Eli Lilly & Co. v. Teva Pharma: Eli Lilly Granted Stay Extension, Prevents Teva's Generic Alternative Until March 9th

Eli Lilly & Co. v. Teva Pharma

Federal Circuit, February 24, 2009, No. 2009-1071
Opinion

On February 24^th, the Federal Circuit affirmed two to one an order by the United States District Court for the Southern District of Indiana extending the 30-month statutory stay on FDA approval of Teva Pharmaceuticals' generic version of Eli Lilly's postmenopausal osteoporosis drug, Evista®. The stay was extended until March 9, 2009, when trial was set to begin for Lilly's suit against Teva, in which Lilly alleged that Teva infringed four method patents.  Teva filed for and received an expedited appeal.  Judge Rader, writing for the two-judge majority with Chief Judge Michel, found that Teva "fail[ed] to ‘reasonably cooperate'" in expediting the lawsuit by altering its product last minute and because of multiple delays in producing critical discovery. Controversially, the court based its decision also on allowing Eli Lilly the time to prepare, rather then solely on the factors mandated by the statute.

Patent Docs offers a description of the case's history, and Patently-O provides a summary of the case.

Patent Baristas notes the importance of even a short stay: Evista accounted for $1.075 billion in sales in 2008, meaning that a two-week extension could mean revenues of $41 million.

Patent Hawk's Patent Prospector notes surprise at Judge Prost's dissent, stating that "[f]or a court that regularly takes liberties interpreting the law, Prost strikes a pose as a religious constructionist to statute."

The dispute began after Teva filed an Abbreviated New Drug Application (ANDA) with the FDA in 2006 to get approval for the manufacture of a generic version Eli Lilly's raloxifene hydrochloride formulation, marketed as Evista®. Under the Hatch-Waxman bill, Eli Lilly's resulting patent infringement suit in July 2006 automatically triggered a 30-month stay on FDA approval of Teva's ANDA, which was set to expire in November 2008.  However, Teva altered its particle size manufacturing specification, a key issue under one of Eli Lilly's patent claims, delivering samples and 27,000 pages of documentation to Eli Lilly well past the court's August 18th 2008 discovery deadline.  As a result, the district court granted a 4-month extension to the original 30-month stay, preventing FDA approval and manufacture by Teva until the scheduled trial date in March.

The 4-month extension was authorized by 21 U.S.C. § 355(j)(5)(B)(iii) of the Waxman Hatch Act, which allows a court leeway to extend or shorten the standard 30-month stay on FDA approval of an ANDA when "either party to the action failed to reasonably cooperate in expediting the action." The Federal Circuit majority found that the lower court did not abuse its discretion and that the record contained sufficient evidence to support the extension based on the violation of discovery deadlines.  Teva has announced that it plans begin production of the generic alternative as soon as the stay expires.

Judge Prost dissented, claiming that the trial court appeared to base their decision on allowing Eli Lilly more time to prepare a response rather than a proven "failure to cooperate," and thereby went outside the analysis required by the statute.

This is not the first time that Teva and Eli Lilly have sparred in patent infringement cases over high-dollar drugs.  Eli Lilly won a case early in 2005 preventing Teva from manufacturing a generic version of Zyprexa®, the world's top-selling schizophrenia medication.  Later that same year, Eli Lilly won another case preventing Teva from using fluoxetine to treat severe forms of PMS.

This case provides an example of one of the controversial ways that pharmaceutical companies can "buy time" on their patents.  This relates to the debate on the pharmaceutical company practice of "evergreening," or using related patents and statutory loopholes to extend patent protection and prevent generic alternatives.  When a generic manufacturer files an application claiming either that the generic does not violate any of the patents the brand has listed in the FDA's Orange Book of approved drugs or that the patents are invalid, brand drug manufacturers may file suit against this move. By doing so, under the Hatch-Waxman Act the brand drug manufacturer receives an automatic thirty-month stay, as Lilly did here. As each additional week that drug companies can extend patents can result in millions of dollars of added revenue-an estimated $41 million over two weeks in this case, as mentioned above-this statutory allowance may have significant results.