(Reuters) - A U.S. appeals court on Tuesday upheld a ruling that invalidated a crucial Johnson & Johnson (JNJ.N) patent on its blockbuster rheumatoid arthritis drug Remicade, limiting J&J’s ability to seek damages from Pfizer Inc (PFE.N) over its launch of a lower-cost version of the drug.
The U.S. Circuit Court of Appeals for the Federal Circuit affirmed a ruling by a U.S. administrative court that a J&J patent covering the active ingredient in Remicade was invalid because its concepts were covered in a prior J&J patent.
Remicade generated U.S. sales of $4.8 billion for J&J in 2016 but it faces increased competition from cheaper “biosimilar” copycats, including Pfizer’s version, which is sold in the United States under the name Inflectra.
Pfizer launched Inflectra in October 2016 after winning a set of rulings that invalidated J&J’s patent.
J&J said at the time that it considered Pfizer’s manoeuvre to be an “at risk” launch, meaning that Pfizer would be liable for money damages to J&J if an appeals court reversed the rulings and upheld the patent.
J&J did not immediately respond to a request for comment on Tuesday’s ruling.
Pfizer praised the ruling but said in a statement that J&J ”continues to use their scheme of exclusionary contracts to maintain Remicade’s monopoly position that prevent patients, payers and providers from the opportunity to benefit from Inflectra.”
Pfizer sued J&J in September, saying its rival violated U.S. antitrust laws offering insurers discounts on Remicade in exchange for essentially excluding Inflectra from insurance coverage.
J&J has said the lawsuit is without merit and that the company is competing on value and price.
Reporting by Jan Wolfe; Editing by Bernadette Baum and Frances Kerry