MANHATTAN (CN) - The Second Circuit revived claims Wednesday that Takeda Pharmaceuticals delayed a competitor from releasing a generic version of its diabetes drug Actos.
Unions and municipalities that purchase drugs for their employees brought the underlying class action in Manhattan. They claimed in a federal complaint that Takeda’s monopolization of the market for Actos forced them to pay inflated prices from at least January 2011, when Takeda's patent on the active ingredient in Actos expired, to at least February 2013, when generic competitors began to flood the market.
The case hinged on a claim that Takeda used false patent descriptions to force generic competitors into an approval process by the U.S. Food and Drug Administration that gives first filers a 180-day exclusivity periods and bottlenecks subsequent filers.
Of the 10 drugmakers that wanted to market generic versions of Actos, nine took the bottlenecked route and faced patent-infringement suits from Takeda.
Though the first three reached settlements that allowed them to begin marketing their versions on August 17, 2012, the latter six had to wait until February 2013.
Teva was the only generic drugmaker that sought approval of its drug through another regulatory scheme, but it wound up in the bottlenecked route anyway because of an FDA announcement.
Though a federal judge dismissed the class action, the Second Circuit reversed in part Wednesday, saying the claims regarding Teva’s market entry may have merit since they do not require any knowledge of Takeda’s allegedly false patent descriptions.
"Teva’s application received preliminary approval from the FDA in 2006, and if Teva had been granted final approval, then it would not have been subject to the first-filers’ 180-day exclusivity period, and could have begun marketing generic Actos for non-patented uses,” the 18-page ruling states.
Sitting by designation from the Southern District of New York, U.S. District Judge Jed Rakoff wrote the opinion for a three-person panel.
The class’s unsuccessful theory “posits a delay in the marketing of generic alternatives to ACTOS by all the generic applicants other than Teva,” according to the ruling.
“Plaintiffs claim that but for the false patent descriptions, applicants would not have been forced to make Paragraph IV certifications, no bottleneck would have arisen, and one or more generics would have entered the market as early as January 2011,” Rakoff wrote.
The court called this theory implausible Wednesday, however, because it “presupposes that the generic manufacturers knew that Takeda had described them as drug product patents when they filed their ANDAs [abbreviated new drug applications].”
Rakoff said it was “incumbent upon plaintiffs to allege that the generic applicants were aware of the descriptions when they filed their ANDAs in 2003 and 2004.”
“The complaint is bereft of any such allegations,” he added.
Seeing the claims involving Teva in a different light, however, Rakoff noted that “this second theory does not depend on Teva’s knowledge of Takeda’s description of its patents as drug product patents, because the FDA’s 2010 announcement was itself expressly based on Takeda’s repeated and allegedly false patent descriptions.”
Rakoff said the FDA made no attempt to evaluate whether the descriptions of the patents were true.
“While Teva thereafter sought to challenge the truthfulness of these descriptions in its litigation with Takeda (but settled before the issue was resolved), the damage had been done,” Rakoff wrote (parentheses in original). “A plaintiff could hardly ask for a clearer causal connection.”
U.S. Circuit Judges Dennis Jacobs and Debra Ann Livingston joined the opinion.
The plaintiffs are represented by Steve Shadowden with Hilliard & Shadowden of Austin,Texas. Teva is represented by Rohit Singla of Munger, Tolles & Olson in San Francisco. Neither firm has returned emails seeking comment sent outside business hours.
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