On January 20, 2015, the FDA issued draft guidelines designed to give developers whose products and applications promote healthy lifestyles (so-called “general wellness products”) direction on when such products qualify as medical devices under Section 201(h) of the Food Drug & Cosmetics Act (the “Act”) and are therefore subject to the Act’s regulatory requirements for devices.
Applicants seeking approval of Abbreviated New Drug Applications (ANDAs) in most cases must perform bioequivalence studies comparing their proposed generic product to the innovator drug listed in the Orange Book, called the “Reference Listed Drug” or “RLD”. Issues have arisen as to whether a RLD sponsor can provide samples for bioequivalence studies when the RLD is subject to a Risk Evaluation and Mitigation Strategy (“REMS”). A REMS is a program design to assure that a drug with a known significant risk or risks can and will be used safely, by a variety of different measures, including, for example, restricted distribution and labeling. The existence of a REMS has been used by RLD sponsors to refuse to sell samples of their RLD drug product to ANDA applicants who are seeking them for use in bioequivalence studies. This has led to litigation over whether it is legal for the RLD sponsor to do so, as will be discussed hereinafter.
In our previous blog post of November 11, 2014, we noted that Celltrion had filed a declaratory judgment action against Kennedy Trust for Rheumatology Research for invalidity of certain patents covering methods of treating rheumatoid arthritis. Celltrion Healthcare Co. v. Kennedy Trust for Rheumatology Research, Case No. 1:14-cv-02256-PAC (S.D.N.Y. 2014). Unlike the other cases in which the biosimilar applicants challenged patents owned by reference product sponsors, this case involved a biosimilar applicants’ challenge to a patent that was not owned by the reference product sponsor (Janssen Biotech, Inc.), but by a licensor (Kennedy Trust for Rheumatology Research). Janssen had a non-exclusive license to the Kennedy Trust patents in suit and Celltrion had voluntarily dismissed its declaratory judgment action of patent invalidity against Janssen on October 23, 2014.
In our blog post of November 18, 2013 (“No Avoiding BPCIA For Biosimilars: No Patent Declaratory Judgment Before Biosimilars Application is Filed”), we discussed the decision of the U.S. District Court for the Northern District of California holding that a biosimilars applicant could not avoid the Biologics Price Competition and Innovation Act (“BPCIA”) patent exchange process by filing a patent declaratory judgment prior to filing its 351(k) biosimilar application. That case – Sandoz, Inc. v. Amgen Inc. – is on appeal to U.S. Court of Appeals for the Federal Circuit. (Appeal docketed as No. 14-1693, Fed. Cir., December 13, 2013). While that case, involving Amgen’s ENBREL® product, will decide the issue of whether BCPIA patent process can be avoided by filing a declaratory judgment prior to filing of the 351(k) application, another dispute has arisen between Sandoz and Amgen as to whether the patent and application certification and exchange process in Section 351(l)(2) of the Public Health Service Act is mandatory or permissive.
Mobile medical and health applications have been in a boom phase for the past few years, but despite this trend, one group of entities has had trouble breaking into the mobile medical app sphere, pharmaceutical (i.e., pharma) companies. A recent report published by Research2Guidance, indicates that most major pharmaceutical companies have had trouble generating downloads for their health-related apps and even when they do, have trouble getting users to continue using their products. For example, some of the most successful pharma companies have only a handful of apps and less than 1 million active users. By contrast, there are more than a hundred thousand health-related apps on Google’s Play store and Apple’s iTunes store based on recent calculations, and some experts estimate that there could be as many as 500 million users of medical applications by 2015. What is the cause of this inability to generate downloads or hang on to users? There are a few possibilities.
Under what is commonly known as “Noerr-Pennington immunity,” persons exercising their First Amendment right to petition the government for redress are generally immune from antitrust liability, even though their actions may harm competition or competitors. The Supreme Court has recognized an exception to this immunity for “sham litigation,” which it has defined as litigation that is “objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits,” and is motivated by a desire “to interfere directly with the business relationships of a competitor.” (Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60-61 (1993)).
On April 7, 2014, the Food and Drug Administration (FDA), in consultation with the Office of the National Coordinator for Health Information Technology (ONC) and the Federal Communications Commission (FCC) released a draft report addressing a proposed strategy and recommendations on an “appropriate, risk-based regulatory framework pertaining to health information technology.”
Apple’s apps store lists close to a 100,000 health apps. Together with wearable technology, direct-to-consumer testing services, and greater consumer participation in the decision to purchase health insurance, the healthcare market in the United States is undergoing a significant transformation. Whether and how to regulate this evolving market is subject to substantial discussion and debate.
On November 15, 2013, the Federal Trade Commission (“FTC”) adopted special rules for determining whether “exclusive” licenses of pharmaceutical patents are required to be reported to the FTC and the Antitrust Division of the Department of Justice under the Hart-Scott-Rodino Premerger Notification requirements as asset transfers/acquisitions. See 78 Fed. Reg. 68705, et seq. While exclusive licenses of any patent regardless of industry have always been subject to reporting under the Premerger Notification rules as asset transfers/acquisitions, assuming they met the monetary thresholds for reporting, the FTC, adopted new rules specifically targeting exclusive licenses of patents of pharmaceutical companies.
The question every false claims defendant must face is whether to pursue litigation or simply concede and settle. While many shy away from litigation, opting for an expensive but certain resolution, for Johnson & Johnson and its subsidiary Janssen Pharmaceuticals, Inc., the decision to pursue their day in court has saved J&J over $330 million.