The Prescription Access Litigation Blog has been on summer vacation recently, sunning itself at the beach, drinking iced tea, and playing volleyball with other blogs at Blog Camp. It’s now back, tanned, rested, and ready to deliver an ice-cold cup of refreshing pharmaceutical news and outrage to you, our thirsty readers.

And its first post-summer-break item is a dispatch straight from the Department of Unbelievably Evil & Greedy Schemes:

Business Week ran a special report yesterday (July 23, 2008), with the frightening title:

“They Know What’s in Your Medicine Cabinet: How insurance companies dig up applicants’ prescriptions—and use them to deny coverage”.

Here’s the rub:

That prescription you just picked up at the drugstore could hurt your chances of getting health insurance.

An untold number of people have been rejected for medical coverage for a reason they never could have guessed: Insurance companies are using huge, commercially available prescription databases to screen out applicants based on their drug purchases.

This is one of the latest revelations concerning the practice of pharmaceutical datamining. There’s a fact that few people know, but that should be printed on huge signs at every pharmacy:

Pharmacies sell information about the prescriptions they fill to companies that then sell that information to health plans, pharmaceutical companies and others that use it for marketing purposes.

The use of this information that’s most widely known is for drug company marketing. Companies like IMS Health and Verispan buy data from pharmacies detailing the prescribing records of doctors. That data is supposed to have any details about individual patients removed, or “scrubbed.” These companies then turn around and sell this information to drug companies. The drug companies give this information to the sales people, who then descend on doctors’ offices, armed with the details of exactly what drugs the doctor has prescribed, and how that’s changed over time. They can then tailor their pitch accordingly.

That practice is bad enough, and a number of states have passed or are trying to pass laws outlawing this “datamining.” (And datamining companies have sued to block these laws in every state in which they’ve been passed — we at PAL joined a “friend of the Court” brief defending Maine’s law. Read more about that here.) It’s an issue that the Prescription Project and the National Legislative Association on Prescription Drug Prices are working very hard on.

But, as the Business Week report describes, an even more nefarious use of this prescribing data is emerging. A few choice excerpts and factoids from that article:

• “Traditionally, applicants have been asked to provide insurers with a description of past illnesses. About 30% are deemed uninsurable because of their histories, according to industry veterans. Prescription profiles could add another hurdle, making it especially difficult for the 47 million Americans who lack insurance to acquire coverage.”
• “Most consumers and even many insurance agents are unaware that Humana, UnitedHealth Group , Aetna (AET), Blue Cross plans, and other insurance giants have ready access to applicants’ prescription histories. These online reports, available in seconds from a pair of little-known intermediary companies at a cost of only about $15 per search, typically include voluminous information going back five years on dosage, refills, and possible medical conditions. The reports also provide a numerical score predicting what a person may cost an insurer in the future.”
• “drugs for depression and other mental health conditions are often red flags to insurers.”

It’s likely that other classes of drugs are red flags as well — anything that suggests a “preexisting condition,” particularly a serious or chronic one, might make an insurer lean towards denying a consumer coverage. So drugs for diabetes, arthritis, HIV/AIDS and any number of conditions might raise similar flags.

What’s particularly troubling about this is that, because of the nature of prescription drugs, there’s no way for consumers to be “anonymous” in the way that they can be in virtually every other product they buy. For instance, let’s say you go to the drug store to buy something that you’d rather not call attention to – be it diarrhea medication, contraceptives, or the latest issue of Us Weekly. You just pay cash and don’t use your store “frequent buyers card” (like the CVS ExtraCare card). Voila – anonymity.

But you can’t do that with a prescription drug. You need a prescription from your doctor, which identifies you, and your information gets entered into the pharmacy’s computer system. What’s ironic about this is that one can argue that there’s a greater interest in having your prescriptions kept private than in having your other purchases kept private.

How can pharmacies disclose my prescription information? Isn’t it private?
This data is private, and is protected from disclosure by HIPAA, the Health Insurance Portability & Accountability Act. UNLESS you give someone PERMISSION to access that information. And that’s exactly what millions of consumers are doing, without realizing it, when they apply for health insurance. As Business Week says:

When applying for insurance, individuals routinely sign paperwork allowing providers to review their medical history. To comply with the privacy provisions of the federal Health Insurance Portability & Accountability Act, most insurers have now added a reference to prescription history in the lengthy fine print consumers are instructed to read.

The FTC forced the industry to begin disclosing the use of prescription information under a different federal statute, the Fair Credit Reporting Act. Insurers now are required to tell applicants the address of the company that assembled the data. Copies of prescription reports are supposed to be available to consumers at no charge under federal law.

But these disclosures are typically buried and never read by the overwhelmingly majority of consumers that are “agreeing” to them by signing that health insurance application. And there’s likely nothing you can do about it either — if you refuse to allow the health insurer access to your medical records, in all likelihood, they can and probably will just turn down your application. I believe that’s what they call a Catch-22, or perhaps being caught between a rock and a hard place.

Now that the practice is coming to light, hopefully privacy advocates and those working to make insurance easier to access will begin raising a hue and cry about this, and get the attention of legislators and regulators. In the meantime, it cant hurt to read the fine print when you apply for health insurance and ask your pharmacy what they do with your prescription records and whether it’s possible for you to “opt out” of whatever programs they have that sell that information.

We’ve written a lot on the past few months about the national class action lawsuit against Abbott Laboratories, targetting Abbott’s December 2003 400% price increase on its HIV/AIDS drug Norvir.

The case has survived Abbott’s numerous attempts to have it dismissed, and the Judge in the case recently forced Abbott to make public some embarrassing documents that Abbott wanted to keep hidden. (See What Abbott Laboratories was Trying to Hide – Court unseals Norvir documents).

A trial is scheduled to begin in the case in August. Given that very few pharmaceutical class actions actually go all the way to trial, this is noteworthy.

Two of the lawyers representing the plaintiffs in the case, including Prescription Access Litigation coalition member SEIU Health and Welfare Fund, recently wrote an analysis of the case in the Bureau of National Affairs publication, Pharmaceutical Law & Industry Report.

With BNA’s permission, we reprint this analysis here. It gives a good overview of the case, and of the Court’s recent rulings invalidating Abbott’s patent defenses. Bear in mind that it was written with a lawyer audience in mind… (A PDF version of this piece is available here)

In a May 16, 2008, ruling, Judge Claudia Wilken of the District Court for the Northern District of California effectively extinguished Abbott Laboratories’ hopes to avoid trial in a nationwide antitrust class action suit arising from its 400 percent price increase on Norvir, a drug that has revolutionized the treatment of HIV (6 PLIR 598, 5/23/08 a0b6n3r1r0 ).1 The Court’s ruling not only offers useful insight into the sometimes-murky issue of inherent anticipation, but also has far-reaching implications for pharmaceutical companies hoping to rely on patents to avoid allegations of anticompetitive conduct.

The Plaintiffs’ Sherman Act claims in In re Abbott Laboratories Antitrust Litigation are inextricably intertwined in the biology of the HIV virus itself. A longstanding challenge to scientists working to create effective treatments for HIV is the fact that the virus reproduces very rapidly, and mutates as it does so. These mutations permit the virus to rapidly gain resistance to new drugs as they are developed. Accordingly, innovation and competition in the marketplace for new HIV treatments is crucial: without it, patients will rapidly succumb to the disease as existing treatments fail.

Beginning in about the mid-1990s, researchers developed a promising new class of treatments for HIV disease called protease inhibitors (“PIs”). The advent of this powerful new class of drugs helped transform HIV disease from a death sentence into a chronic, manageable illness. Physicians used these PIs in combination with other HIV drugs to great effect, halting the disease in its tracks for many patients. However, as soon as PIs became available, the clock began running, as the virus rapidly acquired resistance to the new treatments.

In 1996 Abbott introduced a patented PI called Norvir, the brand name for ritonavir, to be used at a recommended daily dose of 1200 milligrams. Because of the drug’s debilitating side effects at this dose, it was rarely used. However, scientists and physicians soon noticed that Norvir had a striking effect on certain metabolic pathways in the liver, dramatically slowing the metabolism of many types of drugs, including PIs. When Norvir was taken with PIs, therapeutically effective blood levels of the PIs could be consistently maintained, and the PIs could be taken at smaller doses, sparing patients many of the severe side effects associated with the drugs. More importantly, Norvir’s “boosting” effect greatly impaired the virus’ ability to develop resistance to PIs. Norvir is the only commercially available drug known to have this effect.

Indeed, unless a patient takes Norvir together with a PI, the virus can rapidly develop resistance to the entire PI class. Accordingly, Norvir boosting has become part of the standard PI treatment. To enable patients to take these boosted PI regimens, Abbott sells Norvir pills to the public.

In 2000, Abbott capitalized on Norvir’s boosting properties by launching a pill called Kaletra, in which it combined a PI called lopinavir with a boosting dose of Norvir. Kaletra was the only single-pill treatment available that combined Norvir and a PI. While Kaletra was a very effective boosted PI treatment, it was associated with serious side effects, including hyperlipidemia, lipodystrophy, and gastric problems. Notwithstanding these problems, it quickly became the dominant boosted PI prescribed, and one of Abbott’s top primary-care products.

In 2003, however, Abbott’s lucrative Kaletra business was in peril. New PIs were about to be launched by Abbott rivals GlaxoSmithKline and Bristol Myers Squibb that, when boosted with Norvir, were just as effective as Kaletra, but better tolerated and more convenient.

What Abbott did next has become the subject of enormous controversy. In December of 2003, Abbott imposed a 400 percent price increase on the Norvir sold for use with rivals’ PIs, while leaving the price of Kaletra unchanged. Overnight, Kaletra became the cheapest boosted PI regimen on the market. According to Abbott’s rival, GlaxoSmithKline, this price hike has seriously affected sales of Glaxo’s effective new boosted PI, Lexiva.

In 2004, the plaintiffs in In re Abbott Labs Norvir Antitrust Litigation brought suit under Section 2 of the Sherman Act, arguing that Abbott used the Norvir price hike as a means to protect Kaletra from the competitive threat it faced from newer and safer drugs such as Lexiva. Abbott argued in its defense that it raised the price of Norvir in light of the increased clinical importance of the drug, and because it was being used in smaller doses as a booster than it was as a stand-alone PI.2

Abbott also mounted an affirmative defense of patent immunity premised on patents it claimed on the boosting method. In essence, Abbott argued that because it had patents on the method of using Norvir to boost PIs, it was entitled to exclude competitors from the market for Boosted PIs by any means it liked, including a Norvir price hike.

Indeed, Abbott’s boosting patents were a source of substantial revenue for the Company. As Abbott itself explained in documents filed with the Court, “[a]t considerable expense, Abbott’s four major competitors in the Boosted Market have taken a license to these patents for the express purpose of ‘promot[ing] and market[ing] certain of [their] products with Ritonavir for the purpose of co-prescription/co-administration.’”3

After bringing two unsuccessful motions for summary judgment in 2005 and 2006, Abbott filed a third motion in February of 2008, premised in part on its patent immunity defense. The benefits of this tactic seemed obvious. If the Company’s motion were successful, the pending case would be dismissed. If it lost, the complex patent arguments would still have to be resolved at trial, scheduled for Aug. 18.

That there was also substantial risk to Abbott’s strategy became apparent when, in response to the Company’s motion, Plaintiffs filed both an opposition to Abbott’s motion and a cross-motion of their own for partial summary judgment, attacking Abbott’s patents as invalid and asking that the Court bar the Company from asserting its patent immunity affirmative defense.

The validity arguments in Plaintiffs’ opposition and cross-motion turned in large part on the significance to be accorded language in the preambles to Abbott’s patents. Claim 9 of U.S. Patent No. 6,037,157 (the ’157 patent) states:

A method for increasing human blood levels of a drug which is metabolized by cytochrome P450 monooxygenase comprising administering to a human in need of such treatment a therapeutically effective amount of a combination of said drug or a pharmaceutically acceptable salt thereof and ritonavir or a pharmaceutically acceptable salt thereof.

Similarly, claim 21 of U.S. Patent No. 6,703,403 (the ’403 patent), which is dependent on claim 22 of the same patent. Claim 21 states:

A method for improving the pharmacokinetics of a drug which is metabolized by cytochrome P450 monooxygenase comprising administering to a human in need of such treatment an amount effective to inhibit cytochrome P450 monooxygenase of ritonavir or a pharmaceutically acceptable salt thereof.

Claim 22, in turn, states “the method of claim 21 wherein the drug which is metabolized by cytochrome P450 monooxygenase is an HIV protease inhibitor.”

In essence, both claims describe a method of using Norvir together with other drugs in order to benefit from its effects as a metabolic booster. The problem for Abbott, suggested the Plaintiffs, is that these patents were anticipated by U.S. Patent Number 5,674,882, which claims:

A method of inhibiting an HIV infection comprising administering to a human in need thereof a therapeutically effective amount of [Norvir] or a pharmaceutically acceptable salt thereof in combination with a therapeutically effective amount of another HIV protease inhibiting compound.

While all three patent claims describe a method of using Norvir in combination with other drugs, Abbott argued that the ’157 and ’403 patents differed from the earlier ’882 patent in that they claim the method of using Norvir with the intent to achieve a specific result–metabolic boosting.

In determining whether this statement of purpose supported precluded Plaintiffs’ anticipation arguments, the Court looked closely at the Federal Circuit’s 2003 decision in Jansen v. Rexall Sundown.4 In Jansen, the plaintiff sued a manufacturer of an over-the-counter vitamin supplement containing both folic acid and vitamin B12 for the contributory infringement of a patent which claims:

A method of treating or preventing macrocytic-megaloblastic anemia in humans which anemia is caused by either folic acid deficiency or by vitamin B12 deficiency which comprises administering a daily dosage of a vitamin preparation to a human in need thereof comprising at least about .5 mg of vitamin B12 and at least .5 mg of folic acid.

In determining that the claim was not infringed, the Jansen court held that “administering the claimed vitamins in the claimed doses for some purpose other than treating or preventing macrocytic-megaloblastic anemia is not practicing the claimed method, because Jansen limited his claims to treatment or prevention of that particular condition in those who need such treatment of prevention.”5 In this respect, the preamble of the patent claim, describing the purpose for administering the vitamins, “gave life and meaning” to the patent. Id.

The Court rejected Abbott’s argument that the preambles to the ’157 and ’403 patents similarly gave life and meaning to the ’157 and ’403 patents beyond what was described in the ’882 patent. The Court held that

In Jansen, the preamble language was construed as a limitation because it disclosed a specific theretofore unknown use for taking a combination of folic acid and vitamin B12–namely, the prevention and treatment of macrocytic-megaloblastic anemia. The preamble gave “life and meaning” to the claim because without it, the patent would simply recite a method that was already practiced. Here, the preamble does not disclose a new use for the prior art…. The preamble simply expresses one of the necessary results of practicing the existing method. Abbott cannot patent the practice of prior art by framing a necessary result of that practice as a claim-limiting purpose.

The Court’s ruling has dramatic consequences for the Company. Abbott now faces trial on Plaintiffs’ antitrust claims bereft of its principal defense. In light of the fact that Plaintiffs in the In re Abbott Laboratories Norvir Antitrust Case seek not only damages but nationwide injunctive relief, a loss at trial in August could have significant repercussions for the Company’s business. Moreover, a verdict against Abbott will also have preclusive effect with respect to many of the factual issues that will be tried in the cases brought by Glaxo and by the direct purchasers.

The Court’s patent ruling also has important strategic implications for industry observers. In attempting to dismiss Plaintiffs’ antitrust claims, the Company risked and lost valuable intellectual property–patents made more valuable by the fact that Norvir has shown promise as a metabolic booster to drugs used to treat other disease states as well, such as hepatitis. Even without the benefit of a victory at trial, Plaintiffs have significantly altered the playing field in the market for boosted PIs by undercutting Abbott’s claims on this crucial new technology. The Court’s decision thus stands as a caution for companies seeking to press intellectual property into service as a defense in antitrust cases.

Footnotes:
1 In re Abbott Labs Norvir Antitrust Litigation, 2008 WL 2095516 (N.D.Cal. May 16, 2008).

2 In 2007, direct purchasers of Norvir and Abbott’s rival GlaxoSmithKline together filed six more suits, making similar allegations.

3 Abbott Laboratories’ February 13, 2008 Motion for Summary Judgment, Docket No. 445.

4 342 F.3d 1329 (Fed. Cir. 2003).

5 Jansen, 342 F.3d at 1334, cited at page 15 of Judge Wilken’s opinion.

Hollis Salzman (hsalzman@labaton.com) is a partner at Labaton Sucharow LLP. Michael Stocker (mstocker@labaton.com) is an associate with the firm. Labaton Sucharow represents the Service Employees International Union Health and Welfare Fund in pending litigation against Abbott Laboratories. BNA welcomes other views on the litigation.

Reproduced with permission from Pharmaceutical Law & Industry Report, Vol. 6, No. 25 (June 20, 2008), p. 721. Copyright 2008 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

PAL extends an enthusiastic welcome to International Union of Operating Engineers (IUOE) Local 98 to our Coalition. . Local 98 represents approximately 1,300 members, including heavy equipment operators and mechanics, equipment house employees and municipality employees throughout Western Massachusetts, Western New Hampshire and Vermont. Founded in 1896, the IUOE today has 400,000 members in some 200 Local Unions throughout the United States and Canada. The IUOE is the 12th largest union in the AFL-CIO.

The Prescription Access Litigation coalition has more than 130 organizational members that represent over 13 million individuals. The coalition includes consumer advocacy organizations, senior citizen groups, health care advocacy groups, labor unions, union benefit funds, nonprofit health plans, and others. PAL coalition members join class action lawsuits, help get the word out about new lawsuits and settlements, and participate in advocacy campaigns to curtail runaway drug marketing and unethical drug pricing. If your organization is interested in joining the PAL coalition, learn more here.