Generic drug company carve-outs, or “skinny labels,” may be in danger thanks to a recent federal court case. Some generics makers, lawyers and industry watchers believe the recent federal appeals court ruling in favor of GlaxoSmithKline and heart medicine Coreg over Teva’s use of a skinny label for its generic may strip the legislative protection.
The appeals court ruled that even though Teva used a skinny label—a common generic carve-out of a branded drug’s off-patent indications—it could still be liable for infringement. The U.S. Federal Court of Appeals reversed a district court ruling and reinstated the original jury trial finding of patent infringement and a $235 million payout to GSK.
The 2-1 decision determined that Teva marketed the drug the same as Coreg no matter the skinny label. GSK presented evidence including press releases and marketing materials that judges said infringed GSK's remaining patents.
Now Teva, with the backing of eight other amicus briefs from other generic drug makers, including Novartis' Sandoz and Mylan, nonprofits and even one of the former congressmen behind the Hatch-Waxman Act, is asking the full Federal Circuit Court to review the decision. However, the company is running out of legal options.
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Former California Rep. Henry Waxman, who co-sponsored the original 1984 drug legislation, said the decision is inconsistent with the act and predicted a “devastating impact on the Hatch-Waxman Act’s generic drug program,” he wrote in his supporting brief, according to Bloomberg Law.
Another Bloomberg Law column this week by Matthew Lane, executive director of Coalition Against Patient Abuse said, “The repercussions from this ruling cannot be understated. As a result, Teva has been subjected to a $234 million judgment, including damages for the period of time that it used a template skinny label the FDA itself provided. And Teva made only $74 million in sales during the relevant period.”
The fact that the FDA provides instruction for skinny labeling—in this case, it directed Teva to add the third indication that was still under patent at the time in 2015—adds to concerns for the continued legal use and even retroactive consequences.
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“This decision dramatically changes the risk exposure for generic manufacturers that have a drug on the market with a skinny label. The Federal Circuit has paved the way for a potential finding of induced infringement against every skinny-label drug,” wrote a team from the Wilson Elser Moskowitz Edelman & Dicker law firm in a National Law Review article last month.
Indeed, as Lane noted in the Bloomberg article, lawsuits are already being filed against other skinny label generic drugs and their manufacturers stemming from the decision.
Even the dissenting judge in the 2-1 circuit court appeals decision in favor of GSK agreed the ruling essentially erodes the Hatch-Waxman provision for carve-outs. The decision “nullifies Congress's statutory provision for skinny labels—creating liability for inducement where there should be none," she wrote.