FDA's consideration of how brand/generic settlements would impact generic exclusivity may be causing firms to reconsider the arrangements.

Cobalt, which holds the first-to-file application for generic Altace (ramipril), has informed King that it intends to launch the product, notwithstanding the distribution deal the companies had signed last year.

King said that it would defend its patents, but the move by Cobalt suggests that King's evergreening strategy for its franchise ACE inhibitor has run its course. The firm had hoped to switch patients to a tablet version of Altace, but the patent that protects the capsule version until October 2008 has been declared invalid in litigation with Lupin. King is still appealing the decision, but would likely not have time to transition its patients to the new version.

Cobalt's move indicates the company may be seeking to enjoy some portion of its 180-day exclusivity before it is erased by a final court decision on the patent, or FDA declares it has been forfeited.

Mounting Pressure On Deals

The machinations highlight the growing uncertainty surrounding brand/generic settlements. Such deals are generally supported by both types of firms because of the clarity the arrangements offer as a way of resolving litigation. However, the Federal Trade Commission has opposed "reverse payment" deals as anti-competitive, and while it has not enjoyed much success making those arguments in court, legislation that would ban the practice is making some headway in Congress (¹ Also see "Barr in Catbird Seat As Razadyne Trial Begins; Pharma Backs Norvasc Review" - Pink Sheet, 14 May, 2007., p. 13).

Despite its set-backs, FTC has not dropped its pursuit of brand/generic deals. King noted in a recent filing with the Securities and Exchange Commission that the FTC is investigating its dismissal of patent infringement litigation against Cobalt and its collaboration with Arrow International, Cobalt's parent, to commercialize the tablet and other forms of ramipril.

While Cobalt moves towards launch, FDA is weighing whether its deal with King should allow other firms to launch along with it.

A quick resolution to the patent case with Lupin would essentially render the question moot and allow all generics to enter the market, but the generic industry is divided over whether a company forfeits its 180-day marketing exclusivity if it fails to launch a generic drug after settling litigation with the brand manufacturer.

Sandoz and Apotex are arguing against Cobalt's exclusivity to FDA while Barr and Ranbaxy backed Cobalt's position. CVS Caremark, Express Scripts and the Pharmaceutical Care Management Association (which represents pharmacy benefit managers), also objected to Cobalt's marketing exclusivity, while United Research Laboratories and Mutual Pharmaceutical Company submitted a joint letter in support of it.

FDA sought comments on the issue after Lupin and another manufacturer petitioned the agency to immediately approve their ramipril ANDAs (² Also see "Generic Exclusivity Debate Continues At FDA: What Counts As A Forfeit?" - Pink Sheet, 22 October, 2007., p. 26).

FDA first sought outside views to resolve questions about exclusivity in the case of Pfizer's Norvasc (amlodipine). Since then the agency has said it will address questions about exclusivity for generic drug applications on a case-by-case basis through the notice and comment approach (³ Also see "180-Day Generic Exclusivity Decisions Could Follow Norvasc Model, FDA Says" - Pink Sheet, 17 September, 2007., p. 23). In addition to ramipril, the agency also sought comments on exclusivity status for ANDAs for Bayer's Precose (acarbose) and Roche's Kytril (granisetron).

While a few companies have weighed in on acarbose, the questions raised by Cobalt's deal with King provoked the most interest.

Making The Case Against Exclusivity

Sandoz argues that the fact that Cobalt's ramipril ANDA is listed in the "discontinued" section of the Orange Book, coupled with its agreement to distribute an authorized generic, shows the company has no intentions of marketing a generic in the foreseeable future. "Despite that reality, Cobalt has apparently maintained its Paragraph IV certification," Sandoz stated, by parking its 180-day exclusivity and blocking the entire market for generic ramipril capsules.

Apotex further argued that Cobalt's actions converted its paragraph IV certification (that the patent is invalid and will not be infringed by its generic) to a paragraph III certification (that the patent will expire on a given date) and is thus no longer eligible for exclusivity.

Barr and Ranbaxy, meanwhile, contend that Cobalt has not forfeited its right to exclusivity. Ranbaxy says FDA has no authority to require a paragraph IV applicant to commit to launching its product or to litigating its patent position prior to the expiration of the patent.

"Even if the wording of the statute were ambiguous - which is not the case - the agency would have no reasonable basis for interpreting a certification requirement regarding the scope and validity of a patent as a certification requirement regarding the specific nature and certainty of the applicant's marketing strategy," Ranbaxy stated.

Medicare Modernization Act and Settlements

Barr argues that the forfeiture provision in the Medicare Modernization Act of 2003 applies to all ANDAs, including the ANDA for ramipril, which preceded enactment of the law.

"One issue that Congress expressly considered is what, if anything, should happen to the generic exclusivity period when the first company to file a Paragraph IV ANDA (the first-applicant) enters into a settlement agreement with the owner of the patents listed in the Orange Book," Barr wrote.

"Congress obviously could have enacted legislation under which generic exclusivity is immediately forfeited any time the first-applicant enters into any type of agreement with the brand company," Barr continued. "But, as FDA knows, Congress did not do so. Instead, Congress enacted a forfeiture provision under which the law strips the first-applicant of its exclusivity if, but only if, there is a final unappealable order finding that the agreement violates the antitrust laws."

Barr says that since no court has entered such an order FDA has no legal basis or right to conclude that Cobalt has forfeited its right to exclusivity as a result of the agreement.

Barr itself has fared well in court over its reverse settlement agreement with AstraZeneca. The Second Circuit U.S. Court of Appeals ruled in favor of the agreement, in which AstraZeneca paid Barr $21 million to block entry of a generic version of tamoxifen. Thus far, the U.S. Supreme Court has declined to address whether reverse settlements are anti-competitive (⁴ [A#00690220013], p. 21).

But whether a generic company has entered such a deal does not appear to affect its position on Cobalt's situation. Sandoz entered into an agreement with Abbott in 1998 not to market a generic version of Hytrin (terazosin). FTC challenged the deal, but eventually lost on appeal (⁵ Also see "Patent Suit Settlements On The Rise After Failure Of FTC Challenges – Barr" - Pink Sheet, 9 January, 2006., p. 14).

The question of whether Cobalt had marketing exclusivity for a generic version of the drug arose after the rule in September that King's patent on the drug is invalid. Lupin, whose win in the Federal Circuit U.S. Court of Appeals triggered King's crisis, argues to FDA that it should be awarded a "head start" over other ANDA holders since it had successfully challenged the Altace patent.

Sandoz argued against Lupin's claim that it deserves some exclusivity, noting that Lupin has not received tentative approval of its ramipril ANDA or indicated that it has met all substantive ANDA approval requirements. Sandoz also distinguished Lupin's court victory from Apotex's win in its battle over Pfizer's Norvasc. FDA decided that since Apotex won a Federal Circuit ruling that the patent is invalid it would not be blocked from entering the market by Pfizer's pediatric exclusivity once the court's decision was final, but other ANDA holders would be.

Apotex, however, did not comment on whether Lupin deserved a head start.

Acarbose and MMA Provisions

In addition to ramipril, FDA also asked for input on the status of ANDAs for Bayer's acarbose and Roche's granisetron. At issue is how FDA is to interpret the exclusivity forfeiture provisions of the Medicare Modernization Act.

"There are no proposed or final regulations implementing MMA exclusivity provisions," said Kurt Karst, an attorney at Hyman, Phelps & McNamara and co-author of the FDA Law Blog. As such, FDA's decision on acarbose and granisetron will provide "policy ground rules" for determining when companies forfeit exclusivity.

In the case of acarbose, the agency noted that it had not approved a first-to-file application and that Bayer had requested that the acarbose patent be delisted from FDA's Orange Book. Given these facts, FDA questioned whether any ANDA referencing acarbose is eligible for approval under the MMA. The law specifies that first-applicants are eligible for 180-day exclusivity unless they forfeit eligibility by failing to obtain tentative approval within 30 months and by failing to market by 30 months.

FDA also opened a docket for feedback on granisetron at the request of Teva. The company contends its exclusivity for the generic drug is not forfeited under the failure-to-market provision of the MMA. As of mid-November no one had submitted comments to this docket.

Two companies weighed in on the question of acarbose exclusivity, however. Upsher-Smith contends that no party is entitled to exclusivity since the patent was delisted and there is thus no barrier to generic entry. Teva says the first filer has forfeited the right to exclusivity but adds that failure to begin marketing within 30 months or to obtain tentative approval within 30 months of submitting a paragraph IV certification "is not on its own sufficient to trigger a forfeiture" under MMA.

Cobalt Fights On Many Fronts

Cobalt is in the center of the acarbose dispute as well, claiming that it is entitled to 180-day marketing exclusivity. The company submitted a petition with FDA requesting it to stay approval of all other acarbose ANDAs and also filed a complaint against Bayer seeking a declaratory judgment that it does not infringe Bayer's acarbose patent.

In the complaint, filed Oct. 17 in the United States District Court for the Northern District of Illinois, Cobalt contends that "Bayer is not permitted to delist the '769 patent because Cobalt has submitted a paragraph IV certification that entitles Cobalt to the 180-day exclusivity."

The Supreme Court's January ruling in MedImmune v. Genentech is seen as strengthening the ability of generic firms to seek declaratory judgments (⁶ Also see "Declaratory Judgments Win As Federal Circuit Tweaks Standards For ANDA Suits" - Pink Sheet, 9 April, 2007., p. 22). But Kurst said Cobalt's claim that the mere delisting of a patent in the Orange Book is a basis for a declaratory judgment is unusual. "No one to my knowledge has ever specifically decided the issue," he said.

- Brenda Sandburg (b.sandburg@elsevier.com)

Generic Exclusivity Triggers May Force Re-evaluation Of Brand/Generic Deals

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