And the magistrate judge said this about Health Net:
B. Health Net
According to the First Amended Complaint, Health Net’s implementation of its prior authorization process for icosapent ethyl prescriptions, combined with its placement of Hikma’s
generic on the formulary as a tier 1 drug and Vascepa as a tier 3 drug, amounts to encouragement
to providers and patients to administer Hikma’s product for the unapproved CV indication, which,
Plaintiffs allege, results in infringement of the asserted patents.
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.
The thrust of the allegations against Health Net are (1) that it provides coverage and
payment for 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—
CV use, and (2) that Health Net actually encourages use of Hikma’s product instead of Vascepa
for the CV use because Health Net requires its beneficiaries to pay a higher copay for Vascepa
than for Hikma’s generic version, even when Hikma’s version has been prescribed for the
infringing/CV use. Plaintiffs allege that Health Net knows when a particular beneficiary is using
Hikma’s product for the CV use because Health Net’s prior authorization process requires the
beneficiary’s provider to submit documentation supporting the use for which it has been
prescribed. Plaintiffs further allege that Health Net had knowledge that its beneficiaries’ use of
Hikma’s product for the CV indication amounted to infringement of Plaintiffs’ patents because
Amarin sent a pre-suit letter to its point of contact for Health Net informing it of that fact.
11 Takentogether, and in the light most favorable to Plaintiffs, it is at least plausible that Health Net
knowingly induced infringement and that it had specific intent to do so.
I understand Health Net’s position that it merely provides coverage for drugs after they
have been prescribed: it neither prescribes medication nor fills the prescriptions. It may ultimately
turn out, as Health Net contends, that it has not taken any affirmative acts with the intent to foster
infringement. It may also turn out that, despite knowledge of infringement by its beneficiaries and
their providers, Health Net’s actions in selecting its formulary and adopting its prior authorization
procedure for icosapent ethyl prescriptions do not, in fact, influence the decisions of beneficiaries,
pharmacists, and medical providers to use, dispense, and prescribe Hikma’s generic product in an
infringing way or otherwise encourage infringement. It may turn out, as Health Net contends, that
“it is Plaintiffs’ own pricing decision that encourages use of the generic product over Plaintiffs’
brand product.” (D.I. 31 at 17.) But all of those are factual issues that are inappropriate for
resolution on a motion to dismiss. Plaintiffs allege otherwise, and Plaintiffs’ allegations must be
taken as true at this stage.
Like Hikma, Health Net points out that it has no duty to discourage others’ infringement.
While that is true, Plaintiffs also allege that Health Net took active steps—including adopting its
formulary and prior authorization procedure for icosapent ethyl prescriptions and taking coverage
and payment actions—that are alleged to encourage others’ infringement.12
I again stress that I am not concluding that this novel claim against a health insurer will or
is likely to succeed on the merits. I merely conclude that Plaintiffs have stated a plausible claim and can move forward with discovery.
