Waxman, Solicitor General Support Caraco's Supreme Court Fight for Generic Prandin

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By Tony Dutra

Caraco Pharmaceutical, the petitioner in a U.S. Supreme Court dispute about interpreting the Hatch-Waxman Act, received support from its 1984 sponsor, Rep. Henry A. Waxman (D-Calif.) in a Sept. 6 amicus brief (Caraco Pharmaceutical Laboratories Ltd. v. Novo Nordisk A/S, U.S., No. 10-844, petitioner's brief filed 8/29/11).

The case is narrowly focused on the act's counterclaim provision and patent use codes, but most of the briefs filed by and supporting the petitioner fall back on the broad public policy underlying the legislation—the desire for an easier path to market for generic drugs. To date, Caraco has been thwarted in attempts to introduce a generic version of the diabetes drug Prandin.

According to Waxman, the challenged Federal Circuit opinion “eviscerates” key aspects of the Hatch-Waxman system and “would enable brand companies to improperly delay generic competition for years, costing consumers and the health care industry dearly.”

The U.S. government had supported certiorari and further supported the petitioner on the merits. Solicitor General Donald B. Verrilli Jr.'s brief differed only in that it characterized Hatch-Waxman as providing a “balance” between brand name and generic drug interests, rather than focusing on the allowances for generic manufacturers.

The respondent's brief is due Oct. 17. Oral arguments in the case will be held Dec. 5.

Caraco Fights Orange Book Use Description

The issue in the case centers on interpretation of the Hatch-Waxman Act related to the respective roles of the courts and the U.S. Food and Drug Administration.

Novo Nordisk A/S owns patents (RE 37,035 and 6,677,358) underlying the drug repaglinide, which the company markets under the brand name Prandin. The FDA approved three uses of Prandin—by itself, in combination with metformin, and in combination with thiazolidinediones. However, the agency initially limited the Orange Book use code solely to “Use of repaglinide in combination with metformin to lower blood glucose.”

Caraco Pharmaceutical Laboratories Ltd. sought to offer generic repaglinide and so filed an abbreviated new drug application (ANDA) with a Paragraph IV certification—under 21 U.S.C. §355(j)(2)(A)(iv)—as to the ‘358 patent.

Caraco added a Section viii statement declaring that it was not seeking approval for the combination with metformin. Soon thereafter, though, Novo requested and the FDA agreed to a change broadening the use code description: “A method for improving glycemic control in adults with type 2 diabetes mellitus.”

In addition, the FDA required Caraco to label its product without disclaiming use with metformin, leaving it in the position of infringing the patent given that label. Responding to Novo's patent infringement lawsuit, the generic drug maker counterclaimed under Section 355(j)(5)(C)(ii)(I), requesting that the use code and description be changed back to the original.

The U.S. District Court for the Eastern District of Michigan granted Caraco's motion for summary judgment on the counterclaim, which would have forced the use code revision, but the Federal Circuit reversed. Novo Nordisk A/S v. Caraco Pharmaceutical Laboratories Ltd., 601 F.3d 1359, 95 USPQ2d 1031 (Fed. Cir. 2010) (73 PTD, 4/19/10).

In a 2-1 decision, the court determined that the counterclaim provision is available only when the branded drugmaker lists patents that are not related at all to the listed drug. Two terms in the counterclaim provision were key to the majority's view:

• The challenger may invoke the provision “on the ground that the patent does not claim … an approved method of using the drug.” The majority held, “When an indefinite article is preceded and qualified by a negative, standard grammar generally provides that ‘a' means ‘any,' ” and it was thus sufficient that the ‘358 patent claims one of the three methods of use.

• Second, the remedy sought by asserting the provision would be “to correct or delete the patent information submitted by the holder.” But, the majority said, “patent information” means only “the patent number and the expiration date of any patent,” and does not include the use code.

A subsequent petition for en banc rehearing failed 7-2, and the Supreme court granted Caraco's petition for a writ of certiorari June 27.

Caraco's Opening Brief Decries ‘Gamesmanship.'

Caraco's brief, submitted by Steffen N. Johnson of Winston & Strawn, Washington, D.C., set up the public policy argument by accusing Novo of “gamesmanship” in its FDA actions. “Using a patent to block the marketing of concededly unpatented uses would be extraordinary under any statute, but especially one designed to expedite generic competition.”

The brief provided primarily a detailed review of both the relevant provisions of the Hatch-Waxman Act and the FDA's regulations and procedures. It then criticized the Federal Circuit's statutory interpretations in that context.

Caraco further distinguished the pharmaceutical industry, essentially arguing that Hatch-Waxman corrected a potential for extended patent monopolies in that field. “In other markets, competitors that wish to market allegedly infringing products can launch at risk and litigate later,” the company explained. “But marketing drugs requires FDA approval. … Thus, if brands can bottle up the approval process, generics are excluded from the market even where there is concededly no risk of infringement.”

Waxman, Government Lend Support

The Waxman amicus brief, filed by Carlos T. Angulo of Zuckerman Spaeder, Washington, D.C., echoed the same arguments, but with the added perspective of one of the writers of the legislation in question.

Waxman argued that the Federal Circuit's two statutory interpretation decisions were counter to Congress's intent. “Indeed, the Federal Circuit's construction of the statute, far from strengthening the Hatch-Waxman system, eviscerates certain of its key aspects—in particular, the process for expedited FDA approval of generic drug applications for unpatented uses under the statute's ‘section viii'—and, if adopted by this Court, would enable brand companies to improperly delay generic competition for years, costing consumers and the health care industry dearly.”

Both Caraco and Waxman faulted the Federal Circuit for assuming that, in 2003, Congress added the counterclaim provision as a reaction to the court's ruling in Mylan Pharmaceuticals Inc. v. Thompson, 268 F.3d 1323, 60 USPQ2d 1576 (Fed. Cir. 2001). Giving an insider's perspective, however, Waxman said, “Congress and FDA had much broader objectives in mind.”

As one example, the brief recalled a deliberate choice to use “an” instead of “any” in the provision. “If Congress had wanted the statute to have a narrow application and to preclude counterclaims when the NDA holder filed a use code that claimed patented and unpatented uses, it knew exactly what word to use—‘any,' ” Waxman said. “But it chose not to use that word here.”

The solicitor general's brief on behalf of the U.S. government used the same arguments as Caraco and Waxman, differing only in its starting point.

Citing “the Hatch-Waxman scheme's balance between encouraging brandname manufacturers to develop and market new drugs and facilitating the entry of generic drugs that promote competition,” Verrilli argued that the 2003 amendment was a reaction to brand name drug makers who “had upset the Hatch-Waxman balance by submitting a host of inappropriate patent information to FDA that prevented or delayed FDA's approval of ANDAs.”

Three Other Amicus Briefs Filed

Three other briefs were filed in support of the petitioner. Each addressed the same statutory interpretation and policy issues, and added observations about the impact of the high court's decision.

• Mylan Pharmaceuticals Inc., in a brief filed by Dan L. Bagatell of Perkins Coie, Phoenix, noted why Section viii challenges are likely to become more important. “Many patents on the basic chemical composition of blockbuster drugs have expired or soon will,” Mylan said. “Foreseeing this, branded manufacturers have secured follow-on patents on particular methods of use in an effort to maintain ‘evergreen' patent protection.”

• A brief filed by the Generic Pharmaceutical Association made the same point, then added, “Should the decision below stand, brand-name manufacturers will have even stronger incentives—and ready means—to leverage patentable, incremental use improvements into a categorical prohibition on generic competition for the duration of the brand's method-of-use patent.” Brief submitter Roy T. Englert Jr. of Robbins, Russell, Englert, Orseck, Untereiner & Sauber, Washington, D.C., concluded, “Such manipulative tactics will come at the expense of the development of truly new and different advancements, and American consumers will pay the price.”

• The AARP and U.S. PIRG noted, “The United States government, as a market participant, also benefits greatly from generic entry.” The brief, filed by David A. Balto of Washington, D.C., continued, “The Congressional Budget Office (CBO) estimated in 2007 that purchasing generic drugs under Medicare Part D resulted in savings of approximately $33 billion. … Furthermore, the CBO also projects that the federal government would save another $14 billion through 2012 if generic substitutes become available for those drugs that will lose their patent protection during that time.”

Novo is represented by Mark A. Perry of Gibson Dunn & Crutcher, Washington, D.C.

Caraco brief at http://pub.bna.com/ptcj/100844CaracoAug29.pdf