Potential of Extending Exclusive Generic Period by Delaying Generic Launch Does Not Create Actionable Harm

Janssen Pharmaceutica v. Apotex, Inc (Fed. Cir. 2008)

Like most of today's pioneer-generic drug patent battles, this case involves multiple parties all looking for some advantage in the end-game battle over exclusivity.

Three JANSSEN patents are listed in the FDA orange book as covering its blockbuster anti-psychotic drug sold under the name Risperdal. ($2.5 billion in 2007 sales). TEVA was the first to challenge the patents and receives the Hatch-Waxman 180 days of generic market exclusivity. APOTEX came later and hoped to shorten TEVA's clock by invalidating the patents. The Federal Circuit, however, rejected APOTEX case – finding no declaratory judgment jurisdiction. In particular, the court saw no case or controversy between APOTEX and JANSSEN. (APOTEX wanted to shorten TEVA's rights).

TEVA had challenged only two of the three JANSSEN patents. On June 29, 2008, the unchallenged patent expired and the next day the FDA approved TEVA's generic application. To date, however, the generic company has apparently not yet launched. TEVA's 180 day clock will not be triggered until either (1) it launches its generic alternative or (2) the other two patents are found invalid by a court. If the court invalidates the JANSSEN patents, then TEVA's 180 days will end sooner – allowing APOTEX to enter the market at an earlier date. (TEVA's 180 days would have been triggered even earlier if APOTEX had successfully challenged the third patent (the '663 patent). It instead agreed that the '663 patent was valid.). To get out of the case, JANSSEN promised not to sue APOTEX on the other two patents.

On appeal, the three judge panel (CJ Michel, J Moore, and J Rader) recognized the harm APOTEX was feeling – but decided that the harm was not sufficient for declaratory judgment jurisdiction.

"[W]e conclude that the harm that has continuously existed in the present case—Apotex's inability to launch its generic product immediately upon the expiration of the '663 patent—is not sufficient to give rise to declaratory judgment jurisdiction."

What are they talking about?: This decision involves a multi-billion dollar drug and APOTEX – a leading generic provider – would be in a position to obtain at least millions in generic sales by launching sooner. Furthermore, the harm to APOTEX is not just waiting more than the 180 days, but also in giving TEVA more time to solidify its generic market position down the road. YET, the court concludes that the harm is "not sufficient to give rise to declaratory judgment jurisdiction."

Head in the Sand: It turns out that the court based its ruling on facts developed before we knew that TEVA would delay its launch:

"We heard oral arguments in this case on July 7, 2008, approximately a week after Teva could have launched its generic product. However, we are not deciding whether the facts alleged on July 7, 2008—the date we heard oral arguments—give rise to a justiciable Article III case or controversy. We hold that at the time when the district court entered final judgment in this case, Apotex's alleged harm of indefinite delay of approval was too speculative to create an actual controversy to warrant the issuance of a declaratory judgment"

The CAFC is probably correct that when the lower court made its decision months ago, the harm – TEVA's potential delayed marketing after expiration – was too speculative to support DJ jurisdiction.

Now that TEVA's delay is no longer speculative, APOTEX may well be able bring suit to invalidate the JANSSEN patents. However, that result is merely my own speculation.

Comments

[anon]

I agree Dennis. My reading of that case suggests that these types of DJs is that it's not a matter of 'if,' rather, it's a matter of 'when'.

[Matthew Avery]

Basically, between Janssen and Merck v. Apotex (2008 U.S. App. LEXIS 15014, Fed. Cir. July 16, 2008), it seems clear that second-filing ANDA applicants can never bring declaratory judgment actions because they fail to satisfy the Article III “case or controversy” requirement. Therefore, only first-filing ANDA applicants can bring DJ actions under section 271(e)(5). Ironically, this means that when a first-filer enters into a pay-for-delay settlement with the NDA/patent holder, it is now impossible for later-filing ANDA applicants to trigger Hatch-Waxman’s failure-to-market forfeiture provisions (21 USC section 355(j)(5)(D)(i)(I)(bb)(AA)) by bringing a DJ action.

[patent.drafter]

Hmm... I look forward to learning anti-trust law. Something about TEVA's delayed launch smells Sherman-y.

[EG]

DJs after MedImmune, and Hatch-Waxman patent issues relating to the filing ANDAs, are each headache enough. The combination of the two, as in Janssen and Caraco, requires an Extra Stength dose of Excedrin. The conclusion in the Janssen cases seems right to me, even in view of Caraco. As I read Janssen, basically Apotex shot itself in the foot by stipulating to the validity, infringement and enforceability of the '633 patent. So even if Apotex was able to clear the other 2 patents (the '425 and '587 patents) out its way, they still wouldn't be able to move forward on their generic product launch because the '663 patent was still in the way, and no longer challengeable by Apotex because of their stipulation.

Avery suggests that 2nd filing ANDAs can't make the DJ grade. I don't believe that's correct. Being a 2nd filing ANDA had nothing to do with Apotex losing on the DJ action, but instead, their own stipulation that removed any prospect of the DJ action would give them sufficient relief to move on their generic product launch.

[smashmouth football]

Today SCOTUS denied cert in this case.