Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Novartis allegedly used sham patent litigation to delay generic competition for Gleevec, (Nov 4, 2015)

By Linda O’Brien, J.D., LL.M.

Drug manufacturer Novartis Pharmaceuticals engaged in sham patent litigation and unlawfully listed follow-on patents in the FDA’s Orange Book in order to delay entry of a generic version of its leukemia treatment drug Gleevec and to maintain its monopoly power, according to a complaint filed in the federal district court in Boston (Minnesota Laborers Health and Welfare Fund v. Novartis Pharmaceuticals Corp., November 3, 2015).

Swiss pharmaceutical company Novartis AG—through its subsidiary, Novartis Pharmaceuticals Corp.—manufactures and distributes the prescription drug imatinib mesylate for the treatment of chronic myeloid leukemia (CML) under the brand name “Gleevec.” Minnesota Laborers Health and Welfare Fund is an employee welfare benefit plan that pays benefits to plan participants for prescription drugs.

According to the complaint, in 1996, U.S. Patent No. 5,521,184 (the ‘184 patent) was issued to Ciba-Geigy, the predecessor to Novartis, for imatinib mesylate, the active ingredient in Gleevec. Accounting for applicable extensions, the ‘184 patent was set to expire in July 2015. The patent was later assigned to Novartis and Novartis listed the ‘184 in the U.S. Food and Drug Administration (FDA) Orange Book.

After 1996, Novartis looked to extend the patent protection of its current portfolio, or at least for imatinib mesylate. Although its scientists had published articles about the invention of imatinib, publicly disclosed its specific salt form, and were aware that the polymorphic form of imatinib mesylate had been achieved using common formulation techniques, Novartis proceeded to seek a follow-on secondary patent for imatinib mesylate. If successful, Novartis would be able to extend its patent protection on imatinib mesylate beyond the life of the compound patent, the complaint states.

The action also alleges that, in 2000, Novartis filed application number 09/463,097(‘097 application) for a follow-on, secondary patent, claiming that a beta crystalline form of imatinib mesylate was a new invention. The representations in the application were misleading, since the company’s scientists had already publicly-disclosed the specific salt form to be used, imatinib mesylate, or that mesylate salts were common. Subsequently, the U.S. Patent and Trademark Office (USPTO) issued a rejection of the ‘097 application’s claims. However, Novartis successfully appealed the rejection to the Patent Board and the ‘097 application issued as U.S. Patent No. 6,894,051 (‘051 patent), which expires in November 2019. The USPTO also approved Novartis’ application to extend the term of the ‘184 patent for the original compound until July 2015 and issued a third patent, U.S. Patent 7,554,799 (‘799 patent) covering Gleevec.

In 2001, generic drug manufacturer Sun Pharm filed an application with the FDA to market a generic imatinib mesylate and sent notice to Novartis that its ‘051 patent was invalid or unenforceable. After the FDA granted tentative approval to Sun’s application to market a generic version of Gleevec, Sun filed suit against Novartis seeking a declaratory judgment that it was not infringing the ‘051 patent. Less than a year into the litigation, Novartis and Sun entered into a settlement, which permitted Sun to launch its generic version of Gleevec in February 2016. Since June 2014, four other generic drug manufacturers have filed applications for generic Gleevec. Novartis has responded by filing patent infringement suits against each of the four manufacturers, the complaint states.

Gleevec currently costs more than $9,000 a month per patient in the U.S., due to a lack of generic competition. In countries where generic Gleevec is available, the monthly cost is approximately $2,500 a month per patient. But for Novartis’ ongoing anticompetitive scheme to delay generic Gleevec competition in the U.S., a generic version allegedly would have been available in July 2015. Patients and purchasers are compelled to pay higher prices for Gleevec as a result of the defendants’ illegal conduct, the complaint claims.

Generic versions of branded drugs contain the same active ingredients and are determined by the FDA to be just as safe and effective as their branded counterparts. The only material difference between generic drugs and brand name versions is the price. Generic drugs are typically at least 25 percent less expensive than the brand name drug and the discount increases to 50 to 80 percent when there are multiple generic drug manufacturers competing in the market for a given branded drug. Consequently, the launch of a generic drug usually results in significant cost savings to drug purchasers, the complaint states.

The plaintiff asserts claims for unjust enrichment, unfair and deceptive trade practices, monopolization, and attempted monopolization in violation of state law. The action seeks declaratory relief, damages, interest, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 1:15-cv-13725-ADB.

Attorneys: Thomas G. Shapiro (Hagens Berman Sobol Shapiro LLP), Jeffrey L. Kodroff (Spector Roseman Kodroff & Willis, P.C.), Karen Hanson Riebel (Lockridge Grindal Nauen PLLP), William H. London (Freed Kanner London & Millen LLC), and Christian M. Sande (Christian Sande LLC) for Minnesota Laborers Health and Welfare Fund.

Companies: Novartis Pharmaceuticals Corp.; Novartis AG; Novartis Corporation

News: Antitrust MassachusettsNews