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How Drug Life-Cycle Management Patent Strategies May Impact Formulary Management
Jan Berger, MD, MJ; Jeffrey D. Dunn, PharmD, MBA; Margaret M. Johnson, BS, RPh; Kurt R. Karst, JD; and W. Chad Shear, JD

How Drug Life-Cycle Management Patent Strategies May Impact Formulary Management

Jan Berger, MD, MJ; Jeffrey D. Dunn, PharmD, MBA; Margaret M. Johnson, BS, RPh; Kurt R. Karst, JD; and W. Chad Shear, JD
During the second part of the roundtable, the moderator asked participants to comment on several case studies involving specific products, to gain feedback and perspective from the payers and attorneys regarding the particular circumstances surrounding the introduction of generic versions.

Case Study 1: Gleevec (imatinib)

Gleevec (imatinib) is indicated for the treatment of chronic myelogenous leukemia (CML). Novartis’ composition-of-matter patent for Gleevec expired in January 2016, and the first generic version of imatinib was marketed in the United States in February 2016 by Sun Pharmaceuticals.14

Sidebar: Payer Perspectives on the Introduction of Generic Imatinib

The introduction of a generic version of imatinib was followed closely by payer pharmacy directors, said Dr Dunn. “It is really a precedent setter for what we do in the oral oncology space. However, we didn’t change anything in anticipation of its launch, because the brand was not disadvantaged. We are now covering the generic and not covering the brand. It will shape anything that occurs in the future with this class of tyrosine-kinase inhibitors.”

A patent litigation challenge added uncertainty to the timeline and ultimately delayed the generic launch for 7 months,” added Ms Johnson. “Novartis initiated discussions about extending brand contracting in light of an authorized generic launch and also offered patient copay discounts in order to compete with the generic product.”

Dr Dunn’s organization placed the generic on formulary immediately “because it didn’t affect contracts. It is on a specialty tier rather than the traditional generic tier, however. The brand was removed from formulary at the next P&T committee meeting. Today, other tyrosine-kinase inhibitor brands are stepped through the generic for the labeled indications via the prior authorization process.”

The short-term budget impact of this generic may be less than pharmacy directors anticipated, Dr Dunn pointed out, because the generic is not priced substantially less than the brand. However, its budget impact may grow over time, particularly with the expiration of the 180-day exclusivity period and the influx of additional generic competition. In addition, the ability to step other tyrosine-kinase inhibitors for CML through the generic for new patients should generate further cost savings.


Case Study 2: Zytiga (abiraterone acetate)

The FDA approved Zytiga (abiraterone acetate) for use in combination with prednisone for the treatment of men with metastatic castration-resistant prostate cancer who have received prior chemotherapy in April 2011.15  A supplemental indication for use in men prior to receiving chemotherapy followed in December 2012.16

Three years after the initial approval of branded Zytiga (abiraterone acetate), the manufacturer of Zytiga received approval for an additional patent, which will extend the period of exclusivity beyond that of the composition-of-matter patent. This new intellectual property protection was a “method-of-use” patent, which covered the coadministration of prednisone (given as a separate pill) with Zytiga, a dosing regimen that was already prescribed in the FDA-approved product label. This patent was listed in the Orange Book and provides patent protection for Zytiga potentially well into 2027—more than 10 years beyond the expiration of the Zytiga molecule patient in late 2016.

The Figure shows the timeline of activity leading to the potential launch of a generic for Zytiga. The original 5 years of FDA regulatory exclusivity for Zytiga as a new chemical entity expired on April 28, 2016, and the composition-of-matter patent will expire on December 13, 2016. The 30-month stay on FDA approval for any generic expires in late October 2018, and should the manufacturer lose the patent case being subject to litigation brought by generic manufacturers to challenge the new dosing patent and choose to appeal the ruling, the appeals process may last a further 12 to 16 months, until the end of 2019. This would mean that the earliest a generic might reach the market is early 2020. Should the manufacturer win the dosing patent challenge by the generic manufacturers (or lose the challenge, but go on to win the appeal), the addition of the new dosing patent would extend patent protection for Zytiga into 2027.

Sidebar: Panelist Perspectives on Zytiga Patent Protection

According to W. Chad Shear, Arguably, the additional patents offer an additional exclusivity for 20 years from their date of filing. However, those patents are subject to challenge by would-be generics, and are in fact being challenged right now in District Court and at the USPTO.”

The additional patent for Zytiga (patent 8,822,438) is listed in the FDA’s Orange Book. “Companies filing applications to market generic Zytiga will be required to certify to FDA that they do not infringe the dosing regimen patent,” added Kurt Karst. “This recently issued dosing regimen patent listing is therefore a barrier to generic competition, unless a court ultimately denies the patent as invalid and/or noninfringed.”

Health plans and formulary managers, though generally unaware of patent extension efforts or patent litigation status, do monitor the timing of potential generic availability of key products, as it is relatively easy to track the expiry of regulatory exclusivity of branded products on the FDA website, and ANDA applications by generic companies trigger patent litigation, on which information is publicly available.

Ms Johnson stated, “I personally was not aware of the patent extension and potential for a dosing regimen patent related to the coadministration of prednisone. This is a fairly crowded category, so value (outcomes) will be a consideration relative to formulary placement.” She continued, “Contracts are generally not long term (more than 1-2 years) and generally have clauses related to market changes/new market entrants. Brand competition is a factor here, as well as patent extension.”

 


Case Study 3: Namenda (memantine hydrochloride)/Namenda XR (memantine hydrochloride, extended  release)

A “product hop” is the substitution—not addition—of a new branded formulation of a prescription drug for an old version by a manufacturer, with the intention of forestalling generic competition. Multiple examples of product hops have been seen over the years. For this case study, the focus was on an extended-release, once-daily dosage form of memantine (called Namenda XR), which was introduced by Forest Laboratories (now Allergan).17 The manufacturer soon attempted to take away patient access to the immediate-release product, which was dosed twice daily.18

Furthermore, in a product hop example, the original formulation’s clinical effect is unaltered, but the medication is now somewhat different. In other words, the new version will not be considered AB-rated for substitution purposes. The sole beneficiary is the drug maker, who may avoid generic substitution and may reinforce its revenue stream.19

The Namenda versus Namenda XR product hop landed in the court system, as the State of New York brought suit against Actavis (which purchased Forest, before being acquired itself by Allergan). A decision on May 22, 2015 by the US Court of Appeals for the Second Circuit agreed with a lower court ruling, stating that the “Defendants’ hard switch would likely have anticompetitive and exclusionary effects on competition in the memantine market, creating a ‘dangerous probability’ that Defendants would maintain their monopoly power after generics enter the market.”20

Sidebar: Payer Perspectives on the “Product Hop”

Unless there are clear benefits, payers are wary of the introduction of extended-release versions. “Generally, I would say these are not clinical issues. The perception is not very good from a payer perspective,” remarked Dr Dunn, “unless there are very explicit adherence issues [with the original drug] that will lead to obvious benefits [with the extended-release version]. We would treat any of these agents like a new brand. We don’t generally jump on board with these sustained-release or extended-release agents.”

Product hops tend to elicit more visceral reactions from payers, because they are associated with higher costs, with no additional clinical benefits. Ms Johnson noted that “the manufacturer’s attempt to take the immediate-release version off the market after introducing the XR version ‘didn’t work’. These product hops are not viewed as clinical differentiators or value drivers. We treat the extended-release products like other brands, and it’s much less likely they’re going to be positioned as preferred agents.”

Ms Johnson also emphasized that removal of the previous version prevented the validation of the new product’s value compared with the original product, making it more difficult to determine appropriate formulary positioning for the new product.

“This is really an egregious use of the patent extension, and it created a payer backlash,” commented Ms Johnson, because Forest sent the message that “it either doesn’t have faith in the original product, or that it simply wanted to move all of the Namenda business to the more expensive brand.”


Conclusion

Pathways for the protection of pharmaceutical intellectual property are complex. The Hatch-Waxman Act of 1984 defined the pathway for generic drug approvals but also set patent and market exclusivities for different drug marketing scenarios. These protection pathways have evolved since that time, influenced by changes in legislation and the regulatory environment.

The Act’s system for patent protection and generic drug approval offers opportunities to not only guard intellectual property, but also to encourage innovation, including improvements to the drug in question. However, not all new pharmaceutical patents result in true innovation or in improvement in patient care, and payers are often skeptical of claims made around such product refinements.

Managed care stakeholders should have an understanding of pharmaceutical patents and ways in which intellectual property can be leveraged or extended, as this information can help clarify the availability of therapeutic alternatives, such as generics and the timing of their launches. With regard to blockbuster brands going off-patent, understanding this information can assist payers in budget planning, contract negotiation, and even P&T committee decision making.

An understanding of the patent system can also help improve payers’ appreciation of new product launches—for example, whether an approved product is a new molecular entity or simply a new formulation. This information can affect formulary positioning as well as patient care. 

Acknowledgement
The authors wish to thank Stanton R. Mehr, SM Health Communications, for editorial assistance in the preparation of the manuscript.
Author affiliation: Health Intelligence Partners, Chicago, IL (JB); VRx, LLC, Salt Lake City, UT (JDD); MMJ Advisors, LLC, Orchard Park, NY (MMJ); Hyman, Phelps & McNamara, P.C., Washington, DC (KRK); Fish & Richardson P.C., San Diego, CA (WCS).
Funding source: This supplement was sponsored by Churchill Pharmaceuticals, LLC.
Author disclosures: Dr Berger, Dr Dunn, Mr Karst, Ms Johnson, and Mr Shear have no relevant financial relationships with commercial interests to disclose.
Authorship information: Concept and design (JB, JDD, KRK, WCS); acquisition of data (MMJ, KRK, WCS); analysis and interpretation of data (JDD, MMJ, WCS); drafting of the manuscript (JDD, KRK); critical revision of the manuscript for important intellectual content (JB, JDD, MMJ, WCS); and roundtable discussion/interview (JB, MMJ).
Address correspondence to: jberger.healthintell@comcast.net.  
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