Amgen v. Sandoz: Reply Briefs Submitted to Supreme Court

As we previously reported, on February 16, 2016, Sandoz petitioned the United States Supreme Court for a writ of certiorari regarding the Federal Circuit’s interpretation of the BPCIA’s “notice of commercial marketing” provision—subsection (l)(8)(A)—as authorizing such notice only after FDA approval of an aBLA.

In response, on March 21, Amgen opposed Sandoz’s petition, arguing that the BPCIA explicitly allows notice of commercial marketing only after FDA approval, and that Sandoz’s petition was a poor vehicle for review for a number of reasons.  Amgen concurrently filed a conditional cross-petition, challenging the Federal Circuit’s ruling that the BPCIA’s “patent dance” is not mandatory under subsection (l)(2)(A).

As we also previously reported, on May 17, Sandoz filed its opposition to Amgen’s cross-petition, arguing that the Supreme Court should deny it because (1) Amgen did not invoke any cause of action under the BPCIA and instead was denied an injunction under its California state law claims, which require an “unlawful” act—withholding an aBLA is expressly permitted by the BPCIA and therefore not “unlawful” under California state law; and (2) the Federal Circuit correctly interpreted California state law in denying Amgen an injunction under the state law claims and “the necessity of resolving state law questions to reverse that portion of the judgment makes [Amgen’s] conditional cross-petition a poor vehicle for review.”

Most recently, Sandoz filed a reply brief in support of its petition, and Amgen filed a reply brief in support of its cross-petition.

Sandoz’s Reply Brief

Sandoz’s reply brief emphasizes the “tremendous urgency” of the case for review. Sandoz argues that “too much is at stake to accede to Amgen’s plea to postpone review” and that the Supreme “Court’s intervention is urgently needed because the Federal Circuit’s ruling will necessarily delay the market entry of every approved biosimilar, thus thwarting Congress’s goal of making less-expensive biologics available to patients and payors.”  Under the Federal Circuit’s ruling, “no biosimilar can launch until at least six months after FDA approval, necessarily granting every reference product twelve-and-a-half years without any competing biosimilar on the market.”  “Granting certiorari now,” according to Sandoz, “could prevent delay in market entry for dozens of potential biosimilars in the near term.”  Citing IMS data, Sandoz asserts that “as of December 2015, seven biosimilar applications were pending at the FDA, and at least thirty-three additional biosimilars were in the last phase of pre-application clinical trials.”  Challenging Amgen’s view that little public interest exists in the case because “Sandoz is pricing ZARXIO® at only a 15% discount,” Sandoz submits that a 15% discount on the $92 billion biologics market in 2013 would amount to a $13.8 billion “substantial consumer savings.”

On the merits, Sandoz attacks Amgen’s interpretation of subsection (l)(8)(A).  Sandoz argues that Amgen is incorrect in asserting that the word “licensed” in subsection (l)(8)(A) is “the past tense of a verb” that means that the product must already be licensed at the time of notice.  Rather, “licensed” is “an adjective describing ‘product’” and simply identifies the biological product whose commercial marketing is relevant to measuring the 180-day period” and “not the appropriate time for notice.”  Sandoz also argues that Congress’s choice to use the phrase “subsection (k) applicant” in subsection (l)(8)(A) is important because “Congress made clear that notice can be given before or after approval because (as Amgen acknowledges) an applicant is a ‘subsection (k) applicant’ both before and after.”  Otherwise, Sandoz contends, subsection (l)(8)(A) would have instead referred to the “holder” of an approved application.”

Sandoz also rejects Amgen’s concern that notice must come only “after approval because of the ‘possibility of changes in the product or its uses’ between application and approval.”  According to Sandoz, “that rationale contradicts a central purpose of the BPCIA:  facilitating resolution of patent disputes before approval.”  In that regard, Sandoz notes that “the BPCIA created ‘artificial’ acts of infringement precisely so litigation could occur before any imminent infringement.”

Additionally, Sandoz challenges Amgen’s assertion that the case is not ripe for review because the Federal Circuit’s injunction was not based on the BPCIA. Sandoz argues that “the Federal Circuit’s decision makes clear that its injunction was not based on state law,” having “held that Amgen’s appeal of the dismissal of its California claim based on Sandoz’s notice was ‘moot’” and “granted an injunction … ‘in light of what we have decided concerning the proper interpretation of the contested provisions of the BPCIA.’”  Sandoz further contends that the Federal Circuit did not simply grant an injunction pending appeal under Rule 8(a) of the Federal Rules of Civil Procedure because the “injunction was not one that lasted ‘pending’ the appeal; to the contrary, the court ‘extended’ the injunction only to a particular date, September 2, 2015, based on its judgment on the merits,” and “denied Amgen’s request for an injunction pending consideration of en banc review.”

Amgen’s Reply Brief

In its reply brief, Amgen accuses Sandoz of “recast[ing] Amgen’s question presented, to argue that this Court would have to reach questions of state law to avoid an advisory opinion.” Rather, Amgen asserts, “there was no independent state-law ruling; the Federal Circuit’s decision about California law turned entirely on its construction of the BPCIA” and “depended on a violation of federal law.”  Specifically, Amgen argues that the Federal Circuit interpreted subsection (l)(2)(A) as not requiring an aBLA applicant to disclose its technical information, and it was that interpretation of federal law that formed the basis for the Court affirming the district court’s ruling that “Sandoz did not violate that provision, and … dismissal of Amgen’s  state-law claims.”

With regard to the statutory interpretation of subsection (l)(2)(A), Amgen challenges Sandoz’s interpretation of “shall provide” in subsection (l)(2)(A) as being optional.  According to Amgen, “the verb ‘shall’ is generally mandatory, and [] where ‘shall’ is used in juxtaposition to the verb ‘may’—as it is here—the ‘shall’ is clearly mandatory.”  Sandoz, Amgen argues, “ignores the statutory text,” through which “Congress explicitly made patents that cover the ‘making’ of the biological product part of the patent lists and information provisions of paragraph 262(l)(6),” and “without the Applicant’s aBLA and manufacturing information the Sponsor would likely have no way of knowing which, if any, of its manufacturing patents would be infringed by the Applicant’s (nearly always secret) manufacturing processes.”

Amgen argues that where an aBLA applicant refuses to disclose its manufacturing information, neither a “declaratory judgment action under subparagraph 262(l)(9)(C) or a patent-infringement suit under 35 U.S.C. 271(e)(2)(C)(ii) … is remedial, much less an exclusive remedy.”  Although submitting an aBLA can be a technical act of infringement under section 271(e)(2), Amgen asserts that “failing to provide the aBLA and manufacturing information is not an act of infringement, and in suggesting otherwise the Federal Circuit erred.”  And even though “section 271(e)(4) limits the available remedies for [technical acts of] infringement, … that does not mean, however, that the remedies in section 271(e)(4) are the only remedies for a violation of the BPCIA.”  According to Amgen, “Sandoz muddies the waters” and “misapprehends the law” “by arguing that the technical act of infringement in 35 U.S.C. § 271(e)(2)(C)(ii) is necessary to allow a declaratory judgment action.”  On the contrary, “the technical act of infringement in section 271(e)(2) is not necessary to create declaratory-judgment jurisdiction,” and that statute simply “makes it possible for the district court to exercise its section 1338(a) jurisdiction.”

Amgen further argues that Sandoz fails to offer any credible reason why the Supreme Court should not also grant Amgen’s cross-petition if it grants Sandoz’ petition.  Amgen asserts that its “cross-petition is no less important than the petition on which it is contingent” and should be considered because the statutory provisions whose interpretations are in dispute are part of “an integrated series of steps” and should “be construed in the context of subsection 262(l) as a whole.”  Amgen concludes that “if the Court is not inclined to take both Sandoz’s petition and Amgen’s conditional cross-petition, the best course is to deny both.”

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All the papers were distributed to the Supreme Court on May 31 and are scheduled to be considered at the Court’s June 16 conference.  A decision on the petitions could be released as soon as June 20.

Stay tuned to the Big Molecule Watch for further developments.