SCOTUS action will limit generic drug competition

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Congress should act to preserve ‘skinny label’

WASHINGTON  – The U.S. Supreme Court on Monday declined to review a federal circuit court decision that imperils a critical method that many generic drug makers use to win approval. The court denied a petition of certiorari in Teva Pharmaceuticals USA, Inc. V GlaxoSmithKline LLC, Et. Al., allowing the divided lower court’s decision to stand. That decision found that Teva’s “skinny label” for its generic drug carvedilol, a drug used to treat certain forms of heart disease, infringed upon a GlaxoSmithKline (GSK) “method of use” patent. “Skinny labels” denote limited uses for generic drugs compared to their brand-name competitors. Generic drugs compete with higher-priced brand name drugs and bring down the overall cost of medications in the United States. 

As outlined in a recent U.S. PIRG Education Fund report, brand name drug companies abuse the patent system in a variety of ways to deter competition and extend monopoly pricing on drugs, costing patients, employers and taxpayers billions of dollars. Drug companies regularly apply for and amass dozens of patents on a single drug, creating a “patent thicket” that creates multiple barriers to generic competition. Over recent decades, brand name drug companies increasingly employ “method of use” patents that do not cover the drug itself, but how the drug is used to treat specific ailments. In this case, GSK’s primary patent had expired, as had two of its three method of use patents.

Because Congress understood the problem of large pharmaceutical companies using method of use patents to block generic competition, Congress included a “skinny label” provision in the Hatch Waxman Act. Under this act, a drug company can win approval for a generic medication so long as it does not label its product for any specific use still covered by a patent. Teva followed the law with its generic offering, yet GSK argued that Teva’s label “induced” doctors to infringe upon the one use still covered by a patent. 

A 2021 study found that 43% of generics receiving approval in the United States between 2015 and 2019 did so by adopting skinny labels. Monday’s Supreme Court action could create, as Teva wrote in its original petition,”competition-killing uncertainty” significantly curtailing this important avenue for generic competition. 

In response to the Supreme Court’s action, U.S. PIRG Education Fund’s Health Care Campaigns Senior Director Patricia Kelmar made the following statement: 

“By creating further barriers to generic drug competition, this Supreme Court act to deny certiorari could cost patients and taxpayers billions of dollars. Today’s action undermines the intent of Congress, placing generic competitors at great risk if they choose to use a so-called ‘skinny label.’

“Congress should act to clarify the law and preserve the skinny label path to generic competition and the U.S. Patent and Trademark Office should closely scrutinize the proliferation of method of use patents.”