Amgen v. Sandoz: Riddles, Mysteries, and Enigmas

By: Sandra King  |   August 5, 2015

Brief Summary
 
On July 21, 2015, the Court of Appeals for the Federal Circuit provided its interpretation of two provisions of the Biologics Price Competition and Innovation Act of 2009 (BPCIA), more specifically, the information-disclosure and notice-of-commercial-marketing provisions codified as 42 U.S.C. § 262(l)(2)(A) and (l)(8)(A), respectively. The Court held that the information-disclosure provision, i.e., the “patent dance,” was not mandatory and that the 180-day notice-of-commercial-marketing period was not effective until the biosimilar product was licensed by the FDA.
 
The case was argued before Judges Newman, Lourie and Chen. Judge Lourie wrote the opinion for the Court, but was joined only in part by Judge Newman and Judge Chen. Judge Newman concurred in the decision regarding paragraph (l)(8)(A), but dissented in the decision regarding paragraph (l)(2)(A). Judge Chen concurred in the decision regarding paragraph (l)(2)(A), but dissented in the decision regarding paragraph (l)(8)(A). Because of the split nature of the decision, the case will likely be reheard en banc or will be certified to the Supreme Court for further clarification.
 
At this time, however, biosimilars applicants are not required to participate in the patent information exchange described in paragraph (l)(2)(A). Biosimilars applicants should note, however, that failure to participate in the above information exchange grants the reference product sponsor (RPS) the right to bring infringement suits on any patents relevant to the biosimilar product. Accordingly, declining to participate in the exchange may result in substantial litigation costs to the applicant.
 
Additionally, any notice of marketing of the biosimilar product proffered to the reference product sponsor is not effective until a license is granted for the product by the FDA. Therefore, biosimilar applicants should be mindful that any notice of marketing before licensure of the biosimilar product will not trigger the 180-day notice period. This will likely delay marketing of the biosimilar product beyond the 12-year exclusivity period afforded to the reference product sponsor.
 
Detailed Discussion
 
42 U.S.C. § 262(l)(2)(A)
 
42 U.S.C. § 262(l)(2)(A) describes a process for information exchange between a biosimilar applicant and a reference product sponsor (RPS), i.e., the original innovator of a biologic product. Under this process, the “biosimilar applicant grants the RPS confidential access to its aBLA and the manufacturing information regarding the biosimilar product no later than 20 days after the FDA accepts its application for review.” Amgen Inc. v. Sandoz Inc., --- F.3d ---, 2015 WL 4430108, at *2 (Fed. Cir. 2015). The parties then “exchange lists of patents for which they believe a claim of patent infringement could reasonably be asserted by the RPS, as well as their respective positions on infringement, validity, and enforceability of those patents.” Id. “Following that exchange, which could take up to six months, the parties negotiate to formulate a list of patents (“listed patents”) that would be the subject of an immediate infringement action.” Id. The RPS then “sues the biosimilar applicant within 30 days.” Id. The information exchange and negotiation contemplates an “immediate infringement action brought by the RPS based only on listed patents.” Id. The above-described information exchange has been termed the “patent dance.” The first question before the Court in Amgen was whether such “patent dance” was mandatory.The Court ultimately held that the biosimilar applicant was not required to engage in such information exchange with the RPS.
 
The Court reasoned that the plain language of the statute states that “when an applicant chooses the abbreviated pathway for regulatory approval of its biosimilar product, it is required to disclose its aBLA and manufacturing information to the RPS no later than 20 days after the FDA’s notification of acceptance, but not when the ‘when’ criterion is not met.” Id. at *6. Moreover, the Court stated that the “shall” provision in paragraph (l)(2)(A) cannot be read in isolation. Id. “In other provisions, the BPCIA explicitly contemplates that a[n] … applicant might fail to disclose the required information by the statutory deadline.” Id. “It specifically sets forth the consequence for such failure: the RPS may bring an infringement action under 42 U.S.C. § 262(l)(9)(C) and 35 U.S.C. § 271(e)(2)(C)(ii).” Id. The Court stated that the latter provisions indicate that the “shall” in paragraph (l)(2)(A) does not mean “must.” Id. The Court further noted that the BPCIA has “no other provision that grants a procedural right to compel compliance with the disclosure requirement of (l)(2)(A).” Id.
 
Accordingly, the Court concluded that, even though disclosure would be required if paragraph (l)(2)(A) were read in isolation, remedies for non-disclosure are already provided by 42 U.S.C. § 262(l)(9)(C) and 35 U.S.C. § 271(e)(2)(C)(ii). Id. at *7. The Court stated that, because Sandoz “took a path expressly contemplated by the BPCIA, it did not violate the BPCIA by not disclosing its aBLA and the manufacturing information by the statutory deadline.” Id.
 
Judge Newman disagreed with the Court’s interpretation of paragraph (l)(2)(A). Id. at *15. Judge Newman stated that the “designated exchange of information is fundamental to the BPCIA purposes of efficient resolution of patent issues.” Id. Judge Newman additionally stated that the provisions for declaratory action by the Sponsor is “limited to ‘product’ and ‘use’ claims, and does not include manufacturing process patents, although the legislative record makes clear that for bio-similars such patents may be highly material, and were so recognized during enactment.” Id. Accordingly, Judge Newman asserted that she could not agree that the paragraph (l)(2)(A) provision excused compliance “even when such declaratory action is brought.” Id.
 
42 U.S.C. § 262(l)(8)(A)
 
42 U.S.C. § 262(l)(8)(A) provides that the biosimilar applicant shall “provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).” Id. The question before the Court was whether the biosimilar must be licensed before notice of commercial marketing is effective under paragraph (l)(8)(A). The Court held that a biosimilars applicant “may only give effective notice of commercial marketing after the FDA has licensed its product.” Id. at *9.
 
The Court reasoned that, in subsection (l), only paragraph (l)(8)(A) refers to the product as the biological product licensed under subsection (k). Id. at *8. In other provisions, the statute refers to the product as “the biological product that is the subject of the application.” Id. Accordingly, the Court stated that Congress “intended the notice to follow licensure, at which time the product, its therapeutic uses, and its manufacturing processes are fixed.” Id.
 
Judge Chen disagreed with the Court’s interpretation of paragraph (l)(8)(A). Id. at *17. Judge Chen stated that, “[w]hen reading (l)(8) in the context of subsection (l) as a whole, it becomes clear that (l)(8) is simply part and parcel of the integrated litigation management process contemplated in (l)(2)-(l)(7).” Id. Judge Chen did not join the Court in its view of paragraph (l)(8)(A) as a standalone provision. Id. at *20. Judge Chen viewed paragraph (l)(8)(A) as “contingent upon[] the preceding steps in the (l)(2)-(l)(8) litigation management regime.”Id. Accordingly, Judge Chen asserted that, in his view, once the applicant fails to comply with (l)(2), “all the other pieces preceding (l)(8) cease to matter.” Id. at *22. Judge Chen further concluded that he did not “find support in the statutory language to create an automatic 180-day injunction.” Id.