July 27, 2015
On July 21, 2015, the Federal Circuit issued its much anticipated decision in Amgen v. Sandoz (No. 2015-1499) construing two key provisions of the Biologics Price Competition and Innovation Act ("BPCIA"). The split decision held something for both sides, providing that the information disclosure and exchange provisions of the BPCIA (the infamous "patent dance") are not mandatory, and that the biosimilar applicant’s 180-days’ pre-marketing notice may only be given after final FDA approval. It is worth reiterating that the Federal Circuit has determined that the patent dance Congress spent years choreographing is not a mandatory requirement. Judge Lourie wrote the majority opinion, with Judge Newman concurring-in-part and dissenting-in-part, and Judge Chen dissenting-in-part.
42 U.S.C. § 262(l)(2)(A) states that the biosimilar applicant "shall provide to the reference product sponsor" a copy of its ABLA and other information on the processes used to manufacture its biological product. The Federal Circuit held that the applicant’s failure to supply this information does not violate the BPCIA. Rather, it triggers a specific remedy set forth in the statute: the reference product sponsor ("RPS") may file for declaratory judgment of infringement pursuant to 42 U.S.C. § 262(l)(9)(C) and 35 U.S.C. § 271(e)(2)(C)(ii). The court reasoned that once the RPS files suit under those two provisions, it can access the required information through discovery. Based on this interpretation of the statute, the Federal Circuit held that there was no BPCIA violation to sustain Amgen’s state-law claims for unfair competition and conversion. The court also determined that Amgen’s appeal of the denial of its motion for a preliminary injunction was moot given the resolution of the state law claims. These portions of the opinion were joined by Judge Chen.
42 U.S.C. § 262(l)(8)(A) provides that the biosimilar 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 at issue. The Federal Circuit held that the 180 days’ notice may only be provided after the FDA approves the product. The court reasoned that it is only when notice follows licensure that a "fully crystallized controversy" regarding the need for injunctive relief exists. Because the only effective notice that Sandoz provided was on March 6, 2015, when the FDA approved its ABLA, the court held that Sandoz could not launch until September 2, 2015. This portion of the opinion was joined by Judge Newman.
Judge Newman agreed that the biosimilar applicant’s notice of commercial marketing may only be given after final approval, but dissented with respect to the majority’s ruling that the disclosure and information exchange provisions of the BPCIA were not mandatory. Judge Newman reasoned that the information exchange is fundamental to the purposes of the statute, and that if Sandoz obtained the benefit of the Amgen data in filing, it should be required to satisfy its disclosure obligations. Judge Chen disagreed with Judge Newman completely, joining opposite sections of the opinion. Judge Chen agreed with the majority that the failure to supply information to the RPS is not a violation of the BPCIA, but concluded that the 180-day notice provision does not apply if the biosimilar applicant permissibly opts out of the patent dance. Judge Chen reasoned that when the applicant fails to comply with the information disclosure and exchange provisions, the remaining provisions of § 262(l) cease to matter, and that in this scenario the RPS does not need the 180-day injunction of § 262(l)(8) because the statute grants it the right to immediately file an unrestricted patent infringement action.
It remains to be seen if a consequence of this opinion will be that biosimilar applicants opt-out of the patent dance like Sandoz, or if applicants will generally find it easier to comply. If the former, the issue will be whether the remedy set out in the statute for the failure to comply is satisfactory, or if it severely disadvantages RPSs, as some amici have predicted. Congress could also go back and cure the loopholes in the statute, making the patent dance truly mandatory. At any rate, it is unlikely that this is the last we will hear on the statutory interpretation of the BPCIA: a petition for rehearing en banc and a possible further appeal to the Supreme Court are likely right around the corner. If the judicial interpretation of the statute ultimately fails to strike the right balance between the interests of biosimilar applicants and reference product sponsors, the onus will be on Congress to ensure that the purposes of the BPCIA are being carried out.
Gibson, Dunn & Crutcher’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Intellectual Property practice group, or the authors of this alert in the firm’s San Francisco office:
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