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BIOCRAFT WILL LAUNCH GENERIC MODURETIC THIS MONTH

Executive Summary

BIOCRAFT WILL LAUNCH GENERIC MODURETIC THIS MONTH, the company announced after a May 10 appellate court ruled that Merck's patent for the antihypertensive/diuretic drug is invalid. The decision reverses a July 11, 1988 ruling by a New Jersey federal court that Merck's patent was "non-obvious" and therefore valid ("The Pink Sheet" July 18, T&G-1). If the ruling remains unchanged, Biocraft will be rewarded with six months as the sole generic marketer of the product (amiloride HCI with hydrochlorothiazide). "According to IMS reports, Merck's sales of Moduretic totaled over $ 50 mil. in 1988," Biocraft noted in a May 11 release. Biocraft said it has not yet determined pricing for the product. The ANDA for the product was approved on July 15, 1987. The approval had a delayed effective date of April 17, 1988 under provisions of Waxman/Hatch, 30 months after the in patent holder's response to the challenge, which was filed with the ANDA. During the course of the trial, the court issued a interlocutory injunction restraining marketing pending outcome of the trial. Under the previous district court's decision, Biocraft was prevented from marketing the product until Dec. 24, 1990, the date Merck's patent expires. In a May 11 press statement, Merck said it was "surprised" by the two-to-one ruling of the panel of appellate judges and will ask the court, "within the 14-day period prescribed by law, to reconsider the decision." The May 10 appellate ruling notes that the lower court found that amiloride/hydrochlorothiazide combination claimed in the Moduretic patent "would merely be 'obvious to try.'" The appellate court found that a previous Merck patent "instructs the artisan that any of . . . 1,200 disclosed combinations will produce a diuretic formulation with desirable sodium and potassium eliminating properties." However, the court continued, although the patent discloses many combinations, it "does not render any particular formulation less obvious." Merck had argued that its previous patent does not "teach the specific ratios of the combinations" disclosed in the [Moduretic] patent." The court said that "the mere absence from the prior art of a teaching or a limitation recited in the patent at issue is insufficient for a conclusion of nonobviousness." One of the three appeals judges dissented from the majority by agreeing with the district court's decision. The circuit judge stated: "The claimed invention would not have been obvious in view of prior art that does no more than suggest experimenting with over 1,200 combinations to come up with the right one." The decision in the Moduretic patent case marks the second time within the last two weeks that Merck has lost in patent challenge litigation over its products. On May 2, an appeals court ruled that Merck's Flexeril patent is valid but unenforceable ("The Pink Sheet" May 8, T&G-17). That decision upheld a Delaware federal court determination that the patent is unenforceable for having been inequitably procured and affirmed Danbury's challenge of Merck's cyclobenzaprine patent.
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