After the Hatch-Waxman Act of 1984, pharmaceutical companies were neatly categorized as either brand or generic businesses. The lawyers who represented them also had to choose a side—you could be a “brand lawyer” or a “generic lawyer,” but a line could not be crossed. These corporate distinctions, however, have now become more difficult to delineate.
The demand for biologics further blurred the lines. This corporate evolution requires rethinking the choice of counsel. Current trends point to the growing need for flexibility and multifaceted approaches to representing clients in pharmaceuticals and biologics patent litigations.
Mergers and Acquisitions Take Off
Companies seeking growth or diversification utilized mergers and acquisitions to bring generic and branded businesses under combined corporate umbrellas. Whether it was branded companies acquiring generic businesses, or generic companies developing their own products, the existence of hybrid companies has become more common.
The demand for biologics and the adoption of the Biologics Price Competition and Innovation Act of 2009 (BPCIA) further accelerated the blurring of the lines between brand and generic companies. Demand for biologics has exploded, as is evident from the 2018 list of the top selling drugs in the U.S. showing eight out of the top 10 were biologics.
While demand is strong and growing, the increased complexity of developing and manufacturing biologics often requires a larger investment, in both time and resources, to get such products approved.
Consequently, a growing number of biosimilars are made by companies originally focused on branded small molecule products or even branded biologics. Overall, the rise of biologics has further fueled companies that combine development of their own branded products with statutorily authorized follow on products such as generics or biosimilars.
Potential Conflicts of Interest
If a company that historically developed its own branded products is now seeking approval for generics or biosimilars, who should represent them in the ensuing litigation? Can they continue to work with the firms that traditionally represented them—albeit, as plaintiffs when now they are defendants?
Or should they approach the firms they had previously avoided, who have previously represented those challenging patents? The same questions arise in reverse for companies who started out as generics but have now developed or acquired branded products.
The trend toward consolidation in the pharmaceutical industry and the growing scope of the legal needs increases the likelihood of encountering potential conflicts of interest. Both clients and law firms need to recognize the new realities of the industry—that the lines between brands and generic or biosimilar companies have blurred, perhaps so much that there really is no longer a line.
Trying to pick a side may no longer work for a firm, and trying to limit the lawyers who are hired to those who represent just one side or the other no longer makes sense for clients, either.
In the context of patent litigation, the increased diversification of pharmaceutical clients means they are no longer limited to being only plaintiffs or defendants. In short, conflicts cannot be avoided by “picking a side.”
This is even more true with an increase in so-called “Brand v. Brand” cases. See, e.g., Teva Pharmaceuticals Int’l GMBH. v. Eli Lilly & Co., C.A. No. 1:18-cv-12029 (D. Mass.) (pending); Certain Pre-filled Syringes for Intravitreal Injection and Compositions Thereof, Inv. No. 337-TA-1207 (investigation instituted July 21, 2020).
Open Communication, Waivers
Both law firms and clients should be willing to have open and honest conversations about these issues. They should proactively open lines of communication to address potential conflicts. Lawyers and clients should be comfortable discussing these sometimes-uncomfortable topics.
Use of carefully tailored advanced waivers is one means for managing the risk of disqualification. As firms continue to demonstrate their ability to take adequate measures to ensure protection of their client’s confidential information, clients have and will grow more comfortable with providing such waivers.
As firms gain experience representing both pharmaceutical innovators and the manufacturers of follow on products, they develop the knowledge and experience to provide a more comprehensive perspective of the issues and strategies involved in pharmaceutical patent litigations including anticipating an opponent’s strategic objectives and moves.
Clients can be confident that experienced lawyers can provide credible and accurate assessments that are not biased by being tied to any particular side. Instead, they are focused on helping each client successfully resolve each case.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Daryl Wiesen is chair of Goodwin’s IP Litigation group and focuses on patent litigation and advising clients in patent portfolio development. He also has experience in other technologies, including biotechnology and medical devices.
Tyler Doh is an associate in the Goodwin’s IP Litigation group and focuses on complex intellectual property matters. He has litigated patent disputes in federal courts, Hatch-Waxman litigations, and has experience in different technologies, including biosimilars, consumer products, and electronics.