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Generics can challenge overly broad use codes – U.S. Supreme Court

On April 17, 2012, the U.S. Supreme Court released its decision in Caraco Pharmaceutical Laboratories Ltd. et al v. Novo Nordisk A/S et al, reversing a decision of the Court of Appeals for the Federal Circuit. The matter relates to whether Caraco has a statutory basis to challenge incorrect use code submitted to the FDA by Novo Nordisk in relation to its PRANDIN (repaglinide) product.


Use Codes

On approval, a brand company must submit a description of any method of use patents it holds. The wording of this use code is entirely determined by the brand company and the FDA takes no steps to ensure that the information is accurate. Where a method of use patent is listed on the Orange Book, a generic manufacturer that seeks to market a product prior to the expiry of that patent has two choices: (a) it can file a pIV certification alleging that the patent will not be infringed and/or is invalid; or (b) it can carve-out the patented method of use from its proposed label and file a viii statement (also known as a “little eight” statement) that it is seeking approval to market its drug for one or more uses not covered by the brand’s patents. In the latter case, the FDA will not approve an ANDA with a viii carve-out where any indication remaining in the carved out label overlaps with the brand-supplied use code.

Factual Background

PRANDIN is approved as monotherapy, in combination with metformin and in combination with thiazolodinediones (TZDs) for the treatment of diabetes. In 2004, Novo Nordisk obtained US patent 6,677,358 claiming a method of treating diabetes by administering repaglinide in combination with metformin. In respect of the ‘358 Patent, Novo Nordisk submitted the following use code

[u]se of repaglinide in combination with metformin to lower blood glucose.

In 2005, Caraco submitted an ANDA with a pIV certification that the ‘358 patent was invalid or would not be infringed and was sued for infringement under the Hatch-Waxman regime. While the pIV litigation was ongoing, Caraco amended its ANDA by filing a viii statement and carving out the use of repaglinide in combination with metformin from its proposed label.  Before Caraco’s ANDA was approved, Novo Nordisk amended the PRANDIN label to replace the three separate uses with a single indication that PRANDIN “is indicated as an adjunct to diet and exercise to improve glycemic control in adults with type two diabetes.” In conjunction with this label change, Novo Nordisk changed the use code of the ‘358 patent to:

[a] method for improving glycemic control in adults with type two diabetes.

Since Caraco’s ANDA was still seeking approval for the use of repaglinide as a monotherapy and in combination with TZD, Caraco’s proposed label overlapped with the new use code.  Further, since the new use code overlapped with all three approved uses of PRANDIN, the FDA determined that a viii carve-out was not available. Caraco then brought a counterclaim in its ongoing pIV litigation seeking to force Novo Nordisk to correct the use code. The statutory counterclaim provision, 21 U.S.C. §355(j)(5)(C)(ii)(I), was added to the Hatch Waxman regime in 2003 and provides as follows:

If an owner of the patent or the holder of the approved application under subsection (b) for the drug that is claimed by the patent or a use of which is claimed by the patent brings a patent infringement action against the applicant, the applicant may assert a counterclaim seeking an order requiring the holder to correct or delete the patent information submitted by the holder under subsection (b) or (c) on the ground that the patent does not claim either—

(aa) the drug for which the application was approved; or

(bb) an approved method of using the drug.

Caraco was initially successful on summary judgment, but the Court of Appeals for the Federal Circuit subsequently reversed (Justice Dyk dissenting), holding that:

(a)“an approved method..” in the counterclaim provision requires that the ANDA applicant show that the patent does not cover any approved method of use; and

(b)the counterclaim provision was limited to correcting or deleting patent numbers and expiration dates only – and did not extend to correcting or deleting use codes.

Supreme Court’s opinion

While acknowledging that the counterclaim provision is not “altogether free of ambiguity”, Justice Kagan, writing for a unanimous Court, looked to the context of the entire statute to conclude that the counterclaim provision does allow an ANDA applicant to challenge an improper use code. The Court interpreted the phrase “not an” in the statutory counterclaim provision to mean not a particular approved method of using the drug. This construction was also supported by the statutory scheme, including the viii carve out, that “contemplates that one patented use will not foreclose marketing a generic drug for other unpatented ones.” A company may bring a counterclaim to show that a method of use is unpatented because establishing that fact allows the FDA to authorize a generic drug via section viii.

The Court also held that the term “patent information” in the counterclaim provision is not limited to patent number and expiration dates. Patent information submitted under subsection (b) or (c) refers to patent information provided as part of the “comprehensive scheme of regulation” premised on those subsections, and must include use codes. In support of this construction the Court also relied on the language in the counterclaim provision that an ANDA applicant may seek an order to “correct” patent information. The Court did not accept that Congress intended this provision to allow for the correction of “scrivener’s errors” in patent numbers, the only purpose proposed by Novo Nordisk.

Justice Sotomayor wrote a concurring opinion noting that an ANDA applicant faced with an overbroad use code must file a pIV certification, hope to get sued, bring a counterclaim seeking to correct the use code, and litigate the counterclaim all in order to do what it always wanted to do – file a viii statement carving out the patented use. In these circumstances, where a brand does not start a pIV infringement suit, the ANDA appliction may be approved with a label materially identical to that of the brand manufacturer and risk inducing others to infringe the patented use. In light of these difficulties, Justice Sotamayor concluded that a “fix is in order, but it must come from Congress or the FDA.”

The matter has been remanded back to the CAFC for further proceedings consistent with the Supreme Court’s opinion.

A copy of the Supreme Court’s slip opinion maybe found here.