High prescription drug prices are an issue for many Americans; they have been linked to reduced adherence to care regimens and poor health outcomes. Introducing generic alternatives is the only intervention that consistently and substantially lowers prescription drug spending. However, this can be delayed when the brand-name manufacturer sets up a “thicket” of patents — that is, numerous additional patents relating to features of the drug other than its active ingredient.

Some of these patents cover the use of the drug for any additional Food and Drug Administration (FDA)-approved indications, called “use patents,” such as using the drug in a new patient population (for instance, pediatric patients) or to treat a different disease. For example, after its initial approval to treat patients with chronic myeloid leukemia (CML) in 2001, imatinib (Gleevec) received several subsequent FDA approvals to treat both new patient populations (pediatric patients with CML) as well as new diseases (gastrointestinal stromal tumors). Since each patent lasts 20 years, use patents that cover subsequent FDA-approved indications or patient populations could potentially delay generic entry for all indications past the expiration of the original patents. When generics are forced to wait until all the patents in a thicket expire before entering the market, it results in higher prices for patients.

To avoid such delays, Congress created an approval pathway called “skinny labeling.” This permits a generic manufacturer to seek approval for only the unpatented uses of the drug — allowing the generic to avoid any existing use patents altogether instead of waiting until expiration or attempting to invalidate them in court as would normally be required by a generic drug application. The generic version, if successful, is then able to avoid infringing existing patents and is only approved for the unpatented uses.

Skinny labeling is an exception to the FDA requirement that generic labeling be identical to the brand-name drug’s labeling as the generic manufacturer must “carve out” — or exclude — from the labeling, diseases or patient populations that remain protected by use patents. For example, Teva Pharmaceutical’s generic version of the beta blocker carvedilol was approved in 2007 for two indications no longer protected by existing patents: reducing mortality for patients suffering from left ventricular dysfunction following a myocardial infarction and hypertension. However, the brand version, Coreg, included an indication on its label — treating patients with congestive heart failure — that was covered by an additional patent that had not yet expired. Teva’s generic skinny label version excluded congestive heart failure to avoid the still-existing patents covering the use of carvedilol in patients with the disease. Such skinny labeling allows generics to enter the market closer to the time when patents on the active ingredient or original use expire. The practice was recently threatened by an August opinion from the U.S. Court of Appeals for the Federal Circuit — the court with jurisdiction over appeals for nearly all patent cases.

The Federal Circuit found a generic manufacturer marketing a skinny label version of the drug carvedilol liable for inducing others, mainly physicians, to commit patent infringement by prescribing the generic form of the drug for indications not on its label. The decision, after almost four years of litigation, reinstated a jury verdict of $200 million against the generic manufacturer for not adequately excluding the patent-protected indication from its skinny label. This case will have immediate negative effects for patients taking generic versions of carvedilol who may have to switch to the costlier brand-name version. It also has the potential to threaten skinny labels currently on the market, as well as those that may seek approval in the future.

To illustrate the potential effect of this case, a recent study supported by the Commonwealth Fund and conducted by researchers from Brigham and Women’s Hospital and Harvard Medical School examined the prevalence of skinny labeling and significance of skinny label approvals. The study identified the number of brand-name drugs that experienced competition from skinny-labeled generics between 2015 and 2019. Out of the 56 brand-name drugs appropriate for skinny labeling (because they had more than one approved indication or patient population), 24 attracted at least one skinny label generic approval. These generics were estimated to avoid a median of 3.2 years of remaining patent or exclusivity protection. Of the brand-name drugs susceptible to skinny labeling, all five with annual revenue greater than $2 billion in the year before generic approval experienced skinny label generic competition. This suggests skinny labeling is a viable pathway to timely approval of cheaper generic versions of brand-name drugs, even those with extremely high revenue.

The skinny label pathway has provided timely generic competition and price concessions for blockbuster drugs like imatinib and aripiprazole (Abilify), often years before the entire patent thicket expired. Without the skinny labeling approval pathway, patients taking such drugs might have been forced to buy the brand-name versions at a much higher cost. Timely generic drug competition is important, and skinny labeling is a crucial tool to achieving such competition, but the recent court decision may disincentivize the practice. Congress and FDA should consider measures to ensure that generic manufacturers seeking to market a skinny label are not at risk for patent infringement and preserve the pathway Congress created to provide cost-reducing competition in the pharmaceutical market.