Bayer Healthcare Pharm., Inc. v. Watson Pharm., Inc.
By Erica Larson – Edited by Suzanne Van Arsdale
Bayer Healthcare Pharm., Inc. v. Watson Pharm., Inc., No. 12-1397 (Fed. Cir. Apr. 16, 2013)
The Court of Appeals for the Federal Circuit reversed the judgment of the Nevada District Court, which ruled that claims 13 and 15 of Bayer Healthcare Pharmaceuticals, Inc. and Bayer Schering Pharma AG (“Bayer”) U.S. Patent RE37,564 were not invalid for obviousness. The patent claimed a combination of synthetic hormones and dosing regimens used by Bayer in the Yaz birth control pill. Three generic manufacturers—Watson Pharmaceuticals, Inc., Sandoz, Inc., and Lupin Ltd.—filed Abbreviated New Drug Applications (“ANDAs”) with the FDA, including Paragraph IV certifications, 21 U.S.C. 355(j)(2)(A)(vii)(IV), asserting that the patent was invalid.
The Federal Circuit held, first, that the patented combinations were obvious in view of prior art: two foreign patent applications and four scholarly articles. Bayer Healthcare Pharm., Inc. at 11. A person of ordinary skill in the art would have been motivated by the knowledge disclosed in the prior art to craft Bayer’s combination and would have had a reasonable expectation of success. Id. at 11–12. Second, the court rejected Bayer’s arguments on secondary indicia of non-obviousness relating to unexpected results, expert skepticism, industry praise, and copying. Id. at 10, 15.
Reuters and Bloomberg put this ruling into context by describing Bayer’s continuing legal troubles with Yasmin, the precursor to Yaz; the company faces thousands of legal claims that Yasmin increases the risk of blood clots.
Most birth control pills come in packs of twenty-eight, of which twenty-one contain active ingredients and seven are placebos. The medical reasoning is that, after a round of twenty-one pills containing synthetic hormones, a seven-day break is necessary to reduce the risk of side effects (a “21/7 schedule”). Prior art suggested that the risk of side effects could be reduced by a lower per-pill synthetic hormone dosage; however, with a lower dosage, the risk of pregnancy for a patient who forgetfully skipped a day would be much higher than it would be under the traditional dosage scheme. The solution, according to prior art and Bayer’s patent claims, would be to decrease the placebo period from seven days to four or five. A lower hormone dose in combination with a shorter placebo period would lower the risk of side effects without greatly increasing the chance of unintentional pregnancy.
Bayer contended that the traditional 21/7 schedule taught away from an altered dosing regimen, particularly in light of perceived risks of increasing hormone administration. Bayer also argued that the prior art was directed at hormone replacement therapy for pre-menopausal women, and it was not obvious that the proposed combination would have applications as an oral contraceptive. The court disagreed, noting that the prior art acknowledged the problem and expressly proposed the claimed solution, “plainly disclos[ing] preparations with hormone replacement and contraceptive applications.” Id. at 13–14 (emphasis original).
Moreover, Bayer’s secondary evidence of non-obviousness was insufficient. Id. at 15. The clinical data demonstrating the efficacy of the new combination was not unexpected, but “common sense,” and the FDA’s request for clinical safety and efficacy data did not alone demonstrate skepticism about the new drug combination. Id. Alleged wide praise merely referred to results, and at least one source was authored by an inventor, falling short of true industry praise. Id. at 16. Finally, copying of Yaz by generic manufactures did not rebut non-obviousness because generic manufacturers must prove bioequivalence to receive FDA approval under the ANDA system. Id.
As pointed out on Bloomberg and Reuters, this loss is just one more blow to the profitability of the Yaz/Yasmin line of birth control pills. Bayer spent 1.19 billion euros on settlements and legal expenses associated with the drugs last year alone, and worldwide sales are falling due to potential side effects and competition from cheaper generic versions. Bayer’s loss before the Federal Circuit will do nothing to slow generic competition and blocks Bayer from seeking compensation for their lost sales.
Erica Larson is a 1L at Harvard Law School.