Patent Docs

Another Academic with Solutions to Problems that Don't Exist

By Kevin E. Noonan --

Speaking of Oakland, Gertrude Stein famously said "There is no there, there."  The quote comes to mind when reading much of the academic literature on patenting genes and diagnostic method claims, which continues to follow the pattern of "there could be a problem, there should be a problem, in the future there might be a problem, so the fact that there is no evidence that there is a problem is irrelevant to my theory about the best way to solve the problem."

The latest example of this genre is by Geertui Van Overwalle (at right), from the Centre for Intellectual Property Rights, University of Leuven, Belgium, in an article in Science entitled "Turning Patent Swords into Shares."  The article sets forth the "usual suspects" of premises:  claims that "genes are difficult to design around," and that patents could hamper research and development, clinical access and availability of high-quality tests."  This portion of the article raises the first (of many) red flags in its citations:  the threat to "clinical access and availability of high-quality tests" is supported by no citation (representing the problem that "should exist"), and the statement that "genes are difficult to design around" is supported by a citation that reads (in very small type at the end of the article) "[i]n some empirical studies, a negative impact of patents could not be found (citing Walsh et al., 2005, "Science and Law: View from the Bench: Patents and Material Transfers," Science 309: 2002-03)" -- really, there are several such studies, all with the same message.  In other words, despite the empirical evidence that there is no current problem, the Professor postulates that there is, and then devises ways to address the non-existent problem.  This portion of the article also cites the SACGHS report, another example of an attempt to identify and address a problem that proved elusive at best.

The article similarly cites the possibility of a "patent thicket" caused by gene and diagnostic method patenting, but then supports the argument with the now thoroughly discredited (except in academia) "tragedy of the anticommons" idea (see "The Tragedy of a Bad Idea").  The article even admits that the problem does not exist:

Empirical data do not yet confirm existence of a patent thicket in genetics at large . . . .  However, thicket problems in genetic diagnostics could grow with shifts (i) from monogenetic to multifactorial testing (multiplex diagnostics) and (ii) toward diagnostics based on genome-wide association studies driven by the high-throughput of single nucleotide polymorphism platforms and next-generation sequencing possibilities.

And then:

Although not an illustrative example of this phenomenon, the Myriad decision has invigorated concerns about potential negative effects of a dense and dispersed patent landscape.

Having arrived at this description of the problem, Professor Van Overwalle proposes solutions, most taking as their starting point practices prevalent in Europe.  These include compulsory licensing, as has been instituted in France, Belgium, and Switzerland (despite the fact that "they have not yet been put to work"; but, the Professor informs us, "they may have an indirect, preventive effect on unduly restrictive licensing behavior by patent owners").  Another possibility is the exercise of "march-in" rights by the National Institutes of Health under provisions of the Bayh-Dole Act (35 U.S.C. §§ 200-213).  Also mentioned is a "diagnostic use" exemption, as proposed in the SACGHS report.

The Professor does recognize that a ban on gene patents could be as detrimental to "development of drugs and therapies" as it could be beneficial to "upstream" research, although there is no evidence that gene patents have affected such "upstream," non-commercial research at all, and ample evidence that basic research is unaffected by patents on genes (see "The Fantastical Economics of the Gene Patenting Debate").  Nevertheless, the article proposes that gene patents be limited only for those uses appreciated at the time the patent application was filed.  While seemingly a "reasonable" compromise, in reality such a restriction would result merely in prophetic disclosure on the one hand, and would (paradoxically) make it easier to obtain patent rights on newly discovered applications or uses of a claimed gene sequence -- such as a diagnostic method relating change or mutations in the gene to disease or the propensity for disease.  Of course, this is not much different from the current situation, and in addition it is unlikely that patent claims for genes (which are overwhelmingly limited to isolated, full-length copies thereof) are infringed or even necessary to practice such diagnostic methods (patented or otherwise).

Turning to less coercive possibilities, the Professor proposes patent pools or clearinghouses, using as examples the American Society of Composers, Authors and Publishers (ASCAP) for copyright and MPEG LA, the latter group organized to promote distribution of gene sequences in such a manner.  Unfortunately, the article cannot stay true to the concept that such an arrangement can be voluntary, and thus posits that the government may need to force such collaborations.

There certainly exists the possibility that any or even many of the possible problems identified in this and other academic articles could one day exist.  Of course, it is equally (if not more) likely that gene patents will have expired before the technology advances to a point where a patent thicket would have developed.  The history of the past thirty years reflects that possibility:  from an initial glacial pace of gene patenting (due in part to the focused effort to isolate particular genes that encode therapeutically useful molecules, and in part to the need for development of biotechnology) to the flood of genetic sequence unleashed by the Human Genome Project and it commercial counterparts.  It is certainly the case that success in deciphering the relationship between disease and genetic markers thereof has proceeded much more slowly than expected, and it is unlikely that the pace will quicken in the near term.  But patents -- i.e., exclusive rights -- to genes will expire more or less "all at once" in about 2020, being twenty years from the end of the HGP and about 20 years (or more) from the filing date of most gene patents from that time.  Thus, just when the potential for a patent thicket might become relevant (if we are lucky enough that robust genetic markers for disease have been so rapidly developed), the thicket will disappear.

There is a greater potential for diagnostic method patents to raise the kinds of issues referenced in the article, but the complexity of ascertaining these types of genetic relationships, and the potential for these relationships to remain undisclosed if diagnostic methods are unprotected by patenting, is likely to result in a public calculus that trades the relatively short period of exclusivity to the patentee for the economic incentives needed to develop commercial embodiments of these tests.  Perhaps the most frightening prospect set forth in Professor Van Overwalle's article is that diagnostic method patents would be unenforceable against "clinicians using their own 'homemade' gene-based tests."  To the extent that such tests are compared with tests by companies like Myriad, which has never had a reported false positive, it seems that women would be better served having researchers do research (clinical or otherwise) and commercial clinical labs perform such clinical tests.  For diagnoses as important as the propensity to develop cancer, patients deserve no less.

Perhaps the most dangerous aspect of such articles, however, is the tendency for policymakers and even courts (who are not immune to the blandishments of academic "research") to base their decisions on the persistent argument that there is an existing problem that needs a solution.  Darwin said that "[f]alse facts are highly injurious to the progress of science, for they often endure long; but false views, if supported by some evidence, do little harm, for every one takes a salutary pleasure in proving their falseness."  The non-existent problem becomes the unquestioned premise, and as any student of elementary logic can tell you, a syllogism is only as strong as its premises.  Thus can well-intentioned leaders promulgate policies that have harmful unintended consequences, all in the service of solving a problem that simply does not exist.

Court Report

By Sherri Oslick --

About Court Report:  Each week we will report briefly on recently filed biotech and pharma cases.

Human Genome Sciences Inc. v. Genentech Inc. et al.
1:11-cv-00082; filed January 25, 2011 in the District Court of Delaware

• Plaintiff:  Human Genome Sciences Inc.
• Defendants:  Genentech Inc.; City of Hope

Declaratory judgment of non-infringement, invalidity, and unenforceability of U.S. Patent No. 6,331,415 ("Methods of Immunoglobulins, Vectors, and Transformed Host Cells for Use Therein," issued December 18, 2001) based on HGS's manufacture and sale of its Benlysta® product (belimumab, under development for the treatment of seropositive patients with systemic lupus erythematosus).  View the complaint here.

Warner Chilcott Co. LLC et al. v. Teva Pharmaceuticals USA Inc.
1:11-cv-00081; filed January 24, 2011 in the District Court of Delaware

• Plaintiffs:  Warner Chilcott Co. LLC; Hoffmann-La Roche Inc.
• Defendant:  Teva Pharmaceuticals USA Inc.

Infringement of U.S. Patent No. 7,718,634 ("Method of Treatment Using Bisphosphonic Acid," issued May 18, 2010), licensed to Warner Chilcott, following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Warner Chilcott's Once-a-Month Actonel® (risedronate sodium, used to treat and prevent postmenopausal osteoporosis).  View the complaint here.

Orion Corp. v. Mylan Pharmaceuticals Inc.
1:11-cv-00078; filed January 24, 2011 in the District Court of Delaware

Infringement of U.S. Patent No. 5,446,194 ("Pharmacologically active catechol derivatives," issued August 29, 1995) following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Orion's Comtan® (entacapone, used in the treatment of Parkinson's Disease).  View the complaint here.

Daiichi Sankyo Inc. et al. v. Watson Pharmaceuticals Inc. et al.
1:11-cv-00074; filed January 21, 2011 in the District Court of Delaware

• Plaintiffs:  Daiichi Sankyo Inc.; Genzyme Corp.
• Defendants:  Watson Pharmaceuticals Inc.; Watson Pharma Inc.; Watson Laboratories Inc. (NV)

Infringement of U.S. Patent No. 5,693,675 ("Alkylated Amine Polymers," issued December 2, 1997) following a Paragraph IV certification as part of Watson's filing of an ANDA to manufacture a generic version of plaintiffs' Welchol® (colesevelam hydrochloride, used to treat primary hyperlipidemia and type 2 diabetes mellitus).  View the complaint here.

Fresenius Medical Care Holdings, Inc. v. Zydus Pharmaceuticals USA, Inc.
1:11-cv-10110; filed January 21, 2011 in the District Court of Massachusetts

• Plaintiffs:  Fresenius Medical Care Holdings, Inc.
• Defendants:  Zydus Pharmaceuticals USA, Inc.

Infringement of U.S. Patent No. 6,576,665 ("Encapsulated Calcium Acetate Caplet and a Method for Inhibiting Gastrointestinal Phosphorous Absorption," issued June 10, 2003) following a Paragraph IV certification as part of Zydus' filing of an ANDA to manufacture a generic version of Fresenius' PhosLo® GelCaps (calcium acetate, used to treat renal failure).  View the complaint here.

Conference & CLE Calendar

January 31 - February 1, 2011 - Medical Device Patent Litigation*** (American Conference Institute) - New York, NY

February 9-10, 2011 - BioPharma IP Innovations Summit (Strategic Solutions Network) - Miami, FL

February 16-17, 2011 - Life Sciences Collaborative Agreements and Acquisitions*** (American Conference Institute) - New York, NY

February 16-17, 2011 - Biotech & Pharmaceutical Patenting (IBC Legal) - Munich, Germany

March 16-17, 2011 - FDA Boot Camp*** (American Conference Institute) - New York, NY

***Patent Docs is a media partner of this conference or CLE

Biotech & Pharmaceutical Patenting Conference

IBC Legal will be holding its 19th annual Biotech & Pharmaceutical Patenting conference on February 16-17, 2011 in Munich, Germany.  IBC Legal faculty will help attendees:

• Analyze the evolving biotech & pharmaceutical market landscape and what this means for a holistic patent strategy;
• Maximize the chance of a successful patent filing for new scientific processes;
• Optimize patent life cycles and extend market dominance;
• Examine landmark appeal and litigation decisions and analyze the implications for future patent cases; and
• Hear in depth insights on the legal procedures in key European, U.S., Asian, and Brazilian jurisdictions.

In particular, IBC Legal faculty will offer presentations on the following topics:

• Examining how the Commission is assessing antitrust issues since the Pharmaceutical Sector Inquiry;
• Patent filing: Maximizing your chances of success;
• Assessing progress towards establishing patent highways;
• German Patent and Trademark Office's approach to biopatents;
• Emerging opportunities for IP management in Guernsey & other offshore IP jurisdictions;
• Examining current issues relating to plant biotech and breeding;
• Strategies for maximizing patent life cycles;
• Patent strategies in the new biosimilars world;
• Stem cell patenting;
• Personalized medicine: Patenting genes and theranostics;
• Obviousness and inventive step in the U.S. & Europe;
• Evaluating the pros and cons of different European legal systems to maximize your chances of successful patent litigation in each region;
• Examining patent litigation in the U.S.;
• Brazil patent landscape;
• Latin America patent landscape;
• Decoding patent information from Japan, China, Taiwan and Korea;
• Examining how sufficiency is being addressed in Europe;
• Assessing how well functional claims stand up to scrutiny;
• Examining recent case law around supplementary protection certificates; and
• Using second medical use claims to extend patent life cycles.

A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.

The registration fee for the conference is £1,783.81.  Those interested in registering for the conference can do so here, by calling +44 (0)20 7017 5503, or by faxing a registration form to +44 (0)20 7017 4746.

BioPharma IP Innovations Summit

Strategic Solutions Network (SSN) will be holding its BioPharma IP Innovations Summit on February 9-10, 2011 in Miami, FL.  The Summit will offer presentations on the following topics:

• Are you ready for open innovation? -- Pre-conference workshop-applying lessons from other industries to reinvigorate the life sciences business model;
• Emerging business bootcamp -- Pre-conference workshop: Incubating the next generation of revenue generators;
• Diagnostics and beyond: Critical communication requirements in preparing a new era of IP transaction management;
• Actions to avoid in M&A and strategic partnerships;
• Innovations in laboratory collaboration: Fostering open collaboration between global laboratory researchers;
• Pharma innovations: Breaking through bottlenecks to get from concept to commercialization;
• Creating superior collaboration networks to maximize value with external partners;
• Panel: Successful strategies in open innovation -- Split sessions: Focus-open innovation;
• IP due diligence: How to react to rapid changes in R&D cycles;
• In-licensing and out-licensing innovations -- IP marketplace: Strategic sourcing options to remove market barriers;
• How to protect intellectual property when labs go electronic;
• Developing an organizational culture to support the implementation of open innovation;
• Branding yourself as a partner of choice;
• Product lifecycle extension strategies -- Split sessions: Focus-strategic IP portfolio management; and
• Creating an IP ecosystem to secure long term profitability of IP assets -- Split sessions: Strategic IP portfolio management.

The agenda for the BioPharma IP Innovations Summit can be found here.  The registration fee for the conference is $1,795 (standard rate), $1,495 (pharmaceutical/biotech rate), or $1,195 (government/academic rate).  Those interested in registering for the Summit can do so here, by calling 561-674-0084, or by faxing a registration form to 561-674-0282.

Amicus Briefs in AMP v. USPTO: AARP

By Donald Zuhn --

With briefing in the Association of Molecular Pathology v. U.S. Patent and Trademark Office ("Myriad") case now complete, Patent Docs has begun reviewing the 29 amicus briefs that were filed with the Court of Appeals.  Of the 29 amicus briefs, fifteen were filed in support of Defendants-Appellants and/or reversal, twelve were filed in support of Plaintiffs-Appellees and/or affirmance, and two remain to be determined (Patent Docs has not yet obtained copies of these briefs).  To date, Patent Docs has provided summaries for nine of the fifteen of the briefs filed in support of Defendants-Appellants and/or reversal (see "AMP v. USPTO -- Briefing Update II").  Today, we review the amicus brief submitted by the AARP.

Writing in support of Plaintiffs-Appellees and arguing for affirmance, the AARP "urg[es] the Court to find that the [BRCA] patents are invalid."  According to the AARP, the Federal Circuit should find the patents to be invalid because "[p]atents such as those present in this case prohibit diagnosis and treatment based on second medical opinions and discourage full medical testing," and patents "also significantly elevate the cost of genetic testing."  The AARP spends a little more than one page of its 22-page brief explaining why human genes and DNA molecules are not patent eligible under 35 U.S.C. § 101.  The remainder of the AARP brief focuses on public health considerations that demand a finding of invalidity and a discussion of how gene patents limit the accessibility of competitively priced genetic testing.

With respect to the § 101 issue, the AARP argues that "DNA molecules and human genes are natural phenomena that when discovered are not the kind of 'discovery' that Section 101 was designed to protect."  Citing American Wood-Paper Co. v. Fiber Disintegrating Co., 90 U.S. (23 Wall.) 566 (1874), the AARP states that in that case:

[T]he Court found that merely removing pulp from straw, wood, or other natural sources did not make it a patentable new composition of matter:  "A process to obtain it [an extract] from a subject from which it has never been taken may be the creature of invention, but the thing itself when obtained cannot be called a new manufacture."

The AARP argues that "[s]imilarly, isolating a gene from the human body does not then make the gene itself, patentable."  From this, the AARP concludes that "human genes and DNA molecules, regardless of whether they are isolated or not, are natural phenomena and therefore are not patent eligible under 35 U.S.C. §101" (emphasis added).

Noting that Myriad, in its opening brief, "fails to discuss potential patient harm if the [BRCA] patents are upheld," the AARP turns to public health considerations that "demand that the patents in question be denied."  In particular, the AARP argues that "[i]n this case the public interest demands that the patents in question be denied since many individuals will be harmed if the patent is upheld because genetic testing will be denied to them either due to cost or unavailability of a second opinion."  Pointing to the results of "a study [that] was conducted of 300 individuals who had negative test results from Myriad's BRAC analysis but came from families in the United States, each of which included four or more members with breast or ovarian cancer," the AARP brief notes that "[u]sing multiple methods of genetic testing, unlike BRAC analysis, the study found that 35 of the 300, or in other words 12% of the individuals, carried previously undetected BRCA1 or BRCA2 genetic mutations."  Because "it is extremely important that those who undergo BRCA genetic testing receive accurate and thorough testing and results," the AARP contends that "individuals seeking any type of genetic testing should have the option of securing a second opinion which can have life altering results."  Given the federal government's limited oversight over genetic tests, the AARP argues that it is critical that patients have the option of a second opinion.

The AARP brief next addresses the ways in which gene patents limit the accessibility of competitively priced genetic testing.  Citing a Department of Health and Human Services report, the AARP notes that "[w]hile advances in genetics and genomics are driving the development of new genetic tests and services, 'problems with coverage and reimbursement are limiting their accessibility and integration into the health care system.'"  The AARP also points to the "significant numbers of Americans (50.7 million) who are still uninsured," and the fact that "[t]he cost of health care frequently determines whether or not people receive health care."  The brief also notes that while "Medicare is the largest provider of health insurance in the United States," "its current coverage policy of genetic testing is limited."  Stating that "Medicare generally precludes coverage of genetic testing to those people who have not yet been diagnosed with cancer," the AARP argues that "[r]equiring that Medicare recipients wait until they actually have contracted cancer reduces one of the most significant benefits of the testing to those BRAC carriers who have not yet contracted cancer but may do so in the future."  The brief concludes that:

Given the limited coverage of genetic testing for Medicare and Medicaid patients many patients must pay for genetic testing out of their own pockets.  Rejecting the patents in this case and allowing more laboratories to do the tests will result in lower prices for the tests and greater patient access.

For information regarding this and other related topics, please see:

• "AMP v. USPTO: Appellees' Brief," January 12, 2011
• "AMP v. USPTO -- Briefing Update II," December 16, 2010
• "Amicus Briefs in AMP v. USPTO: Alynylam Pharmaceuticals, Inc.," December 15, 2010
• "The Relevance of Patent Exhaustion in the Myriad Genetics Case," December 14, 2010
• "AMP v. USPTO -- Briefing Update," December 14, 2010
• "Amicus Briefs in AMP v. USPTO: University of New Hampshire School of Law," December 12, 2010
• "Amicus Briefs in AMP v. USPTO: Rosetta Genomics & George Mason University," December 8, 2010
• "Academic Amici Refute ACLU Falsehoods in Gene Patenting Debate," December 7, 2010
• "Amicus Briefs in AMP v. USPTO: Genetic Alliance," November 10, 2010
• "BIO and AUTM File Joint Amicus Brief in AMP v. USPTO," November 9, 2010
• "AIPLA Submits Amicus Brief in AMP v. USPTO," November 3, 2010
• "IPO Files Amicus Brief in AMP v. USPTO," November 2, 2010
• "AMP v. USPTO -- Briefing Update," November 1, 2010
• "DOJ Tries to Be All Things to All Constituencies in Myriad Amicus Brief," October 31, 2010
• "Myriad Files Appeal Brief in AMP v. USPTO," October 28, 2010
• "AMP v. USPTO -- Briefing Schedule Update," August 22, 2010
• "FCBA Submits Amicus Brief on Motion for Recusal in AMP v. USPTO," August 9, 2010
• "Appellees Move for Recusal of Chief Judge Rader in AMP v. USPTO Appeal," July 19, 2010
• "AMP v. USPTO after Bilski v. Kappos," July 6, 2010
• "Myriad Appeals AMP v. USPTO Decision," June 16, 2010
• "AMP v. USPTO: What Everyone Else Is Saying - Part II," June 8, 2010
• "AMP v. USPTO: What Everyone Else Is Saying," April 6, 2010
• "'60 Minutes' and 'Newshour' Take Different Approaches to Covering Gene Patenting Story," April 5, 2010
• "'60 Minutes' Examines Gene Patenting Issue on Sunday, April 4th -- Patent Docs Author Kevin Noonan to Appear on Program," April 2, 2010
• "AMP v. USPTO: What the Parties Are Saying About the Decision," April 1, 2010
• "Caught in a Time Warp: The (In)validity of BRCA1 Oligonucleotide Claims," March 30, 2010
• "Round One Goes to the ACLU," March 29, 2010
• "USPTO Asks out of Gene Patenting Case (Again)," January 19, 2010

President Obama Proposes, BIO Agrees

By Kevin E. Noonan --

In his State of the Union address to Congress and the nation, President Obama emphasized the need for America to return to its innovator and entrepreneurial roots, and harness the ingenuity and commercial vigor long associated with this country to effectively compete in the global economy.

The Biotechnology Industry Organization (BIO) agrees.  On Wednesday, BIO President and CEO Jim Greenwood issued the following statement:

We commend President Obama for highlighting the need to increase our nation's global competitiveness and job creation by stimulating investment and research in innovation.  As the President said, "The first step in winning the future is encouraging American innovation."

There is no industry better poised to meet this challenge than biotechnology.  With a strong and predictable patent system, science-based regulatory systems, and appropriate tax policy and incentives, America's biotechnology sector can help drive substantial job growth in the United States and advance our nation's competitiveness over the long term, while providing cutting-edge technologies to address pressing concerns in health care, energy independence and agricultural sustainability.  Innovation is how we make our living.  We are just what the doctor -- and the President -- ordered.

• Therapeutic Discovery Project (TDP) -- We continue to advocate for the extension and expansion of the Therapeutic Discovery Project (TDP) program, which awarded tax credits to small cutting-edge biotech companies to support research and development efforts to cure diseases such as cancer, Parkinson's and Multiple Sclerosis.  Targeted programs like the TDP can help spur continued medical innovation, create and preserve American jobs, and position our nation for continued leadership in the global marketplace.

• Alternative Energy Sources -- The President also renewed his call for the development of clean energy during tonight's speech.  The biotechnology industry, which provides the key technology for producing advanced biofuels and biobased products from renewable biomass, stands ready to provide new green jobs in the United States by developing secure and sustainable sources of domestic energy.

• Regulations for Agricultural Biotechnology Products -- We welcome the President's call to support technology and to review regulations that are barriers to growth.  Agricultural biotechnology provides innovative solutions to help feed and clothe the world, support energy security, and reduce the impact of agriculture on the environment.  The U.S. government's regulatory review on the safety of these products needs to be far more efficient in order to sustain and grown jobs in the industry and bring innovation to market.

America is the world leader in biotechnology.  Our nation's biotechnology industry is comprised of scientists, entrepreneurs, and large and small companies in all 50 states engaged in translating the latest scientific discoveries into innovative new medical therapies and environmental products, increased agricultural production and farm incomes, and greener bio-based products and biofuels.  Nationwide, our industry directly employs more than 1.4 million people and indirectly generates jobs for an additional 6.6 million people.  These are high-quality jobs, paying substantially more than the average U.S. wage.

We look forward to working with President Obama, members of his Administration and the Congress in support of public policies that encourage investment in biotechnology innovation.  The right policies will help create jobs, propel continued innovation, and increase our nation's competitiveness, and security, in the global marketplace for years to come.

The history of the last generation can be interpreted as American ingenuity -- as represented by the biotechnology and computer industries -- lifting the U.S. from its mid-1980's doldrums to the economic prosperity that characterized the years between 1992-2000.  The success of that ingenuity can be exemplified by a simple image:  in 1998 everyone had a Sony Walkman®, and in 2008 everyone had an Apple iPod.  That type of innovation may be less visible in biotechnology, but the pre-eminent biotechnology companies -- Amgen, Genentech, Biogen, Genzyme, and dozens of others -- were American companies.  Mr. Greenwood reminds us that the qualities the President extolled about our country and culture -- risk-taking spirit, availability of venture capital, and acceptance of failure, to name a few -- are just those qualities that support small startup companies, the hallmark of the biotechnology industry.  And his statement brings to mind an apt aphorism by the anthropologist, Margaret Mead:

Never doubt that a small group of thoughtful, committed people can change the world.  Indeed, it is the only thing that ever has.

Data or Market Exclusivity? (Perhaps) Only Congress Knows for Sure

By Kevin E. Noonan --

A debate has begun on the meaning of the term "exclusivity" in the follow-on biologics pathway provisions of the Patient Protection and Affordable Care Act (P.L. 111-148), § 351(k) of the Public Health Service Act, codified at 42 U.S.C. § 262(k)).  The debate centers on the availability of innovator drug company data to be used in support of a follow-on biologic drug application.  And the consequences of how the Food and Drug Administration interprets the term (or how Congress amends the law to better define it) will impact how quickly follow-on biologic drugs will be available after the twelve-year exclusivity period expires.

The scheme as set forth in the law is simple:  the Agency is not empowered to accept a follow-on biologic drug application for four years after the reference drug (the law limits the follow-on biologic to a single reference biologic drug) has been approved under a Biologic License Application (BLA; § 351(k)(7)(B) of the Public Health Service Act, codified at 42 U.S.C. § 262(k)(7(B)).  Then, the law specifies that a follow-on biologic drug application cannot be approved until twelve years after first approval of the reference biologic drug (§ 351(k)(7)(A) of the PHSA).

This leaves the question:  is the innovator's reference drug data available to the follow-on biologic drug applicant prior to the end of the twelve-year exclusivity period?  Innovator drug companies and Members of Congress (from both chambers) have taken the position that the law prescribes "data exclusivity," and that the plain meaning of that phrase is that follow-on biologic drug applicants are not to have access to an innovator's biologic drug data until the twelve year term has expired (see "Senators Let FDA Know Their Intent Regarding Data Exclusivity Provisions of PPACA" and "Representatives Send Letter to FDA to Explain Data Exclusivity Provisions of Biosimilars Legislation").  These MOCs and innovators have taken the position that this is not equivalent to market exclusivity, because the follow-on biologic drug applicant can always submit its own data (as unlikely as such a scenario may be).

The generic drug industry (because, frankly, the follow-on biologic drug industry does not yet exist) has taken the opposite position:  that the law prescribes market exclusivity for the innovator, and that once the four-year exclusionary term is over the biologic drug innovator's data should be available to support their follow-on biologic drug applications (see "More on Data Exclusivity").  They are joined in their position by several Senators who disagree with their colleagues, as set forth in yet another letter to FDA Commissioner Margaret Hamburg.  In this letter, sent on Monday by Senators Sherrod Brown (D-OH), John McCain (R-AZ), Charles Schumer (D-NY), and Tom Harkin (D-IA), the Senators state that they are "extremely concerned about possible misinterpretations" of the provisions of the follow-on biologics law, which misinterpretations "could further delay the availability of generic biologic drugs, restricting access for many Americans and driving up costs for the Federal government."

They note that biologic drugs are a "new frontier" in medicine and that "half of the sales from the Top 100 medicines in 2014" will be biologic drugs.  Citing a Federal Trade Commission report that the annual cost for a "popular biologic [drug] treatment for breast cancer can cost $48,000," they caution that such costs "will continue to be a significant contributor to healthcare costs," both for individuals and the nation as a whole.

They do not state a particular interpretation of the exclusivity term -- "data exclusivity" versus "market exclusivity" -- but they do encourage the Commissioner to "disregard any interpretation that would result in further delay of the availability of generic biologic drugs."  They express concern because "[i]t has recently been brought to our attention that the FDA has received suggested statutory interpretations which, if implemented . . . , could result in generic competition being delayed beyond the 12 year exclusivity period in the statute."  The Senators express their version of statutory interpretation by stating that "the statute is clear that the FDA can begin reviewing biogeneric applications during the 12 year exclusivity period" -- an outcome that mandates the interpretation that the period between the fourth year and the end of the twelfth year after innovator biologic drug approval is market exclusivity, not data exclusivity.

And they remind the Commissioner that they did not support the twelve-year exclusivity term in the law as it was being debated before passage:

It should be noted that we remain opposed to the 12 years of exclusivity that was granted to protect brand-name biologics from market competition -- current law results in limited access for patients who cannot afford these therapies and higher costs for the federal government.

Besides the clear economic parts of this debate and positions taken in service thereof, there is also a policy argument:  if the intent of the law was to speed entry into the marketplace of follow-on biologic drugs (like the Hatch-Waxman Act did for generic copies of conventional drugs), then the position taken by these Senators is consistent with that Congressional intent.  However, it should be recognized that the Hatch-Waxman Act contained a quid-pro-quo (if not a tit for tat) in that innovator drug companies became entitled under the law to up to five years of patent term extension to make up for regulatory delay.  Thus, permitting generic drug companies to have access to innovator data was countered by extending patent term to prevent the generic drug makers from entering the market until either the (extended) patent term expired or they were able to show that the patent(s) protecting the innovator drugs were not infringed, were invalid or were unenforceable.  (The negative policy consequences of those provisions have been discussed previously; see "Maybe Hatch-Waxman Data Exclusivity Isn't So Good For Traditional Drugs After All").

There are no such provisions contained in the PPACA; even the convoluted patent enforcement provisions do not provide much solace to innovator biologic drug companies.  Thus, the other side of the debate that must be acknowledged is that the exclusivity term significantly affects the likelihood for a positive return on investment for drugs that are recognized by all to be much more complex and expensive to develop and bring to market.  Indeed, prior to passage peer-reviewed studies by a leading economist supported a much longer exclusivity term (see "Professor Grabowski's Economic Analysis of Data Exclusivity for Follow-on Biologic Drugs"), and recent studies indicate a longer exclusivity term may be beneficial for conventional drugs (see "Academic Study Supports Longer Data Exclusivity Term for Conventional Drugs").  It cannot be forgotten that in the drive to produce follow-on biologic drugs there must be an innovator drug for the follow-on applicant to copy, and in the absence of these drugs there is no evidence that follow-on biologic drug applicants will become innovators (at least of the experience with generic drug makers can be our guide).  Thus, as the FDA considers its policies, and Congress considers whether to modify the law, both sides of the debate must strive for some equipoise.  The problems of access to biologic drugs is a real one but one that has alternative (albeit expensive) solutions to diminished exclusivity periods for innovators.  But if the solution to this problem is laid solely and exclusively at the doorstep of innovator biologic drug makers, we may face a different and much less easily solved problem:  the biotechnology golden goose may be dead, because it may be too expensive to make biologic drugs in the first place.  There are no alternative solutions to that problem, and the cost -- the human cost -- may make the financial costs bemoaned by the Senators pale in comparison.

More on Data Exclusivity

By Kevin E. Noonan --

Members of Congress, from both houses, have let the Food and Drug Administration know their views on the distinction between "data exclusivity" and "market exclusivity" under the follow-on biologics pathway provisions of the Patient Protection and Affordable Care Act (P.L. 111-148, § 351(k) of the Public Health Service Act, codified at 42 U.S.C. § 262(k))(see "Senators Let FDA Know Their Intent Regarding Data Exclusivity Provisions of PPACA" and "Representatives Send Letter to FDA to Explain Data Exclusivity Provisions of Biosimilars Legislation").

Now it is the generics industry and its supporters who have sent a letter to Commissioner Margaret Hamburg last Thursday.  The letter was signed by several generic drug manufacturers (including Hospira, Medco, Mementa Pharmaceuticals, Mylan Labs, Teva Pharmaceuticals, and Watson Pharmaceuticals), healthcare providers (including Humana, Aertna, and CVS Caremark), and industry and patient groups (AARP, the Generic Pharmaceutical Association, and Pharmaceutical Care Management Association).  Their letter recognizes overlapping intervals of market and data exclusivity, pointing out that a follow-on biologic drug applicant:

• Must wait four years after a reference brand product is first approved under a Biologics License Application (See Section 351(k)(7)(B)) to submit an application; and

• Must wait a period of 12 years before a biosimilar or interchangeable product can be approved under Section 351(k) that references a reference brand biologic product (See Section 351(k)(7)(A).

This results, the authors contend, in four years of market exclusivity and data exclusivity, followed by eight years of market exclusivity.  This is contrary to the understanding of the legislators, who contend that it is data exclusivity, not market exclusivity, that exists during the last eight years of the exclusivity term, since after the first four years, a follow-on biologic drug maker could submit its own data and be approved (provided there are no patent infringement issues that might keep the follow-on biologic drug maker from the marketplace).

In addition to this different understanding of the exclusivity provisions of the law, the letter writers take the opportunity to remind the Commissioner that they opposed the 12-year data exclusivity term when the law was still being debated as a bill:

During the legislative debate, we strongly opposed the 12-year period in these provisions because it restricts competition, delays entry of affordable medicines, and discourages real and important innovation of new cures.  During the legislative debate, we strongly opposed the 12-year period in these provisions because it restricts competition, delays entry of affordable medicines, and discourages real and important innovation of new cures.

And the letter warns of the consequences of the Agency implementing the law with regulations that "prevent biosimilar filings for 12 years:"

[C]onsumers will have to endure an unknown period of delay of FDA review and approval that could stretch far beyond the 12-year total that was set in the legislation.

Accordingly, the authors "concur with the FDA's initial understanding of the provision and ask that the FDA implement the law as passed."

U.S. Patients Petition FDA to Regulate Genzyme Export of Fabrazyme

By James DeGiulio --

In December 2009, the Department of Health and Human Services denied a petition filed by U.S. Fabry patients to secure higher quantities of drug Fabrazyme, exercise Bayh-Dole march-in rights against Genzyme, and issue an open license to U.S. patents needed to manufacture the drug (see "HHS Denies Request to Exercise Bayh-Dole "March-in" Rights for Fabrazyme").  Instead, the FDA entered a consent decree with Genzyme, which gave the FDA authority to regulate distribution of drugs during a shortage, which is the current status of Fabrazyme.  Still faced with the prospect of inadequate treatment options, according to a press release, U.S. Fabry disease patients have now petitioned the FDA to force Genzyme to keep more Fabrazyme for United States patients, rather than shipping it to Europe and other countries.  The initial production of Fabrazyme was sufficient to meet the needs of all patients in the United States.  However, in June 2009, Genzyme decreased production as a result of a viral infection at its manufacturing plant.  As a result of Genzyme's inability to meet the market need, doctors have been prescribing Fabrazyme in doses that are far below the indicated therapeutic use, current patients have been unable to obtain dosage increases, and newly diagnosed patients have been unable to receive therapy.

The petition filed with the FDA requests that Fabrazyme be allocated first to U.S. patients and, if it is not, that U.S. patients be allowed to present their case for medical need before the drug is sent overseas.  At present, only 38% of the total current drug production is actually allocated to U.S. citizens, with the majority of the drug being sold overseas, even though such patients have access to the alternative drug, Replagal, which is manufactured by Shire Pharmaceuticals.  There is no drug shortage in Europe, as the European Medicines Agency has recommended that patients either receive a full dose of Fabrazyme or be switched to Replagal.  The FDA has allowed some Fabry patients to import Replagal from Europe for emergency medical use in the U.S.  However, patients must petition the FDA and then show a critical medical need.

In the U.S., Replagal is not an FDA approved drug, and Shire has withdrawn its application for FDA approval, so no alternatives exist.  Citing the Bayh-Dole Act, the petition argues the public has a right of access to publicly funded inventions, and that depriving the public from this invention is a violation of Constitutional rights, specifically the Fifth Amendment.  According to the petition, by sending most of its Fabrazyme overseas, the current allocation system de facto denigrates the rights of U.S. citizens in favor of non-citizens.

In denying the petition to exercise Bayh-Dole march-in rights, the HHS relied on Genzyme reports indicating that they are very close to renewing and meeting the supply of Fabrazyme.  According to Genzyme, Fabrazyme engineering runs at the company's new Framingham manufacturing facility are nearly completed, and the material created there will become commercial product inventory upon regulatory approval of Fabrazyme production at this facility.  This approval is expected during the second half of this year and will enable the company to provide full, sustainable product supply.

The Nexus between Biotechnology and Economic Recovery

By Kevin E. Noonan --

In anticipation of President Obama's State of the Union address tomorrow, Jim Greenwood, President and CEO of the Biotechnology Industry Organization made a recommendation today in The Arena portion of the Politico website:

The president's State of the Union should, rightly, focus on jobs, particularly the need to create and fill new jobs to compete in an increasing competitive global marketplace.  There's no industry that better exemplifies the promise of job creation than biotechnology.  Today, the U.S. biotechnology sector employs more than 1.3 million workers in high-skill, high-wage jobs.  Since 2001, our industry has added nearly 200,000 jobs.  This is quite an accomplishment in the midst of a deep recession, and a sign that this industry can be a driver of economic growth.  Quite literally we are just what the doctor -- and president -- has ordered.  

Strong patent protection, balanced reimbursement policies, science-based regulations and other pro-innovation public policies will help our industry fulfill our promise.  Through targeted policies such as the Therapeutic Discovery Project, which awarded tax credits to small cutting-edge biotech companies to support research and development efforts, the president can help spur continued medical innovation, grow American jobs and position our nation for continued leadership in the global marketplace.

The jobs emphasis should resonate with the President, who has seen his popularity wane with worsening job numbers, and whose popularity (not to mention re-election prospects) will be affected if not determined by the strength of any economic recovery.  (The days are past when improvements on Wall Street but not Main Street provide much political benefit.)

Mr. Greenwood's emphasis on the biotechnology sector as source of high-paying jobs providing America with a competitive advantage on the world economy is consistent with venture capital guru Steve Burrill's recent report on the industry (see "Steve Burrill Makes Predictions for the Biotech Industry in 25th Annual Report").  In his report (available here), Mr. Burrill predicts that 2011 will be a "good year" for the biotechnology industry, and that the biotech sector will outperform the general markets in 2011 (using his Burrill Biotech Select Index in comparison with the Dow Jones Industrial Average).  The sector is not without its challenges, however, including contraction by about 25% during the economic downturn and a stable but stagnant market cap ($360 million) and overall investment ($15 billion).  So economic policies that promote investment in biotechnology companies will be important in a continued recovery, in accord with Mr. Greenwood's sentiments.

The Obama administration seems to understand the importance of biotechnology in not only promoting growth but in promoting American competitiveness.  This is evidenced by an initiative, announced recently in a January 14th letter from Department of Health and Human Services to Congress (see "Federal Research Center Will Help Develop Medicines"), to establish a new drug development program to compensate for the diminished capacity of the pharmaceutical industry to provide new drugs.  (It is unclear whether the administration understands the plethora of reasons for this diminution, including the complexities of the diseases to be treated (like diabetes and cancer) and the effects of other government policies, like the unintended consequences of the Hatch-Waxman Act to produce almost as many ANDA lawsuits as generic drugs.)  The new center, which will be called the National Center for Advancing Translational Sciences and is slated to open in October 2011, will be funded parsimoniously at first (a hoped-for $1 billion in contrast to the approximately $46 billion invested each year by the pharmaceutical industry), consistent with expected opposition from budget hawks.  The Center will be part of the National Institutes of Health, and is intended to provide sufficient early-stage research and results to interest conventional pharmaceutical companies to invest in the development of new drugs.  Unannounced is whether the government's involvement will come with significant "strings" attached with regard to cost and exclusivity for the pharmaceutical company, issues which could easily derail the initiative.  Dr. Francis Collins, NIH Director, says that "[n]one of this is intended to be competitive with the private sector."  However, he says that he is "frustrated" to see the results of his last endeavor, as head of the Human Genome Project, "wait[] for the pharmaceutical industry to follow through with them."  While acknowledging that the idea is controversial and that many question whether the government should be involved in such an effort, Dr. Collins (and hence the administration) argues that it "would be irresponsible not to take advantage of scientific opportunity" represented by the Center.

A generation ago, the biotechnology industry (and American support of it) led to a change in the distribution of the source of new drugs from Europe to the U.S. and to reverse in the 1980's and 1990's the economic downturn caused by events that occurred in the 1970's (see "The Continuing Value of Biotech Patenting").  In the effort to stimulate an economic recovery today, these efforts, and the efforts of private sector biotechnology companies, are likely to once again be critical.  Which makes policies that support this industry (including sound patent policies) even more important.

Court Report

By Sherri Oslick --

About Court Report:  Each week we will report briefly on recently filed biotech and pharma cases.

King Pharmaceuticals Inc. et al. v. Intelliject Inc.
1:11-cv-00065; filed January 19, 2011 in the District Court of Delaware

• Plaintiffs:  King Pharmaceuticals Inc.; Meridian Medical Technologies Inc.
• Defendant:  Intelliject Inc.

Infringement of U.S. Patent No. 7,794,432 ("Automatic Injector with Kickback Attenuation," issued September 14, 2010) following a Paragraph IV certification as part of Intelliject's filing of an NDA (under § 505(b)(2) of the Food, Drug and Cosmetic Act) to manufacture a generic version of Meridian's EpiPen® Auto-Injector (epinephrine, used to treat anaphylaxis).  View the complaint here.

Genetic Technologies Ltd. v. American Esoteric Laboratories et al.
1:11-cv-00057; filed January 19, 2011 in the Western District of Texas

• Plaintiff:  Genetic Technologies Ltd.
• Defendants:  American Esoteric Laboratories; Clinical Pathology Laboratories, Inc.; Clinical Pathology Laboratories Southeast; East Side Clinical Laboratory; Fairfax Medical Laboratories, Inc.; Clinical Pathology Laboratories Mid-Atlantic; Pathology Laboratories, Inc.; Sonic Healthcare USA, Inc.

Infringement of U.S. Patent No. 5,612,179 ("Intron Sequence Analysis Method for Detection of Adjacent Locus Alleles as Haplotypes," issued March 18, 1997) based on defendants' manufacture and sale or offering of genetic testing services.  View the complaint here.

Prometheus Laboratories Inc. v. Roxane Laboratories, Inc.
2:11-cv-00230; filed January 14, 2011 in the District Court of New Jersey

Infringement of U.S. Patent No. 6,284,770 ("Medicaments for the Treatment of Non-Constipated Female Irritable Bowel Syndrome," issued September 4, 2001) following a Paragraph IV certification as part of Roxane's filing of an ANDA to manufacture a generic version of Prometheus' Lotronex® (alosetron hydrochloride, used to treat women with severe diarrhea-predominant irritable bowel syndrome).  View the complaint here.

Takeda Pharmaceutical Company Ltd. et al. v. Cadila Healthcare Ltd. et al.
1:11-cv-00315; filed January 14, 2011 in the Southern District of New York

• Plaintiffs:  Takeda Pharmaceutical Company Ltd.; Takeda Pharmaceuticals North America, Inc.
• Defendants:  Cadila Healthcare Ltd.; Zydus Pharmaceuticals USA, Inc.

Infringement of U.S. Patent Nos. 5,965,584 ("Pharmaceutical Composition," issued October 12, 1999), 6,329,404 (same title, issued December 11, 2001), 6,166,043 (same title, issued December 26, 2000), 6,172,090 (same title, issued January 9, 2001), 6,211,205 (same title, issued April 3, 2001), 6,271,243 (same title, issued August 7, 2001), and 6,303,640 (same title, issued October 16, 2001) following a Paragraph IV certification as part of Cadila's filing of an ANDA to manufacture a generic version of Takeda's Actos® (pioglitazone hydrochloride, used to treat type II diabetes).  View the complaint here.

Conference & CLE Calendar

January 25, 2011 - Understanding Obviousness in a Post-KSR World:  Practical Applications for Compliance with the Recent USPTO Guidelines (Technology Transfer Tactics) - 1:00 - 2:30 PM (EST)

January 26-27, 2011 - The Life Sciences Lawyer's Guide to Patent Term Adjustment and Patent Term Extensions*** (American Conference Institute) - New York, NY

January 28-29, 2011 - The Future of Patents: Bilski and Beyond (Stanford Law Review & Stanford Program in Law, Science & Technology)

January 31 - February 1, 2011 - Medical Device Patent Litigation*** (American Conference Institute) - New York, NY

February 16-17, 2011 - Life Sciences Collaborative Agreements and Acquisitions*** (American Conference Institute) - New York, NY

March 16-17, 2011 - FDA Boot Camp*** (American Conference Institute) - New York, NY

***Patent Docs is a media partner of this conference or CLE

ACI FDA Boot Camp

American Conference Institute (ACI) will be holding the next session of its FDA Boot Camp conference on March 16-17, 2011 in New York, NY.  ACI faculty will help attendees:

• Master the basics of the application and approval processes for drugs, biologics, and devices;
• Comprehend the structure of the FDA and the roles of the three major agency centers:  CDER, CBER, and CDHR;
• Develop a practical working knowledge of clinical trials for drugs and biologics and the clearance process for devices;
• Learn how devices are classified, monitored, and regulated;
• Appreciate the complexities of pharmaceutical IP and the regulatory balance between brand name and generic products;
• Recognize the pivotal role of labeling in the drug and biologics approval process;
• See the importance of cGMPs to the post-approval regulatory process; and
• Navigate the protocols of adverse events monitoring, signal detection, product withdrawals, and recalls.

In particular, ACI's faculty will offer presentations on the following topics:

• The basics:  Understanding and working with the FDA -- Jurisdiction, functions, organization, and operation;
• The nature of the approval process;
• Understanding the clinical trial process for drugs and biologics;
• Patent and IP overview for drugs and biologics:  Hatch-Waxman, trade dress, and more;
• Drugs and biologics:  Labeling;
• cGMPs:  Drugs and biologics (current good manufacturing practices);
• Follow-on (comparable or biosimilar) biologics;
• Bioequivalence:  What patent lawyers need to know (patent track);
• Challenges, opportunities, and current controversies with the (non-patent) marketing exclusivities;
• Adverse events monitoring, pharmac ovigilance and risk management;
• Medical devices:  Classification and the essentials of the device premarket review process;
• Post-market requirements and concerns for medical devices; and
• Recall guidance for drugs, biologics, and medical devices:  What you need to know.

A pre-conference workshop on the "Fundamentals of FDA Regulatory Law," will be offered on March 15, 2011.  The workshop will provide a basic overview of FDA regulations and will prepare attendees for the in-depth discussions that will take place throughout the conference.

The agenda for ACI's FDA Boot Camp conference can be found here.  A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.

The registration fee is $2,295 (conference alone) or $2,895 (conference and pre-conference workshop).  Those registering by February 17, 2011 will receive a $200 discount.  Those interested in registering for the conference can do so here, by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.

Patent Docs is a media partner of ACI's FDA Boot Camp conference.