Apotex, Waxman take sides against pharma in Supreme Court generics cases

The Supreme Court is hopping with pharma news these days. As the top U.S. court prepares to hear arguments tomorrow in the big generics-liability case, some key lawmakers in the generics world are balking at the whole federal-preemption idea. Meanwhile, Apotex has filed a brief in the pay-for-delay case nearing its hearing date--and this generics maker sides with the Federal Trade Commission. Against the drug industry.

The generics-liability case has been wending its way through the courts for years now, with a debate at each major juncture. Now, the Supreme Court will have its say. The argument is that generics makers can't be held liable for patients' injuries because the FDA approved the branded version and the label warnings attached. The Justice Department filed a brief in favor of that idea, saying that FDA has the say-so on drug safety.

But Rep. Henry Waxman, of Hatch-Waxman Act fame, says Congress never meant for generic-drug legislation to shield companies from liability suits in state court. In a legal brief, Waxman says FDA approval shouldn't preempt lawsuits over drug safety. Congress has never passed a provision allowing FDA approval to shield companies from lawsuits, he said. And he cited a 2009 case noting that even FDA has said that lawsuits play an important role in drug oversight.

"The decision whether to preempt state-law claims, for decades left to Congress, properly remains with Congress," the brief states (as quoted by The Hill).

The pay-for-delay case has its own saga-length back story. Suffice it to say that the FTC sees certain patent settlements as anti-competitive. The agency believes that the deals between branded drugmakers and their would-be copycats delay the launch of cheap generics, costing consumers and government payers billions.

Drugmakers, generic and branded alike, are in favor of the deals as a way to curtail litigation costs and set an agreed-upon date for generic launch. The settlements usually involve a cash payment from the branded company to the patent-challenging generics maker.

A series of industry heavyweights has filed briefs supporting the drugmakers in the case, AbbVie ($ABBV) and Actavis (which used to be Solvay Pharmaceuticals and Watson Pharmaceuticals, respectively). The Generic Pharmaceuticals Association, Merck ($MRK) and Bayer are among them.

But now, the Canadian drugmaker Apotex has filed its brief on the FTC's side. As The Wall Street Journal reports, Apotex says the patent settlements in question simply allow branded drugmakers and generics companies to "divvy up ill-deserved monopoly profits."

And yes, Apotex says, that poses an "enormous cost" to consumers. Among other things, Apotex says these pay-for-delay settlements discourage other patent challengers. "[T]he system envisions patents getting tested," Apotex's director of government affairs, Steve Giuli, told the Journal. "There are going to be a lot of cases where generics litigate and win."

- see The Hill's piece
- get the Reuters story
- read the WSJ article (sub. req.)