Sandoz filed its opening brief to the Supreme Court on Friday, February 10, 2017. The dispute focuses on the notice marketing provision and the information exchange or “patent dance” procedures of the Biologics Price Competition and Innovation Act (BPCIA). Sandoz’s opening brief addressed:
Whether notice of commercial marketing given before FDA approval can be effective and whether, in any event, treating Section 262(l)(8)(A) as a standalone requirement and creating an injunctive remedy that delays all biosimilars by 180 days after approval is improper.
Sandoz’s brief did not address whether the applicant can opt out of the patent dance procedures. Amgen raised that issue on cross-appeal and will address whether the patent dance is mandatory in its consolidated brief due on March 10. Sandoz will likely respond on that issue in its reply brief due on March 31. Amici in support of Sandoz or neither party may argue the issue sooner though, as their deadline is February 17.
Sandoz argued that the Federal Circuit’s interpretation granted an additional six-month period of exclusivity that Congress did not intend. Sandoz made three main arguments against the Federal Circuit’s ruling: First, the law does not require FDA approval before notice of marketing. Second, a mandatory 180-day injunction against marketing is not available to remedy lack of notice. And third, the notice provision is not a standalone requirement and should be considered in the context of the patent dispute procedures.
A previous post reviewed the Federal Circuit’s decision.
I. Notice Before FDA Approval
A. The Statute Supports Preapproval Notice
The notice provision states that the biosimilar “applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).” 42 U.S.C. § 262(l)(8)(A). According to Sandoz, the statute’s notice provision includes “only one timing constraint: the applicant is to give notice at least ‘180 days before the date of the first commercial marketing’ of its biosimilar.” Br. 27.
Sandoz argued that the Federal Circuit’s opinion relies on “overreading the word ‘licensed’,” and Congress would have expressly required an applicant to wait for FDA approval before providing notice if it intended to do so. Br. 27. Sandoz pointed to three textual features to support its position: Subparagraph (l)(8)(B), immediately following the notice provision, uses the timing terms “before” and “after” to establish conditions authorizing the sponsor to seek an injunction, but the notice provision (l)(8)(A) does not use timing terms with respect to licensure. The notice provision refers to the “subsection (k) applicant,” which “contemplates that the notifying party need only have requested FDA approval, not have received it.” Br. 32. Requiring notice “no later than 180 days” before marketing allows for even earlier notice.
Sandoz then critiqued the Federal Circuit’s reading of the term “licensed.” The interpretation “effectively extended the [exclusivity period] from 12 years to 12 and one-half years,” which is a significant policy point that the district court noted would be accomplished under this reading by a “convoluted method.” Br. 33. Sandoz explained the term “licensed” as merely indicating that the product would be licensed by the time of marketing. Sandoz also pointed out that another part of the statute refers to “licensed” products even though the authority granted applies preapproval. Br. 34 (citing 21 U.S.C. § 355-1(a)(1); 42 U.S.C. § 262(k)(5)(C)). Sandoz finally noted instances in which “licensed” is used to refer to biosimilar and biological products pathways to differentiate those products, not as a condition or requirement. Br. 35.
B. Amgen’s Textual Arguments Lack Merit
Sandoz also offered three counters to Amgen’s textual reading. First, unlike other instances when the statute refers to “the biological product that is the subject of” the application, Sandoz argued that the notice provision is structured around the time of marketing. And at that point, the product would be licensed.
Second, Sandoz challenged the relevance of the timing provisions for interchangeability certification. Sandoz notes inconsistencies between the notice and interchangeability timelines under Amgen’s theory. Mainly though, Sandoz contends that the biosimilar and interchangeability regimes are wholly separate and their timing provisions unrelated.
Finally, Sandoz concluded that allowing notice before approval would not obviate the litigation stay provision in the information exchange included in subparagraph (l)(9)(A), but would rather provide an option to move more quickly to litigation. Sandoz said that it would be irrational for an applicant to trigger the information exchange and then invite immediate litigation by giving notice of marketing.
C. Preapproval Notice Serves the Statute’s Purpose
On policy grounds, Sandoz argued that preapproval notice furthers the provision’s purpose for two reasons. First, the statute’s structure encourages early resolution of patent disputes, so biosimilars can come to market quickly. Br. 39. Preapproval notice would allow the parties to address the merits of a preliminary injunction before the sponsor’s exclusivity period ends. Second, only preapproval notice serves any notice function because the FDA announces approvals.
In addition and contrary to the Federal Circuit’s opinion, Sandoz reasoned that approval is not necessary to crystallize a controversy because the statute establishes artificial infringement by filing the biosimilar application, and either not providing the application to the sponsor or creating a patent list. Br. 41-42.
II. The Federal Circuit Erred By Providing A Right of Action and Injunction to Enforce Notice
A. Precedent Prohibits Additional Judicially Created Remedies
Sandoz challenged whether the BPCIA created a private right of action to enforce the notice provision. According to Sandoz, the BPCIA lacks “rights-creating” language, and the required notice serves a procedural role. Br. 44.
Similarly, Sandoz argued that injunctive relief is not available because there is no express congressional intent to create a private injunctive remedy to enforce the notice provision. Br. 45. For support, Sandoz pointed to certain remedies that depend on the applicant’s and sponsor’s compliance with the information exchange and notice provisions. Br. 46. For example, in the information exchange process, failure to provide notice of marketing allows the sponsor to bring an action on patents identified during the information exchange or newly obtained. 42 U.S.C. § 262(l)(9)(B). Under the various courses of the patent dance created by that statute, Sandoz said that patent litigation, not injunctive relief, is the only possible outcome. Br. 47. The notice provision then only affects the timing of lawsuits.
Sandoz went on to address a possible situation raised by Amgen in which an applicant is not required to make disclosures under securities laws and could receive approval and market a product by surprise. Given the costs associated with biosimilar development, Sandoz argued that this situation would be unlikely and also would not be an issue because of disclosures associated with clinical trials and FDA advisory hearings. Br. 48-50.
Sandoz also pointed to the confidentiality sections of the BPCIA as evidence that no injunction should be available to enforce the notice provision. Under subparagraph 262(l)(1)(H), violations of the confidentiality rules are deemed to cause the biosimilar applicant “to suffer irreparable harm for which there is no adequate legal remedy and the court shall consider immediate injunctive relief to be an appropriate and necessary remedy ….” Moreover, Sandoz said that the Federal Circuit failed to weigh the traditional equitable considerations before enjoining Sandoz. Br. 52.
Sandoz then challenged the Federal Circuit’s analysis in Amgen v. Apotex, which held that an injunction was available because there was “no language that excludes other remedies for the conduct described.” 827 F.3d. 1052, 1064. This reasoning, Sandoz argued, was previously rejected by the Supreme Court, and cases that the Federal Circuit relied on are inapt. Br. 53-55. And, Sandoz concludes, express remedies under the statute “leave no room for courts to add their own.” Br. 55-56.
B. The Federal Circuit Created A Six-Month Delay that Disrupts the Balance Struck By Congress
Sandoz reiterated its argument over the de facto 180-day extension by focusing on Congress’s decision to grant 12-year exclusivity and citing Judge Chen’s dissenting opinion from the Federal Circuit opinion. Br. 56-58. Critically, Sandoz noted, the FDA cannot license a product during the 12-year exclusivity period, so the Federal Circuit’s ruling “would delay all biosimilars by 180 days.” Br. 58-59.
III. Notice Should Be Read in the Context of the Patent Dance
The statute lays out a multi-step process for disclosing information and addressing patent disputes. During the dance, a stay prevents litigation of certain patent claims. Notice of marketing lifts that stay, so, Sandoz argued, notice is a procedural element of the information exchange process. Br. 61-62. There is no stay under subparagraph (l)(9)(A) when the applicant chooses not to initiate to information exchange. Br. 62. The sponsor can litigate any of its patents at any point. So, by Sandoz’s logic, the notice provision does not apply.
Please check back for further updates on this case and other BPCIA litigation.