Case 1:20-cv-01630-RGA-JLH Document 64 Filed 08/03/21 Page 1 of 18 PageID #: 1254
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`
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`Plaintiffs,
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`
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`v.
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`)
`AMARIN PHARMA, INC., AMARIN
`)
`PHARMACEUTICALS IRELAND
`)
`LIMITED, MOCHIDA
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`PHARMACEUTICAL CO., LTD.,
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`
`)
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`)
`
`)
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`)
`
`)
`HIKMA PHARMACEUTICALS USA INC.,
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`HIKMA PHARMACEUTICALS PLC, AND
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`HEALTH NET, LLC,
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`
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`Defendants.
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`
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`____________________________________ )
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`C.A. No. 20-1630-RGA-JLH
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`REPORT AND RECOMMENDATION
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`Plaintiffs Amarin Pharma, Inc., Amarin Pharmaceuticals Ireland Limited (collectively,
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`“Amarin”), and Mochida Pharmaceutical Co., Ltd. (“Mochida”) filed this suit against Defendants
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`Hikma Pharmaceuticals USA Inc., Hikma Pharmaceuticals PLC (collectively, “Hikma”), and
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`Health Net, LLC (“Health Net”). Plaintiffs allege that Hikma and Health Net have each induced
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`infringement of U.S. Patent Nos. 9,700,537 (the ’537 patent), 8,642,077 (the ’077 patent), and
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`10,568,861 (the ’861 patent) under 35 U.S.C. § 271(b). Hikma and Health Net have separately
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`moved to dismiss under Federal Rule of Civil Procedure 12(b)(6).
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`Plaintiffs’ infringement case against Hikma is what is referred to by those in the know as
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`a “skinny label” case. Amarin developed and markets a branded prescription drug that has two
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`FDA-approved indications. One of those indications is patented, the other is not. Hikma launched
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`a generic version after receiving FDA approval for the non-patented indication only.
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`Notwithstanding the limited approval, Plaintiffs allege that Hikma—through its product label,
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`website, and press releases—instructs and encourages physicians to use its generic version for the
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`patented indication, making Hikma liable for inducing infringement under 35 U.S.C. § 271(b).
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`Plaintiffs have an entirely different (and apparently novel) theory as to Health Net. Health
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`Net is a health insurance provider. It does not prescribe drugs, but it does pay for drugs that are
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`prescribed to its beneficiaries by physicians. Plaintiffs allege that the way that Health Net has set
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`up its approval and payment process for Amarin’s product and Hikma’s generic version amounts
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`to active encouragement to use Hikma’s generic version for the patented indication, making Health
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`Net liable for inducing infringement under 35 U.S.C. § 271(b).
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`This case is at the pleadings stage. I cannot make factual findings about what Hikma’s
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`label and advertisements communicate to physicians. Nor is it appropriate at this stage to make
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`findings about how Health Net’s prescription drug coverage operates and whether it actually has
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`any effect on anyone’s decision to use Hikma’s product for the patented use. The only
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`determination at this stage is whether Plaintiffs’ allegations state plausible claims for relief.
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`“The plausibility standard is not akin to a ‘probability requirement,’”1 and “a well-pleaded
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`complaint may proceed even if it strikes a savvy judge that actual proof of the facts alleged is
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`improbable, and that a recovery is very remote and unlikely.”2 I conclude that Plaintiffs’ claims
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`satisfy the plausibility standard. According, I recommend that both motions to dismiss be
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`DENIED.
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`1 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
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`544, 556 (2007)).
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`2 Twombly, 550 U.S. at 556 (2007) (internal marks omitted).
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`2
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`Case 1:20-cv-01630-RGA-JLH Document 64 Filed 08/03/21 Page 3 of 18 PageID #: 1256
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`I.
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`BACKGROUND
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`The statutory scheme for obtaining FDA approval of a generic drug for only non-patented
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`uses has been well explained in numerous cases and I could do no better here.3 Accordingly, this
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`Report and Recommendation assumes familiarity with the key features of the Hatch-Waxman
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`generic drug approval process as it relates to “carve out” labels (aka “skinny” labels) and
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`associated infringement litigation.
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`
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`Amarin’s VASCEPA®4
`A.
`The active ingredient in Amarin’s Vascepa product is icosapent ethyl, an ethyl ester of an
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`omega-3 fatty acid (EPA) commonly found in fish oils. (D.I. 17 ¶¶ 25, 28, 54, Ex. D.) Vascepa
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`currently has two FDA-approved indications: (1) treatment of severe hypertriglyceridemia (the
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`“SH indication”); and (2) cardiovascular risk reduction (the “CV indication”). (Id. ¶¶ 1, 56.)
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`Severe hypertriglyceridemia (SH) is a condition where patients have triglyceride levels
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`greater than 500 mg/dL. (Id. ¶ 30, Ex. D.) Vascepa received FDA approval for the SH indication
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`in 2012. (Id. ¶ 30.) At that time, and up until 2019, the Vascepa label contained the following
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`“limitation of use” regarding the CV indication: “The effect of VASCEPA on cardiovascular
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`mortality and morbidity in patients with severe hypertriglyceridemia has not been determined.”
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`(Id. ¶ 60, Exs. E, F.)
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`After receiving FDA approval to market Vascepa for the SH indication, Amarin conducted
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`further clinical studies to examine the effects of Vascepa on cardiovascular risk reduction. (Id.
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`3 See, e.g., AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1045-46 (Fed. Cir. 2010)
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`(describing Hatch-Waxman scheme and carve out labels); GlaxoSmithKline LLC v. Teva Pharms.
`USA, Inc., No. 14-878-LPS-CJB, 2016 WL 3946770, at *2-3 (D. Del. July 20, 2016) (same), report
`and recommendation adopted, No. 14-878-LPS-CJB, 2017 WL 1050574 (D. Del. Mar. 20, 2017).
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`4 I assume the facts alleged in Plaintiffs’ First Amended Complaint to be true for purposes of
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`resolving the motions to dismiss for failure to state a claim. Iqbal, 556 U.S. at 678.
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`3
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`Case 1:20-cv-01630-RGA-JLH Document 64 Filed 08/03/21 Page 4 of 18 PageID #: 1257
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`¶¶ 31-33.) One clinical study assessed the effectiveness of Vascepa as an add-on to statin therapy
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`to reduce major cardiovascular events in patients with persistent elevated triglycerides. (Id. ¶ 33.)
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`Based on the results of the study, the FDA approved Vascepa in December 2019 for the CV
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`indication, that is, “as an adjunct to maximally tolerated statin therapy to reduce the risk of
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`myocardial infarction, stroke, coronary revascularization, and unstable angina requiring
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`hospitalization in adult patients with elevated triglyceride (TG) levels (≥ 150 mg/dL) and
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`established cardiovascular disease or diabetes mellitus and 2 or more additional risk factors for
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`cardiovascular disease.” (Id. ¶ 34, Ex. D.) When the FDA approved the use of Vascepa for the
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`CV indication, Amarin was permitted to add the CV indication to the Vascepa label and remove
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`the CV limitation of use. (Id. ¶ 63; compare id., Ex. D with id., Exs. E, F.)
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`B.
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`The asserted patents
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`Plaintiffs have patents covering methods of using icosapent ethyl to reduce the risk of
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`cardiovascular events in patients. The ʼ537 patent was issued on July 11, 2017 and is assigned to
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`Mochida. Amarin has an exclusive license. (Id. ¶¶ 41-43.) Claim 1 of the ’537 patent describes
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`a method of reducing the risk of a cardiovascular event by administering icosapent ethyl with a
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`statin to a patient with high cholesterol, elevated triglycerides, and reduced HDL-C (good
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`cholesterol).5 It recites as follows:
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`in a
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`1. A method of reducing occurrence of a cardiovascular event
`hypercholesterolemia patient consisting of:
`identifying a patient having triglycerides (TG) of at least 150 mg/DL and HDL-C
`of less than 40 mg/dL in a blood sample taken from the patient as a risk
`factor of a cardiovascular event, wherein the patient has not previously had
`a cardiovascular event, and administering ethyl icosapentate in combination
`with a 3-hydroxy-3-methylglutaryl coenzyme A reductase inhibitor,
`wherein said 3-hydroxyl-3-methylglutaryl coenzyme A reductase inhibitor is
`administered to the patient at least one of before, during and after
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`5 I am attempting to describe the invention in a way that facilitates ease of understanding. In
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`so doing, I make some generalizations about the claim elements. Nothing I say here should be
`taken as the Court’s views on any current or future claim construction (or any other) issues.
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`4
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`administering the ethyl icosapentate; and
`wherein the 3-hydroxy-3-methylglutaryl coenzyme A reductase inhibitor is
`selected from the group consisting of pravastatin, lovastatin, simvastatin,
`fluvastatin, atorvastatin, pitavastatin, rosuvastatin, and salts thereof, and
`wherein daily dose of the 3-hydroxy-3-methylglutaryl coenzyme A reductase
`inhibitor are 5 to 60 mg for pravastatin, 2.5 to 60 mg for simvastatin, 10 to
`180 mg for fluvastatin sodium, 5 to 120 mg for atorvastatin calcium hydrate,
`0.5 to 12 mg for pitavastatin calcium, 1.25 to 60 mg for rosuvastatin
`calcium, 5 to 160 mg for lovastatin, and 0.075 to 0.9 mg for cerivastatin
`sodium.
`
`
`(Id., Ex. C (’537 Patent).)
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`The ʼ077 patent was issued on February 4, 2014 and is assigned to Amarin. (Id. ¶¶ 46-48.)
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`Claim 1 describes a method of reducing triglycerides in a patient with mixed dyslipidemia
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`(abnormal lipid levels) on statin therapy by administering icosapent ethyl. Claims 1 and 8 of the
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`’077 patent recite as follows:
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`1. A method of reducing triglycerides in a subject with mixed dyslipidemia on statin
`therapy comprising, administering to the subject a pharmaceutical composition comprising
`about 2500 mg to 5000 mg per day of ethyl eicosapentaenoate and not more than about
`5%, by weight of all fatty acids, docosahexaenoic acid or its esters to effect a reduction in
`fasting triglyceride levels in the subject.
`
`
`8. The method of claim 1 wherein the subject exhibits a reduction in hs-CRP
`compared to placebo control.
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`(Id., Ex. O (’077 Patent).)
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`The ’861 patent was issued on February 25, 2020. It is also assigned to Amarin. (Id. ¶¶ 50-
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`52.) Claim 1 describes a method of reducing the risk of cardiovascular death in a patient with
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`established cardiovascular disease by administering icosapent ethyl. Dependent claim 2 specifies
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`that the patient must have a triglyceride level “of about 135 mg/dL to about 500 mg/dL” (i.e.,
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`potentially elevated but not necessarily severely high) and an LDL-C (bad cholesterol) level within
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`a specified range. Claims 1 and 2 of the ’861 patent recite as follows:
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`1. A method of reducing risk of cardiovascular death in a subject with established
`cardiovascular disease, the method comprising administering to said subject about 4 g of
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`5
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`ethyl icosapentate per day for a period effective to reduce risk of cardiovascular death in
`the subject.
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`2. The method of claim 1, wherein the subject has a fasting baseline triglyceride
`level of about 135 mg/dL to about 500 mg/dL and a fasting baseline LDL-C level of about
`40 mg/dL to about 100 mg/dL.
`
`(Id., Ex. P (’861 Patent).)
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`After Amarin received FDA approval for the CV indication, it listed the ʼ537, ʼ077, and
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`ʼ861 patents (the “asserted patents”) in the Orange Book for Vascepa. (Id. ¶¶ 70-79.)
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`C.
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`Hikma’s generic product
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`On November 5, 2020, Hikma launched a generic version of Vascepa after receiving FDA
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`approval of its Abbreviated New Drug Application (ANDA). (Id. ¶¶ 11, 13.) Hikma’s ANDA
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`contained a so-called “section viii carve out” regarding the asserted patents. (Id. ¶¶ 104, 105.)
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`That is, Hikma represented to the FDA that it would not market its generic product for the uses
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`covered by those patents.
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`When Hikma originally submitted its ANDA in 2016, it only sought approval for the SH
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`indication, as the FDA had not yet approved Vascepa for the CV indication. (Id. ¶ 108.) At that
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`time, Hikma’s proposed generic label (like the Vascepa label at that time) referred only to the SH
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`indication and contained the CV limitation of use. (Id.) After Amarin received approval for the
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`CV indication and listed the asserted patents in the Orange Book, Hikma submitted section viii
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`statements with respect to those patents. (Id. ¶¶ 104, 108.) Hikma did not propose to add the CV
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`indication to its label, but Hikma did remove the CV limitation of use from its proposed label. (Id.
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`¶ 108.)
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`The FDA approved Hikma’s ANDA on May 21, 2020. (Id. ¶ 105.) The “Indications and
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`Usage” section of Hikma’s approved label refers only to the SH indication, but it does not contain
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`the CV limitation of use. (Id., ¶ 107 Ex. K.) By the time Hikma’s product hit the market in
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`November 2020, the majority of doctors who prescribed Vascepa did so for uses other than the SH
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`indication, and Hikma was aware of that fact. (Id. ¶ 110.)
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`Hikma issued press releases in 2020 regarding its generic product. In a March 31, 2020
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`press release, Hikma referred to its then-unapproved product as a “generic version of Amarin
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`Corporation’s Vascepa® 1 gm (icosapent ethyl) capsules.” (Id. ¶¶ 111-113, Ex. L.) The press
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`release further stated that “Vascepa® is a prescription medicine that is indicated, in part, as an
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`adjunct to diet to reduce triglyceride levels in adult patients with severe (≥500 mg/dL)
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`hypertriglyceridemia” (emphasis added), and that the prior year’s “US sales of Vascepa® were
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`approximately $919 million.” (Id.) The Vascepa sales figure cited by Hikma in the press release
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`included sales for the CV indication, and Hikma knew that. (Id.) Hikma issued another press
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`release on September 3, 2020 that contained similar statements. (Id. ¶¶ 118-120, Ex. M.) Hikma’s
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`March and September 2020 press releases were still accessible on Hikma’s website when Plaintiffs
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`filed this action. (Id. ¶¶ 117, 124.)
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`Hikma’s website also advertises its generic version as being “AB” rated in the “Therapeutic
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`Category: Hypertriglyceridemia.” (Id. ¶ 125-126, Ex. T.) That webpage does not refer to the fact
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`that Hikma’s product is only FDA-approved for “severe hypertriglyceridemia.” (Id.)
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`According to the First Amended Complaint, Hikma’s label, press releases, and website
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`“instruct, promote, and encourage” healthcare providers and patients to administer Hikma’s
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`product in a way that infringes the asserted patents. (Id. ¶ 127.)
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`D.
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`Health Net
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`Health Net is a health insurance provider. (Id. ¶ 137.) Vascepa is covered by Health Net’s
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`insurance plans and appears on Health Net’s formularies as a covered drug. (Id. ¶ 139.) When
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`Hikma launched its generic version, Health Net added the generic to its formularies, meaning that
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`it would provide insurance coverage and/or payment for Hikma’s product. (Id. ¶ 140.) Some of
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`Health Net’s formularies currently list Hikma’s generic version as a Tier 1 drug and Vascepa as a
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`Tier 3 drug. (Id. ¶¶ 143, 157.) The result is that plan beneficiaries have to pay a higher copay for
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`Vascepa than they do for Hikma’s generic version. (Id. ¶ 145.)
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`At least one of Health Net’s plans requires “Prior Authorization” before it will cover and
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`pay for either Vascepa or Hikma’s generic version. (Id. ¶¶ 153, 159.) To obtain prior
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`authorization from the plan, the patient’s medical provider must submit documentation
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`demonstrating that the prescription is being given for either the SH or the CV indication.6 (Id.
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`¶¶ 153, 154, 159, 160, Exs. EE, HH.)
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`Plaintiffs allege that Health Net is aware that use of Hikma’s generic for the CV indication
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`infringes Plaintiffs’ patents because (among other reasons) Plaintiffs sent a letter in December
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`2020 to Mr. Mike Flynn at Envolve Pharmacy Solutions, Inc. (Id. ¶ 87.) Envolve is Health Net’s
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`Pharmacy Benefit Manager, and Mr. Flynn is Amarin’s point of contact for both Envolve and
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`Health Net. (Id.) The letter stated that “[t]he Hikma generic does not have an FDA-approved
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`indication for CV risk reduction.” (Id. ¶¶ 87-90, Ex. GG.) The letter further stated that Amarin
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`“had sued Hikma for patent infringement for encouraging use of its generic product in the CV risk
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`reduction indication” and that “the Hikma generic should not be dispensed for this indication.”
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`(Id.)
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`6 For example, Health Net’s Essential Drug List formulary requires a prior authorization before
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`covering either Vascepa or Hikma’s generic version. The prior authorization has criteria that
`(Amarin contends) map to the SH indication and the CV indication:
`(1) “Hypertriglyceridemia without ASCVD,” where the patient has “[f]asting triglycerides
`≥ 500 mg/dL,” or
`(2) “Reduction of Cardiovascular Disease Risk” with “[d]ocumentation (labs must be
`within 90 days) of fasting triglycerides between 150-499 mg/dL” and, “[f]or members on
`statin therapy,” “Vascepa is prescribed in conjunction with a statin at the maximally
`tolerated dose.”
`(Id. ¶ 153, Ex. HH; see also id. ¶¶ 154, 159-60, Ex. EE.)
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`8
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`According to the First Amended Complaint, Health Net’s implementation of the above-
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`described formulary and prior authorization arrangement amounts to encouragement to providers
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`and patients to administer Hikma’s product for the CV indication, which, Plaintiffs allege, results
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`in infringement of the asserted patents.
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`E.
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`Procedural background
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`Plaintiffs filed their original Complaint on November 30, 2020. (D.I. 1.) The original
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`Complaint only contained claims against Hikma. On January 4, 2021, Hikma filed a motion to
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`dismiss the Complaint for failure to state a claim. (D.I. 11.)
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`On January 25, 2021, Plaintiffs filed a First Amended Complaint. (D.I. 17.) The First
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`Amended Complaint added new factual allegations against Hikma and added new claims against
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`Health Net. Counts I-III allege that Hikma induces infringement of the ʼ537, ʼ077, and ʼ861
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`patents under 35 U.S.C. § 271(b). Counts IV-VI allege that Health Net induces infringement of
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`the ʼ537, ʼ077, and ʼ861 patents under 35 U.S.C. § 271(b).
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`Hikma and Health Net each filed motions to dismiss the claims against them for failure to
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`state a claim. (D.I. 19; D.I. 30.) Health Net also moved to sever Plaintiffs’ claims against Health
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`Net from Plaintiffs’ claims against Hikma. (D.I. 32.) The Court heard oral argument on all
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`pending motions on May 26, 2021. This is my Report and Recommendation on Hikma’s and
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`Health Net’s motions to dismiss.
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`II.
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`LEGAL STANDARD
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`A defendant may move to dismiss a complaint under Federal Rule of Civil Procedure
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`12(b)(6) for failure to state a claim. “To survive a motion to dismiss, a complaint must contain
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`sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
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`Iqbal, 556 U.S at 678 (quoting Twombly, 550 U.S. at 570). A claim is plausible on its face when
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`the complaint contains “factual content that allows the court to draw the reasonable inference that
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`the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). A
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`possibility of relief is not enough. Id. “Where a complaint pleads facts that are ‘merely consistent
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`with’ a defendant's liability, it ‘stops short of the line between possibility and plausibility of
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`entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 557). In determining the sufficiency of
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`the complaint under the plausibility standard, all “well-pleaded facts” are assumed to be true, but
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`legal conclusions are not. Id. at 679.
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`III. DISCUSSION
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`Section 271(b) of Title 35 provides that “[w]hoever actively induces infringement of a
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`patent shall be liable as an infringer.” 35 U.S.C. § 271(b). To state a claim of induced infringement
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`under § 271(b), the complaint must plausibly allege that (1) there has been direct infringement, (2)
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`the defendant knowingly induced infringement, and (3) the defendant possessed the intent to
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`encourage another’s infringement. MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon
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`Corp., 420 F.3d 1369, 1378 (Fed. Cir. 2005); FO2GO LLC v. KeepItSafe, Inc., No. 18-807-RGA,
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`2019 WL 1615398, at *3 (D. Del. Apr. 16, 2019).
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`
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`In the pharmaceutical drug context, a generic manufacturer can be liable under § 271(b)
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`for inducing infringement of a patented method even where the FDA has not approved the generic
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`product for use in accordance with the patented method.7 See AstraZeneca, 633 F.3d at 1056-61
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`(affirming district court’s grant of preliminary injunction against generic manufacturer for
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`inducing infringement of patented method under § 271(b) even though generic product was not
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`approved for patented once-daily use); GlaxoSmithKline, 2016 WL 3946770, at *15 (“The
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`decision in AstraZeneca 2010 indicates that there can, in fact, be situations where a generic
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`manufacturer seeks and obtains a section viii carve-out for a use of a drug that is (according to the
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`FDA) a ‘different’ use from a patented use—and yet the generic’s label could nevertheless be
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`written in such a way that it evidences active steps to induce patent infringement.”); see also id.,
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`2017 WL 1050574, at *1-2 (denying generic defendant’s motion to dismiss inducement claim
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`notwithstanding section viii carve out, where plaintiff alleged that defendant’s label and other
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`conduct encouraged use of the generic product in an infringing manner).
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`The assessment of whether a complaint plausibly alleges inducement in a pharmaceutical
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`case is thus no different than the analysis in any other case. The court must determine whether the
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`complaint plausibly alleges that the generic manufacturer “offer[ed] a product with the object of
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`promoting its use to infringe, as shown by clear expression or other affirmative steps taken to foster
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`infringement.” DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1305-06 (Fed. Cir. 2006) (en banc in
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`relevant part). Such “affirmative steps” may include allegations that a defendant “advertis[ed] an
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`infringing use or instruct[ed] how to engage in an infringing use.” Takeda Pharms. U.S.A., Inc. v.
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`West-Ward Pharm. Corp., 785 F.3d 625, 630-31 (Fed. Cir. 2015) (quoting Metro-Goldwyn-Mayer
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`Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 935-36 (2005)).
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`To be clear, it is not enough to allege that a defendant had “mere knowledge” that its
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`7 In contrast, in an ANDA case, a generic manufacturer cannot be liable under 35 U.S.C.
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`§ 271(e)(2) for infringing a method patent unless its ANDA seeks FDA approval for the patented
`use. Bayer Schering Pharma AG v. Lupin, Ltd., 676 F.3d 1316, 1321-22 (Fed. Cir. 2012); Warner-
`Lambert Co. v. Apotex Corp., 316 F.3d 1348 (Fed. Cir. 2003).
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`11
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`product could be—or is being—used to infringe. Warner-Lambert, 316 F.3d at 1364. Rather, the
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`allegations must plausibly suggest “culpable conduct, directed to encouraging another’s
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`infringement.” DSU Med., 471 F.3d at 1306. Moreover, a defendant who sells a product having
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`substantial noninfringing uses has no duty to take affirmative steps to make sure that others avoid
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`infringement. Takeda, 785 F.3d at 632 n.4.
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`A.
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`Hikma
`
`The First Amended Complaint alleges that Hikma’s product label, press releases, and
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`website encourage infringement of the asserted patents. Hikma contends that the claims against it
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`must be dismissed because the allegations fail to state a plausible claim of inducement. I disagree.
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`The First Amended Complaint alleges that, notwithstanding the lack of an express
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`instruction regarding the CV indication in the “Indications and Usage” section of Hikma’s label,
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`several other portions of Hikma’s label, taken together with Hikma’s public statements, instruct
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`physicians to use Hikma’s product in a way that infringes the asserted patents. For example, claim
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`1 of the ’537 patent covers a method of treating hypercholesterolemia patients with elevated
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`triglyceride (TG) levels of at least 150 mg/dL and HDL-C less than 40 mg/mL, and who are on a
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`statin, in order to reduce the risk of a cardiovascular event. The “Dosage and Administration”
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`section of Hikma’s label instructs providers to “[a]ssess lipid levels before initiating therapy.”
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`(D.I. 17 ¶ 130, Ex. K § 2.1.) The “Indications and Usage” section instructs administration to
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`patients with TG levels ≥ 500 mg/dL, which, by definition, is at least 150 mg/dL. In addition, the
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`“Clinical Studies” section of Hikma’s label describes treatment of patients with (1) median total
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`cholesterol of 254 mg/dL (i.e., hypercholesterolemia); (2) baseline TG levels between 500 and
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`2,000 mg/dL, with a median baseline of 684 mg/dL (i.e., ≥ 150 mg/dL); (3) a median baseline
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`HDL-C level of 27 mg/dL; and (4) with 25% of the patients on concomitant statin therapy. (Id.
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`¶ 130, Ex. K § 14.2.) The “Patient Information” section describes that the product may be used
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`by patients at risk of having a cardiovascular event. (Id. Ex. K.) And, Hikma removed the CV
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`limitation of use from its proposed label, which, according to Plaintiffs, “communicat[es] to the
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`market that Hikma’s generic product has been shown to reduce CV risk.” (Id. ¶ 133.) The First
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`Amended Complaint contains similar allegations regarding the ʼ861 and ʼ077 patents. (Id. ¶¶ 131,
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`134, Ex. K.)
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`The FAC further alleges that Hikma is aware that the majority of Vascepa prescriptions are
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`for uses other than the SH indication and that Hikma’s public statements encourage the use of its
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`product for the same indications that Vascepa is used for. (Id. ¶¶ 110, 115, 122.) Plaintiffs point
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`to Hikma’s March and September 2020 press releases, which describe its product as a generic
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`version of Vascepa and refer to sales figures that—Hikma knew—include sales for the CV
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`indication. (Id. ¶¶ 111, 113, 118, 120.) Plaintiffs also point to Hikma’s website, which advertises
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`its generic version as “AB” rated in the “Therapeutic Category: Hypertriglyceridemia,” which is
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`broader than the “severe hypotriglyceridemia” (SH) indication for which it has FDA approval, and
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`which may suggest administration to patients having merely elevated triglycerides as required by
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`certain claims of the asserted patents. (Id. ¶¶ 125-126, Ex. T.)
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`Those allegations, taken together and viewed in the light most favorable to Plaintiffs,
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`plausibly suggest the following: (1) that Hikma’s label and public statements could instruct and/or
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`encourage third parties to use its product for the CV indication, which Plaintiffs allege is covered
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`by the asserted patents; and (2) that Hikma both knew and intended that third parties would use its
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`product for that purpose. In my view, that is enough.
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`I am not persuaded by Hikma’s arguments to the contrary. Hikma contends that Plaintiffs
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`have not alleged sufficient “active steps” to encourage infringement. (D.I. 20 at 13-14.) But
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`Case 1:20-cv-01630-RGA-JLH Document 64 Filed 08/03/21 Page 14 of 18 PageID #: 1267
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`Hikma’s decision to continue to seek FDA approval after removing the CV limitation of use from
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`its proposed label, its decision to sell its product accompanied by the current version of its label,
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`and its public statements all constitute actions that are alleged to encourage infringement. And, at
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`this stage, those allegations must be viewed in the light most favorable to Plaintiffs.
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`Hikma also points out that mere knowledge of direct infringement is insufficient to support
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`an inducement claim. That is true. But Plaintiffs allege more than mere knowledge.
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`Hikma further points out that it has no duty to discourage infringement. Also true. But it
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`cannot present information in a way that encourages infringement. The above-described
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`allegations make it plausible that Hikma, rather than merely failing to prevent infringement,
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`intended to cause others to infringe and knew that their acts would infringe.8
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`To the extent Hikma is suggesting that it cannot be liable for inducement absent FDA
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`approval to use its product for CV therapy and/or explicit instructions in the “Indications and
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`Usage” section of its label to use its product for a CV indication, I disagree. As explained above,
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`lack of FDA approval for an infringing use does not preclude a finding of inducement. See
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`AstraZeneca, 633 F.3d at 1060; see also GlaxoSmithKline, 2016 WL 3946770, at *13. Many of
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`the cases relied on by Hikma at best establish that were this an ANDA case, and were Plaintiffs’
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`allegations based solely on the label, Plaintiffs’ inducement theory might lack merit as a matter of
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`law.9 But this is not an ANDA case, and Plaintiffs’ allegations are not based solely on the label.
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`8 Of course, in the absence of other evidence of intent, the Court could not find that Defendants
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`are liable for inducement based solely on their failure to take affirmative steps to prevent others’
`infringement. But Defendants’ knowledge that others are using Hikma’s product in an infringing
`way, combined with their failure to take steps to deter such use, could be relevant to their intent to
`encourage others’ infringement. Cf. Grokster, Ltd., 545 U.S. at 939 n.12.
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`9 See, e.g., Bayer Schering, 676 F.3d at 1321-24; AstraZeneca LP v. Apotex, Inc., 669 F.3d
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`1370, 1378-1380 (Fed. Cir. 2012); Warner-Lambert, 316 F.3d at 1362-65; see also
`GlaxoSmithKline, 2017 WL 1050574, at *2 (acknowledging difference between claims under
`§ 271(e)(2) and § 271(b)).
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`Hikma urges the Court to resolve this case at the pleadings stage, pointing out that the
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`contents of its label and public statements are undisputed. But there is a real dispute about what
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`those contents communicate to others, and I do not think it is appropriate to resolve it on a motion
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`to dismiss. Stated another way, at this stage of the case, I am not prepared to say that Hikma’s
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`label and public statements—as a matter of law—could never amount to instruction and
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`encouragement to infringe the asserted patents.
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`In support of its contention that its actions cannot constitute inducement, Hikma cites the
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`Federal Circuit’s opinions in HZNP Medicines LLC v. Actavis Laboratories UT, Inc., 940 F.3d
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`680 (Fed. Cir. 2019), Grunenthal GMBH v. Alkem Laboratories Ltd., 919 F.3d 1333 (Fed. Cir.
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`2019), and Takeda, 785 F.3d 625. But none of those cases was resolved at the motion to dismiss
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`stage. See HZNP, 940 F.3d at 687-88 (bench trial); Grunenthal, 919 F.3d at 1338 (same); Takeda,
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`785 F.3d at 628 (preliminary injunction). And, unlike the allegations in this case, the evidence in
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`those cases related solely to the effects of the generic labels. See HZNP, 940 F.3d at 702;
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`Grunenthal, 919 F.3d at 1338-39 (“Here, [the plaintiffs] point only to the indications of the
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`proposed labels as grounds for inducement . . . .”); Takeda, 785 F.3d at 632.10
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`I conclude that Plaintiffs have pleaded an inducement claim against Hikma that is at least
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`plausible. While Hikma may be right that Plaintiffs will ultimately be unable to prove inducement,
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`I cannot make that determination at this stage. I recommend that Hikma’s motion to dismiss be
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`denied.
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`B.
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`Health Net
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`According to the First Amended Complaint, Health Net’s implementation of its prior
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`10 Moreover, while I need not decide whether Plaintiffs’ allegations regarding the label alone
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`state a plausible claim of inducement, I do note that the Federal Circuit in Takeda expressly
`declined to decide “whether evidence as to the invariable response of physicians could ever
`transform a vague label into active encouragement.” Takeda, 785 F.3d at 632.
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`Case 1:20-cv-01630-RGA-JLH Document 64 Filed 08/03/21 Page 16 of 18 PageID #: 1269
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`authorization process for icosapent ethyl prescriptions, combined with its placement of Hikma’s
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`generic on the formulary as a tier 1 drug and Vascepa as a tier