Bio-Pharma at the U.S. Supreme Court

Since my last article here on IPWatchdog.com, the pharmaceutical industry has been simply overflowing with interesting developments, including the US Supreme Court hearing arguments concerning three significant cases.

The first case argued at the Supreme Court will determine whether generic drugmakers can be sued for alleged flaws in the design of their medications. At issue is whether federal law preempts such claims from proceeding in state court and if drugmakers can be held liable if they decline to withdraw their medicines from the marketplace.

Of course, the same concept could be applied to brand-name drugmakers, which is why the entire pharmaceutical industry is on edge. In fact, the Obama administration filed a brief in support of drugmakers over concerns the FDA regulatory review process could be undermine if medicines deemd safe and effective could later by considered ‘unreasonably dangerous.’

The court reviewed an appeal by Mutual Pharmaceutical to overturn a $21 million jury award to a New Hampshire woman who in 2004 had taken a generic painkiller called sulindac, but developed Stevens-Johnson Syndrome and toxic epidermal necrolysis. She’s nearly permnanetly blind and suffered burn-like lesions over most of her body, underwent numerous surgeries, and is now unable to read, drive or work, and must use a feeding tube, her lawsuit says.

[Bio-Pharma]

She sued Mutual for design defects under state law and a federal appeals court upheld the award. But Mutual argues federal law preempts this type of claim because the FDA had already approved sulindac and federal law requires a generic drug to have the same design as the brand-name medication. Mutual cited a 2011 Supreme Court ruling that generic drugmakers are not required to update product labeling if alerted to side effects, even when the same change has been made to the brand-name drug.

But Bartlett argued the FDA should never have approved the drug and claims the medicine was inherently dangerous based on the number of incident reports of skin reactions filed with the FDA. On that basis, she maintained the design of the drug was ‘unreasonably dangerous’ and defective.

For more information see:

• Betting on Liability for Generic Defects
• White House to Argue in Favor of Federal Preemption
• Oral Argument Transcript in Mutual Pharmaceutical v. Bartlett

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Another argument before the Supreme Court was about pay-to-delay deals in which a brand-name drugmaker agrees to pay a settlement to a generic rival in exchange for ending patent litigation and launching a copycat medicine at a future date.

At stake is a decision that could influence the cost of medicines for most Americans, because the ruling is expected to determine the pact at which lower-cost generic drugs become Drugmakers have struck dozens of these deals over the past decade or more, prompting increasing scrutiny at a time of rising health care costs.

The issue has divided lower courts for years as the pharmaceutical industry and its allies have argued the agreements actually speed lower-cost generics to market. But opponents – which include the US Federal Trade Commission, AARP, the American Medical Association and 31 states attorney general – argue the deals are harmful antitrust activity that raise consumers costs. The FTC has issued forecasts showing the deals force consumers to pay $3.5 billion a year in higher health care costs.

For more information see:

• Court Agrees to Tackle Drug Patent Settlements
• Supreme Court Oral Argument in FTC v. Actavis
• Oral Argument Transcript in FTC v. Actavis 

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And there was one more case that captivated biopharma. The US Supreme Court heard arguments about a case that raises crucial questions about whether human genes can be patented. And the outcome may well reset the boundaries and direction of medical research in the US, which of course has tremendous implications for investments made by the biopharmaceutical industry and the battle against many diseases, notably cancer.

The court is reviewing a lower ruling that upheld the right of Myriad Genetics to patent two human genes that form the basis of a widely used genetic test for breast and ovarian cancers. A decision last year by a federal appeals court gave Myriad the right to patent two so-called isolated human genes – BRCA1 and BRCA2 – that account for most inherited forms of the cancer.

The case began three years ago, when the ACLU and the Public Patent Foundation sued Myraid (MYGN), the University of Utah Research Foundation and the US Patent & Trademark office. They charged that Myriad’s refusal to license its patents broadly meant women who fear they may be at risk of having cancer are prevented from having anyone but Myriad look at the genes in question.

Many women with a familial history undergo genetic tests to determine if they have mutations on their BRCA genes. The info helps decide on treatment or prevention, such as increased surveillance, preventive mastectomies or ovary removal. Women who test positive using the Myriad BRACAnalysis test have an 82 percent higher risk of breast cancer and a 44 percent higher risk of ovarian cancer. However, each test may cost about $4,000 and the patents prevent Myriad competitors from offering such a test without paying a fee.

Those who want the Myriad patients overturned say this amounts to a monopoly, while Myriad, other drugmakers and their supporters say research and innovation would be squelched if intellectual property rights and investments were not honored and rewarded.

The battle over biosimilar substitution is playing out in some two dozen states across the country and, for the most part, biotechs are losing. Maryland became the latest to reject the concept, which was advocated by Amgen and Genentech in order to thwart rivals from having easy entre to their lucrative markets.

Over the past few months, legislators in several states introduced bills that would allow interchangeable biosimilar substitution, but only if more cumbersome conditions are met by prescribing physicians and pharmacies The debate is about interchangeability and biotechs want clear lines drawn for substitution, such as giving physicians authority to specify “do not substitute” and that such an option should override any policy from payers or state law that would have substitution be the standard or default practice

The Generic Pharmaceutical Association argues the bills would hurt state budgets and, in any event, are premature because the FDA has not yet issued guidelines for developing biosimilars.

So far, Arizona, Mississippi and Washington have rejected bills, and Arkansas sent a bill to a study committee. North Dakota is the only state to pass biosimilar legislation. Virginia and Utah passed similar bills, but these contain sunset clauses, which may require new legislation, depending upon when FDA guidance is issued. Meanwhile, legislation is being considered by nine other states: California, Colorado, Illinois, Indiana, Florida, Massachusetts, Oregon, Pennsylvania and Texas.

For more information see:

• Supreme Court to Hear Case that May Reshape Biopharma Research
• Supreme Court Hears Myriad Gene Patent Challenge
• Oral Argument Transcript in Assoc. for Molecular Pathology v. Myriad Genetics