Patent Baristas

Harvard Drug Group has filed an antitrust class action suit against Purdue Pharma alleging an unlawful scheme to maintain its monopoly in the U.S. for its brand name prescription drug OxyContin CR, the notorious opioid analgesic prescribed to treat moderate to severe pain.  OxyContin CR (oxycodone hydrochloride) is a controlled release formulation.  (Harvard Drug Group LLC v. Purdue Pharma L.P. (SDNY 07cv1937)).

Harvard alleges that Purdue engaged in a scheme involving fraud before the U.S. Patent and Trademark Office in order to obtain U.S. patents relating to OxyContin including 5,549,912; 5,508,042; and 5,656,295 stating that these wouldn’t have issued if not for Purdue’s fraud and inequitable conduct.Since these patents were then listed in the FDA’s Orange Book with Purdue filing patent infringement claims against potential generic competitors who sought FDA approval for a competing generic version of OxyContin, in order to block and delay generic competition.

Harvard claims that Purdue (1) unreasonably restrained, suppressed, and eliminated competition in the market for oxycodone CR (OxyContin and generic versions of OxyContin); (2) illegally maintained a monopoly in the market for oxycodone CR; (3) fixed, raised, maintained, and/or stabilized the price of OxyContin at supra- competitive levels; and (4) overcharged Harvard and other direct purchasers of OxyContin dollars by depriving them of the benefits of competition from lower priced generic versions of OxyContin.

Under the Federal Food, Drug, and Cosmetic Act, manufacturers who create a new, “pioneer” drug must obtain the approval of the Food and Drug Administration to sell the new drug by filing a New Drug Application. An NDA must include submission of specific data concerning the safety and effectiveness of the drug, as well as any information on applicable patents.  The Act was amended with the enactment of the Hatch-Waxman amendments, the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (1984).

Hatch-Waxman provides a brand-name manufacturer with the opportunity to obtain what is essentially a preliminary injunction, in the form of an automatic stay that may last as long as thirty months. When the FDA approves a brand-name manufacturer’s NDA, the FDA publishes, in a publication entitled “Approved Drug Products with Therapeutic Equivalence Evaluations,” known as the “Orange Book“, any patents which, according to information supplied to the FDA by the brand-name manufacturer, claim the approved drug or its approved uses, and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug. 21 U.S.C. § 355(j)(7)(A)(iii).

The FDA does not check the facts supplied to it by the brand-name manufacturer, but trusts that the manufacturer will be truthful. In listing patents in the Orange Book, the FDA acts in a purely ministerial capacity. To obtain FDA approval of an ANDA (and thus the legal right to sell a generic version of a brand-name drug), a generic manufacturer must certify that the generic drug addressed in its ANDA does not infringe any patent listed in the Orange Book as claiming the brand-name drug.

Under Hatch-Waxman, a generic manufacturer’s ANDA must contain one of four certifications:

• that no patent for the brand-name drug has been filed with the FDA (a “paragraph I certification”);
• that the patent for the brand-name drug has expired (a “paragraph II certification”);
• that the patent for the brand-name drug will expire on a particular date and the generic company does not seek to market its generic product before that date (a “paragraph III certification”); or
• that the patent for the brand-name drug is invalid or will not be infringed by the generic manufacture’s proposed product (a “paragraph IV certification”).

21 U.S.C. § 355(JX2)(A)(vii).

If a generic manufacturer files a paragraph IV certification asserting that the patent is invalid or will not be infringed, the brand-name manufacturer has the opportunity to delay the generic manufacturer’s receipt of final approval, and, thus, its ability to come to market. This is because a generic manufacturer filing a paragraph IV certification must promptly give notice of this fact to both the NDA owner and the owner of the patent(s) at issue. The generic manufacturer’s act of providing notice of its paragraph IV certification triggers the time by which a patent owner may file an action for patent infringement and take advantage of a stay of FDA approval of the generic version of the NDA owner’s drug.

If the patent owner fails to initiate a patent infringement action within 45 days after receiving the generic manufacturer’s paragraph IV certification, then the FDA may finally approve the generic manufacturer’s ANDA upon satisfying itself that the generic is equivalent to the brand-name drug. If, however, the patent owner initiates an infringement action against the ANDA filer within 45 days, then the FDA may not finally approve the ANDA until the earlier of either 30 months or the issuance of a decision by a court that the patent is invalid or not infringed by the generic manufacturer’s ANDA. 21 U.S.C. § 355G)(5)(B)(iii).

Additionally, Hatch-Waxman provides a 180-day period of market exclusivity to the first generic manufacturer that files an ANDA containing a paragraph IV certification, commencing on the date the generic manufacturer begins marketing the new drug or, if there is a patent infringement claim against it, from the date the generic manufacturer receives a patent infringement decision in its favor, whichever is earlier. If neither of these conditions occur, the exclusivity period cannot expire and no other generic manufacturer may market its generic version of the affected drug.

Here, Harvard claims that Purdue repeatedly represented that it had “surprisingly discovered” that its controlled-release oxycodone formulation would control pain for “approximately 90% of patients” over a comparatively narrow, four-fold dosage range, much narrower than for other opioid analgesics. Purdue stated that, as a result of this reduced dosage range (and, hence, the simplification of the titration process), “[t]he expertise and time of physicians and nurses, as well as the duration of unacceptable pain patients must endure during the opioid analgesiac titration process is substantially reduced[.]”

However, Harvard claims that Purdue did not have any scientific proof for its key contentions concerning its controlled release oxycodone formulation, but intentionally withheld this from the PTO to get the patents to issue.

In an infringement suit against Endo Pharmaceuticals (an ANDA filer) the court held that the ‘ 912, ‘042, and ‘295 patents were unenforceable because Defendants had intentionally made material misrepresentations to the PTO. The District Court found: “Purdue made a deliberate decision to misrepresent to the PTO a ‘theoretical argument’ and an ‘expectation’ as a precisely quantified result* or ‘discovery.'” (Purdue Pharma L.P., et al, v. Endo Pharmaceuticals, et al S.D.N.Y.).

Harvard now contends that Purdue’s exclusionary conduct prevented generic entry into the relevant market and unlawfully enabled them to sell OxyContin without being subject to generic competition stating that but for their illegal conduct, Endo would have begun marketing generic versions of OxyContin on July 31, 2002, or earlier; and, subsequently, other generic competitors would have entered the market.

Harvard now wants the class members to recover payments for the higher prices for OxyContin than it would have paid for OxyContin and/or for generic oxycodone CR in the absence of anti-competitive conduct.