As part of the Hatch-Waxman regime, Congress has provided a pathway for generic drug companies to obtain FDA approval for less than all the indications a branded drug has obtained, using a “carve out” strategy resulting in a so-called “skinny label.” This has raised the possibility of “off-label” use, where physicians prescribe the generic drug for an indication not approved for the generic drug but known to be clinically appropriate from the innovator’s approval for the product. The extent to which a generic drug company can use this strategy to avoid liability for inducing infringement was tested in the Federal Circuit’s recent decision in GlaxoSmithKline LLC v. Teva Pharmaceuticals.
The matter arose in litigation over GSK’s Coreg® product (carvedilol) for treatment of hypertension (the initial approved indication; U.S. Patent No. 4,503,067), congestive heart failure (CHF) (the subject of U.S. Patent No. 5,760,069) and left ventricular dysfunction following myocardial infarction (LVD-MI). Teva’s ANDA was filed with a Paragraph III certification over the ‘067 patent and a Paragraph IV certification over the ‘069 patent. The FDA tentatively approved Teva’s generic product for “treatment of hypertension and heart failure” which Teva launched on expiration of the ‘067 patent. Teva’s label indicated that the product was approved treatment of LVD-MI and hypertension but thereafter, FDA required Teva to amend its label to be identical to the GSK label for Coreg®, which introduced treatment of heart failure into the approved treatments.
GSK filed suit against Teva for inducement of infringement based on the Teva label, based on direct infringement by physicians prescribing the drug for the label indications. Teva argued that it had “carved out” the indication for CHF pursuant to 21 U.S.C. § 355(j)(2)(A)(viii), resulting in a “skinny label” with regard to this indication. In addition, Teva argued that it could be liable for inducement only if GSK could show that Teva had “directly communicated with the direct infringers and ‘caused’ them to directly infringe the method in the ’000 patent.”
Nevertheless, the jury found that Teva induced infringement of GSK’s patent. The court overturned this verdict, based on the basis that GSK had not “caused” physicians to prescribe their product for the infringing uses and its determination that “substantial evidence [did] not support the jury’s finding on causation, and therefore [did] not support its verdict that Teva is liable for induced infringement, during both the skinny and full label periods.” The Court relied on the “many sources of information available to prescribing physicians” other than Teva’s label (including paradoxically GSK’s label and promotion of its Coreg® product) in finding this evidentiary deficiency. Also, the Court based its decision on physician testimony that their prescribing behavior relied on “guidelines and research, as well as their own experience” and not Teva’s label.
The Federal Circuit reversed, in an opinion by Judge Newman joined by Judge Moore; Chief Judge Prost provided a lengthy, comprehensive dissent. The panel majority relied on Supreme Court and its own precedent, including the principle that copying is evidence of inducement. The majority also found compelling evidence from Teva’s website regarding its product’s AB rating with GSK’s Coreg® product and other promotional content, as well as testimony from GSK’s witnesses regarding physician reliance on information from generic drug makers.
The Federal Circuit majority was unpersuaded by Teva’s evidence regarding “deliberately omit[ting]” reference to CHF in its skinny label, particularly in light of the continued promotion of the product by Teva in a manner not consistent with complete exclusion of the CHF indication (albeit without express inclusion of that indication). The panel majority opined 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.” Considering this precedent, the majority held that “[t]here was ample record evidence of promotional materials, press releases, product catalogs, the FDA labels, and testimony of witnesses from both sides, to support the jury verdict of inducement to infringe the designated claims for the period of the ’000 reissue patent.”
Chief Judge Prost dissented based, as the majority noted, on her objections to the quanta of evidence adduced and policy consequences should the majority’s position be sustained. The Chief begins by referencing the need, in her view, for balance between the incentives patents provide for pharmaceutical innovation and the public’s need for access to that innovation once the patent term has expired, noting that this was one motivation for Congress to establish the generic drug approval system. In the Chief’s view the majority’s decision undermines these policy goals by finding Teva induced infringement by marketing its generic drug produce for unpatented uses (emphasis in dissent) using its skinny label. The dissent sets out the opinion that Teva acted just as Congress intended when it enacted the skinny label provisions, by waiting (using its Paragraph III certification) until GSK’s patent had expired before launching its product for unpatented indications. And Teva’s inclusion on its label of the CHF indication (recited in GSK’s ‘000 reissue patent) was compelled by FDA; even then according to the dissent “there was still no inducement via the full label.”
The Chief Judge believes that the district court properly overrode the jury’s verdict, because “the record established that doctors relied on other sources of information, not Teva, in making their decision to prescribe carvedilol. And in any case, the record showed that the switch from Coreg® to generic carvedilol occurred “automatically,” often without doctors’ knowledge at all. The dissent not only disagrees with the majority’s decision, but recognizes that “it nullifies Congress’s statutory provision for skinny labels—creating liability for inducement where there should be none,” contrary to Congressional intent and “slowing, rather than speeding, the introduction of low-cost generics.”
While not expressly discussed by either the majority or the dissent, there is a hint that the majority was concerned with generic drug companies improperly relying on the skinny label strategy to profit from “off-label use” by physicians for the very indication excluded by the skinny label carveout. The majority extended the scrutiny regarding this stratagem perhaps farther than it can reliably be stretched, not requiring the level of promotion of the carved out indication that would be expected to attract inducement liability. And the dissent argued strongly regarding the impropriety of the policymaking consequences of the majority’s decision usurping Congress’s role in deciding the extent to which a generic drug company can use the skinny label strategy to avoid infringement inducement liability. It is likely that (at a minimum) the Court will hear this case en banc; perhaps less likely but certainly within the realm of possibility is Supreme Court review in light of the important policy considerations raised by the majority and even more strongly by Chief Judge Prost’s dissent.
Kevin Noonan is a partner with the law firm McDonnell Boehnen Hulbert & Berghoff LLP and represents biotechnology and pharmaceutical companies on a myriad of issues. A former molecular biologist, he is also the founding author of the Patent Docs weblog, http://patentdocs.typepad.com/.