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FTC v. Watson Pharmaceuticals: Another Piece Of The Puzzling Marketplace For Health Care Innovation


December 21st, 2012

It is too soon to tell whether deciding the fate of national health reform last year in National Federation of Independent Business v. Sebelius has generally emboldened the U.S. Supreme Court to resolve legal uncertainties affecting the health care system. Nonetheless, 2012-2013 will be a busy year on this front for the Justices, who have already heard or agreed to hear seven relevant cases, including three involving the pharmaceutical industry. The first six cases are FTC v. Phoebe Putney Health System, Inc. (hospitals and the “state action” exemption from antitrust liability); Sebelius v. Auburn Regional Medical Center (Medicare reimbursement for hospitals); Association for Molecular Pathology v. Myriad Genetics, Inc. (patenting of human genes), on which we wrote earlier at Health Affairs Blog; Mutual Pharmaceutical Co. v. Bartlett (state tort liability for drug injury), Sebelius v. Cloer (the National Vaccine Injury Compensation Program), and U.S. Airways, Inc. v. McCutchen (ERISA and insurance companies’ rights to recover tort settlements).

On December 7, the Supreme Court announced its decision to review the seventh and latest addition to the list, FTC v. Watson Pharmaceuticals. The Court will look to resolve a disagreement between federal appeals courts over the legality of so-called “pay for delay” or “reverse payment” settlements, in which a settlement payment flows from a patent holder to an accused infringer rather than, as might normally be expected, the other way around. Specifically, the Supreme Court will receive briefs and hear arguments regarding “[w]hether reverse-payment agreements are per se lawful unless the underlying patent litigation was a sham or the patent was obtained by fraud (as the court below held), or instead are presumptively anticompetitive and unlawful (as the Third Circuit has held).”

In answering this question, the Court will influence a much larger debate over innovation in health care markets. Watson Pharmaceuticals’ piece of that puzzle will lie at the intersection of patent law, antitrust law, food and drug law, and civil procedure. We hope that the Court’s review and judgment will improve our collective capacity to apply these legal tools, but we also think it very unlikely that the Court will rule definitively on any of them.

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A Cure For Patent Pathology? The Supreme Court Reviews The Patentability Of Human Genes


December 7th, 2012

“Are human genes patentable?” On November 30, 2012, the U.S. Supreme Court agreed to answer this single question in Association for Molecular Pathology v. Myriad Genetics. Of course, the petitioners, including health care providers, professional associations, and patients, worded the question to favor the answer they want: “No, human genes are not patentable.” For Myriad Genetics, the patent owner who would like its patent rights upheld, the question is better phrased as whether one can patent “isolated molecules of deoxyribonucleic acid that were identified and defined by human inventors.”

The practical stakes in the Court’s decision, which should come in the first half of 2013, are enormous. The U.S. Patent and Trademark Office (USPTO) has issued tens of thousands of patents on genetic sequences over the past few decades, and the U.S. Court of Appeals for the Federal Circuit, the appellate court entrusted with hearing virtually all U.S. patent appeals, has never declared such sequences to be non-patentable subject matter. For more than a century, patents have issued on isolated versions of naturally occurring substances other than DNA.

Many believe that gene patents are crucial to the modern biotechnology industry. On the other hand, many researchers and clinicians feel that gene patents, particularly human gene patents, are commonly unnecessary to spur innovation and in fact interfere significantly with scientific and technological progress, whether by slowing or diverting research, impeding the provision of diagnostic tests, or generally increasing costs for clinical and scientific work.

The patents at issue in Myriad make such concerns particularly poignant. These patents relate to BRCA1 and BRCA2, genes associated with a predisposition to breast cancer. The obvious public interest in ready access to cancer diagnosis helps account for the fact that petitioners’ lead lawyers are not the normal high-priced advocates for a private company accused of patent infringement. Instead, those lawyers work for the American Civil Liberties Union Foundation, an organization more commonly associated with battles for civil rights than rights in technological innovations.

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Preserving The Republic: Chief Justice Roberts’ Affordable Care Act Opinion


June 30th, 2012

Chief Justice John Roberts did right by America.  Thursday’s ruling by the U.S. Supreme Court upheld the constitutionality of the law’s minimum coverage provision and allowed the Affordable Care Act to move forward.  Health reform is often simpler than it looks, and so was the Court’s decision.  In practical terms, a majority of Justices ruled […]

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William Sage On The Last Day Of Supreme Court Arguments: Enough Frivolity For A While


March 29th, 2012

It’s finally over.  After nearly six hours of oral argument over the course of three days, the two cases challenging the constitutionality of the Affordable Care Act have been officially submitted to the Justices for decision.

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William Sage On The Supreme Court ACA Arguments Day Two: Where No Law Has Gone Before?


March 28th, 2012

The much-anticipated argument over the constitutionality of the Affordable Care Act’s insurance centerpiece, the minimum coverage requirement or “individual mandate,” took place Tuesday morning.   It was an entertaining but messy affair, with several individuals often speaking at once and answers to questions frequently getting lost in subsequent comments and inquiries.   Analogies buzzed dangerously around the […]

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The Supreme Court Health Reform Arguments: William Sage On The Lessons Of Day One


March 27th, 2012

Day One of the oral arguments in the constitutional challenge to the Affordable Care Act put the Supreme Court’s many strengths on display.  Everyone came prepared, including the nine Justices, and presented their cases and questions cogently and persuasively.  Tim Jost’s outstanding blog post provides a detailed description and in-depth analysis of the Court’s discussion […]

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CMS’s Essential Benefits Guidance: Brush-Clearing Or Can-Kicking?


December 28th, 2011

The recent CMS bulletin on the essential benefits package (EBP) required for certain types of coverage under the Affordable Care Act has been described in greater detail in earlier Health Affairs Blog posts by Tim Jost and Kavita Patel.  The bulletin is a pragmatic document, seemingly driven by the overall exigency of implementing the ACA […]

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Of Wands, Pens, And Fries: How The Essential Benefits Report Advances Reform


October 19th, 2011

Significant steps are being taken to implement the Affordable Care Act (ACA) even as the challenges to its constitutionality make their way through the federal courts.  For example, the Institute of Medicine recently released its much-anticipated report to the Secretary of Health and Human Services on the principles and methods that should guide the design […]

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Common Sense And Malpractice Reform


September 26th, 2011

Having both medical and law degrees typecasts me.  New acquaintances ask if I have ever sued myself.  Within the health policy community, colleagues assume I study medical malpractice. So I have let it become a self-fulfilling prophecy.  I worked on medical malpractice in the Clinton White House, and devoted my first scholarly efforts to analyzing […]

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Health Reform In The Fourth Circuit: The Politics Strike Back


September 9th, 2011

One of my own professors, Lawrence Friedman, was fond of quoting Finley Peter Dunne’s rough-hewn character “Mr. Dooley,” who delighted early 20th century readers with his blunt commentary on current events.  Mr. Dooley once observed that, no matter whether Americans “follow th’ flag” or not, “th’ Supreme Coort follows th’ election returns.” We’re likely to […]

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The Legal Battle Over Health Reform: Analyzing The 11th Circuit Opinions


August 16th, 2011

Editor’s Note: Below, William Sage analyzes Friday’s federal appellate court decision regarding the Affordable Care Act. See Timothy Jost’s earlier post for more on this decision. On August 12, a divided three-judge panel of the US Court of Appeals for the Eleventh Circuit ruled in State of Florida v. Sibelius that the individual mandate contained […]

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