Another reason drug prices are too high: drug companies can patent an FDA mandate.
High drug prices remain in the news. The Senate Committee on the Judiciary recently held a hearing on proposals to lower drug prices and the role of patents. The Senators appeared to concede that the problem is “complicated,” but identifying solutions that would not over-reach could be difficult. A recent precedential decision from the Federal Circuit shows that certain drug prices will stay high if drug companies can simply take a mandate from the FDA, which was not their idea, and file a patent on it, thereby cornering the market on all IP around that mandate. The case is Endo Pharmaceuticals Inc. v. Actavis, LLC, Case No. 2018-1054 (Fed. Cir. May 3, 2019).
Endo and Mallinckrodt sued both Teva and Actavis, who had each filed ANDAs for Opana ER. Endo asserted U.S. Patent No. 8,871,779. The ‘779 patent was directed, generally, to oxymorphone containing less than 0.001% of 14-hydroxymorphinone. For instance, claim of the ‘779 patent recites: “1. A hydrochloride salt of oxymorphone comprising less than 0.001% of 14-hydroxymorphinone.”
Oxymorphone is a morphinan alkaloid used for pain relief. Morphinan compounds that are useful for pain relief are known as morphinan-6-one compounds. The known methods for producing morphinan-6-one compounds typically yielded impurities known as ABUKs (α,β-unsaturated ketone in- termediate compounds). The ‘779 patent describes a process for preparing highly pure morphinan-6 one products with very low concentrations of ABUK impurities, below 0.001%. The case presumes that 14-hydroxymorphinone, which is recited in the claims, is also referred to as oxymorphone ABUK.
During the litigation, the generics argued that the ‘779 patent was obvious. They relied upon scientific articles purportedly showing that the claimed oxymorphone composition with low ABUK impurities was obvious. The district court disagreed, and found that for a variety of technical reasons, these references did not show a reasonable expectation of success in producing the claimed oxymorphone comprising less than 0.001% of 14-hydroxymorphinone.
Yet, the generics also relied upon prior communications from the FDA. Before the application for the ‘779 patent was filed, the FDA had previously issued a mandate to producers of oxymorphone, including Mallinckrodt. That mandate provided that ABUK impurities in oxymorphone had been determined to be mutagenic. Accordingly, opioid manufacturers were directed by the FDA to reduce ABUK impurities in oxymorphone to below 0.001%.
The FDA communications were alleged confidential, and not publicized. Because of this, the district court held they could not act as prior art. On appeal, the Federal Circuit disagreed. It noted that a patent can be invalidated under § 102(f), which “does not pertain only to public knowledge, but also applies to private communications between the inventor and another which may never become public.” (Slip Op. at 15, quoting OddzOn Produs. V. Just Toys, Inc., 122 F.3d 1396, 1401-02 (Fed. Cir. 1997)). Thus, the Federal Circuit acknowledged that the FDA’s mandate that oxymorphone contain less than 0.001% ABUKs could itself act as prior art to invalidate the ‘779 patent.
Nevertheless, the Federal Circuit upheld the validity of the patent. The Court recognized that the FDA mandate may have been sufficient to provide a motion to combine the prior art to achieve certain ABUK impurity levels in oxymorphone. It stated that “[t]he FDA communications introduced a market force incentivizing purification of oxymorphone to the level of the oxymorphone claimed” by the patent. (Slip Op. at 20). Yet, the Court side-stepped this question. It found that, even assuming there was a motion to combine, the prior art did not show any reasonable expectation of successfully lowering ABUK impurities in oxymorphone to below 0.001%.
The Federal Circuit stated, that “the FDA communications recite a goal without teaching how the goal is attained.” (Slip Op. at 20). The Court found that the FDA communications rather show the challenged posed by the mandate. Indeed, the inventors of the ‘779 patent engaged in extensive experimentation to ultimately arrive at a process that could yield the claimed ABUK impurity levels. Thus, the Court held that because neither the FDA mandate nor the prior art showed any expectation of success of lowering ABUK impurities to 0.001% in oxymorphone, the ‘779 patent was not obvious.
The Honorable Kara Farnandez Stoll issued a strong dissent. Judge Stoll pointed out that the ‘779 patent did nothing more than claim the FDA mandate. Indeed, the FDA mandate anticipates every limitation of the asserted claims. Judge Stoll stated, “[n]ot only does the FDA’s mandate disclose every limitation of claim 1, but it is the only prior art reference that discloses the ‘0.001% oxymorphone ABUK limitation.” (Slip Op. Dissent at 1).
Judge Stoll’s dissent hits upon a strange conundrum of this decision. The only reason this patent existed is because the FDA mandated certain impurity levels for oxymorphone drugs to be approved. That mandate not only created a motivation for drug companies to synthesize oxymorphone with less than 0.001% ABUKs—but it also shows that achieving that goal was not Mallincrkodt’s idea or invention. Indeed, one of the inventors testified that there was no special attention focused on ABUK impurities prior to the FDA’s mandate.
Both the district court and the Federal Circuit found that the FDA mandate stated the goal, but not how to accomplish that goal. Thus, according to the Federal Circuit, because neither the FDA mandate nor the other prior art taught how to synthesize oxymorphone to have ABUK impurities below 0.001% with a reasonable expectation of success, then the patent must be non-obvious.
Yet, Mallincrkodt’s patent did not claim that process. It only claimed the goal itself—the FDA’s mandate that oxymorphone have less than 0.001% ABUK impurities. In other words, Mallincrkodt may have indeed developed a novel process for synthesizing oxymorphone to have ABUK impurities below 0.001%. But the ‘779 patent does not claim that purportedly novel process of doing so. It only claims, “A hydrochloride salt of oxymorphone comprising less than 0.001% of 14-hydroxymorphinone.” Thus, it claims nothing more than the FDA’s mandate itself.
Judge Stoll stated, “[t]his is not a typical Hatch-Waxman case where the patentee provided the public with a new drug, formulation, or manufacturing process. While Mallinckrodt’s patent specification is directed to a specific process for achieving the FDA’s objective, Mallinckrodt did not claim that process. Mallinckrodt instead claimed the FDA mandate.” (Slip Op. Dissent at 5-6).
And therein lies the conundrum. The claims of the ‘779 patent are not purportedly limited to the process disclosed in the specification. That means that Endo can theoretically exclude all others who achieve the FDA mandate of less than 0.001% ABUK impurities in oxymorphone—whether Mallinckrodt’s novel process is used or some other process is used.
This shows that Mallinckrodt simply claimed the FDA mandate, and doing so has been blessed by the Federal Circuit. Endo and Mallinckrodt have now effectively cornered the patent market on oxymorphone. And we wonder why drug prices are too high.