Report: ANDA litigation declines
“Overall, the data show a decrease in ANDA case registrations from 2017 to 2021 of around 36%. The same trend can be observed in the number of patents involved in these cases. “
Last week, Patexia released its second annual ANDA Litigation Intelligence Report, which covered Hatch-Waxman’s rankings, statistics, and comprehensive analysis of Abbreviated New Drug Application (ANDA) and stakeholders. We couldn’t help but notice the decline in ANDA login activity that began after it peaked in 2018. The year-on-year comparison of the ANDA data, as shown in the graph below, shows the trend over the past four years. We see a significant decrease from 2018 to 2019 (a decrease of 4.2 cases / month), followed by a smaller decrease from 2019 to 2020 (2.7 cases / month) and the largest decrease from 2020 to 2021 (5.3 Cases / month) analyzed data for the first half of 2021. Overall, this means a decrease in ANDA case registrations from 2017 to 2021 by around 36%. The same trend can be observed in the number of patents involved in these cases.
The accuracy of the data was improved this year by crawling and analyzing more legal documents related to Hatch-Waxman cases, which resulted in the identification of 1,471 attorneys involved in a total of 1,179 ANDA cases over a period of time Four years from July, January 2017 to June 30, 2021. We also rated everyone involved in Hatch-Waxman cases, including ANDA attorneys, local attorneys, law firms, pharmaceutical companies, and judges, and assessed them based on their activity and performance rated. Although ANDA cases make up only a small fraction of all patent litigation (sometimes less than 10% of the annual patent litigation in the district courts), they turn out to be because of the high earnings potential that comes from branded and generic drugs, so it’s worth exploring the possible reasons for examine the decline.
The trend of decline in ANDA is different from the larger trend seen in recent years (i.e. increased activity in patent litigation in district courts, International Trade Commission [ITC] Section 337 and bipartisan review [IPR]). At this point we should emphasize that ANDA cases are unique among patent litigation in that the infringing act itself is filing an application with the Food and Drug Administration (FDA) for future commercialization of a generic rather than the “classic” drug. Infringement proceedings in which a patented product is manufactured, used, offered for sale, sold or imported.
A pharmaceutical company wishing to develop a generic version of the previously patented drug should file an ANDA not only to demonstrate that the new drug is chemically or pharmaceutically equivalent, but also to demonstrate “bioequivalence,” which means that the generic is in to support the body in the same way and be as safe and effective as the branded drug. From this information we deduce that the reasons for the decline in ANDA disputes should be investigated, especially in patent activity, more precisely the drug patents granted 20 years ago. That number could be lower for that period, so today we have fewer patented drugs that are being phased out.
Additionally, we know that one branded drug doesn’t have the same level of profitability as another, resulting in an accumulated interest in certain drugs and multiple ANDA cases filed above. Here, as an example, we can mention Abilify, which is a top-selling antipsychotic in the United States. The company that makes the drug, Otsuka, had sales of $ 4.9 billion in 2014 alone. Another example would be Oxycontin, which is used to treat moderate to severe pain. This drug has grossed approximately $ 30 billion in sales for its maker Purdue Pharma over the years. Both drugs have been processed in more than 60 and 50 ANDA cases, respectively, in the past few years. So, we’d like to look at the data on the recently expired drug patents to see if we can find something similar in the earnings that could catch the attention of the leading generic drug companies.
In a list provided by Pharmatutor, we don’t see record sales drugs like the ones above, which could be indicted in multiple cases by different companies. The only exception is Gilead Sciences’ Truvada, which is used to treat HIV. In 2019 alone, they generated sales of $ 2.64 billion in the United States. The patent for emtricitabine, one of the two main ingredients in Truvada, expires in September 2021, so it will be very interesting to see how this is reflected in the total number of ANDA cases for 2021.
ANDA data from our ANDA Litigation Intelligence 2021 Report shows even more interesting statistics, such as the distribution of cases submitted by jurisdiction. The majority of generic drug companies in the United States are based in Delaware or New Jersey, so it’s not surprising that New Jersey and Delaware learn to account for 92% (1,087 / 1,179) of the cases filed during the period. The rest are scattered across a variety of district courts from 16 other states (NY, WV, FL, NC, PA, IL, IN, TX, CA, CO, LA, NV, CT, MI, UT, and VA) in the chart below:
Our more in-depth analysis of the legal documents related to Hatch-Waxman cases reveals more interesting observations, especially after evaluating the results of those cases. It’s worth noting that ANDA cases are less likely to end in settlement when compared to other types of patent litigation. It is noteworthy that most ANDA cases are dismissed for one reason or another; a smaller fraction goes to some sort of judgment. Review of these judgments suggests that the plaintiff has more chance of winning in an ANDA case than in other patent litigation. Below is a diagram showing the PACER status of ANDA cases filed and resolved between July 2017 and June 2021:
The outcome of these proceedings, and how they favored either the plaintiffs or the defendants, were critical in determining the operations and performance of 364 companies, 1,471 attorneys, and 243 law firms, including, in particular, those who served as local attorneys in New Jersey and Delaware, where some attorneys and law firms were very active during the period.
Pedram Sameni is the CEO and Founder of Patexia, an online platform launched in 2010 to connect IP experts from companies, law firms and universities around the world. Pedram’s goal in founding Patexia is to bring transparency and efficiency to the IP system, thereby helping companies better evaluate, manage and use their IP assets. Pedram received his PhD in electrical engineering from the University of British Columbia in Vancouver, Canada and prior to founding Patexia worked in a variety of roles for several high-tech companies including International Rectifier, PMC-Sierra and Foveon.