Source: https://www.labaton.com/blog/shall-we-dance-biologic-biosimilar-competition-under-the-biologics-price-competition-and-innovation-act
Timestamp: 2019-04-22 09:00:54+00:00

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As more biosimilar applications are filed, courts will inevitably face the novel and complex issues posed by the BPCIA with increasing frequency.
Although enacted in March 2010, it was not until June 2013 that the BPCIA became the subject of litigation.10 There has been a flurry of litigation since then, however, particularly with respect to two key elements of the BPCIA: (1) the necessity of the complex patent information exchange procedure, also known as the "patent dance;" and (2) the necessity of obtaining FDA approval of an aBLA prior to issuing the 180-day notice of commercial marketing.
This article examines the recent litigation on these two issues, which includes an appellate decision from the Federal Circuit. However, these cases are just the beginning. As more biosimilar applications are filed, courts will inevitably face the novel and complex issues posed by the BPCIA with increasing frequency. The law's competitive impact on the marketplace for biologic products is still to come.
II. THE BPCIA AND THE "PATENT DANCE"
In addition to these patent information exchanges, 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 biosimilar.25 Upon receiving the notice, the biologic manufacturer may bring a preliminary injunction action against the biosimilar applicant.26 However, barring an injunction, once the biosimilar applicant's product is approved by the FDA, the applicant may begin marketing and selling its biosimilar.
These provisions of the BPCIA have proven to be fertile grounds for litigation between biologic producers and biosimilar applicants. Two issues in particular have been the subject of recent litigation: (1) the necessity of the patent dance, and (2) the necessity of the 180-day notice of commercial marketing.
Sandoz's lack of compliance included the tendering of a notice of commercial marketing on July 8, 2014, which Amgen considered premature and defective in light of Sandoz's failure to obtain FDA approval of its aBLA.30 Sandoz answered and asserted counterclaims for declaratory relief, stating that BPCIA 's patent dance and notice of commercial marketing were not mandatory and that the Neupogen patents were invalid and not infringed.
The Court denied Amgen 's motions, finding Sandoz 's "overall interpretation of [BPCIA] 's plain language is more persuasive."34 Despite the repeated use of the word "shall" in patent dance and notice provisions, the Court found it did not imply a mandatory obligation on the part of the biosimilar applicant.
Because the Court found that Sandoz did not violate the mandates of the BPCIA, it dismissed the unfair competition law and conversion claims.
There was clear disagreement among the judges on the panel. The majority opinion was delivered by Judge Alan Lourie and supported by Judges Pauline Newman and Raymond Chen, albeit separately: Judge Newman provided the support for the holding that the 180-day notice period was mandatory; Judge Chen provided the support for holding that the patent dance was optional. In addition, both Judge Newman and Judge Chen wrote dissenting opinions, with Judge Newman disagreeing that the patent dance was optional, and Judge Chen disagreeing that it was mandatory to obtain FDA approval prior to issuing the 180-day notice.
While the majority effectively split-the-baby with respect to the issues before it, two judges on the Federal Circuit believed that no splitting was necessary: Judge Newman believed that Sandoz should have lost on all grounds, while Judge Chen believed that Amgen should have lost on all grounds.
Therefore, even assuming that the majority 's view could be accepted-a view with which she did not agree-subsection 262( l)(2)(A) would still leave Amgen helpless in the face of Sandoz 's non-compliance. Accordingly, she deemed that compliance with the patent dance provisions was mandatory and unavoidable.
Further, he found that accepting the majority 's position would potentially create scenarios in which certain applicants would be subjected to mandatory compliance with the 180-day notice, while others would not. For example, under the majority's ruling, biosimilar applicants who fail to comply with subsection 262( l)(2)-(7) requirements would be required to provide notice of commercial marketing upon FDA licensure and be subjected to a mandatory 180-day injunction. However, biosimilar applicants who do comply with these provisions would not be mandated to provide such notice because the biologic manufacturer would have a right to sue for patent infringement under subsection 262( l)(9)(B).58 Judge Chen found nothing in the BPCIA's structure or underlying purpose that would suggest Congress intended these two different outcomes when applying the law.
However, Amgen II also held that the 180-day notice of commercial marketing was mandatory and could only be submitted upon receiving FDA approval of the biosimilar. This may have the effect of slowing entry of less expensive biosimilars into the market.
The Federal Circuit's opinion, however, is not a magnum opus on all aspects of the BPCIA. Several issues regarding the application of the BPCIA and its effects on the burgeoning market for biosimilars remain. First, as explained by Judge Chen in his dissenting opinion, under the majority's reasoning, the 180-day notice provision may not be mandatory for those biosimilar applicants who undertake some part of the patent dance. Instead, biologics manufacturers may have to sue for patent infringement and seek a court order enjoining the sale of the biosimilar's aBLA product. Whether the Federal Circuit will rule that the 180-day notice is mandatory under this scenario- i.e., compliance with some or all of the patent dance procedures-is uncertain, but the Court may have an opportunity to address this relatively soon.
On August 6, 2015, Amgen filed suit against Apotex for patent infringement and declaratory judgment for the biologic Neulasta® (pefilgrastim).63 According to Amgen's complaint, in December 2014, Apotex provided Amgen with notice that it had filed an aBLA for a Neulasta biosimilar. Amgen and Apotex began patent dance exchanges that same month. These exchanges continued through July 7, 2015. However, on April 17, 2015, Apotex issued a letter, purportedly serving as its notice of commercial marketing to Amgen-likely a decision made in light of the ruling in Amgen I just a few days earlier.64 Amgen moved for preliminary injunction, requesting an order requiring Apotex to provide Amgen with notice of FDA approval of Apotex's biosimilar and to refrain from marketing its biosimilar for 180 days after issuing a compliant notice of commercial marketing.
On December 9, 2015, the Neulasta Court granted Amgen's motion for preliminary injunction.65 While the Court acknowledged the issues raised in Judge Chen's dissent, it found that even when the biosimilar applicant engages in some portion of the patent dance, notice of commercial marketing is still mandatory and the biosimilar applicant can provide such notice only when it obtains FDA approval.66 Whether the majority that decided Amgen II will agree with this construction remains to be seen.
Undoubtedly, the patent litigation between Amgen and Sandoz will continue, and may at some point in the future result in a settlement. It remains to be seen whether a settlement in the context of biologics patent litigation will ultimately trigger the same competitive concerns that patent settlements in the Hatch-Waxman context have often triggered. There is good reason to believe they may.
There are aspects of the BPCIA that suggest such settlements could arise. Just as in the Hatch-Waxman Act, the first biosimilar applicant to file an aBLA receives a statutory grant of exclusivity that forbids the FDA from approving a subsequent aBLA. Thus, as has been observed in Hatch-Waxman cases, a biologic manufacturer could offer a biosimilar applicant valuable consideration-in the form of straight cash payment68 forgiveness of contingent liability,69 co-promotion and other side deals,70 or licenses to other biological or pharmaceutical products71 in exchange for dropping its patent challenge and agreeing to delay entry into the market.
Biologics manufacturers, like brand drug manufacturers, have every incentive to protect the exclusionary rights conferred to them by their patents, so a payment to a biosimilar manufacturer to delay entry may well be worth avoiding the prospect of impending competition. Thus, so long as these elements exist, there is always the potential that biologic and biosimilar manufacturers will enter agreements that may restrict competition for particular biologic products.
As biologic and biosimilar manufacturers continue to navigate the scope of the BPCIA, more litigation is inevitable.72 Patent litigation arising from the BPCIA will likely lead to settlements, which in turn may spawn additional litigation regarding those settlements' competitive effects on the biologics market. Courts will ultimately be asked to resolve these issues and, in doing so, they will likely borrow from existing case law concerning Hatch-Waxman settlements to guide their decisions. Further, industry stakeholders, the FDA, and FTC will also continue adding their input on these competitive issues as more biosimilar applicants trigger the application of the BPCIA.
 Food & Drug Administration ("FDA"), What Are "Biologics" Questions and Answers, (Aug. 8, 2015), http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CBER/ucm133077.htm.
 42 U.S.C. § 262(k)(7)(A). The BPCIA, Pub. L. No. 111-148, 124 Stat. 804 (2010), was enacted as part of the Patient Protection and Affordable Care Act and amended the Public Health Services Act, 42 U.S.C. §§ 201, et seq.
 Amgen Inc. v. Sandoz Inc., 794 F.3d 1347, 1351 n.1 (Fed. Cir. 2015) (" Amgen II")(quoting Winston Churchill , The Russian Enigma (BBC radio broadcast Oct. 1, 1939), http://www.churchill-societylondon.org.uk/RusnEnig.html).
 Data Supplied by the U.S. Department of Justice, Pub. L. No. 98-417, 98 Stat. 1585 (1984).
 Interchangeability means that the "biological product may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product." 42 U.S.C. § 262(i)(3). The FDA publishes a list of licensed biological products with reference product exclusivity and biosimilarity or interchangeability evaluations, known as the "Purple Book."
 Federal Trade Comm'n, Emerging Health Care Issues: Follow-On Biologic Drug Competition; A Federal Trade Commission Report 47, 53 (June 2009) ("FTC Report"), https://www.ftc.gov/reports/emerging-health-care-issues-follow-biologic-drug-competition-federal-trade-commission-report (anticipating biosimilar pricing to be between 10-30 percent lower than pioneer biologics).
 See, e.g., Del. S. 118, Ch. 238 (signed May 28, 2014); Fla. H.R. 365, Ch. 2013-102 (signed Jun. 3, 2013); Ind. S. 262, Ch. 96 (signed Mar. 31, 2014); Mass. H.R. 3734, Ch. 143 (signed Jun. 23, 2014); N.D. S. 2190, Ch. 181 (signed Jun. 25, 2013); Or. S. 460, Ch. 342 (signed Jun. 6, 2013); Utah S. 78, Ch. 423 (signed Apr. 26, 2013); Va. H.R., Ch. 412 (signed Mar. 16, 2013); Va. S. 1285, Ch. 544 (signed Mar. 18, 2013). Other states have legislation pending. See National Conference of State Legislatures, State Laws and Legislation Related to Biologic Medications and Substitution of Biosimilars (Nov. 9, 2015), http://www.ncsl.org/research/health/state-laws-and-legislation-related-to-biologic-medications-and-substitution-of-biosimilars.aspx#2013-14.
 The first cases involving the BPCIA were declaratory judgment actions brought by prospective biosimilar applicants. The courts dismissed these actions as premature in light of the fact that none of the biosimilar applicants bringing suit had submitted applications for FDA approval of their biosimilar products. See Sandoz Inc. v. Amgen Inc., No. C-13-2904, 2013 WL 6000069 (N.D. Cal. Nov. 12, 2013), aff'd, 773 F.3d 1274 (Fed. Cir. 2014); Hospira, Inc. v. Janssen Biotech, Inc., No. 14-cv-7049, 2014 WL 6766263 (S.D.N.Y. Dec. 1, 2014); Celltrion Healthcare Co., Ltd. v. Kennedy Tr. for Rheumatology Research, No. 14-cv-2256, 2014 WL 6765996 (S.D.N.Y. Dec. 1, 2014).
 See FTC Report at 70-71.
 Id. at 71. The FTC also noted that the inclusion of a marketing exclusivity provision "will inevitably generate lawsuits against the FDA regarding award, timing, scope, and termination of the marketing exclusivity periods has occurred regarding the 180-day provision of the Hatch-Waxman Amendments." Id. at 71-72. This may be particularly acute with the BPCIA, where exclusivities vary depending on the circumstances. See 42 U.S.C. § 262(k)(6).
 42 U.S.C. § 262(k)(6)(A)-(C). A final court decision means "a final decision of a court from which no appeal (other than a petition to the United States Supreme Court for a writ of certiorari) has been or can be taken." Id.
 See Amanda Potter, Interpreting the BPCIA - Is the " Patent Dance " Mandatory? , Colum. Sci. & Tech. L. Rev. Blog, (Mar. 31, 2015), http://stlr.org/2015/03/31/interpreting-the-bpcia-is-the-patent-dance-mandatory/.
 42 U.S.C. § 262( l)(2).
 42 U.S.C. § 262( l)(9)(C); 35 U.S.C. § 271(e)(2)(C)(ii) (action for patent infringement for failing to provide aBLA).
 42 U.S.C. § 262( l)(3)(A)(i)-(ii).
 42 U.S.C. § 262( l)(3)(B)(i)-(ii).
 42 U.S.C. § 262( l)(3)(C).
 42 U.S.C. § 262( l)(4).
 42 U.S.C. § 262( l)(5).
 42 U.S.C. § 262( l)(6). See also 35 U.S.C. § 271(e)(2)(C)(i) (action for infringement for listed patents that are the subject of an aBLA).
 42 U.S.C. § 262( l)(9(B).
 42 U.S.C. § 262( l)(8)(A).
 42 U.S.C. § 262( l)(8)(B).
 Compl. at ¶ 2, Amgen Inc. v. Sandoz Inc., No. 14-cv-4741 (N.D. Cal., Oct. 24, 2014) (" Amgen I Compl. ").
 Sandoz's biosimilar was to be marketed under the trade name "Zarxio." The FDA approved Zarxio on March 6, 2015, as the first-and, to date, the only-biosimilar product approved in the United States. See Press Release, FDA, FDA approves first biosimilar product Zarxio (Mar. 6, 2015), http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm436648.htm.
 Amgen I Compl. at ¶ 6.
Although Sandoz maintained that the July 8, 2014 notice was effective under the BPCIA, upon receiving FDA approval for Zarxio, Sandoz provided "further notice of commercial marketing" to Amgen.
 Amgen Inc. v. Sandoz Inc., No. 14-cv-4741, 2015 WL 1264756, at *4 (N.D. Cal. Mar. 19, 2015) (Seeborg, J.) (" Amgen I"), aff'd in part, vacated in part, 794 F.3d 1347 (Fed. Cir. 2015).
 Sandoz and Amgen entered into a stipulation whereby Sandoz agreed not to launch its product until the earlier of either a partial judgment on the pleadings in its favor, or April 10, 2015. See id. at *1 n.3.
 Id. at *8 n.8 (citing 42 U.S.C. § 262( l)(9)(B)).
 Amgen II, 794 F.3d at 1355.
 Id. at 1356 (referring to 42 U.S.C. § 262( l)(9)(C) and 35 U.S.C. § 271(e)(2)(C)(ii)) .
 Id. at 1357 (emphasis added).
 Id. The Court found the facts in the Amgen case to be " untypical" because Sandoz's aBLA was filed more than 12 years after Amgen received FDA approval of Neupogen.
 Id. at 1360. As explained above, Amgen based part of its unfair competition law claim on Sandoz's defective notice of commercial marketing. However, the Court deemed Amgen's appeal on this basis moot because it had already enjoined Sandoz's sale of Zarxio until September 2, 2015. Id. at 1361.
 Id. at 1365 (Newman, J., dissenting in part, concurring in part).
 Id. Cf. id. at 1358 (majority holding the 180-day marketing provision was mandatory because "Congress could have used the phrase 'the biological product that is the subject of ' the application in paragraph ( l)(8)(A), as it did in other provisions, but it did not do so.").
 FTC Report at 48. Notably, the Biotechnology Industry Organization ("BIO"), a trade group representing biologics manufacturers, found the FTC's objection to pre-approval patent resolution procedures of the BPCIA to be "fundamentally flawed" because "without it, biosimilars 'would systematically have to enter the market under a cloud of patent uncertainty,' resulting in confusion 'about the long-term availability' of particular biosimilars." Krista Hessler Carver, et al., An Unofficial Legislative History of the Biologics Price Competition and Innovation Act of 2009, 65 Food & Drug L.J. 671, 790 (2010) (quoting BIO, FTC Biosimilars Rebuttal, at 1 (2009)).
 See Ben Hirschler & Michael Shields, Novartis Launches First U.S. 'Biosimilar' Drug at 15 Percent Discount, Reuters (Sept. 3, 2015), http://tinyurl.com/oelnjsg. Amgen petitioned the Federal Circuit to continue the injunction during the pendency of the en banc review, but the Federal Circuit denied the request. See Amgen Inc. v. Sandoz Inc., No. 2015-1499, slip op. (Fed. Cir. Sept. 2, 2015) ( per curiam); See also Aron Fischer, Both Parties Seek En Banc Intervention in Amgen v. Sandoz, Biologics Blog (Aug. 28, 2015), http://www.biologicsblog.com/blog/both-parties-seek-en-banc-intervention-in-amgen-v-sandoz/.
 Biosimilar manufacturers Celltrion Inc., Hospira Inc., and Mylan, Inc. and a biosimilar trade association, the Biosimilars Council, have filed amici curiae in support of Sandoz. Janssen Biotech, Inc., who is embroiled in litigation with Celltrion over its biologic Remicade®, has filed an amicus in favor of Amgen. See Kurt R. Karst, Multiple Parties Chime in as the Federal Circuit Gears Up for a Rehearing in the ZARXIO Biosimilar Patent Dance/180-Day Notice Appeal, FDA Law Blog (Sept. 9, 2015), http://t.co/TUUyXbiBcC.
 Amgen Inc. v. Sandoz Inc., No. 2015-1499, slip op. (Fed. Cir. Oct. 16, 2015).
 See Compl., Amgen Inc. v. Apotex Inc., No. 15-cv-61631 (S.D. Fla. Aug. 6, 2015) (" Amgen Neulasta Compl."). See also James C. Shehan, You're Better Than My Last Dance Partner But Still Not Perfect: Amgen Alleges that an Otherwise Complete Patent Dance Was Ruined by Pre-Approval Notice of Marketing, FDA Law Blog (Aug. 17, 2015), http://tinyurl.com/o384o5d.
 See Amgen Neulasta Compl. at ¶¶ 44-51.
 Amgen Inc. v. Apotex Inc., No. 15-cv-61631, slip op. (S.D. Fla. Dec. 9, 2015).
 Amgen II, 794 F.3d at 1362 .
 See, e.g., In re Cardizem CD Antitrust Litig., 105 F. Supp. 2d 618, 623 (E.D. Mich. 2000) (brand paid generic $40 million per year in exchange for generic's promise not (1) to launch until an agreed upon entry date or (2) assign its first-filer exclusivity to another company), aff'd, 332 F.3d 896 (6th Cir. 2003); In re Ciprofloxacin Hydrochloride Antitrust Litig., 363 F. Supp. 2d 514, 519 (E.D.N.Y. 2005) (cash payment of $398 million over six years from Bayer to prospective generic competitors), aff'd in part, 544 F.3d 1323 (Fed. Cir. 2008).
 See In re Nexium (Esomerprazole) Antitrust Litig., 968 F. Supp. 2d 367 (D. Mass. 2013) (brand's forgiveness of contingent liability of a generic competitor).
 See Federal Trade Commission v. Actavis, Inc., 133 S. Ct. 2223 (2013) (co-promotion agreement between brand and generic companies).
 See In re Nexium (Esomerprazole) Antitrust Litig., 42 F. Supp. 3d 231 (D. Mass. 2014) (payment in the form of authorized generic distribution agreements for drugs unrelated to drug that the primary subject of the reverse payment); Compl., Federal Trade Commission v. AbbVie Inc., No. 14-cv-5151 (E.D. Pa., filed Sept. 8, 2014) (alleging that AbbVie gave Teva access to Tricor intellectual property in exchange for delaying entry on Androgel).
 In addition to the Neulasta action, see supra note 64, Amgen filed suit against Hospira over Hospira's aBLA for a biosimilar version of Epogen®, a biologic used to treat anemia caused by chronic kidney disease. See Compl., Amgen Inc. v. Hospira, Inc., No. 1:15-cv-839 (D. Del., Sept. 18, 2015). Amgen alleges that Hospira failed to produce information Amgen requested under the patent dance procedures and that Hospira issued ineffective notice of commercial marketing. See also Kurt R. Karst, Amgen Wants Patent Dance Redo and a Halt to Hospira's EPOGEN Biosimilar, FDA Law Blog (Sept. 24, 2015), http://t.co/CsK0p9HbCl.

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