Teva Pharmaceuticals USA, Inc., the maker of a widely used drug for treating multiple sclerosis, told the Supreme Court on Thursday that it is willing to put aside promptly up to $500 million to cover marketing losses that generic competitors might have if Teva succeeds in keeping them on the sidelines for months with their lower-priced alternative versions of the drug.

Teva insisted that no bond was necessary but that, if the Court ordered one, its amount should be calculated by a federal judge.  If the Court itself were to impose such a duty and set an amount, Teva said it “is prepared to post a bond of up to $500 million at the earliest practicable date, but in no event later than May 24.”  That is the earliest date that the generic companies could launch their own version of a drug that Teva sells under the brand name Copaxone.

Although the generic firms had suggested that, if their entry into the market is delayed by the Court at Teva’s request, a bond should be imposed, they did not publicly declare how much it should be other than suggesting it might be in the hundreds of millions.  They submitted, under seal, estimates of the financial impact on them if their entry in the market were delayed.

Language in the Teva response Thursday suggested that private estimates of a bond suggested by the generic companies were considerably higher than $500 million.  Any estimates for a proposed bond, Teva argued, are “inherently speculative” because the generic firms have no idea when they may get government approval to enter the market with their versions, and they have not said how many generic products they were prepared to market.

Teva argued that the estimates of lost profits that the generic firms had submitted under seal to the Court were “staggeringly different” in the separate calculations contained in the private documents.

Should the Court accept the proposal for an immediate bond of up to $500 million, Teva added, then a federal judge should be told to consider whether any more — or less — than that would “adequately secure” the generic firms.  Until that happened, the filing said, the amount it proposed would “fully protect” the rivals “for many months of sales even under their most wildly optimistic projections.”

Teva’s filing Thursday is the final document that is expected to be filed in the Court on the question whether Chief Justice John G. Roberts, Jr., or the full Court will temporarily bar the generic alternatives from the market while the Court reviews Teva’s challenge to a federal appeals court ruling striking down its key patent on Copaxone.  That review will come in the new Term starting in October.

On the need for a stay of the appeals court decision, the new Teva document said there was more than a fair prospect that the Justices will rule in Teva’s favor, thus keeping its right to market Copaxone intact until the key patent expired in September 2015.

 

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Recommended Citation: Lyle Denniston, Teva agrees to put up bond in drug fight, SCOTUSblog (Apr. 17, 2014, 3:49 PM), http://www.scotusblog.com/2014/04/teva-agrees-to-put-up-bond-in-drug-fight/