Par Pharm., Inc. v. Hospira, Inc., 1:17CV944

• Decision Date: 13 November 2019
• Docket Number: 1:17CV944
• Citation: 420 F.Supp.3d 256
• Court: U.S. District Court — District of Delaware
• Parties: PAR PHARMACEUTICAL, INC., Par Sterile Products, LLC, and Endo Par Innovation Company, LLC, Plaintiffs, v. HOSPIRA, INC., Defendant.

420 F.Supp.3d 256

PAR PHARMACEUTICAL, INC., Par Sterile Products, LLC, and Endo Par Innovation Company, LLC, Plaintiffs,

v.HOSPIRA, INC., Defendant.

1:17CV944

United States District Court, D. Delaware.

Signed November 13, 2019

Filed November 14, 2019

Clayton N. Matheson, Daniel Lynn Moffett, George Andrew Lever Rosbrook, Kirt Stephen O'Neill, Rehan M. Safiullah, Thomas Watson Landers, IV, Akin Gump Strauss Hauer & Feld, LLP, Houston, TX, Alan L. Barry, K&L Gates LLP, Chicago, IL, Christine K. Lamb, Fortis Law Partners LLC, Denver, CO, Ranjini Acharya, K&L Gates LLP, Palo Alto, CA, for Plaintiffs.

Brian L. Saunders, Hunton Andrews Kurth LLP, Washington, DC, David A. Kelly, Barnes & Thornburg LLP, Atlanta, GA, Donald E. Lake, III, George G. Matava, Samantha K. Picans, Lewis Brisbois Bisgaard & Smith, LLP, Denver, CO, Douglas McCarley Garrou, Hunton Andrews Kurth LLP, Richmond, VA, Jason M. Beach, Joshua M. Kalb, Hunton Andrews Kurth LLP, Atlanta, GA, Mark A. Hagedorn, Barnes & Thornburg, LLP, Chicago, IL, for Defendant.

UNDER SEAL

FINDINGS OF FACT and CONCLUSIONS OF LAW

Joseph F. Bataillon, Senior United States District Judge This matter is before the Court after a bench trial from June 28, 2019, to July 3, 2019. This is a patent infringement action brought under the Hatch-Waxman Act, 21 U.S.C. § 355, et seq. Defendant Hospira Inc. ("Hospira") filed an Abbreviated New Drug Application ("ANDA"), No. 208908, with the Food and Drug Administration ("FDA"), seeking approval to engage in the manufacturing and sale of a generic version of the plaintiffs' Adrenalin ® brand epinephrine injection 1 mg/mL product, which is indicated for emergency treatment of allergic reactions, including anaphylaxis. The plaintiffs, Par Pharmaceutical, Inc. ("Par Pharm"), Par Sterile Products, LLC ("Par Sterile"), and Endo Par Innovation Company, LLC ("EPIC") (collectively, "Par") allege that Hospira's ANDA infringes its patents, United States Patent Nos. 9,119,876 ("the '876 Patent") and 9,295,657 ("the '657 Patent"). Hospira challenges the validity of Par's patents.

I. REGULATORY BACKGROUND

The Hatch–Waxman Act was passed in 1984 to respond to two problems created by the statutes that then regulated patents and pharmaceuticals. Eli Lilly and Co. v. Medtronic, Inc. , 496 U.S. 661, 669, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990). The first arose from the fact that inventors ordinarily applied for patent protection for newly discovered drugs well before securing regulatory approval, even though marketing was prohibited until regulatory approval was obtained. Warner–Lambert Co. v. Apotex Corp. , 316 F.3d 1348, 1357 (Fed. Cir. 2003). Because the FDA generally took much longer to approve a New Drug Application ("NDA") than the Patent and Trademark Office ("PTO") took to grant a patent, the seventeen-year patent term was substantially eroded by the time the patentee could market its product obtain the benefit of his invention. Id.

The second problem was the requirement that a generic manufacturer obtain its own NDA—providing its own safety and efficacy data—if it wanted to market a product. Id. At that time, manufacturing or using a patented product solely for the purpose of conducting tests and developing the necessary information to apply for regulatory approval later was an act of infringement under 35 U.S.C. § 271(a). Id. Because it took a substantial amount of time for a generic manufacturer to obtain data and secure regulatory approval, requiring those manufacturers to wait until after the patent expired to begin testing and other pre-approval activities resulted in a de facto extension of the patent term. Id.

The Hatch–Waxman Act was designed to address both of these problems by restoring time lost to innovators during pre-patent testing and regulatory approval, while at the same time enabling generic manufacturers to be ready to enter the market once the patents expired. Id. To further the overall goal of getting generics to market faster, Hatch-Waxman authorized the filing and approval of Abbreviated New Drug Applications and provided a mechanism through which patent-holders could adjudicate patent infringement claims prior to a product coming on the market. Id. ; Sunovion Pharm., Inc. v. Teva Pharm. USA, Inc. , 731 F.3d 1271, 1279 (Fed. Cir. 2013) (noting that the Hatch-Waxman framework envisions resolution of the infringement issue earlier, and generally before ANDA approval). Under Hatch-Waxman, generic manufacturers had to show bioequivalence to a patented drug, but no longer had to prove the safety and efficacy of a generic version of a drug, they could effectively "piggy-back" on the patent holder's showing of safety and efficacy. Generic manufacturers are also allowed to test and seek approval to market the generic formulation during the patent term. Id.

Under the infringement adjudication mechanism of the Act, patentees and NDA holders are required to list patents that claim the approved drug or its approved use in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations publication (the "Orange Book"). Id. ; see 21 U.S.C. § 355(b)(1). ANDA applicants are required to either certify that no unexpired patent is listed for its proposed generic formulation, or that the listed patent is either invalid or would not be infringed by the manufacture, use, or sale of the drug by the ANDA applicant ("a paragraph IV certification"). Id. ; 21 U.S.C. § 355(j)(2)(A)(I-IV).

The filing of an ANDA with a paragraph IV certification constitutes an act of artificial patent infringement under 35 U.S.C. § 271(e)(2)(A), which allows litigation to commence before actual sale of an accused product has occurred. Vanda Pharm. Inc. v. West-Ward Pharm. Int'l Ltd. , 887 F.3d 1117, 1126 (Fed. Cir. 2018) ; see also Sunovion, 731 F.3d at 1279 ("Although no traditional patent infringement has occurred until a patented product is made, used, or sold, under the Hatch–Waxman framework, the filing of an ANDA itself constitutes a technical infringement for jurisdictional purposes"). Patent holders benefit from the Act because the patent term was extended for products subject to a regulatory review before commercial marketing or use, if the permission for the commercial marketing or use of the product after such regulatory review period was the first permitted commercial marketing or use of the product. Id. at 1358.

II. FINDINGS OF FACT

A. Background

The following facts are gleaned from the parties' agreed facts in the Pretrial Order and from the evidence adduced at trial. (D.I. 192-1, Pretrial Order, Exhibit ("Ex.") 1, Statement of Uncontested Issues of Fact ("Agreed Facts"); D.I. 223 to D.I. 226, Trial Transcript ("Tr.")).

The dispute between the parties involves injectable epinephrine formulations and long-standing problems of stability and shelf-life. Epinephrine is a well-known drug used to treat allergic reactions and anaphylaxis for over 100 years. Joint Trial Exhibit ("JTX") 48; D.I. 225, Tr. at 452. Older epinephrine formulations, including Par's original Adrenalin ® formulation and Hospira's ampoule and Abboject® products, pre-date the current FDA regulatory regime and were sold without FDA approval under statutory "grandfather" provisions. D.I. 225, Tr. at 527. Although the "grandfathered" drugs had been sold for many years, they did not meet modern pharmaceutical standards in terms of quality, stability, and absence of impurities. D.I. 223, Tr. at 159.

In 2006, the FDA began a drug safety initiative regarding the marketing of unapproved drugs. D.I. 224, Tr. at 215-16; Filing No. 225, Tr. at 527. Under the initiative, the FDA required registration of unapproved products for listing in the Orange Book. Id. Accordingly, the scientists at Par's predecessor company, JHP Pharmaceuticals LLC ("JHP"), began working to develop a product that would meet the FDA's new requirements. Plaintiff's Trial Exhibit ("PTX") 1, '876 Patent, col.1, ll. 53 to 62. Par's Adrenalin ® was the first epinephrine injection product approved by the Food FDA for use in a clinical setting available in the United States. D.I. 192-1, Agreed Facts at 3. Par's NDA No. 204200 was approved by FDA on December 7, 2012 (Id. ).

Though it approved the product, the FDA asked JHP for a post marketing commitment that it would try to reduce the levels of impurities in Adrenalin ®. PTX 191 at 3. The impurities were the result of degradation, a process whereby the amount of the active ingredient, and thereby the potency, of the product decreases and the amount of potentially toxic compounds increases. The primary degradants in epinephrine products are epinephrine sulfonic acid (ESA) and D-epinephrine, an enantiomer of the active ingredient L-Epinephrine.¹ PTX 1, '876 Patent at col. 1, ll.53-56.

The record shows there are three epinephrine degradation pathways—oxidation, racemization, and sulfonation. D.I. 223, Tr. at 165, 173, 179. Patrick Irish, a scientist at JHP, testified it was very difficult to come up with a set of components in a formulation that could minimize one degradation pathway without exacerbating another degradation pathway. D.I. 223, Tr. at 163. The difficulty was that there were unintended consequences of the experiments—solving one issue would create another problem. D.I. 225, Tr. at 452-56

Par's efforts to improve the 2012-FDA-approved product eventually led to a supplemental NDA, No. 204200-04, that was approved on September 12, 2016, and to the two patents that are the subject of this case. D.I. 223, Tr. at 69; D.I. 192-1, Agreed Facts at 2-3. Par's predecessor, JHP, filed Application Serial No. 14/657,990 with the PTO on March 13, 2015, and it issued as the '876 Patent on September 1, 2015. D.I. 192-1, Agreed Facts at 2. JHP filed Application Serial No. 14/818,121 with the PTO on August 4, 2015, and it issued as the '657 Patent on March 29, 2016. Id. at 3. The '657 Patent is a continuation of the application that issued as the '876 Patent. Id. at 2-3. Both patents are titled ...