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April 17, 2012
Supreme Court Action Today: Generic Drug Manufacturer Rights Under Statutes, and Tort Immunity For Temporary Government Employees
The Supreme Court issued two opinions today. One of these should affect the pharmaceutical industry in a big way. The case is Caraco Pharmaceutical Laboratories, Ltd. V, Novo Nordisk A/S (10-844). The case describes the highly complex system used by the FDA to license drugs under patent protection as well as generics that may be sold as well. The Court describes the case as arising under a complex statutory scheme. Brand manufacturers submit statements to the FDA consisting of a drug’s components, scientific information that shows the drug is safe and effective, and a list of uses that will appear on the labels for marketing purposes. Generic manufacturers can use this information to seek permission to sell a competitive version under legislation enacted by Congress.
Permission, however, cannot violate patent law. In this case, the patents at issue concern the uses the brand manufacturer claim for the drug. The legislation that allows for generics requires the brand manufacturers to file patents, the dates of expiration, and the claimed uses of the drug under those patents. These are called “use codes.” These are published, which gives the opportunity for generic manufacturers to submit similar statements about their drugs and that they do not violate existing patents or claimed uses. The FDA does not verify initial claims by brand manufacturers.
One of the statutory options for generic manufacturers allows them to assert that the patent is invalid or that they will not be infringed by the manufacture and marketing of the generic. This almost always results in litigation between companies. Congress addressed this situation by creating a counterclaim under the statute that allows a generic manufacturer to require the brand manufacturer to correct or delete the initial patent information submitted to the FDA.
This case arises out of circumstances where a generic company relied on a brand manufacturer’s use codes to market its drug. The brand manufacturer decided to change its use codes to effectively claim the use identified by the generic maker, thus triggering the generic company to use the statutory counterclaim to limit the patent claims on file with the FDA. The generic won at trial but lost at the appellate level on the way the Circuit Court of Appeals for the Federal Circuit read the statute. It held that the counterclaim was not available as long as any use code was valid.
The Supreme Court reversed. Using principles of statutory construction, the Court read “not an” in regard to the initial claims, to mean not any specifically claimed use, compared to the alternative, which would have allowed brand manufacturers to claim all possible uses by claiming any individual use. The case is complicated by the statutory background and the development of the facts in this case. The Court, however, relied on the purpose of the statute, the history of developments that prompted Congress to act, and intervening cases of which Congress had knowledge in passing the statute to reach its construction.
The opinion is some 24 pages though the result is clear. Generic drug manufacturers may sue brand name drug manufacturers to correct false information. I assume that brand name manufacturers will now claim every possible use of a drug up front or lose some possible therapy options to generic drug makers. For all of its complexity, the Court was unanimous in its ruling. Justice Kagan delivered the opinion with Justice Sotomayor filing a concurring opinion.
The second case is much simpler. It is Filarsky v. Delia (10-1018), and it involves whether a private party working for the government has any claim to immunity from a §1983 suit as a result of that work. Delia was a firefighter in Rialto, California who was on an extended absence from his job from illness. The city became suspicious after Delia was seen buying building supplies. It hired Filarsky, a private attorney, to interview Delia. Filarsky demanded that Delia produce the materials. He did so grudgingly and ultimately filed a §1983 suit contending that forcing him to produce the materials violated his Fourth and Fourteenth Amendment rights. The District Court granted summary judgment to all defendants on the grounds they had qualified immunity. The Ninth Circuit affirmed to all except Filarsky, justifying its decision on his status as a private attorney.
The Supreme Court reversed, holding that Filarsky, by virtue of his employment by the city, was entitled to the same immunity. The Court reasoned that the common law existing at the time §1983 was passed did not distinguish between full-time government employees and those performing part-time service to the government. As such, Filarsky was entitled to the same immunity as government employees. Chief Justice Roberts delivered the opinion for a unanimous Court. Justices Ginsburg and Sotomayor filed concurring opinions respectively. [MG]