Not Optional: Court Rules that Biosimilar Applicants Must Always Give Commercial Marketing Notice

By: Jennifer Giordano-Coltart, Ph.D.

Yesterday, the Court of Appeals for the Federal Circuit added yet another wrinkle to the process of bringing a lower-cost biosimilar to market. In the case of Amgen Inc. v. Apotex Inc.,[1] which involves Apotex Inc.’s (Apotex) biosimilar of Amgen Inc.’s (Amgen) Neulasta® (pegfilgrastim), the Federal Circuit unanimously ruled that a biosimilar applicant must always provide 180-day pre-commercial marketing notice to the biosimilar’s reference product sponsor under the Biologics Price Competition and Innovation Act (BPCIA) regardless of whether the applicant participated in the BPCIA’s patent information exchange procedures (42 U.S.C. § 262(1)) (i.e. the patent dance).   

This issue became an open question after the Federal Circuit’s decision earlier this year in Amgen v. Sandoz,[2] where the Court held that the commercial marketing provision of § 262(1)(8)(A) is mandatory and that the 180-day period may begin only upon notice after licensure of the biosimilar under 42 U.S.C. § 262(k).  A key distinction between the facts of the two cases is that, while Sandoz entirely skipped the patent information exchange procedures of the statute, Apotex participated in the patent information exchange.  Apotex argued that the commercial marketing notice requirement is not mandatory where the biosimilar applicant participates in the exchange process as it did.  In addition, Apotex also argued that Amgen may not keep it from marketing its biosimilar by obtaining an injunction under § 262(1)(8)(B) but must pursue a declaratory judgment under § 262(1)(9) instead.

The Federal Circuit disagreed with Apotex and affirmed the district court’s decision.[3]  The Court found that the statutory language of § 262(1)(8)(A) was compulsive (“applicant shall provide notice”) and that there is no statutory language in the provision or elsewhere that would make the applicability of the provision turn on whether the applicant initiated the patent information exchange or be otherwise optional.  Interestingly, neither Amgen nor Apotex disputed that the notice given by Apotex pre-licensure in April 2015 was of no effect under § 262(1)(8)(A) as construed by Amgen v. Sandoz.[4]

In addition, the Court addressed head on the argument that interpreting § 262(1)(8)(A) of the BPCIA to require a post-licensure notice effectively extends the 12-year exclusivity period for the reference product under § 262(k) by an additional 180-days.  Specifically, the Court read § 262(1)(8) “as allowing the 180-day notice of commercial marketing to be sent as soon as the license issues, even if it is not yet effective, because it is at the time of the license that ‘the product, its therapeutic uses, and its manufacturing processes are fixed.’”[5]  The Court noted that the 12-year date is the earliest date on which a biosimilar license may take effect, not the latest date and, thus, extension of the exclusivity period is not inconsistent with the statute.  The Court also reiterated its position that, over time, there will be fewer instances where the 12-year period will be extended by the notice period, as biosimilars are developed more quickly.  In the meantime, this means that biosimilars sponsors could have up to 12 ½-years of exclusivity before a lower-cost competitor can enter the marketplace.

Finally, the Court rejected Apotex’s position that the reference product sponsor’s sole remedy for violations of the commercial marketing notice requirement is a declaratory judgment action under § 262(1)(9)(B).  The Court found no statutory language in support of this position and further noted that § 262(1)(9) does not act to exclude remedies under 35 U.S.C. § 271(e)(4).  In addition, the Court opined that injunctive relief to enforce § 262(1)(8) serves the purpose of that provision, while the sole remedy of a declaratory judgment action would result in the very problems the provision aimed to avoid (i.e. rushed patent-based litigation upon biosimilar market entry).

The Supreme Court is currently considering whether to grant Sandoz’s petition for writ of certiorari in Amgen v. Sandoz.  As discussed in our prior posts,[6] Sandoz has petitioned the Supreme Court for review whether pre-commercialization notice under § 262(1)(8) of the BPCIA is mandatory in any circumstance.  In issuing its decision in Amgen v. Apotex at this time, the Federal Circuit has further fleshed out its interpretation of the BPCIA’s notice provision and addressed at least some arguments that were raised in Sandoz’s petition.  If the Supreme Court denies Sandoz’s petition, the Federal Circuit’s interpretation of the BPCIA’s notice provision will stand.  However, it is possible that the Supreme Court could grant review and disagree with Federal Circuit’s interpretation, finding that the provision is not mandatory, or may be mandatory only in certain circumstances.  Thus, until the Supreme Court decides whether to grant review, the law is still uncertain.  Following the Court’s invitation to the Solicitor General to file briefs in the case on June 20, 2016, the Court’s decision is not expected until next term.

[1] Amgen Inc. et al. v. Apotex Inc. et al., No. 16-1308 (Fed. Cir. July 5, 2016) (“Decision”).  Decision available here.

[2] Amgen Inc. v. Sandoz Inc., 794 F.3d 1347, 1351 (Fed. Cir. 2015) (en banc reh’g denied Oct. 16, 2015).

[3] See December 15, 2015 post on district court decision here.

[4] Decision at p. 14

[5] Decision at p. 17.  The Court stated that “we have been pointed to no reason that the FDA may not issue a license before the 11.5 year mark and deem the license to take effect on the 12-year date—a possibility suggested by § 262(k)(7)(A)’s language about when the FDA approval may ‘be made effective.’”

[6] Prior posts on January 26, 2016 (here; discussing grant of extension for filing petition for certiorari to Sandoz), on February 25, 2016 (here; discussing Sandoz petition for certiorari), and March 25, 2016 (here; discussing Amgen opposition to petition for certiorari and cross-petition).

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