Patent Bill Could Save Law Firm $214 Million
A bill to overhaul the patent system that is before the Senate contains a provision that could get an influential law firm off the hook for a possible $214 million malpractice payment.
The provision clarifies how much time pharmaceutical companies have to apply for patent extensions that can provide extra years of protection from generic competition.
But critics, who have labeled the provision “The Dog Ate My Homework Act,” say it is really a special fix for one drug manufacturer, the Medicines Company, and its powerful law firm, WilmerHale. The company and its law firm, with hundreds of millions of dollars in drug sales at stake, lobbied Congress heavily for several years to get the patent laws changed.
Back in 2001, the company missed the deadline for applying for a patent extension by a day or two, potentially losing nearly four years of patent protection on its main drug, the anticoagulant Angiomax. The provision would guarantee that the Medicines Company would get the extra patent protection, and it would relieve WilmerHale, which was hired to file the application, of a possible malpractice payment to its client.
On Thursday, the Senate is scheduled to vote on an amendment proposed by Senator Jeff Sessions, Republican of Alabama, that would strip the provision from the bill. “The key question is whether we will vote to bail out a law firm that made a mistake and now wants consumers and taxpayers to pay the freight for that error,” Senator Sessions and Senator Tom Coburn, a Republican from Oklahoma, said in a letter sent Wednesday to colleagues. They said the extra patent protection on Angiomax could cost hospitals and consumers $1 billion.
But Mr. Sessions faces an uphill battle because Senate leaders want their colleagues to pass the House version of the bill, which contains that provision, without any amendments, saying any changes could jeopardize the entire legislation.
David E. Redlick, co-chairman of the life sciences practice at WilmerHale, said other companies, including Bayer and AstraZeneca, also missed filing deadlines and might now benefit from patent extensions.
“The repeated assertion that this is a single company bill is just not so,” Mr. Redlick said. He said the existing law had unclear wording. The new provision “will resolve that uncertainty on a permanent basis, which one would hope would be a key purpose of patent reform.”
He also said that a federal judge ruled last year that the Medicines Company had filed its application on time. So the patent extension is expected to be granted, and WilmerHale would never have to make the malpractice payment, even without the legislation, he said. The legislation provides insurance in case the court ruling is reversed, he said.
Applications for patent extensions must be made within 60 days of a drug’s approval by the Food and Drug Administration.
The United States Patent and Trademark Office ruled that the Medicines Company, which filed its application in 2001, had missed the deadline by a day or two.
As a result, Angiomax could have been vulnerable to generic competition as early as September 2010, instead of June 2015. Sales of Angiomax accounted for virtually all of the Medicines Company’s $437.6 million in revenue last year.
The company, based in Parsippany, N.J., sued the Patent Office, arguing that since it had received F.D.A. approval for Angiomax after the customary close of business on a Friday, the 60-day clock should not have started ticking until the next Monday.
In August 2010, a federal judge agreed and the government did not appeal. The Patent Office, which granted interim patent extensions during the lawsuit, is working on the final extension.
But APP Pharmaceuticals, a drug company that wants to sell a generic version of Angiomax, is trying to have the judge’s decision overturned.
The amendment would change the patent law to agree with the judge’s interpretation of the deadline calculations.
The Medicines Company has been pressing for years for a legislative solution, spending more than $17 million since 2005 on prominent lobbyists, including former House majority leaders Richard Gephardt, a Democrat, and Dick Armey, a Republican.
The company has been assisted in its effort by WilmerHale, known formally as Wilmer Cutler Pickering Hale and Dorr.
The firm has a huge Washington office, and a few dozen of its members went to work for the Obama administration. The firm is also a powerhouse in Boston, and some of the most active supporters of the provision in Congress are from Massachusetts, like Representative Ed Markey, a Democrat.
In February, WilmerHale agreed to pay $18 million to the Medicines Company to compensate it for its legal and lobbying costs. It also agreed to pay as much as $214 million more if a generic version of Angiomax reached the market before June 15, 2015, because the extension application was deemed late.
WilmerHale reported revenue of $962 million in 2010, with profit of $1.33 million per partner.
The Medicines Company, according to its regulatory filings, is also talking about compensation from Ropes & Gray, another law firm that was involved in the filing for the patent extension.
APP Pharmaceuticals, the Generic Pharmaceutical Association and Citizens Against Government Waste are trying to derail the provision.
The Medicines Company has argued that longer patent protection will allow it to test Angiomax, also known as bivalirudin, for more uses. It also argues that the drug saves money for the health care system over all compared to alternatives.
In late June, the House of Representatives narrowly approved adding the provision to the patent reform bill.
Initially, the vote was 209 to 208 against the amendment, but some Democrats pushed for a revote, saying not all members had had time to vote. On the revote, the amendment was approved 223 to 198. Democrats voted 155 to 31 in favor and Republicans 167 to 68 against.
John Conyers Jr., a Democrat from Michigan who sponsored the amendment, called it a “technical revision.” He added, “By eliminating confusion regarding the deadline for patent term extensions applications, this amendment provides the certainty necessary to encourage costly investments in life-saving medical research.”
Representative Lamar Smith, a Texas Republican and chairman of the Judiciary Committee, opposed the amendment.
“As a practical matter, this is a special fix for one company,” he said. He said that it should have been handled under rules for private relief bills and that it would also interfere with the litigation.
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