The Zyprexa Case: A Generic Argument Nullified, for Now
Pharma’s Cutting Edge
Vol. 3 Number 4 - April 2005
The Zyprexa Case: A Generic Argument Nullified, for Now
When Richard Young, Judge of the U.S. District Court for the Southern District of Indiana, ruled on April 14 that Lilly’s listed patent on Zyprexa was valid and enforceable, the sigh of relief that blew across Indiana could be felt as a warm breeze from our home office in Philly. The case, which had hung over Lilly’s heads since April 2001, was at last resolved.
Lilly really needed a win. Zyprexa accounted for 32% of Lilly’s 2004 net sales, nearly 55% of which occurred in the U.S. There is little doubt that a generic entry would have rapidly eroded the value of the U.S. franchise, much as the loss of Prozac to generic competition did in 2001. Lilly now seemingly will maintain their Zyprexa monopoly in the U.S. until 2011, although Dr. Reddy’s and Ivax plan to appeal the decision.
As in all such patent-challenge cases, investors look to the Court’s opinion to determine whether precedents are made that will impact pending decisions. In the case, the Court rendered opinions regarding a variety of claims made by Ivax and Dr. Reddy’s, any one of which could have rendered Lilly’s patent invalid or unenforceable. These claims contended that Lilly’s patent was: anticipated by prior publications, obvious due to prior patent literature disclosure (i.e. prior art), double patented, and unenforceable due to inequitable conduct on Lilly’s part. They also argued that Lilly’s Phase 1 studies constituted an invalidating public use of Zyprexa.
Other than the double-patenting allegation, which Judge Young rejected in less than a full page of text, the fewest pages of the Court’s 224-page opinion were devoted to the public use affirmative defense. It took the judge less than six pages to tackle that issue and find in Lilly’s favor. Yet it is this opinion that provides the precedent of interest to pharma investors. Let’s take a closer look at the public use claim and consider the environment in which Judge Young rendered his opinion.
The section of the U.S. Code pertaining to patent invalidity and public use reads as follows: “A person shall be entitled to a patent unless the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.” Ivax and Dr. Reddy’s argued that conduct (but not publication) of a Phase 1 clinical study of Zyprexa by Lilly at their Indianapolis clinic constituted public use.
In making this claim, the generics makers argued that, since the healthy volunteers did not sign confidentiality agreements, Lilly, in effect “shared” Zyprexa information and its use with the public.
The Court rejected this argument, stating that lack of confidentiality does not equate with sharing of information, and noting that the trials were meant to determine safety and not efficacy of the drug in schizophrenia. Since the patent in question claimed a use for Zyprexa in schizophrenia, a Phase 1 study was not a “use” of the drug as intended by the patent.
Furthermore, the judge noted that experimental uses of inventions are exempt from claims charging prior public use. The U.S.P.T.O. examiner manual states: “A use or sale is experimental…if it represents a bona fide effort to perfect the invention or to ascertain whether it will answer its intended purpose.” Judge Young regarded the use of Zyprexa in this trial as clearly experimental: “The evidence demonstrates that the art with respect to this type of atypical antipsychotic drug was highly unpredictable….Furthermore, the art was plagued with unpredicted side effects that rendered otherwise promising compounds useless in the clinical setting [that] could only be understood when the compounds were tested in actual patients.”
It might seem obvious that a Phase 1 study would always constitute experimental use and thus not represent invalidating public use. Apparently it is not so obvious. In April 2004, a Federal Circuit Court of Appeals panel initially ruled that a GlaxoSmithKline patent protecting Paxil was invalid in part because of prior public use from clinical trials. To quote the Court: “[C]linical trials designed to establish the efficacy and safety of the compound as an antidepressant for FDA approval are not experimental uses of that claimed invention…[because] the claim covers the compound regardless of its use as an antidepressant. The antidepressant properties of the compound are simply not claimed.” In other words, because GSK did not claim the antidepressant use, experiments testing its efficacy as an antidepressant did not allow an experimental use exception.
One year later (April 8 2005) the same Appellate Court issued a second opinion, superseding the first, and made no mention of this line of reasoning when invalidating the GSK patent. Therefore, the first decision can be considered advisory only, not precedent-setting.
It is tempting to speculate that Judge Young delayed issuing his opinion in the Zyprexa case until the Appellate Court’s second ruling on the Paxil case was handed down. If the Appellate Court had upheld Apotex’ assertion that GSK’s clinical trials constituted public use, it would have made it more difficult for Judge Young to rule in Lilly’s favor.
The Zyprexa ruling will now be appealed by Ivax and Dr. Reddy’s to the Federal Circuit and perhaps eventually to the U.S. Court of Appeals. Undoubtedly, the issue of invalidating public use will be raised by the generics companies yet again, and yet again, innovator companies and their investors will be left wondering whether experiments conducting years ago will expose them to near-term financial risk.
Direct to Consumer Advertising: The Larger Lesson
As effective as it has been driving prescriptions, I have never been a fan of direct to consumer advertising (DTCA) for medicines. I have always thought that they serve consumers poorly, because they tell such a small piece of the story behind the decision to use a medicine. And, often, they tell it in a way that emphasizes a drug’s benefits over its risks.
Admit it, when you think of DTCA, you picture blissful couples lazing in the sunset, content in the thought that he will be ready to rock at a moment’s notice all weekend long; you envision young women and their mothers dancing in flower-filled meadows with nary a care for the pollen caking their nostrils; and you hear dialog, such as “I like it because of the low risk of sexual side effects.” Honey, if you’re not experiencing sexual side effects, good for you, but the low risk of them doesn’t help the poor gal who’s on the same med and suffering; she could care less that she was at low risk.
I was always more favorably inclined to DTCA that were not brand-specific but meant to create disease awareness. Of course, such ads are typically developed for first-in-category therapies, in which a visit to the doctor to discuss the possibility of a medication offers only one FDA-approved choice as a drug solution. I guess that is having your altruism and profiting too.
Lately, stung by criticism surrounding the COX-2 debacle, some high-level executives in the pharma industry have admitted that DTCA could use an overhaul. Bill Weldon, CEO/Chairman of J&J, in particular, has indicated that his firm will lead the way toward more balanced DTCA.
In the meantime, we keep learning more about the influence DTCA has on prescribing. As I write this, JAMA has just published a prospective study, where actors posing as patients with adjustment disorder or depression cited DTCA during their discussions with doctors. Not surprisingly, brand-specific DTCA led to more prescribing of the brand mentioned, even in cases (adjustment disorder) when medication was not indicated. Brand-nonspecific DTCA also increased prescribing, both appropriate and inappropriate. Highlighting the disease-awareness benefit of DTCA, ‘patients’ who mentioned an ad, led to an appropriate action of some sort (drug therapy or not) much more often than no DTCA mention.
No doubt, the results of this study will add further fuel to the DTCA-reform fire, but I hope that the larger lesson isn’t lost amidst the furor. This study, more than most I can recall, pointedly demonstrates the consumer-oriented nature of the U.S. healthcare system. Influence the consumer—whether through DTCA, public service announcements, formal education, or entertainment outlets—and you will strongly influence how doctors treat their patients. It is simply the untamed nature of our healthcare beast.
