shutterstock-129344918-web-1
lucarista / Shutterstock.com
12 March 2015AmericasAndrew Williams

I won’t dance, so don’t ask me

On March 6, 2015, the US Food and Drug Administration (FDA) approved an application by Sandoz to market a biosimilar version of Amgen’s Neupogen(filgrastrim) biologic drug.  Neupogen is a 175 amino acid recombinant methionyl human granulocyte colony-stimulating factor (r-metHuG-CSF), and is often prescribed for cancer patients on chemotherapy at times when they are at most risk of infection because their white blood cell count is low. Sandoz, a division of Novartis, will market its biosimilar under the brand name Zarxio.

This is the first such application to be approved using the new biosimilar pathway created by the Biologics Price Competition and Innovation Act (BPCIA). Much like with the Hatch-Waxman statute for small-molecule pharmaceuticals, the BPCIA includes both an abbreviated drug approval process and a mechanism by which the parties can address any patent claims while the drug is being approved.

Nevertheless, even though Sandoz chose to avail itself of the first part of the statute, thereby reducing the time and cost required to obtain approval of its drug, it chose not to supply Amgen with a copy of its biosimilar application. This thwarted Amgen’s ability to avail itself of the statutorily-mandated patent exchanges, nicknamed the biosimilar ‘patent dance’.

Because of this, it is unclear when Sandoz will actually be able to begin selling its new product, or if it launches  ‘at risk’, what will happen to the market if Amgen wins its patent battle. It is also unclear whether the BPCIA will be a viable mechanism to bring cheaper follow-on drugs to the market if applicants are able unilaterally to opt out of this delicately crafted system.

The case

With regard to the specifics of this case, Sandoz apparently informed Amgen on July 8, 2014 that it had filed a biosimilar filgrastrim application with the FDA. Around twenty days later, however, Sandoz informed Amgen that it would not provide “a copy of the application submitted to the FDA” or any “such other information that describes the process or processes used to manufacture the biological product that is subject of such application” as required by the BPCIA.

Without that information, Amgen claimed, it was unable to initiate the so-called patent dance. Instead, Amgen filed an action in the US District Court for the Northern District of California. Amgen asserted that the statute mandates the disclosure of the biosimilar application (“the ... applicant ... shall provide ...”), and that the statutorily-required 180-day “notice of commercial marketing” cannot occur before approval. As a result, Amgen sought an injunction to prevent Sandoz from marketing Zarxio.

In addition, likely prompted by the imminent approval of the Sandoz application, Amgen subsequently sought a preliminary injunction to prevent Sandoz from entering the market before these issues can be resolved by the court. In order to determine the appropriateness of a preliminary injunction, a court must weigh four factors:

  • Likelihood of success on the ultimate merits of the case;
  • Likelihood of irreparable harm;
  • The public interest; and
  • The balance of equities. 

Amgen contended that it will succeed on the merits because the US Congress set forth mandatory requirements in the BPCIA for biosimilar applicants, and Sandoz ignored them. Amgen also asserted that the harm it will suffer by Sandoz’s failure to provide its application is the type of harm the statute was meant to protect against in the first place: the entry of a biosimilar competitor without the ability to seek an injunction on the full breadth of its patent portfolio.

Option or requirement?

As a result, Amgen alleged that its research and development will suffer, that its new products will be harmed, that the price of its filgrastim products will be permanently and irrevocably eroded, and that it will suffer damages to its customer relationships and loss of goodwill. Finally, Amgen contended both that the public interest will not be served by “permitting lawlessness”, and that the balance of equities counsel against allowing Sandoz to ignore the statute.

Sandoz, on the other hand, defended its decision not to participate in the statutory scheme because it did not want to share its Biologic License Application (BLA) or manufacturing process with a future competitor, notwithstanding the confidentiality provisions and the limitations on disclosure placed on recipients as found in the BPCIA.

"This thwarted Amgen’s ability to avail itself of the statutorily-mandated patent exchanges, nicknamed the biosimilar ‘patent dance’."

Moreover, Sandoz alleged in its answer to Amgen’s complaint that “providing the biosimilar application to the reference product sponsor is an option, not a requirement”. It supported this position by citing the statutorily-mandated “penalty” for not complying with the disclosure requirements from section 42 of the US Code:

If a subsection (k) applicant fails to provide the application and information required under paragraph (2)(A), the reference product sponsor, but not the subsection (k) applicant, may bring an action under section 2201 of Title 28, for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.

If the disclosure was mandatory, according to Sandoz, this section would be superfluous. Sandoz also contended that it gave Amgen notice of commercial marketing back in July 2014, and that nothing in the statute required that approval had already been obtained.

Sandoz also responded that Amgen is not entitled to a preliminary injunction. First, Sandoz contended that its actions have been fully consistent with both the text and the purpose behind the BPCIA. It chose to forgo the optional disclosure requirements with full knowledge that it was also giving up the protections afforded by the statute. For example, if Sandoz had participated in the patent dance, it would have been able to limit the number of patents that Amgen could litigate.

Instead, Amgen can now assert any patent. Sandoz also contended that any alleged harm that Amgen faces is self-inflicted because Amgen ignored every offer by Sandoz to provide its application, albeit under different terms of confidentiality. Moreover, according to Sandoz, any harm alleged by Amgen was either too speculative or could ultimately be compensated with financial damages.

Sandoz also argued that the public would not be served by an injunction because it would be deprived of an alternative to Amgen’s filgrastim products. Likewise, Sandoz alleged that the balance of hardships tips in its favour because it will be prevented from launching for another 13 months or longer.

The court is set to hear arguments on these issues on March 13. It has been reported that Sandoz will not launch until either April 10, 2015 or when it receives a favourable ruling on the pending motions.

This is, however, not the first time Sandoz has appeared to sidestep the requirements of the BPCIA. Last year, it attempted to obtain a declaratory judgment action against Amgen before filing an application to market a biosimilar version of Enbrel (etanercept). The US District Court for the Northern District of California dismissed that case as essentially premature, and the US Court of Appeals for the Federal Circuit affirmed it.

It will be interesting to see if the court will also thwart Sandoz’s current plan of avoiding the patent exchange provisions of the BPCIA, or whether it will side with Sandoz, thereby paving the way for the commercial marketing of the first approved biosimilar application.

Andrew Williams is a partner at  McDonnell Boehnen Hulbert & Berghoff. He can be contacted at:  williams@mbhb.co