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Generic drug makers are gaining legal ground on the large pharmaceutical companies in their battle over billion-dollar drugs. As companies like Pfizer, Merck and Warner-Lambert fight to maintain patents on drugs that bring in huge sums of money, Congress, federal agencies and the courts are making decisions that make it easier for generic drugs to come to market. The latest shot in this battle came out of the courts on Jan. 16 when the U.S. Court of Appeals for the Federal Circuit threw out, on a summary judgment motion, a common legal ploy used by brand-name companies against their generic competitors: In the past, after a drug’s patent had expired, the manufacturer would acquire a new patent for the drug based on the drug’s unapproved use to treat a medical condition. This new patent would be used to forestall generic manufacture of the drug. The ruling in Warner-Lambert Co. v. Apotex Corp., 2003 U.S. App. Lexis 594 (Fed. Cir. Jan. 16, 2003), involving the drug gabapentin, may effectively end this tactic, leaving brand-name companies with one less weapon to use against generics. FENDING OFF GENERICS This legal battle over gabapentin illustrates how the brand-name manufacturers are trying to fend off generic competition at a time when generics have gathered political steam and are winning more often in court. Gabapentin, which is sold under the trade name Neurontin, garnered Warner-Lambert more than $2 billion in sales just in the United States during 2002. And although some of Warner-Lambert’s key patents on gabapentin expired in January 2000, no company has yet been able to overcome Warner-Lambert’s legal defenses and bring a generic version of the drug to market. Warner-Lambert had a method patent covering the use of gabapentin to treat epilepsy, and this patent expired on Jan. 16, 2000. Apotex filed an Abbreviated New Drug Application with the Food and Drug Administration (FDA) in April 1998, requesting permission to market a generic version of gabapentin to treat epilepsy after Warner-Lambert’s patent expired. But Warner-Lambert sued Apotex, asserting that Apotex’s version of the drug would infringe a later patent that Warner-Lambert owned — a patent for a method of using gabapentin to treat certain neurodegenerative diseases such as stroke, Alzheimer’s disease, Huntington’s disease and Parkinson’s disease. This was an “off-label-use patent,” since the FDA had not approved the use of gabapentin to treat neurodegenerative disease. The FDA had only approved the use of gabapentin to treat epilepsy, and the vast majority of the manufactured drug was used to treat that condition. Nevertheless, Warner-Lambert listed its off-label-use patent on the FDA’s publication of approved drug products, commonly known as the “Orange Book.” Then Warner-Lambert sued Apotex for infringement of this patent. By bringing the infringement action, Warner-Lambert activated an automatic stay which prevented the FDA from approving Apotex’s application until the infringement action was resolved or until 30 months had elapsed, whichever occurred first. In September 2001, a federal district court in Illinois ruled, in a summary judgment motion, that Apotex had not infringed the patent. In January of this year, the Federal Circuit affirmed. The Federal Circuit, in the first appellate ruling on this issue, held that no infringement occurs when a company seeks FDA approval to market a generic drug for a specific medical use when neither that drug nor the specified use is covered by an existing patent, and the only patent at issue is for a use not approved by the FDA. “Warner-Lambert’s proposed interpretation is inconsistent with both of the stated purposes of the Hatch-Waxman Act, and would confer substantial additional rights on pioneer drug patent owners that Congress quite clearly did not intend to confer,” Judge Alan D. Lourie wrote for the 3-0 Federal Circuit panel. “If Warner-Lambert’s interpretation were correct, for example, an NDA holder would be able to maintain its exclusivity merely by regularly filing a new patent application claiming a narrow method of use not covered by its NDA. There is no evidence that Congress intended to enable an innovator to extend its exclusivity merely by asserting patents on unapproved uses.” “This ruling has very significant and wide-ranging effects for the generic drug industry,” said William Rakoczy, a partner at Chicago-based Lord, Bissell & Brook and the lead outside counsel for Apotex. He said that it has been common for brand-name drug companies to obtain off-label-use patents and to use these patents to forestall generic competition. But this ruling “comes close to putting the nail in the coffin” on this technique, Rakoczy said, since generic companies can quickly get summary judgment against future uses of the technique. Moreover, any brand-name manufacturer that tries the technique in the future might find itself facing treble damages. “The [Warner-Lambert] decision says that off-label-use patents shouldn’t be listed in the Orange Book,” said Steven Lee of New York’s Kenyon & Kenyon, who represents both brand-name and generic drug companies. “With such clear instructions from the Federal Circuit, a patent holder who listed an off-label-use patent in the Orange Book would face potential antitrust liability for listing an inappropriate patent and so trying to illegally extend its patent monopoly.” Two blockbuster drugs that could be affected by this ruling are Pfizer’s Zoloft, which had worldwide sales in 2002 of $2.7 billion, and GlaxoSmithKline’s Paxil, which had worldwide sales in the first three quarters of 2002 of $2.3 billion, according to Mary Jane D. O’Connell, also of Kenyon & Kenyon. Despite the Federal Circuit’s ruling, a generic version of gabapentin won’t be hitting the market soon. That’s because the delay caused by litigating the off-label-use patent allowed Warner-Lambert to obtain a new patent and get yet another 30-month stay, according to Rakoczy. This new patent, which was issued in April 2000, claims “a novel composition of gabapentin that contains a lower percentage of a toxic impurity called lactam,” said Rakoczy. “In our view, Warner-Lambert has attempted to patent any stable composition of gabapentin, and that is not valid. We don’t believe that patent is anything new.” Warner-Lambert’s lead outside counsel in the gabapentin litigation, Hugh C. Barrett, a partner at New York’s Fitzpatrick, Cella, Harper & Scinto, declined to comment on the litigation. Calls to Warner Lambert’s in-house legal department were not returned.

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