Amgen v. Apotex: Analysis of the Fed. Cir. Opinion

As we posted yesterday, the Federal Circuit has issued its decision in Amgen v. Apotex, affirming the district court’s (S.D. Fla, J. Cohn) order preliminarily enjoining Apotex from launching its biosimilar version of Amgen’s Neulasta (pegfilgrastim) until it has received FDA licensure, given Amgen a post-licensure notice of commercial marketing, and then waited for 180 days to expire.

The Court held that the commercial-marketing provision of BPCIA (l)(8)(A) “is mandatory and enforceable by injunction even for an applicant in Apotex’s position”—i.e. even for an applicant that has engaged in the patent dance steps of the BPCIA patent dispute resolution provisions.  The Court clarified that its holding in Amgen v. Sandoz—that “the notice of commercial-marketing provision is mandatory, with the 180-day period beginning only upon post-licensure notice, and that an injunction was proper”—applied to Apotex, which had engaged in the patent dance with Amgen, just as it applied to Sandoz, which had opted to forego the patent dance entirely.


Factual background on Amgen v. Apotex can be found in greater detail in our previous post here, but in sum: Apotex engaged the patent dance by providing Amgen a copy of its biosimilar application and manufacturing information within 20 days of FDA accepting Apotex’s biosimilar application for review.  After Amgen provided its (l)(3) list of patents that could be asserted against Apotex, Apotex provided detailed responses to each patent and on the same day purported to provide notice to Amgen of its future commercial marketing, pursuant to the notice requirement of (l)(8)(A).  The parties proceeded with the patent dance and agreed to immediate litigation on two patents, one of which has since expired.  Trial on that action is scheduled to begin on July 11, 2016. In its Complaint in that action, Amgen also alleged that Apotex’s notice of commercial marketing was legally ineffective, and Amgen later sought a preliminary injunction on that allegation, which the district court granted on Dec. 9, 2015.

Apotex appealed the preliminary injunction, arguing that although the Federal Circuit had held that post-licensure notice was mandatory in Amgen v. Sandoz, it was not mandatory in this case, because unlike Sandoz, Apotex had engaged in the patent dance and thus Amgen’s only remedy was to seek a declaratory judgment action under (l)(9)(B).

Summary and Analysis

The Court’s opinion yesterday rejected Apotex’s asserted distinction, finding it a “factual distinction, not a legally material” one.  The Court held that the notice provision in (l)(8)(A) “contains no words that make the applicability of its notice rule turn on whether the applicant took the earlier step of giving the (2)(A) notice that begins [the patent dance],” and “no other statutory language…compels a treatment of (8)(A) as non-mandatory.”  The Court further held that it could not infer from the text of the BPCIA or the corresponding amendments to 35 U.S.C. § 271 that (l)(9)(B) provided the sole remedy for Amgen in the event of Apotex’s non-compliance with the notice provision.

Interestingly, the Opinion picks up a question left lingering after Amgen v. Sandoz: Judge Lourie’s opinion in that case noted that the Court’s holding that post-licensure notice is mandatory did not amount to granting a de facto additional exclusivity period for reference product sponsors because the “extra 180 days will not likely be the usual case, as [biosimilar-product applications] will often be filed during the 12-year exclusivity period.”  The district court in Amgen v. Apotex reiterated this part of the opinion without elaboration—a somewhat puzzling statement if the effect of the rulings was to require biosimilar applicants to give 180-days’ notice after the expiration of the 12-year exclusivity period for the RPS and FDA licensure of the biosimilar.*

In its Opinion yesterday, the Federal Circuit noted that as time passes and biosimilar applications begin to reference newer reference products, they may begin to file applications “long before the [reference product’s] 12-year exclusivity period is up.”  And, the Court noted:

In such circumstances, we have been pointed to no reason that the FDA may not issue a license before the 11.5-year mark and deem the license to take effect on the 12-year date—a possibility suggested by § 262(k)(7)(A)’s language about when the FDA approval may ‘be made effective.’ And we read (8)(A) as allowing the 180-day notice of commercial marketing to be sent as soon as the license issues, even if it is not yet effective, because it is at the time of the license that ‘the product, its therapeutic uses, and its manufacturing processes are fixed.’

The Court thus seemed to suggest that a biosimilar applicant can give a legally effective “post-licensure” notice of commercial marketing upon tentative approval by the FDA, which may issue before the RPS’s 12-year exclusivity period expires.  In other words, the effective exclusivity period for the RPS may still be 12 years (as opposed to 12 years + 180 days) even with a mandatory, post-licensure 180-day notice requirement, because the 180 days may run concurrently with, and expire before or with, the 12-year period.  The Court added that the purpose of the BPCIA notice requirement “is to ensure that, starting from when the applicant’s product, uses, and processes are fixed by the license, the necessary decision-making regarding further patent litigation is not conducted under time pressure that will impair its fairness and accuracy.”  This purpose, the Court seemed to suggest, would be served by a post-tentative-licensure notice as well as a post-effective-licensure notice.

Also of note is the Court’s characterization of the mechanics of the BPCIA patent dance, its steps, and penalties for non-compliance.  Detailing the mechanics of the BPCIA patent dance provisions, the Court explained that given the timeline of the patent dance steps and “the time commonly taken for FDA review,” it may be assumed that “the early litigation under paragraph (6)”—i.e., the first wave of patent litigation, the scope of which, the Court noted, the biosimilar applicant may limit under step (l)(4)—“will be initiated before the FDA licenses the applicant’s biosimilar product.”  “But,” the Court explained, “having provided for a narrowing of the scope of the paragraph (6) litigation, including by allowing the applicant to exclude potentially meritorious patents from that litigation,” the BPCIA provides for a second stage of patent litigation, triggered by a post-licensure notice of commercial marketing given not less than 180 days before the first date of commercial marketing of the licensed biosimilar.

The Opinion notes that paragraph (l)(9) of the BPCIA “reinforces” the patent dance’s “channeling of litigation and provides incentives for the applicant to proceed in those channels” by prohibiting the reference product sponsor (“RPS”) from filing a declaratory judgment action against the applicant so long as the applicant continues engaging in the patent dance, and lifting the ban on declaratory judgment actions for the reference product sponsor if the applicant fails to complete a step in the patent dance (in which case the RPS may bring suit on any patent it has listed during the dance) or fails to engage in the patent dance at all (in which case the RPS may bring suit on “any patent that claims the biological product or a use of the biological product.”

Interestingly, the Court explains that on the other side, the RPS is incentivized to adhere to the patent dance provisions by amendments to the infringement provision of the Patent Act, 35 U.S.C. § 271.   According to the Opinion: “First: If the [RPS] is late in bringing the first-stage infringement action [under paragraph (6)] … the only remedy the [RPS] can get in that action is a reasonable royalty. …Second: If a patent that the [RPS] should have included” on its patent dance lists “‘was not timely included,’ then the owner of that patent may not sue for infringement under 35 U.S.C. § 271 with respect to the biological product at issue.”  Previously, some have wondered whether the provision in 35 U.S.C. § 271(e)(6)(C)—which provides that an RPS may not bring an action for infringement of a patent that was not timely listed during the patent dance “under this section”—barred the RPS from bringing later suits under just 35 U.S.C. § 271(e) or under the broader 35 U.S.C. § 271.  The Court’s statement here—that “the owner of that patent may not sue for infringement under 35 U.S.C. § 271” suggests the latter is the case, although we can expect this issue to be the subject of further litigation down the road.

With the Court’s suggestion for the possibility of tentative approval by the FDA triggering a post-licensure notice of commercial marketing, we can expect further developments from FDA and future litigation—including potential litigation against FDA—regarding the notice requirement.  It should be noted that any litigation against FDA on this issue would be appealed to the D.C. Circuit Court, which may interpret the BPCIA and related legislation differently than the Federal Circuit.   And, as we’ve been covering, Sandoz has petitioned to the Supreme Court to review the Federal Circuit’s holding in Amgen v. Sandoz regarding the notice provision—a petition that remains pending and on which the Supreme Court has asked for the Solicitor General’s views.  For now, with this ruling we can expect preliminary injunction hearings prior to commercial launch in more—if not all—BPCIA cases.

Stay tuned for the Big Molecule Watch for further developments.