Drug Patents and the High Cost of Healthcare: Case of Over-Advocacy for Under-Patentability

In my last post, I discussed a particular form of drug-patent abuse unique to “Orange Book”-listed patents covering small-molecule drugs, which can have the power to delay generic drug competition by 2.5 years merely by the filing of a lawsuit.  In this post, I would like to focus on a more foundational weakness in the patent examination system that sometimes has been exploited by drug-patent owners in their attempts to unjustly delay market entry for both generic and biosimilar versions of a drug, way-beyond the expiration of the original patents covering the drug.  This weakness is the limited ability of members of the examiner corps to effectively rebut so-called “Rule 132” declarations during ex parte patent prosecution of drug-patent applications.

Rule 132 declarations are grounded in the Code of Federal Regulations, 37 C.F.R. § 1.132, entitled “Affidavits or declarations traversing rejections or objections” (as discussed in the Manual of Patent Examination Procedure § 716).  When an applicant introduces Rule 132 declarations by alleged experts in the field during prosecution of a patent application, examiners have neither the wherewithal nor the authority to provide alternative expert analyses: Examiners are not experts (nor even those of ordinary skill in the art); and they cannot retain experts on behalf of the PTO.  At best, they may be able to assert prior art that contradicts an expert declaration.  But in the absence of directly contradictory statements or other such tangible rebuttal evidence, the examiner can effectively be forced to accept assertions by an applicant’s experts as true, even though, upon more careful scrutiny, those assertions turn out to be false.

A case in point can be found in Allergan’s “second wave” of Restasis patents, which were obtained by the drug company late in the term of the original Restasis patents that expired in 2014—and which sought to effectively extend this term by nearly a decade.  These second-wave patents include U.S Patent No. 8,629,111 (“the ‘111 patent”), which was asserted along with several others against three generic drug companies in the Eastern District of Texas, and which Judge Bryson of the Federal Circuit, sitting by designation, found invalid last October.

Allergan’s prior-art Restasis patent, U.S. Patent No. 5,474,979 (the so-called “Ding I patent”), was generally directed to pharmaceutical emulsions comprising a particular combination of an immunosuppressant, called cyclosporin A, in a suspension of castor oil, for treatment of a condition known as “dry eye.”  The Ding I patent discloses and claims pharmaceutical emulsions of cyclosporin A in castor oil generally, as well as emulsions in which the concentration by weight of cyclosporin A and castor oil are within certain ranges.

The alleged innovation in the ‘111 patent (and its siblings) amounts to the allegedly surprising and unexpected discovery by Allergan scientists that the specific combination of a certain amount of cyclosporin A within the range in the prior art—about 0.05% by weight—in a certain amount of castor oil within the range in the prior art—1.25% by weight—produced superior results, relative to other possible combinations within those ranges in the prior art, for the treatment of dry eye.

To be sure, as the Federal Circuit has noted in In re Geisler, and more recently in Galderma v. Tolmar, such combinations within ranges known in the prior art may be patentable, but only when the applicant can show that the particular combination is “critical.”  This generally means “by showing that the claimed range achieves unexpected results relative to the prior art range.”  Only if such “results of optimizing a variable” are “unexpectedly good,” however, can a patent be obtained for the claimed critical combination.  The results must be “different in kind and not merely in degree from the results of the prior art.”

With annual sales of Restasis at around $1.5 billion, one might expect that in return for nearly 10 years of additional market exclusivity, that the results with the claimed 0.05% cyclosporin A in 1.25% castor oil would have been “unexpectedly good,” indeed.  But in this case, quite the opposite was true.

The examiner initially rejected the claims of the ‘111 patent as obvious over the Ding I patent.  What is more, Allergan had even conceded the point during prosecution of the ’111 patent’s parent applications.  For example, Allergan previously argued that 0.05% cyclosporin A in 1.25% castor oil would have been obvious over the Ding reference:  “[A]pplicants concede that in making this selection (0.05% cyclosporin and 1.25% castor oil) there would have been a reasonable expectation of success; the differences between [the data in Ding I] are too small to believe otherwise. The formulation . . . is squarely within the teaching of the Ding reference, and the Office should disregard any statements by the applicants suggesting otherwise . . . .”

But in a preliminary amendment filed with the application that issued as the ‘111 patent, Allergan did another about-face: “Applicants hereby rescind and retract” the above statements.  “Since these comments have been filed,” Allergan argued, the Applicants have collected evidence that supports the patentability of the pending claims.”

Allergan then went on to present expert declarations under Rule 132, in order to buttress its case of non-obviousness before the examiner.  Allergan’s experts provided data that purported to show an up-to 8-fold increase in efficacy for the claimed formulation, relative to the prior art ranges.

However, as Judge Bryson pointed out in detail in his 135-page Opinion, the alleged 8-fold increase in efficacy was statistically unfounded.  First, the data were based on a small sample size that showed no statistically significant differences.  Second, the alleged improvement in efficacy appeared in just two of 58 different indices of efficacy.  Third, and most importantly, the alleged 8-fold increase in efficacy was based on a misleading statistical reliance on a so-called “ratio of ratios.”

To paraphrase Judge Bryson’s illustrative example:   In a first experiment, compare conditions X and Y and find that X gives 10.3 while Y gives 10.1—i.e., X does 3-fold better than Y (a ratio of X:Y of 3:1).  Then, in a second experiment, compare X and Z, and find the X gives 10.1 and Z gives 10.3—i.e., Z does 3-fold better than X (a ratio of X:Z of 1:3).  Suppose as well that none of those values were themselves found to be statistically significant relative to one another.  Nonetheless, the ratio of the two ratios, X:Y and X:Z—3:1 and 1:3—gives a whopping 9:1 alleged “increase” in the efficacy of Z, relative to Y!  As Judge Bryson aptly noted, “[a]ny conclusion from the “ratio of ratios” that there was a nine-fold relative improvement in performance by the 0.05% formulation [“Z”] . . . would obviously be spurious.”

Judge Bryson thus did not mince words in finding that Allergan had persuaded the examiner to let the patent issue “by way of a presentation that was more advocacy than science.”

“In fact,” Judge Bryson continued, “a closer examination of the results” showed that in arguing to the PTO, Allergan “substantially overstated the difference between the clinical results obtained” and the prior art, and that no significant difference actually existed.  (Slip Op. at 133.)  Accordingly, the court concluded, “Allergan is not entitled to renewed patent rights for Restasis in the form of a second wave of patent protection.”  (Slip Op. at 135.)

The price-tag for non-innovative drug patents, such as these second-wave Restasis patents, is substantial.  Indeed, one cannot help but question Allergan’s true motivations for attempting to evade PTAB scrutiny of these patents by reliance on Tribal Immunity based on its deal with the St. Regis Mohawk Tribe.  The PTAB, unlike the examiner corps, does have the ability to consider rebuttal expert testimony, and is thus not-so handicapped in its capacity to vet drug patents of questionable validity, with aplomb.

Both Judge Bryson’s invalidity decision and the PTAB’s decision not to recognize Allergan’s assertion of Tribal Immunity in the PTAB proceedings are currently on appeal to the Federal Circuit.  We await the Federal Circuit’s decision in both matters, with great interest.

In my next (and last) post in this series, I will consider one final example of attempted drug-patent abuse; and will then conclude with some brief remarks about how we might best balance the need for strong patent incentives to innovate, without compromising the general public’s need for the availability of affordable medicines at the earliest time possible.