Legal Briefs: September Is a Mixed Bag For Brand Pharma Patents

Former InterMune CEO convicted of wire fraud for misleading press release: A California jury convicted W. Scott Harkonen of wire fraud for the creation and dissemination of false and misleading information about the efficacy of InterMune's Actimmune (interferon gamma-1b) as a treatment for idiopathic pulmonary fibrosis. The information was included in a press release the company issued in 2002 announcing the results of a clinical trial. The jury acquitted him of a misbranding charge of promoting the drug for an unapproved use. A grand jury indicted Harkonen for fraudulent promotion in 2008, two years after InterMune entered a deferred prosecution agreement with the Department of Justice and agreed to pay $36.9 million to resolve criminal charges and civil liabilities for fraudulent promotion (1"The Pink Sheet" DAILY, March 18, 2008). The government has prosecuted pharma execs in the past but has largely been unsuccessful in winning verdicts against them. Eight executives of TAP were acquitted in a 2001 case over pricing and marketing of the prostate cancer drug Lupron (leuprolide) and several Serono executives were acquitted in a case over marketing of the AIDS drug Serostim (somatropin) (2"The Pink Sheet," March 31, 2008)

Former InterMune CEO convicted of wire fraud for misleading press release: A California jury convicted W. Scott Harkonen of wire fraud for the creation and dissemination of false and misleading information about the efficacy of InterMune's Actimmune (interferon gamma-1b) as a treatment for idiopathic pulmonary fibrosis. The information was included in a press release the company issued in 2002 announcing the results of a clinical trial. The jury acquitted him of a misbranding charge of promoting the drug for an unapproved use. A grand jury indicted Harkonen for fraudulent promotion in 2008, two years after InterMune entered a deferred prosecution agreement with the Department of Justice and agreed to pay $36.9 million to resolve criminal charges and civil liabilities for fraudulent promotion (¹ (Also see "Former InterMune CEO Charged With Actimmune IPF Marketing" - Pink Sheet, 18 Mar, 2008.)). The government has prosecuted pharma execs in the past but has largely been unsuccessful in winning verdicts against them. Eight executives of TAP were acquitted in a 2001 case over pricing and marketing of the prostate cancer drug Lupron (leuprolide) and several Serono executives were acquitted in a case over marketing of the AIDS drug Serostim (somatropin) (² (Also see "A Closer Look: Health Care Fraud Investigations In Pharma Sector Take New Twists" - Pink Sheet, 31 Mar, 2008.)).

Court permanently enjoins Teva from selling generic Evista: The U.S. District Court for the Southern District of Indiana issued a final ruling Sept. 23 prohibiting Teva from selling any generic Evista (raloxifene) product before the latest expiration date of four of Lilly's method of use patents. The decision assures Lilly marketing exclusivity of the osteoporosis drug through March 2014. In a 120-page ruling, the court found that Teva infringed claims in four Lilly patents and that claims in three other patents covering particle size distribution were invalid for lack of enablement. The court had issued a temporary restraining order in March and a preliminary injunction in April pending a final decision on the validity of Evista patents (³ (Also see "Limited Launch Of Teva’s Generic Evista Rejected By Court" - Pink Sheet, 23 Apr, 2009.)). One of Lilly's top-selling products, Evista had sales of $1.08 billion in 2008.

Janssen's patent ruled invalid: An appeals court affirmed a lower court ruling that claims in Janssen's patent for a method of treating Alzheimer's disease with galantamine are invalid for lack of enablement. In a Sept. 25 decision, the U.S. Court of Appeals for the Federal Circuit found that the claim specification did not demonstrate utility because relevant animal testing was not finished by the time the patent was issued and does "no more than state a hypothesis and propose testing to determine the accuracy of that hypothesis." Circuit Judge Arthur Gajarsa dissented. Janssen had filed suit against six generic manufacturers who filed ANDAs for galantamine, including Teva and Mylan. FDA has approved several ANDAs and six generic products are now on the market. The case is In Re '318 Patent Infringement Litigation.

AstraZeneca's prosecution of its Seroquel patent is upheld: The U.S. Court of Appeals for the Federal Circuit affirmed a district court's finding that Teva and Sandoz had not presented sufficient evidence for a jury to find that AstraZeneca misrepresented or omitted material information with intent to deceive or mislead the patent examiner into granting its Seroquel (quetiapine) patent. Teva and Sandoz argued that AstraZeneca did not submit internal test data on four other compounds. But the Federal Circuit said the test data were not material because the compounds were not the structurally closest compounds to quetiapine. Seroquel's patent is to expire in 2012. The drug had sales of $4.6 billion in 2008.

AWP ruling against AstraZeneca is affirmed: In a Sept. 23 order, the U.S. Court of Appeals for the First Circuit upheld the $13 million award Massachusetts U.S. District Judge Patti Saris imposed against AstraZeneca for publishing a false and inflated average wholesale price for its prostate cancer drug Zoladex (goserelin). Saris issued an order against the company in 2007 in the class action suit brought by consumer and third-party payers. The case is among nearly 100 AWP suits against more than 40 pharmaceutical companies that have been consolidated in multidistrict litigation as In Re Pharmaceutical Industry Average Wholesale Price Litigation. Saris issued similar rulings against Bristol-Myers Squibb and Schering-Plough (⁴ 'The Pink Sheet,' June 25, 2007). Several states have also filed AWP suits against dozens of companies. Alabama won a $215 million jury verdict against AstraZeneca in 2008 that was subsequently reduced to $160 million (⁵ 'The Pink Sheet,' July 7, 2008). A trial in Kentucky's suit against the company began on Sept. 29.