High Court Decision Seen Easing Marketing of Biosimilar Drugs

Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.

By John T. Aquino

The Supreme Court June 12 gave a clear victory to biosimilar applicants by saying they don’t have to wait for FDA approval to begin the process of getting their versions of biotech drugs to market ( Sandoz Inc. v. Amgen Inc. , U.S., No. 15-1039, 6/12/17 ).

The high court unanimously reversed the U.S. Court of Appeals on the Federal Circuit’s ruling on the timing of a biosimilar maker’s notice to the branded company, or reference product sponsor, before marketing its own version. The appeals court had held the 180-day notice that a biosimilar applicant must give the owner of the original biologic drug can’t be submitted, until the Food and Drug Administration has approved the biosimilar for market. The high court concluded that the language of the Biologics Price Competition and Innovation Act (BPCIA) makes it clear that “the applicant may provide notice either before or after receiving FDA approval.” The case involves Sandoz’s effort to market a biosimilar version of an Amgen drug.

Courtenay Brinckerhoff, an intellectual property lawyer with Foley & Lardner LLP, Washington, told Bloomberg BNA in a June 12 phone interview: “The Supreme Court seems to have largely sided with Sandoz and other biosimilar applicants, giving the applicant control over when and how patent disputes between the applicant and the biologic owner are addressed.” She added: “The court’s ruling on the 180-day notice will be heralded by lots of people anxious for less expensive biosimilars to get to the market as quickly as possible.”

Biologics are complex molecules used to treat diseases such as cancer and hepatitis C. A biosimilar is a biologic drug product that is highly similar to an FDA-approved biologic and is likely to be from 15 percent to 30 percent less expensive.

Nicholas K. Mitrokostas, with Goodwin Procter LLP, Boston, wrote in a June 12 e-mail to Bloomberg BNA that the court’s decision on the 180-day notice is “critically important to biosimilars applicants as it realigns the exclusivity period intended under the BPCIA for biologic products and means that biosimilars can enter the market on the first day of licensure,” or FDA approval.

The Pharmaceutical Care Management Association, the national association for pharmacy benefit managers, said in a statement that the court’s ruling “will help create more competition among costly biologic medications, which is the key to reducing overall prescription drug costs for consumers, employers, government programs, and others.”

Three Issues

The BPCIA, part of the 2010 Affordable Care Act, provides an abbreviated pathway for Food and Drug Administration approval of a biosimilar. The FDA has approved five biosimilars under the law. The BPCIA allows the biosimilar applicant to partly rely on the data submitted for the original biologic’s approval and outlines obligations the applicant has to the biologic patent owner, also known as the reference product sponsor (RPS).

On the one hand, the Federal Circuit agreed with Amgen, maker of the biologic Neupogen (filgrastim), that the BPCIA dictates a biosimilar must wait six months after FDA approval before being put on the market. On the other hand it supported Sandoz, a part of Novartis and maker of the Neupogen biosimilar Zarxio, that the exchange of manufacturing and patent information between the RPS and biosimilar applicant is optional.

Sandoz petitioned and Amgen cross-petitioned that the court reverse the part of the ruling that wasn’t favorable to them. Also at issue was whether a preliminary injunction for noncompliance with the information exchange was available under federal law.

During the oral argument, the court focused a good part of its questions on the preliminary injunction issue, leading some observers to think the court wouldn’t address the information exchange and 180-day notice questions and instead remand them back to the Federal Circuit.

Federal Injunction, No, State, Maybe

The Supreme Court’s opinion was authored by Justice Clarence Thomas, who asked no questions during oral argument. The organization of the opinion reflected that of the oral argument, beginning with the preliminary injunction issue.

According to the opinion, Section 262 of the BPCIA provides the remedy of a sponsor’s filing of a declaratory judgment action for infringement for an applicant’s failure to turn over its application and manufacturing and patent information. “The presence of §262(l)(9)(C), coupled with the absence of any other textually specified remedies, indicates that Congress did not intend sponsors to have access to injunctive relief, at least as a matter of federal law, to enforce the disclosure requirement,” Thomas wrote. He added the remedy provided by Section 262 excludes all other federal remedies, including injunctive relief.

The litigation over the biosimilar involved state-law claims. Thomas noted that whether Sandoz’s conduct was “unlawful” under California’s unfair competition law is a state-law question and the Federal Circuit erred in attempting to answer that question by referring to the BPCIA alone. The court, accordingly, remanded this issue to the Federal Circuit to determine whether California law would treat noncompliance with Section 262 as “unlawful” and whether the BPCIA preempts any additional state-law remedy for failure to comply with Section 262.

One Timing Requirement

The court quickly agreed with the Federal Circuit that the BPCIA’s information exchange--sometimes called the patent dance--is optional.

In addressing the 180-day notice provision, it noted that Section 262(l)(8)(A) states the 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 [the abbreviated approval pathway].”

“Because the phrase ‘of the biological product licensed under subsection (k)' modifies ‘commercial marketing’ rather than ‘notice,’ ‘commercial marketing’ is the point in time by which the biosimilar must be ‘licensed.’ Accordingly, the applicant may provide notice either before or after receiving FDA approval,” Thomas wrote.

Justice Stephen Breyer wrote in a concurring opinion that he agreed with the court’s ruling, but added that if the FDA “after greater experience administering this statute, determines that a different interpretation would better serve the statute’s objectives, it may well have authority to depart from, or to modify, today’s interpretation.”

Might Do Patent Dance Anyway

Brinckerhoff told Bloomberg BNA that from the reference product sponsor’s (RPS) perspective, its only remedy under the ruling is a declaratory judgment action.

From the applicants’ perspective, the ruling gives them three options, Brinckerhoff said. An applicant who wants to resolve patent disputes early could share its application at the outset to force the RPS to bring litigation based on the information in the application or face the limitations on remedies set forth in 35 U.S.C. § 271(e)(6)(B). An applicant who wants to defer the patent issues could decide not to share its application and even wait for FDA approval before giving premarketing notice. A biosimilar applicant also could try to defer litigation while challenging the patents in an inter partes review or post-grant review proceeding at the Patent and Trademark Office, where it could take advantage of the lower burden of proof for invalidity.

“Consequently, the court’s decision on the 180-day notice issue will mean that biosimilar products can be marketed as soon as they are approved, as long as there are no preliminary injunctions stemming from any still-pending patent litigation,” she said. “That possibility might even do what the [reference product sponor] has wanted—encourage biosimilar applicants to participate in the patent dance to increase the likelihood that all patent disputes will be resolved by the time the product is approved.”

James Czaban, chair of DLA Piper’s FDA practice group, told Bloomberg BNA that he had anticipated the Supreme Court’s reasoning in a 2010 article in which he wrote that there might be situations where it is advantageous for a biosimilar applicant not to disclose its biologic application and manufacturing and patent information and that the only remedy for a reference product sponsor is a declaratory judgment action.

To contact the reporter on this story: John T. Aquino in Washington at jaquino@bna.com

To contact the editor responsible for this story: Randy Kubetin at RKubetin@bna.com

For More Information

The court's opinion is at http://src.bna.com/pLA.

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Health Care on Bloomberg Law