Amici challenge pharma pay-for-delay

Readers may recall our earlier report that, in April, a Second Circuit panel grudgingly ruled for Bayer and Barr pharmaceutical companies in In re Ciprofloxacin Hydrochloride Antitrust Litigation. Bound by Tamoxifen, the panel determined that reverse payment ("pay-for-delay") arrangements between branded and generic pharmaceutical companies did not violate antitrust laws. But, apparently swayed by the plaintiffs' public interest arguments, and moved by the "'exceptional importance" of the antitrust implications," the panel invited the plaintiffs to request an en banc Tamoxifen rehearing.

The wheels have started turning. Last month the U.S. government's Federal Trade Commission (FTC) and a group of 86 professors filed separate amicus curiae briefs asking the court to grant en banc review. Long opposed to reverse payment deals, the FTC argues in its brief that the Tamoxifen decision "protect[s] undeserved patent monopolies" and "improperly undermines the balance ... between the public interest in encouraging innovation and the public interest in competition." The FTC also cites studies indicating that getting rid of pay-for-delay could save consumers roughly $3.5 billion annually, and that "a one-year delay in generic entry represents ... a transfer from consumers to producers of about $14 billion."

For their part, the professors (represented by Stanford law professor and Durie Tangri partner Mark A. Lemley) argue that reverse payment arrangements are per se illegal. They also point out that an issued patent carries only a presumption of validity that does not grant a patentee "an absolute right to enter into a settlement that excludes competitors from the market." Moreover, the professors hint that, in In re Cipro and other reverse payment cases, the patentee's massive payout to the generic may indicate that the patent holder believed its own patent was invalid.

Indian pharma sector "fares well" in US disputes

India's Financial Express reports ("Domestic pharma cos fare well in patent litigation tests") on the pharma patent litigation success rates of India's leading pharmaceutical companies in US litigation over the past decade. Lupin Pharma has a success rate of 75%, while Sun Pharma (67%), Ranbaxy (63%) and Dr Reddy’s (61%) are not far behind. The article also gives a neat thumbnail sketch of the pharma patent litigation environment.

Interim relief "more nuanced than expected", says Pharma Report

Today's Pharma Sector Report from the European Commission's DG Competition contains a large amount of statistical data concerning the litigation and/or settlement of disputes involving pharmaceutical patents in more than half the member states of the European Union. There's far too much data for PatLit to be able to make a convenient summary of it and, despite its extensive use of tabular formats to illustrate and contrast numbers and trends, there is in any event only a limited amount that one can learn from them. For example, they cannot take into account the merits of the cases before the courts in terms of such core issues as the (non)obvious nature of disputed patents and the scope of the claims in both infringement and validity proceedings.

While DG Competition comes out in support of both a Community patent and a unitary court system for the litigation of patent disputes, its investigation was principally into matters concerning competitiveness within the pharma sector and the report does little more than endorse the position which the Commission is already known to hold.

One matter which may be of particular interest to readers of this blog is that of interim relief against alleged infringement. On this the report says

"(656) ... the subsample of cases with interim injunctions shows two particular features, namely: a high ratio of settled cases (73%, i.e. 44 out of 60 cases, which are final) and a low ratio of judged final cases (27%, i.e. 16 out of 60 cases). Furthermore, it is interesting to note that in the subgroup of settled cases, there is a tendency to end litigation with the conditions that are favourable to generic companies (i.e. either allowing generic entry or a value transfer from the originator to the generic company). Even if this cannot be regarded to be a conclusive indication as to likely outcome of the respective court cases, this element needs to be borne in mind when interpreting a higher proportion of the cases with interim injunction won by originator companies (11 out of 16 cases).

(657) The overall picture is thus more nuanced than one would have expected from the cases in which interim injunctions, the most restrictive legal tool, were granted, taking into account that, when requesting interim injunctions, the applicant is usually required to show that he is likely to succeed in the main proceedings and to demonstrate urgency. Adding up the actual generic successes (8%) and the settled cases appearing to be particularly favourable to the generic companies (38%), it would seem that in almost a half of the closed cases the grant of interim injunctions might not have been justified, whilst in another 25% of the cases that were settled the situation is unclear".

Suing, not suing both attract the Commission's attention

According to today's Pharma Times ("EU pharma inquiry submissions to be made public soon"), the public consultation following the European Commission’s inquiry into alleged anti-competitive practices in the pharma sector received more than 40 submissions, which will be made public "within the next few weeks", according to Commission spokesman Jonathan Todd. The Commission's definitive report is expected "before the summer". 

Issues specifically investigated by the Commission include “patent clusters” (the making of multiple patent applications for the same product) and lengthy patent litigation: more than 700 cases were brought during the seven-year period, each one lasting an average of three years and with generics firms winning around 60% of cases.  Also on the list are “reverse payment settlements”, made by patent owners to generics companies in order to keep them off the market. Cynics might wonder whether, if patent litigation is viewed as an anticompetitive practice, it might seem a little strange that payments made in order to avoid patent litigation are equally suspect.