High Court’s Narrow ‘Skinny-Label’ Case Has Broader Implications

A US Supreme Court fight over how branded drugs’ makers must plead induced infringement in “skinny-label” patent suits could both reshape the pharmaceutical industry’s financial and legal calculus and influence how soon lower-cost generics reach patients.

Skinny labels on generic drugs include only uses not covered by a brand-name drug’s patents, allowing copies approved by the US Food and Drug Administration to launch for unpatented uses.

Two recent appellate decisions have allowed induced-infringement claims against generics makers to survive dismissals—most recently when Amarin Pharma Inc. sought to advance a suit targeting a generic competitor of its heart-disease drug Vascepa. The Federal Circuit ruled the generic’s skinny label, when considered along with related promotional statements, could be read as encouraging doctors to prescribe it for off-label uses covered by the branded-drug’s patent.

Central to those cases are “method-of-use” patents—follow-on patents that extend a pharmaceutical company’s legal monopoly over specific uses of a branded drug but not the compound itself. Nearly half of generic versions of drugs covered by method-of-use patents are brought to market using skinny labels, according to an amicus brief filed by the Association for Accessible Medicines, a generics-industry aligned group.

However the high court rules, its decision is likely to affect how risky it is to market drugs with skinny labels and, conversely, the value of method-of-use patents for branded-drug makers.

The Supreme Court granted Hikma Pharmaceuticals Plc’s petition to review a US Court of Appeals for the Federal Circuit decision reviving Amarin’s claims of induced infringement of two Vascepa patents. Hikma’s skinny label carved out those patented uses, but the appeals court said the company made promotional statements that could be read as encouraging doctors to prescribe for infringing uses.

The Federal Circuit’s decision “has led to a lot of uncertainty as to what types of statements may be relevant” to inducement when a generic uses a carve-out, said Chad Landmon, chair of Polsinelli’s Hatch-Waxman and biologics practice.

Clarity from the justices could affect more than the pharmaceutical companies on either side of the branded/generic divide, said Taylor Weilnau a patent attorney who specializes in life sciences at McDonnell Beohnen Hulbert & Berghoff, which represents both branded- and generic- drug companies.

The case’s ramifications extend to physicians and patients, because skinny labels allow generics to hit the market earlier, and may also affect other patent-heavy industries where induced-infringement theories can also be applied, she said.

Pleading Fight

Several pharma patent attorneys following the case described it as essentially procedural in nature and said the most likely outcome is a recalibration of what patent owners must allege for their skinny-label suits to survive a motion to dismiss.

“Skinny labeling is alive, well and thriving,” said Irena Royzman, a partner at Orrick, Herrington & Sutcliffe who represents branded-drug makers in patent litigation.

Hikma is effectively asking for a heightened pleading standard or a safe harbor based on labels alone, Royzman said, but it’s “unlikely” the Supreme Court will endorse either approach or disrupt the carve-out system.

That level of specificity might include more detail than currently required on who the alleged audience was—doctors and pharmacists, for example—what statements were made beyond the language on the drug label, and how those allegations link the statements to the patented use.

Shashank Upadhye, a managing partner at Upadhye Tang LLP who represents both branded- and generic-drug companies in patent and FDA litigation, similarly cast the dispute as a procedural fight while downplaying the ultimate impact.

“If the Supreme Court tightens the specificity requirement, well, guess what? It’s just going to go back down to the trial court level, where Amarin is going to be able to refile a complaint,” he said.

The practical effect of a higher bar would be branded-drug manufacturers having to spell out more granular “who, what, where, when, why” facts tied to the accused statements, said Upadhye, who’s working on an academic article on inducement pleading standards he intends to submit to law journals.

Course Correction?

Some critics, however, contend the Federal Circuit veered off-course with its ruling in Hikma v. Amarin and an earlier decision that reinstated GlaxoSmithKline’s $235 million jury induced infringement verdict over Teva’s skinny label generic offering.

That court has made method-of-use patents more powerful at the expense of drug affordability, according to Charles Duan, a patent law professor at American University who wrote an amicus brief urging the Supreme Court to side with Hikma.

“As a general matter for patent law,” the Federal Circuit’s approach to skinny-label liability and induced infringement “seems to be pushing things in very weird directions that seem to be encourage game playing,” Duan said. He argued that a method-of-use patent covering an extremely niche treatment could be leveraged to block generic competition for a much larger group of patients.

A victory for Hikma, though, may be less dramatic than it might seem, Upadhye said.

“Even if Hikma quote-unquote wins, in one sense, all they’re doing is winning the right to go back to trial,” he said, “and then seeing whether Amarin will refile a complaint with much more specificity, or whether Amarin will say, ‘Well, I guess I can’t, so I’ll just drop the case.’”

Winston & Strawn represents Hikma. Amarin is represented by Perkins Coie.

The case is Hikma Pharm. USA Inc. v. Amarin Pharma Inc., U.S., 24-889.