{"id":7604,"date":"2020-05-11T08:06:02","date_gmt":"2020-05-11T08:06:02","guid":{"rendered":"https:\/\/cpip.gmu.edu\/?p=7604"},"modified":"2026-02-03T20:29:46","modified_gmt":"2026-02-03T20:29:46","slug":"recent-developments-in-the-life-sciences-the-continuing-assault-on-innovation-by-antitrust-plaintiffs-in-lantus","status":"publish","type":"post","link":"https:\/\/blogs.uakron.edu\/ualawip\/2020\/05\/11\/recent-developments-in-the-life-sciences-the-continuing-assault-on-innovation-by-antitrust-plaintiffs-in-lantus\/","title":{"rendered":"[Archived Post] Recent Developments in the Life Sciences: The Continuing Assault on Innovation by Antitrust Plaintiffs in Lantus<\/em>"},"content":{"rendered":"

By Erika Lietzan<\/a><\/em><\/strong><\/p>\n

\"dictionaryIn February, the U.S. Court of Appeals for the First Circuit held<\/a>, in a direct purchaser antitrust action, that an innovative pharmaceutical company marketing an injectable drug product had \u201cimproperly listed\u201d in FDA\u2019s Orange Book a patent claiming a mechanism used in the drug\u2019s delivery device. As I explain below, the ruling creates the specter of antitrust liability for steps taken in good faith to comply with a complex regulatory framework that overlaps in part with patent law. I explain below how the ruling puts biopharmaceutical innovators in a tough spot.<\/p>\n

First, the legal framework.<\/strong><\/p>\n

Federal law requires each company that submits a new drug application to identify the patents that claim the drug or a method of using the drug (if a claim of patent infringement could reasonably be asserted against someone who made, used, or sold the drug without a license). The application cannot be approved, if the company fails to submit the required information on a patent that satisfies the listing standard. (See section 505(d)(6) of the drug statute, here<\/a>.) FDA publishes the patent numbers and expiration dates in the \u201cOrange Book,\u201d which takes the form of a PDF and electronic database.<\/p>\n

Federal law also requires a generic drug applicant to take a position with respect to every patent that claims the drug or a method of using the drug \u2014 effectively, every patent listed in the Orange Book. For every unexpired patent, the generic applicant has two choices, which dictate when its application can be approved. (There\u2019s a third option for a patent claiming a method of using the drug, which isn\u2019t relevant here.)<\/p>\n

It can choose to wait for patent expiry, which means filing a \u201cparagraph 3 certification.\u201d In this scenario, FDA cannot approve its generic drug for market entry until expiry of the patent.<\/p>\n

Or it can say that it plans to market right away, because its product doesn\u2019t infringe the patent or because it thinks the patent invalid, which means filing a \u201cparagraph 4 certification.\u201d In this scenario, it must notify the innovator (and patent owner, if different). (I\u2019ll just say \u201cinnovator,\u201d going forward.) As far as this patent is concerned, FDA can approve the generic drug for market entry as soon as its review is complete and assuming the generic drug is otherwise approvable with one important exception. If<\/em><\/strong> the patent was listed before the generic drug company submitted its application, and if<\/em><\/strong> the innovator files a patent infringement suit within 45 days of receiving notice, then<\/em><\/strong> final approval of the generic application is stayed for 30 months or until a district court ruling in the generic company\u2019s favor (whichever happens first). The paragraph 4 certification is considered an act of infringement, which creates federal court jurisdiction.<\/p>\n

The patent listing mechanism is intended to facilitate litigation of patent issues before <\/em>market entry, which both industries wanted. The generic companies wanted a way to litigate these issues before launching, for example, because doing so avoids the risk of damages (for more information, see my article<\/a> on the history and political economy of the legislation). The scheme encourages generic companies to participate by offering 180-day exclusivity in the market for the first to file a (true) generic application with paragraph 4 certification, and it encourages innovators to participate by offering the 30-month stay that makes it possible for the patent to be litigated before the generic drug launches.<\/p>\n

These rules apply to companies that file true generic applications, for exact copies of the innovator\u2019s drug. And with one exception they also apply to companies that file a different type kind of abbreviated application known as a 505(b)(2) application. The distinction between the types of application isn\u2019t critical here. The one exception is that companies filing 505(b)(2) applications with paragraph 4 certifications aren\u2019t eligible for 180-day exclusivity.<\/p>\n

Second, applying the framework to combination products in particular.<\/strong><\/p>\n

The listing standard \u2014 \u201cany patent which claims the drug for which the applicant submitted the application or which claims a method of using such\u201d \u2014 has proved vexing to interpret.<\/p>\n

In 1994, FDA published its first regulation interpreting this provision, stating that it meant \u201cdrug substance (ingredient) patents, drug product (formulation and composition) patents, and method of use patents,\u201d but not \u201cprocess patents.\u201d But there have been questions about a variety of patent types over the years, and in 2003 \u2014 responding in part to requests for elaboration \u2014 the agency revised its regulations to provide more details about what it required<\/em> to be listed and what was not<\/em> to be listed.<\/p>\n

At issue here: what to do with combination products. These products combine two regulated components, such as a device and a drug. Two discrete products packaged together for use together are, together, considered a \u201ccombination product.\u201d But the phrase also means a single finished product that comprises two regulated components<\/em> \u2014 thus a drug and device produced as a single entity. Combination products thus include prefilled drug delivery devices \u2014 such as a prefilled drug syringe, an auto-injector, or an metered dose inhaler (see here<\/a>).<\/p>\n

The question is whether the statute requires companies to list patents associated with the device component of these products.<\/p>\n

FDA considered this in the 2003 rulemaking. The final regulation is 21 C.F.R. \u00a7 314.53<\/a>, but the agency\u2019s explanation of the regulation in the Federal Register<\/a> \u2014 which has the formal status of an \u201cadvisory opinion<\/a>\u201d \u2014 is just as important.<\/p>\n

The agency decided that \u201cpatents claiming a package or container must not be submitted.\u201d Packaging and containers are \u201cdistinct from the drug product.\u201d<\/p>\n

Several commenters also argued that patents claiming devices that are \u201cintegral\u201d to the drug product or require approval should be listed. FDA offered what it labeled as a \u201cresponse.\u201d The agency didn\u2019t write that these patents \u201cshould\u201d be listed, or that they \u201cshould not\u201d be listed. Instead it said that a \u201cdrug product\u201d is the drug in its \u201cfinished dosage form\u201d \u2014 meaning the form administered to patients. And, it added, the current list of \u201cdosage forms for approved products\u201d \u2014 which appears in an appendix to the Orange Book \u2014 includes \u201caerosols, capsules, metered sprays, gels, and pre-filled drug delivery systems.\u201d Elsewhere it wrote that a patent claiming the finished dosage form \u201cmust be submitted for listing.\u201d<\/p>\n

Now, the litigation and First Circuit ruling.<\/strong><\/p>\n

Sanofi-Aventis holds the approved marketing application for Lantus (insulin glargine recombinant), a long-acting human insulin analog used in treating diabetes. At first the company sold Lantus in multiple dose vials and in cartridges for use with a (separate) insulin delivery device. In 2007, however, FDA approved a supplemental application for sale of Lantus in a single-patient-use prefilled injector pen.<\/p>\n

Sanofi has listed several patents in connection with Lantus. In connection with the prefilled pen, the company listed U.S. Patent No. 8,556,864<\/a> (drive mechanisms suitable for use in drug delivery devices), which issued in October 2013 and expires in March 2024. The parties agree that the \u2019864 patent claims the drive mechanism used in the Lantus pens, and FDA would not have approved the prefilled pens without a showing that the pen (including the drive mechanism) ensures patients safely receive accurate doses. But \u2014 and this turned out to be critical in the end \u2014 the patent doesn\u2019t mention insulin glargine. Nevertheless, according<\/a> to the agency, an insulin injector pen is a prefilled drug delivery system. And this makes it a dosage form. And patents claiming dosage forms must be listed.<\/p>\n

In 2013, Eli Lilly submitted a 505(b)(2) application for a copy of Lantus, which it planned to market as Basaglar. It included a paragraph 4 certification to the \u2019864 patent and to various other patents as well. Sanofi brought suit. The case settled on the morning trial was scheduled to begin, with Lilly agreeing to pay for a license to launch in December 2016, seven years before<\/em> patent expiry.<\/p>\n

The plaintiffs in this antitrust litigation are drug wholesalers. They claim, among other things, that Sanofi improperly listed the \u2019864 patent. (As far as I can tell, Lilly didn\u2019t raise the issue.) The district court dismissed their first amended complaint, pointing out that FDA has interpreted \u201cdrug products\u201d to include \u201cprefilled drug delivery systems\u201d and that patents claiming drug products must be listed. The plaintiffs amended their complaint, but the district court dismissed again on largely the same grounds. Under a \u201creasonable interpretation\u201d of the agency\u2019s regulations, Sanofi had to submit the patent for listing. So, it couldn\u2019t have been improper conduct to list the patent.<\/p>\n

The First Circuit\u2019s ruling came as a shock. In a unanimous decision, Judge Kayatta wrote that Sanofi had improperly listed the patent. He reasoned as follows. First, the statute and regulations call for listing of patents that claim the drug, and the patent doesn\u2019t even mention the drug. Second, in 2003 FDA didn\u2019t<\/em> adopt the proposal that devices \u201cintegral\u201d to the product should be listed. Instead, the agency said that companies should list patents that claim the finished dosage form. And this patent doesn\u2019t, the court wrote; it claims a device that can be combined with other components to produce the finished dosage form.<\/p>\n

Finally, the implications.<\/strong><\/p>\n

The innovative pharmaceutical industry has asked FDA repeatedly<\/em> since 2003 \u2014 at least four times, including in citizen petitions \u2014 to clarify whether patents directed to drug delivery systems are supposed to be listed, if they don\u2019t recite the drug\u2019s active ingredient or formulation. The agency never<\/em> answered these requests.<\/p>\n

Although FDA\u2019s failure to respond has been frustrating, it is my understanding that most companies \u2014 consulting with patent and regulatory counsel \u2014 have concluded these patents should be listed and that, in fact, they list them, and FDA publishes them. I have always thought this was the best reading of what FDA wrote in 2003. At the very least, it is a reasonable reading of what FDA wrote. It is deeply concerning that the First Circuit now purports to answer this question for the agency \u2014 no, these patents do not satisfy the listing standard <\/em>\u2014 in litigation to which FDA was not a party and could not explain its interpretation of the statute or its expectations.<\/p>\n

The decision is also fundamentally hostile to pharmaceutical innovators. The Hatch-Waxman scheme \u2014 statute, regulations, guidance, and precedent \u2014 is complex, and figuring out how it applies in any particular situation can be tricky. There are other unresolved listing issues, which companies and their counsel work through in good faith. The lesson here seems to be that an innovator trying to navigate uncertainty about the listing requirements does so at its peril.<\/p>\n

On the one hand, failing to list a patent that satisfies the criteria has serious consequences. Listing is not voluntary; the statute requires it. The company must declare (\u201cunder penalty of perjury\u201d) that its patent submission is \u201caccurate and complete.\u201d The patent submission form<\/a> reminds the company that \u201ca willfully and knowingly false statement is a criminal offense\u201d under 18 U.S.C. \u00a7 1001. (And at least in theory, FDA would reject an application that lacked the required patent information, though I don\u2019t know if this has ever happened or if it would<\/em> happen.) Most importantly, failing to list a patent means there is no paragraph 4 certification, and thus no artificial act of infringement, and no opportunity to enforce the patent before generic market launch. Failing to list also passes up the benefit of the 30-month stay. And there may be concern that failure to list a patent is some sort of admission against the innovator\u2019s interests in litigation.<\/p>\n

On the other hand, listing a patent that doesn\u2019t<\/em> satisfy the criteria attracts antitrust scrutiny, presumably because the listing places an administrative burden on generic applicants and might trigger a stay of approval. And this case shows that a hostile court may disagree with the company\u2019s reading of the statute, regulations, Federal Register, and precedent. Even if a company adopts what appears to many to be a reasonable interpretation of the patent listing requirements, a court might interpret the listing requirements on its own \u2014 without the benefits of FDA\u2019s views \u2014 and force the company into expensive and time-consuming antitrust litigation. Indeed, two bloggers recently praised<\/a> the decision, recommending that generic companies \u201cexamine the Orange Book listings,\u201d as they may contain a \u201crich vein\u201d for antitrust claims.<\/p>\n

To be sure, as the court wrote, Sanofi can try to show, on remand, that its submission was \u201cthe result of a reasonable, good-faith attempt to comply with the Hatch-Waxman scheme.\u201d This would provide a defense to any liability under the Sherman Act for \u201cantitrust injury caused by\u201d the submission. But the burden has shifted to the company, and much of the language in the court\u2019s opinion suggests that this will be an uphill battle. (E.g., \u201cThe statute and regulations clearly require that only patents that claim the drug for which the NDA is submitted should be listed in the Orange Book. The \u2019864 patent \u2026 does not fit the bill.\u201d)<\/p>\n

A postscript from the administrative law side of the table.<\/strong><\/p>\n

Consider a counterfactual.<\/p>\n

As a preliminary matter, recall that FDA\u2019s regulations require companies to list patents on drug products. These regulations also state that the phrase \u201cdrug product\u201d refers to a drug in its \u201cfinished dosage form.\u201d FDA has said, for years, that a patent claiming a finished dosage form \u201cmust be submitted for listing.\u201d Finally, it has listed prefilled drug delivery systems as a type of \u201cdosage form\u201d in the Orange Book.<\/p>\n

Now suppose that FDA had<\/em> responded to the industry requests for clarification and stated definitively \u2014 given what I just wrote \u2014 that a patent claiming any component of a prefilled syringe must be listed? In my view, this would be a defensible position for the agency to have taken, given the statute, the regulations, and what it has written to date.<\/p>\n

What would have happened if this hypothetical FDA decision<\/em> had gone to the First Circuit for review, in a totally different kind of lawsuit? Would the First Circuit really conclude that the agency\u2019s interpretation of the statute was un<\/em><\/strong>reasonable or impermissible (Chevron<\/em><\/a>)? Would it really conclude that the agency\u2019s interpretation of its regulation was \u201cplainly erroneous or inconsistent with the regulation\u201d (Auer<\/em><\/a>)? And if we think that the courts would (or should) defer to FDA in this hypothetical case, how can Sanofi\u2019s decision possibly<\/em> have been unreasonable?<\/p>\n

In the end, the First Circuit\u2019s ruling contains a troubling lesson for pharmaceutical innovators. When navigating uncertainty about a patent\u2019s status under the patent listing requirements, even if it seems reasonable<\/em> to conclude that FDA would require listing and even if the agency won\u2019t answer the question, listing the patent in good faith creates a serious risk of facing antitrust litigation. The alternative, equally unappealing, is to relinquish the opportunity to enforce the patent before generic market entry, which conflicts with the purpose and design of the Hatch-Waxman Amendments and undermines the value of the patent.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Erika Lietzan In February, the U.S. Court of Appeals for the First Circuit held, in a direct purchaser antitrust action, that an innovative pharmaceutical company marketing an injectable drug product had \u201cimproperly listed\u201d in FDA\u2019s Orange Book a patent claiming a mechanism used in the drug\u2019s delivery device. As I explain below, the ruling […]<\/p>\n","protected":false},"author":3627,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,5,40,41],"tags":[140,174,187,272,494,516,549,559,598,656,709,798,864,1050,1065,1084,1132,1133,1278],"class_list":["post-7604","post","type-post","status-publish","format-standard","hentry","category-antitrust","category-biotech","category-patents","category-pharma","tag-antitrust","tag-auer","tag-basaglar","tag-chevron","tag-eli-lilly","tag-erika-lietzan","tag-fda","tag-first-circuit","tag-generics","tag-hatch-waxman","tag-insulin","tag-judge-kayatta","tag-lantus","tag-orange-book","tag-patent","tag-patent-listing","tag-pharma","tag-pharmaceutical-patents","tag-sanofi"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts\/7604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/users\/3627"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/comments?post=7604"}],"version-history":[{"count":1,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts\/7604\/revisions"}],"predecessor-version":[{"id":15691,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts\/7604\/revisions\/15691"}],"wp:attachment":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/media?parent=7604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/categories?post=7604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/tags?post=7604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}