While the biotech and pharmaceutical industries face ever-increasing intense global competition, there have been numerous, recent, high-profile litigation cases affecting the industry. Consequently, there is ever-increasing pressure on the industry to comply with these new legal mandates. This article provides the author’s thoughts regarding several high-profile litigation cases that are having a major impact on these industries.
Truthful, Non-Misleading Off-Label Promotion of FDA-Approved Drugs
The industry is still feeling the impact of the U.S. Supreme Court’s decision in Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (2011). The Sorrell decision is having a significant impact on the U.S. Food and Drug Administration’s traditional ban on off-label promotion. In Sorrell, the U.S. Supreme Court affirmed that truthful, non-misleading off-label promotion of FDA-approved drugs is protected under the First Amendment. Consequently, truthful, non-misleading off-label promotion cannot be indiscriminately banned by the FDA. The decision in Sorrell will have a significant impact on how pharmaceutical companies decide to promote their FDA-approved products. No doubt, it is believed that there will be more litigation in the wake of the Sorrell decision, based on controversies about what is deemed to be truthful, non-misleading off-label promotion for individual products that have already received FDA approval. In addition to the Sorrell decision, other recent high-profile decisions are having a major impact on the pharmaceutical industry.
Rethinking Strategies in the Biopharmaceutical Industry in the Wake of the Myriad decision
The biotech and pharmaceutical industries are also dealing with the huge impact of the U.S. Supreme Court’s decision in Ass’n. for Molecular Pathology v. Myriad Genetics, Inc. 133 S. Ct. 2107 (2013), otherwise referred to as the Myriad case. In Myriad, the U.S. Supreme Court held that isolated human genes are not patent-eligible. In a unanimous opinion, the Court held that “a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring.” In the landmark decision, Justice Thomas discussed that the Supreme Court has traditionally limited patent eligible subject matter under 35 U.S.C. § 101 to exclude abstract ideas, natural phenomena, and laws of nature. Moreover, because the genetic sequence and structure of DNA are products of nature, the Court held that gene sequences themselves were not deemed “new… composition[s] of matter” under the relevant patent statute, 35 U.S.C. § 101. In the continued wake of the Myriad decision, the biopharmaceutical industry is continuing to re-evaluate plans and strategies for protecting potential DNA-based therapeutics, and how best to draft patent applications and patent claims to make sure that only patent-eligible subject matter is covered.
Feeling the Impact of the Crackdown on Alleged Anticompetitive Settlement Agreements
Another area of increased recent litigation which is having a huge impact on the pharmaceutical industry pertains to allegedly anticompetitive settlement agreements. In a recently filed case, Fed. Trade Comm’n v. AbbVie Inc., No. 2:14-cv-05151 (E.D. Pa. Sept. 8, 2014), the Federal Trade Commission (FTC) alleged that some well-known pharmaceutical companies engaged in anticompetitive practices. More specifically, the FTC alleged that AbbVie and Teva entered into an allegedly anticompetitive settlement agreement which would further delay generic competition. This type of litigation is having a major impact on the pharmaceutical industry, and highlights how the FTC continues to closely monitor the drug industry for alleged anticompetitive practices. Moreover, the Fed. Trade Comm’n v. AbbVie Inc. litigation comes in the wake of the U.S. Supreme Court’s decision in Fed. Trade Comm’n v. Actavis, Inc, 133 S. Ct. 2223 (2013). In this high-profile decision, the Supreme Court in the Actavis case held that the FTC can bring antitrust claims against drug companies after review of so-called reverse payment settlement agreements. Given FTC’s continued intense scrutiny of allegedly anticompetitive settlement agreements in the pharmaceutical industry, it is predicted and very likely that FTC will also scrutinize any allegedly anticompetitive settlement agreements between brand/innovator companies that pioneer biologics and generic manufacturers of biosimilars.
Biosimilar Applicants and ANDA Applicants Feel the Impact of Other Recent Court Decisions
While the Biologics Price Competition and Innovation Act, or Biosimilars Act, has provided very significant and lucrative new opportunities in the U.S. for the biopharmaceutical industry, and particularly for manufacturers of generic biologics or biosimilars, the industry has already felt the impact of recent, high-stakes litigation focused on biosimilars which will have a major impact on how industry competitors develop their biosimilar strategies. Just recently, in the case Sandoz Inc. v. Amgen Inc., 2014-1603 (Fed. Cir., December 2014), the Federal Circuit affirmed that Sandoz’s declaratory judgment (DJ) action for its proposed biosimilar of the product Enbrel® should be dismissed. In its decision, the Federal Circuit held that a biosimilars applicant cannot use a DJ action to challenge a Reference Product Sponsor’s patent before filing a biosimilars application with the FDA. While this case really ushers in the beginning of biosimilars litigation in the United States, the pharmaceutical industry has been very familiar for a much longer time with the challenges of ANDA litigation for small-molecule therapeutics. While there will likely be even more intense global competition between manufacturers of biologics and biosimilars, there has long been very intense global competition between brand and generic pharmaceutical companies vying for drug approval and market share and consequently brand and generic competitors often square off in ANDA litigation. In an important recent 2014 decision by the Federal Circuit, in Ferring B.V. v. Watson Laboratories, Inc.–Florida, 764 F.3d 1401 (Fed. Cir. 2014), the court held that the question of infringement must be determined in view of the originally filed ANDA and any amendments based on other submissions to the FDA, i.e., in an amended ANDA. Moreover, the Federal Circuit’s decision in Ferring makes clear that when an ANDA does not include specifications that address elements within the asserted patent claims, the patent owner during ANDA litigation still bears the burden to prove by a preponderance of the evidence that an accused infringing generic product will likely be marketed. It is believed that the Ferring decision and other similar ANDA litigation cases will have a major impact on how pharmaceutical companies develop their competitive strategies and prepare for litigation in the future.
In summary, the biopharmaceutical industry will continue to feel the impact of these and other significant court decisions. There will no doubt be additional significant litigation, given the intense global competition and very high stakes for companies competing in these industries.