Pernix Ir. Pain Dac v. Alvogen Malta Operations Ltd.

• Decision Date: 24 August 2018
• Docket Number: Civil Action No. 16-139-WCB
• Citation: 323 F.Supp.3d 566
• Parties: PERNIX IRELAND PAIN DAC and Pernix Therapeutics, LLC, Plaintiffs, v. ALVOGEN MALTA OPERATIONS LTD., Defendant.
• Court: U.S. District Court — District of Delaware

323 F.Supp.3d 566

PERNIX IRELAND PAIN DAC and Pernix Therapeutics, LLC, Plaintiffs,

v.ALVOGEN MALTA OPERATIONS LTD., Defendant.

Civil Action No. 16-139-WCB

United States District Court, D. Delaware.

Signed August 24, 2018

Michael P. Kelly, Benjamin A. Smyth, Daniel M. Silver, McCarter & English, LLP, Wilmington, DE, Brendan M. O'Malley, Pro Hac Vice, Christopher P. Borello, Pro Hac Vice, David G. Varghese, Pro Hac Vice, Dominick A. Conde, Pro Hac Vice, Josh Calabro, Pro Hac Vice, for Plaintiffs.

David M. Fry, Jeffrey Thomas Castellano, Nathan Roger Hoeschen, Shaw Keller LLP, Wilmington, DE, Thomas K. Hedemann, Pro Hac Vice, Chad A. Landmon, Pro Hac Vice, Christopher M. Gallo, Pro Hac Vice, Edward M. Mathias, Pro Hac Vice, Matthew J. Becker, Pro Hac Vice, Seth I. Heller, Pro Hac Vice, for Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

WILLIAM C. BRYSON, UNITED STATES CIRCUIT JUDGE

BACKGROUND

This is a Hatch-Waxman Act case. The plaintiffs, Pernix Ireland Pain DAC and Pernix Therapeutics, LLC, (collectively, "Pernix") have sued the defendant, Alvogen Malta Operations Ltd. ("Alvogen") for patent infringement under 35 U.S.C. § 271(e)(2). Pernix is the owner of U.S. Patent Nos. 9,265,760 ("the '760 patent") and 9,339,499 ("the '499 patent"), both of which are entitled "Treating Pain in Patients with Hepatic Impairment

." The patents share an essentially identical specification, referred to here as the common specification. The two Pernix patents have a priority date of July 31, 2012.

1. The Hatch-Waxman Act is the name commonly used to refer to the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (codified at 21 U.S.C. §§ 355, 360(cc), 35 U.S.C. §§ 156, 271, 282 ), as amended by the Medicare Prescription Drug Improvement and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066. The Hatch-Waxman Act was intended to strike a balance between two competing policy interests: (1) to induce pioneering research and development of new drugs; and (2) to enable competitors to bring low-cost generic copies of those drugs to market rapidly if those drugs are not entitled to patent protection. See Andrx Pharm., Inc. v. Biovail Corp. , 276 F.3d 1368, 1371 (Fed. Cir. 2002). To promote those objectives, the Hatch-Waxman Act provides a means for pharmaceutical companies to resolve patent disputes relatively quickly. Ideally, it provides for a prompt determination of whether particular drugs made and sold by brand-name pharmaceutical companies are protected by valid patents. If the patents are held to be infringed and not invalid, the covered drugs cannot be made and sold by generic manufacturers until the patents expire. If the patents are held to be invalid or not infringed, the Act provides a mechanism for prompt approval of the generic versions of the drugs by the U.S. Food and Drug Administration ("FDA"), which regulates the sale of pharmaceutical drugs in this country.

In order to obtain the necessary FDA approval to market a new drug, a pharmaceutical company must file a New Drug Application ("NDA"). That application is designed to show the FDA, through rigorous testing procedures, that the drug is safe and effective for its proposed indications. After considering the application, and often after extended negotiations with the pharmaceutical company, the FDA may grant the application and authorize the company to market the drug for particular indications. The company is restricted to marketing the drug for those indications, as dictated by FDA regulations that govern both labeling and advertising for all prescription drugs. See 21 C.F.R. §§ 201.1 – 201.327 (labeling); id. § 202.1 (advertising).

In an effort to speed up the approval process for generic drugs, the Hatch-Waxman Act provides that a generic drug manufacturer may submit an Abbreviated New Drug Application ("ANDA") for approval by the FDA. If the generic company intends to market a drug that is equivalent to the first pharmaceutical company's approved drug, the ANDA may rely on the safety and efficacy studies previously submitted as part of the first company's NDA. In order to take advantage of those studies, the ANDA applicant must demonstrate that the proposed generic drug is bioequivalent to the previously approved drug product. See 21 U.S.C. § 355(j)(2)(A) ; Caraco Pharm. Labs., Ltd. v. Forest Labs., Inc. , 527 F.3d 1278, 1282 (Fed. Cir. 2008).

Under the Hatch-Waxman Act, NDA holders are required to notify the FDA of all patents that "claim[ ] the drug for which the [NDA] applicant submitted the application ... and with respect to which a claim of patent infringement could reasonably be asserted." 21 U.S.C. § 355(b)(1), (c)(2). The FDA lists such patents in a publication entitled "Approved Drug Products with Therapeutic Equivalence Evaluations," which is commonly referred to as the "Orange Book." See Bayer Schering Pharma AG v. Lupin, Ltd. , 676 F.3d 1316, 1318 (Fed. Cir. 2012) ; AstraZeneca LP v. Apotex, Inc. , 633 F.3d 1042, 1045 (Fed. Cir. 2010).

The Hatch-Waxman Act creates what is referred to as an "artificial" type of infringement that allows for the adjudication of the parties' rights in patents that would be infringed if the ANDA were issued and the generic product made, used, or sold. See Eli Lilly & Co. v. Medtronic, Inc. , 496 U.S. 661, 676, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990) ; Glaxo Grp. Ltd. v. Apotex, Inc. , 376 F.3d 1339, 1351 (Fed. Cir. 2004). In particular, 35 U.S.C. § 271(e)(2)(A) provides that it shall be an act of patent infringement to submit an ANDA for a drug claimed in a patent or the use of which is claimed in a patent if the purpose of the submission of the ANDA is to obtain approval to engage in the commercial manufacture, use, or sale of the drug claimed in the patent, or the use of which is claimed in the patent before the patent's expiration.

2. Zohydro ER, which the parties sometimes refer to as "HC-ER," is an extended-release hydrocodone product that contains no other active ingredients.¹ The formulation for Zohydro ER was set forth in a prior art U.S. patent application to Devane, U.S. Patent Appl. No. 2006/0240105 (JTX37), which was published on October 26, 2006. See Trial Tr. 210:20–211:7, 368:24–369:3. When Zogenix, Inc., the prior owner of Zohydro ER, sought FDA approval to market Zohydro ER, the FDA insisted that Zogenix conduct a "hepatic impairment

study" to determine the potential effect of Zohydro ER on patients with hepatic impairment—i.e., compromised liver functionality—and to determine whether special restrictions should be imposed on the use of the drug in such patient populations. Trial Tr. 280:7–19, 359:10–360:21. The Zohydro ER hepatic impairment study produced results that surprised the Zogenix scientists who conducted the study. Contrary to their expectations, they discovered that the concentration of hydrocodone in the bloodstream of subjects with mild and moderate hepatic impairment was not dramatically higher than in patients without hepatic impairment. Trial Tr. 369:7–371:4, 379:16–380:5, 387:8–21, 391:21–393:13, 398:5–399:13, 412:23–413:12, 433:23–435:10, 440:18–25.

The FDA approved the NDA for Zohydro ER on October 25, 2013, in capsule dosage forms ranging from 10 to 50 milligrams that are administered twice daily. The FDA-approved label for Zohydro ER provided, in the Dosage and Administration section: "Patients with Severe Hepatic

Impairment

: Initiate dosing with 10 mg every 12 hours and titrate carefully, while monitoring for respiratory depression, sedation, and hypotension. No adjustment in starting dose with ZOHYDRO ER is required in patients with mild or moderate hepatic impairment." JTX5, at 1. In a subsection entitled Dosage Modification in Patients with Severe Hepatic Impairment, the label advises that "[p]atients with severe hepatic impairment may have higher plasma concentrations of hydrocodone than those with normal function," but it adds that "[n]o adjustment in starting dose with ZOHYDRO ER is required in patients with mild or moderate hepatic impairment." JTX5, at 7. And in the section dedicated to the use of the drug in specific populations, the label repeats that "[n]o adjustment in starting dose with ZOHYDRO ER is required in patients with mild or moderate hepatic impairment. Patients with severe hepatic impairment may have higher plasma concentrations than those with normal hepatic function .... Therefore a dosage reduction is recommended for patients with severe hepatic impairment...." JTX5, at 17. In the section on clinical pharmacology, the label reported the results of the hepatic impairment study that was performed in connection with the filing of the NDA. JTX5, at 22.

Following the approval of Zohydro ER, Alvogen filed an ANDA seeking FDA authorization to market a generic form of that product. Alvogen proposed to market its hydrocodone

extended-release capsules in strengths ranging from 10 to 50 milligrams. The proposed label for Alvogen's ANDA product, JTX6, is essentially identical to the label for Zohydro ER.²

3.Hydrocodone

is an opioid that is widely prescribed to treat pain. It is marketed in both an extended-release form and an immediate-release form. It is often combined with another ingredient, and was found in several products before the priority date of Pernix's patents, including: Vicoprofen, which is hydrocodone combined with ibuprofen ; Lortab and Vicodin, which are hydrocodone combined with acetaminophen ; and TussiCaps, which is hydrocodone combined with chlorpheniramine, an antihistamine, and is approved for coughs and upper respiratory symptoms. Vicoprofen, Lortab, and Vicodin were sold in immediate-release form, while TussiCaps was sold as an extended-release product.

Since the priority date of the Pernix patents, two other extended-release hydrocodone

products were developed besides Zohydro ER—Hysingla ER and Vantrela. Neither of those products has an active ingredient other than hydrocodone. In addition,...