Supreme Court Rules Generic Drug Makers can Challenge Brand-Name Patents

On April 17, 2012, the Supreme Court ruled in Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S that generic drug makers can sue brand-name drug makers when the latter claim exaggerated descriptions of indications covered by their patented drugs.

The Food and Drug Administration has historically allowed brand-name drug makers to write their own descriptions of patents, which are then included in the “Orange Book,” the FDA’s list of approved drug products.

Because the Hatch-Waxman Act prohibits the FDA from approving generic drugs for uses already covered by brand-name drug patents, pharmaceutical companies have been accused of blocking approval of generic drugs by overstating the uses of their drugs in regulatory findings.

The ruling is an important win for generic drug makers. From law firm Duane Morris:

“Allowing generic manufacturers to counter-claim for correction of overly broad use codes provides a faster, more efficient means for bringing non-infringing generic products to market, while hopefully curtailing abuses of use codes by brand pharmaceutical companies seeking to delay generic competition.” (U.S. Supreme Court Restores Generic Pharma’s Ability to Challenge Orange Book Use Code Information)

For your reference, here’s a look at the ruling and what it means for pharmaceutical companies:

U.S. Supreme Court Rules in Favor of Generic Drug Maker in ANDA Case (Patton Boggs LLP)
“Novo Nordisk A/C, manufacturer of the brand-name Prandin diabetes drug, holds the patent which covers one of three uses approved by the Food and Drug Administration for the drug. Novo sued Caraco for patent infringement after it filed an abbreviated new drug application (ANDA) for its generic version of the drug, and also sought to market it for the two other uses. Novo then changed the ‘use code’ for its patent, claiming that it covers all three of the FDA-approved methods for the drug. Caraco filed a statutory counterclaim, seeking an order requiring Novo to correct its use code. Caraco argued that Novo’s description was too broad, preventing Caraco from entering its generic drug into the market.” Read the full update>>

U.S. Supreme Court Restores Generic Pharma’s Ability to Challenge Orange Book Use Code Information (Duane Morris LLP)
“The district court, on summary judgment, ordered Novo to restore the old use code within 20 days… A divided Federal Circuit panel reversed the district’s court holding [and] … held that the statutory language was clear on its face, and that ‘an approved method of using the drug’ is equivalent to ‘any approved method,’ as opposed to ‘all approved uses.’ Furthermore, the counterclaim provision of the 2003 Medicare and Modernization Act was meant to deter brand manufacturers from listing patents that were not related at all to the patented product or method, and not to create a tool to compel ‘the patent holder to change its use code narrative.’” Read the full update>>

The Supreme Court Reverses the Federal Circuit’s Decision in Caraco v. Novo Nordisk (Morrison & Foerster LLP)
“The Supreme Court reversed [the Federal Circuit’s decision], interpreting the counterclaim provision more broadly and holding that it may be used to force a correction of a use code. The decision emphasized that the counterclaim provision was enacted to facilitate approval of non-infringing generic drugs, and thus should be available to challenge use codes that extend beyond patented methods of use.” Read the full update>>

Hatch-Waxman Counterclaim Provision Allows Generic Drug Maker to Force Correction of Brand’s Orange Book-Listed Use Code, Supreme Court Rules (K&L Gates LLP)
“…the Supreme Court resolved an important, long-standing question under the Hatch-Waxman Act. While the Act provides that an ANDA applicant sued for patent infringement may bring a counterclaim seeking an order requiring the brand manufacturer to ‘correct or delete the patent information [it] submitted… on the ground that the patent does not claim… an approved method of the drug,’ the Federal Circuit had never breathed life into this section.” Read the full update>>

Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S (McDonnell Boehnen Hulbert & Berghoff LLP)
“In her concurring opinion, Justice Sotomayor argues that the statutory regime … is flawed because ‘it results in delay and expense the statutory scheme does not envision’ and ‘there is no guarantee the process will work,’ either because the generic drug maker will not prevail on its counterclaim or, even more troublesome, the branded drug maker will not file suit… She takes the Agency to task for this situation, calling the relevant regulations ‘remarkably opaque’ and suggests that Congress has created precisely the ‘excessive litigation’ it sought to avoid in enacting the statute in the first place.” Read the full update>>

Patent Litigation Alert: Supreme Court Allows Generic Manufacturers To Challenge Overbroad Use Codes (Fenwick & West LLP)
“It remains to be seen whether Congress and the FDA will accept Justice Sotomayor’s challenge. In the meantime, it seems likely that counterclaims alleging overbroad use codes will be raised in Paragraph IV litigations where the use code does not precisely reflect the claimed method of use. Such situations may be more common than expected given the FDA’s 240-word limit.” Read the full update>>

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