In re Actions
| Docket Number | Master File No. 1:13-cv-09244 (RA) (SDA) |
| Decision Date | 16 September 2022 |
| Citation | 628 F.Supp.3d 524 |
| Parties | IN RE ACTOS ANTITRUST LITIGATION This Document Relates to: All Actions |
| Court | U.S. District Court — Southern District of New York |
Pending before the Court is Plaintiffs' Letter Motion seeking clarification of the scope of privilege waiver made by Defendants Takeda Pharmaceutical Co. Ltd., Takeda America Holdings, Inc., Takeda Pharmaceuticals U.S.A., Inc. and Takeda Development Center Americas, Inc. (collectively, "Defendants" or "Takeda"), and seeking to compel Defendants to produce certain categories of documents withheld on privilege grounds. (Pls.' 8/30/22 Ltr. Mot., ECF Nos. 394 & 395.)1 For the reasons set forth below, Plaintiffs' Letter Motion is GRANTED IN PART and DENIED IN PART.
This is an antitrust class action in which Plaintiffs allege that Takeda prevented competitors from timely marketing a generic version of Takeda's diabetes drug ACTOS by falsely describing two patents to the Food and Drug Administration ("FDA"). See In re Actos End-Payor Antitrust Litig., 848 F.3d 89, 92 (2d Cir. 2017). The relevant background for the privilege dispute before the Court is set forth below:2
I. The Hatch Waxman Act And The Listing Requirement
Under the Federal Food, Drug, and Cosmetic Act, brand-name drug manufacturers must obtain FDA approval to sell a new drug. 21 U.S.C. §§ 301-399. To do so, a manufacturer needs to file a New Drug Application ("NDA"), which includes among other information "a full list of the articles used as components of such drug" and "a full statement of the composition of such drug." 21 U.S.C. § 355(b)(1). If the new drug either is or contains a patented substance, the pharmaceutical company that owns the patent enjoys market exclusivity for the drug co-extensive with the patent's protection.
Meanwhile, the Hatch-Waxman Act simplifies the regulatory hurdles for prospective generic drug manufacturers by eliminating the need to file lengthy and costly NDAs. As a result, generic manufacturers need only file an Abbreviated New Drug Application ("ANDA"), which allows the applicant to rely on the FDA's previous safety and effectiveness findings for the brand drug they wish to replicate and bring to market. 21 U.S.C. §§ 355(j)(2)(A)(ii), (iv). Still, generics are prohibited from infringing the brand's patents; when a generic competitor submits an ANDA, it must provide a "certification" with respect to each unexpired patent related to the brand drug's production. The certification alerts the FDA to the relevant patent and explains why the proposed generic would not infringe it.
The Hatch-Waxman Act envisions two types of certifications, each providing a separate regulatory route for the production of a generic drug despite a brand pharmaceutical company's patent related to the drug. The first is commonly referred to as a "Paragraph IV" certification. 21 U.S.C. § 355(j)(2)(A)(vii)(IV). This certification states that the patent "is invalid or will not be infringed by the manufacture, use, or sale of the new drug." Id. The second is a "section viii" certification. 21 U.S.C. § 355(j)(2)(A)(viii). A section viii certification is appropriate where the generic company seeks only to market an unpatented method of using a substance in the public domain and certifies that it will "carve out" patented methods from its drug's production and labeled uses. Id.
Relevant to this case, Paragraph IV certifications activate powerful rights and restrictions on behalf of the patent-holding company. As an initial matter, it triggers a highly artificial act of infringement, permitting the brand manufacturer to sue the ANDA applicant. If the brand chooses to sue, the FDA is automatically prevented from approving the ANDA for the earlier of thirty months or the outcome of the litigation. The wait may be worth it, however, because the statute awards a 180-day period of market exclusivity to the first generic Paragraph IV ANDA applicant who is either not sued or who proves the patent invalid or not infringed by the generic. The exclusivity period begins to run "after the date of the first commercial marketing of the drug" by that generic applicant. 21 U.S.C. § 355(j)(5)(B)(iv). This imposed delay oftentimes creates a bottleneck effect of generic competitors who are ready and willing—but legally unable—to enter the market.
The consequences of filing a section viii certification, on the other hand, are much less dramatic. The process entails neither a 30-month litigation stay nor a 180-day exclusivity period. Thus, a generic manufacturer that files a section viii certification can more easily enter the market without delay.
Whether the generic manufacturer files a Paragraph IV certification or a section viii certification depends on how the brand drug manufacturer identifies the object patent(s) to the FDA. During the period relevant to this case, the specific language that a brand looked to in making this decision was found in the Hatch-Waxman Act's so-called "Listing Requirement" of 21 U.S.C. § 355(b)(1). In relevant part, that section provided:
The applicant shall file with the application the patent number and the expiration date of any patent which claims the drug for which the applicant submitted the application or which claims a method of using such drug and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug.
Id. (emphases added by Second Circuit). Related to the statutory Listing Requirement, an FDA regulation provides:
If the brand manufacturer lists the patent as claiming the drug itself, a generic manufacturer must make a Paragraph IV certification asserting that the patent is invalid, expired, or otherwise will not be infringed by the generic version. For if the patent at issue is valid and current (and actually claims the drug), there is no way to produce a bioequivalent generic without infringing the patent. But if the brand manufacturer lists the patent as claiming a method of using the drug, the section viii certification affords the generic manufacturer an avenue to immediately produce its proposed drug provided only that the generic does so in a manner different from the patented method.
Because the FDA lacks both the expertise and the authority to review patent claims, rendering its own role with respect to patent listing ministerial, it does not independently assess the patent's scope or otherwise look behind the description authored by the brand. The use of improper designations during this process therefore throws a wrench into the FDA's ability to approve generic drugs.
II. Factual Background
In 1999, the FDA approved Takeda's Type-2 Diabetes drug ACTOS, a treatment tablet containing only one active ingredient—pioglitazone. In its NDA for ACTOS, Takeda listed U.S. Patent 4,687,777 (the "'777 Patent"), which consisted of pioglitazone and its pharmacologically acceptable salts, as claiming the drug ACTOS. The '777 Patent was set to expire on January 17, 2011, and, in 2007, the Federal Circuit upheld the patent's validity, thus definitively preventing generic entry into the pioglitazone market until after that expiration date.
Takeda twice supplemented its NDA—in 1999 and 2002—with information about newly-acquired patents: U.S. Patents 5,965,584 (the "'584 Patent") and 6,329,404 (the "'404 Patent"), respectively. Both patents, each set to expire in 2016, cover unique compounds containing pioglitazone and another active ingredient that, together, yield novel synergies not offered by pioglitazone alone. Specifically, the '584 and '404 Patents are pharmaceutical compositions which comprise an insulin sensitivity enhancer [i.e., pioglitazone] in combination with other antidiabetics which shows a potent depressive effect on diabetic hyperglycemia. Because they are amalgams of separately identifiable constituent parts, both '584 and '404 are properly called "combination patents."
In its supplements for the ACTOS NDA, Takeda told the FDA that these combination patents both claim the drug ACTOS in addition to claiming methods of using ACTOS. Under normal circumstances, this would have compelled generic drug makers seeking to compete in the ACTOS market to file Paragraph IV certifications because one would have to undermine the validity of the '584 and '404 patents for the FDA to grant the ANDA. Complicating matters in this case, however, when the FDA published Takeda's supplemental patent information in its Orange Book—the go-to source of brand patent information—it listed the '584 and '404 Patents only as method-of-use patents.3 Presumably, then, there was no reason at that time for a generic...
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