In the fall of 2020, Amarin Corporation—a brand-name drug company—brought an unprecedented claim in federal court. Instead of just suing a generic manufacturer for inducing infringement of its method patent, as is typical in litigation over skinny label generic drugs, Amarin also added a health insurance company as a defendant. In its complaint, Amarin alleged that Health Net induced infringement under 35 U.S.C. § 271(b) of the Patent Act by charging a lower co-pay for the generic, skinny label version of its brand-name drug. Industry commentators agreed that a finding of liability for Health Net would be a blow to the generic industry, as the precedent would dissuade insurers from covering skinny label generics in the future. Amarin’s case withstood a motion to dismiss before the parties settled.
Using Amarin Pharma, Inc. v. Hikma Pharmaceuticals USA Inc. as a jumping off point, this Comment is the first piece of legal scholarship to examine whether, and under what circumstances, health insurers can induce infringement of a method patent by providing preferential coverage of a skinny label generic when it is distributed for a patented drug indication. An evaluation of this question requires examining the standard of causation in induced infringement cases, a subject that has received startlingly little judicial or scholarly inquiry. This Comment argues that the Delaware district court’s decision in Amarin was based on an improper theory of causation that assumed insurance companies have a duty to prevent infringement. It then establishes that the proper counterfactual baseline for evaluating inducement claims against insurers reveals that insurance companies are rarely the but-for cause of infringement in the skinny label context. In proposing an application of the loss of chance doctrine to determine liability in future cases, this Comment also identifies and addresses a key legal error from the majority opinion in GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc.: a misapplication of causation principles in damages calculations for induced infringement. Ultimately, the Comment demonstrates that adopting a loss of chance theory of the injury in future cases would force courts to conduct often-ignored causation analysis and ensure that a finding of inducement corresponds with a proportionate damages award.