As an update to our March 5th, April 4th and April 9th postings, The Copaxone Story in the U.S. and India,  The Copaxone Story in the U.S. and India:  An Update and The Copaxone Story in the U.S. and India:  A Further Update, on April 18th, the U.S. Supreme Court (“Supreme Court”) denied Teva Pharmaceutical Industries Ltd.’s (“Teva”) application to recall and stay the Federal Circuit’s mandate pending the Supreme Court’s decision.  This denial paves the way for Sandoz and Mylan to launch their generic versions of Copaxone® at risk in approximately one month.

Background

On December 27, 2007, Sandoz  filed the first abbreviated new drug application (“ANDA”) with the U.S. Food and Drug Administration (“FDA”) seeking approval to manufacture and sell its proposed generic version of Copaxone®, before the expiration of the Orange Book patents.  On June 29, 2009, Mylan filed its own ANDA.  In view of the ANDA submissions, Teva (and Yeda Research and Development Co., Ltd.) separately sued Sandoz (in August 2008) and Mylan and Natco (in October 2009) in the U.S. District Court, Southern District of New York (“District Court”) for infringement of the Orange Book patents as well as U.S. Patent Numbers 5,800,808 (“’808 patent”) and 6,048,898 (“’898 patent”).  The District Court issued an injunction barring Sandoz and Mylan from marketing their generic versions of Copaxone® until September 1, 2015 (the expiration date of the ‘808 patent).

The lawsuits were consolidated and on June 29, 2012, the Judge found all nine patents valid, enforceable and infringed.  Specifically, the Judge found Mylan had infringed seven of the patents and Sandoz infringed four patents.  On July 26, 2013, the Federal Circuit ruled that four of the patents were valid but found five invalid for indefiniteness.  Specifically, the Federal Circuit ruled that the claims of the five patents were indefinite because a person skilled in the art could not discern the boundaries of the claims.  The patents declared invalid were U.S. Patent Numbers 5,800,808, 5,981,589, 6,048,898, 6,620,847 and 6,939,539.  The patents held valid were U.S. Patent Numbers 6,054,430, 6,342,476, 6,362,161 and 7,199,098.  The invalidation of the ‘808 patent was significant because of all the Orange Book listed patents, it had the longest expiration date (namely, September 1, 2015 (all of the remaining patents expire on the same date – May 24, 2014)).  The Federal Circuit remanded the case to the District Court to determine whether to modify its injunction.

On November 13, 2013, the Supreme Court denied Teva’s request to stay the Federal Circuit’s decision during appeal.  As a result of this denial, the District Court was compelled to follow the Federal Circuit’s mandate and modified its injunction.  As a result, Sandoz and Mylan are permitted launch their respective generic versions of Copaxone® beginning May 24, 2014 (rather than September 1, 2015).

On March 31, 2014, the Supreme Court granted Teva’s writ of certiorari to review the Federal Circuit’s decision.  Specifically, Teva petitioned for writ of certiorari to clarify the correct standard of review used by Federal appellate courts when reviewing factual findings made by a district court.  Most Federal appellate courts review a district court’s factual findings to see if they are “clearly erroneous”.  However, the Federal Circuit has had a practice of reviewing a district court’s factual findings in support of claim construction using de novo review.

Application to Recall and Stay Federal Circuit’s Mandate

On April 4th, Teva filed an application with Chief Justice John G. Roberts (“Chief Justice”) asking the Supreme Court to recall the Federal Circuit’s mandate which modified the District Court’s injunction.  In its application, Teva stated that it would “likely face irreparable harm if the mandate is not recalled”.  Specifically, Teva argued: 

Absent a recall of the mandate, respondents will be free to launch products that infringe the ’808 patent fifteen months before that patent expires.  In analyzing whether that premature launch will cause Teva irreparable harm, the Court assumes that Teva’s legal position is correct, Barnes, 501 U.S. at 1302—an assumption that carries greater weight now that the Court has chosen to grant the petition.  Applying that standard, the Federal Circuit’s insistence on lifting the District Court’s injunction while this Court’s review proceeds will leave Teva unprotected and likely cause Teva serious, irreparable harm.

The Chief Justice gave Sandoz and Mylan until April 14th to respond to Teva’s application.

Opposition of Sandoz and Mylan to Teva’s Application

On April 14th, Sandoz and Mylan filed a joint opposition to Teva’s application.  The parties argued that the stay should be denied because:

1.  The relief sought by Teva would require the issuance of a new injunction (the original injunction no longer existed because that injunction had been modified by the District Court) and Teva could not justify such extraordinary relief; and

2.  Even if a recall and stay of the mandate could provide the relief sought, Teva failed to satisfy its burden demonstrating that such relief was warranted.  Specifically, Teva had failed to show a “fair prospect” that the Supreme Court would reverse the Federal Circuit’s decision.

Interestingly, Sandoz and Mylan argued that an injunction or stay could ultimately cause each of them immense harm.  Specifically, the parties argued:

What is more, the harm to Sandoz and Mylan from an injunction or stay is likely to extend well beyond the duration of any such order as a result of Teva’s ongoing efforts to undercut the present Copaxone® market before the introduction of a generic alternative.  Until a few months ago, Copaxone® had been administered only in daily 20-milligram injections – the version of the drug that Sandoz and Mylan intend to produce.  But on January 28, 2014, Teva obtained FDA approval to market a version of the drug that is administered in 40-milligram injections three times a week.  Glatiramer Acetate, Orange Book:  Approved Drug Products with Therapeutic Equivalence Evaluations, U.S. Food & Drug Admin.  The 40-milligram version purportedly is covered by separate patents, not at issue in this litigation, that will not expire until 2030.  Ibid. 

Because the 40-milligram version is shielded from imminent generic competition, Teva has made efforts to move the Copaxone® market to that version, because ‘the more patients it converts ahead of generic approvals, the higher the probability insurers won’t force those customers to switch back to daily shots once generics become available.’ David Wainer, Teva’s Early Copaxone® Conversion Effort Convincing Analysts, Wash. Post, Mar. 11, 2014.  Indeed, Teva even has created financial incentives for patients to use the new 40-milligram version by pricing it thousands of dollars per year lower than the 20-milligram formulation.

…Simply put, Teva is aggressively moving to cannibalize the 20-milligram market that Sandoz and Mylan are seeking to enter:  by February 28, 2014 – after only one month on the market – Teva already had switched 8.7% of Copaxone® users to the 40-milligram formulation.

Teva’s Reply in Support of its Application to Recall and Stay Federal Circuit’s Mandate 

On April 17th, Teva filed a reply in support of its application.  In its brief, Teva reiterated that its application was for a stay of a mandate and not an injunction.  Specifically, Teva argued that “The District Court in this case enjoined respondents from such infringement, and the requested stay would prevent the Federal Circuit’s incorrect decision from disrupting the injunction while this Court decides whether (as is likely) the Federal Circuit must be reversed.”  Additionally, Teva argued that there was far more than a “fair prospect” that the Supreme Court would reverse the Federal Circuit.  Teva argued that “…the briefs of the United States and a host of other amici, the closely divided en banc court (6-4), and two decades of vigorous dissents from Federal Circuit judges seeking to overturn the no-deference rule all demonstrate not just a fair prospect, but a probability of reversal.”In response to the arguments made by Sandoz and Mylan regarding the harm each would suffer as a result of an injunction or stay, Teva argued:

Respondents’ argument seems to be that if they could launch before this Court decides the case, they could lock up more customers who have not yet tried Teva’s new three-times-per-week Copaxone® product.  That product is now FDA-approved, is as efficacious as the daily injection, and allows patients to substantially reduce the number of injections they must undergo.  Respondents hope that insurance companies will decide to reimburse patients only for the less expensive (but still expensive) generic daily injection product.  Respondents’ desire to lock up customers before they try Teva’s three-times-a-week product rests on speculation about voluntary choices between products that patients and doctors will make.  Such speculative fear of competition is not cognizable harm in any event.

If anything, the existence of three-times-a-week Copaxone® undermines respondents’ position.  Respondents oppose reinstating the District Court’s injunction precisely so that they can undermine Teva’s ability to sell the new product – one that offers real advantages to patients – and permanently erode the price of that product as well.  What respondents seek to preserve is their chance to increase the irreparable harm that the launch of their generic products before the expiration of the ‘808 patent would cause Teva.  Such changes in the market would make the damages from the launch of an infringing generic product even more difficult to calculate here than in other cases in which courts have routinely found that launching a generic product would create irreparable harm (emphasis in original).

Additionally, Teva stated that it was prepared to post a bond of up to $500 million at the “earliest practicable time, but in no event later than May 24, 2014”.  According to Teva, the “bond would fully protect both respondents for many months of sales even under their most wildly optimistic projections”.

Denial of the Application by the Supreme Court 

On April 18 the Chief Justice denied Teva’s application.  Specifically, the Chief Justice acknowledged that while the Supreme Court had granted certiorari and Teva had demonstrated a fair prospect of success on the merits, he was not convinced that Teva had demonstrated a likelihood that irreparable harm would result as a result of the denial of the stay.  More specifically, the Chief Justice stated:

[R]espondents acknowledge that, should Teva prevail in this Court and its patent be held valid, Teva will be able to recover damages from respondents for past patent infringement.

…Given the availability of that remedy, the extraordinary relief that Teva seeks is unwarranted.

At Risk Launch?

With approximately one month to go, it will be interesting to see whether or not Sandoz and Mylan launch their generic versions of Copaxone®.