31 May 2016Americas

Supreme review: will SCOTUS take on Amgen v Sandoz?

Signed into law by the Obama administration in 2009 and part of the Affordable Care Act, the Biologics Price Competition and Innovation Act (BPCIA) introduced a biosimilars pathway to the US. The new regulatory pathway brought with it a new problem: interpretation.

Two major items of interpretation of the BPCIA were brought to a head after a claim was brought against Zarxio, the first biosimilar product approved by the Food and Drug Administration (FDA).

In July last year the US Court of Appeals for the Federal Circuit sought to clarify rules on the ‘patent dance’ and the 180 days’ notice period for marketing a biosimilar in the case of Amgen v Sandoz.

Since 1991, Amgen had marketed filgrastim under the brand Neupogen. In May 2014, Sandoz filed an application to seek FDA approval of a biosimilar version of filgrastim under the brand Zarxio.

Before FDA approval, Sandoz notified Amgen that it intended to commercially market Zarxio immediately after receipt of approval. Later that month Sandoz informed Amgen that it would not provide it with the biosimilar application and that Amgen was entitled to sue.

The argument led to the US Court of Appeals for the Federal Circuit interpreting two provisions of the BPCIA in July 2015, resulting in an ample amount of confusion.

Confusion reigns

“First, it decided that a biosimilar applicant (Sandoz) is not required to share its application with the reference product sponsor (Amgen) and that the entire patent dance process for identifying and litigating patents is optional,” explains Courtenay Brinckerhoff, partner at law firm Foley & Lardner.

“Second, it decided that the requirement that a biosimilar applicant give 180 days’ pre-marketing notice to the reference product sponsor is a standalone requirement that must be followed, and that the notice cannot be given until the biosimilar product is approved,” she adds.

Following the decision, Sandoz petitioned the Supreme Court to overturn the Federal Circuit’s interpretation of the 180 days’ notice requirement. In response, Amgen filed a conditional cross-petition, asking for the holding that the patent dance process is optional to be overturned.

Unfortunately there’s no way to predict whether the Supreme Court will choose to review the case and what it may decide. The court could refuse to review the dispute, postpone the review, or agree to review one or both of the issues presented to it.

Kevin Noonan, partner at law firm McDonnell Boehnen Hulbert & Berghoff, believes the court may ask the solicitor general to file a brief on whether, in the federal government’s view, the petition should be granted.

“One of the big pushes for the government to have this biosimilars pathway is that they expect cost savings. The Supreme Court justices are likely to be interested in hearing what the government thinks,” he explains.

According to Noonan, the case may not be reviewed until mid-2017, depending on how urgent and important the Supreme Court justices feel it is and what intermediary steps are taken.

Brinckerhoff believes that the case may be reviewed given that it involves “a new statutory scheme and has important implications for the pharmaceutical and healthcare industries”.

In her view, the Federal Circuit’s decision was surprising in that “it made a large portion of the BPCIA patent provisions optional and it may effectively keep biosimilars off the market for 180 days longer than the 12-year period negotiated with Congress”.

Shots in the dark

Two possible rationales exist for the court if it decides to review the patent dance issue. First, the statute does use language that is typically regarded as mandatory (‘shall’), but equally the Federal Circuit held that the inclusion of consequences for not sharing the application meant that it was not actually mandatory.

“At this point, if I was a biosimilar applicant all I would tell the reference product sponsor is that the application had been filed. Generally I don’t see any incentive for the biosimilar applicant to go through the patent dance right now.”

Upholding the patent dance decision could hurt biologic makers in that they would be “taking shots in the dark”, explains Noonan. “In the Amgen case, Sandoz is the only one that knows what it actually did, so Amgen needs to essentially hope it chose the right patents for the action.”

On the second issue of the notice requirement, it’s also difficult to predict what the court will do, but according to Brinckerhoff, Judge Chen’s dissenting opinion in the Federal Circuit provides a rationale for reversal. Chen dissented on the ground
that the notice requirement comes into play only if the disclosure and patent dance are followed.

Brinckerhoff adds: “That would keep biosimilars from profiting from their products for that 180 days, and also delay the pricing pressures that biosimilar competition presumably will bring.

“At this point, if I was a biosimilar applicant all I would tell the reference product sponsor is that the application had been filed. Generally I don’t see any incentive for the biosimilar applicant to go through the patent dance right now.”

Noonan agrees in principle but adds that in the future this won’t really matter to biosimilar applicants.

“Essentially it will delay the savings on each drug by 180 days, but for most biosimilar applicants this will not be so problematic. It will be calculated so that applications will be filed during the 12-year exclusivity period,” he says.

Wait and see

Brinckerhoff feels that there’s also a chance the court will choose not to review the case any time soon given that a number of similar biosimilar disputes are currently making their way through the lower courts. She adds that it’s entirely possible that the court may wait to see how those cases are resolved before stepping in.

“I think it will be important for the Supreme Court eventually to review the Federal Circuit’s interpretations of the BPCIA, but I can see the value in its waiting to provide its own interpretation until the facts of the other cases are also before it,” she says.

“The Federal Circuit’s interpretations are clear as they pertain to fact patterns similar to those presented by the Amgen case, but the other pending cases raise additional nuances. Also, even if the Federal Circuit’s interpretations are clear, that does not mean that they are correct.”

She adds: “Ideally, it could grant certiorari in all of the pending cases and hear them together, but it is not clear that the timing will work out for such a consolidated review.”

But what if the court decides not to hear the Amgen case at all? If the court declines review, district courts will continue to apply the Federal Circuit’s interpretations.

Biosimilar applicants can then make the choice: share their applications and go through the patent dance, or refuse to share and force the patent owner to institute a declaratory judgment action.

Additionally, biosimilar applicants will have to wait until their products are approved to give 180 days’ pre-marketing notice and then 180 days before launching them.

Noonan adds: “At this point, if I was a biosimilar applicant all I would tell the reference product sponsor is that the application had been filed. Generally I don’t see any incentive for the biosimilar applicant to go through the patent dance right now.”

He explains that until the law is clarified this sort of behaviour will be rife, placing the biologic drug maker in a disadvantageous position compared to the biosimilar applicant.

Noonan adds that the US Judicial Conference and Congress have both considered the idea of making requirements for filing a patent infringement lawsuit more strict.

“This would make it difficult for applicants: not knowing exactly what a biosimilar applicant is doing would make it challenging to bring an action.”

Despite this, there is still a danger for the biosimilar applicant if it chooses not to go through the patent dance, adds Noonan. Launching the drug while subsequent patent infringement is continuing results in a more traditional patent infringement case, meaning remedies such as damages and injunctions could be brought against the applicant.

Noonan suggests that, in the case of Amgen, it would be smart to ask the court for a protective order for Sandoz and for Amgen to demand discovery. In traditional patent infringement cases, a protective order is usually the first order of business.

“It’s a backwards way of doing things but it would allow Sandoz to protect its trade secrets and Amgen to get the information it requires to build a potential case.”

Whether the Supreme Court decides to review the case, postpone a review until more disputes are resolved or refuses to review the case, it is clear that the implications from the decision of Amgen are still being ironed out.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Adrian Tapping at