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In a decision with enormous implications for the U.S. health care system, a federal appeals court panel issued a ruling that throws into question the ability of generic companies to “carve out” uses for their medicines and supply Americans with lower-cost alternatives to pricey brand-name drugs.

At issue is skinny labeling, which refers to an effort by a generic company to seek regulatory approval to market its medicine for a specific use, but not other patented uses for which a brand-name drug is prescribed. For instance, a generic drug could be marketed to treat one type of heart problem, but not another. By doing so, the generic company seeks to avoid lawsuits claiming patent infringement.

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