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Supreme Court Declines Tobacco Industry’s Petition for Certiorari, Paves Way for FDA to Design Graphic Package Labels

April 25, 2013 by

On April 22, 2013, the U.S. Supreme Court declined to hear a case filed by tobacco companies challenging certain aspects of the 2009 Family Smoking Prevention and Tobacco Control Act (the Act) (P.L. 111-31) without comment, paving the way for the FDA to require anti-smoking images to appear on tobacco product labels. Anti-smoking advocates applaud the decision, but the tobacco industry promises more litigation. Implementation of the FDA’s graphic labeling requirement is far from reality, as an earlier federal court decision blocked the FDA from implementing the labeling requirement, forcing the agency to rethink the images and propose new rulemaking.

Petition for Certiorari

According to the tobacco companies’ petition for certiorari in American Snuff Co. v U.S., the Family Smoking Prevention and Tobacco Control Act “imposed myriad restrictions on truthful, non-misleading speech to adult tobacco consumers concerning lawful tobacco products. The industry specifically took issue with labeling requirements that would require companies to include graphic anti-smoking images on tobacco products taking up 30 to 50 percent of the front and back of product labels. The nine FDA-approved images included a man exhaling smoke through a tracheotomy hole, a cadaver post-autopsy, a premature baby in an incubator, and an infant surrounded by smoke.

Underlying Case

In 2012, the U.S. Court of Appeals for the Sixth Circuit ruled that the graphic labeling requirements were reasonably related to the prevention of consumer deception. It further found constitutional provisions prohibiting tobacco companies from advertising the decreased risks of modified risk tobacco products without prior FDA approval and prohibiting marketing through brand-name sponsorships, merchandise, sample products, and free gifts upon purchase.

Conflicting Ruling

However, later that year, the U.S. Court of Appeals for the District of Columbia Circuit ruled for R.J. Reynolds Tobacco Company in a separate case, R.J. Reynolds Tobacco Co.v Food & Drug Administration. It specifically found that the FDA did not submit evidence that the inclusion of graphic images on tobacco labels would accomplish its goal of reducing smoking rates. It thus vacated the FDA regulation and remanded it to the agency.

Impact

Although the Supreme Court’s action seems to give credence to the FDA’s labeling decision, the Obama administration has already stated that it will not continue to defend the labels, forcing the agency to consider new labeling in order to conform with the District of Columbia appellate court ruling. The FDA will then need to enter the federal rule-making process, which could last years; the agency could face challenges along the way. Cigarette labels were last updated nearly 30 years ago—it seems it could be several more years before they change again.

Filed Under: Cases, Food & Drug Administration, HHS, News, SCOTUS, Tobacco

AMA Urges Supreme Court to Invalidate Patents on Human Genes

April 18, 2013 by

The American Medical Association (AMA) is urging the U.S. Supreme Court to end patents on human genes in an amicus brief it filed with other health care organizations in Association for Molecular Pathology v Myriad Genetics, Inc. The brief defended a ruling by the Federal Circuit that invalidated patents held by Myriad Genetics on the BRCA1 and BRCA2 genes.

“Exclusive patent rights over human genes conflict with long-standing principles of medical ethics regarding the sharing of natural scientific information to further advance science, technology and medical care,” said Jeremy Lazarus, MD, President of the AMA. He asserted that blocking medical innovations that provide insight into natural human biology interferes with diagnosis and treatment of patients and inhibits new medical discoveries.

Court Proceedings

In 2009, the American Civil Liberties Union Foundation (ACLU) and the Public Patent Foundation (PPC) filed a declaratory judgment action alleging that certain of Myriad’s patents were ineligible under sec. 101 of the Patent Act. The district court invalidated Myriad’s claims, and Myriad appealed. A divided panel of the Federal Circuit reversed, with each judge writing a separate opinion on the patentability of human genes.

Supreme Court Precedent

The AMA argued in its amicus brief that human gene patents conflict with the Supreme Court’s holding on subject matter eligibility in Mayo Collaborative Services v Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), which held that laws of nature, natural phenomena, and abstract ideas are not patentable subject matter. Myriad did not invent the DNA sequences covered by the patents, the AMA argued; rather, Myriad removed them from the body using common, longstanding techniques.

Interference With Diagnosis and Treatment

Further, the AMA asserted, because a patent on the sequence of a human gene grants the patent holder complete control over that sequence for the life of the patent, the patent holder can prohibit health care providers from using even unpatented methods to learn the sequence of a patient gene. According to the AMA, the patenting of the BRCA1 and BRCA2 breast cancer mutations has forced patients to undergo tests that are inferior and more expensive than what are available in other countries. It also prevents women from getting an independent second opinion on positive test results, which could cause them to have their breast or ovaries removed due to a false positive on a BRCA1 or BRCA2 test.

Filed Under: Cases, News, Patents, SCOTUS

Supreme Courts Hears Oral Arguments on “Pay for Delay” Agreements Between Brand and Generic Drug Manufacturers

March 27, 2013 by

On March 25, 2013, the U.S. Supreme Court heard oral arguments on “pay for delay” agreements between brand and generic drug manufacturers, which the FTC has asserted costs consumers $3.5 billion each year. The justices hearing the arguments in Federal Trade Commission v Actavis, No. 12-416, will soon resolve a circuit split and decide whether such agreements are presumptively unlawful.

“Pay for Delay” Agreements

Under “pay for delay” agreements,” branded drug manufacturers pay patent settlements to generic companies in exchange for an agreement not to bring lower-cost alternatives to market, according to the FTC.

Watson

In 2009, the FTC filed a complaint alleging that Solvay Pharmaceuticals, Inc. paid generic drug manufacturers to delay generic competition to Solvay’s AndroGel, a prescription testosterone replacement with annual sales of more than $400 million. The FTC argued that the companies violated antitrust laws when Solvay paid the generic companies millions of dollars annually in exchange for an agreement to abandon their patent challenges and to delay marketing a generic version of the drug until 2015.

The Eleventh Circuit found no antitrust violations in Federal Trade Commission v Watson Pharmaceuticals, holding that, absent sham litigation or fraud in obtaining the patent, a reverse patent settlement is immune from antitrust liability as long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent.

Circuit split. The Supreme Court granted certiorari after a split developed in the circuits over this issue. The Second, Eleventh, and Federal Circuits permit the agreements unless the underlying patent litigation was a sham or the patent was obtained by fraud. The Third Circuit treats reverse-payment agreements as presumptively anticompetitive and unlawful.

FTC’s Oral Argument

Malcolm Stewart from the Office of Solicitor General urged the Supreme Court to reject the “scope of the patent” approach adopted by the Eleventh Circuit in favor of a rule that such agreements are presumptively unlawful. Justice Kennedy expressed concern that the FTC’s test would be the same for a weak or strong patent, which “doesn’t make a lot of sense.” Similarly, Justice Breyer was cynical about per se burden of proof rules “that I have never seen in other antitrust cases,” and Sotomayor stated that it is “rare” for the Court to find a per se antitrust violation, noting that it usually follows the rule of reason. Breyer also noted the “true nightmare” inherent in deciding what payments were for when multiple drugs distribution systems are involved.

Hatch-Waxman Act

Justice Scalia suggested that the problem is with the Hatch-Waxman Act, which, in certain circumstances, protects an applicant whose abbreviated new drug application (ANDA) includes a “paragraph IV” certification challenging patents that may be invalid from competition against subsequent versions of the same drug product for 180 days. According to Scalia, Congress “made a mistake” by not foreseeing that the Hatch-Waxman Act could produce this type of agreement, which, according to the FTC, gives the generic drug manufacturer an incentive to accept something other than competition as a way of earning money. Scalia asserted that, in response to that issue, the FTC has proposed a new interpretation of antitrust law that did not exist before.

Pharmaceutical Companies’ Oral Argument

Jeffrey Weinberger represented the pharmaceutical companies. He argued that if settlement between brand-name and generic drug companies were made more difficult, fewer generics would challenge patents, which would be contrary to the purpose of Hatch-Waxman. He also rejected the suggestion that there was little incentive for a generic manufacturer to challenge a patent after the 180-day exclusivity period created by Hatch-Waxman.

Justices Kennedy and Ginsburg also expressed concern that generic companies earn more by settling the suit than by selling their generic in competition with the brand.

Filed Under: Cases, Federal Trade Commission, News, Patents, SCOTUS
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