October 1, 2012 (Vol. 32, No. 17)
Isabelle A.S. Blundell, Ph.D. Sunstein Kann Murphy & Timbers
Recent Decision Makes Testing Occurring After Approval Exempt from Infringement
The Hatch-Waxman Act, which became law in 1984, created a shortened process, the Abbreviated New Drug Application (ANDA), for manufacturers to seek approval for generic versions of proprietary drugs. Ever since, generic-drug manufacturers have had increasing success in lowering barriers to entry in the marketplace.
As a further boon to these manufacturers, the patent laws were amended to provide them with protection—a safe harbor—from claims of infringement for pre-approval activities geared toward showing the equivalence of the generic to the brand-name drug.
Remarkably, the Court of Appeals for the Federal Circuit has now extended the reach of safe harbor protection to testing activities occurring after approval of the drug. While this ruling serves Hatch-Waxman’s goal of encouraging the introduction of generic drugs, it inflicts severe collateral damage on patents for methods of ascertaining the composition of such drugs.
In Momenta Pharmaceuticals v. Amphastar Pharmaceuticals (2012), the Federal Circuit held that all uses of a patented invention, even those conducted after FDA approval of the generic drug, benefit from the exemption from infringement claims so long as the use of the invention is, in the language of the safe harbor provision, “reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs…”
Momenta, the first to win approval of a generic version of enoxaparin (a/k/a Lovenox®), a low molecular weight version of heparin that helps prevent the formation of blood clots, developed and patented a method for identifying the composition of the batches of enoxaparin. Because enoxaparin is, like heparin, a mixture of biopolymer chains that have variability in both structure and formula, the FDA requires rigorous ongoing testing to identify the composition of each batch of the drug before it can be sold. Momenta’s method became the only listed method in the US Pharmacopoiea and sanctioned by FDA.
Even though other valid methods are available, Amphastar, which also gained marketing approval for enoxaparin, uses Momenta’s patented method for identifying its batches during manufacturing. Momenta sued, complaining that Amphastar infringed its patent.
In a split panel decision, the Federal Circuit construed the safe-harbor provision to protect Amphastar’s post-marketing activities because, even though the information is not submitted to the FDA, but merely kept available as proof of compliance in the event of FDA inspection, the testing results are needed to comply with Amphastar’s ANDA to ensure that each new batch of the generic drug meets the equivalency requirements.
The court found ample support in the Supreme Court’s decision of Merck v. Integra (2005). The high court interpreted the safe-harbor statute broadly and held that pre-marketing activities conducted to develop information intended to be submitted to the FDA, but which was ultimately not submitted, fell within the ambit of the provision. So long as the information is of the kind that would be submitted to the FDA, the activities are “reasonably related” and thus fall under the exemption, even though the research was aimed at developing new drugs and not at developing generic versions of an already approved drug.
In reaching its decision, the Supreme Court recognized the difficulties in developing new drugs in the face of high rates of failure. Most drug research activities, although intended to generate information for submission to the FDA, become fruitless. Denying safe-harbor protection just because the information is ultimately not submitted would stifle innovation as one cannot predict which drug candidate will be successful and lead to information that will be submitted to the FDA. Thus, in Merck, the intent and purpose of the activities dominate the interpretation of “reasonably related.”
Unlike testing-method patents, compositions of matter or methods-of-use patents, for which the effect of the exemption is minimal, enjoy their full force and effect by delaying generic entry until expiration of the patent, and thus cannot be exploited by others for commercial gain. In contrast, Momenta’s testing patent realizes its value chiefly during the post-approval period. The Federal Circuit’s decision has rendered Momenta’s patent worthless, contrary to the intent of the legislature to limit the impact of the safe-harbor exemption on the patent holder.
As if to diminish the impact on other patent owners, and on the pharmaceutical industry, the court wisely distinguished this case from its earlier decision in Classen v. Biogen (2011). That case reviewed the legislative history in close detail to support the conclusion that the safe-harbor provision, intended to cover only pre-marketing activities and facilitate the market entry of the generic drug, was not meant to impair the value of patents.
Here, revisiting Classen, the court brought a different perspective in extending the safe-harbor exemption to post-marketing activities. In the process, it distinguished two types of activities.
In Classen, the post-approval activities were deemed to be routine, unlike Amphastar’s which were required by the FDA to maintain its approval to market its generic version of enoxaparin. Classen’s patent was directed to a prophylactic method of treatment by following a specific regimen.
Specifically, Biogen provided vaccines, advised on immunization schedules, and reported any adverse vaccine effects to the FDA. None of these activities were considered to be directed to producing information for an investigational new drug or a new drug application during a phase of research and thus not worthy of protection under the safe harbor provision.
For the sake of safeguarding access to generics, the Momenta decision makes clear that maintaining approval of a generic drug is as important as obtaining approval in the first place and merits safe-harbor protection.
Despite the lengthy quotes in Classen from the legislative history about limiting the exemption to pre-approval activities, the court could not ignore the fact that the statute does not explicitly limit such activities to a particular timeframe.
Instead, the statute looks to the intent and purpose of the generic drugmaker’s activities; so long as they are “reasonably related” to producing information required by federal laws directed to regulating the manufacture, use, or sale of drugs, those activities remain within the safe harbor.