Is the battle over 'skinny' generic labels headed to the Supreme Court?
The US appeals court for the federal circuit recently denied Teva Pharmaceuticals’ request to rehear a case on so-called “skinny” labels that sent shockwaves across the generic drug industry.
That denial means that Teva may shift its appeal to the US Supreme Court, which is a distinct possibility, given how high-stakes this case is, and how it affects almost every generic drug and reference product. Teva did not immediately respond to our request for comment but told other media outlets that it is taking the case to SCOTUS, which experts said may actually hear the case.
Michael Carrier, distinguished professor at Rutgers Law School, told Endpoints News that “given how important this ruling is to a central pathway that generics have used to reach the market, I wouldn’t be surprised if Teva took this to SCOTUS. In the meantime, generic companies may be more hesitant to use this strategy given what happened to Teva.”
Normally, new generic drugs can enter the market for one or several of the approved indications of its brand-name counterpart’s label. If the label does not contain all of the approved indications of the reference product, the new generic drug label is then known as a “skinny” label. Generic drug companies have used these skinny labels for years, and there haven’t been any major legal issues.
But that precedent is beginning to change as GlaxoSmithKline defeated Teva in a recent court case involving Teva’s skinny label for GSK’s beta-blocker Coreg (carvedilol), which Teva launched in 2007.
At the time, Teva’s carvedilol generic label included only two of the three Coreg indications: one to reduce cardiovascular mortality in patients suffering from left ventricular dysfunction following a heart attack, and another related to hypertension. Teva did not initially win approval for the third indication related to congestive heart failure.
But GSK sued, alleging that by leaving the heart attack indication language on the skinny label, Teva induced infringement, or intentionally encouraged something it knew was infringing, i.e. the third indication.
The court’s opinion against Teva in the case noted that Teva’s press releases and marketing materials touted its generic carvedilol as “indicated for treatment of heart failure and hypertension.”
GSK ended up winning the case before a jury, as well as $235 million from Teva. A district court then overruled that decision, but an appeals court reversed that ruling and reinstated the original jury trial finding of patent infringement and the $235 million for GSK.
Now, the Federal Circuit Court of Appeals agrees that the jury’s decision should be reinstated, and it’s not going to hear the case again.
The judges who denied the re-hearing noted that “substantial evidence supports the jury’s verdict that Teva actively encouraged infringement.”
Chief judge Kimberly Moore said in the majority opinion:
I too am concerned that GSK’s representations to the FDA are at odds with its enforcement efforts in this case. It would be troubling to hold Teva liable for relying on GSK’s representations to the FDA. But that concern does not readily fit the standards governing inducement, given the sufficient evidence of active encouragement and that Teva never disputed in this court the jury’s finding that it knew that the uses it encouraged, through the partial label and otherwise, infringed.
But the minority of judges who wanted the case to be re-heard, led by Judge Sharon Prost, called out the decision as “disappointing” in its failure to address some of the key questions. Prost explained that given the case is at the “unquestionably important” cross-section of patent law and pharma regulation, the “panel majority’s treatment of these issues has raised enough alarm to warrant the full court’s attention.”
She also explains how this decision to not rehear the case fails to “confront the obvious question: how could this label, which faithfully followed what the brand said about its own patents and which the FDA required Teva to use, itself be evidence that Teva intentionally encouraged something it knew would infringe?”
But in terms of the wider implications, and upping the stakes for SCOTUS to weigh in, Moore wrote that because most of these skinny labels contain language “that (with clever expert testimony) could be pieced together to satisfy a patent claim, essentially all of these cases will now go to trial.” She added (italics are hers):
The system can’t work like this. Congress enacted the skinny-label provisions as a way for generics to avoid inducement liability—and thus litigation itself.
The timeline for another Teva appeal to SCOTUS remains unknown, but all industry eyes will be glued to any near-term skinny label decisions.
A GSK spokesperson told Endpoints, “We have no comment at this time because this is ongoing litigation.”