Skinny labels are back in focus at the White House. On September 9, 2021, the U.S. Department of Health and Human Services submitted its much-anticipated report to the White House Competition Counsel regarding a “Comprehensive Plan for Addressing High Drug Prices.” The HHS Report—issued in response to President Biden’s Executive Order on Promoting Competition in the American Economy—contains a range of approaches for effecting reforms aimed at reducing the price of prescription drugs. Among these proposed reforms are administrative actions that will be undertaken by the Food and Drug Administration to “address potential barriers to biosimilar and generic drug development and market entry to spur competition so that consumers can access the medicines they need at affordable prices.” HHS Report at 19.
For both the biosimilar and generic drug marketing pathways, HHS emphasized the importance of labeling carve-outs—so-called “skinny” labels—under 21 U.S.C § 355(j)(2)(A)(viii) as a way to “decrease costs to patients and to the federal government, including reducing spending on Medicare and Medicaid.” HHS Report at 21. HHS’s emphasis appears driven in part by a recent case before the Federal Circuit, GlaxoSmithKline v. Teva Pharmaceuticals USA, Inc., addressing patent-infringement liability for generic drug manufacturers that employ skinny labeling practices. 976 F.3d 1347 (Fed. Cir. 2020), aff’d in part and vacated in part, 7 F.4th 1320 (Fed. Cir. 2021); HHS Report at 21 (“Recent litigation has raised some questions about the practice of carving out patent-protected indications for generic drugs, which may discourage the use of carve-outs and thus delay the approval of some generic drugs.”).
The patent at issue in GlaxoSmithKline covered the use of Coreg® (carvedilol) to treat congestive heart failure. Teva’s label for its generic carvedilol product omitted this patented indication when FDA first approved it but retained indications for two other approved uses: treatment of post-MI LVD (left ventricular dysfunction following post-myocardial infarction) and hypertension. During this time, however, Teva also marketed carvedilol as therapeutically equivalent to Coreg®, and there was evidence that post-MI LVD patients were also being treated with carvedilol for congestive heart failure. Beginning in 2011, Teva maintained the carve-out but added language elsewhere in the carvedilol label stating that it could be used to treat congestive heart failure. The jury found Teva liable for induced infringement, but the district court granted Teva judgment as a matter of law reversing the verdict. GSK appealed, and, last year, the Federal Circuit reversed the district court’s judgment, holding that the jury’s finding of induced infringement was supported by substantial evidence. GlaxoSmithKline, 976 F.3d 1347 (Fed. Cir. 2020). Teva subsequently requested rehearing, but the same three-judge panel affirmed its prior judgment on August 5, 2021, again holding that substantial evidence supported the jury’s verdict that Teva was liable for inducing infringement.
The panel reiterated that its decision was limited to the particular factual circumstances presented. The panel emphasized, for example, that “GSK presented evidence that doctors read and consider labels, that Teva’s marketing materials guided doctors to the label and to its website promoting the patented use, that Teva issued press releases encouraging doctors to prescribe carvedilol for the patented use, that Teva’s own employees expected doctors to prescribe carvedilol during the partial label period for the patented uses, and expert testimony that Teva’s actions encouraged doctors to do so.” 7 F.4th at 1338. But the decision raised concerns among generic manufacturers that skinny labeling would not sufficiently shield them from liability and appears to have piqued HHS’s interest. In fact, Teva filed a petition for en banc rehearing on October 7, 2021, in which it urged the full court to reject the panel’s decision because it would “throw inducement doctrine into disarray” and have a “seismic” effect on skinny-label cases.
Given how recently GlaxoSmithKline was decided and the uncertainty about how the court will rule en banc, the scope of its impact on skinny labeling practices remains to be seen. The handful of opinions citing it so far have not expanded its application. See Roche Diagnostics Corp. v. Meso Scale Diagnostics, LLC, 503 F. Supp. 3d 156, 2020 U.S. Dist. LEXIS 223968 (D. Del. Nov. 30, 2020) (jury could reasonably infer lack of intent to induce infringement from “removal of field restrictions from [generic] labelling”); Niazi Licensing Corp. v. St. Jude Med. S.C., Inc., 2021 U.S. Dist. LEXIS 54618 (D. Minn. Mar. 23, 2021) (distinguishing GlaxoSmithKline in finding insufficient evidence of intent to induce infringement by generic manufacturer); United Food & Commer. Workers Local 1776 v. Takeda Pharm. Co., 2021 U.S. App. LEXIS 25572 (2d. Cir. Aug. 25, 2021) (citing GlaxoSmithKline solely for general proposition that a generic manufacturer may carve out patented uses). Nevertheless, and although the Court observed that “the FDA is not the arbiter of patent infringement issues,” the HHS Report concludes that HHS is “committed to taking steps as appropriate to ensure these critical [skinny label] practices remain available for generic drugs and biosimilars.”
 Teva requested en banc rehearing, but the Federal Circuit interpreted its request as seeking panel rehearing. For a quick overview of this procedural quirk, see this recent post from MoFo’s Federal Circuitry blog.