Pharmas Lose Battles To Generics

October 1, 2000 Advisory

Major pharmaceutical companies recently lost patent litigation battles involving blockbuster drugs.

Patent Term for Prozac Reduced

Eli Lilly & Co. lost almost two years of patent protection on its $1 billion Prozac® anti-depressant when a U.S. Court of Appeals held that an earlier expired patent covered the scope of a current unexpired patent.

When a generic manufacturer sought FDA approval to market its product, Lilly sued for patent infringement. The court described Lilly's many related patents as "a progeny of divisional applications, continuation applications and patents that rival the Hapsburg legacy."

An earlier patent, which had expired in 1994, covered administering a compound within a certain class of compounds to treat depression. The later Lilly patent claimed a method of blocking the uptake of monoamines by administering a compound found within the same class of compounds. The court concluded that the compound covered in the later unexpired patent is also one of the compounds claimed in the earlier expired patent, and therefore held th the claims of the later parent were invalid under the doctrine of "double patenting." This judicial doctrine prohibits a patent owner from extending the life of a patent by obtaining a later patent whose claims are "not patentably distinct" from the claims in the earlier patent.

Despite the vast publicity and $34 billion one day drop in Lilly's market cap, this case does not create any new law. It does, however, serve as a illustrative guide of the risks with divisional and continuation patent practice and certainly highlights the availability of double patenting as a potential defense.

BMS Battles To Retain Taxol Profits

After losing a court proceeding that invalidated the patent protecting its $1 billion monopoly over Taxol, Bristol Myers-Squibb entered into an option with American BioScience ("ABI") to license a soon to be issued patent on a dosage form of Taxol. This option was a response to ABI's threats to sue for infringement and for BMS to list this patent in the FDA's Orange Book.

When BMS declined to list the patent after it was issued, ABI sued and a California district court ordered BMS to list the patent; the court later reversed itself. While the listing may trigger obligations to ABI, it also continues $3 million of daily Taxol® revenues without generic competition because the FDA is not permitted to approve an ANDA for 30 months, unless patent litigation is resolved earlier.

Meanwhile, the FDA approved Ivax's ANDA, an appellate court affirmed and BMS was forced to de-list the ABA patent, opening the way for Ivax to launch its generic version and, since it was the first to file an ANDA, to enjoy 180 days of generic exclusivity.

However, the court battles continue. BMS again listed Taxol and simultaneously asked a New York federal court to determine whether this patent must be listed. On October 4, a Washington D.C. court denied ABI's request to rescind the FDA approval of Ivax' generic version. Although Ivax announced that it intends to begin marketing its generic Taxol, the litigation war continues with pending appeals, an attempt to hold ABI in contempt of court, an investigation by the FTC of BMS-ABI dealings and Ivax' suit on October 5 against BMS and ABI in a Florida state court alleging abuse of process, fraud and violations of Florida's antitrust and trade practices laws.