Generic company planning strategic lawsuits with recently acquired US subsidiary

Japanese generic company Sawai Pharmaceutical Co is planning to undertake lawsuits in the United States in cooperation with its US subsidiary Upsher-Smith Laboratories Inc. Sawai acquired Upsher-Smith for $1 billion on May 31 2017.

In order to submit Paragraph IV certifications, Sawai will reportedly conduct invalidity searches for patents which protect original drugs and that have significant patent terms remaining. By invalidating patents for original drugs, Sawai expects to increase sales of its generic drugs. From the early 2020s, Sawai plans to release one or two generic drugs each year in the United States.

Sawai obtained abbreviated new drug application (ANDA) approval for Pitavastatin tablets in February 2017. This is reportedly the first ANDA approval based on a Paragraph IV certification for a Japanese generic manufacturer. It seems that Sawai would rather actively invalidate patents for original drugs than wait for patents to expire. IP service companies that excel in patent invalidity searches could therefore become good partners for Sawai.

To deal with concerns about the growth of medical expenses in recent years – in 2016 national medical expenses amounted to Y41.28 trillion, which includes Y7.49 trillion in drug dispensing costs – the Japanese government is promoting the use of generics to reduce medical expenses and has announced a plan to increase the penetration rate of generics to 80% by September 2020 (from 69.8% in December 2016).

If Sawai succeeds, other Japanese generic companies may adopt its approach.