By Kevin E. Noonan --
On Tuesday, Roche filed its brief in support of U.S. District Court
for the District of Massachusetts (Judge William G. Young, presiding)
modifying its preliminary injunction granted on February 28th, barring
Roche from launching its FDA-approved Mircera® drug product. The
Court's preliminary injunction was entered pursuant to a jury judgment
on October 23, 2007 that Mircera® infringed several Amgen patents. That verdict found Roche's Mircera® infringed claims 3, 7, and 8 of
Amgen's U.S. Patent No. 5,547,933 (claim 12 was found not to be
literally infringed but infringed under the Doctrine of Equivalents);
claims 1 and 2 of U.S. Patent No. 5,441,868; and claims 6 through 9 of
U.S. Patent No. 5,618,698. Amgen's infringed claims were directed to
recombinant methods and recombinant EPO protein, and Roche's Mircera®
drug product is a form of recombinant EPO that has been covalently
linked to polyethylene glycol. In addition, the jury found that Roche
had not sustained its burden of establishing that any of Amgen's
asserted claims were invalid (see "Amgen Survives Another EPO
Challenge").
Absent this jury verdict, Roche would be in a position
to launch Mircera®, because the U.S. Food and Drug Administration
granted approval for Roche to market Mircera® last Novmber (it has
already been approved in Europe and is sold in Austria, Sweden,
Germany, the United Kingdom, and Norway). Judge Young foreclosed
this option when he imposed the preliminary injunction on February
28th. However, Judge Young also left open the possibility that he
would modify his order under certain circumstances. He assessed
whether Amgen was entitled to an injunction using the four-factor test
set forth by the Supreme Court in eBay Inc. v. MercExchange, L.L.C.,
expressly finding that Amgen satisfied three of the four requirements
(Amgen's asserted claims were infringed and not invalid; Amgen's injury
would not be adequately compensated merely with money damages; and the
balance of the hardships weighed in favor of granting the injunction). More difficult was the fourth prong, the public interest, particularly
in view of Roche's representations of the advantages of its Mircera®
product over Amgen's version of EPO (including inter alia less frequent
dosing; see "Long-Acting Drug for Dialysis Anemia Equivalent to Weekly
Agent").
The Court put the parties on notice that, in the absence of appellate jurisdiction by the Federal Circuit, it was inclined to at least consider modifying the injunction within 30 days (i.e., by March 30th), provided that Roche was willing to agree to the following conditions. First, Roche would pay Amgen a royalty of 22.5% (Amgen having already rejected an offer for a 20% royalty from Roche (see "Amgen Rejects Roche's Micera [sic] License Payment Offer"). Second, Roche could be introduced to the Medicare patient population at a cost no more than the average sales price of Amgen's EPO products (sold under the names Epogen® and Aranesp®) (a requirement that would prevent Roche from passing its royalty obligations onto patients, but would not prevent Roche from selling Mircera® at a bargain price relative to Epogen®). Third, Roche would have to provide clinical evidence to permit the Court to determine a "dosage conversion factor" between Mircera® and Epogen®. Fourth, Roche would pay for an independent agency to monitor sales and determine royalty payments owed to Amgen. Finally, Roche would agree to supply Mircera® to any patient needing it, at or below the authorized price (presumably, this is a provision that would prevent Roche from abandoning the Medicare market once it has entered it).
Roche agreed to these conditions in its court filing today, and took the occasion to present two arguments to the Court in support of lifting the injunction. First, Roche argued strenuously that Mircera® was not simply a generic version of Epogen® but rather was an independently developed (and patented) "new molecule" having significant advantages over Amgen's products. Roche particularly argued that Mircera® had dosing and cost advantages that should be considered to be in the public interest, including a better dosing schedule (according to Roche, the difference between 12 (for Mircera®) and 156 (for Epogen®) injections per year for dialysis patients), concomitant reduced Medicare and Medicaid costs, and fewer adverse effects as well as meeting unmet medical needs (relating to Amgen's failure to secure FDA approval for monthly dosing for certain indications). Roche also argued that Amgen's commercial activities in promoting its erythropoiesis-stimulating agents (ESAs) constituted patent misuse and "unclean hands" that should discount whatever private equities cut in favor of making the injunction permanent. Roche also argued that Amgen had enjoyed an effective patent life of 28 years from its earliest filing date, and that this term was contrary to current public policy that limited patent term to 20 years from the earliest filing date.
For its part, Amgen countered by casting the proposed
modification as a compulsory license in favor of Roche. Amgen argued
that it would be inequitable to "reward" Roche, an adjudged infringer,
with such a license. Moreover, Amgen argued that compulsory licensing
was not within the province or the power of the Court to impose, but
that it could either grant or deny the injunction and nothing more. Congress, Amgen argued, had several times considered introducing
compulsory licensing provisions into the patent statute but had not,
and Amgen argued that the Court did not have the power to impose such a
license in the face of Congressional disapproval, citing in support of
this argument the Federal Circuit's decision in Biotechnology Industry Organization v. District of
Columbia, which struck down restrictions on drug pricing as being
contrary to the balancing of consumer costs and patent incentives that
were Congress' prerogative to make. Amgen argued that the Court must
also consider as part of the public harm the harm to innovation that
would be caused by the precedent of having an infringer rewarded with a
compulsory license, and contrasted this harm with what it termed the
speculative medical and financial benefits (which it proffered evidence
from the trial record to refute) that Roche used in support of its
public interest argument. Amgen countered these claims with argument
citing harm to the American economy, jobs, and tax base that would be
occasioned by permitting Roche to produce Mircera® overseas and import
it into the U.S. for sale in competition with Amgen's ESA products. Amgen also asserted its right to a trial by a jury to determine the
extent of damages it would be entitled to should Roche launch under a
modified injunction, stating that the Court did not have the power to
deny Amgen its statutorily-defined profits (which were 2-4 fold higher
than the Court's 22.5% royalty), as well as treble damages for willful
infringement.
Amgen also submitted evidence from "secondary sources," including economic analyses, academic studies, Congressional Budget Office data, and policy papers in support of its argument that innovator drug companies rely on market exclusivity provided by patenting to support research and development of blockbuster drugs, and that the compulsory license occasioned by the Court's proposed modification of its injunction would endanger Amgen's ability to obtain the financing required for new drug discovery. Amgen also noted that Congress had recently considered but did not pass compulsory licensing bills introduced in anticipation of a possible "bird flu" epidemic, and for the antibiotic Cipro® in the wake of the anthrax bioterrorism scare following the September 11, 2001 attacks. Both situations were more compelling than the evidence adduced by Roche in support of a compulsory license for Mircera®, according to Amgen, and Congress' failure to so enact compulsory licensing provisions should inform the Court's decision not to modify its injunction into a compulsory license.
The Court having said it would "consider" modifying its injunction, its failure to do so by March 30th would provide Roche with ample time to appeal; Amgen has said in its pleading that it will ask the Court to stay any modification to permit it time to appeal the modified injunction to the Federal Circuit.
For additional information regarding this topic, please see:
• "Roche's Mircera® Remains Off the Market (For Now)," March 2, 2008
• "Amgen Survives Another EPO Challenge," October 28, 2007
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