Should Pharma Patents Be Exempt From Biosimilar Makers' IPRs?

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

Last month, I interviewed two attorneys from leading biotech patent law firms for our sister publication, Life Science Leader. The topic — inter partes review, or IPR — was admittedly unfamiliar to me, as I don’t have a background in law. However, the IPR process, instituted through the 2012 America Invents Act (AIA), has been brought to center stage in the pharma industry over the past few months, thanks to Hayman Capital hedge fund owner Kyle Bass and his numerous, high-profile challenges of blockbuster drug patents. As I learned in my interview, only a small percentage — 6 percent — of IPRs are directed toward the pharmaceutical industry. Now that the U.S. has its first biosimilar on the market, however, these tides are potentially turning. Bass continues to challenge more patents — one of the most recent being Amgen’s Enbrel, the first biologic patent he’s challenged via IPR — and now, biosimilar makers themselves are looking to the process for their own motives.

According to a recent article published by JDSupra Business Advisor, more biosimilar makers have set their sights on the IPR process prior to filing an application for approval with the FDA. This makes sense considering the IPR offers a quicker, cheaper, and more streamlined process for patent disputes. For biosimilar makers, this not only gives them the opportunity to challenge patents prior to filing for FDA approval, but it could also protect a biosimilar maker from patent litigation under the Biologics Price Competition and Innovation Act (BPCIA) and help clear the path to market. But for reference makers, this new patent-challenging process stands as yet another threat to their branded drugs, and high-profile pharma organizations BIO and PhRMA have both argued that pharma should be exempted from IPRs for a number of reasons. But is this logical?   

As Patterson Belknap Webb & Tyler’s Zhiqiang Liu and Irena Royzman write in their JDSupra article, Amgen, Hospira, Celltrion, and Boehringer Ingelheim have all jumped onto the IPR bandwagon in an attempt to clear their biosimilars’ pathways to market. However, it seems Boehringer Ingelheim is a prime example (and perhaps warning) for biosimilar makers using the IPR to clear barriers to the market. Boehringer turned to the process to challenge several patents protecting Biogen Idec and Genentech’s Rituxan. In particular, the company was challenging the patents protecting (1) the treatment method for rheumatoid arthritis patients who are non-responsive to TNFα-inhibitors, (2) and the rituximab and methotrexate combination treatment method for rheumatoid arthritis. (In fact, Celltrion is also attempting to knock through these patents for its own biosimilar, as well.) Boehringer also launched a challenge against (3) a patent protecting a method for using chemo and rituximab to treat low-grade B-cell non-Hodgkin lymphoma.

However, for Boehringer, the results were less thrilling than they’d been hoping for. The Patent Trial and Appeal Board (PTAB) instituted an IPR review for all claims in the first challenge. However, the PTAB only found half of the claims in the second patent challenge worthy of an official review, and completely denied review of the third patent challenge. Liu and Royzman posit that the IPR process will most likely not be the answer for those trying to avoid BPCIA litigation, especially seeing Boehringer’s mixed success with its own challenges. 

This isn’t to say that both brand makers and generics manufactures shouldn’t be paying attention to this process, as I’m expecting it to become more important and more common in the pharmaceutical industry, despite the fact the industry is doing its best to protect itself from the procedure. For one, Celgene has risen up against Kyle Bass, claiming Bass’s IPRs are “an unwarranted burden on the PTAB ... and on innovators like patent owner Celgene Corporation … and its shareholders,” IP Frontline reports. There are calls to fix the loopholes that enable organizations, such as Bass’s hedge fund, to challenge drugmakers’ patents, arguably in order to see a financial benefit. For instance, Rep. Bob Goodlatte has proposed an amendment to the Innovation act of 2015 barring those who own a “financial instrument … designed to hedge or offset any decrease in market value of an equity security of the patent owner or an affiliate” from filing IPRs.

Even this, though, isn’t quite enough for pharma. If the industry — or rather, brand makers — could have their way, they’d like to see the whole IPR process done away with when it comes to drug patents. As Law360 describes, branded drugmakers are arguing that, since patents can already be challenged via the Hatch-Waxman process, drug patents should be exempted from the AIA proceedings. According to BIO and PhRMA, “There is no evidence that Congress intended the IPR process to be used by generic and biosimilar companies to challenge biopharmaceutical patents out of Hatch-Waxman and BPCIA.” 

Judging from the lawyers quoted in Law360’s article, it appears those on the legal side rather than the drug-making side are torn as to whether the pharma industry should be exempt from IPRs. On one hand, it’s noted that pharma patents are not cheap to research and develop, and the Hatch-Waxman Act was established specifically for those with generics and, therefore, should be the only Act generics/biosimilar makers can use to challenge brand patents. As Bernard J. Knight of McDermott Will & Emery LLP states, “The easier it is to attack drug patents, the less likely it is that there will be incentive to spend money on research and development of new drugs.”

There is, however, the argument that the IPR portion of the AIA was launched in order to eliminate poor-quality patents, and if this is the case, “It’s a more difficult hurdle to exempt any particular industry from the process,” says Knight. Indeed, a number of other lawyers cited in the article express their doubts that Congress would approve of this kind of special treatment.   

While there are clearly differences between a life-saving drug on patent compared to a piece of technology, I’m not in favor of any special treatment in terms of eliminating pharma from IPRs. Given the number of patents protecting the reference products and how difficult it is to overturn the patents via an IPR thus far, it’s nonsensical to expect that IPR challenges will be the silver bullet to get biosimilars more quickly to market. Rep. Goodlatte has proposed ( that those who own hedge funds be banned from using IPRs to challenge patents (and rightfully so, though I do give Bass props for his clever use of the IPR process and his confident pursuit of “cheaper drugs” for the American people … or something like that).

Ultimately, the rise in IPRs from biosimilar makers seems like a good opportunity for pharma to ensure that the appropriate number of resources and attention is granted to the patenting process — especially as companies begin facing challenges over the value and pricing of their drugs. Applying more attention and resources to the patent process ensures that each company and their blockbusters are earning their patent protection — and ultimately, their high price tags and market exclusivity. 

Editor’s Note: For those of you interested in learning more about the role IPRs have been playing in the pharmaceutical industry up to this point, I’d direct you to this article written by DLA Piper’s Erica Pascal. In her article, Pascal details the number of pharmaceutical IPRs that have been instituted and have proceeded to trial (as of May 2015), and some of the types of patents that have been challenged via the IPR process. Pascal also argues the IPR process could be particularly beneficial for biosimilar manufacturers because of the fact biosimilars are designed around a chemical structure that has or will be expired.