By Andrew Williams —

Earlier today, the Supreme Court heard oral arguments in Sandoz Inc. v. Amgen Inc.  Sandoz was represented by Deanne E. Maynard, and Amgen was represented by Seth P. Waxman.  In addition, Anthony A. Yang presented the position of the United States.  The Court considered two issues:  (1) whether a biosimilar applicant is required to provide the reference product sponsor ("RPS") with its abbreviated biologics license application ("aBLA") and related manufacturing information in order to take advantage of the abbreviated approval process, and (2) whether the 180-day notice of commercial marketing can be given before FDA approval.  In addition, Amgen had originally included causes of action under California state law because Sandoz refused to participate in the patent dance.  Justice Gorsuch, in his first oral argument related to patent law as a Supreme Court Justice, brought up the issue of preemption and state law.  In this first post related to the oral argument, we will address the first of these issues related to the so-called patent dance, and review the issue regarding preemption.

Patent Dance

The majority of the oral argument dealt with the question about the Notice-of-Commercial marketing provision.  We will address that section in an upcoming post.  Nevertheless, there was enough discussion about the patent dance that it is possible to glean some insights into the thoughts of the Justices.  As a reminder, the patent dance kicks off with the disclosure of the biosimilar application, as well as the process of manufacture, by the subsection (k) applicant.  The statute at subsection (l)(2) reads:

(2) SUBSECTION (k) APPLICATION INFORMATION.—Not later than 20 days after the Secretary notifies the subsection (k) [biosimilar] applicant that the application has been accepted for review, the subsection (k) applicant—
    (A) shall provide to the reference product sponsor a copy of the application submitted to the Secretary under subsection (k), and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application; and
    (B) may provide to the reference product sponsor additional information requested by or on behalf of the reference product sponsor.

42 U.S.C. § 262(l)(2) (emphasis added).  However, the BPCIA appears to include a remedy should the biosimilar applicant not disclose the requisite information:

If a subsection (k) applicant fails to provide the application and information required under paragraph (2)(A), the reference product sponsor, but not the subsection (k) applicant, may bring an action under section 2201 of Title 28, for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.

42 U.S.C. § 262(l)(9)(C).  Moreover, the section of the patent statute dealing with patent infringement actions also suggests a remedy for such a failure to disclose:

It shall be an act of infringement to submit—

if the applicant for the application fails to provide the application and information required under section 351(l)(2)(A) of such Act, an application seeking approval of a biological product for a patent that could be identified pursuant to section 351(l)(3)(A)(i) of such Act,

if the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug, veterinary biological product, or biological product claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.

35 U.S.C. § 271 (e)(2)(c)(ii).

Sandoz was questioned about how the reference product sponsor will be able to know with certainty just which patents are being infringed if the biosimilar application does not disclose the requisite information.  For example, Justice Sotomayor challenged Sandoz, asking:

[C]ould the company with the product file a declaratory judgement action when they don't know what you're going to do?  Do they have a good-faith basis for believing you're going to infringe if they don't have the application to look at until they get discovery?

Counsel for Sandoz responded in the affirmative, pointing out that "by definition, a biosimilar is highly similar to the reference product sponsor's product."  When Chief Justice Roberts pushed back on this point, noting that "by definition, the biosimilar is similar; it's not identical," counsel responded:

But the question is whether or not you have a good-faith basis to sue.  And given the standard of highly [sic] similarity and the kind of similarities there have to be, if the sponsor has any patent that covers its product, this product itself or any uses of the product, it would have a good-faith basis to sue, which is exactly what Amgen did here.

She explained that Congress created this statutory artificial act of infringement for this very reason.  With no significant follow-up questions, it is possible that the Justices were satisfied with this response.

With respect to Amgen's position, one of the factors it is required to overcome is that the BPCIA appears to include a remedy when a biosimilar applicant refuses to "dance."  For example, Justice Gorsuch questioned counsel for Amgen by asking:

But the question still remains under . . . (l)(9)(c), what the remedy is.  And we've heard from the other side that the exclusive remedy is a declaratory judgement action.  And how can we possibly decide what (2)(A) means without taking a peek at (9)(c) as to what remedies are permitted.

Importantly, Justice Gorsuch was willing to "spot" Amgen the assumption that "shall" means shall.  But, as he put it:

[I]t's hard to divorce a right from its remedy, isn't it, and to understand the contours of the right.  And if (2)(A) gives you a certain right to information, we usually understand the right in the context of the remedy provided.

Counsel for Amgen responded to this issue by alleging that (9)(C) was not meant to provide a remedy to the reference product sponsor, but rather it was meant to specify who cannot bring a declaratory judgement action, specifically the biosimilar applicant:

9(C) says if you don't provide that (2)(A) information, you, the applicant, can't ever file for a declaratory judgement action, but (9)(C) doesn't remedy the sponsor's harm . . . 9(C) simply confirms what is — what should be obvious, which is if it isn't provided, the sponsor is left to his background rights to — to litigate the declaratory judgment action.

However, the Justices did not seem convinced.  As such, it would appear as though the Supreme Court is likely to come to the same conclusion as the Federal Circuit — that even though "shall" normally means "shall," because the statute specifies the remedy, the biosimilar applicant is free to accept the consequence for not satisfying this requirement.

State Law and Preemption

After Sandoz refused to provide its aBLA, Amgen filed suit in the U.S. District Court for the Northern District of California.  Interestingly, a number of the allegations fell under California state law.  For example, the first cause of action in the complaint alleged that the Sandoz action of filing its BLA and planning for launching its biosimilar drug product was a violation of California's state law of unfair competition.  Specifically, Amgen alleged, in part, that the use of the abbreviated biosimilars pathway without complying with the statutory requirements of the BPCIA was a direct cause of economic injury.  Amgen also asserted a cause of action for conversion based on the use of Amgen's information related to safety, purity, and potency.  If Sandoz does not adhere to the patent exchange provisions of the BPCIA, Amgen argued, it should not be entitled to rely on the efforts of the reference product sponsor.

The parties did not raise the state law and preemption issue because the Federal Circuit decision rested solely on Federal law.  Nevertheless, Justice Gorsuch brought it up during the argument by the assistant to the Solicitor General.  Specifically, he was concerned that if (l)(9)(C) was viewed as the exclusive remedy, "what happens when we have a claim under State law that no one's argued is preempted?"  Chief Justice Roberts echoed the concern:

And in terms of the preemption question, it seems to me that it's very hard to give a comprehensive answer to the questions presented without considering whether, well, thanks for your opinion on what Federal law does, but, in fact, State law, you can get the same injunction.  It's really asking us to put together a puzzle where a big piece is missing.

Nevertheless, the assistant to the Solicitor General pointed out that there would be no issue, as there would be "no State law claim, because your state law claim is predicated on violating the Federal law."

Justice Sotomayor also expressed concern regarding this issue during Amgen's argument.  Specifically, she questioned counsel for Amgen:

What you're not telling me is, it's no longer a choice . . . because State law can force them . . . through you seeking injunctions to participate unwillingly.

In fact, she pointed out that every time a biosimilar application refused to participate in the patent dance, the reference product sponsor could:

[J]ust run to court and say, my State law remedy is force them to take the next step.  Give me the application, then identify, then do this.  You're going to — there's no longer a choice.

Counsel for Amgen tried to avoid the subject by pointing out that the state law was not preempted, but that it was not appropriate to address it at this time.  He started by citing the Bates v. Dow Agroscience, which he had argued, but the Court ruled against his client in that case holding that because Texas made it a violation to fail to comply with a Federal statute, the plaintiff was entitled to a state law remedy.  This was true, even though Congress did not provide for a remedy in the statute.  He ultimately concluded that, even though the result would be unsatisfactory, the Court should not be deciding that issue at this time.  Correspondingly, it will be interesting to see if the Court addresses the preemption issue when it issues its decision by the end of June.

By Kevin E. Noonan —

On Wednesday, April 26, the Supreme Court will hear oral arguments in Sandoz  Inc. v. Amgen Inc, involving interpretation for the first time of the Biologics Price Competition and Innovation Act ("BPCIA"), which was enacted in 2010 to facilitate the entry of biosimilar drug products into the marketplace.  Yesterday's post considered the parties' and amici's arguments with regard to whether disclosure of a biosimilar applicant's biosimilar application (or aBLA) was mandatory or optional (see "Supreme Court Preview — Sandoz Inc. v. Amgen Inc.").  This post considers the other question before the Court:  whether a biosimilar applicant must give notice of commercial marketing only after FDA has approved its aBLA, or whether such notice is effective at any time provided it is at least 180 days before commercial marketing commences.

The District Court agreed with Sandoz that the latter interpretation was the correct meaning to give this provisions of the statute (42 U.S.C. § 262(l)(8)(A)):

The subsection (k) applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).

The Federal Circuit disagreed, in a opinion by Judge Lourie joined by Judge Newman, with Judge Chen dissenting (see "Amgen v. Sandoz (Fed. Cir. 2015)"). The Federal Circuit majority agreed with Amgen that notice can only effectively be given after the biosimilar product has been approved by the FDA.  According to the opinion, this is because while in other portions of the statute, the biosimilar product is referred to as "the biological product that is the subject of the application," in subsection (l)(8)(A) the statute reads "the biological product licensed under subsection (k)."  The change in language indicates to the Court that "[i]f Congress intended paragraph (l)(8)(A) to permit effective notice before the product is licensed, it would have used the 'subject of' language."  The Court appreciated that Congress made this distinction at least in part because it is only after licensure that "the product, its therapeutic uses, and its manufacturing processes are fixed," something that even the biosimilar applicant does not know with certainty when it applies for FDA approval.  The Court also recognized that "[g]iving notice after FDA licensure, once the scope of the approved license is known and the marketing of the proposed biosimilar product is imminent, allows the RPS to effectively determine whether, and on which patents, to seek a preliminary injunction from the court."  This permits "a fully crystallized controversy" between the parties to have arisen when suit is filed, and "provides a defined statutory window during which the court and the parties can fairly assess the parties' rights prior to the launch of the biosimilar product."  Interpreting the statute as advanced by Sandoz would, on the contrary, result in a situation where "the RPS would be left to guess the scope of the approved license and when commercial marketing would actually begin."  The Court dismissed the argument that Amgen would receive unfairly an additional 180 days of exclusivity as being serendipitous under these particular circumstances (Sandoz having filed its aBLA 23 years after Amgen received market approval) which will not be the usual case.

Judge Chen, in his dissent on this issue, was concerned that the majority's opinion gave Amgen another 180 days of exclusivity that is outside the statutory 12-year exclusivity term and thus should not be permitted (because it gives Amgen "an extra-statutory exclusivity windfall").  He believed that a biosimilar applicant could give notice of intent to market prior to obtaining FDA approval of its biosimilar product.  Stated in statutory construction terms, Judge Chen believed that subsection (l)(8)(A) becomes a nullity when, as here, the biosimilar applicant has not complied with subsection (l)(2)(A)'s provisions.  This is because he viewed the provisions of subsection (l)(8)(A) to be intended to give the reference product sponsor time to obtain an injunction when the other provisions have been complied with and, as a result, the reference product sponsor has not been able to assert all its patents prior to biosimilar product launch.  He stated in this regard his opinion that "[t]he interwoven structure of subsection (l) indicates that Congress viewed the procedures of (l)(8) as inseverable from the preceding steps in [section] (l)."

Sandoz presented this question to the Court in its certiorari petition:

Whether notice of commercial marketing given before FDA approval can be effective and whether, in any event, treating Section 262(l)(8)(A) as a stand-alone requirement and creating an injunctive remedy that delays all biosimilars by 180 days after approval is improper.

The Court, before granting Sandoz' petition asked the Solicitor General for the government's views, which succinctly stated were that:

The court of appeals erred in interpreting Subsection (l)(8)(A) [the Notice provision], but it correctly construed Subsection (l)(2)(A) [the "patent dance" provision].  The proper interpretation of those provisions has a significant impact on the operation of the BPCIA and the ability of aBLA applicants promptly to bring their biosimilars to the public.  And because the provisions are integrally related, the Court should consider all of the questions presented together.  Both the certiorari petition and conditional cross-petition therefore should be granted.

The SG's analysis was expressly textual and framed the notice provisions as a gatekeeper for initiation of a second round of patent infringement litigation, wherein said notice triggers the "stay" imposed on such litigation the SG says is part of the statutory scheme.  Specifically:

The text and purpose of Section 262(l)(8)(A)'s notice provision and the BPCIA's broader statutory context demonstrate that the provision permits [but does not mandate] an applicant to give advance notice of the first commercial marketing of its biosimilar before FDA has licensed the biosimilar.

The SG advocated that the statute provides that the RPS "may seek a preliminary injunction to enjoin such marketing '[a]fter receiving the notice . . . and before [the] date of the first commercial marketing,'" citing § 262(l)(8)(B).  In practice, however, should the BA (as Sandoz did in this case) give the required notice when the FDA accepts the aBLA for review, the RPS can either file suit (and seek a preliminary injunction immediately), or risk waiting for the FDA to approve the biosimilar.

The brief provided this basis for its reading of the statute:

The timing of biosimilars' entry onto the market prohibits FDA from making its approval of an aBLA effective before 12 years after the reference product's first licensure.  . . .  Given the expressly granted exclusivity periods, it is particularly unlikely that Congress would have further delayed biosimilars' marketing in such an indirect manner.

The statute provides a balance, according to the SG's brief, between Round 1 litigation (as a consequence of the statute's provisions for aBLA filing as an artificial act of infringement), the timing and subject matter of which is controlled by the BA, and Round 2 litigation prompted by the notice of commercial marketing, which in the SG's view is under the RPS control.

Importantly, not only did the SG argue that notice of commercial marketing can be given before FDA approval, but the brief argued that injunctive relief is not available as a remedy after such notice is given.  This was based on the principle that the right to an injunction must be conferred by statute, and the BPCIA does not do so (supposedly this proscription lies outside the scope of a preliminary injunction motion in the anticipated second round of litigation provided by the statute).

This means the BA would be able to market immediately upon approval, and the only recourse for an RPS would be to file suit and apply for a TRO — because unlike under the Hatch-Waxman Act there is no automatic stay upon filing suit under the provisions of the BPCIA.  Alternatively, if as in this case the notice is given at the same time that the FDA accepts the aBLA for review, the RPS would need to initiate both Phase 1 and Phase 2 of the litigation at the same time.

The party briefs generally followed these principles and arguments.  Sandoz adopted a textual approach, wherein the various provisions of the BPCIA could be woven together into an integrated whole.  In its view, the notice provision is just one aspect of a requirements/ remedies scheme set forth in the statute:

The Biosimilars Act specifies consequences for not following its procedural steps.  Yet the Federal Circuit erroneously added its own remedy:  a mandatory, 180-day injunction against commercial marketing of the biosimilar, even after it is licensed by the FDA.  In addition, rather than reading the statutory provisions in context and as part of a coherent design, the Federal Circuit erroneously read the notice provision as a freestanding requirement, divorced from the role it plays in the statute's patent resolution regime.

The upshot of all these errors is a windfall for sponsors at the expense of competition and patients.

[T]he statute pairs the notice provision with an alternative procedural path.  If the applicant does not provide the notice, the sponsor (but not the applicant) may bring a declaratory judgment action for any patents on the sponsor's original patent list (as well as any patents newly issued or licensed after the sponsor provided its original patent list).  35 U.S.C. § 271(e)(2)(C)(i); 42 U.S.C. § 262(l)(9)(B).

In addition to the policy bases (with regard to the "extra" six months of exclusivity) the brief also attacks the "extra-statutory" remedy of an injunction fashioned by the Federal Circuit, and asserts that the court did not satisfy the traditional requirements for injunctions in violation of the Supreme Court's eBay v. MercExchange decision:

Regardless of whether notice can be provided only after approval, the Federal Circuit independently erred by fashioning a private right of action for an extra-statutory injunction to enforce subsection (l)(8)(A).  It is up to Congress, not the courts, to create private rights and remedies for their enforcement.  The Biosimilars Act reflects no congressional intent to do so for the notice provision.

Congress created no private right in subsection (l)(8)(A).  That provision plays only a procedural role by affecting the timing of certain patent infringement suits.  Even if subsection (l)(8)(A) conferred a right, no extra-statutory remedy may be inferred for violating it.  Congress already provided a remedy.

As an example of the Federal Circuit's error advocated by Sandoz, its brief argues that under the appellate court's interpretation, the notice (and additional 6-month "delay") would be required even where there were no patents remaining:

The Federal Circuit's ruling gives sponsors an additional 180-day injunction beyond that statutory period—thus effectively rewriting a central provision of the Biosimilars Act.  And it does so even where the sponsor has no patent protection for its product.

In Sandoz view, so long as that "180 days before" condition is satisfied, so too is Section 262(l)(8)(A).

Amgen's brief also provides a textual exegesis of the statute, reaching the opposite conclusions.  According to Amgen, the use of the term "licensed product" in the statute by its plain meaning mandates that notice cannot be given before approval.  With regard to the structure of the statutory provisions as a whole, Amgen argues that the two "phases" of litigation (i.e., the first phase commonly referred to as the "patent dance" and the second phase that commences after notice of commercial marketing is given) could be inverted if notice could be given as Sandoz did, upon FDA acceptance of the application.  Using Sandoz' logic, that notice provides a reference product sponsor the opportunity to immediately bring suit on any patent, listed by the parties or not in the patent dance.

With regard to the practical realities, Amgen voices the concern expressed by the Federal Circuit majority about the uncertainties that could arise following Sandoz' interpretation of these provisions of the statute (and notes in this regard that Sandoz' application was amended 30 times before obtaining FDA approval):

A notice given in such circumstances is a notice in name only.  In practice, it tells the sponsor nothing about when the biosimilar will be approved or, indeed, whether it is likely to be approved at all.  A sponsor cannot seek injunctive relief against such a hazy risk of the biosimilar's launch; instead, it will have to rush to the courthouse to seek emergency injunctive relief after learning of the biosimilar's licensure.

Under Sandoz's approach, a sponsor could be left totally in the dark about the existence of a pending application until the applicant launched its competing product upon receiving FDA approval.  The sponsor would then have to rush to court to seek emergency injunctive relief on every potentially relevant patent, without having time to analyze the nature of the biosimilar and the scope of the FDA's approval, and without knowledge of the manufacturing process.  The resulting proceedings would burden the courts by forcing them to decide complex disputes almost instantaneously.  As experience with the Hatch-Waxman Act demonstrates, such compressed proceedings are arduous for the judiciary and unnecessarily prone to error.

The chaos caused by Sandoz's and the government's interpretation is reason enough to reject it.  Amgen's interpretation of the statutory scheme is not merely more consistent with the statutory text and structure.  It is also the only one that serves Congress's goal of promoting the orderly and efficient resolution of patent disputes.

Amgen's brief also argues that this chaos is exacerbated where, as here, the biosimilar applicant has failed to make its § 262(l)(2)(A) disclosures, exemplified by situations where a biosimilar applicant "seek[s] approval for a different formulation than the reference product, a different delivery device, a subset of the reference product's routes of administration and conditions of use, or different manufacturing techniques."  In addition, under these circumstances the statutory relief which Sandoz assures the Court remains as a remedy (such as a preliminary injunction) could be much less robust, because "[t]he sponsor could have trouble articulating why it was 'likely to suffer irreparable harm in the absence of preliminary relief,' why it was 'likely to succeed on the merits,' or why an injunction was 'in the public interest,'" citing City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983) (injunctive relief requires "a 'likelihood of substantial and immediate irreparable injury'").  Finally, Amgen argues that the regime advanced by Sandoz would "impose extraordinary burdens on district courts" because "emergency proceedings [] would be necessary under Sandoz's view [that] would afford courts little time to examine potentially voluminous factual records and complex questions of patent law.  Patents relating to biosimilars are among the most technical that a generalist judge is ever likely to encounter.  . . .  It is difficult to imagine how a court conducting emergency proceedings, with no more than a few days or perhaps hours to issue a ruling, could sufficiently master the relevant issues to adjudicate patents like these."

Fourteen amicus briefs were filed, nine supporting Sandoz:

• AARP, AARP Foundation, Citizens against Government Waste, UAW Retiree Medical Benefits , National Health Law Program, and Coalition to Protect Patient Choice (addressing only the 180 day notice question)
• Adello Biologics (addressing only the 180 day notice question)
• America's Health Insurance Plan (addressing both questions)
• Apotex (addressing only the 180 day notice question)
• Biosimilars Council (addressing only the 180 day notice question)
• Coherus Biosciences (addressing both questions)
• Mylan (addressing both questions)
• Pharmaceutical Care Management Association, National Association of Chain Drug Stores, and Healthcare Supply Chain Association
• The United States (addressing both questions)

And five supporting Amgen:

• AbbVie (addressing both questions)
• The Biotechnology Innovation Organization (BIO)(addressing both questions)
• Genentech (addressing only the 180 day notice question)
• Janssen Biotech (addressing both questions)
• 11 Law Professors (addressing only the mandatory disclosure question)

Many of these amicus briefs concentrated on the deleterious consequences of the purported additional 180 days of market exclusivity; for example, the AARP's brief set forth these consequences in the context of their study showing (somewhat dubiously) that the development costs for a biologic drug could be recouped by a reference product sponsor in only one year and stating that "Congress did not intend to penalize biosimilars manufacturers for their readiness to bring their products to market immediately upon their approval by the FDA."  The briefs by Adello Biologics, America's Health Insurance Plans, the Biosimilars Council, and the Pharmaceutical Care Management Association raised similar concerns as the basis for the Court to reverse the Federal Circuit.  The Coherus brief follows the reasoning that the notice is provided in the statute only as a "safety valve," saying:

The statute's 180-day period is meant to give the reference product sponsor adequate time to seek an injunction, not itself serve as an injunction.  . . .  [T]he statute is designed to resolve some or all of the parties' patent disputes before the biosimilar application is approved, so that, if it turns out the proposed product will not infringe any valid patents, it can be launched—and the public can enjoy the befits that come with it—immediately upon expiration of the 12 year exclusivity.  Section 262(l)(8) simply provides a safety valve that permits a reference sponsor who has engaged in the statutory patent identifications to immediately sue on any patent that the parties initially include on their lists of potential implicated patents under § 262(l)(3), yet do not include in the first-wave of litigation.

The Apotex's brief adopts Sandoz's argument about extra-statutory injunctive relief and argues that no notice of commercial marketing is required if the applicant complies with the patent dance, saying it serves no purpose if there are no remaining patents, while Mylan's brief asserts in the context of the statutory framework that "[t]here is no basis in the BPCIA, equity, or common sense to delay patient access to lower-cost biosimilars for even a day—much less 180 days— without a full consideration of the equities and justification on the merits of a patent claim."  Finally in support of Sandoz, the government's brief reiterates much of what was in its earlier brief in support of the Court granting certiorari, but also contains the following argument with regard to the purported transparency of the biosimilar application process, which transparency was relied upon by Sandoz and several amici with regard to the need for notice at all:

Although 21 C.F.R. 601.51(b) constrains FDA from revealing the existence of an undisclosed aBLA, petitioner correctly explains . . . that a surprise-launch strategy would be infeasible given the amount of public information available by the time FDA approves a biosimilar.  An applicant, moreover, would be quite unlikely to engage in a surprise launch in the face of a potentially viable patent claim, given the applicant's substantial and ongoing monetary investments in its biosimilar[], which would be put at significant risk by the monetary-damages and injunctive sanctions for actual (not artificial) patent infringement.  . . .  Finally, if an applicant were nevertheless to launch without notice, the district court could take any failure to give notice under Section 262(l)(8)(A) into account when exercising its equitable discretion to award preliminary injunctive relief while a sponsor's actual patent-infringement claims are being litigated.

BIO's brief in support of Amgen provides legislative history context for its arguments that subsection (l)(8)(A) of the BPCIA is mandatory as the "triggering mechanism" for the second wave of patent infringement litigation.  Notice provides a minimum of six months for the reference product sponsor to assert all relevant patents (remaining after the patent dance) and seek a preliminary injunction to block biosimilar market entry.  The brief argues that the 180-day notice cannot be given before FDA approval, both because of the statutory language and the possibility that the biosimilar product, its manufacture, or its intended uses are subject to change.  The brief also adopts the Federal Circuit's proposal from Amgen v. Apotex that the FDA could issue tentative approval which would become effective at the end of the 12-year period.

Janssen's brief focuses on the "premature and ineffective" nature of "early" (pre-approval) notice, stating that such notice of commercial marketing "leaves the innovator uncertain of the nature of the product that will finally be approved or whether the product will be approved at all.  The diseases that a product will eventually be approved to treat, the methods of manufacture that will ultimately be approved, and even the precise composition of the product can change from those disclosed in the initial aBLA."

Both AbbVie and Genentech's briefs argue against the notion that the Federal Circuit had created a private right of action that does not exist in the statute, with Genentech arguing "if not private litigant, then who?":

Sandoz's argument also is unmoored from the considerations and concerns that animate the Court's implied-right-of-action cases.  Its brief relies on cases in which private lawsuits were excluded because Congress had created other mechanisms for enforcing its statutes.  Here, however, Sandoz points to no other way to enforce the Biologics Act.  This is not a situation in which Congress created a statutory scheme for an administrative agency to enforce.

According to Genentech's brief:

Sandoz wants to take the statutory shortcut without paying the toll.  It seeks to reap the benefits of the abbreviated licensing procedure while disregarding the accompanying requirements.  The Court should prevent Sandoz—and the scores of biosimilar applicants who would mimic its approach—from ignoring Congress's explicit instructions.  As Amgen explains, the Biologics Act makes clear that notice of commercial marketing must follow the FDA's issuance of a license.

In addition, AbbVie argues that this question is not properly before the Court because Amgen sought an injunction in state court, not Federal Court and so the proper issue is whether the BPCIA preempted the state cause of action (a position that AbbVie argues Sandoz abandoned and that, even if properly before the Court should be held did not preempt).

The effects of these arguments may become more evident tomorrow.

By Andrew Williams —

On Wednesday, April 26, the Supreme Court will hear oral arguments in the Sandoz  Inc. v. Amgen Inc. case.  This case involves the interpretation of the Biologics Price Competition and Innovation Act ("BPCIA"), which will be the Court's first opportunity to consider this statute enacted in 2010 to facilitate the entry of biosimilar drug products into the marketplace.  However, even though the purpose of the statute is commonly understood, the language of the BPCIA is far from clear, so much so that Judge Lourie described it as "a riddle wrapped in a mystery inside of an enigma."  As a case in point, the Amgen v. Sandoz decision authored by Judge Lourie contained two dissenting opinions (at least in part).  Patent Docs began following this case from the very beginning; at the time the FDA accepted its first aBLA from Sandoz to market a biosimilar version of NEUPOGEN^® (see "Finally, A Biosimilar Application Has Been Accepted By The FDA").  Now, almost three years later, the Supreme Court will be considering two issues that have plagued this case from Judge Seeborg's early rulings in the Northern District of California to the Federal Circuit's highly fractured conclusions:  (1) whether the biosimilar applicant is required to provide the reference product sponsor ("RPS") with its abbreviated biologics license application ("aBLA") and related manufacturing information in order to take advantage of the abbreviated approval process, and (2) whether the 180-day notice of commercial marketing can be given before FDA approval.  In this preview post, we will review the first of these issues.

This case stems from two appeals from the aforementioned Federal Circuit opinion:  Sandoz v. Amgen (No. 15-1039) and Amgen v. Sandoz (No. 15-1195), which were subsequently consolidated.  Amgen did not initially appeal the decision related to aBLA-disclosure provision, but instead filed a conditional cross-petition asking the Court to review that issue in the event it granted the Sandoz petition for writ of certiorari on the notice-of-commercial marketing issue.  Specifically, the question posed by Amgen was:

Is an Applicant required by 42 U.S.C. § 262(l)(2)(A) to provide the Sponsor with a copy of its biologics license application and related manufacturing information, which the statute says the Applicant "shall provide," and, where an Applicant fails to provide that required information, is the Sponsor's sole recourse to commence a declaratory-judgment action under 42 U.S.C. § 262(l)(9)(C) and/or a patent-infringement action under 35 U.S.C. § 271(e)(2)(C)(ii)?

Not surprisingly, this case has garnered a significant amount of amicus interest from pharmaceutical companies that market biologic therapeutics, biosimilar manufacturers, trade organizations, and academics.  The Solicitor General's office filed a brief for the United States in support of Sandoz.  In addition, eight other amici filed briefs in support of the petitioner, although many did not address Amgen's question (and those that did gave it little attention).  On the other hand, there were five amicus briefs filed in support of Amgen, including three submitted by pharmaceutical companies: Abbvie Inc, Genentech, Inc, and Janssen Biotech Inc. (all of which are reference product sponsors dealing with aBLAs filed against their products); one submitted by the Biotechnology Innovation Organization (BIO); and one submitted by eleven Professors.  For the record, the brief of the eleven Professors was filed by Patent Docs author Kevin E. Noonan, Ph.D. as counsel of record, along with other attorneys at McDonnell Boehnen Hulbert & Berghoff LLP.

To understand the question presented by Amgen, it is important to understand the so-called "patent dance."  The patent resolution section of the BPCIA consists of a series of exchanges between the biosimilar applicant and the RPS that most likely culminates in litigation that potentially proceeds in two phases.  This procedure begins with the FDA's acceptance of the aBLA, after which the biosimilar applicant is to provide the application and other information describing the process(es) used to manufacture the biosimilar product.  The patent dance consists of a cascade of information exchanges regarding the patents that the parties believe could reasonably be asserted against the biosimilar drug product were it to be marketed before patent expiration.  The parties negotiate a first set of identified patents that will be asserted in a first round of litigation.  The remaining identified patents (if any) are held in reserve until the biosimilar applicant provides notice that it intends to market the biosimilar product, at which time the RPS can seek a preliminary injunction with respect to the second-phase patents.  If the biosimilar applicant fails to complete any action required by the BPCIA, the RPS is permitted by the BPCIA to immediately bring a declaratory judgement action.

The information disclosure provision of the BPCIA can be found at § 262(l)(2)(A), and reads:  "[the aBLA applicant] shall provide to the reference product sponsor a copy of the application submitted to the Secretary under subsection (k), and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application . . . ."  The Federal Circuit held that even though the statute uses the word "shall," in the context of the BPCIA, "shall" does not mean "must."  Importantly, the statute contains an optional remedy:  if a biosimilar "applicant fails to provide the application and information required under paragraph (2)(A), the reference product sponsor . . . may bring an action . . . for a declaration of infringement, validity, or enforceability of any patent that claims the biologic product or a use of the biological product."  42 U.S.C. § 262(l)(9)(C).  In essence, the statute expressly provides the remedy to address the precise "non-disclosure" path that Sandoz chose.  As such, failure to disclose was found to not be a violation of the BPCIA.

Amgen has asserted that such a conclusion is contrary to the purpose of the BPCIA.  In other words, without the knowledge of the nature of the biosimilar drug product and the methods of manufacturing it, the RPS must essentially guess which patents it should assert.  This uncertainty may ultimately prevent a reference product sponsor from being able to assert any of its patents in federal court prior to the launch of the biosimilar drug.  Nevertheless, Sandoz has pointed out that Congress did not include a provision linking the FDA approval process to the patent resolution procedures.  Thus, there is nothing in the statute that would appear to prevent the FDA from approving an aBLA even if the applicant did not participate in the patent dance.

BIO's Amicus Brief

The Federal Circuit focused on the text of the statute, specifically the inclusion of the remedy should the aBLA applicant fail to disclose its application.  For the Supreme Court to reverse on this issue, they will likely need to be convinced that such an interpretation of "shall" is contrary to the legislative history of the BPCIA.  BIO submitted a brief in support of Amgen that highlighted the background and history of the statute, recounting the efforts of the various interested parties to arrive at a compromise solution.  As BIO put it, the Federal Circuit's "construction was contrary to the plain meaning of the text, the purpose of the legislation, and the intent of Congress."

With regard to the text, BIO stressed that "shall" means "shall" — in other words, the "shall" connotes a requirement (citing the Supreme Court's recent case of Kingomware Techs Inc. v. United States case from 2016).  In fact, the very next section of the statute, § 262(l)(2)(B) demonstrates that Congress understood the difference between "shall" and the word "may" (which implies discretion):  "[The aBLA application] may provide to the reference product sponsor additional information requested by or on behalf of the reference product sponsor."  Moreover, BIO pointed out that the BPCIA was fashioned after the Hatch-Waxman act for dealing with small molecule generics.  Without the disclosure obligation, though, the patent-dispute-resolution scheme of the BPCIA scheme falls apart.  "Not only is the information disclosure requirement critical to the identification of relevant patents, it is also vital to the sponsor's ability to assert them."

The BIO brief is probably at its most effective, however, when it explains why the history of the legislation "bolsters" this conclusion.  For example, the brief explained that the Senate "HELP" committee, consisting of Sens. Hatch, Enzi, Kennedy, and Clinton, worked for approximately three years to devise a bill that ultimately became the BPCIA.  This committee "concluded that a mandatory patent-dispute-resolution procedure would best effectuate the goals of the legislation while balancing competing interests of stakeholders."  This was because biosimilar manufacturers were always able to (and are still able to) file a full BLA to get a biological generic on the market.  But by taking advantage of the abbreviated FDA approval pathway of the BPCIA, it must "accept both the benefits and the burdens."  The Federal Circuit's decision, therefore, upset this balance, allowing an aBLA applicant to get all of the benefits and none of the burdens.

The Amicus Brief of the Eleven Professors

The eleven professors, for their part, focused on the real-world implications of the Federal Circuit's construction of the BPCIA.  Beginning with an explanation of the innovations brought about by the biopharmaceutical industry, the brief highlighted the advances that have come about thanks to the biotechnology revolution.  The United States has been at the forefront of those advances, for example, the U.S. was responsible for "originating more than half of all worldwide biopharmaceutical introductions from 1982 to 2003" (citing Henry Grabowski, Follow-on Biologics: Data Exclusivity and the Balance Between Innovation and Competition, 7 Nature Rev. Drug Discovery 479, 483 (2008)).  Nevertheless, obtaining such drugs can take around ten to twelve years at a cost more than $2.5 billion.  Expenses related to the manufacturing process range from building the required complex facilities to the actual development and validation of the process.  Moreover, biologic drugs are risky because they, unlike small molecules, present a risk of immunogenicity that can render the medicine ineffective or cause the treatment to become life-threatening.  It is because of this, according to the brief, that patent protection is essential.  And the Federal Circuit's decision disrupts the balance established by the BPCIA, thereby eroding the reference product sponsors' patent protection.

The eleven professors also countered the arguments posited by Sandoz by casting the Sandoz actions as an end-around the compromise reached by Congress.  In other words, they were attempting to obtain an outcome through the courts that they otherwise were not able to obtain from Congress.  For example, the parent company of Sandoz, Novartis, repeatedly opposed any version of the statute that combined the biosimilar regulatory pathway with the patent resolution process.  This went against other representatives of the generics industry who generally agreed that resolution of the patent issues prior to biosimilar approval was desirable.  Congress nevertheless rejected the Novartis approach.  The eleven professors concluded by arguing that "Novartis/Sandoz should take its case back to Congress rather than asking this Court for relief that the company failed to secure from the legislature."