DID - Feb. 6, 2008 Issue

Vol. 7 No. 25

Administration Opposes Patent Reform Bill

Foes of the patent reform legislation being considered by Congress got a strong ally as the Commerce Department notified the Senate Judiciary Committee that the administration says the damages section will seriously harm the U.S. intellectual property system.

The Judiciary Committee passed S. 1145, the Patent Reform Act, last summer, and the House later passed its version of the bill, H.R. 1908 (DID, Sept. 10, 2007). Sen. Patrick Leahy (D-Vt.), chairman of the Senate Judiciary Committee and the bill’s sponsor, said the Senate is preparing to consider S. 1145 this month. Leahy said he would continue to work with the administration to craft an agreement on disputed sections of the bill, including the damages provision.

In its Feb. 4 letter to Leahy and other committee members, Commerce said the bill’s damages provision “will create more problems than it solves.” The damages language in S. 1145 would establish a codified system for courts to use when calculating reasonable royalty awards in patent litigation.

The damages provision aims “to give judges, and juries, better guidance on the proper way to calculate a reasonable royalty,” according to a Jan. 24 Judiciary Committee report on S. 1145. Rather than leaving juries to calculate royalties using various factors, the Patent Reform Act would require judges to tell juries which factors to consider. The judge also would decide whether royalties are supposed to be calculated based on the entire market value of the invention or on the specific patent’s contribution over prior art.

This proposed method for calculating damages is too narrow and would discourage innovation, according to Commerce. Judges should be required to identify all possible factors to use when calculating reasonable royalties, and juries should be required to apply all factors. “Innovation can and will be encouraged in all industries by giving federal juries the flexibility to apply appropriate economic principles to the facts of each case, consistent with the business model or technology,” the department wrote.

The damages provision also would introduce a new element of uncertainty in patent litigation. “This uncertainty will take years to resolve in the courts and could result in long-lasting uncertainty over the value of the nation’s stock of intellectual property,” Commerce said.

While the administration agrees with other parts of the bill and the need for some type of patent legislation, it will continue to oppose S. 1145 until the damages provision is amended, the department said.

The Biotechnology Industry Organization (BIO) also strongly opposes the damages provision, saying it would lead to too-low royalty calculations and make patent infringement cheaper.

“Assuming that courts and juries could even apply a prior-art subtraction standard in a reasonably accurate manner, … the resulting residual royalties would be lower than the reasonable royalties calculated under current law and would compensate patent owners for only a portion of their invention, rather than its whole,” BIO said in written testimony at a June 6, 2007, Senate Judiciary Committee hearing on patent reform (DID, June 7, 2007). — Breda Lund


Federal Electronic Adverse Event Reporting System in the Works

The FDA and the NIH are aiming to make it easier for the public to report adverse events by collaborating on a way to electronically submit them in a range of forms federal agencies already use.

The agencies signed a memorandum of understanding (MOU) to create a web-based method for consumers, healthcare professionals, sponsors and other parties to submit adverse event reports, according to a notice to be published in the Feb. 6 Federal Register.

The unified method will streamline adverse event report submissions, improve data quality and analysis and improve human subject protections, the agencies said. In addition, both the NIH and the FDA can use the system to lower costs and reduce delivery time. 

For the project, the FDA and the NIH will develop at least two products: a rational questionnaire to assist people submitting information to determine what data need to be submitted and to whom and a prototype to test the feasibility of a central federal portal to provide electronic submission of adverse event reports to the correct agencies.

The NIH has contacted technical experts and contractors to develop the two products and will provide financial resources for the project management of the common components of the questionnaire and the prototype. Both agencies will provide financial resources to implement the project.

“Successful completion of the project on schedule is vital,” the MOU says. The FDA must have an electronic adverse event reporting system as soon as possible, so it can receive mandatory event reports for dietary supplements and accommodate users who want to submit information electronically.

The scheduled completion date for the project will be determined after work has begun.

The MOU can be seen at www.fda.gov/OHRMS/DOCKETS/98fr/FDA-2008-N-0043-M.pdf. — Emily Ethridge


GSK Faces Another Delay on Requip Decision

The FDA has extended until the second quarter of this year the action date for GlaxoSmithKline’s (GSK) Requip XL extended-release tablets, which are indicated to treat the signs and symptoms of idiopathic Parkinson’s disease. 

The action is the second recent delay in the Requip (ropinirole HCl) approval process for the Parkinson’s indication. GSK had to submit additional information on the food effect of the drug following the receipt of an approvable letter in December 2007.

Requip XL uses UK drugmaker SkyePharma’s Geomatrix technology to provide a steady rate of absorption in the body to help reduce daily blood plasma fluctuations. It was approved last year in France, Slovakia, Slovenia, Latvia, Estonia and Canada.

Requip is approved for moderate to severe restless leg syndrome.

GSK also is awaiting word from the FDA on its new drug application for Promacta (eltrombopag olamine), which it filed in December 2007. Promacta is indicated for the short-term treatment of previously treated patients with chronic idiopathic thrombocytopenic purpura, a disorder marked by increased platelet destruction and inadequate platelet production in the blood (DID, Dec. 21, 2007). —  Elizabeth Jones


Lawmakers Ask FDA Science Board to Determine Necessary Resources

One day after President Bush released his budget request for fiscal 2009, four high-ranking members of Congress asked the FDA’s Science Board to determine the resources necessary to fix problems at the agency.

The Bush administration proposed a 5.7 percent increase in the FDA’s funding for fiscal 2009, bringing the agency’s budget to $2.4 billion (DID, Feb. 5). However, House Energy and Commerce Committee Chairman John Dingell (D-Mich.), House Oversight and Investigations Subcommittee Chairman Bart Stupak (D-Mich), House Health Subcommittee Chairman Frank Pallone (D-N.J.) and House Oversight and Government Reform Committee Chairman Henry Waxman (D-Calif.) said the budget continues a trend of inadequate funding that has led the FDA to its “current crisis.”

“We are deeply concerned the budget submitted by the president is grossly inadequate to meet the many challenges at FDA,” the lawmakers wrote. The president’s budget “barely covers the cost of inflation,” they added.

The Science Board’s Subcommittee on Science and Technology recently released a report saying the FDA could not perform its mission to protect the public health because of a lack of funding, among other reasons (DID, Dec. 4, 2007).  

American lives are at risk because the FDA cannot adequately perform its duties, the lawmakers said. They asked the FDA subcommittee to determine if the president’s FDA budget request will provide enough resources to correct the problems noted in its report. They also asked the subcommittee to determine the specific funding levels necessary to address its concerns.

The subcommittee found that the FDA needed a significant and sustained funding increase to fulfill its mission. The dearth of funding contributed to a lack of resources, weak scientific base, obsolete IT system and employee recruitment and retention challenges. 

Congressional committees have begun to hold hearings to discuss the president’s budget request. However, none of the letter writers’ committees had scheduled a hearing to discuss the proposed FDA budget by press time.

The letter can be seen at oversight.house.gov/documents/20080205123705.pdf. — Emily Ethridge


Generic Fosamax on the Way

As Merck’s blockbuster osteoporosis treatment Fosamax loses patent protection today, Watson Pharmaceuticals is planning to start shipping an authorized generic of the drug.

Watson will market the 35- and 70-mg dosage strengths of Fosamax (alendronate sodium). Merck’s other formulation of the drug, Fosamax Plus D (alendronate sodium/cholecalciferol), is expected to lose exclusivity in April.
Final approval of Barr Pharmaceuticals’ 70-mg dosage form of the product is expected when pediatric exclusivity on the Fosamax ’575 patent expires Feb. 6. Barr has said it will share 180-day marketing exclusivity for the generic with Teva Pharmaceutical Industries. Both companies have multiple tentatively approved applications pending at the FDA.
Merck recorded $3 billion in worldwide sales for the Fosamax franchise in 2007 and is expecting 2008 sales to fall more than 50 percent. During Merck’s earnings announcement for fiscal 2007, the company said it anticipates 2008 sales for the drug to be between $1.1 billion to $1.4 billion. — Christopher Hollis

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Reporters: Martin Gidron, Emily Ethridge, April Astor, Breda Lund, Christopher Hollis, Elizabeth Jones

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