The district court held that the PTO’s ruling was “not in accordance with law,” and that the patent on MAL hydrochloride is subject to term extension. The USPTO Director David Kappos appealed claiming that the district court did not correctly define or apply the statutory terms “drug product” and “active ingredient.”  The US Court of Appeals for the Federal Circuit sided with the district court.  Photocure ASA v. Kappos (09-1393).

The Patent Term Extension statute was enacted in recognition of the long procedures associated with regulatory review of a new drug product, for the patent term continues to run although the product cannot be sold or used until authorized by the Food and Drug Administration. The statute was designed to restore a portion of the patent life lost during the period of regulatory review, in order to preserve the economic incentive for development of new therapeutic products.

35 U.S.C. §156(a):

The term of a patent which claims a product, a method of using a product, or a method of manufacturing a product shall be extended in accordance with this section . . . , if– (a)(4) the product has been subject to a regulatory review period before its commercial marketing or use; (a)(5)(A) except as provided in subparagraph (B) or (C) [not here relevant], the permission for the commercial marketing or use of the product after such regulatory review period is the first permitted commercial marketing or use of the product under the provision of law under which such regulatory review period occurred;

A product includes a new drug, antibiotic drug, or human biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Public Health Service Act), . . . including any salt or ester of the active ingredient, as a single entity or in combination with another active ingredient.

Metvixia® is used in photochemotherapy or photodynamic therapy to treat actinic keratoses, which are precancerous cell growths on the skin. When the Metvixia® cream is applied to the skin, the MAL hydrochloride concentrates in the cells to be treated. The cells use MAL hydrochloride to form an excess amount of a naturally-occurring, light sensitive compound called protoporphyrin IX (“Pp”). On exposure to light, the Pp is activated and a chemical reaction ensues that kills the precancerous cells.

MAL hydrochloride was a new chemical compound, and was patented in U.S. Pat. No. 6,034,267 on the basis of its improved therapeutic properties as compared with the known compound aminolevulinic acid hydrochloride. MAL is the methyl ester of ALA. ALA hydrochloride had previously received FDA approval for the same therapeutic use. The specification of the ’267 patent discusses and exemplifies the biological and physiological advantages of the MAL product over the ALA product; MAL is characterized as “better able to penetrate skin and other tissues,” as a “better enhancer[] of Pp production than ALA,” and as providing “improved selectivity for the target tissue to be treated.” ’267 patent col. 4 l.59–col. 5 l.

The product containing MAL hydrochloride was a “new drug” in terms of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §321(p), and required full FDA approval. The clinical and other tests for demonstration of safety and efficacy of the MAL hydrochloride product consumed four and a half years. After FDA approval was received, Photocure applied for the statutory extension of the term of the ’267 patent. The PTO consulted with the FDA, in accordance with the Memorandum of Understanding, 52 Fed. Reg. 17,830 (FDA May 12, 1987). The FDA advised that MAL hydrochloride had received regulatory approval for the designated use. The FDA also pointed out that MAL hydrochloride is an ester of the previously FDA-approved ALA hydrochloride, and proposed that the requirements of §156(a)(5)(A) were not met.

The PTO then denied the requested term extension, stating that “active ingredient” in §156(f)(2) does not mean the product that was approved by the FDA, but rather means the “active moiety” of that product. The PTO held that MAL hydrochloride is the “same ‘product’” as ALA hydrochloride because the “underlying molecule” of MAL is ALA, and the PTO stated that “ALA is simply formulated differently in the two different drugs.” Final Decision Regarding Patent Term Extension Application Under 35 U.S.C. §156 For U.S. Patent No. 6,034,267 at 3, 5 (May 13, 2008). The PTO held that since a drug product containing ALA hydrochloride was previously approved by the FDA, the FDA’s marketing approval of the MAL hydrochloride product was not the first commercial marketing or use of that “product.”

Applying the provisions of the patent term extension statute, the district court considered the separate chemical composition, the separate patentability, and the separate FDA approval of MAL, and held that MAL hydrochloride is the active ingredient of a new drug product that required FDA approval, §156(f)(2)(A); that the MAL hydrochloride product was subject to a full regulatory review period before commercial marketing and use was permitted, §156(a)(4); that this review permitted the first commercial marketing and use of the MAL hydrochloride product, §156(a)(5)(A); and therefore that the statutory requirements for term extension were met.

The PTO argued that the statutory term “active ingredient” does not mean the product that is present in the approved drug, but only the “active moiety” of the product, that is, the part responsible for the pharmacological properties. However, the Federal Circuit said that MAL would meet the criteria for term extension since the pharmacological properties of MAL differ from those of ALA, supporting the separate patentability of the MAL product. MAL hydrochloride is a different chemical compound from ALA hydrochloride, and it is not disputed that they differ in their biological properties, warranting separate patenting and separate regulatory approval, although their chemical structure is similar. Thus the district court held that MAL hydrochloride and ALA hydrochloride are different “products” with different “active ingredients,” as the terms are used in §156, explaining that “a compound can only qualify as the ‘active ingredient’ of a drug if that compound itself is present in the drug,” citing Glaxo Operations UK Ltd. v. Quigg, 894 F.2d 392, 393 (Fed. Cir. 1990). Photocure, 622 F. Supp. 2d at 347.  In Glaxo, the Federal Circuit held that “product” in §156(a) means the product that is present in the drug for which federal approval was obtained.

The Federal Circuit said that the district court correctly applied 35 U.S.C. §156 and that the patent on MAL hydrochloride is subject to term extension.

Related posts:

1. When It Comes to Patent Term Extensions, An Enantiomer is a Different Drug From Racemate
2. Synergy Won’t Save Patent Term Extension For Combination of Known Drugs
3. Bill Introduced to Allow Unintentional Delay in Filing for Drug Patent Term Extensions

“The court granted plaintiff’s motion for summary judgment of indirect infringement based on defendants’ use of a label containing “instructions on how to use the product in a manner that encourages acts of infringement” even though “doctors prescribe the drug for a number of non-infringing uses” and defendants used the label only because it was required by the FDA. “Here, the accused infringers will be labeling the product in a manner which encourages direct infringement by others. . . . This objective evidence is critical in determining whether intent to cause infringement exists, and such evidence is sufficient to establish Defendants’ intent.”

Eli Lilly and Co. developed and markets STRATTERA brand atomoxetine capsules.  received a patent on a method of treatment patent, which issued as U.S. Patent No. 5,658,590, entitled “Treatment of Attention-Deficit/Hyperactivity Disorder.”  The ‘590 Patent contains 16 claims. Claim 1 is the only independent claim
and it reads:

“[a] method of treating attention-deficit/hyperactivity disorder comprising administering to a patient in need of such treatment an effective amount of tomoxetine.”

Claims 2-16 recite more particular methods of treating ADHD.  The ‘590 patent does not claim tomoxetine itself.  All claims of the ‘590 Patent require tomoxetine to be administered to (1) a patient in need of treatment and (2) in a so-called “effective” dose. The  patent specification states that the dose administered to the patient “must be set by the physician in charge of the case.”

Lilly contends that each of the Defendants’ act of filing an ANDA constitutes infringement under 35 U.S.C. з 271(e)(2)(A). Lilly further contends that the Defendants intend to commercialize generic atomoxetine products defined in their ANDAs if they receive FDA approval. Lilly argues that the commercialization of generic atomoxetine before the expiration of the ‘590 Patent would constitute further infringement of the ‘590 Patent under 35 U.S.C. 271(a), (b), and/or (c). Defendants asserted that Lilly’s patent is for the treatment of patients by physicians which is something the Defendants do not do. Defendants further argued that 35 U.S.C. з 271(e)(2)(A) does not create a new or independent infringement test and that they did not and cannot infringe Lilly’s patent.

Subsection 271(e)(2)(A) of the Hatch-Waxman Act “provides an ‘artificial’ act of infringement that creates case-or-controversy jurisdiction to enable the resolution of an infringement dispute before the ANDA applicant has actually made or marketed the proposed product.” Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1365 (Fed. Cir. 2003). This provision of the Act is about ripeness and establishing jurisdiction. It is well settled that “the substantive determination whether actual infringement or inducement will take place is determined by traditional patent infringement analysis, just the same as it is in other infringement suits.” Id. Thus, while filing an ANDA is sufficient to trigger an action under 35 U.S.C. 271(e)(2), this subsection “does not determine the ultimate question whether what will be sold will infringe any relevant patent.” Glaxo, Inc. v. Novopharm, Inc., 110 F.3d 1562, 1569 (Fed. Cir. 1997).

Eli Lilly and Company v. Actavis Elizabeth LLC, 2-07-cv-03770 (NJD December 31, 2009, Amended Opinion (Cavanaugh, J.).

Today’s post is by Guest Barista Amy Towell of  Docket Navigator.

Related posts:

1. Could the FDA Put the Squeeze on Off-Label Revenues?
2. FDA Panel Decides that Foradil Needs Warning Label
3. ZymoGenetics Goes After Bristol-Myers for Infringing Fusion Protein Patents

BIO President and CEO Jim Greenwood addressed the policies expected to be considered by the Obama Administration and the 111th Congress which will impact the biotechnology industry including health care reform, stem cell research, follow-on biologics, comparative effectiveness and energy security.

Following President Obama address to Congress and the nation, Greenwood released a statement saying:

“We share President Obama’s stated goal of expanding access to health care.  We believe biotechnology can play a key role in this quest.  Biotechnology can help bring needed innovation to modernize and add efficiencies to our nation’s health care system.   Innovation in health care, including health care solutions such as new therapies and diagnostics, has always been and will continue to be central to realizing our health care goals.  Further, we believe that market-based reforms provide the best opportunity to achieve the goal of universal access while providing high quality care and incentives for the discovery and development of innovative improvements throughout the health care delivery system.”

Greenwood then discussed the importance of biotech both in the economy and in developing technologies, particularly relating to healthcare and biofuels.  A large part of the discussion focused on the expectation that there will be some kind of follow-on biologics rule proposed and the importance of data exclusivity.  Not to be confused with patents, data exclusivity is the period after the FDA approves a product during which an imitator can’t rely on the innovator’s clinical data for safety and effectiveness. It can run during and longer than the period of patent protection.

President Obama’s budget, released today, is set to remove barriers to creating generic biologics. The administration is expecting to use the money the federal government would save through use of biogenerics to help pay for a major overhaul of the healthcare system.

Unlike traditional chemical drug approval, the Food and Drug Administration currently has no process for approving biogenerics, also called “follow-on biologics” and “biosimilars.” Generally, biotech drugs are more complicated than regular drugs because they are made from living cells or bacteria.

For a generic drug manufacturer to win approval of a generic version of a traditional prescription drug, the product must have the same active ingredient, strength, dosage form and route of administration as the original drug. This means that generic drugs are the exact same chemically as their brand name counterparts and they act the same way in the body.

Such a process is not possible with biologics. Biologics manufacturers must ensure that the manufacturing process remains the same over time by controlling the source and nature of starting materials and controlling the manufacturing process. When a follow-on biologic is created, it requires a new manufacturing process with new starting materials. As a result, it will produce a product that is different from and not therapeutically equivalent with that of the brand name biologic.

The generic industry has proposed letting companies copy biologics after three to five years, similar to rules set for conventional drugs under the 1984 Hatch-Waxman Act. The administration’s proposal suggests the time frame would be consistent with Hatch-Waxman, though administration officials could not confirm that last night.

To give you an idea of the impact of these changes, last year the Congressional Budget Office estimated that the federal government would have saved $6.6 billion over 10 years under proposed legislation that would have provided biotech companies 12 years of market exclusivity for new biologic drugs.

But biotechnology companies have fought to keep a monopoly on their drugs for at least 14 years. They say they need that amount of time in order to ensure a return on the significant investment required to develop biologics. Companies also fear patents will not fully protect biologics since competitors could make a similar molecule that may not be covered by the patent.

Greenwood pointed out that in order to preserve incentives to research, develop and manufacture new innovative therapies and cures, as well as new indications for such products, any statutory pathway for follow-on biologics must include substantial non-patent data exclusivity, during which follow-on manufacturers could not rely on FDA’s prior approval of innovative biologics to support approval of their own products.

BIO supports the notion that the longer period is justifiable stating that such data exclusivity is necessary because a follow-on biologic may be similar enough to an innovative biologic for regulatory approval purposes, but different enough to avoid the innovator’s patents. Thus, non-patent exclusivity is necessary to maintain effective market protection. Further,  the industry’s heavy dependence on significant amounts of investment capital and the high risks and costs involved in the development of new biologic medicines all warrant a substantial period of exclusivity.

Greenwood stressed that any discussion must recognize that the methods used to show that one chemical drug is the same as another are different from and insufficient for biologics. Thus, versions of a biological product made by different manufacturers must be evaluated on a case-by-case basis, because they will differ from each other in certain respects.

Greenwood also pointed out that mandating a data exclusivity period below 14 years in follow-on biologics legislation would save the federal government at most an additional $1.4 billion over 10 years, a “relatively small savings” for the government’s total health budget.  On the other hand, just reducing the exclusivity period from 14 years to 10 years would reduce revenue by 12% for the biotech companies and cause a dramatic drop in R&D spending for biotechs.  BIO claims that the average biotechnology company does not cover its costs of a biologic until 17 years after the initial sales of the product.

Recent legislative proposals vary along several dimensions, including differing durations of data exclusivity. Under any new law, a follow-on biologic applicant will be required to demonstrate that there are no clinically meaningful differences in safety, purity and potency between its product and the brand product in order for the FDA to approve a follow-on biologic as interchangeable. However, the applicant must provide evidence that its product will produce the same clinical result as the brand product in any given patient and that it presents no additional safety risks or diminished efficacy if a patient alternates or is switched between products.  This will be a tough road to travel.

Biotechnology Industry Statistics

• 120 companies (30%) are now trading with less than 6 months of cash on hand. 180 companies (45%)  have less than 1 year of cash remaining.” Only 10% of the 370 public US biotech companies have positive income. (source: BIO)
• By comparison with 2007, funds raised from IPOs in 2008 fell 97% and follow-on/secondary offerings fell 56%.  Total capital raised by the industry in 2008 fell by 55% vs 2007 (source: BioCentury).
• In 2006, 32 life sciences companies raised $1.7 billion through IPOs. In 2007, 41 raised $1.9 billion. In 2008, there was only one IPO in the US, which raised $5.8 million. (source: BioWorld)  There were 19 biotech IPOs withdrawn in 2008.
• 87% of US biotech stocks have lost value in 2008 with 26% of 350 biotech companies currently trading under $1 Billion in market cap now trading below their cash value. That is, they have more cash on hand per share than the market value of their companies. This level has gone up by 3x vs 2007.(source: BIO).

The podcast is available here.

Related: Congressman Waxman Addresses GPhA Meeting on Follow-on Biologics

Related posts:

1. Will Follow-On Biologics Bill Become Law?
2. Is the FDA Set To Bring On Generic Biologics?
3. Senate Committee Approves Follow-On Biologics Bill: Fear and Trepidation Follow

Authorized generics can lead to delaying generic competition by discouraging generic companies from challenging weak and potentially unenforceable patents.  Now, Representative Jo Ann Emerson (R-MO), along with Rep. Marion Berry (D-AR), Dennis Moore (D-KS) and Zach Wamp (R-TN), have re-introducing H.R. 573, which would prohibit the marketing of an authorized generic during the 180-day generic exclusivity period following a patent challenge.

The Act would amend the Federal Food, Drug, and Cosmetic Act to prohibit the marketing of authorized generic drugs. (Introduced in House).  The Act would amend Section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) by adding at the end the following:

Prohibition of Authorized Generic Drugs-

(1) IN GENERAL- Notwithstanding any other provision of this Act, no holder of a new drug application approved under subsection (c) shall manufacture, market, sell, or distribute an authorized generic drug, direct or indirectly, or authorize any other person to manufacture, market, sell, or distribute an authorized generic drug.

(2) AUTHORIZED GENERIC DRUG- For purposes of this subsection, the term `authorized generic drug’–

(A) means any version of a listed drug (as such term is used in subsection (j)) that the holder of the new drug application approved under subsection (c) for that listed drug seeks to commence marketing, selling, or distributing, directly or indirectly, after receipt of a notice sent pursuant to subsection (j)(2)(B) with respect to that listed drug; and

(B) does not include any drug to be marketed, sold, or distributed–

(i) by an entity eligible for exclusivity with respect to such drug under subsection (j)(5)(B)(iv); or

(ii) after expiration or forfeiture of any exclusivity with respect to such drug under such subsection (j)(5)(B)(iv).’.

Related posts:

1. Bill Introduced to Limit Authorized Generics
2. FTC Eyes Impact of Authorized Generic Drugs
3. Do Authorized Generic Drugs Deter Paragraph IV Certifications?

The Warning Letters identify the agency’s concerns about deviations from U.S. current Good Manufacturing Practice (cGMP) requirements at Ranbaxy’s manufacturing facilities in Dewas and Paonta Sahib (including the Batamandi unit), in India.

Because of the extent and nature of the violations, the FDA issued an Import Alert blocking any active pharmaceutical ingredients (API) (the primary therapeutic component of a finished drug product) and both sterile and non-sterile finished drug products manufactured at these Ranbaxy facilities and offered for import into the United States.

The problems at these two Ranbaxy plants relate to deficiencies in the company’s drug manufacturing process. These actions are proactive measures that the FDA is taking in order to assure that all drugs that reach the public are manufactured according to cGMP requirements. While this action does not involve removing products from the market, FDA has no evidence to date that Ranbaxy has shipped defective products.

The announcement does not impact products from Ranbaxy’s other plants which are not affected by today’s actions. FDA has inspected those facilities and, to date, they have met U.S. cGMP requirements for drug manufacturing.

The 30 drugs affected are posted on the FDA site (Drug List).

One Warning Letter addressed problems at Ranbaxy’s Dewas facility found during an inspection conducted by FDA in early 2008. Specific areas of concern included the following aspects of the firm’s quality control program:

• The facility’s beta-lactam containment program (measures taken to control cross-contamination), which appeared inadequate to prevent the potential for cross-contamination of pharmaceuticals;
• Inadequate batch production and control records;
• Inadequate failure investigations; (A failure investigation is done to address any manufacturing control or product rejection to determine the root cause and prevent recurrence); and,
• Inadequate aseptic (sterile) processing operations.

The second Warning Letter addressed the Paonta Sahib facility.This inspection documented various cGMP deficiencies, including the following:

• The lack of assurance responsible individuals were present to determine the firm was taking necessary steps under cGMP;
• Inaccurate written records of the cleaning and use of major equipment;
• Incomplete batch production and control records; and,
• Inadequate procedures for the review and approval of production and control records for drug products.

See the Notice here:  FDA Issues Warning Letters to Ranbaxy Laboratories Ltd., and an Import Alert for Drugs from Two Ranbaxy Plants in India

Related posts:

1. FDA Wants to Put Generic Drug Approval in Faster Lane
2. FDA Issues New Guidelines to Help Small Drug Companies in Early Stage Development
3. Bill Introduced to Allow FDA to Remove OTC Drugs From the Market