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Although recent Federal Circuit decisions on the ‘patent dance’ provide some clarity, the BPCIA still presents difficult and hotly debated issues of interpretation. Stacie Ropka, William Rose and Ryan Hersh of Axinn, Veltrop & Harkrider report.
The US Court of Appeals for the Federal Circuit has now twice interpreted the Biologics Price Competition and Innovation Act’s (BPCIA) complex patent dispute resolution pathway for a biosimilar applicant seeking to launch its follow-on product.
In 2015, the Federal Circuit in Amgen v Sandoz held that an applicant could choose whether to participate in the detailed patent information exchange process known as the “patent dance”. To the disappointment of biosimilar applicants, the court also held that the applicant must provide to the reference product sponsor (RPS) a 180-day notice of commercial marketing and can do so only after the Food and Drug Administration (FDA) approves its biosimilar.
In July 2016, the Federal Circuit clarified in Amgen v Apotex that the applicant must provide the 180-day notice of commercial marketing whether or not it takes part in the dance. These decisions provide biosimilar applicants with certain strategic choices regarding the patent dance.
Congress passed the BPCIA to allow follow-on alternatives to biologics, typically referred to as “biosimilars”. The BPCIA provides applicants with an abbreviated pathway to obtain FDA licensure and contains provisions to encourage continued investment in and development of biologics. For example, the BPCIA prohibits an applicant from submitting biosimilar applications to the FDA until “four years after the date on which the reference product was first licensed”. Moreover, it prohibits the FDA from making “effective” approval of any such application until “12 years after the date on which the reference product was first licensed”.
In addition to providing an abbreviated pathway for obtaining FDA licensure, the BPCIA also provides a framework for resolving patent disputes that is largely controlled by the actions of the applicant. This detailed framework provides for two phases of litigation, often referred to as “early phase” and “late phase” litigation.
The early phase litigation begins with the RPS and the applicant engaging in a detailed exchange of patent information—ie, the patent dance. Here, the RPS assembles a list of patents for which it “believes a claim of patent infringement could reasonably be asserted”, and the applicant and RPS negotiate a set of patents to be asserted in an immediate (ie, early) litigation, with the applicant having control over which and how many patents will be asserted in the early litigation.
The late phase litigation starts when the applicant provides the RPS with at least 180 days’ notice before commercial marketing. During these 180 days, the RPS “may seek a preliminary injunction prohibiting” the applicant from manufacturing or selling its product. Even here, the applicant has some control over the number of patents involved, as the RPS is limited to only those patents agreed upon but not asserted in the early phase litigation.
As the decision in Amgen v Apotex made clear, notice of commercial marketing may only be given after FDA approval. Because approval may only be made effective after the 12-year reference product exclusivity period expires, biosimilar applicants fear that the Federal Circuit’s holding provides the RPS with an additional exclusivity period of 180 days. It’s possible that this fear may be mitigated, however, if, as the court hinted in Amgen v Sandoz, the FDA issues regulations providing for “tentative approval” before the expiration of the 12-year exclusivity period.
Navigating early phase litigation
Because the Federal Circuit has held that participating in the patent dance is optional, an applicant has the strategic freedom to decide whether to dance. In doing so, the applicant must balance two interests. On the one hand, the applicant might choose to take part in the dance so that it can have control over the scope of patents that can be asserted. Doing so, however, requires the applicant to disclose potentially sensitive, trade secret-protected product-manufacturing information.
Some biologics currently on the market retain expansive patent portfolios, with some RPS companies indicating patent portfolios of 70, 100 or more protecting a single biologic product. Controlling which and how many patents are litigated in the “early phase” may allow the applicant to reduce overall litigation costs, while receiving helpful answers on those patents deemed to be most problematic from an infringement standpoint.
“For the applicant who chooses not to dance, it remains an open issue whether the RPS has any available patents on which it may seek preliminary injunction.”
By controlling which patents are asserted in the early phase litigation, the applicant effectively controls those that can be asserted in the late phase litigation. Having control over which and how many patents are to be litigated in the early phase is an attractive option when the applicant desires early resolution on patents deemed problematic. In so doing, the applicant “saves” other patents for late phase litigation—typically patents that are likely to expire before FDA approval or commercial launch. By opting into the dance, the applicant can spread litigation costs over a longer period of time and potentially avoid litigating certain patents altogether.
If the applicant elects to forgo the dance, the RPS may seek a declaratory judgment at least on any patent that claims a biological product or a corresponding method of use, and perhaps on others, as alluded to in the Amgen v Sandoz decision. Although the applicant has no control over which patents the RPS elects to pursue, resolving patent disputes through this mechanism may provide resolution without incurring the cost of participating in the dance.
But, as the Federal Circuit made clear in Amgen v Apotex, the applicant must always provide the RPS with a 180-day notice of commercial marketing after FDA approval, but before launch. During this time, the RPS can seek a preliminary injunction to prevent the applicant from launching its product. From a practical standpoint, preliminary injunction proceedings are expensive for the applicant and RPS alike because of their trial-like characteristics.
And, the statute is unclear on the scope of patents available for a preliminary injunction proceeding where the applicant chose not to dance. The statute merely states that the preliminary injunction proceeding is limited in scope to those patents listed, but not previously asserted (and not necessarily agreed upon) during the dance.
So, for the applicant who chooses not to dance, it remains an open issue whether the RPS has any available patents on which it may seek preliminary injunction.
Notice of commercial marketing
As discussed, applicants fear that requiring notice of commercial marketing to be given after FDA approval provides the RPS with an additional exclusivity period of 180 days. Because, for now, the majority of biosimilar applications will likely be filed close to or after the 12-year exclusivity period, in Amgen v Apotex the Federal Circuit urged the FDA to use its rulemaking authority to address the concern that the notice of commercial marketing provision could provide an extra-statutory exclusivity period.
Effectively, the Federal Circuit called on the FDA to issue what amounts to “tentative approval” licences to applicants. The Federal Circuit suggests that such licences could be approved before, but only become effective on, expiration of the 12-year exclusivity: “[W]e have been pointed to no reason that FDA may not issue a licence before the 11.5-year mark and deem the licence to take effect on the 12-year date—a possibility suggested by [the BPCIA]’s language about when FDA approval may ‘be made effective’.”
At the same time, however, these licences will permit the applicant to provide to the RPS the required 180-day notice of commercial marketing ahead of time, and resolve preliminary injunction-type matters ahead of market launch.
Such tentative approval might be beneficial for the applicant and RPS alike. On the one hand, the applicant can potentially provide earlier notice and have patent clarity well before the 12-year exclusivity period running. On the other hand, if the notice comes earlier in time, the RPS will have the opportunity to fully litigate the case, potentially without having to seek a preliminary injunction.
It remains to be seen, of course, what the FDA will do in response to this suggestion. Currently, the FDA has no regulations or guidance in place for issuing so-called tentative approval licences to applicants. And unlike other agency-centric statutes, the BPCIA does not expressly give the FDA rulemaking authority. The FDA will have to go through notice-and-comment rulemaking procedures to fashion any “tentative approval” provision.
Although the recent Federal Circuit decisions provide some clarity, the BPCIA still presents difficult and hotly debated issues of interpretation. Sandoz has petitioned the US Supreme Court to review the Federal Circuit’s holding on the notice of commercial marketing provision, and Amgen conditionally cross-petitioned the Supreme Court to review the Federal Circuit’s holding that the patent dance is optional.
The court has invited the solicitor general to provide a brief on the US’s views of the BPCIA. This increasing public scrutiny, as well as ongoing litigation and potential future rulemaking by the FDA, should provide greater guidance on the BPCIA.
Stacie Ropka is a counsel at Axinn, Veltrop & Harkrider. She can be contacted at: firstname.lastname@example.org
William Rose is an associate at Axinn, Veltrop & Harkrider. He can be contacted at: email@example.com
Ryan Hersh is a summer associate at Axinn, Veltrop & Harkrider.
Stacie Ropka, William Rose, Ryan Hersh, Axinn, Veltrop & Harkrider, BPCIA, patent, party, FDA, Sandoz, RPS, Amgen,