Articles Posted in Litigation

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for gavelgold.jpgZogenix, Inc., the San Diego-based manufacturer of the extended-release hydrocodone drug Zohydro ER, has sued the Governor of Massachusetts in U.S. District Court in Boston to overturn as unconstitutional the state’s recent prohibition against prescribing and dispensing the medication.

Zohydro ER is the only FDA-approved hydrocodone drug indicated for daily, round-the-clock, long-term treatment of chronic pain for which other pain treatments are inadequate. The product, which was approved last year, is also the only available extended-release opioid drug containing hydrocodone alone, not combined with acetaminophen, which has been associated with liver damage.

The Governor of Massachusetts recently issued an “emergency declaration” establishing the ban, without consulting Zogenix, on the ground that a hydrocodone-only drug presents a greater risk of overdose and abuse than a hydrocodone combination drug. The ban would remain in place until “adequate measures are in place to safeguard against the potential for diversion, overdose and misuse.”
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Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for drugmoney.jpegOn January 24, 2014, Judge Walls of the U.S. District Court for the District of New Jersey dismissed the In re Lamictal Direct Purchaser Antitrust Litigation after concluding that the U.S. Supreme Court’s FTC v. Actavis ruling concerning the antitrust implications of so-called “pay-for-delay” settlements of Hatch-Waxman patent infringement cases only “applies to patent settlements that contain an unjustified reverse payment of money.”

The settlement in this case ended a patent infringement action between branded pharmaceutical manufacturer GlaxoSmithKline (“GSK”) and generic manufacturer Teva Pharmaceuticals (“Teva”). The settlement “allowed Teva to market generic lamotrigine [Lamictal®] before the relevant patent expired and ensured that once it did so, its generic tablets and chewables would not face competition from GSK’s own ‘authorized generic’ for a certain period of time.”

Direct Purchaser plaintiffs Louisiana Wholesale Drug Company and King Drug Company of Florence brought the present antitrust action against GSK and Teva, “alleg[ing] that the settlement violates federal antitrust laws.” The district court dismissed the case a first time in December 2012 for failure to state a claim under the then-existing antitrust laws. The Direct Purchasers appealed. While the appeal was pending, the Supreme Court issued its Actavis decision. As a result, the Third Circuit Court of Appeals remanded the case back to the district court for reconsideration of its earlier dismissal based on Actavis.
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On December 11, 2013, FLH Scientific Advisor Howard E. Rosenberg, Ph.D. will speak on: “Patent Settlements/Pay-for-Delay – are they so incompatible?” as part of the International Broadcasting Convention (“IBC”) International Patent Litigation Conference held in London, England, at The Bloomsbury Hotel, 16-22 Great Russell Street, London WC1B 3NN.

Dr. Rosenberg’s presentation is a “Case Study” with the following description:

Both in Europe and USA there is pressure for curbing aspects of patent settlements, consequently it has resulted in hotly debated missives from both sides of the divide. Can a patent dispute be resolved in which a settlement can occur where a commercial advantage is obtained by both litigants or is it solely the public purse that has to be of concern?

The IBC website includes a comment from The Right Hon. Professor Sir Robin Jacob explaining the focus of the Conference:

These are interesting times for patent law and procedure. This makes for uncertainty in many directions. Patentees, potential defendants and advisors to both sides are increasingly having to base their actions and predictions on less and less firm material. They need all the help they can get.

This conference is aimed at exploring some of the major questions of the day. IBC Legal have brought together many of the key players in this complex and fast changing world to debate and discuss where things are and may be going. It will be an exciting event – one not to be missed if you really want to know what’s going on.

Dr. Rosenberg looks forward to seeing you there at the IBC International Patent Litigation Conference.

dna.jpgYears have passed since enactment of the Biologics Price Competition and Innovation Act of 2009 (“BCPIA“), and we have been waiting for developments–from government, industry, and/or law–that would spark life into the biosimilars’ industry. But, with FDA taking a wait-and-see approach, industry unwilling to act without more FDA guidance, and the courts not having any cases to decide, progress on the biosimilars’ front has been slow.

Some of that may change though after a judicial decision coming out of the Northern District of California this week. There, Judge Maxine Chesney nixed Sandoz’s early challenge to two Hoffman-La Roche (“Roche”) patents covering etanercept, a human tumor necrosis factor receptor. Amgen, the exclusive licensee of the patents, claims they cover its Enbrel® product. Sandoz, who is currently conducting clinical trials to test an etanercept product, stated that once the trials were complete, it intended to file an application for licensure of its etanercept product as biosimilar to Enbrel®. Accordingly, Sandoz sought a declaration that its claimed biosimilar product did not infringe either patent, and that both patents were invalid and unenforceable.

Sandoz contended that declaratory relief was appropriate, because it had provided notice of commercial marketing. In opposition, Roche and Amgen made two related arguments: (1) the district court did not have standing to consider the patent dispute, because Sandoz had not yet submitted an application to FDA and (2) there was no cognizable case or controversy. The court agreed with Roche and Amgen, finding a number of problems with Sandoz’s position.
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Thumbnail image for DEA Badge.jpgOn August 19, Eisai Incorporated (“Eisai”) filed a Writ of Mandamus to Redress Unreasonable Delay by the Drug Enforcement Administration (“Writ”) to compel the Drug Enforcement Agency (“DEA”) to issue a Notice of Proposed Rulemaking (“NPRM”) within ten days of the Writ and otherwise expedite its drug scheduling for Fycompa® (perampanel). According to Eisai, DEA’s failure to initiate the scheduling of Fycompa® almost seven months after receiving a scheduling recommendation from the Assistant Secretary for Health (“ASH”) “constitutes unreasonable and egregious delay warranting mandamus.” In Eisai’s opinion, mandamus is warranted because: “(i) many thousands of patients who may benefit from the drug cannot obtain it, (ii) the drug’s sponsor is unable to benefit from FDA’s approval [of Fycompa®, and (iii) the burden on DEA of scheduling this drug is very small.”

Eisai’s Writ explained the process where FDA sends its drug scheduling recommendation through the ASH to DEA to initiate a scheduling proceeding “within a reasonable time” to permit the drug to be marketed with the appropriate scheduling safeguards. Under the Controlled Substances Act (“CSA”), if a drug has the potential for abuse, it must be subject to DEA scheduling, which considers “the eight-factor analysis” indicative of abuse potential and places the drug in one of five drug schedules. Schedule II is the most restrictive category where the drug is still accepted to have an accepted medical use, and Schedule V is the least restrictive schedule with an accepted medical use yet a low potential for abuse, physical dependence, or psychological dependence relative to other drugs or substances in Schedule IV.

The CSA permits DEA to add, change, or delete a substance’s schedule at any time by FDA/Health and Human Services or by petition from ay interested person or entity. The process that Eisai referred to, however, is the initial approval of a new chemical entity (“NCE”), where there was previously no schedule for the drug substance, and FDA recommends that a drug be scheduled prior to marketing. Although FDA lacks the direct authority to restrict marketing of products with pending DEA scheduling orders, FDA includes FDA Form 356h as a cover sheet for all new drug applications (“NDAs”) with a statement that the sponsor will not market until DEA makes a final scheduling decision. In the past, sponsors have honored these commitments to wait for a final scheduling decision before marketing their FDA-approved NDAs. Sponsors have waited despite FDA starting the clock for the five-year NCE exclusivity from the date of FDA’s approval letter rather than the final DEA scheduling, i.e., losing exclusive marketing time.
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supreme court.jpgOn April 15, the U.S. Supreme Court heard oral arguments in Assoc. for Molecular Pathology v. Myriad Genetics, Inc. et al., the famous case concerning the patent-eligibility of human gene patents. At issue is the validity of Myriad’s patents on the human genes, BRCA1 and BRCA2, but ruling would surely cover the patent eligibility of all animal and plant genes and impact various biotechnology industries. Additional details may be found in previous blogs, for instance here and here.

The Justices appeared skeptical of Myriad’s argument that isolated DNA is patent-eligible subject matter. Isolated DNA is DNA that is cut from a chromosome, resulting in an “isolated” piece of DNA that has the same nucleotide sequence as the naturally-occurring genomic DNA.

The Justices compared Myriad’s isolated DNA to the discovery of plants with medicinal properties. Justice Breyer commented that it was long-standing patent law that while particular applications of such a plant can be patented, the plant cannot be. If someone discovers a medicinal plant “he gets a patent on the process, on the use of the thing, but not the thing itself.” Justice Sotomayor expressed her understanding that to obtain a patent “you had to take something and add to what nature does” and wondered, “how do you add to nature when all you are doing is copying its sequence?”
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Obamabudget.jpgOver the past months, there has been a lot of speculation (see recent blogs here , here, and here) whether the White House’s proposed budget would cause a sequester situation for FDA, resulting in potential layoffs or program cuts, in an era of new user fees for generic drugs and biosimilar biological products. While initial reports and temporary budget fixes (called continuing resolutions) appeared to keep FDA’s user fees intact and available for use, FDA’s Commissioner, Margaret A. Hamburg, M.D., recently reported to members of a biotechnology trade association, the Massachusetts Biotechnology Council (“MassBio”), that it was not clear what would happen with user fees in the new federal budget.

Released on April 10, the White House’s proposed fiscal year 2014 budget is a mixed bag that has been called a “political document rather than a serious piece of legislation” with a “series of bargaining positions” that “would bleed pharma.” On the one hand, the plan would appear to confirm that FDA’s user fees would not be sequestered, given that it supported the $4.7 billion in total program budget requested by FDA, which included user fees that would help fund over 90 percent of the requested increases. On the other hand, the budget includes a myriad of proposals that would change the way the government pays for medical care and products. For example, Medicare (senior citizens’ drug coverage) Part D manufacturer discounts for branded drugs would be increased from 50% to 75% in 2015 (rather than 2020) and low-income individuals would be pushed more to generic drugs by increasing certain copayments for branded drugs and lowering certain copayments for generic drugs.

Many of the more controversial proposals were nestled in a document called “Reducing the Deficit in a Smart and Balanced Way”. Here, the White House proposes, among other things, several items to purportedly lower drug costs, including: 1) authorizing the Federal Trade Commission to stop companies from entering into certain “pay-for-delay” agreements (see below) and 2) beginning in 2014, to reduce biologic product exclusivity from 12 years to 7 years and prohibit additional periods of exclusivity for minor changes to product formulations. These two items could open up some unanticipated debate regarding the White House’s budget.
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ITC Building.pngOn March 27, FLH attorneys Brian Malkin and Christopher Gosselin attended the International Trade Commission (“ITC”) Trial Lawyer’s Association (“ITCTLA“) luncheon with administrative law judge (“ALJ”) Thomas B. Pender. Judge Pender joined the ITC in October, 2011, and is one of six ALJs at the Commission.

Judge Pender arrived at the luncheon with a number of themes that he wanted to discuss. Chief among them is a concern shared by many other ALJs and district court judges about the scope of electronic discovery in today’s litigation. He urged the practitioners in the room not to lose control of the paper, and to reign in the costs and scope of electronic discovery. In Pender’s experience, less than 1% of all discovery becomes an exhibit, and less than 5% of those exhibits are ever argued. In addition to paring back discovery, Pender would like to see fewer patents and patent claims being asserted by complainants. Ultimately, Pender would like to see more efforts taken to reduce the cost of litigation at the ITC, and hopes that more streamlined cases will allow him to finish an Initial Determination in a year or less.

Judge Pender also suggested, on a related note, that big firms make an effort to send their associates “to the podium,” both to give the associates valuable experience, and to reduce the cost of a trial. In his experience, well-prepared associates perform as well or better than partners who had less time to prepare. Pender cautioned parties to think twice before betting an entire case on one witness, and suggested that secondary witnesses could and should be handled by associates.
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supreme court.jpgOn March 25, 2013, the U.S. Supreme Court heard oral argument in the Federal Trade Commission’s (“FTC’s”) case challenging the Hatch-Waxman patent settlements Solvay (now owned by Abbot Laboratories) entered into with Watson Pharmaceuticals, Par Pharmaceutical, and Paddock Laboratories resolving their disputes involving Solvay’s testosterone-replacement drug AndroGel®. The so-called reverse-payment settlements at issue in FTC v. Actavis, Inc., Sup. Ct. No. 12-416 (“AndroGel”) involved the generic manufacturers’ agreements to abandon their patent challenges and delay generic entry for nine years. The settlements also involved Solvay making certain payments to the generic manufacturers in return for backup manufacturing and marketing support. For additional background information, please see some of our more recent blogs here, here, and here.

The issue before the Court is whether reverse-payment settlements are per se lawful unless the underlying patent litigation was a sham or the patent was obtained by fraud (as the Eleventh and other circuits have held), or instead are presumptively anticompetitive and unlawful (as the Third Circuit held in K-Dur).

Deputy U.S. Solicitor General Malcolm L. Stewart argued on behalf of the FTC that the Court should adopt a “quick look” rule of reason analysis under the antitrust laws whereby reverse-payment settlements will be presumptively anticompetitive unless defendants can show that the payment from the brand to the generic was for a purpose other than delaying generic entry, or the payment offered some pro-competitive benefit. Notably, this quick look approach was adopted by the Third Circuit in K-Dur. Counsel for the respondent drug companies argued that the Court should adopt the “scope of the patent defense” applied by the Second, Eleventh, and Federal Circuits finding these agreements to be lawful absent sham litigation or fraud in obtaining the patent.
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safe harbor.jpgThe Supreme Court has another chance to clarify the scope of the safe-harbor provisions of 35 U.S.C. § 271(e)(1). Momenta Pharmaceuticals, Inc. and Sandoz Inc. petitioned the Supreme Court to review Momenta Pharmaceuticals, Inc. v. Amphastar Pharmaceuticals, Inc.. In that case, the Federal Circuit held that 35 U.S.C. § 271(e)(1) protected post-approval studies performed for FDA. Momenta’s request comes roughly one month after the Supreme Court declined to grant cert in Classen Immunotherapies, Inc. v. Biogen Idec, another Federal Circuit case involving the scope of 271(e)(1) (blogged on here).

Momenta identifies the issue for the Supreme Court as:

Whether the use of a patented invention in the course of post-approval manufacture of a drug for commercial sale, where the FDA requires that a record of that manufacturing activity be maintained, is exempt from liability for patent infringement under Section 271(e)(1) as “solely for uses reasonably related to the development and submission of information under a Federal law which regulations the manufacture, use, or sale of drugs.

The generic-drug company seeks Supreme Court intervention to remedy what it views as inconsistent and incorrect Federal Circuit law. The safe harbor states that it is not an act of infringement to make, use, offer to sell, or sell a patented invention solely for uses reasonably related to the development and submission of information under [federal drug laws]. 21 U.S.C. § 271(e)(1). In Classen, a divided Federal Circuit panel interpreted the provision to be limited to “activities conducted to obtain pre-marketing approval of generic counterparts of patented inventions, before patent expiration.” Roughly one year later, another divided Federal Circuit panel, in Momenta, held that “the requirement to maintain records for FDA inspection satisfies the requirement that the uses be reasonably related to the development and submission of information to FDA.
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