[author: Andrew Williams]

In a second case involving the Hatch-Waxman regulatory scheme decided by the Federal Circuit on Monday, the Court held in Bayer Schering Pharma AG v. Lupin, Ltd. that for an ANDA filing to infringe a method-of-use claim, the proposed label must indicate that the FDA has determined that the drug is safe and effective for the claimed method.  Judge Newman dissented, however, because the District Court had made this determination on the pleadings but failed to conduct a standard infringement analysis.  Instead, Judge Newman believed the question should have been whether the sale or use of the generic equivalent, in accordance with the representations in the ANDA, would infringe the claims of the patents, which should have at least proceeded past the pleading stage.

As background, when a pharmaceutical company files a New Drug Application (NDA) with the FDA seeking approval to market a new drug, it is required to identify every patent that claims the drug or use of the drug that could reasonably be asserted in an infringement action.  For method-of-use claims, the FDA regulations provide that the patents must claim "indications or other conditions of use that are described in the pending or approved application" (21 C.F.R. § 314.53(b)).  These patents are then listed in the Orange Book.  Anyone wanting to market a generic version of the drug before the expiration of any method-of-use patents must either state that it is not seeking approval of the claimed method, i.e., that it created a carve-out, (a section viii statement), or they must certify that the claim is either invalid or not infringed (a Paragraph IV certification).  The filing of an ANDA with a Paragraph IV certification is a statutory act of infringement, which can give rise to a "Hatch-Waxman" litigation.

The drug at issue in the present case was Yasmin, an oral contraceptive.  Bayer's predecessor company received FDA approval in 2001, where the FDA "concluded that adequate information has been presented to demonstrate that the drug product is safe and effective for use as recommended in the agreed upon enclosed labeling text."  The drug Yasmin or its use for contraception alone was not covered by a Bayer patent.  Instead, Bayer had listed three patents in the Orange Book, one of which was U.S. Patent No. 5,569,652 ("the '652 patent").  All of the claims in this patent recite that the claimed method achieves three effects simultaneously:  a contraceptive effect, an anti-androgenic effect (effective in treating conditions such as hirsutism or acne), and an anti-aldosterone effect (which can be used to reduce excess water retention).  Claim 1 is representative:

1. A method of simultaneously achieving, during premenopause or menopause a gestagenic effect, antiandrogenic effect, and an antialdosterone effect in a female patient in need thereof comprising administering an amount of dihydrospirorenone to said female patient, wherein said amount of dihydrospirorenone is effective to simultaneously achieve a gestagenic effect, antiandrogenic effect and antialdosterone effect in said patient.

Watson and Sandoz filed an ANDA, followed shortly by Lupin, all with certifications that the ANDA products do not, among other things, infringe the '652 patent.  In turn, Bayer filed complaints against all of the ANDA filers.  Watson and Sandoz moved for judgment of non-infringement on the pleadings (pursuant to Rule 12(c)), arguing that Bayer could not succeed in its suit because the ANDAs that they filed only sought approval to market the generic form of Yasmin for oral contraception.  Because the "Indications and Usage" section of the label was limited to the use for oral contraception, and not for the treatment of three conditions, the District Court granted the motion of non-infringement.  In view of this ruling, Bayer and Lupin stipulated to final judgment in the other case, and both cases were considered together by the Federal Circuit.

Bayer's position was that the FDA did approve the use of all three effects simultaneously in menopausal and premenopausal women, and that the District Court erred because it only looked at the approved "Indications and Usage" section of the label.  This section stated that "Yasmin is indicated for the prevention of pregnancy in women who elect to use an oral contraceptive."  Bayer pointed out, however, that the "Pharmacodynamics" subsection of the "Clinical Pharmacology" section of the label explains that one of the two active compounds in Yasmin had anti-mineralocorticoid activity, and in preclinical studies in animals had anti-androgenic activity.  As such, the use of Yasmin to alleviate all three claimed conditions was described in the proposed labels.  The majority, however, rejected this argument because that passage from the label did not provide any safety or efficacy information associated with the use of Yasmin to treat patients in need of these effects.  The Court concluded that "[t]o practice the method claimed in the '652 patent, a physician must determine that all three effects are needed by a specific premenopausal or menopausal patient," and that "FDA approval of that method of use would require a showing that Yasmin was safe and effective for simultaneously obtaining those three effect in patients needing those effects."  Because the label, taken in its entirety, failed to recommend or suggest this to a physician, the Court affirmed the District Court's ruling.

To support its opposition to the motion for judgment of non-infringement, Bayer submitted two declarations -- one from Dr. Shulman, an obstetrician-gynecologist with experience in the clinical use of contraception, and Dr. Allan, a former FDA official who oversaw the approval of the Yasmin NDA.  Dr. Shulman declared that prescribing Yasmin as an oral contraceptive with the intent to produce the other two pharmacological effects was "clearly stated and on-label."  Similarly, Dr. Allan stated that the label indicates that the FDA approved Yasmin for all of the therapeutic effect of contraception, and the two pharmacological effects.  She pointed out that the listing of those two effects on the label indicated that they were pertinent to the human use of the drug.  However, the Court still found that because the label did not include that the drug was safe or effective in inducing the three claimed effects in patients with a specific need for those effects, the testimony of Dr. Shulman and Dr. Allan were unavailing.

Finally, Bayer argued that the FDA's own regulations regarding what patents should be submitted for inclusion in the Orange Book provided support for its position.  As noted out above, the FDA requires submission not only of patents that claim "indications," but also patents that claim "other conditions of use."  However, the Court pointed out that the FDA encourages broad disclosure of patents, and that just because a patent is listed doesn't mean that a generic product in an ANDA submission will necessarily infringe the patent.  Moreover, as made clear by the recent Supreme Court decision in Caraco v. Novo Nordisk, the FDA does not police the correctness of information submitted for inclusion in the Orange Book.

Judge Newman took issue with the District Court's dismissal and judgment on the pleadings, and the Federal Circuit's affirmance, because they both ignored the fact that a plaintiff's non-conclusory factual allegations must be taken as true at this stage.  Not only that, but the majority ignored the fact that Bayer also came forward with evidence, including Dr. Allan's testimony regarding the FDA approval process, stating that because the label included information regarding all three effects meant "that the FDA approved (a) the therapeutic effect (contraceptive) and (b) the two additional pharmacological effects (anti-androgenic and anti-mineralocorticoid) of Yasmin®."  Judge Newman pointed out that it was error to only consider a portion of the FDA label in determining what a product's properties are, while failing to undertake a standard infringement analysis -- to determine whether the patent would be infringed by the sale of use of the ANDA product.  Instead, Judge Newman would have framed the infringement question as "whether sale or use of the generic equivalent of the Yasmin® product, in accordance with the representations in the ANDA with respect to FDA approval for the generic equivalent of Yasmin®, infringes the '652 patent."  And, because this is a fact-intensive inquiry, she would have entitled Bayer the opportunity to present its infringement case at the district court level.

Bayer Schering Pharma AG v. Lupin, Ltd. (Fed. Cir. 2012)
Panel: Circuit Judges Newman, Plager, and Bryson
Opinion for the court by Circuit Judge Bryson; dissenting opinion by Circuit Judge Newman