Amgen v. Sandoz Supreme Court Update: Opposition and Amicus Briefs

This is an update on the latest activity before the United States Supreme Court in the ongoing dispute between Amgen and Sandoz regarding Sandoz’s biosimilar application for Zarxio® (filgrastim-sndz).

Federal Circuit Proceedings

As we previously reported, in May last year, a split Federal Circuit panel held that the patent dance is optional (majority: Lourie and Chen; Newman dissenting), but, by opting out of the patent dance, a biosimilar applicant’s compliance with the 180-day “notice of commercial marketing” provision of 42 U.S.C. § 262(l)(8)(A) becomes mandatory and such notice cannot be made until after licensure by the FDA (majority: Lourie and Newman; Chen dissenting).  Both Amgen and Sandoz petitioned for rehearing en banc, but the Federal Circuit denied those petitions without further opinion.

Sandoz’s Petition for Certiorari

In February, Sandoz filed a petition for a writ of certiorari (see S. Ct. Dkt. No. 15-1039), asking the Supreme Court to review the Federal Circuit’s interpretation of the BPCIA’s “notice of commercial marketing” provision as requiring notice only after licensure by the FDA.  In its petition, Sandoz also asked the Supreme Court to consider whether the Federal Circuit erred in creating a private right of action to force a biosimilar applicant to provide timely notice of commercial marketing and in granting an automatic, extra-statutory injunction, in disregard of the traditional four-factor test for injunctive relief under eBay, that will have the effect of delaying all biosimilars from entering the market for an additional 180 days after FDA-approval.

Amgen’s Opposition Brief

As we reported recently, on March 21, Amgen filed its opposition to Sandoz’s petition for certiorari, arguing that the Federal Circuit’s ruling about the timing of notice under subsection 262(l)(8)(A) correctly followed the explicit language of the statute, “The subsection (k) applicant shall provide notice … of the first commercial marketing of the biological product licensed under subsection (k).”  Amgen contends that Congress used the word “licensed” deliberately here to require notice only after the product is already licensed, when the scope of the approved license is sufficiently defined for the RPS to determine whether to enforce its patent rights.  According to Amgen, Sandoz’s proposal to allow notice as soon as the applicant files the aBLA would render “unworkable” other provisions of the BPCIA (such as subsections 262(l)(8)(B) and (9)(A)), and would leave the RPS to guess the scope of the license that might eventually get approved.  Amgen also challenges Sandoz’s characterization of the 180 days as an extra period of “market exclusivity” because “what the BPCIA confers is not market exclusivity, … but twelve years of data exclusivity,” protecting the RPS against generic competition but not against competing products pursued through the traditional approval pathway of subsection 262(a).  Amgen concludes that “what subparagraph 262(l)(8)(A) affords is not exclusivity, but notice and a time during which the Sponsor can seek, and the courts can efficiently address, a preliminary injunction application.”

With regard to the other questions presented in Sandoz’s petition, Amgen argues that they are not ripe for review. Amgen asserts that the issues of what the available remedies are, and whether there exists a private right of action to compel compliance with subsection 262(l)(8)(A), when a biosimilar applicant fails to provide timely notice of commercial marketing, is moot because, regardless of the untimely notice Sandoz provided prior to approval, Sandoz later provided timely notice of commercial marketing after the FDA approved Zarxio®.  Amgen further argues that the Federal Circuit did not issue an automatic, extra-statutory injunction but instead extended the injunction-pending-appeal, which was properly issued pursuant to Fed. R. App. P. 8(a) based on the traditional four-factor test.

Amgen emphasizes that this case is a “poor vehicle” for review. According to Amgen, many of the issues presented by Sandoz simply are not present in the record on appeal and other courts are dealing with those issues, such as the Federal Circuit, which is hearing oral argument today in Amgen v. Apotex about whether an injunction is appropriate when a biosimilar applicant refuses to provide timely notice of commercial marketing.  (Big Molecule Watch is at today’s argument and will separately report on it soon.)  Moreover, Amgen argues, “there is little factual urgency here” because only seven biosimilar applications have been submitted to the FDA (as of September 30, 2015), and Sandoz’s claim that there is “an urgent need to put low-cost medications in the hands of prescribers and patients” is refuted by the facts that Zarxio® is still the only approved biosimilar product and Sandoz prices Zarxio “at only a 15% discount from Amgen’s wholesale price.”

Amgen’s Conditional Cross-Petition

Amgen concurrently filed a conditional cross-petition for a writ of certiorari (see S. Ct. Dkt. No. 15-1195), challenging the Federal Circuit’s ruling that a biosimilar applicant is not required to trigger the patent dance by providing the RPS with a copy of the biosimilar application and related manufacturing information.  Amgen’s question presented reads as follows:

Is an Applicant required by 42 U.S.C. § 262(l)(2)(A) to provide the Sponsor with a copy of its biologics license application and related manufacturing information, which the statute says the Applicant “shall provide,” and, where an Applicant fails to provide that required information, is the Sponsor’s sole recourse to commence a declaratory-judgment action 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)?

Amgen asks the Supreme Court to take up this question only if it decides to grant Sandoz’s petition. Sandoz’s opposition to Amgen’s cross-petition is due April 22, 2016.

Amicus Briefs

On March 21, the following entities filed amicus briefs in support of Sandoz’s positions:

  1. The Biosimilars Council (a division of the Generic Pharmaceutical Association);
  2. Mylan;
  3. Apotex;
  4. Hospira and Celltrion.

The amicus briefs rehash many of the same arguments made by Judge Chen in his dissent and raised by Sandoz in its petition. The amici criticize the Federal Circuit’s interpretation of subsection 262(l)(8)(A) for disrupting the balance of the BPCIA that Congress intended. The amici assert that the Federal Circuit decision improperly extends the 12-year market exclusivity that Congress specifically authorized and will delay, rather than expedite, patent litigation, which has the potential to slow biosimilar competition at a significant cost to the nation’s healthcare system.

The Biosimilars Council argues the Federal Circuit erred in considering subsection 262(l)(8)(A) to require FDA licensure, when the entire subsection actually “is premised on resolution of patent disputes before, and is in no way predicated on, FDA licensure.” According to the Biosimilars Council, “no other provision of subsection [262(l)] is triggered by FDA licensure, and the notice provisions should not be read differently, outside the context of the statute’s overarching goals generally or the patent dispute resolution framework in particular.” Rather than expediting patent litigation before a biosimilar product is ready to market, “the Federal Circuit’s reading of the notice provisions has the countervailing effect, by postponing notice – and therefore even the initiation, much less resolution, of litigation regarding ‘unlisted patents’ – until after FDA approval.” The Biosimilars Council further states that “Congress cannot have intended this result, which is so plainly contrary to the statute’s overall goals and to the patent dispute resolution framework of which the notice provisions are ‘part and parcel.’”

Mylan argues that “the Federal Circuit’s decision is based on reasoning that reflects a fundamental misunderstanding of the detrimental impact it will have on all future aBLA applicants for years to come,” and will mean that “an aBLA applicant’s launch will necessarily be delayed by 180 days regardless of whether there are patents in dispute at the time notice is given.” According to Mylan, the Federal Circuit decision “converts a simple notice provision into a de facto 180-day extension of market exclusivity, and provides for an automatic 180-day preliminary injunction against every biosimilar sponsor with no consideration of the merits or equities.” Mylan argues that the Federal Circuit’s reading of subsection 262(l)(8)(A) is inconsistent with statute’s purpose and plain language because “Congress obviously contemplated that this litigation would be completely resolved by the end of year 12,” and “considered these disputes to be ‘fully crystallized’ before FDA approval.” Indeed, “phase-two patent disputes are no less capable of being ‘fully crystallized’ before FDA approval than phase-one disputes,” and “delaying the notice of commercial marketing until FDA approval accomplishes nothing other than to provide sponsors with windfall protection from competition.” According to Mylan, “the majority below effectively read the statute to provide that notice be provided ‘not sooner than 180 days before’ commercial marketing,” when the statute actually reads “not later than 180 days before the date of the first commercial marketing.” Mylan urges the Supreme Court “to restore the balance Congress created and immediately correct the Federal Circuit’s erroneous and costly misunderstanding and misapplication of the BPCIA while the Act is still in its infancy.”

Apotex argues that the Federal Circuit’s “reading [of subsection 262(l)(8)(A)] places more interpretive weight on the word ‘licensed’ than it can reasonably bear when the phrase is considered in the context of the statute as a whole.” Apotex asserts that Congress’ “choice of words … strongly suggests that notice can be given before the application has been approved, and that “if Congress had thought otherwise, it presumably would have imposed the [notice] requirement on the ‘subsection (k) licensee,’ or some similar term denoting the completion of the application process.” Apotex also challenges the Federal Circuit majority for having “crafted its own extra-statutory remedy – an injunction preventing commercial marketing until 180 days after notice has been given – to fill in what it regarded as a gap in the statute.” Apotex views this as “distort[ing] the remedial scheme created by Congress to fill an imagined gap in the scheme that does not exist,” and asserts that “if Congress had wanted to impose a 12-and-a-half year waiting period before biosimilar products could be brought to market, it could have done so.”

Hospira and Celltrion argue that “the Federal Circuit’s fractured ruling threatens to cause an unwarranted six-month delay in the medications, … independent of any patent protection.” “In doing so,” Hospira asserts, “the court distorted the structure of the BPCIA—which is designed to expedite patent litigation that might otherwise slow biosimilar competition.” Hospira and Celltrion also assert that the Federal Circuit’s “interpretation makes no sense.” To illustrate that point, Hospira and Celltrion offer the following hypothetical:

Suppose the parties begin phase-one patent litigation in year 5 of the 12-year marketing exclusivity and conclude that litigation in year 8. But then in year 9, while the parties await FDA approval, a new patent may issue.  Under the decision below, the parties must sit on their hands for 3 years waiting for FDA approval before they can even begin to litigate the new patent.

Why? Because, again, under paragraph (l)(7), “such patent shall be subject to paragraph (8)” (ibid.)—that is, the notice requirement.  And that notice, according to the opinion below, cannot validly be sent until FDA approval.  The majority’s reading thus delays litigation for no apparent purpose.

The amici also emphasize the need for immediate review because they believe the Federal Circuit’s decision will adversely impact every single biosimilar application and is already influencing how the BPCIA is being interpreted in other courts.

Noting “Congress’ overriding goal of expediting patients’ access to affordable versions of badly needed medicines,” The Biosimilars Council argues that “[t]he Federal Circuit’s erroneous decision, if left uncorrected, would undermine these goals by (1) denying patients access to biosimilars for six months longer than Congress intended and (2) enabling an RPS to effect this delay through an automatic injunction, outside the remedial framework Congress established as part of the BPCIA’s patent dispute resolution process.” The Biosimilars Council further states that “the Federal Circuit’s decision will apply to other biosimilars, not just the Sandoz product at issue in this case, shaping the overall biosimilars landscape just as the BPCIA and the biosimilars industry are coming of age.”

Hospira and Celltrion assert that “the ruling has implications for every case arising under the BPCIA, warranting immediate review.” Hospira and Celltrion note that “other ‘pending cases’ … underscore the need for this Court’s review,” and remind the Supreme Court that “this Court has not hesitated to take up similar questions under the Hatch-Waxman Act, where those questions were critical to the incentives and competitive framework created by Congress.”

Mylan argues that the Federal Circuit’s “attempt to downplay the anti-consumer effects of its decision … misunderstands, if not completely ignores, the timing consequences of mandating post-licensure notice of commercial marketing.”  Rather, “the Federal Circuit’s decision requiring notification after licensure inevitably and effectively extends this market exclusivity in all instances where notice is given.”  Mylan further warns that “at least one district court in Florida already has blindly adopted and extended the Federal Circuit’s interpretation, and the reasoning behind it, beyond the situation when an aBLA applicant elects not to disclose its aBLA or participate in the patent exchange process.”

Apotex asserts that “the Federal Circuit’s decision … creates an issue of national importance that warrants review” because “an unnecessarily lengthy, unintended, and unwarranted extension of the exclusivity period will impede access to biosimilars and add hundreds of billions of dollars in costs to consumers, employers, and publicly funded programs like Medicare and Medicaid.” Apotex notes that the Supreme Court “previously has granted review of analogous Federal Circuit decisions under the Hatch-Waxman Act, where the questions presented as a matter of first impression were intrinsically important to balancing the structure and function of the statutory framework to encourage both innovation and competition.”  Apotex further argues that “further percolation offers no prospect of crystallizing the issue for this Court’s review,” and that “[t]he adverse effects of the [Federal Circuit’s] decision on competition and biosimilar drug prices are too important for the Court to defer review.”  Finally, Apotex recommends that the Supreme Court “should call for the views of the Solicitor General because the federal government has enormous interest in this case.”

Stay tuned to the Big Molecule Watch for further developments in the Amgen v. Sandoz case.  In addition, as discussed above, we are in attendance at today’s oral argument before the Federal Circuit in Amgen v. Apotex, so be on the lookout for report on that soon.