The Supreme Court has agreed to hear its first biosimilar case interpreting two provisions of the Biologics Price Competition and Innovation Act (“BPCIA”).  On January 13, 2017, the Supreme Court granted Sandoz’s petition for certiorari in Sandoz, Inc. v. Amgen, Inc., et al. No. Case No. 2015-1039 and on Amgen’s conditional cross-petition for certiorari in Amgen Inc., et al. v. Sandoz, Inc., Case No. 2015-1195.  The consolidated cases raise two critical issues related to the patent dispute resolution provisions of BPCIA. This is the first time the Supreme Court has accepted an opportunity to consider and interpret the BPCIA statutory scheme. The issues before the Supreme Court are central to the applicability of the statute and arose between Amgen and Sandoz in conjunction with Sandoz’s filing of an abbreviated biologics license application for filgrastim (a proposed biosimilar to Amgen’s Neupogen®) and pegfilgrastim (a proposed biosimilar to Amgen’s Neulasta®).

Issues to Be Decided

The issues the Supreme Court will decide in the appeal of Amgen v. Sandoz are: (1) whether a biosimilar applicant is required by 42 U.S.C. § 262(l)(2)(A) to provide the reference product sponsor with a copy of its biologics license application and related manufacturing information, which the statute says the applicant “shall provide;” and (2) whether, where an applicant fails to provide that required information, the sponsor’s sole recourse is to commence a declaratory judgment 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).

The issues that the Supreme Court will decide in the appeal of Sandoz v. Amgen are: (1)  whether notice of commercial marketing given before Food and Drug Administration approval can be effective; and (2) whether, in any event, it is improper to treat Section 262(l)(8)(A) – the Biologics Price Competition and Innovation Act of 2009’s “Notice of commercial marketing” provision which states that a biosimilar applicant shall provide notice to the incumbent seller of the biological product “not later than 180 days before the date of the first commercial marketing of the biological product licensed under” an abbreviated pathway for biosimilars – as a stand-alone requirement and as creating an injunctive remedy that delays all biosimilars by 180 days after approval.

Factual Background

The BPCIA established an abbreviated approval pathway allowing applicants seeking approval of biologics to rely on certain clinical data contained in an earlier application submitted by the reference product sponsor if they can demonstrate that product is “biosimilar” to the previously approved reference product. The BPCIA amended the Patent Act to create an artificial “act of infringement” based on the filing of a biosimilar application.  See 35 U.S.C. § 271(e)(2)(C), (e)(4), (e)(6). The BPCIA further provides a series of steps for the exchange of patent information and the potential for early resolution of patent infringement claims related to the product that is the subject of the application. See 42 U.S.C. 262(l).  This process is commonly referred to as the “patent dance.”

Pertinent to the issues presented here, section § 262(l)(2)(A) of the BPCIA states that, upon FDA acceptance of an application for review, the applicant “shall provide” the reference sponsor with a copy of its application and other information describing the manufacturing processes for the biosimilar product.  See 42 U.S.C. § 262(l)(2)(A).  Separately, the BPCIA provides that, under § 262(l)(8)(A), an 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).”

Amgen markets filgrastim under the brand name Neupogen®. In May 2014, Sandoz submitted an abbreviated biologics license application seeking FDA approval of its proposed biosimilar filgrastim product. In July 2014, Sandoz informed Amgen of its filing and of its intent to launch the product immediately once it received FDA approval. Subsequently, upon FDA’s acceptance of its application, Sandoz informed Amgen that it had decided not to disclose a copy of its application or manufacturing information to Amgen and advised Amgen that it was entitled to sue Sandoz under § 262(l)(9)(C) for declaratory judgment of patent infringement, validity, and enforceability. Paragraph 9(C) provides that if an applicant does not provide the application and information as required under (2)(A), “the reference product sponsor, but not the subsection (k) applicant may bring an action under section 2201 of title 28, United States Code, for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.”

The FDA approved Sandoz’s product in March 2015 and Sandoz again gave Amgen notice of its intent to commercially market its product. Amgen subsequently filed suit alleging that Sandoz violated the BPCIA by failing to provide Amgen with a copy of its application and by giving ineffective notice of commercial marketing. Ruling on the parties’ cross-motions for judgment on the pleadings, the district court concluded that the plain language and statutory scheme of the BPCIA render Sandoz’s decision not to disclose its application permissible and that such a decision does not provide the reference sponsor a basis for injunctive relief. The district court further concluded that an applicant may give 180-day notice of commercial marketing to a sponsor prior to obtaining FDA approval.

The Federal Circuit Decision

On appeal, the Federal Circuit concluded that the while the language “shall provide” in section (l)(2)(A) would appear to create a mandatory requirement that an applicant disclose its application and manufacturing information to the reference sponsor when read in isolation, the provision cannot be read in isolation. The Court recognized that other portions of the BPCIA explicitly contemplate that an applicant may fail to disclose the required information by the statutory deadline and specifically provide the consequence of such a failure is the exposure to an infringement action under 42 U.S.C. § 262(l)(9)(C) and 35 U.S.C. § 271(e)(2)(C)(ii). The Court further concluded that (l)(9)(C) and § 271(e) provide the only remedies available to a reference product sponsor under the circumstances because “the BPCIA has no other provision that grants a procedural right to compel compliance with the disclosure requirement of paragraph (l)(2)(A).” Thus, according to the Federal Circuit, by taking actions specifically addressed by the BPCIA, Sandoz did not violate the statute.   The effect of this decision is that a section (k) applicant may “opt out” of the disclosure requirements of the patent dance.

The Federal Circuit, however, agreed with Amgen that notice of commercial marketing is only effective for a “licensed” product, meaning that the notice must be provided after the product is approved (licensed) by the FDA.  The Court reasoned that providing notice only after approval of a license allows the reference sponsor to definitively determine the patents involved and the scope of injunctive relief to seek. The Court ultimately held that Sandoz’s initial notice was ineffective, but that its notice subsequent to its approval was effective. The Court further concluded that notice of commercial marketing is an independent mandatory requirement that is not excused if the applicant chooses not to disclose its application and participate in the patent dance.

The Supreme Court’s decision to hear the cases was surprising to some because the Court previously denied the petition for certiorari in Apotex v. Amgen, another case involving the notice of commercial marketing requirement.  After Amgen v. Sandoz had been decided, the Federal Circuit issued another decision, a year later, reiterating the principles of its earlier decision – namely that the notice of commercial marketing required by 42 U.S.C. § 262(l)(8)(A) must occur post-licensure. The issue in Apotex v. Amgen was whether the commercial notice requirement of section (8)(A) was also necessary post-licensure if the applicant had elected to provide access to its application pursuant to section (2)(A) of the BPCIA rather than “opting out” of the patent dance.

Unlike Sandoz, Apotex had elected to participate in the patent dance and provided Amgen with a copy of its application and information regarding its manufacturing process for its biosimilar product within 20 days of the FDA’s acceptance of its application pursuant to section (l)(2)(A) of the BPCIA.  During the exchange of information, Apotex sent a letter to Amgen providing notice of its future intent to commercially market its product, prior to receiving approval from FDA for its product. Following the required negotiations, the parties agreed to an infringement action on two patents and Amgen subsequently filed suit on August 6, 2015. In October 2015, Amgen filed a motion for a preliminary injunction requesting the district court require Apotex to provide the notice of commercial marketing pursuant to section (8)(A) once receiving a license (i.e. upon product approval), and confirming that commercial marketing would not begin until 180 days following that notice. The district court granted the motion and Apotex appealed.

The Federal Circuit affirmed the district court’s ruling, stating that the fact that “Apotex gave (2)(A) notice provides only a factual distinction, not a legally material distinction, between its situation and that of Sandoz in Amgen v. Sandoz.” The Court concluded that the (8)(A) post-licensure notice requirement is mandatory and enforceable by an injunction regardless of whether disclosure under (2)(A) has been provided. The Court also rejected Apotex’s contention that § 262(l)(9)(B) makes a declaratory-judgment suit the exclusive remedy for violation of the commercial notice requirement of section (8)(A). Amgen filed a petition for writ of certiorari but the Supreme Court denied the petition in that case.

On January 25, 2017, the Supreme Court issued a briefing schedule.  According to the schedule, Sandoz’s opening brief in 15-0139 is due February 10, 2017, Amgen’s consolidated opening brief in 15-1195 and response in 15-039 is due on March 10, 2017, Sandoz’s consolidated reply in 15-0139 and response in 15-1195 is due March 31, 2017, and Amgen’s reply in 15-1195 is due on April 14, 2017.  Amici briefs in support of Sandoz or in support of neither party are due February 17, 2017.  Amici briefs in support of Amgen are due March 17, 2017.