PBMs are headed to the Supreme Court, generics got snubbed

The Supreme Court dealt a painful blow to the generic drug industry Monday when it declined to take up Hikma v. Vanda, a dispute between two largely unknown drug makers that could have serious implications for drug prices.

The case centers on a patent that Vanda Pharmaceuticals was granted for its schizophrenia drug iloperidone. That might sound run of the mill, and frankly boring, but the patent isn’t for a molecule or some fancy formulation: Vanda has a patent that covers specific directions to doctors to test patients to see how they metabolize the drug and administer a lower dose if they metabolize it poorly.

An appeals court ruled in April 2018 that the patent was valid, setting a precedent by which these so-called “method[s] of medically treating a patient” can be patented. The Association for Accessible Medicines, which represents generic drug manufacturers, was hoping the Supreme Court would take up the case and ultimately throw out the patent and others like it — they say the patents "improperly extend" brand name drug monopolies. But no dice.

Drug middlemen, however, will be heading to SCOTUS later this year to argue against an Arkansas law that allows the state to dictate how much middlemen reimburse pharmacies. The case could have sweeping implications for statehouses around the country, as PBMs have become an early target for state lawmakers eager to do something on drug prices. All told, more than 40 states considered PBM bills last year.