U.S. Supreme Court Finds that Dancing with Biosimilars is NOT Mandatory

imagesThe U.S. Supreme Court had a busy day on Monday (June 12, 2017) issuing four unanimous decisions in recently argued cases.  Of particular note is the final decision in the Supreme Court’s 2016 term - the consolidated case of Sandoz Inc. v. Amgen Inc. and Amgen Inc. v. Sandoz Inc., which interpreted the Biologics Price Competition and Innovation Act (BPCIA).  As we reported here, this case originated out of the U.S. District Court for the Northern District of California where Amgen sued Sandoz for failure to engage in the BPCIA’s patent dance[1] and for inadequate notice of commercial marketing of Sandoz’s biosimilar version (Zarxio®) of Amgen’s Neupogen® product.

The Supreme Court decided that Sandoz had not violated the BPCIA by failing to engage in the patent dance. The justices found it compelling that the BPCIA expressly sets forth the consequences for failure to provide a copy of the FDA application and manufacturing information as required under 42 U.S.C. § 232(l)(2)(A).  This initial exchange of information sets into motion the patent dance.  The consequences, found in 42 U.S.C. § 232(l)(9)(C), permit the sponsor to bring an immediate declaratory judgment action for patent infringement.  Thus, the Supreme Court found the BPCIA does not require a biosimilar applicant to share its abbreviated biologics application and associated data, and, in the absence of voluntary sharing, a branded biologics developer must use injunctive relief to enforce its patents.  As such, the Supreme Court determined there is no requirement that a biosimilar applicant participate in the patent dance.  However, the Court remanded to the Federal Circuit to determine whether California state law may provide for injunctive relief to enforce 42 U.S.C. § 232(l)(2)(A) based on failure to comply with California’s unfair competition statute.

In the financial crux of the case, the second major issue addressed by the Supreme Court is whether the 180-day notice of marketing provision can be satisfied before FDA licensure. If Sandoz violated the notice requirement in the statute, a federal court could enjoin Sandoz from marketing its biosimilar until it provided proper notice.  The Supreme Court reversed the Federal Circuit on this issue and held that “the applicant may provide notice either before or after receiving FDA approval.”  The justices concluded that this result followed from the statutory language imposing only a “single timing requirement” such that the notice would occur 180 days before commercial marketing of the biosimilar.  The language does not also require that the notice be timed such that it occurs after FDA licensure.

The practical result of the Court’s ruling is that a branded biologics developer may not enjoy an additional six-month of exclusivity after a biosimilar receives FDA licensure. Setting aside issues of patent infringement, companies may be able to bring a biosimilar to market immediately after FDA licensing if (1) the biosimilar company gave notice at the beginning of the FDA process, and (2) the FDA process took more than 180 days.  Theoretically, this should help biosimilars come to the market faster.

While it seems unlikely that the FDA will depart from the Court’s interpretation of the BPCIA, Justice Breyer left open this possibility in a Concurring Opinion by citing to National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U.S. 967 (2005), stating “if [FDA], after greater experience administering this statute, determines that a different interpretation would better serve the statute’s objectives, it may well have authority to depart from, or to modify, today’s interpretation.”

[1] The BPCIA provides a detailed process, known as the “patent dance,” for addressing patent disputes surrounding biosimilar products, laid out in 42 U.S.C. § 232(l).

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