be encouraged to file serial patents for novel methods of use and effectively bar generics from entering the market indefinitely,” Waxman said.

Other Support

Generic makers Apotex Inc., Mylan Pharmaceuticals Inc., Novartis Pharmaceuticals Corp., and Sandoz Inc. argued in their briefs about what the ruling would do to their industry.

Mylan warned of “catastrophic results” in its amicus brief. “The decision threatens to upend both Congress’s path to marketing generic drugs for concededly non-infringing uses and the law of induced infringement, to the detriment of those who urgently need affordable medicine,” it said.

Novartis and Sandoz said in their brief that the decision “injects uncertainty into a body of law upon which innovators and generics alike rely when deciding to invest in the complex technical and regulatory efforts needed to bring medicines to market.”

The Association for Accessible Medicines, which advocates for generics, said the decision provides a road map for suing generic makers, exposing them to punishing liability even when they follow the law.

“By turning what was supposed to be a safe harbor into dangerous waters, the panel decision will greatly hinder the development of low-cost generic medicines,” the group said in its amicus brief.

Fifty-seven law, economics, business, health, and medicine professors said in their brief the decision could allow branded companies to improperly block marketing generic drugs for uses no longer covered by patents, “thus reducing generic competition.”

Free-market think tank the R Street Institute and Knowledge Ecology International, which describes itself as a nonprofit that “searches for better outcomes regarding the management of knowledge resources,” also filed briefs in support of rehearing.

Fish & Richardson PC represented GSK. Goodwin Procter LLP represented Teva.

The case is GlaxoSmithKline LLC v. Teva Pharm. USA, Inc., Fed. Cir., No. 18-1976, amicus briefs 12/30/20.

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editors responsible for this story: Renee Schoof at rschoof@bloombergindustry.com; Keith Perine at kperine@bloomberglaw.com

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