The Zyprexa Case: A Generic Argument Nullified, for Now
Pharma’s Cutting Edge
Vol. 3 Number 4 - April 2005
The Zyprexa Case: A Generic Argument Nullified, for Now
When Richard Young, Judge of the U.S. District Court for the Southern District of Indiana, ruled on April 14 that Lilly’s listed patent on Zyprexa was valid and enforceable, the sigh of relief that blew across Indiana could be felt as a warm breeze from our home office in Philly. The case, which had hung over Lilly’s heads since April 2001, was at last resolved.
Lilly really needed a win. Zyprexa accounted for 32% of Lilly’s 2004 net sales, nearly 55% of which occurred in the U.S. There is little doubt that a generic entry would have rapidly eroded the value of the U.S. franchise, much as the loss of Prozac to generic competition did in 2001. Lilly now seemingly will maintain their Zyprexa monopoly in the U.S. until 2011, although Dr. Reddy’s and Ivax plan to appeal the decision.
As in all such patent-challenge cases, investors look to the Court’s opinion to determine whether precedents are made that will impact pending decisions. In the case, the Court rendered opinions regarding a variety of claims made by Ivax and Dr. Reddy’s, any one of which could have rendered Lilly’s patent invalid or unenforceable. These claims contended that Lilly’s patent was: anticipated by prior publications, obvious due to prior patent literature disclosure (i.e. prior art), double patented, and unenforceable due to inequitable conduct on Lilly’s part. They also argued that Lilly’s Phase 1 studies constituted an invalidating public use of Zyprexa.
Other than the double-patenting allegation, which Judge Young rejected in less than a full page of text, the fewest pages of the Court’s 224-page opinion were devoted to the public use affirmative defense. It took the judge less than six pages to tackle that issue and find in Lilly’s favor. Yet it is this opinion that provides the precedent of interest to pharma investors. Let’s take a closer look at the public use claim and consider the environment in which Judge Young rendered his opinion.
The section of the U.S. Code pertaining to patent invalidity and public use reads as follows: “A person shall be entitled to a patent unless the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.” Ivax and Dr. Reddy’s argued that conduct (but not publication) of a Phase 1 clinical study of Zyprexa by Lilly at their Indianapolis clinic constituted public use.
In making this claim, the generics makers argued that, since the healthy volunteers did not sign confidentiality agreements, Lilly, in effect “shared” Zyprexa information and its use with the public. Read the rest of this entry »
