CAPA Statement on the Federal Circuit’s Decision to Throw Generics ‘Skinny Label’ Process Back in Jeopardy

The Coalition Calls on Congress to Intervene as Courts Undermine the ‘Skinny Label’ Framework, Preventing Generic Competition While Drug Companies Profit

WASHINGTON, DC: Recently, the U.S. Court of Appeals for the Federal Circuit upheld the verdict in GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., subjecting Teva to a $234 million judgment that includes damages for the period of time that it used a template skinny label provided by the Food and Drug Administration (FDA).  Matthew Lane, executive director of the Coalition Against Patent Abuse (CAPA), released the following statement in response:

“Today, millions of patients and families are increasingly impacted by high drug prices while some Big Pharma companies continue abusing the U.S. patent system through anti-competitive tactics that hurt American patients.  By allowing the original verdict to stand, the Federal Circuit has undermined the ‘skinny label’ framework used by generic drug companies to compete against brand-name drugs in the marketplace.”

Over 30 years ago, Congress passed the Drug Price Competition and Patent Term Restoration Act, known as “Hatch-Waxman.”  The two party compromise was simple: longer and stronger monopolies for the pharmaceutical industry in exchange for a regulatory framework that created a robust generic industry.  This requires allowing generic competition to enter on unpatented uses while continuing to protect newly patented uses for older medications.  The “skinny label” framework created by Congress did just that.  This decision upsets that balance and creates new uncertainty in the skinny label practice that will discourage competition.  

Lane continued, “Not only will this ruling further erode the Hatch-Waxman Act, but it could destroy the balance that was reached by Congress after months of deliberation and cause higher drug prices for patients.  Now, we’re calling on Congress to restore the proper functioning of the skinny label process to support innovation while encouraging generic competition.”

CAPA previously warned that the recent Federal Circuit Court decision could erode Hatch-Waxman, leading to even higher drug prices.  As it stands, companies can continue their anti-generic patent thicketing strategies to establish a cluster of blocking patents around a blockbuster drug to completely bar generic entry and increase profits.