Walking Through The US Supreme Court Decision On BPCIA Act

The US SC has clarified certain portions of the Biologics Price Competition and Innovation Act (BPCIA) of 2009, concluding that (i) biosimilar makers do not have to wait for approval before giving 180-day notice of commercial marketing under the BPCIA and (ii) a federal injunction is not available to compel biosimilar makers to disclose their approval applications to rivals...

This is basically an update on one of my previous articles on the same topic which has been the talk of the town for quite some time now. We all have been waiting for this decision which was finally rendered on June 12, 2017. The U.S. Supreme Court rendered its first interpretations of the biosimilar patent dispute resolution procedures of the Biologics Price Competition and Innovation Act (BPCIA), providing clarification on both issues raised in Sandoz Inc. v. Amgen Inc. (No. 15-1039).

The case involved another chapter in the evergreen battle between innovator pharmaceutical companies, which tend to seek more intellectual property protection and regulatory pathway clarity for their innovations, and generic pharmaceutical or biopharmaceutical companies, which typically seek to overcome the intellectual property barrier and identify regulatory gaps which can be explored to get benefited.

The litigation ascended after Sandoz sought a license from the Food and Drug Administration (FDA) to market the biosimilar of Amgen’s drug filgrastim (trade name Neupogen®). Sandoz’s application for an FDA license triggered a complex statutory mechanism for patent litigation under the BPCIA, which is approximately a 17- page subchapter present in the larger 906-page Affordable Care Act.

The Supreme Court vacated in part, reversed in part, and remanded the judgment of the Federal Circuit. The US Supreme Court clarified certain portions of the BPCIA of 2009, concluding that (i) biosimilar makers do not have to wait for approval before giving 180-day notice of commercial marketing under the BPCIA and (ii) a federal injunction is not available to compel biosimilar makers to disclose their approval applications to rivals. The court’s unanimous decision was authored by Justice Thomas. Justice Breyer wrote a concurring opinion that invited the US FDA to “depart from” or “modify” the decision if it “determines that a different interpretation would better serve the statute’s objectives.”

Just to recap, the case was related to some of the provisions of the BPCIA. This act governs the approval process for biosimilar products. Similar to the Hatch-Waxman Act that governs traditional generic drugs, the BPCIA allows a biosimilar applicant to rely on the FDA’s previous approval of the reference product. Amgen has been marketing filgrastim since 1991 in the USA. Filgrastim is a recombinantly produced human granulocyte colony-stimulating factor protein (C-CSF) under the brand name Neupogen®. Neupogen® is used in certain patients at risk of infection, such as those receiving chemotherapy. In May 2014, Sandoz sought FDA approval of a biosimilar of Neupogen® under the BPCIA by filing an abbreviated pathway application created by the BPCIA. Sandoz notified Amgen of its biosimilar application but did not provide a copy to Amgen and did not follow any of the other patent dispute resolution procedures of the statute. As to premarketing notice, Sandoz first notified Amgen of its intent to commercially market Zarxio® in July 2014, before it was approved, and gave notice again when it became the first approved biosimilar product on March 6, 2015.

Amgen sued Sandoz in the United States’ District Court for the Northern District of California, alleging, among other things, violation of California’s unfair competition laws and conversion based on Sandoz’s alleged failure to comply with the BPCIA. The district court ruled in favour of Sandoz and found no violation of the BPCIA to support Amgen’s state law claims. The Federal Circuit affirmed the district court on the patent dance issue but ruled that premarketing notice cannot be given until the FDA approves the biosimilar product.

The issues in the Supreme Court’s opinion concern the requirements and timing for certain disclosures that a biosimilar applicant makes to the biologic manufacturer.

The first question the court addressed is whether injunctive relief is available to enforce a BPCIA requirement that the biosimilar applicant “shall provide” a copy of its biosimilar application and manufacturing information to the biologic manufacturer. In addition to seeking this injunction under federal law via the BPCIA, Amgen also sought an injunction under California’s unfair competition law. The second question addressed by the Court is whether a biosimilar applicant’s notice of commercial marketing is effective if it is provided prior to the FDA’s decision to license the biosimilar. The BPCIA requires notice to be provided not later than 180 days before the date of the first commercial marketing of the biosimilar. Thus, this issue is important because if notice may be provided 180 days or more before FDA approval, commercial marketing may begin immediately after licensure; otherwise, a biosimilar applicant would not be able to market its product until 180 days after approval.

Addressing the first question, the court considered whether § 262(l)(2)(A)’s requirement that an applicant “shall provide” the sponsor with its biosimilar application and information about how the biosimilar is manufactured “within 20 days” after being informed that the FDA accepted the application for review is enforceable by an injunction under either federal or state law. The court held that under federal law, an injunction is not available to enforce this requirement. The court reasoned that the BPCIA includes a provision that provides a remedy for when an applicant fails to turn over its application and manufacturing information. This provision, found in § 262(l)(9)(C), allows a sponsor “to bring an immediate declaratory-judgment action for artificial infringement.” The court decided that the existence of this remedy in the BPCIA acts should exclude all other federal remedies, including injunctive relief. In support of this, the court noted that Congress expressly provided injunctive relief for breaching confidentiality provisions under the BPCIA; thus, if it had intended to do so, Congress could have done the same for the breach of disclosure requirement. But since Congress did not do so, the court found that Congress did not intend for sponsors to have access to injunctive relief to enforce the disclosure requirement. Consequently, injunctive relief is not available under federal law to enforce the BPCIA’s disclosure requirement.

As to whether injunctive relief may be available under California’s unfair competition law, instead of deciding the issue, the court remanded it to the Federal Circuit with instructions about how to proceed. Previously, the Federal Circuit had concluded that no injunctive relief was available under California’s unfair competition law, but the court found that this conclusion was based on an improper application of the BPCIA’s requirements to this question of state law. Thus, on remand, the court instructed the Federal Circuit to consider “whether California law would treat noncompliance with § 262(l)(2)(A) as ‘unlawful.’”

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.

Addressing the second question, the honourable US Supreme Court considered whether the BPCIA’s requirement that an applicant shall provide notice to the reference product sponsor not later than 180 days before the date of first commercial marketing of the biosimilar product licensed under the BPCIA could be satisfied by providing notice prior to the FDA licensing the biosimilar product, or whether such notice is effective only after the biosimilar is licensed as per § 262(l)(8)(A). While the Federal Circuit had determined that an applicant’s biosimilar must be “licensed” at the time applicant gives notice, the Supreme Court disagreed. The court found that the use of the word “licensed” in the statute “merely reflected the fact that on the ‘date of the first commercial marketing,’ the product must be ‘licensed.’” Thus, the court held that notice can be provided before or after the FDA licenses the biosimilar. The court found that this was supported by the statutory context of § 262(l)(8)(A) because the provision contained a single timing requirement, and if Congress intended to have more than one timing requirement, it would have done so, as it did in the following sub-paragraph of this section. Thus, the court’s decision allows a biosimilar applicant to provide notice of commercial marketing to run out the 180-day clock before actually receiving FDA approval to commercially market the biosimilar.

The court’s decision on the premarketing notice issue will mean that biosimilar products could be marketed as soon as they are approved, as long as there is no preliminary injunction stemming from any still-pending patent litigation. This possibility might encourage biosimilar applicants to participate in the patent dance to increase the likelihood that all patent disputes will be resolved by the time the product is approved.

The BPCIA Act is indeed a complex statutory document, and we do not know how many more such disputes would reach the US Supreme Court. This landmark judgment is perhaps one of many more such cases which could unfold in the complex US Biotech field. Each such judgment would become a guidance document for biotech companies and would have huge impact on biopharma practices in the USA.

Disclaimer – The views expressed in this article are personal views of the author and are purely informative in nature.