The U.S. Court of Appeals for the Federal Circuit handed Eli Lilly a victory over that Teva Pharma in upholding an extension of the statutory thirty-month stay under the Hatch-Waxman Act, thus preventing the U.S. Food and Drug Administration from finally approving Teva’s Abbreviated New Drug Application (ANDA).   Eli Lilly & Co. v. Teva Pharma (09-1071).

The Hatch-Waxman Act requires a pioneer drug manufacturer to notify the FDA of all patents that “claim[ ] the drug for which the [NDA] applicant submitted the application.”  The FDA lists the patents in its Approved Drug Products With Therapeutic Equivalence Evaluations (Orange Book).  Under the law, a generic manufacturer infringes a patent by filing an ANDA to obtain approval for a generic drug product claimed by a valid and unexpired patent.

In this case, Lilly holds the approved NDA for raloxifene hydrochloride tablets, which is marketed under the brand name Evista® for the treatment and prevention of postmenopausal osteoporosis.  Lilly lists twelve patents that claim Evista® in the Orange Book.

Teva filed an ANDA with the FDA to get approval to manufacture and market generic raloxifene filing paragraph IV certifications, i.e., a patent is invalid or will not be infringed.  Lilly sued Teva for infringement of four method patents listed in the Orange Book: U.S. Patent Nos. RE38,968, RE39,049, RE39,050, and 6,906,086.  The FDA gave a 30 month stay on approval from the date that Lilly received Teva’s paragraph IV notifications, expiring on November 16, 2008.

Lilly later amended its complaint to assert that Teva infringed three additional Evista® patents—U.S. Patent Nos. 6,458,811, 6,797,719, and 6,894,064—covering raloxifene particle size and formulation.

On July 8, 2008, Teva amended its ANDA to include a new particle-size measuring methodology for the active pharmaceutical ingredient in its proposed raloxifene tablets.    Teva disclosed this amendment to Lilly on July 10, 2008, and provided it three batch samples on July 28, August 19, and September 17, 2008.  The district court, however, previously set a discovery deadline of August 18, 2008.  Teva allegedly began changing its particle-size measuring methodology as early as November 2007 with the goal of avoiding infringement of Lilly’s asserted patents.

Lilly asked the district court to extend the statutory thirty-month stay due to Teva’s alleged discovery violations, which extended the stay from the original November 16, 2008, until the beginning of trial on March 9, 2009.

The U.S. District Court found that Teva had “recast its product more than eighteen months after it provided the original sample to Lilly and only eight months before trial is set to commence.”

Teva appealed.

The Court of Appeals upheld the extension saying that the district court acted within its discretion in this area and it has the discretion to adjust the statutory thirty-month stay of ANDAs if “either party to the action failed to reasonably cooperate in expediting the action.”  Trial courts may shorten or extend the thirty-month statutory period based on the parties’ uncooperative discovery practices.

Take-Home Lesson:  Don’t mess around in turning over materials in discovery.  It will cost you dearly.  Think two weeks is not much to fuss over?  Think again.  Last year, Eli Lilly reported sales of Evista® of $1,075,600,000.  That works out to over $41 million for a mere two weeks of exclusive sales.

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Note that Circuit Judge Prost, disagreed with the majority saying “[t]he thirty-month stay … may be extended for one reason and one reason only:  “because either party to the action failed to reasonably cooperate in expediting the action.”

Although Teva did not complete production until September 5, 2008, the court did not purport to base any finding that Teva “failed to reasonably cooperate in expediting the action” on this eighteen-day delay. …  Not once in this order did the court indicate, much less unambiguously state, that it found Teva had failed to reasonably cooperate in expediting the action.

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