[Ip-health] BNA - Roche seeks US compulsory license for anemia drug

[Mike Palmedo]

BIO Files Amicus in Anemia Drug Case, Says Roche Wants Court to Be
'Price Czar'

BNA Pharmaceutical Law and Industry Report
July 11, 2008

A biotechnology industry group July 7 urged the U.S. Court of Appeals
for the Federal Circuit to reject drugmaker F. Hoffmann-LaRoche Ltd.'s
public interest argument for selling an anemia drug in the U.S. market
(Amgen Inc. v. F. Hoffmann-LaRoche Ltd., Fed. Cir., No. 2008-1300,
amicus brief filed 7/7/08).

In the amicus brief filed in Roche's appeal of a lower court's order
barring Roche from selling its anemia drug, Mircera, in the United
States, the Biotechnology Industry Organization (BIO) argued that the
appeals court should not override the exclusive patent right in order
for an infringer to enter the market to possibly produce competitive
pricing.

Amgen Inc. sells the anti-anemia drugs Epogen (Epoetin alfa) and Aranesp
(darbepoetin alfa). Roche wants to sell Mircera (methoxy polyethylene
glycol-epoetin beta) for treatment of anemia associated with chronic
kidney disease in patients on dialysis and in patients not on dialysis.
The Food and Drug Administration approved Mircera in November 2007, but
a jury in October 2007 found that Amgen's patents were valid and were
infringed by Roche's product.

In a Feb. 28 ruling, Judge William G. Young of the U.S. District Court
for the District of Massachusetts rejected Roche's motion for a new
trial and upheld "in all respects" the jury's verdict that Amgen's
patents are valid and infringed by Roche's product.

At the same time, however, Young, in response to Roche's contention that
the public interest would be served by the reduced drug price that it
claimed would inevitably result from competition between Mircera and
Amgen's Epogen and Aranesp products, said he might be willing to modify
the injunction and let Roche go forward with Mircera sales if it met
certain conditions. Young suggested that Roche might pay Amgen a 22.5
percent royalty and fund an independent agency to monitor Roche sales
and royalty payments. On March 26, Young ordered the appointment of a
special master to make recommendations on price parity and dose
conversion ratios for Amgen's Epogen and Roche's Mircera.

On April 11, Roche filed a notice of appeal to the U.S. Court of Appeals
for the Federal Circuit from the district court's decision. In its
notice of appeal, Roche claimed that Young abused his discretion on
multiple matters, including failing to consider and weigh evidence of
Amgen's "unconscionable marketing conduct" in his preliminary injunction
ruling as well as failing to adequately consider the negative effect on
the public interest that would flow from the court's decision to grant
of an injunction in Amgen's favor rather than enter in an
ongoing-royalty remedy that would have placed Mircera in the marketplace.

Overrides Framers' Judgment

In its amicus brief, while taking no position on whether Mircera
satisfies an "unmet medical need," as Roche argued, BIO urged the
Federal Circuit to reject Roche's position that the court should weigh
the possibility of price competition that would result if Roche put
Mircera into the anemia drug market.

Noting that it takes years for a company to earn back its R&D costs, BIO
stated, "If infringers are allowed to enter the marketplace during this
period in order to compete on price, the innovator's incentives to make
the necessary R&D expenditures would be greatly diminished."

Expanding the "public interest" prong of the four-factor injunctive
relief test in order to deny injunctive relief, as Roche advocates,
would deprive a patent holder of exclusivity and create great
uncertainty and market disruption, BIO stated. Such an action, BIO
argued, would be unsupported by Supreme Court and Federal Circuit precedent=
.

According to BIO, Roche's argument relied on the Supreme Court's
decision in eBay Inc. v. MercExchange LLC, 547 U.S. 388 (2006), which
held that the decision to grant injunctive relief must be exercised in
patent disputes consistent with traditional principles of equity. And
yet, BIO argued, "theeBay decision does not suggest that reducing the
period of patent exclusivity in an effort to lower the price of patented
products is a sufficient public interest that could be determinative
when weighed in the exercise of discretion under 35 U.S.C. =A7 283."

If the Federal Circuit found "that ongoing patent infringement is a
public good to be weighed in the balance, [it would] effectively
override the judgment of the Framers of the Constitution and Congress
that the grant of exclusive patent rights serves the public interest,"
BIO wrote.

District Court as 'Price Czar'?

BIO next argued that in a number of laws, including the Bayh-Dole Act,
the Hatch-Waxman Act, and the Medicare Act, Congress has struck a
balance between incentives for innovation and access to lower-priced
drugs that district courts are not free to second guess. The
Hatch-Waxman Act, for example, actually increases patent term to an
innovator as a recompense for regulatory delay. BIO cited many
unsuccessful attempts to pass legislation authorizing compulsory patent
licenses.

"Indeed," BIO stated, "if Congress had intended that =A7 283 be
interpreted so broadly as to confer on district courts the discretionary
power to order compulsory licensing whenever the 'public interest' might
be served, there would have been no reason for Congress to grant express
statutory authority for compulsory licensing in the limited
circumstances set out in the patent statute." Rather, BIO stated, using
the public interest prong to order "injunctions with terms" in an effort
to promote drug price competition would undermine the system of
incentives created by the patent statute and recognized by Congress.

An ongoing-royalty injunction such as the one Roche proposed, BIO wrote,
would "put the district court in the position of price czar,
establishing price controls in a market not based on government policy
and Congressional directive, but instead upon a limited evidentiary
record and the exercise of equitable discretion."

The brief was filed by Donald R. Ware, Barbara A. Fiacco, and Jeremy A.
Younkin of Foley Hoag LLP, Boston, with Hans Sauer of the Biotechnology
Industry Organization, Washington, of counsel.

BIO's amicus brief can be found at
http://op.bna.com/hl.nsf/r?Open=3Djaqo-7gcqwx.


--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu