Third Time’s the Charm: The Fate of Skinny Labels May Hang in the Balance as Teva Tries Again at the Federal Circuit

November 19, 2021 In Blog, Litigation, Patent, Patents, Pharmaceuticals By Tasos Kanopoulos

Imagine you are a generic drug manufacturer. Your drug products contain the same active ingredients as their brand-name counterparts, but not necessarily the same inactive ingredients. There is a brand-name originator drug in the market with at least one unpatented^[1] FDA-approved use, or indication. So, using an oversimplified example, assume that originator drug X is approved for three indications: (i) treatment of high blood pressure; (ii) decreasing mortality caused by one type of heart failure; and (iii) decreasing mortality caused by another type of heart failure. Only indication (ii) is patented, as well as drug X itself (i.e., the active ingredient, or substance). Luckily, the latter patent has just expired. The brand-name manufacturer has conducted extensive clinical trials to establish the drug’s safety and effectiveness. You can skip the costly testing so long as you file what is known as an “abbreviated new drug application” (“ANDA”)^[2] and comply with a complex list of requirements—among them is the need for the label of your generic drug to be essentially the same as that of the originator drug.^[3] The brand-name label contains all approved indications, including those that are unprotected by a patent.

Naturally, however, the FDA cannot approve a generic drug label that includes an indication covered by a patented method of use—indeed, the mere submission of such an application would constitute “an act of infringement.”^[4] As it happens, there is statutory law that permits you to ‘carve out’ any such use from the generic drug label. The FDA compiles a list of all approved drugs along with their patent information in a publication commonly referred to as the Orange Book.^[5] Drug sponsors designate their method-of-use patents^[6] for FDA-approved indications with “use codes.”^[7] Returning to our example above, suppose you check the Orange Book and find the following use codes: (i) U-100; (ii) U-101; (iii) U-102. Accordingly, you submit a certification to the FDA stating that your label will not include the indication defined in use code U-101, et voilà.

Not quite. In October 2020, a divided panel of the Federal Circuit reversed a grant of judgment as a matter of law (“JMOL”) issued by the District Court of Delaware in favor of Teva Pharmaceuticals.^[8] The appellant, GlaxoSmithKline (“GSK”), had received a jury verdict in the amount of $235.51 million for lost profits and reasonable royalties, which the Federal Circuit reinstated.^[9]

Before proceeding to more recent developments, some context is necessary. Under the Drug Price Competition and Patent Term Restoration Act of 1984,^[10] known more commonly as the Hatch-Waxman Act, the sponsor of a generic version of an approved drug (the “reference listed drug,” or “RLD”) may file an ANDA with the FDA to expedite its approval.^[11] As part of this process, the sponsor must demonstrate that its generic version is “bioequivalent” to the RLD, and, subject to a few key exceptions, the label thereon must be identical to that of the RLD.^[12]

One of those exceptions involves the use of a “section (viii) statement,”^[13] which the sponsor may include in its ANDA—in lieu of some alternative patent certifications that are beyond the scope of this post—to certify that it “does not seek approval for the use covered by a listed method-of-use patent (and only a method-of-use patent).”^[14] Then, after reviewing the FDA’s Orange Book, the sponsor removes from its label the patented indication described in the relevant use code—hence the name “skinny label.”^[15] Finally, the FDA reviews the “skinny label” alongside the language in the corresponding use code, and typically approves the sponsor’s ANDA for any remaining indications.^[16]

So, back in 2002, Teva submitted an ANDA seeking approval for a generic version of carvedilol, a beta blocker.^[17] It listed GSK’s Coreg® as the RLD.^[18] At the time, Coreg® was FDA-approved for three indications: (i) hypertension; (ii) mild-to-severe congestive heart failure (“CHF”); and (iii) left ventricular dysfunction following myocardial infarction (“post-MI LVD”).^[19] Moreover, the second indication was protected by a method-of-use patent (i.e., “Method of Treatment for Decreasing Mortality Resulting from Congestive Heart Failure”^[20] ), and carvedilol itself was patented until March 2007.^[21] When the latter patent expired, “generic carvedilol entered the market.”^[22] Despite using a different patent certification initially, in August 2007, Teva sought approval of its ANDA through the inclusion of a section (viii) statement, which ‘carved out’ the CHF indication covered by GSK’s patent.^[23] Teva received the necessary approval from the FDA and launched its generic product.^[24]

Roughly seven years later, in July 2014, GSK sued Teva for patent infringement, alleging that Teva induced infringement of GSK’s method-of-use patent when Teva marketed its generic carvedilol.^[25] Specifically, at trial, GSK’s cardiology expert, Dr. Peter McCullough, testified that Teva’s “skinny label” met all the limitations claimed in GSK’s method-of-use patent.^[26] Furthermore, GSK presented evidence that Teva described its carvedilol as the “AB rated generic equivalent” of Coreg® in product catalogs, press releases, and reference guides.^[27] The jury was convinced.^[28] Thereafter, the district court granted Teva’s renewed motion for JMOL, concluding that “substantial evidence does not support the jury’s findings on inducement.”^[29] In its opinion, the court focused particularly on the insufficiency of the evidence presented with respect to causation, an element of induced infringement.^[30] According to the court’s determination, a reasonable juror could not have found that Teva’s alleged inducement—its marketing materials and the inclusion of the post-MI LVD indication—”actually caused” doctors to prescribe generic carvedilol for CHF, as opposed to other factors.^[31]

GSK appealed the decision and the Federal Circuit ruled in its favor.^[32] Teva petitioned for a rehearing en banc, which the Federal Circuit construed as a simultaneous request for a panel rehearing.^[33] In February 2021, the Federal Circuit granted a panel rehearing and vacated its previous judgment.^[34] Notwithstanding the flurry of amicus briefs submitted in support of Teva’s position, including one by former Representative Henry Waxman, the Federal Circuit was unmoved.^[35] Once again, in August 2021, the same divided panel came to the same decision: “substantial evidence supports the jury’s verdict that Teva’s partial label encouraged an infringing use (via the post-MI LVD indication) and that Teva’s marketing materials encouraged prescribing carvedilol in a manner that would cause infringement of [GSK’s method-of-use] patent.”^[36]

To be sure, there are a host of complicated interdisciplinary and procedural issues underlying the court’s analysis, many of which are deconstructed by Judge Prost in her two dissenting opinions.^[37] For purposes of this post, I would like to touch on the apparent absence of any clear causal link between Teva’s alleged inducement (i.e., its promotional materials and the indications listed on its “skinny label”) and the direct infringement of GSK’s patent by doctors prescribing generic carvedilol.

To begin with, there seems to be some incoherence in the majority’s reasoning. On the one hand, it stated—in its now-withdrawn opinion—that “precedent makes clear that when the provider of an identical product knows of and markets the same product for intended direct infringing activity, the criteria of induced infringement are met.”^[38] Curiously, this exact characterization of Teva’s carvedilol is missing from the majority’s second decision. Nonetheless, in both opinions, the majority cites the same series of cases to support this general proposition (i.e., the contents of the label itself may permit an inference of specific intent to induce infringement).^[39] On the other hand, however, the majority argues that Teva’s promotional materials provide further evidence of its intent to induce infringement, as they described a product that was, in effect, identical to, or a generic equivalent of, Coreg®.^[40] How? The majority reasons: given that “an AB rating means the generic product is therapeutically equivalent to the brand product under the conditions specified in the generic’s label,” and “substantial evidence supports the jury’s presumed conclusion that the partial label’s indication for post-MI LVD did not effectively carve out the use claimed in [GSK’s] patent[,]…Teva’s AB rated representations…are further affirmative evidence supporting the jury’s inducement finding.”^[41] In other words, Teva’s promotional materials show that Teva encouraged doctors to refer to the label on its generic carvedilol, which itself is evidence of Teva’s intent to induce infringement, as it failed to ‘carve out’ the post-MI LVD indication. Granted, Teva’s marketing materials may suggest that there is some degree of interchangeability between Coreg® and generic carvedilol. Yet, according to the majority, the AB rated representations point the doctor back to the label of the generic product.^[42] But Teva’s “skinny label” excluded the CHF indication altogether.^[43] If that is so, can it really be said that Teva’s generic carvedilol constitutes an “identical product” within the meaning of the cases cited by the majority?^[44]

More confounding still is the majority’s analysis of the post-MI LVD indication, which places great emphasis on the testimony of GSK’s cardiology expert.^[45] Without delving into a level of detail that falls well beyond the scope of this post—admittedly I am not a doctor either—it is not clear that post-MI LVD (namely as described on Teva’s “skinny label”) is “intertwined” with congestive heart failure.^[46] While post-MI LVD may be related to (the development of) congestive heart failure,^[47] the district court’s definition of the latter, though unchallenged on appeal, is too broad to offer a serious point of distinction.^[48]

It is true that Teva’s post-MI LVD indication includes a reference to a set of clinical studies, wherein Dr. McCullough identified what appear to be major areas of overlap between Teva’s post-MI LVD indication and the claim limitations in GSK’s method-of-use patent for CHF.^[49] Specifically, the patients in these studies had “background treatment of ACE inhibitors and diuretics”—two medications that are used in conjunction with a beta blocker (e.g., in this case, carvedilol).^[50] Is this “substantial evidence” of inducement? While the majority seems to think so, the studies are less conclusive. Beta blockers and ACE inhibitors, for example, are used routinely to prevent “[symptomatic heart failure] in patients with a history of MI and reduced EF.”^[51] Diuretics enter the mix when a patient has “evidence of, [or] a prior history of, fluid retention”^[52] —this is the “congestive” part of congestive heart failure.^[53] In one of the studies referenced by the majority, the CAPRICORN study, only “34% [of patients] had background treatment of diuretics.”^[54]

Based on the record at trial, numerous experts testified that post-MI LVD and CHF are distinct conditions, with different groups of patients and studies thereon.^[55] How does one reconcile these differences with the majority’s reasoning? At the very least, by endorsing a piecemeal analysis of Teva’s “skinny label,” the majority seems to ignore the actual ways in which doctors make prescription choices, to say nothing of the practical implications of its decision.^[56] Teva has raised similar questions in its latest petition for a rehearing en banc, which it filed on October 7, 2021.^[57] The saga continues.

Footnotes[+]

Footnotes
1	Let us review some important provisions of patent law. To begin with, “whoever invents or discovers any new and useful process…may obtain a patent therefor.” 35 U.S.C. § 101. The term “process,” as defined in the statute, “includes a new use of a known process…composition of matter, or material.” 35 U.S.C. § 100(b). Hence, these patents are also referred to as method-of-use patents. Finally, in relevant part, “[e]very patent shall contain a short title of the invention and a grant to the patentee,…if the invention is a process, of the right to exclude others from using, offering for sale or selling throughout the United States, or importing into the United States, products made by that process.” 35 U.S.C. § 154(a)(1); see also 35 U.S.C. § 271(c). This ‘exclusion right’ typically lasts for twenty years. 35 U.S.C. § 154(a)(2). You may ask, why are these patents common in the pharmaceutical industry? When the patent on a drug (i.e., the active ingredient or “composition of matter”) expires, that exact substance cannot then be patented by someone else. The drug becomes what is known as “prior art.” See 35 U.S.C. § 102(a)(1). If, however, a pharmaceutical company manages to patent “new and useful process[es]” involving this drug, the company’s competitors may be limited in their ability to market it—even though the drug itself is unpatentable. See 35 U.S.C. § 271(c).
2	See 21 U.S.C. § 355(j).
3	See 21 U.S.C. § 355(j)(2)(A)(i).
4	35 U.S.C. § 271(e)(2)(A); see also 35 U.S.C. § 271(b).
5	See Food & Drug Admin., Approved Drug Products with Therapeutic Equivalence Evaluations \| Orange Book, https://www.fda.gov/drugs/drug-approvals-and-databases/approved-drug-products-therapeutic-equivalence-evaluations-orange-book [https://perma.cc/K3HV-DDW9] [hereinafter Orange Book].
6	See supra note 1.
7	SeeFood & Drug Admin., Orange Book Data Files, https://www.fda.gov/drugs/drug-approvals-and-databases/orange-book-data-files [https://perma.cc/2GST-2JV9].
8	GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., 976 F.3d 1347 (Fed. Cir. 2020) [hereinafter GSK Fed. Cir. Op. I] (2-1 decision).
9	Id. at 1356–57.
10	Pub. L. No. 98-417, 98 Stat. 1585 (1984) (codified at 21 U.S.C. §§ 355, 360cc; 35 U.S.C. §§ 156, 271), as amended by the Medicare Prescription Drug Improvement and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066 (2003).
11	21 U.S.C. § 355(j); see also Food & Drug Admin., Drugs@FDA Glossary of Terms,https://www.fda.gov/drugs/drug-approvals-and-databases/drugsfda-glossary-terms#R [https://perma.cc/B84P-7AQN].
12	See Food & Drug Admin., FDA Ensures Equivalence of Generic Drugs, https://www.fda.gov/drugs/resources-you-drugs/fda-ensures-equivalence-generic-drugs [https://perma.cc/HME5-7MK9].
13	See 21 U.S.C. § 355(j)(2)(A)(viii)
14	Sara W. Koblitz, GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., Food & Drug L. Inst. (June 2021), https://www.fdli.org/2021/06/glaxosmithkline-llc-v-teva-pharmaceuticals-usa-inc/#_ftnref40 [https://perma.cc/W7MR-WDDG].
15	See Orange Book, supra note 5.
16	See Koblitz, supra note 14. As an initial matter, the RLD sponsor may attempt to challenge the approval by filing a petition with FDA.
17	GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., 313 F. Supp. 3d 582, 586–87 (D. Del. 2018) [hereinafter GSK Dist. Ct. Op.]; see also Sara W. Koblitz, Ding Dong is the Skinny Label (Effectively) Dead?, FDA L. Blog (Sept. 7, 2021), https://www.thefdalawblog.com/2021/09/ding-dong-is-the-skinny-label-effectively-dead/ [https://perma.cc/PY66-MBYA]. Beta blockers, a type of medication, are used to treat a variety of heart conditions, as they “decrease[] blood pressure, heart rate, and myocardial work.” See Mourad H. Senussi, Beta-Blockers in the Critically Ill: Friend or Foe?, 78 J. Am. Coll. Cardiology 1012 (2021).
18	See GSK Dist. Ct. Op.,313 F. Supp. 3d at 587; supra notes 11–12 and accompanying text.
19	GSK Dist. Ct. Op., 313 F. Supp. 3d at 586–87.
20	Id. at 586.
21	Id. at 587.
22	Id.
23	Id.
24	Id. Per the FDA’s instructions, Teva updated the partial label in 2011 to include the CHF indication, thereby rendering it identical to the approved GSK Coreg® labeling.
25	GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., 7 F.4th 1320, 1325 (Fed. Cir. 2021) (2-1 decision) [hereinafter GSK Fed. Cir. Op. II].
26	See id. at 1328–30.
27	See id. at 1333–36.
28	See GSK Dist. Ct. Op., 313 F. Supp. 3d at 584–85.
29	Id. at 590.
30	See id. at 590–91, 596–98.
31	Id. at 590.
32	See supra notes 8–9 and accompanying text.
33	GSK Fed. Cir. Op. II, 7 F.4th at 1326.
34	Id.
35	See id. at 1326, 1342.
36	Id. at 1327.
37	See GSK Fed. Cir. Op. II, 7 F.4th 1320, 1342-61 (Fed. Cir. 2021) (Prost, J., dissenting); GSK Fed. Cir. Op. I, 976 F.3d 1347, 1357-74 (Fed. Cir. 2020) (Prost, J., dissenting).
38	GSK Fed. Cir. Op. I, 976 F.3d at 1355 (emphasis added).
39	See id.; see also GSK Fed. Cir. Op. II, 7 F.4th at 1334.
40	See GSK Fed. Cir. Op. II, 7 F.4^th at 1334–35.
41	Id. at 1335–36 (emphasis added).
42	Id. at 1335.
43	GSK Fed. Cir. Op. II, 7 F.4th at 1349–50 (Prost, J., dissenting).
44	See GSK Fed. Cir. Op. I, 976 F.3d at 1365–66 (Prost, J., dissenting).
45	See GSK Fed. Cir. Op. II, 7 F.4^th at 1328–29.
46	Id. at 1328; see Clyde W. Yancy et al., 2013 ACCF/AHA Guideline for the Management of Heart Failure, 62 J. Am. Coll. Cardiology e147, e153 (2013) (“[I]t should be emphasized that [heart failure] is not synonymous with either cardiomyopathy or LV dysfunction; these latter terms describe possible structural or functional reasons for the development of [heart failure].”).
47	See Yancy et al., supra note 46, at e153, e193 fig.3.
48	GSK Dist. Ct. Op., 313 F. Supp. 3d 582, 584 (D. Del. 2018) (“[C]ongestive heart failure (‘CHF’) is a chronic condition that occurs when a diseased heart is unable to deliver sufficient oxygenated blood to the rest of the body.”).
49	See GSK Fed. Cir. Op. II, 7 F.4^th at 1328. The method of use, or “process” in GSK’s patent is described as follows: “administering a therapeutically acceptable amount of carvedilol in conjunction with one or more other therapeutic agents…consisting of an [ACE inhibitor], a diuretic, and digoxin.” Id. at 1324.
50	Id. at 1328.
51	Yancy et al., supra note 46, at e169–70.
52	Id. at e173 (emphasis added).
53	See id. at e153 (“[B]ecause some patients present without signs or symptoms of volume overload, the term ‘heart failure’ is preferred over ‘congestive heart failure.’”).
54	By contrast, 97% “had background treatment of ACE inhibitors.” GSK Fed. Cir. Op. II, 7 F.4^th at 1328.
55	GSK Dist. Ct. Op., 313 F. Supp. 3d at 592 n.9.
56	See GSK Fed. Cir. Op. II, 7 F.4th at 1356–61 (Prost, J., dissenting).
57	Petition for Rehearing En Banc, GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., No. 18-1976 (Fed. Cir. Oct. 7, 2021).

Tasos Kanopoulos

Tasos Kanopoulos is a third-year J.D. candidate at Fordham University School of Law and a staff member of the Intellectual Property, Media & Entertainment Law Journal. He holds a B.A. in History of Art and Design from Pratt Institute.

Third Time’s the Charm: The Fate of Skinny Labels May Hang in the Balance as Teva Tries Again at the Federal Circuit

Third Time’s the Charm: The Fate of Skinny Labels May Hang in the Balance as Teva Tries Again at the Federal Circuit

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