Lung-Disease Drug Fight Exposes Fault Lines in Patent System

United Therapeutics Corp. is taking its founder’s ethos to “make generic barbaric” to heart as it fights a multifront battle against a rival’s potential competitor to the blockbuster lung-disease treatment Tyvaso.

Martine Rothblatt has said she launched the biotech company in 1996 to find a cure for her daughter’s rare, life-threatening disease that causes high blood pressure in the lungs, pulmonary arterial hypertension. UTC, she’s said, wanted to improve the convenience or efficiency of a patient’s treatment—and zealously defend those innovations with new patents extending decades beyond the life of the active ingredient’s original patent—to render cheaper copies of its products’ earlier versions antiquated.

But some experts describe UTC’s aggressive tactics—particularly against Liquidia Corp., whose proposed Yutrepia would compete with Tyvaso—as emblematic of how the US patent system, judiciary and regulatory framework can enable—even encourage—companies to extend legal monopolies for older drugs beyond what lawmakers intended.

“Innovation should be happening in the lab, not in the legal department,” said Robin Feldman, a law professor at the University of California College of the Law, San Francisco. “But companies today spend an enormous amount of time and energy manipulating the patent system. It is certainly a lot easier and cheaper than inventing a new drug.”

Tyvaso is one of three treatments UTC sells based on the active ingredient treprostinil, whose original formulation patent expired more than 20 years ago. UTC acquired rights to the compound from a GlaxoSmithKline Plc predecessor in 1999. Since then, it’s obtained new patents for additional indications and methods of manufacturing or delivering the molecule, and asserted those patents in litigation to block competing products like Yutrepia from reaching the market. Its most recent patent expires in 2042.

The Tyvaso franchise had US sales of $1.2 billion in 2023, up from $866.9 million the previous year and accounting for 53% of UTC’s overall revenue, according to data compiled by Bloomberg. Tyvaso’s annual sales could hit $2.3 billion by 2027, according to a Bloomberg consensus of nine analysts.

The UTC-Liquidia dispute illustrates how “a lot of litigation is being created by lawyers who are perhaps too creative,” said Arti Rai, an intellectual-property law expert and professor at Duke Law School.

Tangled Battles

Earlier this week, UTC urged a Delaware federal judge to block Liquidia from launching Yutrepia for the duration of a lawsuit it filed in September.

That case alleges Yutrepia infringes US Patent No. 11,826,327, which covers a new indication for treating pulmonary hypertension associated with interstitial lung disease. The patent, issued Nov. 28, expires in January 2042—almost 15 years later than US Patent No. 10,716,793, which was the focus of earlier litigation with Liquidia—and is the latest of any patent listed for either version of Tyvaso in the US Food and Drug Administration’s registry of approved drugs, the Orange Book.

Tyvaso is UTC’s inhaled-solution formulation of treprostinil that the FDA approved in 2009. The agency in 2022 approved Tyvaso DPI, the first dry-powder treprostinil formulation sold in the US. In 2023, for the first time, US sales of Tyvaso DPI leapfrogged those of nebulized Tyvaso, with $731.1 million and $477.1 million, respectively, UTC said Feb. 21 in its annual earnings report. Shifting patients from the nebulized Tyvaso to the more convenient delivery system of Tyvaso DPI may improve patients’ compliance and willingness to continue the therapy.

Liquidia’s proposed Yutrepia is also a dry-powder formulation, which the company claims to have pioneered. Liquidia completed late-stage trials before UTC had begun them, Jason Adair, its chief business officer, said in an emailed statement.

One month after the Patent Trial and Appeal Board voided the ’793 patent as obvious, Judge Richard G. Andrews of the US District Court for the District of Delaware went the other way, upholding its validity and ruling that Yutrepia infringes it. Complicating matters are seemingly conflicting rulings—both written by Circuit Judge Alan D. Lourie—from two panels at the US Court of Appeals for the Federal Circuit. In July, Lourie backed Andrews’ finding of infringement, at least until UTC exhausts its appeals of the PTAB decision, but in December the appellate judge affirmed the PTAB’s order nixing the patent.

The Supreme Court last week denied Liquidia’s request for review of the Federal Circuit ruling that upheld Andrews’ findings. UTC immediately asked Andrews to cement its district court victory. The same day, UTC also sued the FDA in Washington, D.C. federal court, seeking to force the agency to rescind its acceptance of Liquidia’s amended Yutrepia application.

“United Therapeutics has engaged in an extensive litigation campaign to deny choice to thousands of sick patients in order to maintain a monopoly, filing lawsuit after lawsuit, including against the FDA and even after its patents were found to be invalid or not infringed,” Adair said.

Liquidia CEO Roger Jeffs has said the company hopes to see Yutrepia approved for use by mid-2024, assuming the PTAB’s ruling nixing the ‘793 patent survives UTC’s appeal. Jeffs previously worked for UTC until 2016, asits president for 18 years and its co-CEO for two years.

‘Lifecycle Management’

UTC’s approach isn’t a bad thing, said Chad Landmon, who chairs the IP and FDA practice groups at Axinn Veltrop & Harkrider LLP.

Companies “are always looking—at least the good companies are always looking—to see whether there’s some FDA regulatory right that they might have that they need to exercise,” he said. “I’ve certainly been involved in more than one case.”

Litigation like UTC’s suit against the FDA is more common for bigger products, Landmon said, “or in this case, where you have a company that has one product dominant in its portfolio.”

“Innovator companies call it ‘lifecycle management,’” Landmon said of the staggered patenting for various methods of delivery.

In creating “a different version of the molecule, extended-release form from an immediate-release form, they would argue there’s a patient benefit, and they’re not wrong,” he said.

UTC sounded the same notes in a statement.

Patents protecting biotech innovations that serve unmet patient needs “are critical to ensuring continued innovation,” Dewey Steadman, spokesperson for UTC, said in an email. “Without those protections, patients with rare diseases, like those we serve every day, would be in a far worse position than they are today.”

Gaming the System?

Speaking at a 2015 health-care conference, UTC founder Rothblatt said each of the company’s treprostinil-based therapies “have some very interesting and intriguing ways to maintain their market share.” For Tyvaso, “that is very largely through proprietary technology which we have developed,” Rothblatt said.

The FDA’s approval of Tyvaso as a “drug-device combination product,” she said, was based on “proprietary software algorithms that ultimately govern the dispersal pattern of the treprostinil molecule down in the deep bronchi.”

Rothblatt said at the time that UTC—which has claimed to be “revenue-agnostic” regarding which of its treprostinil therapies patients choose—was in good position with Tyvaso to keep its exclusivity “well out into the late 2020s.”

Joshua Lamel, executive director of the nonprofit Public Innovation Project, called UTC’s behavior “disgusting” but representative of the current playing field for pharmaceutical patents.

The company isn’t “doing anything that violates current law, and you can make a legitimate argument in today’s society that a pharmaceutical or biotech company that is not engaging in this type of behavior would be subjecting themselves to potentially getting attacked in a shareholder lawsuit, which is even worse,” Lamel said.

Under current law, “there is no downside for trying out new games” that would manipulate the system, said Feldman, the law professor.

“At the very least, you inflict some pain on a competitor and warn others to expect rough treatment if they challenge you,” she said.

At best, she added, the company succeeds and gets to continue its blockbuster sales.

“That is the problem with our current patent system,” Feldman said. “Its complex byways encourage the wrong type of innovation.”