July, 26th, 2017
By Dov Hirsch
On June 12, 2017, the Supreme Court issued a unanimous opinion in Amgen v. Sandoz relating to the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”). In the decision, the Court addressed and answered two important issues regarding the “patent dance” provisions of the BPCIA. The Court, however, seems to have punted on another key question regarding the “patent dance” – specifically, whether the patent dance is mandatory or optional.
Biologics are complex, large molecules that are derived from living organisms. In contrast traditional, small-molecule pharmaceuticals are usually synthesized from chemicals. Biosimilars are analogous to generic versions of traditional small-molecule pharmaceuticals except they are “generic” versions of a brand-name biologic. Unlike generic pharmaceuticals that are identical to the brand name versions, however, biosimilars are only highly similar to the brand-name biologic.
The BPCIA also contains a mechanism for early resolution of patent disputes relating to biosimilars and the corresponding brand-name biologic (referred to as the Reference product sponsor (“RPS”) in the BPCIA). This mechanism is colloquially referred to as the “patent dance” due to its structured back-and-forth nature.
The patent dance begins when the FDA accepts a biosimilar application. At this point, the patent dance instructs the biosimilar manufacturer to provide its application and information about its manufacturing process to the RPS. This triggers a series of back-and-forth communications between the biosimilar manufacturer and RPS to generate a list of relevant patents on a preset timeline. Once the list is complete, the RPS can initiate a patent infringement suit for an agreed upon subset of the specified patents for immediate litigation.
The patent dance makes it possible to resolve all potential patent disputes before a biosimilar’s market launch. Resolving patent disputes before the biosimilar product enters the market is thought to benefit both parties and the broader public.
Additionally, the BPCIA also requires that the biosimilar manufacturer provide notice to the RPS at least 180 days before it launches its biosimilar. At that point, the RPS may bring a patent infringement suit on any remaining non-litigated patents. The biosimilar manufacturer may also initiate a suit itself, asking for a declaratory judgement that its biosimilar does not infringe the patent or, that the patent is invalid.
In Amgen v. Sandoz, the Supreme Court interpreted the patent provisions of the BPCIA for the first time. In a unanimous decision written by Justice Thomas, the Supreme Court held that (1) no injunction is available under the BPCIA to force compliance with the patent dance and (2) a Biosimilar manufacturer may give notice of commercial marketing to the (“RPS”) prior to FDA approval. Nevertheless, the Court remanded the case to the Federal Circuit to answer: (1) whether an injunction is available under state law and (2) whether such a state-law injunction is preempted by federal law.
Biosimilar manufacturers were clearly the winners on the notice issue. The court’s ruling on this issue allows biosimilar manufacturers to launch their products sooner because they can provide notice earlier on.
On the second issue, however, the outcome was more complex. The Supreme Court held that an RPS is not entitled to an injunction requiring the biosimilar applicant to provide its marketing application and manufacturing information. The Court explained that although the BPCIA “requires” the biosimilar manufacturer to provide these materials to the RPS, the BPCIA also specifies the “remedy” for the RPS should the biosimilar company violate that requirement. In dictum, the Court explained that typically a biosimilar manufacturer has a lot of control over the premarket patent litigation because the patent dance gives the biosimilar manufacturer control over how many patents are identified for the first wave of litigation, as well as control over the timing of the second wave. If the biosimilar company violates the requirement to provide its application, however, control shifts to the RPS. In this scenario, the RPS can sue at any time for a court order declaring that the biosimilar infringes the RPS’s patents. The Court added that even if the biosimilar manufacturer provides notice of market entry at least 180 days prior to launch as required under the statute, the biosimilar manufacturer still can not challenge the patent on its own initiative before it launches. In such a scenario, the biosimilar manufacturer must wait to be sued for patent infringement.
In the case of Amgen v. Sandoz, where Sandoz failed to provide its application, the BPCIA gives Amgen the control over the litigation that Sandoz would have had. According to the Supreme Court, this is Amgen’s only remedy under the BPCIA. Thus, the Court can not enjoin Sandoz to comply with the patent dance as Amgen had requested. Litigation is not over yet, however, because the Court only answered one of the two issues it had been asked.
Indeed, the Court was asked to rule on a two-part question. The first question was whether the patent dance “required” a biosimilar applicant to provide a copy of its application and manufacturing information to the RPS. The second question was what remedy was available to an RPS where a biosimilar applicant failed to provide its application and manufacturing information. The Court, however, treated the issue as one question: “whether the requirement that an applicant provide its application and manufacturing information to the manufacturer of the biologic is enforceable by injunction.” Effectively, the Court assumed the answer to the first question. Indeed, in the opinion, Justice Thomas repeatedly refers to disclosure of the application as a “requirement” and as “required.”
Thus, the Court never explicitly answered whether the patent dance is mandatory or only optional. Indeed, the Court declined to decide this particular question. Instead, it seems that the Supreme Court punted this question to the Federal Circuit.
As noted above, the Supreme court remanded the case to the Federal Circuit. Specifically, the Supreme Court instructed the Federal Circuit to determine whether noncompliance with the patent dance is “unlawful” under state unfair competition laws. The answer to this question may depend on the answer to the unanswered question of whether the patent dance mandatory or optional because if the patent dance is mandatory then failure to comply may be “unlawful” under state unfair competition laws.
Thus, the Federal Circuit will need to address the question again; Is the patent dance of the BPCIA mandatory or optional?
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