Hikma Pharmaceuticals USA v Amarin Pharma presents a complex dispute between Amarin, the manufacturer of Vascepa, a prescription medication to reduce heart disease, and Hikma, which markets a generic substitute for Vascepa. With a great deal of simplification, the general topic is how hard it should be to hold Hikma responsible when pharmacists dispense Hikma’s substitute to patients who have been prescribed Vascepa for a use that infringes Amarin’s patents. The lower courts held that the evidence was enough for Amarin to proceed on that infringement claim and Hikma is asking the justices to overturn that ruling.
The problem arises because Vascepa, like many pharmaceuticals, has some uses that are patented and some that are not. The FDA has approved multiple uses of Vascepa. For the on-patent uses, it would infringe patents held by Amarin for doctors in those situations to prescribe, pharmacies to dispense, or patients to use the generic version. But the FDA also has approved Vascepa for some uses that are off-patent, which is to say that no patent protects Amarin from the competition of generics for patients that have those conditions.
The statutory framework for generics, the Hatch-Waxman Act, addresses the situation, offering the generic manufacturer seeking approval of its pharmaceutical the option to submit a certification asking approval of its drug on the premise that it will market the pharmaceutical only for the off-patent use. If the FDA approves that, as it did here, the generic manufacturer uses a so-called “skinny label,” which describes use of the generic only for the off-patent uses.
In reality, whatever those labels might say, it is quite common for pharmacies to dispense the generic for the on-patent use. That is true in part because of the reality of prescription writing – prescriptions typically identify the pharmaceutical but not the reason for the prescription, so it is impossible for the pharmacy to know whether dispensing the generic would infringe the branded manufacturer’s patents. It also reflects state generic substitution laws, which allow (if not command) pharmacists to substitute generics whenever they are less expensive for the customer than the branded pharmaceutical.
Against that backdrop, the branded manufacturer here (Amarin) is suing Hikma (the generics manufacturer) contending that Hikma is responsible for the dispensing and use of its generic product in settings protected by Amarin’s patents. Because even Amarin acknowledges that Hikma itself has not infringed Amarin’s patents, the suit arises under a provision of the Patent Act imposing secondary liability on Hikma for infringement by others. Crucially, that statute permits liability only if Hikma “actively induces” the infringement by the pharmacies and customers. So the key question for the justices is whether the activities of Hikma are enough to justify liability under that standard.
Amarin characterizes Hikma’s activities as “active encouragement” through the medium of advertising. It points first to the generic manufacturer’s website, which has referred at times to the on-patent use of Vascepa as a potential use of its generic. It also points to press releases about the generic substitute, which describe the total size of the potential market for Vascepa, even though a strong majority of Vascepa’s revenues comes from the on-patent rather than off-patent uses. Finally, related to those, Amarin contends that the “skinny” label that the generic manufacturer uses includes information that was relevant only to the on-patent use of the pharmaceutical.
Hikma makes two points in response. The first is to emphasize the high standard of the statute, which applies only if the generic manufacturer “actively induces infringement” of the branded manufacturer’s patents. Whatever one can say about Hikma’s conduct, it contends it does not amount to “actively inducing” pharmacists to dispense its product. Among other things, it argues that the materials on which the branded manufacturer relies were unlikely to come to the attention of pharmacists and that the reason pharmacists dispense the generic is much more a function of state law than anything the generic manufacturer has said.
Hikma gets strong support on that point from an amicus brief of a large and impressive group of academics – including several of the nation’s leading patent law scholars, as well as noted IP economists and business scholars. They argue that the relevant statute requires affirmative proof of some direct and positive step before holding the generic manufacturer responsible for “actively” inducing the infringement of another. In their view, none of the activities alleged here approach that standard of proof.
The second point that Hikma makes is that upholding liability here essentially would force generic manufacturers to withdraw from the market whenever a pharmaceutical still has important on-patent uses. That outcome, Hikma argues, undermines the provisions of the Hatch-Waxman Act designed to facilitate generic entry. An amicus brief from the government buttresses that argument, suggesting that Amarin’s position is little more than an end-run around the design of the Hatch-Waxman Act.
This is a complex dispute, and the stakes are high – as it well might affect the availability of generics currently routinely dispensed for major conditions. My sense is that the justices will situate this case with their recent cases on secondary liability in the intellectual property context. And those decisions – such as Cox Communications from just a few weeks ago – have tended to be quite forceful in setting a high bar for the imposition of secondary liability. So I would expect a bench that starts off receptive to Hikma’s position.