GSK, Teva on-again, off-again lawsuit is back on: Will 'skinny labeling' get a reprieve?

court decision
Teva is getting a second chance to plead its use of a skinny label for GlaxoSmithKline's heart med Coreg—or face a reinstated $235 million penalty. (Getty Images)

Just when it seemed generic drug company carve-outs—aka “skinny labels”—might be in permanent peril, a federal appeals court is giving Teva another chance to prove its case.

GlaxoSmithKline won an appeals panel ruling against Teva in the fall—and the $235 million judgment that went with it. But Teva and eight other generic drug makers filed amicus briefs asking for the full Federal Circuit Court to review the decision. Wednesday, they said yes.

GSK originally won a $235 million patent infringement jury verdict against Teva, which had launched a copy of the branded heart med Coreg. The generic could only be sold for Coreg initial indications—hypertension and left ventricular dysfunction after a heart attack—because GSK maintained patents on its other use for congestive heart failure.

GSK's argument? Teva marketed its generic Coreg as equivalent to the brand, which would necessarily cover all of its approved indications—including the one still on patent. GSK presented Teva press releases and marketing materials to press its case.

The district court judge disagreed with the jury and tossed out their verdict, so GSK appealed. Then, in October, a three-judge circuit court panel decided 2-1 to back the jury's original verdict. Now, the appeals court will review the case "en banc," which means the court's entire complement of 12 judges will hear arguments.

RELATED: 'Skinny labeling' under fire: GSK, Teva federal court decision undermines common practice

The new hearing brings new hope for Teva—and for other generic drug makers, too. Concerns have been mounting in the pharma industry that the decision would have a chilling effect on future generic carve-outs and thus thwart cheaper copies until all of a brand's approved indications are off patent.

Lawsuits stemming from the decision are already in the works—Amarin’s lawsuit regarding Vascepa, for instance, which analysts and consumer groups say is a case in point. Amarin filed suit in November after the Teva decision. It claims Hikma Pharmaceuticals used a skinny label—the drug’s original indication as an add-on drug to lower triglyceride levels for adults with very high levels—to induce doctors to prescribe the generic for the broader cardiovascular risk-reduction approval it won later.

RELATED: Teva back on the hook for $235M to GSK for heart drug infringement

Cantor Fitzgerald analysts pointed to the GSK and Teva decision, noting that if Amarin “can leverage this precedent to deter/prevent generics from selling into the larger, multibillion-dollar cardiovascular risk-reduction opportunity, we think this would be upside to Street expectations.”

Even GSK seems to realize the potential for a potentially unwelcome precedent, pointing out that its case is “fact-specific” to Teva’s actions, such as keeping old press releases on its website, according to a Bloomberg Law report. The carve-out options “continue to remain viable if properly done,” GSK said.