On June 27, 2011, the Supreme Court granted certiorari in Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S. This means that the Court will review the Federal Circuit decision which held that the ANDA litigation counterclaim provision of the Hatch-Waxman Act does not permit a counterclaim to challenge a method patent listing when the listed patent claims at least one approved method of using the drug, and does not permit a challenge of a use code narrative on the basis that it is broader than the relevant patent claims.

The Hatch-Waxman Framework

The Federal Circuit decision provides a good summary of the Hatch-Waxman framework, so I will provide only a skeleton outline of the most relevant provisions here.

The Orange Book

When an innovator obtains FDA approval for a new product or treatment, the innovator submits to the FDA a list of relevant patents and their expiration dates. For method patents, the innovator must provide a description of the methods, which is referred to as the “use code narrative.” The FDA publishes this information in its “Approved Drug Products With Therapeutic Equivalence Evaluations,” a/k/a, the Orange Book.

Generic Carve-Out Labeling

When a product is covered only by one or more method patents (as opposed to product patents), a generic manufacturer can file an Abbreviated New Drug Application (ANDA) that seeks FDA approval for a use that is not covered by the patents. In addition to the usual ANDA certifications, the generic manufacturer must submit proposed labeling that does not encompass the patented methods. When deciding this type of ANDA, the FDA compares the innovator’s use code narrative with the proposed labeling to confirm that there is no overlap between the uses.

ANDA Litigation Counterclaim

The Hatch-Waxman Act ANDA litigation provisions include a clause introduced by a 2003 amendment (21 USC § 355(j)(5)(C)(ii)(I)) that permits a generic manufacturer to challenge the innovator’s Orange Book listing under certain circumstances:

[The ANDA] applicant may assert a counterclaim seeking an order requiring the holder to correct or delete the patent information submitted by the holder under subsection (b) or (c) of this section on the ground that the patent does not claim either–
(aa) the drug for which the application was approved; or
(bb) an approved method of using the drug.

The Caraco Question

This issue presented by the Caraco case is whether this clause permits a counterclaim when the listed patent does claim an approved method of using the drug, but the use code narrative describes the use (allegedly) over-broadly.

As set forth in Caraco’s petition for certiorari (available on SCOTUSblog.com), the question presented is:

Whether this counterclaim provision applies where (1) there is “an approved method of using the drug” that “the patent does not claim,” and (2) the brand submits “patent information” to the FDA that misstates the patent’s scope, requiring “correct[ion].”

The Caraco Dispute

The Original Orange Book Listing

The product at issue is the drug repaglinide, which Novo Nordisk A/S markets under the brand name Prandin®. As noted by the Federal Circuit, the FDA has approved the drug for three uses:

  1. repaglinide by itself (i.e., monotherapy)
  2. repaglinide in combination with metformin
  3. repaglinide in combination with thiazolidinediones 

The Orange Book listed two patents for Prandin®: 

  1. U.S. RE 37,035, which includes product claims and expired March 14, 2009
  2. U.S. 6,677,358, which includes combination product and method claims using repaglinide and metformin, and which is set to expire June 12, 2018:

A method for treating non-insulin dependent diabetes mellitus (NIDDM) comprising administering to a patient in need of such treatment repaglinide in combination with metformin.

According to the Federal Circuit decision, the FDA initially listed the ’358 patent with the following use code:

U-546–Use of repaglinide in combination with metformin to lower blood glucose.

The Caraco Carve-Out

After Novo Nordisk initiated ANDA litigation against Caraco, Caraco submitted an amended ANDA seeking approval with a carve-out of the repaglinide-metformin combination therapy. The FDA indicated that it would approve Caraco’s proposed carve-out label, but then Novo Nordisk submitted an amended form to modify the use code narrative. Pursuant to that filing, the FDA removed the use code U-546 from the Orange Book listing and substituted a new use code:

U-968–A method for improving glycemic control in adults with type 2 diabetes mellitus.

Because Caraco’s proposed carve-out no longer avoided the method encompassed by the new use code narrative, the FDA would not approve Caraco’s proposed carve-out labeling.

Caraco’s Counterclaim

After the FDA adopted the new use code, Caraco asserted a counterclaim in the ANDA litigation, “requesting an order requiring Novo to change the use code for the ’358 patent” and alleging that the new use code “was overbroad because it incorrectly suggested that the ’358 patent covered all three approved methods of using repaglinide even though it claimed only one approved method.”

The district court granted Caraco’s request, and issued the following order:

Novo Nordisk is hereby directed by mandatory injunction under 21 U.S.C. § 355(j)(5)(C)(ii)(1)(bb) to correct within twenty (20) days from the date of this Order and Injunction its inaccurate description of the ’358 patent by submitting to FDA an amended Form FDA 3542 that reinstates its former U-546 listing for Prandin and describes claim 4 of the ’358 patent in section 4.2b as covering the “use of repaglinide in combination with metformin to lower blood glucose.”

On appeal, the Federal Circuit construed the counterclaim provision narrowly, and reversed the distrct court. The Federal Circuit read the plain language of clause (bb) as ”authoriz[ing] a counterclaim only if the listed patent does not claim any approved methods of using the listed drug.” Because the patent at issue claimed one of the three approved uses for Prandin®, the counterclaim provision did not apply. Moreover, the court read the main clause as “only authoriz[ing] suits to correct or delete an erroneous patent number or expiration date,” not to correct any alleged errors in the use code narrative.

Deja Vu?

When reading the Federal Circuit decision, it is interesting to keep in mind that the 2003 amendment that introduced the counterclaim provision at issue here was enacted in response to the 2002 Federal Circuit decision in Mylan Pharmaceuticals, Inc. v. Thompson, where the court held that there was no private right of action to delist an allegedly improperly listed patent. While the Federal Circuit majority reads the amendment as addressing only that specific situation, it is possible that Congress’ quick legislative reversal of that decision reflects a Congressional intent to permit generic manufacturers to challenge Orange Book listings. Indeed, Judge Dyk’s dissent in Caraco raises this point.

Now that the Supreme Court has granted certiorari, it may decide that Congress indeed has demonstrated its intention to permit generic manufacturers to challenge Orange Book listings that otherwise prevent the FDA from approving generic drugs, and may read the statute more broadly to permit such counterclaims.

**Foley & Lardner LLP Involvement In This Case**

Although one of my colleagues at Foley & Lardner LLP served as an expert witness in this case, I personally had no confidential knowledge or involvement in the proceedings, and based this article entirely on public records.