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Emerging issues in pharmaceutical and healthcare law and practice Emerging issues in pharmaceutical and healthcare law and practice ACTAVIS v MERCK
Ch D (Patents Court) (Warren J) 06/06/2007
The judgment in Actavis v Merck illustrates that in order to obtain patent protection for a second medical use of a known substance, the second use in question must meet the usual patent law requirements of novelty and inventiveness. Section 2(6) of the Patents Act 1977, implementing the relevant part of the European Patent Convention, states: "In the case of an invention consisting of a substance or composition for use in a method of treatment of the human or animal body by surgery or therapy or of diagnosis practised on the human or animal body, the fact that the substance or composition forms part of the state of the art shall not prevent the invention from being taken to be new if the use of the substance or composition in any such method does not form part of the state of the art". In 1993, Merck obtained the patent in question for the use of finasteride, with a daily dosage in the 0.5 – 1.0 mg range, for treatment of a form of androgenic alopecia, and marketed the drug under the name PROPECIA. As at 1993, Merck was already marketing finasteride, in a 5 mg daily dose, under the name PROSCAR for the treatment of a condition known as benign prostatic hyperplasia, and had obtained an earlier patent claiming that use. The earlier patent disclosed that finasteride was beneficial in the treatment of androgenic alopecia, but referred to a significantly larger dosage for that use than that referred to in the patent in suit. Actavis sought to revoke the second patent on the grounds that it lacked novelty, and that it was obvious in the light of the earlier patent and common general knowledge. Whilst the latter claim failed, the patent was revoked for lack of novelty. The use of finasteride for treating androgenic alopecia was disclosed in the earlier patent, and the only possible novelty in the second patent was use of a new dosing regimen. Applying the earlier decision in Bristol Myers Squibb v Baker Norton Pharmaceuticals, the court held that novelty cannot reside in a new dosing regimen for the treatment of the same disorder as previously treated or disclosed, and the patent was accordingly revoked. GLAXO GROUP LIMITED v GENETECH INC & BIOGEN INC
Ch D (Patents Court) (Lewison J) 15/06/2007
Genetech and Biogen are the proprietors of a second medical use European patent claiming the use of an anti-CD20 antibody in the manufacture of a medicament for treatment of rheumatoid arthritis. One such antibody, rituximab, is marketed as MabThera and Rituxan. Glaxo, in seeking to revoke the patent, filed post-grant oppositions in the EPO in August 2006, and issued UK revocation proceedings in February 2007. The patentees applied to stay the UK proceedings, pending the decision of the EPO in the opposition proceedings. Lewison J, whilst holding that there is a presumption, albeit not a strong one, that English proceedings should be stayed in such circumstances, refused to stay the English proceedings. Taking all relevant factors into account, the balance of justice was in favour of allowing the English proceedings to go to trial. A key factor was the lengthy delay typically seen in EPO proceedings. The judge noted that whereas the English trial would be held in February 2008, with any appeals being dealt with by early to mid-2009, EPO proceedings would not be likely to be concluded before 2011, and could in fact take a further 12 months after that. Staying the English proceedings would therefore be likely to lead to a delay of between 18 months and 3 years. This delay would prejudice Glaxo’s clinical trials and would be highly commercially damaging. The stay was accordingly refused. BOEHRINGER INGELHEIM LIMITED v VETPLUS LIMITED
Court of Appeal (Pill, Longmore & Jacob LJJ) 20/06/2007
The Court of Appeal has ruled that the provisions of the Human Rights Act protecting freedom of speech are applicable to comparative advertisements. Boehringer sought an interim injunction to prevent the publication of an advertisement by Vetplus which compared, unfavourably, the performance of one of Boehringer’s products with a similar product produced by Vetplus. The application was refused by the High Court, and Boehringer appealed that decision. Vetplus argued that freedom of expression was involved, and that for two reasons the normal test for interim injunctions laid down in American Cyanamid (is there a serious question to be tried/real prospect of success, are damages likely to be an adequate remedy and does the balance of convenience favour preservation of the status quo) should not apply. First, it was common ground that an interim injunction would not be available to restrain the alleged malicious falsehood and libel contained in the advertisement – it is established law that the courts will not restrain the publication of a defamatory statement where the defendant says he will justify it at trial, save where the statement is obviously untruthful and libellous (Boehringer did not seek to argue that the statement was “obviously untruthful”). Vetplus argued that this rule should apply not only to defamation actions, but also in respect of trade mark infringement, which was also alleged in this case. This argument was accepted by the High Court, but rejected by the Court of Appeal. Jacob LJ held that a claim for trade mark infringement is a claim to protect a property right, not merely to protect reputation, and the defendant has a commercial interest in diverting trade to himself, it is not a question of "pure" free speech. Vetplus’ other argument was based on the Human Rights Act 1998. Section 12(3) of that Act states: “No relief … is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed”. Vetplus’ argument that this more stringent threshold replaces the usual threshold which must be satisfied before a court can grant interlocutory injunctive relief (applicant required to establish only that it has a real prospect of success) was accepted by the Court of Appeal. Jacob LJ held that in applications for interim injunctions in relation to alleged trade mark infringement, the “general threshold” which must be crossed by the claimant is that he will probably succeed at the trial i.e. he must be able to show, at the interlocutory stage, that it is more likely than not that the advertisement is wrong and misleading. Whilst this general threshold can sometimes be departed from, particularly where the consequences of disclosure are “particularly grave”, Jacob LJ held that damage to reputation cannot be considered to be “particularly grave” and the general rule laid down in s. 12(3) of the Human Rights Act 1998 was applicable. The application for an interim injunction was accordingly refused. This decision makes it considerably more difficult for trade mark owners to obtain interim injunctions against allegedly misleading comparative advertisements. Unless the trade mark owner can establish at the outset that the advertisement is wrong and misleading (which may be difficult in respect of advertisements relying on technical data, for which evidence will be required), the advertiser is free to run the advert until trial. EU to review drugs rules (Financial Times, 22 May 2007)
The European Commission will rule in 2008 on whether regulations should be strengthened to tackle the sale of fake medicines. The EU Trade Commission has launched studies to asses whether efforts to reduce red tape were outweighed by the need to prevent counterfeit pharmaceuticals and medical equipment. Counterfeit Schizophrenia drug alert (Financial Times, 25 May 2007)
The MHRA has issued a product recall of thousands of packets of schizophrenia drugs after counterfeits were discovered in pharmacists. Patients and pharmacists have been asked to hand in all packets of Zyprexa (olanzapine) labelled with three batch numbers that laboratory tests had shown to be fake. 168,000 British patients use the drug which is manufactured by Eli Lilly. It is the first time regulators have traced fakes to parallel traders. EU drug industry in repackaging clampdown (Financial Times, 1 June 2007)
The European pharmaceutical industry is pushing to ban the repackaging of medicines in an attempt to curb the role of intermediaries who buy drugs in low-cost markets and resell them at a profit where prices are higher. Head of Bayer Healthcare and president of the industry's European trade association, Arthur Higgins, said he planned to strengthen the integrity and transparency of the industry's drug supply chain as one of his top priorities. Possible health benefits in drugs 'guarantee' (Financial Times, 4 June 2007)
Experts believe that a proposed risk-sharing scheme - a "money back guarantee" if a drug does not work in particular patients - may prove advantageous for both health systems and drug manufacturers. The scheme has been put forward by UK-based drug maker Janssen-Cilag, as a string of expensive new treatments come on stream for cancer and other diseases. By agreeing that the NHS - or health insurers - pay only for the patients who respond well, a "money back guarantee" would allow a drug company to maintain the nominal price for its medicine but receive payment only for the patients in whom it does provide real benefit. OFT considers undertakings in lieu of reference in Lloyds/IPCC merger (OFT press release, 8 June 2007)
The Office of Fair Trading has decided that Lloyds Pharmacy Ltd's anticipated acquisition of Independent Pharmacy Care Centres Plc will not be referred to the Competition Commission provided that the parties give undertakings satisfactorily addressing competition concerns in the retail pharmacy services market in four UK localities. The OFT carried out a public consultation on the proposed undertakings and the closing date for submissions was 20 July 2007. "Group litigation" status of MMR claims to be dropped (Financial Times, 9 June 2007)
A High Court judge has recommended that the "group litigation" status given to claims brought against big drug companies by parents who claim that their children were injured by the MMR vaccine should be ended, due to the small number of claimants who now had the public funding necessary to pursue their cases. Cartel case to be split into separate trials (Financial Times, 26 June 2007)
A drug cartel case being brought against five generic drug manufacturers and nine individuals by the SFO will be split into two separate trials. The first trial will deal with allegations of price-fixing in the supply of penicillin based antibiotics to the NHS, followed by a second trial which will address similar allegations concerning blood-thinning products, warfarin and Marevan. The offences date back to the 1990s, and the first trial is unlikely to begin before 2008 due to separate proceedings on whether price fixing was a criminal offence before the implementation of the Enterprise Act 2002. AZ delays wholesale system (Guardian, 5 July 2007)
AstraZeneca has postponed the implementation of its controversial new distribution deal – in which AAH Pharmaceuticals and UniChem become the sole suppliers of its medicines - until next year. AstraZeneca had planned to have its new system in place by the end of summer, but said that the delay will allow its customers more time to ensure they have accounts with AAH or UniChem, to check that the new system is robust, and to carry out more consultations with customers. ABPI to bring judicial review proceedings against UK Department of Health over drug switching initiative
The ABPI has obtained leave to bring a judicial review of the NHS’s schemes to switch patients to cheaper medication. The ABPI has objected to the schemes on two grounds, claiming that no central guidance was available to ensure that such switches were not being made without proper regard to the welfare of individual patients and that additional payments to doctors were being made as a direct financial inducement to prescribe certain medicines in substitution for other named drugs. The ABPI considers the latter practice to be illegal under European Union law. The Department of The Emerging Issues in Pharmaceutical and Healthcare Law and Practice newsletter is edited by Dr. Brian Whitehead, solicitor and Adrienne Wilson, professional support lawyer, both of Addleshaw Goddard. Brian can be contacted on 0113 209 2330 or brian.whitehead@addleshawgoddard.com. Copyright Addleshaw Goddard 2007. Extracts may be copied with prior permission and provided their source is acknowledged. The articles in this newsletter are for information only, and should not be acted upon without further specific advice. If we can be of further assistance, please contact the partner with whom you normally deal or any of the persons listed. Addleshaw Goddard is not authorised under the Financial Services and Markets Act 2000, but we are able in certain circumstances to offer a limited range of investment services to clients because we are members of the Law Society. We can provide these investment services if they are an incidental part of the professional services we have been engage to provide. Addleshaw Goddard's Pharmaceuticals and Healthcare Group consists of over 20 fee earning
members drawn from the firm's IP, Corporate, Litigation and Competition divisions. Please contact
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Michael Birchall (corporate finance)
Email: michael.birchall@addleshawgoddard.com John Kelleher (litigation)
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Email: richard.kempner@addleshawgoddard.com Guy Leigh (competition, trade and regulatory)
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Email: phil.mcdonnell@addleshawgoddard.com Copyright reserved 2007 Addleshaw Goddard LLP. Addleshaw Goddard LLP is a limited liability partnership registered in England and Wales (with registered number OC318149) and is regulated by the Solicitors Regulation Authority.

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