puhhha /
21 June 2017Europe

Bated breath: awaiting the Amgen v Sandoz verdict

There is a sense of tension and anxiety in the US biotech industry.

In April, the US Supreme Court held an oral hearing with Amgen and Sandoz. The two parties have fought a long battle over the interpretation of the Biologics Price Competition and Innovation Act (BPCIA).

The Supreme Court, which is set to make its decision in June, heard oral arguments on two questions. The first was whether a biosimilar applicant’s 180 days’ notice of commercial marketing is properly given only after its biosimilar product has been approved by the Food and Drug Administration (FDA).

The second was whether a biosimilar applicant must provide its abbreviated biologics licence application (aBLA) and manufacturing information to the reference product sponsor within 20 days after the FDA accepts the aBLA for filing, thereby triggering early patent litigation.

According to Brendan O’Malley, partner at Fitzpatrick, Cella, Harper & Scinto, if the Supreme Court affirms the US Court of Appeal for the Federal Circuit’s decisions on both questions, the parties will have about a six-month window after notice of commercialisation is given to resolve remaining patent disputes through a declaratory judgment action and to apply for injunctive relief, if necessary.

The Federal Circuit decided in 2015 that a biosimilar applicant must wait until its aBLA is approved (licensed) by the FDA before giving the reference drug sponsor 180 days’ notice of the biosimilar product’s launch.

O’Malley says: “Reference product sponsors believe a reversal on this question would lead to chaos, in part because they would have no way to predict when a launch might be imminent, making it difficult to obtain a preliminary injunction before the biosimilar enters the market.”

Lifting the gate

In the Supreme Court’s oral hearing, Sandoz argued that while an applicant must give at least 180 days’ notice, it may do so at any time before the date of the first commercial marketing of the biologic product. O’Malley recaps Sandoz’s argument that the notice “lifts the gate” to allow the reference product sponsor to go to a district court and litigate any remaining patent rights through a declaratory judgment action.

“According to Sandoz the word ‘licensed’ is just a description of the biosimilar at issue in the case, and Congress did not use the word ‘licensed’ to indicate that licensing must precede notice,” he says.

“Sandoz argued that such a requirement would amount to a de facto extension of the 12-year exclusivity period, and Congress would not have extended the exclusivity period, to use Sandoz’s words, ‘in such a bizarre way’.”

The BPCIA allows a biosimilar applicant to rely on the safety and efficacy data of an approved reference product, but provides 12 years of marketing exclusivity for the reference product before a biosimilar application may be approved by the FDA.

Amgen argued that until a biosimilar has been given FDA approval, the reference product sponsor has not received notice of what the marketed biosimilar product will be. It will also not have knowledge of the biosimilar’s manufacturing processes or what the uses of the biosimilar will be.

Sandoz said in a public webcast on April 20 that one of the factors of the act giving it confidence that it is right is that one of the critical functions of the notice of commercial marketing is to open the gate of what most commentators are calling “the second wave” of potential patent litigation.

The company added: “So in circumstances where two parties engage in the patent dance, and there is a first wave of litigation, there are necessarily a number of patents that might be excluded from that first wave of litigation. What lifts the gate to the brand starting action on the exclusive patents is the notice of commercial marketing.”

If it were true that the brand could sue on the second wave patent only after the notice of commercial marketing, and necessarily on the Federal Circuit current ruling after FDA approval, “that would mean that every biosimilar product will have this chaos of last- minute patent litigation immediately after FDA approval,” the company continued.

“We think it was clear from the statute itself that it was trying to resolve these patent issues before a biosimilar could launch in order to eliminate last-minute patent litigation.”

Sandoz said that implying patent rights are needed precisely at the time it could have been sued for patent infringement is not consistent with the statute as a whole.

“If the Supreme Court reverses, in the worst-case scenario the reference product sponsor’s first knowledge of the biosimilar application may be upon biosimilar approval,” O’Malley adds.

The need to tell all

The question of when the biosimilar company
is to give the 180 days of notice is only half of the equation. Amgen and Sandoz are also in dispute over whether participation in the process is premised on the biosimilar applicant revealing the biosimilar application within 20 days of gaining FDA approval to the reference product sponsor.

Amgen and Sandoz claim different interpretations of the BPCIA. The statute states that a biosimilar applicant “shall” provide its application and manufacturing information to the reference product sponsor within 20 days of filing its biosimilar drug application.

Sandoz claimed that the wording “shall” means that providing the information is optional unless the biosimilar applicant opts to engage in the ‘patent dance’. Amgen on the other hand interpreted “shall” to mean providing the information is mandatory in all cases.

The Federal Circuit affirmed the district court’s holding that Sandoz did not violate the BPCIA by failing to disclose its application and manufacturing process to Amgen.

The Federal Circuit said that because the BPCIA provided certain remedies to the reference product sponsor for failure by the biosimilar applicant to participate in the patent list exchange process, the biosimilar applicant’s participation must be completely voluntary, despite the statutory language of “shall provide”.

Courtenay Brinckerhoff, partner at Foley & Lardner, predicts that the Supreme Court will affirm the Federal Circuit on the issue challenged by Sandoz and confirm that the required 180-day pre-marketing notice can be given only once the biosimilar is approved.

She further predicts that although the Supreme Court may disagree with the Federal Circuit on the issue challenged by Amgen and hold that the provisions stating that the biosimilar applicant “shall” provide the application to the reference product sponsor are not optional, the court’s decision may not change the parties’ conduct.

Brinckerhoff explains: “On the latter issue, I would not be surprised if they indicate that the only remedy the reference product sponsor has for a biosimilar applicant’s failure to comply is the option to bring a declaratory judgment action—not an injunction forcing them to comply.”

O’Malley agrees with Brinckerhoff. According to him, if the Supreme Court affirms the 180-day provision, and in addition holds that it is optional for biosimilar applicants to provide their biosimilar application, as well as manufacturing information within 20 days after the acceptance for FDA review, then a declaratory judgement may be the reference product sponsor’s sole mechanism for patent enforcement if the biosimilar applicant declines to engage in the ‘patent dance’.

In the oral argument, Sandoz argued that the applicant’s aBLA and manufacturing information could easily be obtained via the discovery process once a declaratory judgment action is initiated.

O’Malley explains that Amgen countered that providing the aBLA and manufacturing information would allow the parties to identify and litigate relevant patent claims early in the case.

He adds: “For its part, the US government argued that the courts should not police whether the parties engage in the patent dance.

“Although the Supreme Court during oral argument seemed at times to treat as a foregone conclusion that it is optional for an applicant to provide its aBLA early on, a reversal on this question could help to restore reference product sponsors’ expectation that an early and orderly pathway would exist for enforcing their patent rights.

“Absent a favourable outcome, reference product sponsors will need to develop strategies for bringing declaratory judgment actions perhaps on short notice and based on minimal knowledge of the proposed biosimilar and
its manufacture.”

According to Brinckerhoff, the Supreme Court’s ruling on the pre-marketing notice issue is likely to have the most impact on the industry at large. This is because it will directly impact how soon after the FDA approval a biosimilar product can be marketed.

“Although the maximum time difference at issue is only 180 days, given the expected price difference between original biologic products and biosimilars, those six months may have a marked impact not only on the parties’ revenue, but also on insurance and Medicare payers,” she says.

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