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
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.