shadow216 /
26 May 2016AmericasLisa Pensabene and Daniel O'Boyle

Solving the mystery of the patent dance

Winston Churchill’s October 1939 comment on the actions of Russia, “a riddle wrapped in a mystery inside an enigma”, was borrowed by US Court of Appeals for the Federal Circuit judge Alan Lourie to describe the patent resolution procedures of the act that governs biosimilars, the Biologics Price Competition and Innovation Act (BPCIA), in the 2015 case Amgen v Sandoz. The process to “unravel the riddle, solve the mystery, and comprehend the enigma” of the BPCIA is continuing, he said.

The BPCIA “established an abbreviated pathway for regulatory approval of follow-on biological products that are ‘highly similar’ to a previously approved product (‘reference product’)”, ie, biosimilars, Lourie noted. The drafting goal was to balance “innovation and consumer interests”, according to the act. A biosimilar applicant may submit an Abbreviated Biologic Licensing Application (aBLA) that relies in part on the approved licence of a reference product. In return, the reference product sponsor (RPS) receives 12 years of marketing exclusivity after first licensing, and the biosimilar applicant may not file its aBLA until four years after that.

This period of up to eight years was envisioned as available for the BPCIA’s patent dispute resolution procedures “to ensure that litigation surrounding relevant patents will be resolved expeditiously and prior to the launch of the biosimilar product, providing certainty to the applicant, the reference product manufacturer, and the public at large,” according to Democrat politician Anna Eshoo in 2009. Specifically, to create a jurisdictional mechanism for the parties to begin patent litigation during the time between aBLA filing and approval, the BPCIA created an artificial act of infringement for the act of filing an aBLA.

No clear precedent exists to guide the unravelling. While the BPCIA’s patent dispute resolution procedure shares certain similarities with those of the Hatch-Waxman Act, which addresses generic versions of small molecule products, there are several obvious differences, Lourie said. Under the Hatch-Waxman Act, the applicant provides a notice letter to the RPS, followed almost immediately by litigation and a 30-month stay on Food and Drug Administration (FDA) approval to preserve the status quo.

The BPCIA established more than six months of information exchanges followed by two phases of patent litigation, the first within 30 days of the information exchanges and the second triggered by the applicant’s notice of 180 days until commercial marketing of the biological product licensed under subsection (k).

For recently approved reference products which have 12 years of exclusivity, if an applicant filed an aBLA at the first chance (the four-year anniversary), eight years remain for the parties to litigate patents before any possible commercial marketing. The BPCIA patent exchange process is triggered by the FDA’s acceptance of the aBLA and the applicant has 20 days to provide the application to the RPS.

After that, the RPS sends the applicant a list of patents covering the reference product that limits the universe of patents to be asserted in any future litigation, fulfilling the role of the Orange Book in Hatch-Waxman litigation. The applicant then states its position regarding each patent on the list, and a subsequent series of exchanges determines which patents the RPS will assert in “first wave” litigation.

The whole series of exchanges before the start of first wave litigation, christened the “patent dance” by many practitioners, could take more than 180 days. Just before marketing the biosimilar, the BPCIA provides for a second, final wave of litigation. To trigger the second wave, the applicant provides the RPS 180 days’ notice of commercial marketing, which allows either party to begin litigation on certain previously non-litigated patents. This sequence of events seems to have been the typical scenario envisioned by Congress when drafting the BPCIA.

Hard nut to crack

The toughest riddle is for blockbuster reference products approved in the 1990s and early 2000s—such as Enbrel (etanercept), Humira (adalimumab), Herceptin (trastuzumab), Neupogen (filgrastim) and Remicade (infliximab)—where the 12-year period from first licensing has already expired and the applicant can launch a biosimilar immediately on FDA approval unless the RPS successfully asserts its remaining patents.

“The applicant states its position regarding each patent on the list, and a subsequent series of exchanges determines which patents the RPS will assert in ‘first wave’ litigation.”

In this situation, little time exists for patent litigation before potential marketing and, from the applicant’s perspective, the potential benefits from the 180-day-plus patent dance and waves of litigation appear significantly diminished. The resulting incentive to avoid the delays caused by the BPCIA has led to creative strategies.

First, applicants tried avoiding the BPCIA by filing declaratory judgment actions. Before submitting an aBLA referencing Enbrel, Sandoz brought a declaratory judgment of non-infringement. However, in 2014 the Federal Circuit found the lawsuit premature, stating that “any dispute about patent infringement is at present subject to significant uncertainties—concerning whether it will actually arise and if so what specific issues will require decision.”

Next, Sandoz refused to provide its biosimilar application to avoid triggering the rest of the BPCIA procedures by triggering the remedial provision of 42 USC §262(l)(9)(C) that allows the RPS to sue for patent infringement immediately. Accordingly, Amgen sued for patent infringement and to enforce the BPCIA exchanges and the 180-day notice provision. This was the case that led Federal Circuit Judge Lourie to brand the procedures a riddle-mystery-enigma.

Two of the three Federal Circuit judges on the panel opined that the BPCIA patent exchanges were optional. As the deciding vote, Lourie wrote that “the BPCIA explicitly contemplates that a subsection (k) applicant might fail to disclose the required information by the statutory deadline” by “specifically setting forth the consequence for such failure: the RPS may bring an infringement action under 42 USC §262(l)(9)(C) and 35 USC §721(e)(2)(C)(ii).”

Under Amgen, the biosimilar applicant avoids triggering the BPCIA patent exchanges by withholding the aBLA. In return for potentially earlier litigation, the applicant cedes the RPS sole discretion when and what patents to sue, under 42 USC §262(l)(9)(C). The applicant thus assumes some risk of launching without patent certainty (possibly resulting in damages) because the innovator could decline to sue or could sue on only a subset of patents, and the applicant is prevented from bringing a declaratory judgment action.

On the other hand, by providing the application and following the BPCIA exchanges, the applicant forces the RPS to provide a list of all potential patents at issue and, to a large extent, controls which of those patents will be litigated.

While Sandoz’s avowed goal of avoiding the BPCIA succeeded in Amgen, all subsequent applicants have rejected that strategy and at least partially followed the BPCIA by providing the aBLA. But, instead of following the entire patent exchanges, after receiving the RPS’s patent list, the applicants have immediately agreed to litigate all patents and then refused to continue with the exchanges. This strategy seeks to shorten the patent exchanges while potentially still receiving the BPCIA protections. For each aBLA, Table 1 shows the time to litigation from FDA acceptance, and demonstrates that providing the application while skipping the later steps can lead to earlier litigation than the 180 days of the patent dance.

Table 1: Time period between drugs’ acceptance by FDA and litigation commencing

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