Supreme Court Unanimously Bolsters Biosimilars in Key Reversal of Federal Circuit Ruling
On June 12, 2017, in Amgen v. Sandoz, the U.S. Supreme Court unanimously (8-0) ruled that Novartis’ unit Sandoz should not have had to wait until six months after FDA approval before its biosimilar version of the leukocyte growth drug Neupogen® (filgramstim) could enter the market.
The Court’s ruling reversed the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) and clears the way for biosimilar developers to bring their products to market as early as their approval date without having to wait up to an additional six months.
The case addressed the requirements of the 2010 Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) including the effect of applicant’s (1) failure to provide a biologic sponsor with certain information (e.g., biologics license application and related manufacturing information); (2) notice of marketing to the sponsor prior to FDA approval.
In 2010, as part of the Patient Protection and Affordable Care Act, Congress enacted the BPCIA to provide faster FDA approval of follow-on biologics (i.e., “biosimilars”) that are highly similar to biologic products that were previously approved under the traditional FDA approval process for biologics.
Examples of such such biologic products (and follow-on biosimilars) could include therapeutic serums, antitoxins, vaccines, blood components or derivatives, allergenic products, or other analogous products applicable to the prevention, treatment, or cure of a disease or condition of human beings. See 42 U.S.C. 262(i)(1)).
Battle in U.S. District Court
Amgen (here the biologic sponsor) had sold its Neupogen® biologic for over 20 years. In 2014, Sandoz (here the biosimilar applicant) filed a biosimilar application for approval of its own filgrastim product.
Pursuant to the BPCIA, FDA’s acceptance of the Sandoz application triggered a process under which Sandoz would share its biologics license application and related manufacturing information with Amgen; both parties would work to resolve any patent disputes; and Sandoz would provide notice to Amgen at least 180 days prior to the time Sandoz began its commercial marketing of its biosimilar product. However, Sandoz declined to share its application with Amgen, and purported to give notice of commercial marketing both while its application was pending, and on the date of approval (the Sandoz product was the first biosimilar product approved in the US).
Amgen contended that these actions violated the BPCIA and sued Sandoz in the U.S. District Court for the Northern District of California asserting two state law claims for unfair competition and conversion (relating to Sandoz’s conduct underlying its alleged violations of the BPCIA) and one claim for patent infringement. In March 2015, the district court dismissed Amgen’s state law claims, finding that Sandoz’s failure to share its application with Amgen was permissible; that such failure did not offer a basis for the relief sought by Amgen; and that the Sandoz notice of commercial marketing prior to approval was permissible.
The Federal Circuit’s Ruling
On appeal, the Federal Circuit held that Sandoz’s failure to provide Amgen with its application and manufacturing information was permissible, with Amgen’s sole remedy being based on patent infringement.
The Federal Circuit also ruled that Sandoz’s notice of marketing to Amgen prior to FDA approval of Sandoz’s biosimilar application was premature and ineffective—holding that notice is only effective after FDA approval.
The Court also held that because Sandoz failed to provide Amgen with the application and manufacturing information, Sandoz was precluded from marketing its biosimilar product for 180 days after the effective date of notice—here effectively granting another 6 months of exclusivity to Amgen.
Finally, the Court also affirmed dismissal of the state law claims for reasons as stated in the opinion as can be found here: http://www.cafc.uscourts.gov/sites/default/files/s15-1499.pdf.
The Supreme Court’s Reversal
The Supreme Court disagreed with the Federal Circuit’s statutory interpretation. First, the Court held that Sandoz’ failure to provide Amgen with its application and manufacturing information could not be enforced by an injunction under federal law (for a different reason than held by the Federal Circuit), but it remanded to the Federal Circuit for a determination whether an injunction would be available under state law.
Next, the Supreme Court decided that the BPCIA does not require that the commercial marketing notice be given after the FDA licenses the biosimilar, and reversed the Federal Circuit’s holding to the contrary. That interpretation is welcome news to biosimilar applicants, as it will permit them to enter the market as much as 6 months earlier than permitted by the Federal Circuit’s interpretation.
Finally, in a non-binding one-paragraph concurrence, Justice Breyer remarkably observed that while he agreed with the Court’s interpretation of the statutory terms, the FDA “may well have authority to depart from, or to modify, today’s interpretation.”
Here is a link to the opinion: https://www.supremecourt.gov/opinions/16pdf/15-1039_1b8e.pdf
Glenn E. Karta is a shareholder at Shores & Oliver, P.C.
More information about our firm can be found at www.shoresoliver.com