Source: https://www.mwe.com/insights/supreme-court-analyzes-key-provisions-biologics/
Timestamp: 2019-04-23 19:53:22+00:00

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In a unanimous decision, the United States Supreme Court has clarified certain portions of the Biologics Price Competition and Innovation Act of 2009 (BPCIA), concluding (1) that biosimilar makers do not have to wait for approval before giving 180-day notice of commercial marketing under the BPCIA, and (2) a federal injunction is not available to compel biosimilar makers to disclose their approval applications to rivals.
The United States Supreme Court unanimously clarified portions of the Biologics Price Competition and Innovation Act of 2009 (BPCIA), holding that (1) biosimilar makers do not have to wait for FDA approval of the biosimilar product before providing 180-day notice of commercial marketing under the BPCIA, and (2) a federal injunction is not available to compel biosimilar makers to disclose their FDA biosimilar applications to rivals. Sandoz Inc. v. Amgen Inc., Docket No. 15-1039 (Supr. Ct., June 12, 2017) (Thomas, Justice; Breyer, Justice concurring). The Court vacated the US Court of Appeals for the Federal Circuit’s decision related to the application of California state law claims, remanding the case to the Federal Circuit to determine whether a biosimilar maker’s refusal to share its FDA application with an innovator rival—as directed by the BPCIA—would violate California’s unfair competition law and warrant an injunction.
The BPCIA sets forth a statutory framework for obtaining FDA approval of biosimilars and for resolving patent disputes between manufacturers of licensed biologics and manufacturers of biosimilars. A manufacturer of a biosimilar biologic product may “piggyback” on the original regulatory submission with its data submitted by the sponsor of a previously licensed biologic (reference product), if that biosimilar applicant shows that its product is “highly similar,” i.e., a biosimilar, to the reference product and that there are no “clinically meaningful differences” between the two in terms of “safety, purity, and potency” (42 U.S.C. §§ 262(i)(2)(A), (B)).
The BPCIA facilitates litigation during the period preceding FDA approval of the biosimilar application, enabling the parties to bring infringement actions at certain points the application process. Analogous to the Hatch Waxman process for small molecules, this time period before FDA approval provides the parties time to resolve their patent disputes before commercial marketing or other acts that would traditionally constitute patent infringement.
Under § 262(l)(2)(A), an applicant seeking FDA approval of a biosimilar must provide its application and manufacturing information to the sponsor within 20 days of the date the FDA notifies the applicant that it has accepted the application for review. Under § 262(l)(8)(A), 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 licensed under subsection (k).” The issues before the Supreme Court were (1) whether notice, provided prior to the FDA decision to license the biosimilar, is effective and (2) whether the requirement to provide the application and manufacturing data is itself enforceable by injunction.
The BPCIA provides various consequences for failing to comply with its procedural requirements. For example, if an applicant fails to provide its application and manufacturing information to the sponsor, then the sponsor may immediately bring an action “for a declaration of infringement” under 35 U.S.C. § 271(e)(2)(C)(ii), which makes it an artificial act of infringement to submit a biosimilar application.
Amgen has marketed since 1991 a filgrastim product called Neupogen, a biologic used to stimulate the production of white blood cells Amgen holds patents on the methods of manufacturing and using filgrastim (Neupogen). Sandoz filed an application with the FDA seeking approval to market a filgrastim biosimilar under the brand name Zarxio. Amgen sued Sandoz for patent infringement and for violating California’s unfair competition law, which prohibits “any unlawful . . . business act or practice.” Amgen alleged that Sandoz engaged in “unlawful” conduct by (1) failing to provide its biosimilar application and manufacturing information under § 262(l)(2)(A), and (2) providing notice of commercial marketing under § 262(l)(8)(A) before, rather than after, the FDA licensed Sandoz’s filgrastim biosimilar. Sandoz counterclaimed for declaratory judgments that the asserted patent was invalid and not infringed and that it had not violated the BPCIA.
During the pendency of the district court case, the FDA licensed Zarxio and Sandoz provided Amgen further notice of commercial marketing following the grant of the license. The district court granted partial judgment on the pleadings to Sandoz on its BPCIA counterclaims and dismissed Amgen’s unfair competition claims with prejudice. Amgen appealed.
On appeal, the Federal Circuit affirmed the dismissal of Amgen’s California unfair competition claim based on Sandoz’s alleged violation of § 262(l)(2)(A), holding that Sandoz did not violate the BPCIA in failing to disclose its application and manufacturing information. In doing so, the Federal Circuit found that the remedies contained in the BPCIA are the exclusive remedies for an applicant’s failure to comply with § 262(l)(2)(A).
The Federal Circuit also held that a biosimilar applicant may only provide effective notice of commercial marketing after the FDA has licensed the biosimilar. Thus, Sandoz’s 180-day clock did not begin until Sandoz’s post-licensure notice. Because the notice requirement was found to be mandatory, the Federal Circuit extended its injunction pending appeal to bar Sandoz from marketing Zarxio until 180 days after the date it provided its second notice.
The Supreme Court vacated-in-part, reversed-in-part and remanded the judgment of the Federal Circuit.
First, the Supreme Court addressed whether § 262(l)(2)(A)’s requirement that an applicant provide the sponsor with its application and manufacturing information is enforceable by an injunction under either federal or state law. On this issue the Court affirmed the Federal Circuit’s holding that § 262(l)(2)(A) is not enforceable by an injunction under federal law. However, the Court rejected the Federal Circuit’s reasoning on this point, finding that Sandoz’s failure to disclose its application and manufacturing information was not an act of artificial infringement under the statute and, thus, was not subject to remedies provided under § 271(e)(4). Rather, when an applicant fails to comply with § 262(l)(2)(A), § 262(l)(9)(C) authorizes the sponsor to bring an immediate declaratory judgment action for artificial infringement. Thus, the remedy for this violation vests in the sponsor the control the applicant otherwise would have exercised over the scope and timing of the patent litigation, depriving the applicant of the certainty it could have obtained by bringing a declaratory judgment action prior to marketing its product. The Court found this remedy provision of the BPCIA excludes all other federal remedies, including injunctive relief, as evidenced by Congress specifically providing for injunctive relief for violation of other sections of this statute.
Because the Federal Circuit’s holding on the application of California’s unfair competition law was likewise based on its incorrect interpretation of the relevant law, the Court remanded the case to the Federal Circuit to determine whether California law would treat noncompliance with this section as “unlawful.” If so, the Federal Circuit should determine whether the BPCIA pre-empts any additional remedy available under state law for this noncompliance.
Second, the Supreme Court addressed whether an applicant may provide effective notice before FDA licensure. Reversing the Federal Circuit’s statutory interpretation, the Court held that because the phrase “of the biological product licensed under subsection (k)” modifies “commercial marketing” rather than “notice,” it is “commercial marketing” that marks the point in time by which the biosimilar must be “licensed.” In terms of notice, the Court concluded the statute permits an applicant to provide notice either before or after receiving FDA approval.
Justice Breyer wrote a concurrence, joining the Court’s opinion and providing additional commentary on the ability of the FDA to depart from, or to modify, the Supreme Court’s interpretation of the BPCIA.

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