Multiple Parties Chime in as the Federal Circuit Gears Up for a Rehearing in the ZARXIO Biosimilar Patent Dance/180-Day Notice Appeal

By Kurt R. Karst –

The Order handed down last week by the U.S. Court of Appeals for the Federal Circuit denying Amgen Inc.’s (“Amgen’s”) Emergency Motion For An Injunction Pending En Banc Consideration and Review and Sandoz Inc.’s (“Sandoz’s”) September 3, 2015 launch of the first biosimilar licensed pursuant to the provisions added to the law by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) – a biosimilar version of Amgen’s NEUPOGEN (filgrastim) called ZARXIO (filgrastim-sndz) that FDA licensed on March 6, 2015 under BLA 125553 – are not events marking the end to controversy over various provisions of the BPCIA, but are merely waysides along a highway that may very well end with a decision from the U.S. Supreme Court.  Putting aside Amgen’s recent Emergency Motion (Sandoz’s Opposition Brief is available here), the Federal Circuit’s July 21, 2015 split panel decision (see our previous post here) upholding Sandoz’s position that the complicated exchange of information provisions known as the “patent dance” is a voluntary process that biosimilar (also referred to as an “aBLA”, or abbreviated Biologics License Application) applicants may or may not partake in, but also upholding Amgen’s position that a biosimilar applicant’s notice to the holder of the reference product of an intention to begin commercial marketing in 180 days can occur only after the biosimilar is licensed, has already led to hundreds of pages of briefing.  And there’s likely to be a lot more ink spilled as interested parties continue to chime in at the Federal Circuit. 

For starters, there are the August 20, 2015 Petitions For Rehearing En Banc filed by both Amgen and Sandoz (here and here).  Amgen and Sandoz take the positions one would anticipate them taking.  Amgen argues that the patent dance is a mandatory process, while Sandoz argues that providing 180-day notice of launch after biosimilar licensure (instead of beforehand) creates a new automatic injunction remedy that effectively grants a period of 180-day exclusivity for all biological products beyond what Congress expressly provided in the BPCIA.  On September 8, 2015, Amgen and Sandoz filed Responses (here and here) to one another’s Rehearing Petitions defending each company’s respective wins before the Federal Circuit panel.  According to Amgen, the BPCIA’s text is clear with respect to 180-day notice and the Federal Circuit Panel correctly held that PHS Act § 351(l)(8)(A) requires notice after FDA licensure of an aBLA.  Sandoz’s two arguments for why notice should not have to follow FDA licensure are flawed, argues Amgen:

First, Sandoz argues that notice at the time of FDA approval is superfluous, because FDA licensure is itself a public act.  But the required notice is notice of the timing of first commercial marketing, which cannot be presumed merely from the grant of a license.  It is also notice of the scope of that first commercial marketing: As the Panel noted, it is only upon FDA approval that “the product, its therapeutic uses, and its manufacturing processes are fixed.”

Second, Sandoz argues that the thirty-month stay of approval of a generic drug under the Hatch-Waxman Act confirms, by its absence in the BPCIA, that Congress did not intend litigation to delay approval or marketing of a biosimilar.  The absence of a thirty-month stay under the BPCIA confirms only that Congress did not pattern this part of the BPCIA after the Hatch-Waxman Act.  Instead of conditioning FDA licensure on the outcome or pendency of patent litigation, Congress linked the Applicant’s obligation to provide notice of commercial marketing to the event of FDA licensure.  This makes sense for a statute that uses a standard of biosimilarity, rather than identity, under which the ultimately approved product may differ from the reference product in its structure, manufacture, and uses. Whereas the Hatch-Waxman Act maintains the status quo through a thirty-month stay of FDA approval, the BPCIA vests in the district courts the authority to determine whether to preserve the status quo beyond the 180-day notice period through a preliminary injunction sought by the [Reference Product Sponsor].  Anticipating the increased burden and disruption this would create for the courts, Congress established a defined statutory window of no less than 180 days after FDA approval and before commercial marketing “during which the court and the parties can fairly assess the parties’ rights prior to the launch of the biosimilar product.”  [(Emphasis in original; internal citations omitted)]

According to Sandoz, Amgen’s arguments on the mandatory nature of the patent dance are flawed:

[The BPCIA’s amendments to the law] create artificial acts of infringement, enabling declaratory judgment actions before actual infringement is imminent.  Who can bring such an action, when, and for what relief depends on the actions or inactions of the applicant and the sponsor at each step of a multi-step patent-exchange process regarding the sponsor’s possible patent claims.  Congress carefully spelled out both the action the applicant or sponsor “shall” take as a condition precedent to continue the process, and if that party declines, what follows.  Each step has benefits and burdens for both parties.  Critically, the BPCIA provides no means to force either participant to take any of those steps.  Instead, each step is simply a procedural means to a substantive goal: resolving patent disputes so that biosimilars can be available to patients as soon as possible.

Lining up behind Sandoz are amici curiae Hospira, Inc., Celltrion Healthcare Co., Ltd. and Celltrion, Inc. (collectively “Celltrion”), Mylan Inc. (“Mylan”), and the Biosimilars Council (a division of the Generic Pharmaceutical Association consisting of companies and other stakeholders focused on issues relating to biosimilars). 

Celltrion, which is embroiled in litigation with Janssen Biotech, Inc. (“Janssen”) over a biosimilar version of Janssen’s REMICADE (infliximab) (see our previous post here) says in its brief that the Federal Circuit’s panel decision on 180-day notice “exceeds the judicial role contemplated by Congress in the BPCIA, and calls out for en banc review,” and warns that “[t]he decision has major implications for industry and consumers.” 

Amici file this brief to emphasize three points.  First, review is needed now.  Although the panel’s ruling addresses an issue of first impression, that issue is vital to the competitive structure of the biosimilar industry.  Litigation over the meaning of the ruling continues in the lower courts; further percolation will not advance the law; and settling the issue will spur competition.

Second, the ruling flouts the [BPCIA’s] text and Congress’s purpose in passing it.  In the panel’s view, a potential second phase of litigation—which involves patents that only the sponsor deems relevant—cannot even begin until after FDA approval.  But as even the Biotechnology Industry Organization (“BIO”) has noted, the Act is designed “to identify and resolve patent issues before a biosimilar is approved.” 

Third, the ruling conflicts with a host of cases. . . governing when courts may recognize a private right of action or extra-statutory remedy.  That precedent bars the automatic, bondless injunction entered here—one that not only was granted without any findings that satisfy the traditional requirements for equitable relief, but is unmoored from any patent rights.  [(Internal citation omitted)]

Mylan, which reportedly has “a robust pipeline of biologic products in development, both for the global marketplace and to be submitted for licensure in the United States as biosimilar products under the [BPCIA],” says in its brief that rehearing and reversal of the panel decision on 180-day notice are necessary: 

The majority’s interpretation distorts the statutory scheme, contradicts the plain language, and would produce “real world” outcomes contrary to Congress’ intent.  The consequences cannot be overstated: the majority interpretation would necessarily, in every case where notice is provided, extend the reference product’s monopoly six months past the 12-year market exclusivity Congress granted.  This exclusivity extension, implied from a simple notice provision, disrupts the statutory bargain and improperly delays competition. [(Internal citation omitted)]

Finally, the recently launched Biosimilars Council says in its brief that the Federal Circuit’s panel decision on 180-day notice should not stand:

The panel’s incorrect reading of (l)(8)(A) converts notice into the trigger for an automatic six-month injunction against the marketing of a licensed biosimilar, sub silentio extending to 12 ½ years Congress’s carefully crafted 12-year reference product exclusivity.  This automatic, extra-statutory delay, if left uncorrected, would broadly undercut Congress’s goal of greater competition in biologics markets and dramatically reduce savings to the U.S. healthcare system from biosimilars.  This Court en banc must correct a reading of the BPCIA that Congress could not have intended and that will delay millions of patients’ access to needed treatments. . . .

The clear meaning of 42 U.S.C. § 262(l)(8)(A) is that notice provided under that subsection must occur at least six months “before the date of the first commercial marketing” of the relevant biosimilar, without limiting when notice can first be given.  However, the majority effectively rewrote this straightforward notice requirement to dictate both the earliest and the latest possible time for notice.

The panel’s reading is incorrect because the word “licensed” is clearly intended to modify “the product” that is the subject of notice and not to circumscribe the timing of notice.  Congress used the past-tense “licensed” because the right to commercially market a product, regardless of when notice is given, only exists after FDA licensure.  In other words, the statute simply provides for notice that the applicant intends to market its product once it has been “licensed,” not to limit the earliest date notice can be provided.

There may be a lineup of amici curiae behind Amgen, perhaps including BIO and Janssen, in the days and weeks ahead as we travel further down the highway in this litigation to another wayside.