Glaxo’s Win in Case Against Teva Lifts Other Drugmakers
(Bloomberg) -- GlaxoSmithKline Plc won its bid to reinstate a $235 million patent-infringement verdict against Teva Pharmaceutical Industries Ltd. in a closely watched dispute over labeling for generic drugs that gave a boost to other brand-name drugmakers in similar fights.
A U.S. appeals court, in a 2-1 ruling, said Teva’s product label for a copycat version of the heart drug Coreg encouraged doctors to prescribe the generic for an unapproved use. The majority called it a “narrow, case-specific review” that won’t affect other cases involving so-called skinny labels, though the third judge said it involved “sometimes labored, sometimes opaque” reasoning that could hurt efforts to bring low-cost medicines to the market.
This is the second time the three-judge panel considered the issue -- a controversial 2-1 ruling from October was seen as giving brand-drug companies new ammunition to thwart lower-cost copycat medicines and legal experts say this did as well. Other generic-drugmakers, consumer groups, and even one of the co-sponsors of the 1984 law that created the modern generic-drug industry had asked the panel to reconsider the earlier decision.
The October ruling from the nation’s top patent court emboldened other brand-drug companies to sue generic-drug makers, 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. A magistrate in the Amarin case earlier this week recommended allowing that suit to proceed.
Amarin’s American depositary receipts, each worth one regular share, surged as much as 13%, while Endo shares were up 2.6% in New York trading.
Glaxo and Teva were little changed. London-based Glaxo said it was “pleased the jury verdict and damages award have been reinstated.” Officials with Petach Tikva, Israel-based Teva, which makes both generic and brand drugs, didn’t respond to a request for comment.
The original three judges took the unusual step of rehearing arguments in the case in February. The Federal Circuit on Thursday also issued an order saying that the matter won’t be taken up by all active judges in the court, so the next step would be possible petitions to the Supreme Court.
Brand companies often try to find new treatment uses for their medicines to expand the potential number of patients taking them. Labels cover information like the drug’s composition, its uses and side effects. The law encourages generic-drug makers to use “skinny labels” for copycat medicines that include only older uses, but not newly-approved ones.
This case involved a Glaxo drug called Coreg that was initially approved for the treatment of hypertension, though Glaxo later got approval -- and received a patent -- to promote the drug to prevent congestive heart failure. After the patent on the drug’s active ingredient expired in 2007, Teva began selling a generic version of the drug with a skinny label that only mentioned hypertension.
But Glaxo argued that information including press releases on Teva’s website, encouraged doctors to prescribe the generic for heart failure, and sued. A jury in 2017 agreed and awarded Glaxo $234 million in profits it lost to the competition plus $1.4 million in royalties on the $75 million in Teva sales. The trial judge later threw out the verdict.
“Substantial evidence supports the finding that Teva’s partial label was evidence Teva instructed physicians to use its carvedilol in an infringing way,” Chief Judge Kimberly Moore and Circuit Judge Pauline Newman said in an unsigned opinion. “Teva intended its label to affect physician’s prescribing practices.”
The new ruling, which places a greater emphasis on the label itself rather than just the press releases, marks a low for generics relying on the routine practice of “carving out” certain uses of their copycat drugs to avoid infringement of name-brand products, and “might actually have been worse” than the original decision, said Scott Lassman, an FDA law and policy attorney with Lassman Law + Policy.
“It’s going to make it more difficult for companies to avoid infringement through standard carve-outs,” Lassman said. “It’s going to provide new strategies for brands, when they’re getting approval of their drugs, to make it more difficult for generics to carve out”
Circuit Judge Sharon Prost, who also dissented in October, said the new ruling doesn’t clear up the concerns of generic-drug makers and “does little to assuage, and even exacerbates, concerns raised by the original” ruling.
“The majority creates confusion for generics, leaving them in the dark about what might expose them to liability,” she wrote. “These missteps throw a wrench into Congress’s design for enabling quick public access to generic versions of unpatented drugs with unpatented uses.”
The 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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