The BPCIA After Amgen v. Sandoz

By Gary Levin and Ron Kern, BakerHostetler

The Federal Circuit’s recent decision to not rehear the Amgen Inc. v. Sandoz, Inc. case^[1] leaves open several important issues under the Biologics Price Competition and Innovation Act (“BPCIA”). Whether or not the Supreme Court reviews the issues from the final Federal Circuit decision, other important questions about the BPCIA remain to be addressed.

The BPCIA

The Act creates an abbreviated licensure pathway for biosimilars. An application for biosimilarity must demonstrate that the product is, among other things, “highly similar” to the previously approved “reference” product in terms of “safety, purity, and potency” and has the same mechanism of action as the reference.[2]

Two of the major aspects of the BPCIA are an information exchange between the applicant and the sponsor of the reference product [“RPS”]^[3] and a notice of commercial marketing to be provided by an applicant to the RPS.^[4] These were at significant issue in the Amgen case. As to the first, the Act provides that within 20 days after the FDA accepts a biosimilar application for review, the applicant “shall provide to the [RPS] a copy of the application . . . and such other information that describes the [manufacturing process(s)].” ^[5] These disclosures initiate an exchange of information and patent accusations between the applicant and RPS, now referred to as the “patent dance,” intended to establish an agreed upon list of the RPS’s patents at issue, which the RPS may immediately assert in an infringement action. The purpose is to resolve patent issues before commercialization of an ultimately approved biosimilar, so an applicant may be able to avoid an “at risk” launch.

Under the “notice” provision, an applicant “shall provide notice to the [RPS] not later than 180 days before the date of the first commercial marketing of the biological product licensed under” the Act.^[6]  The RPS can then use this period of time to seek a preliminary injunction based on infringement by the approved biosimilar of any patents that were not on the agreed upon list from the patent dance.^[7]

Amgen v. Sandoz

Sandoz filed an abbreviated biologics license application (“aBLA”) for a biosimilar version of Amgen’s filgrastim product, Neupogen. On July 8, 2014, the day after the FDA accepted the application for review, Sandoz alerted Amgen that it intended to market its Zarxio biosimilar “immediately” upon approval of its application. Sandoz did not, however, provide Amgen with a copy of the application or manufacturing details for its product, contending that the patent dance was optional. Amgen sued Sandoz for infringement of at least one patent (that it presumably would have identified in the patent dance). It also asserted that Sandoz’s failure to provide its aBLA and manufacturing information, while still piggy-backing on Amgen’s approval, constituted unfair competition, and that Sandoz’s July 8, 2014 communication was not legally effective as the 180-day notice because the product had not yet been approved by the FDA.

The district court ruled in favor of Sandoz on both BPCIA issues. Following an expedited appeal, a divided panel of the Federal Circuit ruled that: 1) the information exchange and “patent dance” procedures were optional and that a biosimilar applicant could choose not to engage in them; but 2) the 180-day notice requirement was mandatory, at least for applicants who had opted out of the patent dance, and that only a notice given after FDA approved the aBLA would be effective to start the 180-day clock. According to the Court, Sandoz’s opt-out did not violate the BPCIA or constitute unfair competition, leaving patent infringement as Amgen’s only remedy, but Sandoz’s July 8, 2014, notice was ineffective since its application was unapproved at that time.^[8]

Possible Supreme Court Review And Open Issues

Each party had requested the Federal Circuit to rehear the respective issue on which it had lost; either party now has until January 14, 2016, to petition the Supreme Court to review its respective issue. Since the issues involved are significant and have ongoing implications, both parties will likely seek review of their respective issues. Whether the Supreme Court will oblige is a bit less likely — but still possible. This was the first appellate case on the BPCIA, and the Supreme Court often declines review of first analyses. On the other hand, no other appellate court is likely to review these specific BPCIA questions, making the Federal Circuit’s current decision on them final. Therefore, the issues have significant on-going effect, and they present questions of pure statutory construction, making it unlikely any future case could provide a better vehicle for review.

But even if the Supreme Court were to take and rule on the two issues from the Amgen case, other questions under the BPCIA will likely remain, including:

(1) Is the 180-day notice mandatory for an applicant who did follow the patent dance?

In its decision on this issue, the Federal Circuit stated “where, as here, a subsection (k) applicant completely fails to provide its aBLA . . . the [notice provision] is mandatory.” This has led at least some post-Amgen applicants to argue that the notice is not mandatory for an applicant who does not “fail to provide its aBLA.” If the Supreme Court takes this issue up, the Federal Circuit is likely to be affirmed.  But the facts of the case are limited to a non-compliant applicant, and the Supreme Court generally does not opine on fact patterns not presented. Therefore, its decision might not answer the question as it affects a dancing applicant.

But the question is already percolating in the district courts. There are four other cases in which applicants who have provided at least their aBLA to the RPS, have complied with the other steps of the patent dance, and have been sued for infringement of the agreed-upon patents. The applicants have also asserted they are entitled to begin marketing immediately upon receipt of FDA approval – without any further notice or 180-day delay. So although this question might remain for now, no matter what the Supreme Court does, it will be answered at least by the district courts and the Federal Circuit in other cases within the next year or so.

(2) Can the 180-day clock begin to run when approval occurs and notice is given during the 12-year period of exclusivity?

The BPCIA provides that a biosimilar application may not be approved by the FDA until 12 years after the reference product was first licensed, giving the RPS 12 years of exclusivity regardless of the patent status or the status of the FDA’s application review.^[9] In Amgen and in all the pending district court cases referenced above, the aBLA was not even submitted until well after the RPS’s 12-year period had passed. But in future cases involving more recently licensed biologics, applicants are likely to submit their aBLA while that reference biologic is still within its 12-year exclusivity period, hoping to start the 180-day clock running so as to be free to launch as soon as the 12-year period expires.

The Amgen panel recognized that Amgen received an “extra 180 days” precisely because Sandoz’s application and approval only came much later than 12 years after Amgen’s Neupogen was approved. The panel majority further opined that this extra 180 days of exclusivity “will not likely be the usual case, as aBLAs will often be filed during the 12-year exclusivity period for other products.^[10] But although that comment indicates how those two majority judges might rule when the issue is actually before them, it is not binding on other panels. So the question remains as to the effect of having a biosimilar application approved within the 12-year exclusivity period: Can the approved applicant give effective notice at that time, so that the 180 days runs and expires within that period and the applicant can launch as soon as the 12^th year is up? Or, since the law states that an approval “may not be made effective” until the 12 years are up, does the legal effectiveness of notice not ripen and the running of the 180 days not begin, until then?

(3) What “further information” must an applicant provide to get into the dance?

To comply with the information exchange, an applicant is to provide the RPS “a copy of the [aBLA] and such other information that describes the [manufacturing process(es)].”[11] How much additional information, beyond what is otherwise of necessity described in the aBLA itself, that an RPS will deem sufficient remains to be seen. Because Sandoz opted completely out of the dance, that question is not presented in the case. It is presented, however, in at least one district court case now pending involving Janssen’s Remicade biologic; applicant Celltrion provided its aBLA but no additional manufacturing information.  The case may shed light on the amount of information, whether included in the aBLA or separate, that must be provided. The answer may affect the decision by applicants on whether to proceed with the patent dance since it may force the disclosure of highly confidential manufacturing information that might not otherwise need to be provided to the RPS even in litigation proceedings.

Although the Amgen v. Sandoz decision has provided some insight into procedures under the BPCIA, it has left open and created questions that even Supreme Court review may not answer. Further clarification from the courts will be coming.

About the authors: Gary Levin and Ron Kern are with the national law firm of BakerHostetler. They reside in Philadelphia. Mr. Levin focuses on patent litigation and counseling and has been involved in dozens of complex patent cases in courts around the country.  Mr. Kern, who has extensive scientific research experience in biochemistry and molecular biology, focuses his practice on patent prosecution and client counseling.