Will you, won’t you, will you join the dance?

When Congress enacted the Biologics Price Competition and Innovation Act (BPCIA) in 2009 to create an abbreviated pathway for biosimilar product approval, it included complicated provisions for resolving patent infringement disputes. In March this year, the US Food and Drug Administration (FDA) approved the first biosimilar product, and the US Court of Appeals for the Federal Circuit then had to decide whether those provisions are mandatory or optional.

On July 21, in Amgen v Sandoz, the federal circuit held that the provisions are optional, although a biosimilar applicant that opts out may be subject to an immediate patent infringement suit. The court also held that biosimilar applicants must give 180 days prior notice of commercial marketing, and cannot do so until the biosimilar product has been approved by the FDA.

The Neupogen biosimilar dispute

In May 2014, Sandoz sought FDA approval of a biosimilar version of Amgen’s Neupogen (filgrastim) product, which is a human granulocyte colony-stimulating factor protein (G-CSF) produced by recombinant DNA technology and used to reduce the chance of infection in certain cancer patients receiving chemotherapy. Although Sandoz notified Amgen of its biosimilar application, it did not provide a copy to Amgen and did not follow any of the other patent provisions of the BPCIA.

Amgen sued Sandoz in the US District Court for the Northern District of California alleging, among other things, violation of California’s unfair competition laws and conversion based on Sandoz’s alleged failure to comply with the BPCIA. The district court ruled in favour of Sandoz, finding no violation of the BPCIA to support Amgen’s state law claims. Although the federal circuit agreed that Sandoz did not have to share its biosimilar application or follow the complicated patent provisions of the BPCIA, it determined that the statute required Sandoz to give 180 days’ pre-marketing notice after its product was approved, so that it could not enter the market until September 2, 2015.

The patent dance

Like the Hatch-Waxman Act, which governs traditional generic drugs, the BPCIA allows a biosimilar applicant to rely on the FDA’s previous approval of a reference product (eg, the original biologic product). Therefore, a biosimilar applicant does not need to provide clinical data demonstrating the safety and efficacy of its product, as long as it submits information demonstrating that its product is ‘biosimilar’ to, or ‘interchangeable’ with, the reference product. Also, like the Hatch-Waxman Act, the BPCIA includes patent dispute resolution procedures, but the similarity ends there.

The BPCIA lays out what the federal circuit characterised as a “unique and elaborate” process, one that many refer to as the ‘biosimilar patent dance’. The process:

The statute sets relatively short time periods for each of these steps, and generally relies on the parties to cooperate.

Amgen and other biotechnology innovators believed that the requirement to share the biosimilar application and engage in the patent dispute resolution process was part of the quid pro quo of the statute, but the federal circuit determined that since the BPCIA sets forth specific consequences for failing to comply with those provisions, they are optional.

According to the court, biosimilar applicants that elect not to share their applications could be subject to an immediate declaratory judgment action that the RPS could bring to assert any patent that claims the product or a use of the product. (As recognised by the federal circuit, the provisions that create this right to sue do not mention patents that claim methods of making the product.)

Under those circumstances, the RPS can rely on the infringement statute of the US Patent Act, which makes filing a biosimilar application without providing a copy to the RPS an act of infringement of a product or use patent.

“The federal circuit determined that since the BPCIA sets forth specific consequences for failing to comply with those provisions, they are optional.”

There are many implications of the court’s ruling on this issue. First, it lets biosimilar applicants control how patent disputes will be addressed. A biosimilar applicant that wants to follow the BPCIA procedures can share its application with the RPS and engage in the patent dance. A biosimilar applicant that would rather force the RPS to do the initial leg work and bring a declaratory judgment action can withhold its application from the RPS and wait to see if the RPS does so.

Second, it restricts the RPS’s ability to enforce manufacturing method patents, which may be of particular relevance for biologic/biosimilar products. While an RPS could elect to list and assert such patents via the patent dance, the BPCIA and infringement statute appear to exclude such patents from their declaratory judgment provisions.

Third, it is not clear that a permanent injunction against infringement could be awarded in a declaratory judgment action. Although one paragraph of the infringement statute generally provides for “injunctive relief”, another paragraph, which expressly states that “the court shall order a permanent injunction”, applies only to patents found to be infringed in an action brought pursuant to the patent dance.

Moreover, the infringement statute also states that the remedies prescribed in the statute “are the only remedies which may be granted … for an act of infringement” deemed to arise from the filing of a biosimilar application.

Pre-marketing notice

As noted by the federal circuit, the BPCIA seeks to balance the innovator’s investment in developing the reference product with the price competition a generic will bring to the market by providing that a biosimilar application cannot be filed until the reference product has been approved for at least four years, and that approval of a biosimilar application cannot be effective until the reference product has been approved for at least 12 years.

In effect, these provisions provide 12 years of market exclusivity to the original biologic owner. (Amgen’s Neupogen product had been approved for more than 12 years before the BPCIA was enacted, so these time periods were not relevant in this case.)

Against this backdrop, the court held that the notice provision of the BPCIA is a “standalone requirement” for 180 days’ pre-marketing notice that cannot be given until the biosimilar product is approved.

As between Amgen and Sandoz, this ruling meant that the notice Sandoz gave before its product was approved was ineffective, and that Sandoz could not enter the market until 180 days from the notice it gave when its product was approved on March 6, 2015, ie, September 2, 2015.

The implications for other biosimilar products are less clear. While Judge Raymond Chen in his dissenting opinion characterised this ruling as giving the RPS a “windfall” of an extra period of market exclusivity, that may not always be the case. If a biosimilar application is filed early in the 12-year market exclusivity period, it is possible that the FDA could decide to approve the product before the 12 years has run, although the approval could not yet be effective.

If the court’s interpretation of the notice requirement permits a biosimilar applicant in that situation to give the required pre-marketing notice once the FDA has indicated its tentative approval, the 180-day notice period could start running then, and could expire before, with, or after the 12-year period. Therefore, depending on the relative timing of the FDA’s review and the 12-year period, it may be possible for a biosimilar product to enter the market as soon as the reference product’s 12-year exclusivity period has ended.

What’s next?

While the decision in Amgen v Sandoz is an important one that answers two key questions about the BPCIA, it leaves open many more questions than it answers. We still have no interpretation of the complicated patent dance provisions of the BPCIA, and no interpretation of the infringement, damages and estoppel provisions of the related portion of the infringement statute.

While some of these additional issues have been raised in Janssen Biotech vCelltrion Healthcare, which relates to Remicade (infliximab) and is pending in the US District Court for the District of Massachusetts, the parties in that case have been focusing on the pre-marketing notice requirement which was addressed in Amgen. Therefore, it could still be some time before we have a better understanding of the most complex aspects of the BPCIA.

Courtenay Brinckerhoff is a partner at  Foley & Lardner. She can be contacted at: cbrinckerhoff@foley.com

The views expressed in this article are personal to the author and do not necessarily reflect those of other members of Foley & Lardner or its clients