Mylan Wins Argument In Exclusivity Case, But Not Terazosin Approval

Mylan will have to wait until after Feb. 9 to launch its generic terazosin capsules even though the company has won a federal court ruling that Geneva's 180-day exclusivity for the product should have already expired.

Washington, D.C. federal court Judge Richard Roberts agreed with Mylan's argument that a firm's 180 days of exclusivity begins with the first court ruling on the invalidity of a patent, not the final appeal decision.

However, Roberts declined to remove Geneva's exclusivity before its previously scheduled expiration date of Feb. 9 because it would create hardship for the company.

"The fact that, in my view, Geneva's exclusivity period should have expired already does not detract from the harm that Geneva would suffer if its exclusivity is revoked now," Roberts' opinion states.

The 180-day exclusivity was designed as an incentive for companies to embark on patent challenges, the decision notes. "Geneva relied in good faith on the FDA regulation at issue in this case - a regulation which a federal court of appeals had previously upheld," the decision states. Penalizing Geneva by approving Mylan's ANDA would be "inequitable."

Mylan estimated that it would have been ready to launch its terazosin capsules Jan. 10, and could have earned approximately $3 mil. before Feb. 9. Geneva told the court it would have lost about $11 mil. if its exclusivity were revoked Jan. 10 because of the entrance of Mylan and other generics into the market.

Mylan, Invamed, Lemmon (Teva), Novopharm and Zenith have tentative approvals for terazosin (Abbott's benign prostatic hyperplasia treatment Hytrin.)

In its case, Mylan argued that Geneva's exclusivity began on March 4, 1999, when Mylan won a district court judgment invalidating Abbott's patent on terazosin capsules (Abbott had challenged Geneva's terazosin tablets, not capsules). Geneva's exclusivity began when it launched the product Aug. 13.

FDA's current regulatory interpretation specifies that 180-day exclusivity begins after the ruling of a court "from which no appeal can or has been taken." Roberts ruled that the agency's interpretation was inconsistent with the language of the Waxman/Hatch Act; the statute's reference to "a court" includes a district court.

FDA argued that it placed the exclusivity start date at the end of the appeal process to ensure that generic firms would be able to use the exclusivity without fear of liability if a patent invalidation were reversed on appeal.

Judge Roberts wrote he was "unconvinced" that "interpreting the statute as written would necessarily diminish the 180-day exclusivity incentive to such an extent that the Hatch-Waxman Amendments' main goal of expeditiously providing the public with generic drugs at reasonable prices would be greatly undermined."

FDA is reviewing the decision. The agency may not decide to appeal, even though the ruling would supersede FDA's recently proposed rule on 180-day exclusivity trigger periods.

The proposed rule would create a trigger period once another generic is tentatively approved. To retain exclusivity, the first-to-file would have to launch the product or win a final decision in a court case within six months (¹ ).

The existing structure of the exclusivity period has been criticized as a mechanism that allows brandname companies to postpone competition for their products. The Federal Trade Commission is investigating agreements under which Abbott paid Geneva and Zenith parent Ivax not to market their terazosin generics (² ).

Sen. Hatch (R-Utah) has begun the process of reopening the Waxman/Hatch Act, which would become the likely forum for any discussion of restructuring 180-day exclusivity. Hatch expects to meet with consumer groups soon and may hold a follow-up meeting with industry in February.

The Mylan v. Shalala decision may reduce the incentive for generic companies to pursue uncertain patent challenges. Equally, innovator companies may be discouraged from listing weak patents that could be easily invalidated since the first court decision against it could trigger generic competition under an exclusivity period.