SUPREME COURT SIDES WITH GENERIC DRUG COMPANY AGAINST BRAND NAME IN FIGHT OVER PATENT RIGHTS

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by Jay Pate

A significant part of our law practice is fighting for the rights of consumers to have safe, effective prescription medicine.   Last month, The United State Supreme Court issues a decision that many feel will make it easier for drug companies to market generic versions of drugs: Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S, 132 S.Ct. 1670 (2012).

The Food and Drug Administration (FDA) regulates the manufacture, sale, and labeling of prescription drugs. A brand-name drug manufacturer seeking FDA approval for a new drug submits a new drug application, including a statement of the drug’s components and proposed labeling describing the uses for which the drug may be marketed.

Once a brand name drug is approved, other companies can seek to market a generic version.  However, the FDA cannot authorize a generic drug that would infringe a brand manufacturer’s patent. Those patents come in different varieties. One type protects the drug compound itself. Another kind—the one at issue in the Caraco case—gives the brand manufacturer exclusive rights over a particular method of using the drug.

The Caraco case involved the diabetes drug repaglinide. The drug company Novo manufactures Prandin, the brand-name version of the drug. The FDA has approved three uses of Prandin to treat diabetes: (1) repaglinide by itself; (2) repaglinide in combination with thiazolidinediones (TZDs); and (3) repaglinide in combination with metformin.

As far as the FDA was concerned, the third use—repaglinide in combination with metformin—was protected by a patent (called the “358 patent”). Novo’s use code for the 358 patent represented that the patent covered “[u]se of repaglinide in combination with metformin to lower blood glucose.”

Caraco sought to market a generic version of the drug for the two approved uses that were not covered by the use code for Novo’s 358 patent.  In response, Novo changed its use code for the 358 patent so that it would encompass all three approved uses of the drug.  The new use code broadly described “[a] method for improving glycemic control in adults with type 2 diabetes. ” Because the new code indicated that the 358 patent protects all three approved methods of using repaglinide to treat diabetes, the FDA refused to approve Caraco’s generic version.

The question in the case was whether the generic drug company, Caraco, could bring a claim seeking to “correct” the brand name drug company’s use code.  The Supreme Court held that the generic drug company could bring such a claim, pursuant to the Hatch-Waxman Act, 21 U.S.C. § 355(j)(5)(C)(ii)(I).  The Court concluded that  the relevant statutory provision “enables courts to resolve patent disputes so that the FDA can fulfill its statutory duty to approve generic drugs that do not infringe patent rights,” and that  the text and context of the provision “demonstrate that a generic company can employ the counterclaim to challenge a brand’s overbroad use code.” The Court therefore reversed the Federal Circuit’s judgment and remanded for further proceedings.

The Court’s decision arguably closes a loophole whereby uncorrected, overbroad “use codes” could effectively prevent generic drug manufacturers from “carving out” patented uses from their applications to sell generic drugs.

The Supreme Court’s opinion in Caraco can be read here:

http://www.supremecourt.gov/opinions/11pdf/10-844.pdf