Schering v. Geneva: Drug Discovery Implications
While the Federal Circuit suggested various ways in which patent owners could modify their compound claims covering metabolites, none of the suggested ways can ameliorate the potential damage done to a company’s investments in a metabolite product. Prior to the Schering case, pioneer pharmaceutical companies could have relied on a strategic pharmaceutical business plan wherein they could stagger patenting and marketing of a parent drug and its metabolite. Such staggering would have ordinarily extended the market protection rights for the parent drug and the metabolite. Accordingly, these companies secured patent claims covering both compounds, pharmaceutical compositions, selected pro-drugs and formulations containing the compounds, as well as treatment methods involving administration of the compounds. Any other competitor seeking to market a pharmaceutical product containing the parent or the metabolite would have been blocked by these patents.
After the decision in this case, however, the metabolite patents no longer have an economically viable claim to the metabolite compound. While it had always been the case that a competitor could patent an unobvious and unanticipated pro-drug of a metabolite that is covered by a compound claim, the competitor could not have marketed this pro-drug without infringing the compound claim covering the metabolite. Thus, before the Schering case, there was no such thing as a non-infringing pro-drug of a patented metabolite. After Schering, however, the invalidity of economically viable compound claims covering metabolites means that a competitor can now patent and market an unobvious and unanticipated pro-drug of the metabolite. From a chemistry point of view, designing and synthesizing such a pro-drug is not only feasible but it is also easily achievable. The competitor can also rely – at least in part – on the pioneer's data on the parent drug or the metabolite to gain FDA approval to market its non-infringing pro-drug. This scenario can take place even if the patent terms on the pharmaceutical compositions containing the metabolite and the associated treatment method claims are still in effect. Worse yet, in another scenario, a competitor can now patent and market a non-infringing pro-drug of the metabolite regardless of whether the patent term on the parent drug is still in effect. Under this scenario, the pioneer’s business plan to stagger the marketing of the parent drug and the metabolite would not only be preempted by this competitor, but the pioneer’s market share for the parent drug itself would be eroded by the competitor’s potentially superior drug.
Therefore, unless mitigating measures are taken at all steps of a pharmaceutical business plan involving parent and metabolite drugs, the holding of the Schering case will severely diminish the return on investment expectations that can be gained from such a plan. We have evaluated the market protection issues that the Schering case raises, and have identified strategies to address them. These strategies include patent, regulatory and data protection approaches to address concerns at various stages of development and commercialization. Please contact us if you would like us to assist you in assessing your risks or potential vulnerabilities regarding your pharmaceutical business plan, and to guide you on how to put in place mitigating measures to avert the adverse consequences engendered by Schering Corp. v. Geneva Pharm.
For assistance on this and other market protection matters, please contact your Ropes & Gray attorney.