Patents and Drug Availability

by Dennis Crouch

Amarin Pharma, Inc. v. Hikma Pharmaceuticals USA Inc., Docket No. 21-02024 (Fed. Cir. 2021) is up on appeal again.  The district court found Amarin’s asserted patent claims obvious and the Federal Circuit affirmed that holding in a R.36 affirmance without opinion.

Following the Federal Circuit’s decision, an ad-hoc group of doctors, patients, and Amarin stock holders (collectively known as EPA Drug Initiative II) moved to intervene in the lawsuit and asked the court to vacate its judgment based upon “multiple fatal statistical errors in analyzing and interpreting the prior art.”  The group argues that

The invalidation of Amarin’s patents could potentially cost hundreds of thousands of American lives, as Amarin has been deprived of  the incentive to promote Vascepa in the U.S., and Defendants can neither sell generic Vascepa to a large segment of the patient population, nor promote generic Vascepa, as those activities would violate Amarin’s other patents.

[EPADI Motino to Intervene] [EPADI Motino to Vacate].  The district court denied the motions and those issues are now on appeal before the PTAB.  I expect EPADI to lose its appeal, but it raises an ongoing interesting question about the role of patents in the availability and pricing of drugs and biologics.  The intervenors are calling for patent rights in order to better ensure that the drug is available.

One reason that I expect EPADI to lose is that it had requested permission to file an amicus brief in the original appeal as had the Biotechnology Innovation Organization (BIO). The Federal Circuit denied EPADI’s request but permitted BIO’s.

= = = =

One idea here goes back to the deals of Edmund Kitch with his prospect theory of patenting as a special form of the tragedy-of-the-commons. Edmund Kitch, “The Nature and Function of the Patent System,” Journal of Law and Economics, 1977, 20, pp. 265.

22 thoughts on “Patents and Drug Availability

  1. 11

    OT, but of general interest as involving thousands of very long pending Gilbert P. Hyatt claims with no definite patent term ending under the old patent term statute. Reportedly EDVA on July 28 dismissing his latest lawsuit, finding that the USPTO’s heightened examination regulations [special examining group] for nearly 400 Hyatt patent applications were not arbitrary, capricious or an abuse of discretion under the terms of the Administrative Procedure Act (APA). This is presumably the same case noted earlier here in which some former PTO officials had surprisingly provided evidence. [An unproven rumor is that the PTO had agreed to speed up his applications prosecutions?]

  2. 10

    “ Amarin’s other patents.”

    Oh I’m sure those “other patents” are really super solid and broad, and not just obvious like the one asserted and destroyed here. These people are very serious and not just blustering sore losers!

  3. 9

    This is weird.
    Patentee sues, loses patent to invalidity.
    Patentee appeals, loses appeal.
    (I’m assuming there was no cert petition)

    The case is over, right? No, according to EPADI, if the losing party’s shareholders are sufficiently angry. The patentee lost, but now the patentee’s shareholders want to try again in the district court because they believe the result is wrong. That isn’t how Rule 60 works.

    The briefs read like someone shouting at you for 20 pages at a time. The intervenors seem to think they can restart the case if they can impress upon the court that they’re really angry.

  4. 8

    An interesting start to the Kitch essay (footnote omitted):

    This essay argues that the patent system performs a function not previously noted: to increase the output from resources used for technological innovation. Recognition of this function makes it no longer possible to maintain that the patent inevitably reduces the output of the technology it subjects to exclusive control, but it does make more understandable what have heretofore been puzzling features of the patent system and reintegrates the patent institution with the general theory of property rights.

  5. 6

    The invalidation of Amarin’s patents could potentially cost hundreds of thousands of American lives, as Amarin has been deprived of the incentive to promote Vascepa in the U.S., and Defendants can neither sell generic Vascepa to a large segment of the patient population, nor promote generic Vascepa, as those activities would violate Amarin’s other patents.

    This is a very moving and a thoroughly worthy consideration for legislators to consider when crafting the law. It is not, however, a consideration that any actual legislators have actually written into any actual law that presently governs the controversy involving this patent. If this patent is obvious, then it is invalid—quite regardless of the public policy consequences that might follow for the lives and health of individual Americans.

    It is true that one can arrive at a circumstance in which a drug is—for whatever reason—not brought to market before the patent ages to the point at which it is expired or near enough to make no difference. In such a circumstance, the drug will likely never come to market, because it will not be profitable to bring it to market. That is a market failure, and a failure of the well functioning of patent law. It would make fine sense for the legislature to redraft the patent law to deal with this dead-weight loss situation. It would likewise make fine sense for the legislature to come up with some non-patent solution to the problem (as they already have done in the realm of biological drugs with the 12 year “data exclusivity” provisions for new biological drugs).

    Unless and until the legislature addresses this issue in the small-molecule drug worlds, however, it is not for the courts to solve this problem. Until the legislature chooses to act, it should suffice for the courts to note that 35 U.S.C. §103 provides that “[a] patent… may not be obtained… if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date… .”

  6. 5

    I’m not taking a position on the underlying obviousness determination, but the MtI at least on intervention by right and at least the first ground of the MtV seem like pretty much a pipe dream.

    On the MtI, as noted above, EPADI is mostly Amarin shareholders. And its stated purpose (according to its website) relevant to this case is to promote Vascepa. That’s not surprising either given who its members are. So it seems quite clear on the face of things that EPADI has no protectable interest distinct from Amarin’s. EPADI doesn’t really have an argument otherwise; it just cites to shareholder derivative cases where courts permitted intervention. But cases like that plainly have zero relevance here. I also chuckled at EPADI’s claim that Amarin won’t adequately protect EPADI’s interests because Amarin had the gall to ignore “a formal demand requesting [to] file the Rule 60 motion” served on Amarin by one of the shareholders.

    On the MtV, while I don’t know the precise contours of how the “mistake” ground works for Rule 60(b)(1), it seems clear enough that it’s not available here. For one, I don’t think the court was “mistaken” in its fact finding, it just interpreted the prior art in a way that EPADI disagrees with. But the proper avenue for challenging that is an appeal. Otherwise Rule 60(b)(1) motions would substitute for appeals in every single case. And even the paper cited by the motion backs that up. On page 2 it states clearly that “the decision should be reversed on appeal”—because, as argued on page 14, “crucial facts in Judge Du’s opinion are clearly erroneous”; so the motion isn’t even following the paper’s recommendation.

    As an amusing aside, FN5 of the motion asserts that, “[b]ecause the paper was published well after the Judgment, it likewise could be considered as newly discovered evidence justifying relief under Fed. R. Civ. P. 60(b)(2).” But the paper itself squarely contradicts this assertion. On page 14 it notes that “our detection of an error in the prior art does not constitute new evidence in the case” (emphasis mine).

    Finally, I just will point out that one of the paper’s authors (Dr. Bhatt) is funded by, unsurprisingly, Amarin.

  7. 4

    The invalidation of Amarin’s patents could potentially cost hundreds of thousands of American lives, as Amarin has been deprived of the incentive to promote Vascepa in the U.S., and Defendants can neither sell generic Vascepa to a large segment of the patient population, nor promote generic Vascepa, as those activities would violate Amarin’s other patents.

    This statement seems to be contradicting itself. How can both of these be true:
    (a) Amarin has been deprived of the incentive to promote Vascepa in the U.S because it lost this patent; and
    (b) Others can neither sell generic Vascepa to a large segment of the patient population, nor promote generic Vascepa, as those activities would violate Amarin’s other patents.

    1. 4.3

      I realize that it sounds self-contradictory, but maybe it really is not. I do not pretend to know the exact circumstances of this drug and these companies, but please allow me to explain how this could be true:

      1) For Amarin, the market launch as an innovator comes with certain irreducible costs. If there remain (let us hypothesize) only two years on all of their patents, then it simply will not make sense for them to go to market, because they can never hope to sell enough drug in two years (even with the benefit of the sort of market exclusivity that comes from a patent) to recoup their innovator launch costs.

      2) Let us imagine, therefore, that their most solid patents have (e.g.) two years left, while the more controversial patent at issue here will last another (e.g.) ten years. As noted above, two years is too short a time to hope to recoup their innovator costs, but ten years might be. Therefore, if their more controversial patent holds up, it makes financial sense for them to launch, but not otherwise.

      3) In a world (like the present world) in which the controversial patent does not hold up, then it does not make sense for Amarin to bring the drug to market. However, for the next two years, Amarin’s patents still prevent anyone else from launching either.

      4) During those two years, then, nobody bring VASCEPA to market. Without the drug (ex hypothesi) several hundred thousand people die. At the end of those two years, someone else can bring VASCEPA to market, but by that point those hundreds of thousands are already dead, and once dead, they are no longer in a position to benefit from this delayed market launch.

      It is all, in other words, a matter of timing. The decision for whether an innovator can bring the drug to market is not a function of (we have patents / we don’t have patents) or even of (we have ten valid patents / we have one valid patent). Rather, it is much more a function of (we have 10 years of enforceable patent life remaining by launch / we have only 3 years of enforceable patent life remaining by launch). Meanwhile, if that decision means that the launch does not happen for another few years (at which point generics can take it over), that still means that people die in the interim, and once dead they stay dead. The fact that the drug will eventually launch is cold comfort to those who die in the interim.

      1. 4.3.1

        Well, I’m not sure Amarin’s story holds up completely. Or rather, it’s making very specific claims, because it’s not the case that generics are completely unavailable, or that it’s just plain given up on branded Vascepa.

        At least according to the linked article below, a generic from Hikma is already on the market since last fall. Granted, it has a skinny label and the supply is apparently a work in progress. But, a generic is available to some extent at present. So, I think part (b) of Amarin’s story has to be taken with this additional context.

        Likewise, for part (a), the article states that “Amarin continues to put resources behind branded Vascepa” and “would ‘continue to meet the strong demand for Vascepa'” in the U.S. Again, that doesn’t seem like Amarin has decided to just call it a day.

        link to fiercepharma.com

      2. 4.3.2

        Greg,

        Your example works well in some instances, but it would not apply in this particular case. VASCEPA received FDA approval in 2012. They’ve already had quite a bit of time to recoup their investment.

        1. 4.3.2.1

          Sure, like I said, I was trying to spin a hypo in which the claim could be true. Whether it is true in this instance I do not know. Amarin could well be full of… you know. I just wanted to point out that the claim was not as inherently self-contradictory as it might sound if one did not know a little about the overall business context.

        2. 4.3.2.2

          Dvan,

          You have stumbled upon one of Big Pharma’s dirty little secrets.

          They’ve already had quite a bit of time to recoup their investment.

          Rather than fixing (or innovating) the drug development process, Big Pharma has been content to SOAK the (largely US) public on “recouping” not just the development effort for the particular patented item, but ALL other development items that did NOT make it through to commercialization.

          The business model is an abject support of
          F
          A
          I
          L
          U
          R
          E.

          What would shine the sunlight on this ‘practice’ would be full end to end transperancy.

  8. 3

    It would be interesting to know how many people in EPADI that Amarin Pharma has directly or indirectly paid.

    1. 3.1

      I think page 5, line 17 of the MtI mostly clears it up: “EPADI II is comprised largely of Amarin retail shareholders.”

  9. 2

    This made not sense until I also read “As detailed in Intervenor EPADI II’s companion Motion to Vacate Judgment pursuant to Rule 60, EPADI II contends that the Judgment should be vacated on grounds of mistake, fraud, misrepresentation, unclean hands, inequitable conduct, and fraud on the Court.” [Since solid evidence of such extreme misconduct is normally the only way to get a decided case very rarely re-opened. Mere belated assertions of factual errors doesn’t cut it.]
    One reopened patent case example I remember a talk on was a patent suit lost by defendant’s submitted alleged prior art commercial product, a bus windshield wiper. After-trial microscopic analysis of that windshield wiper trial exhibit proved it was completely hand-made.

  10. 1

    The intervenor’s position is logically flawed (in a goose and gander manner); also, it appears to confuse a patent with some affirmative action right (as opposed to being a negative right).

Comments are closed.