By Candace Polster, Christopher Betti, Ph.D., and Richard Martin, Ph.D., Morgan Lewis
Congress enacted the Biologics Price Competition and Innovation Act (“BPCIA”) in 2009 to provide an abbreviated approval pathway for generic (“biosimilar”) versions of biologic drugs. Similar to the landmark 1984 Hatch-Waxman Act governing small molecule generics, the BPCIA includes a framework for resolving patent disputes that attempts to streamline the dispute resolution process while balancing the interests of the innovator, or reference product sponsor (“RPS”), and the biosimilar applicant (“Applicant”). Known colloquially as “the patent dance,” this framework directs an exchange of information between the applicant and RPS intended to identify and streamline potential litigation of patents that are implicated by the eventual marketing and sales of the biosimilar product.
The BPCIA Patent Dance
The BPCIA contemplates two phases of litigation. The first phase is initiated after the Applicant submits its abbreviated Biologic License Application (aBLA) to the FDA. Within 20 days of aBLA acceptance by the FDA, the statute provides that an applicant “shall” provide the RPS a copy of the application, along with any “other information” describing its confidential manufacturing process. The RPS then has 60 days to provide a list of patents they believe to be infringed, and to identify the patents on this list they are prepared to license. The Applicant then responds in turn, and the statute directs a process of negotiating the final list to be litigated.
The second phase of litigation is triggered by the Applicant’s serving a notice of commercial marketing to the Sponsor. The Applicant must provide such notice no later than 180 days before the date of the first commercial marketing of the biosimilar product.
Supreme Court: Dancing to the Tune of None?
In theory, the initial exchange process in the first phase of litigation is intended to whittle down the number of patents and initiate resolution of any disputes during FDA review of the aBLA. However, despite its high-minded objectives, litigation under the BPCIA has proven less harmonious than planned. Indeed, although the first ten years under the BPCIA has seen over thirty litigated patent disputes, a basic set of questions remain regarding the quantity and type of information the applicant should disclose to the RPS, and whether the applicant should engage in the patent dance at all.
Much of this uncertainty arises from the seminal Supreme Court decision in Sandoz Inc. v. Amgen Inc.[i] (“Sandoz”). In an opinion only students of statutory interpretation will enjoy, the Court held that the patent dance is entirely discretionary—a biosimilar applicant can either participate in the prescribed information exchanges or forego the patent dance entirely by refusing to disclose even its aBLA. Thus, despite the statutory language that the Applicant “shall” provide the aBLA and “other information” to the RPS, the Supreme court looked to the overall framework of the legislation and determined that the entire first phase is discretionary. Beyond the threshold question of participating in the patent dance, however, uncertainty also arises over how much information to disclose when the patent dance is initiated. Indeed, questions regarding the adequacy of information disclosure have proven central in BPCIA litigation to date.
The DJ Beat Goes On
In either scenario—whether an applicant refuses to engage in the BPCIA patent resolution procedures in the first place, or the RPS considers the applicant’s proffer of information inadequate—the RPS has a statutorily prescribed remedy to seek a Declaratory Judgment (DJ) action for a declaration of patent infringement and validity. The statute itself provides—and the Sandoz Court recognized—that a consequence of refusing any of the BPCIA information exchanges is that the RPS can immediately file a Declaratory Judgment (“DJ”) action “for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.”[ii]
At first glance, DJ liability provides a strong counterweight to any potential strategic advantage of withholding information. However, recent BPCIA litigation suggests that an action for declaratory relief may be the default outcome of the statutory patent resolution scheme whatever course the Applicant takes. Out of eighteen cases from 2018 to 2020, sixteen resulted in a DJ action filed by the RPS. The other two cases involved a DJ action filed by the applicant. And in eight of these cases, the RPS filed a DJ against the applicant due to a failure to disclose sufficient information.
In cases where the RPS asserted non-adherence with the disclosure requirements as a basis of DJ jurisdiction, the amount of actual disclosure asserted in the pleading has run the gamut. For example, some applicants have disclosed thousands of pages of information, including all manufacturing batch records, cell culture conditions, purification processes, and the raw materials used during manufacture. In contrast, other applicants did not disclose any “other information” beyond the aBLA itself. But the unvarying outcome whatever level of disclosure has been an apparently unavoidable DJ for patent infringement.
Sitting Out The Patent Dance
Since a DJ is an apparently unavoidable outcome of participating in the patent dance, it may be worthwhile for the applicant to skip the patent dance all together. After all, the entire patent dance can take up to 245 days until the RPS even files a complaint—avoiding this delay may outweigh the strategic disadvantages of DJ liability.
On the other hand, by refusing to file its aBLA and participate in the patent dance at all, the Applicant is subject to an immediate DJ and thus cedes control over the jurisdiction, scope, and timing of the patent litigation. These may collectively amount to a substantial disadvantage in view of the potential litigation costs associated with the panoply of patents the RPS might assert in a DJ action.[iii] Further, the delay in litigation may in some cases be desirable where an Applicant wants to gauge the progress of its aBLA through the regulatory process.
Moreover, failure to participate in the patent dance affects future outcomes during the second-wave of litigation after the applicant files its NCM. For instance, the applicant might lose its ability to file a DJ after it files its NCM.[iv] Not to mention, the lack of participation in the patent dance can factor into a court’s decision to grant an injunction against the applicant after it files its NCM.[v]
From the RPS’ perspective, the adequacy of the applicant’s information disclosure constrains its determination of the patents it “believes a claim of patent infringement could reasonably be asserted,” and therefor add to its 3A list of asserted patents.[vi] In the absence of sufficient information, the RPS’ options are to request supplemental disclosure from the applicant (“other information”) or file an immediate DJ for patent infringement against the applicant.[vii] Cases litigated under the BPCIA indicate that the latter scenario is likely to eventually occur regardless of the amount the applicant discloses.
 42 U.S.C. § 262(l)(2)(A)
 42 U.S.C. § 262(l)(8)(A).
[i] Sandoz Inc. v. Amgen Inc. 137 S. Ct. 1664 (2017).
[ii] 42 U.S.C. § 262(l)(9)(C).
[iii] Sandoz, 137 S. Ct. at 1675 (providing that “[w]hen an applicant fails to comply with 42 U.S.C. § 262(])(2)(A), § 262(])(9)(C) authorizes the sponsor, but not the applicant, to bring an immediate declaratory judgment action for artificial infringement. Section 262(l )(9)(C) thus vests in the sponsor the control that the applicant would otherwise have exercised over the scope and timing of the patent litigation. It also deprives the applicant of the certainty that it could have obtained by bringing a declaratory-judgment action prior to marketing its product.”).
[iv] Celltrion v. Genetech, No. 18-cv-00274, Dkt. No. 1 (N.D. Cal. Jan. 11, 2018); and Celltrion v. Genetech, No. 18-cv-00276, Dkt. No. 1 (N.D. Cal. Jan. 11, 2018).
[v] Sandoz Inc. v. Amgen Inc., 137 S. Ct. 1664 (2017).
[vi] Pursuant to 42 U.S.C. § 262(l)(3)(A), sixty days after the RPS receives the applicant’s aBLA, the RPS must provide a list of patents that it will assert or license to the applicant. This is also referred to as a “3A list.”
[vii] 42 U.S.C. § 262(l)(9)(C).