Uncertainty surrounding so-called skinny labels has practitioners on edge, but if the U.S. Supreme Court weighs in, it could offer clarity.

A skinny label refers to a situation in which the generic omits or carves out from its label an indication that is patented by the brand name company, and only seeks approval for unpatented uses.[1]

Generic-drug makers are hoping Teva follows through with a petition for grant of certiorari in the wake of the U.S. Court of Appeals for the Federal Circuit's en banc denial in GlaxoSmithKline LLC v. Teva Pharmaceuticals USA Inc. in February that left undisturbed a determination of induced infringement by Teva of GSK's drug Coreg.

On April 29, Teva filed an application for an extension of time to file a petition for writ of certiorari. That application was granted May 3, and Teva now has until July 11 to file a petition for writ of certiorari.

Teva's application hints at two aspects of the Federal Circuit decision that it may ask the Supreme Court to review in its petition, if ultimately filed. First, Teva notes the proper question on inducement is "whether the skinny label affirmatively instructs infringement, not whether a reader could theoretically glean an infringing method by cobbling together disparate portions from the label."

Teva also raised the issue of causation required for inducement, in particular what it described as the panel's holding "that if a label is capable of causing infringement, the jury can simply assume causation." Second, Teva raised concerns that the Federal Circuit's decision would "threaten ... to render the carve-out statute a dead letter."

GSK v. Teva: Denial of Rehearing Leaves Infringement Finding Intact

The GSK v. Teva case has a lengthy history. Initially, a jury found Teva induced infringement and assessed damages based on lost profits and reasonable royalty. The U.S. District Court for the District of Delaware granted Teva's renewed motion for judgment as a matter of law and found no reasonable juror could have found that Teva induced infringement.

GSK appealed, and on Oct. 2, 2020, the Federal Circuit vacated the grant of judgment as a matter of law and reinstated the jury's verdict and damages award. Following a petition by Teva, on rehearing, the Federal Circuit panel on Aug. 5, 2021, found sufficient evidence supported the jury's verdict of induced infringement.

The Aug. 5, 2021, decision focused on Teva's label and marketing materials in finding that it induced infringement. GSK markets and sells carvedilol, a beta blocker, under the brand name Coreg for treating three indications. Teva's skinny label contained two of those indications:

• Post myocardial infarction, left ventricular dysfunction, or post-MI LVD; and
• Hypertension.

But it did not contain the third indication, chronic heart failure.

Teva's press releases and marketing materials noted its generic was "indicated for treatment of heart failure and hypertension," as the generic version of cardiovascular agent Coreg and as an "AB-rated generic equivalent of [GSK's] Coreg tablets."

The Federal Circuit found that the following factors constituted substantial evidence to support the jury's finding:

• The partial label;
• Expert testimony to support that the partial label instructed administering carvedilol for the patented use of decreasing mortality caused by chronic heart failure; and
• Expert testimony that the post-MI LVD indication falls within the definition of congestive heart failure.

The Federal Circuit then addressed marketing materials, finding the jury appeared to conclude that Teva was intending to communicate that its generic could be used as a substitute for Coreg to treat congestive heart failure.

The court noted that the statement that "tablets are the AB-rated generic equivalent of GlaxoSmithKline's Coreg Tablets and are indicated for treatment of heart failure and hypertension" did not parse between congestive heart failure — the patented use — and post-MI LVD.

Likewise, a jury could reasonably conclude that Teva's statement that it was marketing a generic version of GlaxoSmithKline's cardiovascular agent Coreg was encouragement for doctors to substitute its product for all indications, including the patented use.

Most recently, on Feb. 11, 2022, the Federal Circuit denied Teva's petition for panel rehearing and rehearing en banc. The denial featured one concurrence and three dissents, which discussed the admission of Teva's skinny label as evidence against it, how the defense of equitable estoppel may be raised by Teva, and whether certain arguments were raised by the parties.

Chief U.S. Circuit Judge Moore authored the concurrence, which was joined by U.S. Circuit Judges Pauline Newman, Kathleen M. O'Malley, Richard G. Taranto, Raymond T. Chen and Kara Farnandez Stoll. The concurrence noted it shared the dissent's concern that "GSK's representations to the U.S. Food and Drug Administration are at odds with its enforcement efforts in this case" but ultimately, "equitable estoppel [is] the natural vehicle to address [those] concerns."

In short, the concurrence took the view that the court should not "consider altering our settled inducement law standards based on fairness concerns that are central to the equitable estoppel defense not yet addressed."

U.S. Circuit Judge Sharon Prost's dissent, which was joined by U.S. Circuit Judges Timothy B. Dyk and Jimmie B. Reyna, focused on concerns that "no skinny-label generic is safe" if language on the skinny label can be cobbled together to satisfy a patent claim, even when the generic follows the skinny label pathway set out by Congress and the FDA requires certain language on the label.

Judge Dyk wrote a separate dissent to further elaborate on the FDA-required label, stating "[i]t is hard to see how Congress could have intended that a mandated label could be used as evidence of infringement."

Judge Reyna's dissent expressed the view that en banc consideration is warranted because the issues presented are of "exceptional importance" and that the majority's opinion may lead to instability in the ANDA and skinny label processes.

Amarin v. Hikma: Hope for Generics at the District Court

While the battle between GSK and Teva was taking place in the Federal Circuit, U.S. District Judge Richard G. Andrews in the U.S. District Court for the District of Delaware offered some respite for generics in the Jan. 4 decision in Amarin Pharma v. Hikma Pharmaceuticals USA.[2]

Plaintiff Amarin sells icosapent ethyl under the brand name Vascepa for the treatment of severe hypertriglyceridemia and cardiovascular risk reduction.

Only the cardiovascular risk indication is covered by Amarin's patents, which defendant Hikma omitted from its label for generic icosapent ethyl. Defendant Health Net Inc. is an insurer that provides coverage for Amarin's Vascepa and Hikma's generic icosapent ethyl.

In response to a motion to dismiss, Amarin argued that Hikma's label induced infringement and taught that icosapent ethyl be administered to reduce cardiovascular risk for two reasons:

First, Hikma's label contained a "notice regarding side effects for patients with [cardiovascular] disease," and second, it did not affirmatively state that the generic "should not be used for [cardiovascular risk] Indication."

Hikma responded that the notice is a "warning" and thus not an instruction to use icosapent ethyl to reduce cardiovascular risk and that it has "no duty to discourage infringing use." The court sided with Hikma, noting that the warning was "hardly instruction or encouragement."

The court also stated that the Federal Circuit has rejected the argument that "generic labels must contain a 'clear statement' discouraging use of the patented invention."[3]

The court next addressed whether Hikma's public statements induced infringement. Hikma's press releases stated that its product is the "generic equivalent to Vascepa" and that "Vascepa . . . is indicated, in part, as an adjunct to diet to reduce triglyceride levels in adult patients with severe (≥500 mg/dL) hypertriglyceridemia."

Hikma's press releases also contained sales figures for Vascepa, which included the patented indication. Amarin's complaint also alleged that Hikma's website states that Hikma's generic is AB-rated in the therapeutic category: hypertriglyceridemia.

With respect to the "generic equivalent" statement and sales figures, the court said while relevant to intent, "they do not support actual inducement" as "Amarin must plead an inducing act."

As to whether Hikma induced infringement by advertising its product in the hypertriglyceridemia category, the court noted that "Hikma has not pointed to Vascepa's patented uses in describing itself as Vascepa's generic equivalent," so its statement that its product was AB-rated in a category that included both patented and nonpatented uses was not inducement.

The court distinguished the case from GSK v. Teva, in which Teva:

• Said its product was a generic equivalent of GSK's cardiovascular agent Coreg;
• Had prior press releases that mentioned heart failure; and
• Was encouraging substitution for Coreg on all indications.

The court then denied Health Net's motion to dismiss. Amarin alleged that Health Net's formulary placement induced infringement by "encouraging use of Hikma's generic for the [cardiovascular risk] indication." Health Net's formulary lists Hikma's generic in a lower tier than Amarin's Vascepa, which results in a lower copay if a patient chooses the generic.

Because it is common for pharmacies to automatically substitute an AB-rated generic — like Hikma's — for the branded drug, Amarin alleged that this would lead to substitution on all prescriptions for Vascepa, not just the prescriptions directed to indications of severe hypertriglyceridemia.

The court found that formulary selection and Health Net's prior authorization form, which listed the patented indication on the generic icosapent ethyl capsules form, "as pled, could be affirmative acts under the law of induced infringement."

What's Next for Skinny Labels

In the near term, while practitioners wait for a petition of certiorari by Teva and a possible Supreme Court ruling, it may be difficult to predict the result in a skinny label case. As both the Federal Circuit and Judge Andrews have stated, these cases are fact specific.

For one, as GSK v. Teva shows, the statements on the label may be dissected by branded companies in hopes of finding language that meets the limitations of patented uses. Generics worry that this could leave them in a tough position, because they are essentially required to copy the branded drug's label — omitting, of course, the patented use in a skinny label.

Thus, there could be overlap in language to describe both unpatented indications and patented indications, like the post-MI LVD indication that was determined to fall within the definition of "congestive heart failure." This situation is likely to crop up again, as multiple indications for one drug are often directed to the same disease, like diabetes or heart disease.

In addition, marketing materials and press releases could play a critical role, and branded drugmakers may try to capitalize on statements made by the generics, who will likely take a closer review of those materials. While the GSK v. Teva decision raises concerns for generics that there could be liability for stating that a drug is generic or an AB-equivalent, the Amarin holding should provide some solace that additional evidence related to the patented indication would be required to find inducement.

Branded companies may be emboldened by Amarin's success against insurer Health Net, albeit at the motion to dismiss stage, and look for other avenues to attack the chain in the generic's manufacturing and sales process. Branded companies will likely also be sure to press the attack on the skinny labels of generics, and try to keep them out of the market until there are no remaining patented indications.

On the generic side, some companies may look for creative solutions in light of the GSK v. Teva decision. Others may avoid skinny labels altogether if they feel they cannot draft labels and marketing materials in a way to avoid infringement liability.

Conclusion

Tension remains in the balancing act between protecting patents that branded companies hold while allowing generic drugs to come to market. Practitioners and the courts will have to take a close assessment of the language on the generic's label, as well as press releases and marketing materials to assess the infringement inquiry.

Some generics may sit on the sidelines and avoid skinny labels until there is more clarity and predictability in the law. While the Amarin decision should give generics some optimism, Amarin may appeal the decision with respect to Hikma, and the Federal Circuit may make a similar conclusion as it did in GSK v. Teva.

On the other hand, GSK v. Teva may prove to be an outlier if more district courts distinguish it, given the fact specific nature of the inquiry. In addition, equitable estoppel may provide an escape hatch for generics, even if they meet the induced infringement standard. In the meantime, both branded and generic companies alike look ahead to the next step in the GSK v. Teva saga, which could be a final word on the issue from the Supreme Court.

Paul W. Kalish is an associate at Fox Rothschild LLP.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] A skinny label is typically used "when the brand's patent on the drug compound has expired and the brand has patents on only some approved methods of using the drug." Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S , 566 U.S. 399, 406 (2012). Here, the generic may file a "section viii statement" which omits from its label any patented uses of the drug. See 21 U.S.C. 355(j)(2)(A)(viii). This is in contrast to the common "paragraph IV" certification in which the generic states that the "patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted." 21 U.S.C. 355(j)(2)(A)(vii)(IV); Caraco Pharm. Labs., 566 U.S. at 425 ("A paragraph IV certification (unlike a section viii statement) requires the generic company to propose labeling identical to the brand's; it cannot carve out any uses.").

[2] Amarin Pharma, Inc. v. Hikma Pharms. USA Inc ., Case No. 20-1630, 2022 WL 605734 (D. Del. Jan. 4, 2022).

[3] citing Takeda Pharms. U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d 625, 632 n.4 (Fed. Cir. 2015).

Reprinted with permission from Law360(c) 2022 Portfolio Media. Further duplication without permission is prohibited. All rights reserved.