(Bloomberg) -- A U.S. appeals court panel signaled that it wants to ensure generic-drug makers can continue selling low-cost copycat medicines with limited-use labels as long as they don’t actively promote newer uses discovered by brand-name companies.
In an unusual proceeding, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit on Tuesday heard arguments for the second time over a $235 million verdict won by GlaxoSmithKline Plc over Teva Pharmaceutical Industries Ltd.’s copy of its Coreg heart drug. In October, it split 2-1 in upholding the jury verdict that found Teva’s label encouraged doctors to prescribe a generic version for a newer patented indication.
Labels cover information like the drug composition, its uses and side effects. The law encourages generic-drug makers to use so-called “skinny labels” for copycat medicines that include only older uses, but not newly-approved ones.
The panel of the Federal Circuit, the nation’s top patent court, agreed to reconsider the October ruling after concerns of its impact by other generic-drug makers, nonprofit groups, and a former congressman who was a co-author of the Hatch-Waxman Act, which in 1984 created the modern generic-drug industry.
Other generic-drug makers “seem to be concerned this is a true skinny label case and the sky is going to fall,” said Glaxo lawyer Juanita Brooks of Fish & Richardson. “This is not a true skinny label.”
Circuit Judge Kimberly Moore, one of two judges who sided with Glaxo in October and is seen as the key to reissuing the ruling, said that merely saying a copycat drug is interchangeable with a branded medicine doesn’t prove the generic-drug maker encouraged doctors to prescribe it for a new patented use. In this case, though, she questioned whether Teva had gone beyond that, with wording on its labels and old press releases that were easily found.
The questioning indicated that the panel may again be split over reinstating the jury verdict, but would make it more clear that this is a fact-specific issue that wouldn’t limit the use of skinny labels in other cases. Lawsuits leaning on the October ruling have emerged, including ones over generic versions of Amarin Corp.’s heart medicine Vascepa and of the low-blood-pressure drug Vasostrict, sold by Endo International Plc’s Par Pharmaceutical.
The eventual ruling in the closely watched dispute could give brand companies new ways to fend off low-cost competition -- or it could solidify discounts patients have enjoyed for the nearly four decades since Congress passed a law to promote generic drugs.
Judge Pauline Newman, who authored the October decision, said the new ruling should ensure “we don’t cut off at the pass the kind of research” that leads to new treatments. She said it comes down to the balance between “the public interest that’s involved as well as the private interest of the generic producer.”
Teva said it had carved out uses that Glaxo said it patented. Drugmakers can get patents on new methods and “they’re able to enforce that if they’re able to show the generic encourages, promotes or recommends” that use, said William Jay of Goodwin Procter. The other side, however, “hasn’t given the court this morning anything in Teva’s skinny label” that does so.
The Delaware jury had found that, notwithstanding a Teva label that excluded Glaxo’s patented treatment for congestive heart failure, Teva was responsible for inducing doctors to prescribe the drug for that purpose. Jurors said Teva should compensate Glaxo for the $234 million in profits it lost to the competition plus $1.4 million in royalties on the $75 million in Teva sales. The trial court later threw out the verdict.
The Federal Circuit case is GlaxoSmithKline LLC v. Teva Pharmaceuticals USA LLC, 18-1976, U.S. Court of Appeals for the Federal Circuit (Washington).
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