The U.S. Supreme Court ruled on Tuesday in favor of a generic drugmaker in a case over how companies can fight brand-name rivals in an effort to get their cheaper medicines to market.
The high court unanimously ruled that the generics company, Caraco Pharmaceuticals, could sue a brand-name drugmaker to get it to narrow its patent description with the Food and Drug Administration.
The FDA uses this information to decide whether to approve a generic "copycat" version of a medicine before the patent has expired.
Caraco, a unit of India's Sun Pharmaceutical Industries (SUN.NS), argued that the description of the patent for the diabetes drug, Prandin, was too broad and therefore prevented any generic from entering the market. It raised a "counterclaim" to challenge the description.
The U.S. government said generic drugs saved consumers billions of dollars each year, and it opposed a lower court ruling in favor of the brand-name company, Denmark's Novo Nordisk NOBOb.CO.
The justices agreed, and overturned a U.S. appeals court ruling that Caraco could not file a legal counterclaim to challenge the way Novo had described its patent to the FDA.
Justice Elena Kagan said in the opinion that when the FDA evaluated an application to market a generic drug, it considered whether the proposed drug would infringe a patent held by the manufacturer of the brand-name version.
The FDA requires brand-name manufacturers to submit descriptions of the scope of their patents, known as use codes, and it assumes the information is accurate, she said.
"We hold that a generic manufacturer may employ this provision to force correction of a use code that inaccurately describes the brand's patent as covering a particular method of using the drug in question," Kagan concluded.
The FDA approved Prandin, known generically as repaglinide, for three separate uses to help patients with Type 2 diabetes to control their blood sugar levels.
Novo Nordisk's main patent on the drug already expired, but it has another that covers the use of repaglinide only when it is used in combination with another diabetes drug, metformin. This patent expires in 2018.
That means Caraco could get FDA approval to "carve out" two other uses for the drug without infringing on Novo Nordisk's specific patent.
But Novo Nordisk, the world's biggest insulin producer, submitted a more general description of its remaining Prandin patent to the FDA, effectively covering all three uses.
Novo Nordisk said its description of the patent for Prandin fulfilled FDA requirements and that the "counterclaim" provision was a minor point in the law that was never supposed to fix patent descriptions. But the Supreme Court rejected the company's arguments.