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At-Risk Generic Drug Launch

Background

A number of generic drug companies participated in an “at-risk” launch of generic versions of a blockbuster branded drug used to treat epilepsy. The generic companies launched “at-risk” by selling product after receiving FDA marketing approval, but while claims of patent infringement were still pending. Upon generic entry, annual sales of the branded drug declined from multiple billions of dollars to the low hundreds of millions of dollars. The branded drug company asserted a multi-billion dollar claim of lost profits against the generic drug companies.

Our Analysis

Intensity was called upon to quantify the percentage of sales of the generic drug that resulted from off-label promotion of the branded drug and to evaluate commercial success of the branded drug. The Court found that Intensity’s findings were relevant to the determination of both patent damages and patent validity.

Intensity performed statistical modeling of sales, competition, physician prescribing behavior, and network effects to quantify the amount of sales attributable to off-label promotion. Intensity calculated the portion of branded drug sales that were driven by off-label promotional activities separate and apart from other factors that influenced sales. Intensity also calculated sales attributable to lasting economic effects of the off-label promotion that persisted after the off-label promotion had ceased. In a pretrial order, the Court stated that “the jury may consider [sales attributable to off-label promotion] as one of the many complex factors it will weigh in calculating appropriate damages in this case.”

Intensity also performed an economic analysis of commercial success, which is a secondary consideration relating to non-obviousness and patent validity. Intensity answered the question of whether sales of the branded drug were driven by patented technology or other economic factors. Intensity performed an analysis of the patented technology, other technologies contributing to sales, sales of acceptable non-infringing alternatives, and other factors to arrive at a conclusion regarding commercial success of the technology claimed in the patent-in-suit.