Pharmaceutical companies can anticipate more costly, drawn-out patent litigation in the wake of the June 17 US Supreme Court decision, which creates great uncertainty about the grounds for negotiating settlements in patent cases. In ruling that “pay-for-delay” arrangements could violate the antitrust laws, and that the Federal Trade Commission (FTC) has the right to challenge these deals, the majority undermined years of patent case law and sent the issue back to the lower courts to decide.

The decision was not a complete victory for the FTC, in that it stopped short of declaring reverse payment agreements as per se illegal. Instead, the Justices instructed the lower courts to apply a “rule of reason” to these cases, and not the “quick look” approach employed by the Circuit Court case under review.

The ruling in FTC v. Actavis supports the long-held contention of FTC officials and consumer activists that brand-generic patent settlements maintain market exclusivity for brand name drugs, reducing competition and raising costs for consumers and health care systems. Both innovator and generic firms have insisted that these settlements actually permit generic products to come to market earlier than under costly, drawn-out court battles over patent rights. That argument was supported in an April 2012 ruling from the US Court of Appeals, which found that an arrangement that allows generic competition earlier than patent expiration did not violate antitrust laws. The dissenting opinion from Chief Justice John Roberts, which was joined by Justices Antonin Scalia and Clarence Thomas, echoes the earlier Court ruling and also raises concerns about linking antitrust law and patent issues and weakening patent protections for innovators.

However, a 5-3 majority led by Justice Stephen Breyer held that the FTC and other government and private parties have the right to pursue reverse payment arrangements as violations of antitrust laws. Breyer, joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan, expressed concerns that reverse payment settlements have an adverse effect on competition. At the same time, though, the majority failed to provide guidance on how to structure patent settlements so that they do comply with antitrust policy.

The ruling is expected to encourage the private plaintiffs’ bar to bring new lawsuits challenging brand-generic patent settlements of all kinds, setting the stage for years of uncertainty in challenging and defending patents on all sides. “It’s going to be a nightmare,” predicted Arent Fox attorney Wayne Matelski, as District Courts struggle to decide what “rule of reason” means in these complex cases.

While companies may be more reluctant to settle future lawsuits, they may face legal challenges to earlier settlements, and new arguments against cases currently before the courts. More plaintiffs may enter the fray, as seen in recent actions by chain drugstores. These cases will require decisions from judges on whether a settlement is illegal primarily due to the size of a reverse payment, or to other services and arrangements with a generic firm. The courts also will have to weigh the strength of a patent and the merits of a patent suit and what extraneous financial factors might lead a generic competitor to seek a settlement.

Although the FTC claimed the ruling a “significant victory,” many legal authorities questioned whether the decision would promote competition and lower drug costs. It remains to be seen if generic drug makers will become more aggressive in challenging patents in order to speed copycat products to market, or if brand firms become more determined to protect intellectual property rights, despite the high cost of litigation.

Congress gets off the hook, for now, as it’s likely to drop efforts to enact FTC-backed legislation to limit reverse-payment settlements. Yet, the issue could end up before the Supreme Court again if lower courts continue to produce divergent rulings on these cases, as they have done over the last decade.

The Supreme Court decision blocking patents on naturally-occurring genes has generated predictions of doom for biotech innovation, along with expectations of more healthy competition in discovering new treatments and diagnostics. Although some commentators regarded the decision, Association for Molecular Pathology v. Myriad Genetics, as a “major reversal” in longstanding patent policy, many leaders of the biopharmaceutical research community described the ruling as likely to spur innovation and the development of therapies and companion diagnostics necessary for advances in personalized medicine.

All sides had legitimate reasons to claim victory:  patient and research groups anticipated easier access to more effective and efficient tests and therapies; biotech companies were relieved that the Justices did not invalidate ancillary patents surrounding genetic discoveries. A number of testing firms announced plans to develop newer, better, less costly tests using the BRCA genetic mutations. Myriad Genetics said its test for breast cancer would remain a leading option for patients and that it would continue its R&D program based on hundreds of other patents.

The ultimate outcome remains to be seen.  The U.S. Patent & Trademark Office (PTO) is expected to revise practices for granting patents for isolated DNA, although the court specifically permits protection for companies that modify genetic material or create new products based on human genes. But in upholding patents on complementary, or cDNA, the Court left the door open to further debate and legal battles over just what genetic manipulations qualify for patent protection.

Yet, there is reason to hope that the unanimous, non-partisan Court ruling will help clarify patent policy related to biotechnology, a subject that remains tangled up in multiple legal cases and legislative proposals.  And the non-political nature of this fairly technical ruling should provide grounds for optimism that the system can address some issues on the legal merits of the case.

Risk and reward. It is a balance that has to be achieved in any business endeavor and is of utmost importance for pharmaceutical and biopharmaceutical companies managing their growth and manufacturing in emerging markets. Emerging markets are a crucial part of pharmaceutical companies’ growth strategies, but in serving those markets, pharmaceutical and biopharmaceutical manufacturers must align that strategy with partners that can facilitate access to local markets, manage complex supply chains, meet global and national regulatory standards for quality, and secure production for local as well as established markets in North America and Western Europe. Read more »

Quality is of utmost importance in drug development and manufacturing. The increased globalization of the pharmaceutical and biopharmaceutical industries, resulting in more complex and elongated supply chains on a raw material and ingredients basis, obligates suppliers and pharmaceutical and biopharmaceutical companies to develop ways to achieve greater transparency and understanding of those supply chains to ensure product quality and regulatory compliance.  Read more »

It is well known that the pharmaceutical industry spends billions each year on promoting their products, especially to healthcare professionals. In the US, a significant amount is also spent on direct advertising to consumers. In a report by the FDA on Keeping Drug Advertising Honest and Balanced, Thomas Abrams, director of the Office of Prescription Drug Promotion (OPDP), shares on how the agency “protects consumers from false and misleading ads for prescription drugs that appear on TV, radio, online and in print publications.” Read more »

International markets play an important role in pharmaceutical and biopharmaceutical companies’ growth strategies, and it is crucial that companies meet the challenge of global regulatory compliance. Optimizing a quality management system to ensure regulatory and corporate compliance for product registrations for new and existing drugs in new geographic markets is essential for commercial success. Pharmaceutical Technology will examine the operational, organizational, and technological-based requirements on how to reduce risk and achieve operational efficiency for global product registrations in a live webcast on Tuesday June 11 from 2:00 to 3:00 PM EST. Read more »

The US Food and Drug Administration and industry have been working to incorporate process validation as an integral component of drug development and production, and to avoid divergent policies in the US and Europe. A good deal of progress has been made in this area, but manufacturers continue to feel uncertain about the details in revising existing systems and updating long-held practices to fit new approaches, as seen in the discussion at the PDA/FDA Process Validation Workshop in Bethesda, Md., May 20-21. Participants assessed FDA’s Process Validation guidance, which was published in January 2011, and the corresponding PDA technical report on “A Lifecycle Approach to Process Validation” (TR 60) issued in January 2013 [available at www.PDA.org].

RELATED EVENT: Quality by Design (QBD)
Dec 3-5, 2013 – Philadelphia, PA

The aim is to help manufacturers who are wrestling with and working to implement the FDA guidance, explained Harold Baseman, chief operating office of ValSource and co-chair of the PDA process validation interest group. The workshop program followed FDA’s three stages for process validation, starting with process design and moving through process qualification to achieve continued process validation to provide ongoing assurance that a production process remains in a state of control.

Workshop attendees discussed the importance of gaining extensive knowledge about a process early in design and development stages to ensure that the system is well controlled. Patrick Swan, deputy director of the Division of Monoclonal Antibodies, Office of Biotechnology Products (OBP) in the Center for Drug Evaluation and Research (CDER), highlighted the value of tapping prior knowledge to support process validation activities, noting that this may expedite product development for lifesaving breakthrough therapies.
Process qualification involves identifying and interpreting information from process design functions to establish testing and acceptance criteria. Methods for equipment and facility assessment are important, as are sound process qualification sampling plans.

The lifecycle approach also involves linking process validation activities to a manufacturer’s Quality Risk Management system. While manufacturers and regulators are looking to shift away from assessing a set number of batches, questions remain about how much data is needed to show that something is or is not in control, Baseman explained.

Similar efforts by the European Medicines Agency (EMA) to update policies on these issues were discussed, with an emphasis on the importance of achieving similar approaches to validation requirements. Concerns were raised that EMA doesn’t consider process development part of process validation, that different terms are emerging, and that divergent regulatory approaches may cause confusion. Manufacturers filing applications in some 150 countries emphasized the importance of common formats and systems.

OBP deputy director Jeffrey Baker explained that FDA and EMA officials discuss these and other issues at “cluster meetings,” held to address topics such as biosimilar evaluation, good manufacturing practices and differences in review policies. Regulatory authorities at these sessions don’t consider specific companies or applications, Baker noted, but address general policy approaches, with an eye to gaining alignment on regulatory guidance.

Baker and others suggested that questions about data collection and regulatory requirements can be addressed by focusing on the science, which is key to appropriate terminology, data formats and determining what information is needed to assure product quality.

Yet, legacy products raise challenges, as manufacturers have to determine what would be involved in updating process validation data to support manufacturing changes or address safety issues.

One benefit of revised process validation policy that reduces the volume of unnecessary testing is to streamline the development and approval of important, life-saving therapies. Future FDA guidance on its regulatory approach to “breakthrough” therapies should explain further how the agency will address manufacturing and quality assurance issues for such products, Baker noted. But he pointed out that companies request the breakthrough designation and thus should be able to explain how they will supply a quality product efficiently and quickly for sick patients.

The issue of patients not receiving essential medicines because they cannot afford them is becoming a serious problem in the EU as the region battles through its economic crisis. In a briefing by the European Public Health Alliance (EPHA) on Access to Medicines in Europe in Times of Austerity, it was highlighted that the three factors that will determine whether or not a patient gets his/her medicine are “affordability and availability, in terms of access to medicines, and innovation in terms of developing new methods of assuring best possible health outcomes.” Read more »

FDA’s quality-by-design (QbD) initiative is a systematic approach to designing and developing pharmaceutical formulations and manufacturing processes to ensure predefined product quality. Understanding the critical quality attributes of the ingredients in a formulation, including excipients, and the critical process parameters in the manufacturing process of the finished drug product is crucial for successfully implementing QbD. Pharmaceutical Technology will be holding a live webcast on Thursday May 23 from 10:00 AM  to 11:00 AM EST to examine the regulatory and technical considerations in implementing QbD for coatings in modified-release formulations, including strategies to mitigate the risks associated with alcohol-induced dose-dumping and the application of alcohol-resistant coatings. Read more »

The global market for biosimilar drugs has been forecasted to be worth $2.445 billion this year, according to a new report by British market research specialist Visiongain. The growth represents a 20% increase from last year and accounts for approximately 2% of the overall biologics market. Moreover, the global biosimilars market is expected to experience a steady growth over the next 10 years, driven by worldwide launches of such products, particularly in the EU and US. Read more »