Norvasc: Federal Circuit will reverse trial & rule for Pfizer

Aug 31, 2003 by Jeff Stewart

August 31 2003

INTRODUCTION

On July 9, 2003, the Federal Circuit Court heard oral argument in Pfizer’s Norvasc© appeal.  A trial judge had dismissed Pfizer’s patent infringement suit seeking to block Dr. Reddy’s Laboratories’ launch of the generic version of this hypertension and angina drug (amlodipine).  The patent term was extended from 2003 to 2006 pursuant to §156 of the Hatch Waxman Act.  This poorly drafted section of the statute was intended to restore the period of patent exclusivity that the patentee lost during the FDA approval process.[1]

In ruling against Pfizer, the trial judge held that patent term extensions under §156 apply only to products that are identical to the patentee’s (Pfizer’s) and cannot be applied to slightly different products that also infringe the patent.

Verdict has reviewed the appellate briefs, and an audiotape of the oral argument, and predicts that the appeals court will reverse the trial judge’s dismissal of Pfizer’s complaint and remand the case to New Jersey where discovery will begin.  Verdict assesses the chance of reversal in favor of Pfizer at 80% or better. Because of the delays this will cause to any launch by Dr. Reddy, Mylan could benefit.

The Panel of Judges

By background, judicial temperament, and political persuasion, the three-judge appeals panel appears receptive to Pfizer’s patent-strengthening position on appeal.  The trial judge, who is a Clinton appointee, accepted Dr. Reddy’s patent-weakening position.  Although Republican presidents appointed all three appellate judges, it is far more important to know that two of three appellate judges were formerly corporate patent lawyers.

The Facts

Pfizer obtained a “patent term extension” for its patent # 4,572,909 from February 2003 to July 2007.  The patent office granted this three-and-a-half year extension because the FDA’s regulatory process delayed Norvasc’s launch.  The ‘909 patent covers all salt forms of amlodipine, the active ingredient in Norvasc.

Dr. Reddy admits that its proposed product (amlodipine maleate) would have infringed the claims of the ‘909 patent before the original expiration date in 2003.  Dr. Reddy also admits that it proposed amlodipine would be sold for the same hypertension and angina treatments as Pfizer’s product.

Although both companies use amlodipine, they use different salts of the same active ingredient:  Pfizer’s Norvasc is amlodipine bysylate and Dr. Reddy’s product will be amlodipine maleate.

Another case asserting the ‘909 patent against Mylan is pending in Pittsburgh.

The Issue

Since Dr. Reddy admits that its proposed product infringes the ‘909 patent, the only issue on appeal is whether the §156 (b) of the Hatch Waxman Act grants an extension that covers only Pfizer’s product (amlodipine bysylate) or whether it covers all salts under ‘909 including Dr. Reddy’s proposed product (amlodipine maleate). The only issue on appeal is whether Dr. Reddy’s proposed generic Norvasc would infringe the ‘909 patent between February 2003 and July 2006.

The Statute

Section §156(b) of the Hatch Waxman Act provides:

“… the rights derived from any patent the term of which is extended under this section shall during the period during which the term of the patent is extended –

(1)   In the case of a patent which claims a product, be limited to any use approved for the product ….”

OPINION BELOW

The trial court held that the only product entitled to an extended term is Pfizer’s amlodipine bysylate. The trial judge decided that Dr. Reddy’s amlodipine maleate did not infringe the ‘909 patent because the judge decided that the patent extension did not apply to any salt of amlodipine except amlodipine bysylate (Pfizer’s product).  The trial judge’s opinion interprets the statutory language of §156(b) quoted above to mean that only those formulations that are identical in use [as specified in the NDA or by a “paper NDA” pursuant to §505(b)(2)] and identical in chemical composition (i.e. identical products) are granted the extended term of patent exclusivity.  The judge rejected Pfizer’s argument that the statute contains only a single requirement for identical use and accepted Dr. Reddy’s position that the two requirements of identical use and identical composition are “inherent in a logical reading of the statutory language.”

Pfizer had also argued that §156 (f) defines  “drug product” to include “any salt or ester of the active ingredient.” The court rejected Pfizer’s definitional argument because:

    • Pfizer chose to market Norvasc in the amlodipine bysylate salt form;
    • The FDA never approved amlodipine maleate for Pfizer; and,
    • Pfizer’s term extension application to the patent office limited Norvasc’s active ingredient to “amlodipine bysylate.”

Verdict believes this statutory interpretation by the trial judge is flawed.

THE BRIEFS

Pfizer argues that patent term extensions under §156 extend to the full scope of the patent claims not just to the product approved by the FDA.  Consequently, Pfizer argues that the trial judge was wrong to define products to mean only FDA approved products.  The Dr. Reddy brief seeks to uphold the decision of the trial judge.  Pfizer’s appeal generated significant industry support.

The Washington Legal Foundation, the Pharmaceutical Research and Manufacturers of America, Eli Lilly, Merck, Wyeth and Takeda Chemical Industries filed Amicus (Friend-of-the-court) briefs urging reversal.  Amicus briefs can only help Pfizer (by underscoring the importance of the case and adding to the credibility of its arguments), but they are usually not decisive.

The addendum to Pfizer’s reply brief shows that Congress considered and rejected the dual requirement of identical use and identical products.  The reply brief also contains a detailed and convincing explanation of why neither the cases relied upon by Dr. Reddy are ultimately irrelevant to this case.

ORAL ARGUMENT CLEARLY FAVORED PFIZER

Justices Newman and Lourie;

Asked Pfizer’s lawyer “softball” questions and interrupted him to agree with the arguments that he was making;

Asked Dr. Reddy’s lawyer hostile questions and interrupted him to note that his point was irrelevant;

Appeared to value the policy underpinnings of the patent term restoration;

Appeared to accord great significance on the issue of whether the two salt forms of amlodipine were the same “product” that

    • Pfizer’s earliest clinical studies submitted to the FDA involved the maleate salt (which Dr. Reddy argues is a different product); and
    • The patent office in granting the term extension credited Pfizer’s time involved with the maleate salt;
    • Dr. Reddy’s “paper NDA” relied on Pfizer’s clinical studies with the maleate salt of amlodipine;
  • Clearly shared Pfizer’s view of the case in the assumptions inherent in the  questions to Dr. Reddy’s;
  • Forced Dr. Reddy’s counsel to repeat arguments which the Justices had already discredited; and
  • Appeared to side with Pfizer’s interpretation of the two key cases on which Dr. Reddy relies.

Chief Judge Mayer was, as customary for him, not particularly involved in the oral argument but is likely to share the view of the other members of the panel.

FURTHER PROCEEDINGS

Verdict assesses the chance of reversal in favor of Pfizer at 80% or better.

Further proceedings will be an uphill battle for Dr. Reddy:

  • Reversal will mean remand to the New Jersey Court for discovery, summary judgment motions and trial;
  • Pfizer’s briefs claim that Dr. Reddy admits infringement and Dr. Reddy’s brief does not deny infringement; and therefore,
  • The issues on remand will be limited to validity and enforceability.
  • The burden on defendants to prove invalidity and unenforceability is higher than in proving non-infringement;
    • It would be particularly difficult for Dr. Reddy to obtain summary judgment of invalidity or unenforceability because the trial judge would be gun-shy after having been reversed.
  • Finally, invalidity, unlike non-infringement, benefits all generics.

SETTLEMENT PROSPECTS

The poor chances of success on remand to the trial court when coupled with the diminished rewards of success in the market, may influence Dr. Reddy to seek a graceful exit from the case by way of settlement with Pfizer in case of reversal:

  • Pfizer filed its complaint against Dr. Reddy on 6/12/02 so the Hatch-Waxman 30 month stay period on FDA approval of Dr. Reddy’s launch will expire 12/12/04;
  • Because Pfizer filed its complaint against the Mylan case in Pittsburgh three months later on 9/9/02, Dr. Reddy is the first filer so it has the 180-day exclusivity;
  • But Mylan has a pre-trial conference scheduled for 3/19/04
  • Since the decision in this case will not be issued until late ’03, and since discovery after remand will take 18 months, Dr. Reddy will not get to trial until mid or late ’05.
  • So Mylan could easily get to trial before Dr. Reddy.
  • Assuming Mylan can prove invalidity, then Mylan would take the 180 exclusivity from Dr. Reddy.
  • Assuming the Federal Circuit reverses (as Verdict predicts), there are strong incentives for Dr. Reddy to avoid further litigation expenses by settling with Pfizer on unfavorable terms.

ADVANTAGE MYLAN…?

Verdict has not studied and does not know the merits of either the Mylan case or what would be left of the Dr. Reddy’s case on remand.  Still, a reversal by the Federal Circuit could ultimately benefit Mylan by making it the leading candidate for the 180-day generic exclusivity period if Mylan can establish that the ‘909 patent is invalid or that Mylan does not infringe it.

[1] On December 17, 2002, only a week after the §12(b)(6) motion to dismiss was heard, the trial judge issued a 23-page oral opinion from the bench that dismissed Pfizer’s complaint.  The dismissal thus occurred before any discovery depositions had been taken.  The timing of the decision suggests that the trial judge intended to force the appeals court to resolve of the statutory ambiguity before discovery occurred.

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