IP Hot Topic: Senate Bill Seeks to Create New Skinny Label Protections

A bipartisan Senate bill dubbed the “Skinny Label, Big Savings Act” was introduced in January. The bill would expand the scope of protection afforded by section viii carve-outs, a mechanism that allows Abbreviated New Drug Application (“ANDA”) applicants to remove (“carve out”) certain patented methods of use from a generic drug label while still being considered therapeutically equivalent to an FDA-approved drug listed in the Orange Book. Labels with such carve-outs are known as “skinny labels.” The carve-out mechanism provides an exception to the general rule that generic drug labels must exactly match the FDA-approved label of the brand equivalent. The bill would afford analogous protections to those seeking approval to market biosimilars for fewer than all FDA-approved indications of the corresponding biologic drug.

If passed into law, the bill would create a new affirmative defense for companies marketing generics or biosimilars. Namely, it would not be an act of infringement for such companies to market their products as “a generic of, or therapeutic equivalent to,” the reference drug, so long as “the labeling, promotion, or commercial marketing does not reference the condition or conditions of use claimed” in the patent(s) in question.

GSK v. Teva: Overlapping Indications Can Induce Infringement

The bill is in part a response to the Federal Circuit’s holding in GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., 7 F.4th 1320 (Fed. Cir. 2021) (“GSK v. Teva”). There, the Federal Circuit upheld a jury verdict finding that Teva induced infringement of a patent covering an indication that Teva attempted to carve out when seeking approval of its ANDA.

The label for Teva’s carvedilol (a generic version of GSK’s Coreg^®) included an indication for reducing cardiovascular mortality in patients suffering from left ventricular dysfunction following a myocardial infarction (“post-MI LVD”) (a use not protected by any GSK patent). Teva had carved out Coreg^®’s indication for treating congestive heart failure, which was protected by a method-of-use patent owned by GSK. At trial, GSK’s expert testified that the post-MI LVD and congestive heart failure indications have significant overlap, meaning the post-MI LVD indication induced both infringing and non-infringing conduct by prescribing doctors. The expert also testified that Teva’s press releases induced infringement by promoting the drug as indicated “for treatment of heart failure” generally. The Federal Circuit found that this expert testimony was sufficient to support the jury’s verdict.

In the wake of this ruling, many generic drug companies expressed concern about its implications. The fear is that GSK could potentially subject any generic company marketing its drug as an AB-rated generic to liability for induced infringement of patented indications, even if the generic has carved out those patented indications to the full extent permitted by the FDA.

A New Defense: Focus on Therapeutic Equivalence

The Skinny Label, Big Savings Act is intended to quell some of these concerns by effectively providing a safe harbor for companies marketing generics with skinny labels. The bill provides that it is not an act of infringement to describe such a drug “as a generic of, or therapeutically equivalent to,” the brand equivalent. Importantly, though, the safe harbor applies only if the generic’s “labeling, promotion, or commercial marketing does not reference the condition or conditions of use claimed in the patent.” So, the bill is not a silver bullet for skinny label defendants. The issue of whether statements in the label and promotional or marketing materials “reference” the carved-out, but overlapping, indication(s) will likely remain a hotly contested factual question requiring extensive discovery and expert testimony.

Key Takeaways

If the bill is passed into law, companies seeking to market generic drugs or biosimilars with skinny labels will likely want to direct their promotion and marketing of the drug to its therapeutic equivalence and, if possible, avoid specific statements about any indications that may be covered by a patent. Conversely, companies seeking FDA approval for a new drug or biologic may aim to intertwine any patented and non-patented indications in the label language in order to make references to patented indications more difficult to carve out. Even if the bill becomes law, the impact remains to be seen; as noted above, the bill as currently worded is unlikely to forestall litigation about whether skinny labels are “skinny enough” to avoid inducing infringement. In any event, both branded pharmaceutical companies and companies marketing generics or biosimilars should pay close attention to label language covering multiple indications and its implications for infringement of any applicable method-of-use patents.