In Re: Lantus Direct Purchaser v.
949 F.3d 21 (1st Cir. 2020) (2020)
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Rule of Law:
An antitrust claim under Section 2 of the Sherman Act may arise from a drug manufacturer's improper listing of a patent in the FDA's Orange Book, triggering an automatic stay of a competitor's drug approval. However, the manufacturer may assert an affirmative defense that its submission was the result of a reasonable, good-faith attempt to comply with the Hatch-Waxman Act's regulatory scheme.
Facts:
- In 2000, Sanofi obtained FDA approval to market insulin glargine under the brand name "Lantus" for diabetes management and submitted the '722 patent, which claimed insulin glargine and was set to expire in August 2014.
- In 2006, Sanofi filed a supplemental new drug application (sNDA) to sell insulin glargine in a disposable injector pen device called the Lantus SoloSTAR.
- In 2013, Sanofi submitted U.S. Patent No. 8,556,864 ("the '864 patent"), titled "Drive Mechanisms Suitable for Use in Drug Delivery Devices" and set to expire in 2024, for listing in the Orange Book in association with the SoloSTAR.
- The '864 patent contains claims concerning aspects of a "drive mechanism" intended for use in drug injector pens but does not mention insulin glargine, the Lantus SoloSTAR, an injector pen more broadly, or a method of using a pen.
- In 2013, competitor Eli Lilly planned to market its competing insulin glargine product, Basaglar, in its own KwikPen injector and, confronted with the '864 patent listing, submitted a Paragraph IV certification stating non-infringement.
- Sanofi sued Lilly for patent infringement within 45 days of the Paragraph IV certification, triggering an automatic 30-month stay of FDA approval for Basaglar.
- In September 2015, Sanofi and Lilly settled the lawsuit, with Sanofi granting Lilly a royalty-bearing license to sell Basaglar beginning in December 2016.
- Later, Merck and Mylan also submitted applications to market insulin glargine in injector pens and were sued by Sanofi for patent infringement based on the SoloSTAR patents.
Procedural Posture:
- César Castillo, Inc. and FWK Holdings LLC, on behalf of themselves and all others similarly situated (plaintiffs), filed a putative class action complaint against Sanofi-Aventis U.S., LLC and Sanofi GmbH (defendants) in the United States District Court for the District of Massachusetts.
- The plaintiffs alleged claims under Section 2 of the Sherman Act, specifically an unlawful scheme to monopolize and an attempt to monopolize the market for insulin glargine products.
- The district court (Magistrate Judge Judith G. Dein) dismissed the plaintiffs' Sherman Act claims, ruling that Sanofi's decision to list the '864 patent was reasonable and not 'objectively baseless' due to perceived ambiguities in the FDA's listing requirements.
- The plaintiffs appealed the district court's dismissal to the United States Court of Appeals for the First Circuit.
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Issue:
1. Does a drug manufacturer improperly list a patent in the FDA's Orange Book, potentially incurring antitrust liability, if the patent claims only a component of a drug delivery device and not the approved drug product itself or a method of using it? 2. If so, can the manufacturer assert a defense to antitrust liability by demonstrating that its patent submission was a reasonable, good-faith attempt to comply with the Hatch-Waxman Act's regulatory requirements?
Opinions:
Majority - Kayatta, Circuit Judge
Yes, a drug manufacturer improperly lists a patent if it claims only a component of a drug delivery device and not the approved drug product or a method of its use, and yes, the manufacturer can assert an affirmative defense of reasonable, good-faith compliance. The court found that Sanofi improperly listed the '864 patent in the Orange Book because the patent does not claim insulin glargine, nor does it claim the Lantus SoloSTAR injector pen as a "drug" or "drug product." Under 21 U.S.C. § 355(b)(1) and 21 C.F.R. § 314.53(b)(1), only patents claiming the drug for which an application is submitted or a method of using that drug should be listed. The '864 patent's claims relate solely to a "drive mechanism" within a drug delivery device, not the drug itself or the drug product (the finished dosage form). The FDA has previously declined to expand listing requirements to include patents claiming "integral components" of a drug product, reiterating that the patent must claim the finished dosage form. Therefore, the complaint adequately alleges an improper submission. The court further held that while such improper conduct can give rise to antitrust liability, a defense exists where the defendant's action was taken as part of a reasonable, good-faith attempt to comply with the regulatory scheme, citing precedent from the communications industry (e.g., MCI Communications v. AT&T Co.). This defense, to be proven by Sanofi on remand, balances the regulatory mandate to submit patents with antitrust scrutiny, acknowledging the potential dilemma for manufacturers. Finally, the court found that the plaintiffs' allegations plausibly showed that the improper listing and subsequent 30-month stay could have caused antitrust injury by delaying competition.
Analysis:
This case is significant for clarifying the scope of patent listings in the FDA's Orange Book under the Hatch-Waxman Act, particularly for combination drug-device products. It reinforces that patents must claim the actual drug or drug product, not just components of a delivery system, to be properly listed. Crucially, the decision establishes an important affirmative defense to antitrust liability in the context of complex regulatory compliance, allowing drug manufacturers to avoid treble damages if they can prove their actions were a reasonable, good-faith attempt to meet regulatory obligations. This could influence how pharmaceutical companies assess and list patents, potentially leading to more cautious listing practices and fewer improper Orange Book submissions.
