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Brand-name drugs, such as apixaban (Eliquis) and lenalidomide (Revlimid), account for approximately 80% of US drug spending during periods of market exclusivity protected by patents.1 The only meaningful relief occurs when enough generic manufacturers enter the market to drive prices down to close to the cost of production.2 To forestall generic entry, brand-name manufacturers often obtain additional patents that cover aspects of the drug’s formulation and method of use. For example, more than 100 patents were identified as protecting adalimumab (Humira), with approximately 90% of the drug’s patent applications filed after the initial approval of the drug for the US market in 2002 covering related chemical structures and compositions, manufacturing processes, and methods of treatment.3,4 Generic manufacturers then have to take legal action over these patents to clear a path for market entry. In the case of method-of-use patents in particular, the law has for decades provided another pathway: generic manufacturers can seek approval for their bioequivalent drugs for unpatented uses and exclude patented methods of use from the drug’s labeling, a process called “skinny labeling.”5
In the last few years, a series of legal decisions has undermined the pathway.6 The most recent, in August 2021, held that a generic drug’s skinny labeling—or formal Food and Drug Administration (FDA)–approved labeling that excludes some of the patent-protected indications listed in the brand-name drug’s labeling—infringed the brand-name drug’s remaining use patent.7 This Viewpoint explains how skinny labeling works, how the recent case has created uncertainty about this pathway, and how the government and generic manufacturers can help restore the prospect for timely generic competition in the face of brand-name drugs protected by multiple method-of-use patents.
Skinny labeling is possible because brand-name drugs may be FDA approved for more than 1 disease indication or for separate populations (eg, adults and children). Those additional indications may be protected by method-of-use patents. For example, ambrisentan (Letairis) tablets, approved in 2007, received a supplemental approval in 2015 for use with tadalafil to treat pulmonary arterial hypertension. This approval was protected by 3 subsequent patents, filed from 2011 to 2017. Because each patent lasts 20 years from the date filed, patents sought later in a drug’s development covering later-approved indications can remain in force even after the original patents expire.
Skinny labeling allows generic manufacturers to enter the market just for the unprotected indications. When a generic manufacturer files an abbreviated new drug application to earn FDA approval, it must provide studies showing that the product is chemically bioequivalent to the brand-name drug. The Hatch-Waxman Act of 1984 allows generic manufacturers to apply for skinny labeling to omit or “carve out” the remaining patent-protected uses from the generic labeling. This allows generic manufacturers to promote some uses of those products while excluding from the labeling the still-patented uses.5
Once a generic drug reaches the market with a skinny label, prescriptions may be filled for some indications that go beyond those listed on the skinny label. In addition, state drug substitution laws allow (and some require) pharmacists to substitute interchangeable generics for brand-name drugs.8 As a result, generics with skinny labels are often used in the market no differently than full-label generics and help decrease drug prices.
Skinny-label approvals have therefore become a crucial tool for timely generic entry of a drug. For example, in 2002 aripiprazole (Abilify) was originally approved to treat schizophrenia. Aripiprazole later received supplemental FDA approvals for 4 new disease indications, including bipolar disorder, major depressive disorder, autism, and Tourette syndrome, protected by later-obtained patents. In April 2015, numerous generic manufacturers sought and received approval for versions of aripiprazole with labeling that retained the earliest indications but carved out later indications with remaining patent protections. Had approval of these generics been delayed until these later-granted patents expired, aripiprazole could have extended its generic-free market period until at least 2027.
As another example, rosuvastatin (Crestor) was originally approved in 2003 as a treatment for hypercholesterolemia, hypertriglyceridemia, and hyperlipidemia. More than a decade later, rosuvastatin had received 4 supplemental indications (for treating atherosclerosis, dysbetalipoproteinemia, and pediatric patients with hypercholesterolemia, as well as reducing risk of myocardial infarction, stroke, or arterial revascularization procedures) along with additional patents covering these indications. In 2015, the drug generated more than $5 billion in revenue. In April 2016, a skinny-label generic was approved that carved out all 4 of the supplemental indications. Had the generic manufacturer waited until the patents protecting the supplemental indications expired, rosuvastatin might have extended its freedom from generic competition in the US for at least another 5 years.
GlaxoSmithKline v Teva and the Future of Skinny Labeling
In the most recent case to challenge the skinny-label pathway, GlaxoSmithKline sued Teva for marketing a skinny-label generic of the brand-name β-blocker carvedilol (Coreg). GlaxoSmithKline argued that Teva induced physicians to prescribe carvedilol for indications that had been carved out by Teva’s skinny label, infringing the patents protecting these indications. In 2017, a jury found Teva liable for patent infringement and set a $235 million verdict, but the district court judge determined GlaxoSmithKline had not produced enough evidence and overturned the verdict. GlaxoSmithKline appealed.
In October 2020, the Federal Circuit reversed the district court in a 2 to 1 decision, holding that GlaxoSmithKline had presented enough evidence to justify the jury verdict. After criticism of the decision, including by former representative Henry Waxman, one of the designers of the Hatch-Waxman Act, the judges reconsidered the case. In August 2021, the panel (with 1 judge dissenting) reaffirmed its reversal, pointing to several pieces of circumstantial evidence GlaxoSmithKline had presented. First, the jury found Teva had not adequately removed the carved-out indication from their skinny label. Teva’s label retained references to clinical trials, instructions for dosing and administration, and indications that the jury found could suggest or encourage physicians to prescribe the drug for the carved-out indication. Second, Teva had issued a press release that touted its drug as “AB-rated” (ie, bioequivalent to the brand-name or reference drug and therefore able to be automatically substituted at the pharmacy) and a “generic equivalent of GSK’s [GlaxoSmithKline’s] cardiovascular agent Coreg.” Physicians testifying for GlaxoSmithKline said they generally rely on such press releases and other promotional materials, such as prescribing references that direct them to carefully read drug labels, when determining whether to prescribe generics such as carvedilol. In addition, GlaxoSmithKline introduced evidence that Teva amended its labeling 4 years before the remaining patent protections expired to include the previously excluded indications, amounting to a more straightforward claim for induced patent infringement.8
The Federal Circuit panel’s decision has the potential to put generic drugs that fail to adequately carve out indications from the brand-name labeling at risk for damages related to infringement. Many of Teva’s actions, particularly the claims that the generic was AB rated and a generic equivalent to the brand-name drug, reflect standard practice for generics. In part because the court emphasized that its holding applied only to the facts in this case, the decision did not provide clarity for other generic manufacturers marketing skinny labels, potentially raising liability concerns for such manufacturers.
Although the court stressed the decision did not eliminate the skinny-labeling pathway, similar claims are currently being heard in other courts. On November 30, 2020, the pharmaceutical firm Amarin announced that it had filed an induced patent infringement claim against a generic manufacturer, Hikma, regarding Amarin’s brand-name fish oil icosapent ethyl (Vascepa). This followed a prior induced infringement claim from Amarin that resulted in the invalidation of several key patents covering the drug.9 In its complaint, Amarin followed GlaxoSmithKline in arguing that Hikma’s routine promotional materials, such as those saying the generic was bioequivalent to the brand-name drug, created infringement liability. In early August 2021, just before the GSK v Teva decision, Amarin’s claims against Hikma were found to be “at least plausible,” allowing the case to move forward.10 The release of the updated GSK v Teva decision will likely bolster Amarin’s claims.
To allow patients and payers to continue to obtain benefits from earlier generic entry, the companies that currently market skinny-label generics should be explicit in their promotional materials about the nature of the carve-outs, particularly when the carved-out indication overlaps with an indication included in the skinny label. Manufacturers could even give clear disclaimers that although the generic is FDA approved as bioequivalent, some indications have been carved out of the label and the generic version has not been approved for such indications. But the potential that these actions would still be found insufficient by a court may dissuade future applications for skinny labels. To address this, generic drugmakers should consider new approaches to litigation, such as the argument that the Federal Circuit’s doctrine restricts lawful and accurate speech—that is, true statements on drug labels—and thereby violates the First Amendment.6
Legislation is the best response. Nearly 40 years after the Hatch-Waxman Act, Congress may now need to reaffirm the permissibility of skinny labeling. One way to do this could be by amending the induced infringement statute (Pub L 98-417 ) to add a safe harbor for skinny labels. This safe harbor should explicitly exempt skinny labels meeting appropriate criteria from inducement liability, outlining what actions are permitted.
Making it more difficult for generic drugs to enter the market with skinny labels undermines established statutory provisions and risks delaying the price declines generic competition provides.
Corresponding Author: Aaron S. Kesselheim, MD, JD, MPH, Brigham and Women’s Hospital, 1620 Tremont St, Ste 3030, Boston, MA 02120 (email@example.com).
Published Online: September 13, 2021. doi:10.1001/jama.2021.0006
Conflict of Interest Disclosures: Dr Kesselheim reported cosigning an amicus brief on behalf of academic professors in the GlaxoSmithKline LLC v Teva Pharmaceuticals USA, Inc case in support of the petition for rehearing the case. No other disclosures were reported.
Funding/Support: The authors were supported by grants from Commonwealth Fund and Arnold Ventures to support this work.
Role of the Funder/Sponsor: The funders had no role in the preparation, review, or approval of the manuscript or decision to submit it for publication.
Disclaimer: Mr Bloomfield currently serves as a judicial clerk at the US Court of Appeals for the District of Columbia Circuit. This Viewpoint was written before his clerkship and represents only his personal views.
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Walsh BS, Bloomfield D, Kesselheim AS. A Court Decision on “Skinny Labeling”: Another Challenge for Less Expensive Drugs. JAMA. Published online September 13, 2021. doi:10.1001/jama.2021.0006
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