States have pains over generic TriCor

Is Abbott deliberately playing smoke-and-mirrors via the courts to stifle competition or merely protecting its patents as it is required to do?

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Eighteen states and the District of Columbia have filed suit against Abbott Laboratories and Solvay's Fournier Industrie et Santé and Laboratories Fournier for allegedly working a sleight-of-hand trick to block the generic version of the cholesterol lowering drug TriCor (fenofibrate), indicated for the treatment of hypercholesterolemia and hypertriglyceridemia.

The states filed their lawsuit in federal court, accusing Abbott and Fournier of undermining efforts to bring generic drugs to market by patenting new formulations of TriCor with only minor changes to the drug.

When generic drug companies began developing their own versions of TriCor, Abbott and Fournier brought a series of more than 10 patent-infringement lawsuits against the generic companies between 2000 and 2004. The lawsuits were based on patents that were allegedly obtained by deceiving the U.S. Patent Office with incomplete and misleading data. Abbott and Fournier eventually lost or dismissed all of the lawsuits.

A moving target
According to the lawsuit, Abbott and Fournier didn't accidentally trip and fall into a scheme that kept out generics. Instead, executives planned how to exclude generic competition for TriCor and came up with an anti-generic strategy that included enforcing multiple patents with the knowledge that the patents were not infringed.

While it's easy to second-guess the knowledge and intent of the companies, the states believe that Abbott and Fournier knew all along the patents were invalid and unenforceable, but pursued the lawsuits anyway as a way to use the litigation process as an anti-competitive weapon against generics.

This strategy was to use the patent suits to give them enough time to out-flank the generics by getting a reformulated TriCor product on the market. They could then withdraw the prior formulation from the market and leave consumers, physicians, pharmacists and insurance companies with no choice but to use the reformulated product.

The suit alleges Abbott and Fournier planned to switch the market to a reformulated TriCor product every few years, effectively creating a moving target for generic manufacturers, by making minor changes in the formulations of TriCor. These changes were not to improve the product, but to keep generic versions from being substituted for the more expensive brand-name drug.

According to the AGs, the companies made trivial changes to the formulations of TriCor and marketed those while withdrawing the original drug from the market. Moreover, the companies deleted references to the original forms of the drug from national drug databases, according to prosecutors, making it more difficult for a generic version of TriCor to obtain generic status.

Reformulating for dollars
It's not hard to see the incentive to try any tactic to extend their sales monopoly since TriCor, which costs more than $3 a pill, generated sales of $1.2 billion for Abbott in 2007. Abbott denies the allegations, saying it has not prevented other fenofibrate drugs from being marketed.

In a long-running battle with Teva Pharmaceutical, Abbott has tried to stay one step ahead of the generic entry. Originally, Teva filed an ANDA for a TriCor capsule formulation and made a Paragraph IV certification that U.S. Pat. No. 4,895,726 was invalid so not infringed. Abbott sued, initiating an automatic 30-month stay of FDA approval.

While the capsule patent battle was continuing, Abbott filed a new NDA for 54 mg and 160 mg TriCor in a tablet formulation urging that the tablet was bioequivalent to the capsule. After this was approved, Abbott stop selling the capsules and even bought back all the capsules from the market.

Then Abbott, in a move that was probably too smart for its own good, changed the code for TriCor capsules in the National Drug Data File (NDDF) to "obsolete." The NDDF is a private database that provides information about FDA-approved drugs. Changing the code to obsolete meant that it removed the TriCor capsule drug formulation from the NDDF, which prevented pharmacies from filling TriCor prescriptions with a generic capsule formulation.

Needless to say, Teva took it kind of hard and added antitrust counterclaims to its suit against Abbott. Abbott is no longer marketing the 54 mg and 160 mg strength tablets because it has now changed its Tricor product to 48 mg and 145 mg strength tablets. Abbott even filed a new NDA for 48 mg and 145 mg TriCor tablets looking to change the label to state that the new tablets do not need to be taken with food (a dissolvable version).

Teva claims that Abbott's actions have continually frustrated generic competition in fenofibrate products through a combination of two market conversions and the gaming of the Hatch-Waxman Act, denying consumers access to a generic alternative to Abbott's products. The dissolvable version of TriCor retains patent protection until 2018.

Competitors often claim that a patent holder has tried to monopolize the market by trying to enforce a patent that was obtained through fraud on the PTO or bringing patent litigation, despite knowing either that the patent is invalid, or that the defendant's conduct does not infringe the patent. It is standard procedure for patent lawyers to greet each other by claiming "inequitable conduct" or fraud. It's more difficult to get a handle on predatory redesigns—where trivial changes are made only for the purpose of blocking competition.

Rule of reason?
We expect companies to fully enforce patent protection for their inventions. We also don't want the courts to get involved in every little product redesign decision. You can imagine a court asking "Did you really need to make the widget square instead of rectangular?" But, product redesigns—especially those involving a drug company having substantial market power—can in some circumstances create or perpetuate monopoly.
A trivial change in a drug can continue a monopoly if the supposed new version is the subject of a new NDA and the old version can no longer be sold, as in the case of TriCor.  Although it's easy to say a redesign with no purpose shouldn't be enough to continue a monopoly, what if the improvement is a small one? How small a change is too small? Plaintiffs are not required to prove that the new formulations are absolutely no better than the prior version or that the only purpose of the innovation is to eliminate the complementary product of a rival. Instead, if the plaintiffs show anti-competitive harm from the formulation changes, that harm will be weighed against any benefits presented by defendants under the "rule of reason."

This present action could indicate a trend as cash-strapped states—large purchasers of drugs and healthcare—look for ways to cut costs. In another lawsuit involving drug companies working overtime to keep lower-priced generic versions of a drug off the market, Barr Pharmaceuticals was just ordered to pay $5.9 million to 34 states plus the District of Columbia after Barr illegally received a payment of $20 million from another company to keep Barr from marketing a lower-priced generic version of Ovcon, a prescription oral contraceptive.

No word yet on when Abbott's new magic orange-colored TriCor comes out, but expect to see more lawsuits against anti-competitive behavior in this high-stakes game.

Stephen Albainy-Jenei is a patent attorney at Frost Brown Todd LLC, serving up chat at Feel free to write him with comments or questions at: Stephen doesn't own shares of any company mentioned in this article. 

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