Amicus brief in Sequenom v. Ariosa: Why the U.S. Supreme Court should grant the petition for a writ of certiorari

By Timo Minssen

I am happy to announce that on April 20th the New York attorney Robert M. Schwartz and I have filed an amicus brief at the US Supreme Court with Berkeley-based Andrew J. Dhuey as Counsel of Record. The brief, which was signed by 10 prominent  European and Australian Law Professors as amici curiae, adds a European perspective to the many amicus briefs that have been submitted in support of Sequenom’s petition for certiorari to the United States Supreme Court. Sequenom’s petition in Case No. 15-1182 was filed on March 21, 2016 and seeks review of the Federal Circuit’s controversial decision in Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, reh’g denied, 809 F.3d 1282 (Fed. Cir. 2015). The case concerns the revocation of Sequenom’s patent claims directed to inventive methods of genetic testing by detecting and amplifying paternally inherited fetal cell-free DNA (cffDNA) from maternal blood and plasma. Before the development of this highly beneficial, non-invasive prenatal diagnostic test, patients were placed at higher risk and maternal plasma was routinely discarded as waste. Distinguishing this case from previous Supreme Court decisions and highlighting the mitigating effects of other patentability requirements, we are concerned that the Federal Circuit’s overly rigid approach to claims eligibility decision might jeopardize the development of new therapies in an increasingly important area of modern medicine.

As most Bill of Health readers know, the US Supreme Court has in a recent series of cases (i.e. the combined effect of Bilski, Prometheus, Myriad and Alice) barred the patent eligibility for many genetic inventions as “products and processes of nature”. In Sequenom the CAFC interpreted these to mean – in essence- that “laws of nature” had to be entirely eliminated from the test of patent eligibility under §101 of the Patent laws. Should this interpretation be institutionalized it will contravene the tests for exclusions and exceptions under the EPC, arguably contradict longstanding US treaty policy and disrupt international patent harmonization. More importantly, we fear that the broader impact of such an restrictive interpretation may have grave consequences for a sustainable global drug delivery system, which should involve both public and private actors.

Although we believe that patents will remain the backbone of the industry, we acknowledge in our brief that  there are certain areas of biomedical innovations, such as antibiotics and orphan drugs, where the patent system does not work particularly well. We further recognize that both in Europe and in the US concerns have been raised about overly pre-emptive patents scope, but these are addressed at different levels. In contrast to Europe, the CAFC has interpreted the uncodified exception as part of a “threshold test” for patent-eligibility applied before other patentability requirements can be assessed. A strict and coherent application of these requirements, however, would invalidate overly-broad patent claims (including some of Sequenom’s arguably too broad and badly drafted claims), while also permitting, well-defined, narrower claims on diagnostic technology. In our view, the current approach conflates the patent eligibility test with issues that can be more sensibly addressed within a strict and coherent assessment of novelty, non-obviousness and sufficient disclosure criteria or at the post-grant level. We believe that, the Federal Circuit’s threshold test has not sufficiently considered the manner in which today’s statutory requirements have developed in both the U.S. and Europe to address policy rationales for patentability exceptions. To entirely transplant those issues into the patent eligibility assessment would categorically close the patentability door on many well-defined and beneficial inventions that deserve patent protection. In absence of sufficient public involvement and appropriate alternative incentives we risk that the wells driving technological progress run dry and that companies engage in business strategies, such as increased reliance on trade secrecy, that are not necessarily beneficial for our innovation system.

Accordingly, we urge the Supreme Court to clarify a patent eligibility test in line with its longstanding jurisprudence and in harmony with international and European law.

If the CAFC’s restrictive interpretation should prevail, however, I believe that it will be crucial to swiftly optimize the framework for PPPs and alternative innovation incentives, such as prizes and regulatory exclusivities. This would have to be done on an international level to allow for greater flexibilities and encompass further technological areas, such as biomedical diagnostics. Regarding regulatory exclusivities, Article 39 of the TRIPS agreement should provide sufficient leeway for such changes. The pros and cons of the different alternative approaches would of course have to be carefully considered.

The Amici curiae have no stake in the parties or in the outcome of the case. A full list of the Amici is appended at the end of the brief.

 

What do doctors know about FDA drug approval standards and the breakthrough therapy designation? Less than we’d hope.

By Dalia Deak

A study published this week in JAMA examined how much physicians know about FDA approval standards for new drugs and the breakthrough therapy designation. The investigators found major gaps in understanding with regard to both issues, despite intuitive beliefs to the contrary.

For the study, Kesselheim et al. conducted a national survey of board-certified internists and specialists. They selected a random sample of 300 clinically active internists and 900 specialists in endocrinology, hematology, and infectious diseases from the American Board of Internal Medicine’s diplomate list. Of the 1,148 physicians contacted, 692 physicians, or 60%, responded.

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Treasury Targets Corporate Inversion, Pfizer-Allergan Deal Falls Through

By Dalia Deak

The Treasury Department published regulations on Monday that took aim at corporate inversions – and, they hit their mark. Two days later, the merger of pharmaceutical giants Pfizer and Allergan, the largest planned inversion in history of the pharmaceutical industry, fell through.

The temporary and proposed regulations put forth on Monday make it more difficult for U.S.-parented multinational groups to change their tax residence to a low-tax country. This practice, the Treasury noted, is typically not to grow the underlying business or pursue other commercial benefits that may arise, but primarily to reduce their taxes. Companies will often follow up corporate inversions with another tactic—earnings stripping. This is where the company will seek to further minimize U.S. taxes by paying deductible interest to the new foreign parent or its affiliates in the low-tax country.

Specifically, the regulations attempt to curb inversions and earnings stripping by doing the following:

  • Limiting inversions by disregarding foreign parent stock attributable to certain prior inversions or acquisitions of US companies (under section 7874);
  • Targeting transactions that increase related-party debt that does not finance new investment in the US (under section 385); and
  • Allowing the IRS on audit to divide a purported debt instrument into part debt and part stock (under section 385).

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Sequenom vs. Ariosa and international approaches to the patent eligibility of biomedical innovation

By Timo Minssen

With a potential petition for writ of certiorari in the Sequenom v. Ariosa case approaching, it appears as if the US Supreme Court  will once again have to consider crucial patent eligibility questions with a great significance for biomedical innovation and diagnostic methods.

The claims at issue (see U.S. Patent No. 6,258,540 ) are directed to methods of genetic testing by detecting and amplifying paternally inherited fetal cell-free DNA (cffDNA) from maternal blood and plasma. Before the development of this non-invasive prenatal diagnostic test, patients were placed at much higher risk and maternal plasma was routinely discarded as waste.

In an earlier decision the district court ruled that the method claims were patent ineligible and an – apparently reluctant  – Federal Circuit agreed in Ariosa Diagnostics, Inc. v. Sequenom, Inc. 788 F.3d 1377 (Fed Cir. 2015). Judge Linn, for example, wrote that the innovation deserves patent protection, but also that the “sweeping language of the test” established in Mayo v. Prometheus requires a determination that the claims are patent ineligible. Read More

Jacobus and Catalyst Continue to Race for Approval of LEMS Drug

By Dalia Deak

The latest development in the race for approval between Jacobus Pharmaceutical Company and Catalyst Pharmaceuticals is a ‘refuse to file’ letter that the FDA issued to Catalyst indicating that Catalyst’s New Drug Application for Firdapse was incomplete. Both companies are competing for approval of slightly modified forms of a drug—3,4-diaminopyridine, or 3,4-DAP— to treat Lambert-Eaton myasthenic syndrome (LEMS). The winner will receive 7 years of exclusive marketing rights to the drug.

LEMS is an autoimmune disorder that affects an estimated 3,000 people in the United States. It is a rare, debilitating disorder that is marked by progressive weakening of the muscles that often begins in young adulthood. The drug in question was initially discovered in the 1970s in Scotland, with researchers in Sweden demonstrating its use in LEMS patients in the 1980s. Jacobus Pharmaceutical Company has been providing a free base form of the drug to patients with a LEMS diagnosis since the early 1990s at no cost (with the exception of postage), though the drug had never received FDA approval.

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Peeling the Onion: How to Promote Pharmaceutical Innovation and Access to Medicine

By Timo Minssen

As mentioned in my earlier blog post, I decided to conclude this year by publishing a introductory speech that I gave on April 14th, 2015 at the 2015 Broad Institute Innovation & Intellectual Property Symposium. The speech was part of the session “Bringing Therapies to the Patients” and introduced a panel-discussion with Entrepreneur and Professors of Law and Business about the failures of the patent system to support new therapeutics. The text is below:

Peeling the Onion:
How to Promote Pharmaceutical Innovation and Access to Medicine

Speaking about frustrations over the IP system in pharmaceutical innovation, sometimes feels like – to lend the words of the late German Nobel Prize winner Günter Grass – “peeling an onion:” Read More

Happy New Year: From “Weltschmerz” to Pharmaceutical Innovation

By Timo Minssen

Dear readers and colleagues,

I would like to take this opportunity to wish you all a very happy, healthy and peaceful year 2016.

Reaching the end of 2015, I cannot stop thinking about the year that has passed. Being a native German, living in Sweden and commuting every week over the bridge to Copenhagen in Denmark – most recently with thousands of terrified refugees and border controls on the way back to Sweden – this year has left me with much astonishment and concern about the state of the European Union and our global situation. It appears to me as if the EU and other global leaders have focused far too much on tiny technicalities, while leaving the bigger issues untouched and disregarding crucial lessons of history. There are so many things that we must learn from 2015’s terrible events and alarming decisions, but also from the hope-giving agreements, incidents and initiatives. For me one of the most important take-aways is that everything is connected and that sustainable, realistic solutions not only require immediate actions. In my view, we need to think about long-term strategies both in more detail and from a bigger perspective. Due to the complexity of our most pressing problems this is a colossal task. It demands more knowledge, better communications, more collaboration and a more effective coordination of  the considerable skills and different competences that are already out there.

Returning to the actual topic of this blog, it becomes evident that this is also very much true for the health sector and the bio-pharmaceutical area. Not only the Ebola outbreakglobal health crises, IPR debates, dreadful business models and controversial FTA negotiations, but also scientific break troughs, new therapies, legislative action and novel US and EU approaches demonstrate very clearly how this area is left with many challenges and opportunities. The recently approved US 21st Century Cures Act and the new EU Clinical Trials Regulation, for example, show how legislative activities pursuing laudable goals might lead to unwanted adverse effects if they are not carefully enough considered. Read More

A Conversation about… Tax Rates?: The Pfizer and Allergan Deal

By Dalia Deak

Last week, Pfizer and Allergan announced a $155B merger that has the health care and policy world talking. The contours of the deal—in particular, where the new company will be based and the implications it has for the company’s tax rate— have raised important questions.

Pfizer is a company with a long history in the United States that dates back to the mid-1800s when it sold antiparisitics and then painkillers during the Civil War. In the modern era, Pfizer is perhaps best known for blockbusters drugs like Viagra and Lipitor. Yet, expiring exclusivities and patent protections have threatened to knock the drugmaker from its No.1 spot. In January of this year, revenues were higher than expected but still down 3% year-over-year, with a forecasted decline in sales from $49.6B in 2014 to between $44.5B and $46.5B expected in 2015. Without blockbusters to replace Lipitor and Celebrex in particular (which fell 6% and 31% respectively), the company has been looking for a deal, even trying to push through a $118B acquisition of UK-based Astrazeneca in 2013, though that deal ultimately failed.

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A Cost Conundrum for Treating Small Patient Populations

By Dalia Deak

The issue of drug pricing has been thrust center stage (again) after Turing Pharmaceuticals raised the price of daraprim from $13.50 to $750 per dose. The public issued a loud outcry, the pharmaceutical industry condemned the move, and presidential candidates are now discussing drug prices (as discussed previously on this blog). The reactions were so swift and loud that Turing eventually backed down, indicating that they will lower the drug’s price, though it is unclear by how much.

The drug in question in this debate, daraprim, is a 62-year old drug used to treat toxoplasmosis, a parasite that is particularly dangerous in infants, AIDS patients, and cancer patients. The curiosity of this case in particular is that the usual host of development incentives implicated in driving up the cost of a drug (e.g., patents, market exclusivity) was not in play. The reason Turing was able to raise the cost of daraprim is because no other generic competitor for the drug is on the market to drive down the cost. This is largely a result of the small market for daraprim, which had 13,000 prescriptions filled for it last year. This begs the questions: specifically for disease areas where populations are small, will drug prices, even for generics, remain stubbornly high?

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Bureaucracy Can Save Lives – The Legacy of Dr. Frances Kelsey

By Robert Field

What adjective would most people associate with the word “bureaucrat”? For many, it would be “inefficient,” “inept,” or “incompetent.” But another that is just as descriptive is “lifesaving.”

Dr. Frances Kelsey, who died this month at the age of 101, was celebrated as an American hero for her work as a medical officer at the Food and Drug Administration (FDA). She saved thousands of lives and prevented untold suffering by using techniques that earn bureaucrats a bad name, delay and obstruction, to keep the drug thalidomide from reaching the market in the United States in 1961.

Thalidomide is a sedative that had been approved for sale in Europe four years earlier and was prescribed for morning sickness during pregnancy. The American manufacturer, Richardson-Merrell, saw a large potential market in the United States. However, Dr. Kelsey, who was assigned to review its application for marketing approval, was troubled by questionable safety data. The law in effect in 1961 required that she issue a decision within 60 days, but she was able to buy more time by asking for additional information.

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