Supreme Court declines to hear Bracco claim for patent extension

March 5, 1997

Complex case has major ramifications for genericsBracco Diagnostics hit a snag in its attempt to extend patentprotection for its nonionic x-ray contrast agent iopamidol afterthe U.S. Supreme Court declined to hear an appeal of a lower courtruling

Complex case has major ramifications for generics

Bracco Diagnostics hit a snag in its attempt to extend patentprotection for its nonionic x-ray contrast agent iopamidol afterthe U.S. Supreme Court declined to hear an appeal of a lower courtruling on a pharmaceutical patent case. Although the particularsof the litigation are complex, the Supreme Court's decision boilsdown to a victory for manufacturers of generic nonionic contrastagents that would compete with iopamidol.

The U.S. Supreme Court on Jan. 21 decided not to hear Bracco'sappeal of a lower court's ruling that rejected an extension ofiopamidol's patent. The Supreme Court provided no reason for denyingthe request, but legal experts believe the court's action hadmore to do with a crowded judicial schedule than the merits ofthe case.

"The Supreme Court is inundated with requests to takecases, so the judges usually take ones of significant nationalimportance," said Bracco counsel Edward FitzPatrick, an attorneyat the law firm of Rogers & Wells in New York City. "Herethere was only a finite number of patent properties involved.While the impact on those companies is significant for them, itis not on a macroeconomic analysis."

Iopamidol is a low-osmolar contrast medium (LOCM) that Braccomarkets under the trade name Isovue. The agent, which is one ofthe four best-selling x-ray contrast media in the world, was inventedby Bracco researchers and originally licensed to Squibb Diagnosticsfor marketing in the U.S. In 1994, Bracco, which is headquarteredin Milan, Italy, purchased Squibb's contrast media assets, formingBracco Diagnostics as its U.S. subsidiary and assuming directU.S. marketing of Isovue.

Isovue has been on the U.S. market for more than a decade,but a good portion of the product's term of patent protection(17 years under U.S. law at the time) was spent while it was underreview by the Food and Drug Administration.

To partially compensate Bracco for the delay, the FDA grantedIsovue a patent restoration extension under the Hatch-Waxman Actof 1984, a law that allows patents to be extended to compensatefor delays encountered while traversing the FDA approval process.The same law allows drug companies to file applications for genericversions of patented products without conducting original researchto back up the application.

"What sometimes happens is that a particular pharmaceuticalproduct is held up from marketing because of the regulatory proceduresof the FDA," FitzPatrick said. "The Hatch-Waxman Actoffsets that patent protection for pharmaceutical products bya relatively complex formula, such that you can get added backto your patent protection a certain number of years as a functionof the quantum of delay in the FDA regulatory process."

The FDA's action gave iopamidol two years of added protection,starting from January 1994, when iopamidol's patent originallyexpired. But even with the Hatch-Waxman extension, iopamidol'spatent protection ran out in January 1996.

Harmonizing patent law. Bracco, however, had hoped to keepiopamidol to itself a while longer by applying recently enactedinternational patent rules that provide for patent coverage of20 years, three years more than what the U.S. law allowed wheniopamidol was approved.

The new rules are included in the Uruguay Round AgreementsAct (URAA) of 1994, a U.S. law that implements the General Agreementon Tariffs and Trade (GATT). GATT is an international trade agreementthat harmonizes global trade treaties.

Specifically, URAA provided for a new patent term of 20 yearsfrom filing for all U.S. patents in force on June 8, 1995, orlater. Iopamidol's patent, because it was under the older U.S.law, was for 17 years and expired in January 1994, although itwas extended until January 1996 under Hatch-Waxman.

The question was: Should iopamidol and other drugs that hadreceived Hatch-Waxman extensions get additional extensions becausetheir patents were in force on June 8, 1995? Or should the extensionsbe denied because the patents were in force at that time onlydue to Hatch-Waxman?To answer these questions, a group of pharmaceuticalcompanies, including Bracco, asked for extended patent protectionunder the URAA shortly after the passage of the act. These companiesincluded Merck & Co. and MSD Technology; Schering; Hoffmann-LaRoche and Syntex; and Organon. Fighting the action were the FDA,the Department of Commerce, and the Generic Pharmaceutical IndustryAssociation. A total of 11 patents were included in the claim.

A U.S. District Court in Virginia initially ruled in favorof the plaintiff pharmaceutical companies, stating that the Hatch-Waxmanrestoration extension was to be added to the patent term of 20years defined by the URAA. On appeal of the ruling, however, theU.S. Court of Appeals for the Federal Circuit narrowed that decision,finding that the extension only applied to some of the plaintiffs.

Unfortunately for Bracco, the company's iopamidol patent wasnot one of them. The U.S. Court of Appeals decided that thosecompanies whose patents were in force on the URAA's June 8, 1995,deadline only due to Hatch-Waxman extensions were not eligiblefor an additional extension. Bracco and several other companiesaffected by the ruling appealed the decision to the Supreme Court,which in January declined to hear their case.

Bracco's only recourse now to extend iopamidol's patent isthough congressional legislation, a remote likelihood given thecrowded political calendars of the House of Representatives andSenate. Bracco is exploring this option, however, according tolegal sources.

"The litigation course of action is over," FitzPatricksaid. "Now it is a question of whether or not we can obtaina requisite legislative correction."

If such legislation is enacted, the protection afforded iopamidolwould be extended. Barring intervention from Capitol Hill, however,the decision of the appeals court will stand, in which case thelegal door is now apparently open for the introduction of genericiopamidol.

Several firms are already preparing to make generic forms ofthe agent. Among them are the Australian pharmaceutical makerF.H. Faulding & Co. (SCAN 12/18/96), as well as ESI-Lederle,a division of American Home Products. Both firms have receivedFDA approvals to market their versions of generic iopamidol inthe U.S. In addition, Abbott Laboratories has an application fora generic version of iopamidol pending a decision by the FDA (SCAN11/20/96).

While the introduction of generic brands of iopamidol may causesome reduction in the price of Isovue, the effect will be mitigatedby drops among all LOCM precipitated over the last 18 months byheightened competition for national accounts, such as those heldby group purchasing organizations, including VHA.