In This Issue
· FTC
Issues Warning To Sanofi, Watson and Synthon In Connection With Ambien CR® Settlement
· District
Court Declares Amerix® Patents Invalid And Then Grants TRO Preventing Mylan From Going To Market
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FTC
Issues Warning To Sanofi, Watson and Synthon In Connection With Ambien CR® Settlement
The Federal Trade
Commission’s Bureau of Competition recently issued advisory letters to Sanofi-Aventis
U.S. LLC (“Sanofi”), Watson Pharmaceuticals, Inc. (“Watson”), and Synthon
Holding B.V. (Synthon”), warning that the companies violated federal law by
failing to submit agreements/stipulations from the Ambien CR® litigations to the FTC. The FTC,
however, did not pursue an enforcement action against the companies because,
according to the FTC, the violations, inter
alia, did not appear to have harmed consumers or competition, nor
benefitted the companies. The FTC has
further noted that these letters were meant to provide public guidance to the
pharmaceutical industry at-large to avoid such situation in the future.
By way of background, Sanofi
filed infringement suits against Synthon and Watson in response to their
filing of paragraph IV ANDAs seeking approval for generic versions of Ambien
CR®. The parties thereafter
settled the litigations and submitted the settlement documents to the FTC in
accordance with the reporting requirements of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (“MMA”). The FTC, after reviewing
the documents, noted that there were agreements/stipulations entered into
during the litigations that the FTC believed should have been submitted for
review.
Specifically, FTC Bureau of
Competition Director, Richard Feinstein, observed, in the advisory letters,
that in the FTC’s view, the companies’ failure to notify and submit those
agreements/stipulations violated the MMA in that the statute requires that
brand name and generic drug companies file agreements with the FTC and U.S.
Department of Justice within 10 business days when the agreement involves a
drug for which the generic has submitted the paragraph IV certification.
Here, the agreements/stipulations
at-issue were: (1) the joint stipulation and order
staying the Sanofi-Synthon litigation pending resolution of the inter partes reexamination of the
Ambien CR® patent; and (2) the joint stipulation dismissing the
Sanofi-Watson litigation.
In relevant part, the
Sanofi-Synthon joint stipulation to stay the litigation required Synthon to
provide Sanofi with 120-days notice of its intention to begin marketing a
generic version of Ambien CR® during the pendency of the
stay. The FTC observed, in the
advisory letter, that “the joint stipulation is an ‘agreement’ within the
meaning of the MMA, regardless of whether its terms had binding effect
without court action and regardless of whether there was an exchange of
consideration.” The FTC continued that
“the MMA required the filing of the joint stipulation even if the prior
notice obligation had no actual effect on Synthon’s ability to market its
ANDA product.”
The FTC concluded that “the
language of the statute makes it clear that the MMA filing requirement is
triggered by an agreement ‘regarding’ the manufacture, marketing, or sale of
the ANDA product [and] is not limited to agreements that actually restrict
such marketing. Nor does the MMA exempt agreements that the parties believe
will have no effect on the sale of the generic drug. The 120-day notice
requirement implicates the marketing or sale of generic Ambien CR because of
its potential to impede Synthon's ability to launch its ANDA product. This
provision therefore triggers the filing requirement, regardless of its actual
or anticipated effect.”
The FTC, likewise, noted that
the Sanofi-Watson stipulation should have been submitted because it required
Watson: (1) to convert its paragraph IV certification to a paragraph III
certification, and (2) similarly to provide notice to Sanofi if Watson
converted its paragraph III certification back to paragraph IV, and that
Sanofi was entitled to a new 30-month stay provided that Sanofi filed a
patent infringement suit within 45 days of receiving such notice. The FTC observed that “on its face, the
joint stipulation falls within the MMA's filing requirement [because]: (1) it
is an agreement between a brand name drug company and a generic applicant
that has submitted a Paragraph IV ANDA; and (2) the agreement concerns the
marketing of the ANDA product.” The
FTC further reasoned that “the joint stipulation is an agreement ‘regarding
the manufacture, marketing, or sale of the generic drug for which the ANDA
was submitted’” and should have been submitted to the FTC. The FTC continued that while, “no joint
stipulation was required to secure dismissal. And even where a joint
stipulation is required to secure the action the parties desire, that fact
does not preclude the existence of an agreement between the litigants
concerning the sale of an ANDA product (which triggers a filing obligation
under the MMA).” The FTC specifically
noted that “the stipulation here goes beyond a simple agreement to seek
dismissal of the case. Watson's agreement provided for notice to Sanofi and
included terms regarding the application of the 30-month stay of FDA
approval.”
While the failure to timely submit
such agreements may result in a civil penalty of up to $11,000 for each day
that a required filing has not been made, the FTC, in the instant case,
issued advisory letters instead of recommending that the FTC take enforcement
action because the violations, inter
alia, did not appear to have harmed consumers or competition, nor to have
benefitted the companies. Nevertheless, the consensus among commentators appears to be that the
prudent course of action going forward will be to err on the side of caution
and submit any agreements/stipulations that appear to limit and/or relate to
“the manufacture, marketing, or sale of the generic drug for which the ANDA
[at-issue] was submitted.”
District Court Declares Amerix® Patents
Invalid And Then Grants TRO Preventing Mylan From
Going To Market
Just eight days after declaring
the Amerix® patents invalid, the U.S. District Court for the
District of Delaware in In Re:
Cyclobenzaprine Hyldrochloride Extended-Release Capsule Patent Litigation granted plaintiffs’ (i.e., Eurand,
Inc., Cephalon, Inc. and Anesta AG) motion seeking a temporary restraining
order (“TRO”) against Mylan.
By way of background, the
District Court conducted a seven-day bench trial during September-October
2010, and, on May 12, held the asserted claims of U.S. Patent Nos. 7,387,793
and 7,544,372 (“the Amerix® patents”) invalid as obvious. Mylan, as the first paragraph IV filer,
then launched its generic version of Amerix® triggering its
180-day exclusivity period. Plaintiffs, nevertheless, filed a motion for a TRO, which the District
Court granted.
Despite declaring the Amerix® patents invalid, the District Court, when addressing the “likelihood of
success on the merits” element of a TRO, stated that “plaintiffs’ success on
appeal is just as likely as not,” and therefore “this factor marginally supports
a temporary restraining order.” Shortly thereafter Mylan filed an Emergency Motion for
Reconsideration, asserting that the District Court “committed fundamental, material errors of law…” because the Court
“did not find that Plaintiffs were likely to succeed on the merits but rather
that ‘plaintiffs’ success on appeal is just as likely as not.’” Mylan then argued that: “As a matter of
law, this sort of 50-50 assessment is insufficient to establish a likelihood
of success and destroys the basis for the TRO.” The District Court denied Mylan’s Emergency
Motion and issued an injunction on May 24. Mylan, obviously concerned that the 180-day exclusivity period was running,
appealed the TRO to the Federal Circuit, which issued an order staying the
District Court’s injunction. |
