Cardiologists and heart surgeons at Hoag Hospital spent most of the day on April 11 learning how to implant a recently approved nonsurgical heart valve, so they could add a new option for patients who are too sick to have their chests cut open.
Then they got caught up in an ongoing dispute between two health care heavyweights – Irvine-based Edwards Lifesciences Corp. and its giant rival, Medtronic Inc. of Minneapolis.
Late that night, the doctors at Hoag learned that a federal court judge had ordered Medtronic, the manufacturer of the new valve, to curtail sales of it in the United States and halt training at new sites. Hoag had planned over the next few months to finish getting its medical team up to speed so it could start using the device, known as CoreValve. But the court order, by Judge Gregory M. Sleet, put those plans in limbo.
“We are right in the middle of the process. We’ve had the training, but our nurses and technicians have not completed it,” said Aidan Raney, a cardiac surgeon who is medical director of cardiovascular surgery at Hoag’s Heart and Vascular Institute in Newport Beach. “We’ll keep our fingers crossed and hope we will be able to complete the training here.”
The judge’s ruling highlights a fundamental conflict that pits patient access to life-saving technology against the need to protect the kind of investment that enabled its invention in the first place.
Sleet’s order stemmed from a 6-year-old case in which Medtronic was found liable for infringing on a patent held by Edwards and ordered in 2010 to pay its rival $74 million in damages incurred up to that date, with more to come.
Edwards’ competing Sapien valve, approved by the Food and Drug Administration in 2011, was the only one in this country that could be implanted through a catheter without open heart surgery – until three months ago, when CoreValve got FDA clearance.
The legal case is now in the hands of a federal appeals court, where Medtronic has filed a request for an “emergency” order to delay implementation of Sleet’s ruling while the company’s lawyers attempt to have it overturned altogether.
Sleet’s order limiting U.S. sales of CoreValve, if it stands, will be a big boon for Edwards’ market share and profitability, guaranteeing it an iron grip on the market for so-called transcatheter valves at least until March 2016.
Hoag wanted to add CoreValve to its repertoire because there are cases in which it is preferable to Sapien – or even the only choice.
Raney said CoreValve has “definite advantages” over the Edwards device. For one thing, it is easier to implant in people with small vessels or significant vascular obstructions. More importantly, its biggest size is one bigger than Sapien, which means there is a subset of patients who can only use the Medtronic device – and could die without it.
“It is the very nature of the way the patent system works that the inventor has the ability to sell whatever it is they have a patent for at monopoly prices for a period of time, and that always means the customer is going to be worse off,” said Russell Korobkin, a professor of law at UCLA.
“The justification for this is the intuition that if it weren’t for patent protection and the ability to make high profits on these inventions, companies like Edwards would not be willing to invest the time and money it takes to create them.
But Korobkin noted that when it comes to life-saving devices, “there is an increased ethical obligation” to let others use the technology – as long as they pay a fair price.
“Nobody is going to die if Apple does not license its technology to Samsung. So this is a different situation,” he said.
Sleet recognized this reality, too, which is why the order he handed down had a touch of King Solomon about it.
He conceded that CoreValve “may be to some degree the safer, better option for most patients,” and insisted that patients who need the largest size valve “must be allowed ongoing access to CoreValve.” At the same time, however, Sleet stressed “the strong public interest favoring enforcement of patent rights” – especially in a case in which Medtronic “boldly continued to thumb its nose at the law by continuing its conduct even after being found to be a willful infringer.”
His solution was to issue an injunction against CoreValve sales but order the two companies to start talking about how the Medtronic valve can still be made available to patients who would be best served by it.
Edwards Lifesciences has already proposed that Medtronic pay it a fee for each CoreValve sold – essentially the kind of licensing deal Korobkin talked about – according to Edwards’ spokeswoman, Sarah Huoh. However, in a letter to its customers on Wednesday, Edwards said Medtronic had so far refused its offers.
“In spite of the violations of our intellectual property, we are not seeking a total ban on CoreValve sales, because we understand the implications that could have for patients and physicians,” the letter said. “We encourage Medtronic to accept our standing offer to enable use of CoreValve at U.S. hospitals where it is commercially available today.”
A Medtronic spokesman, Christopher Garland, said it would be “inappropriate” to comment on the company’s negotiations with Edwards.
In its filing with the court of appeals, Medtronic said that by prohibiting CoreValve training at new sites the injunction by Sleet “would deprive countless patients of the very care that the district court held was safest simply because they do not live close enough to a previously trained center.”
Limiting the use of CoreValve could jeopardize the lives of patients, the company said. Therefore, delaying Sleet’s order pending the appeal is “necessary to protect the public health.”
Meanwhile, financial markets are expecting significant gains for Edwards if the order against CoreValve sales is allowed to stand. In a research note issued last week shortly after the court order was handed down, Wells Fargo analyst Larry Biegelsen predicted that the injunction would boost Edwards’ earnings by 15 cents a share this year and 34 cents in 2015, while severely restricting CoreValve’s market share.
Clearly, all eyes will be on the appeals court in the coming days.