Magistrate Judge Hall issued an R&R today recommending that the Court deny a motion to dismiss an inducement claim against a health insurer relating to a method-of-use claim for a generic drug.
The complaint alleges that, despite knowing that the plaintiff had a method-of-use claim for a specific treatment, the insurer nonetheless covered the patented treatment at a lower cost to patients than treatment with the name-brand drug:
The thrust of the allegations against [the insurer] Health Net are (1) that it provides coverage and payment for [co-defendant] Hikma’s generic product even in cases where Health Net actually knows that a particular beneficiary is using the generic version for an unapproved—and allegedly infringing . . . use, and (2) that Health Net actually encourages use of Hikma’s product instead of Vascepa for the [infringing] use because Health Net requires its beneficiaries to pay a higher copay for Vascepa [the branded version] than for Hikma’s generic version, even when Hikma’s version has been prescribed for the infringing[] use.
Plaintiff had previously sent a pre-suit letter to the insurer alleging infringement.
Judge Hall noted the novelty of a patentee accusing an insurer of inducement for covering a generic drug for a still-patented use—but found no reason why they couldn't do so:
To my knowledge, this is a novel theory. Neither side has cited any case in which a health insurer has been found liable to a pharmaceutical company for inducing infringement of a drug method of use patent. Viewing the allegations in the light most favorable to Plaintiffs, and in the absence of precedent to the contrary, I cannot say at this stage that Plaintiffs’ theory is so implausible as to require dismissal at the pleadings stage.
As this is an R&R, it stands as an order of the Court for the time being, but may still be adopted or rejected by the district court judge (in this case, Judge Andrews).
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