By Kurt R. Karst –
Way back in June 2016, the United States Supreme Court invited the Solicitor General to file a brief in two cases – Docket No. 15-1039 and Docket No. 15-1195 – expressing the views of the United States as to two provisions of the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”): (1) PHS Act § 351(l)(8)(A) (42 U.S.C. § 262(l)(8)(A)), which states that a biosimilar (or aBLA or subsection (k)) “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);” and (2) PHS Act § 351(l)(2)(A) (42 U.S.C. § 262(l)(2)(A)), which governs the information exchange procedures under the BPCIA’s patent dance provisions and states that an aBLA applicant “shall provide to” the reference product sponsor a copy of the biosimilar application and information about the product’s manufacturing processes.
The Supreme Court’s request stems from a highly fractured July 21, 2015 opinion handed down by the U.S. Court of Appeals for the Federal Circuit in a dispute between Amgen Inc. (“Amgen”) and Sandoz Inc. (“Sandoz”) involving Sandoz’s ZARXIO (filgrastim-sndz), a biosimilar version of Amgen’s NEUPOGEN (filgrastim) (see our previous post here). Earlier this year, both Sandoz and Amgen requested Supreme Court review (see our previous posts here and here), resulting in the following questions presented to the Court:
The questions presented in the [Sandoz] certiorari petition are (a) whether notice of commercial marketing under Subsection (l )(8)(A) is legally effective if it is given before Food and Drug Administration (FDA) approval of the biosimilar application, and, if not, (b) whether Subsection (l )(8)(A) is a stand-alone requirement that may be enforced by means of an injunction that delays the marketing of the biosimilar until 180 days after FDA approval.
The question presented in the [Amgen] conditional cross-petition is whether Subsection (l )(2)(A) creates a binding disclosure obligation that a court may enforce by injunction, or whether the sponsor’s sole recourse for the applicant’s failure to disclose the information is the right, prescribed elsewhere in the BPCIA, to commence an immediate action for patent infringement.
On December 7, 2016, the Acting Solicitor General of the United States responded to the Supreme Court’s request and filed a brief urging the Court to grant a writ of certiorari with respect to Sandoz’s petition and Amgen’s conditional cross-petition. According to the Big Molecule Watch Blog, “[t]he Court will consider the petition at its private conference on January 6, [2017,] and a cert grant could be announced as soon as that afternoon.” If certiorari is granted, then we may see a decision by June 2017.
Whereas the Federal Circuit ruled that the notice of commercial marketing under PHS Act § 351(l)(8)(A) can be provided only after aBLA licensure, and that the patent dance process initiated under PHS Act § 351(l)(2)(A) is optional; the government says that the Federal Circuit “erred in interpreting Subsection (l )(8)(A), but it correctly construed Subsection (l )(2)(A),” thus coming out in favor of the interpretations advocated by Sandoz.
With respect to PHS Act § 351(l)(8)(A), the government says that the provision:
allows the applicant to give the requisite 180-day advance notice of the first commercial marketing of its biosimilar before FDA has approved the applicant’s biosimilar application. But in any event, no federal cause of action exists under which a sponsor could obtain injunctive relief if the applicant fails to give notice as specified in Section 262(l )(8)(A).
The text and purpose of Section 262(l )(8)(A)’s notice provision and the BPCIA’s broader statutory context demonstrate that the provision permits an applicant to give advance notice of the first commercial marketing of its biosimilar before FDA has licensed the biosimilar. . . .
The Federal Circuit imposed an injunction to enforce its reading of Section 262(l )(8)(A)’s notice requirement. Although respondents state that the court had authority under Rule 8(a) to extend its “injunction pending appeal,” that rationale makes little sense because the court had resolved that appeal. The Federal Circuit thus reads its decision here as holding more generally that “an injunction [i]s proper to enforce” Section 262(l )(8)(A). That holding is incorrect. [(Emphasis in original; internal citation omitted)]
With respect to PHS Act § 351(l)(2)(A), the government says that the Federal Circuit was correct in holding that while the provision states that an aBLA applicant “shall provide” a copy of the aBLA and manufacturing process information to the reference product sponsor within 20 days of FDA’s acceptance of the aBLA for review, failure to do so results in other consequences under the BPCIA (i.e., the aBLA applicant’s submission of its application is deemed an artificial act of infringement and the reference product sponsor may bring a declaratory judgment action based on “any patent that claims the biological product or a use of the biological product”) that “are exclusive and that, when a sponsor brings its patent action, it may obtain information from the applicant in discovery.”
Respondents’ conditional cross-petition argues that the Federal Circuit erred in concluding that Section 262(l )(2)(A)’s use of “shall” “does not mean ‘must.’ ” The government agrees that the Federal Circuit misconceived the relevant inquiry in that respect. But Section 262(l )(2)(A) may properly be understood as imposing a mandatory condition for invoking Subsection (l )’s patent-dispute framework without concluding that an injunction is available to compel compliance with that condition.
Even if the term “shall” is understood as mandatory, the only consequences for failing to satisfy that condition are those expressly set forth by Congress in the BPCIA. That conclusion flows logically from essentially the same reasons discussed above in connection with Section 262(l )(8)(A). And as petitioner explains, a sponsor can, after conducting a diligent investigation, file an infringement suit as contemplated by the BPCIA based on any patent it reasonably believes has been infringed, and it may seek additional information regarding that patent claim through discovery.
Given the government’s strong recommendation to grant certiorari to both the Sandoz and Amgen petitions, we’re guessing that it will happen. Hold on to your hats; 2017 could be an important year for biosimilars! (There’s also the threat in 2017 of a repeal of the BPCIA if the Affordable Care Act is repealed; however, Republican and Democratic lawmakers recently quelled those fears, saying that the BPCIA would likely be carved out from any Affordable Care Act repeal.)