The Biologics Price Competition and Innovation Act (“BPCIA”), found at 42 U.S.C. § 262(k), and informed by § 262(l), established an abbreviated pathway for producers of biologic products deemed sufficiently similar to products already on the market (“biosimilars”) to receive FDA approval. The BPCIA enables a process for resolving patent disputes arising from biosimilars, whereby applicants and sponsors may participate in a series of disclosures and negotiations aimed at streamlining patent litigation, dubbed the “patent dance.” As long as both the applicant and the sponsor comply with the BPCIA’s patent dance provisions, both parties potentially enjoy a safe harbor from patent litigation outside the scheme established by the BPCIA. The BPCIA’s provisions were enacted with the goal that parties are able to narrow the scope of their patent dispute, likely saving litigation resources. If either party fails to comply with the provisions, the litigation safe harbor is lost.
The Amgen v. Sandoz Case
Amgen v. Sandoz calls into question whether the scheme set forth at Sections 262(k) and (l) is mandatory or not. The dispute hinges on interpretation of two portions of subsection (l) of 42 U.S.C. § 262: (1) paragraphs (l)(2)-(l)(6) which lay forth the disclosure and negotiation processes that commence when an applicant shares its Biologic License Application (“BLA”) and manufacturing information with the reference sponsor; and (2) paragraph (l)(8) requiring an applicant to give the sponsor a 180-day advance notice of the first commercial marketing of its biosimilar.
In 2014, Sandoz became the first company to file a BLA pursuant to the BPCIA. This application was for approval to market ZARXIO™, a biosimilar version of NEUPOGEN®, Amgen’s filgrastim product. Despite availing itself of the benefits of the BPCIA, however, Sandoz refused to participate in the patent dance, alleging the patent exchange provisions were not mandatory. Amgen disagreed and filed suit in the Northern District of California on October 24, 2014. Amgen alleged that Sandoz’s failure to comply with subsection (l)’s disclosure and negotiation procedures and its interpretation of subparagraphs (l)(8)(A)’s 180-day notice requirement each comprised an unlawful business practice actionable under California’s Unfair Competition Law. In addition, Amgen alleged Sandoz’s use of Amgen’s FDA license for NEUPOGEN® in its biosimilar BLA without abiding by subsection (l)’s procedures constituted an act of conversion. Amgen requested a preliminary injunction to prevent Sandoz from entering the market with ZARXIO™ until a decision on the merits issued. Sandoz counterclaimed seeking declaratory judgment in favor of its interpretation of the BPCIA as well as non-infringement of Amgen’s asserted patent. Sandoz also moved for dismissal of Amgen’s unlawful competition and conversion claims and denial of Amgen’s request for an injunction.
The District Court sided with Sandoz, concluding that the BPCIA’s patent dance provisions are optional and that the 180-day notice provision does not require licensure. Judge Richard Seeborg issued a detailed opinion on March 19, 2015, outlining the parties’ positions and discussing the provisions of the BPCIA at issue, clearly teeing up appellate review of his decision.
The Disclosure/Negotiation Provisions
Amgen insisted that subsection (l)’s repeated use of the word “shall” meant the disclosure/negotiation provisions were mandatory. In response, Sandoz pointed to subparagraphs (l)(9)(B) and (C), which, when combined with the BPCIA’s amendment to the patent infringement statute, 35 U.S.C. § 271(e), provide an immediate cause of action for failure to comply with the disclosure/negotiation provisions. This consequence of noncompliance, argued Sandoz, meant the patent dance provisions were merely optional. Judge Seeborg found Sandoz’s holistic reading of the statute more persuasive. “The [BLA] applicant may . . . opt to forego its ability to bring certain types of declaratory actions and receive information about potentially relevant patents from the reference product sponsor, and instead commence litigation immediately.”
The 180-Day Notice Provision
Amgen argued that the word “licensed” in paragraph (l)(8), a past tense verb, could only refer to a biosimilar already approved by FDA. Thus, argued Amgen, the court should enjoin Sandoz from marketing ZARXIO™ until at least 180 days after FDA’s approval of Sandoz’s BLA. Judge Seeborg rejected Amgen’s argument not only for being “nonsensical” from a grammatical perspective, but also for how it would impact the entire statutory scheme. The BPCIA already gives reference products twelve years of market exclusivity. Amgen’s interpretation would tack on an extra 180 days to this twelve-year period, the most “convoluted method” possible for determining the length of market exclusivity, according to Judge Seeborg.
Decision & Appeal
Finding Sandoz’s conduct not unlawful, Judge Seeborg dismissed Amgen’s Unfair Competition Law and conversion claims, and denied Amgen’s request for preliminary injunction. The substantive patent dispute is ongoing. Amgen appealed Judge Seeborg’s interpretation of the BPCIA and denial of preliminary injunction. On May 5, 2015, the Federal Circuit granted Amgen’s appeal seeking a preliminary injunction, preventing Sandoz from launching ZARXIO™ [see Fish’s previous post on the topic, Preparing for Biosimilar Litigation, here]. The Federal Circuit will hear oral argument on the case on June 3, 2015. Fish & Richardson P.C. will continue to monitor the litigation and report on any significant developments.
Tasha Francis, Ph.D., an associate in Fish & Richardson’s Twin Cities office, practices intellectual property litigation with an emphasis on patent litigation. Dr. Francis has represented plaintiffs and defendants in cases involving medical devices, biotechnology, and...