Supreme Court Provides Some Clarify to BPCIA Patent Dance

On June 12, 2017 in Sandoz v. Amgen the Supreme Court decided two issues concerning the Biologics Price Competition And Innovation Act of 2009 (BPCIA).  It is now clear that the 180 day notice required before the date of first commercial marketing of a biologically equivalent drug can be given prior to FDA approval.  The Court also decided that an injunction under federal law predicated upon the failure of the biosimilar applicant to adopt the “patent dance” procedures is not available, but left open the possibility that a state law unfair competition action could be.

BPCIA provides a pathway for an applicant seeking FDA approval of a biosimilar to rely upon the data of an already approved biologic.  It created a multiple stage approach which permits patent challenges during the FDA approval process between the applicant and the prior registrant.  This has been referred to as the “patent dance.”

Because the act of applying for FDA approval is not an act of patent infringement, the law established an “artificial” act of infringement permitting early patent challenges.

Under BPCIA, the applicant seeking FDA approval must notify the owner of the registered drug about the application and provide manufacturing information within twenty days after the FDA advises the applicant that it has accepted the application for review.  This triggers an exchange of information designed to create a list of relevant patents and legal positions.  It is a two-phased process.  In the first phase the parties collaborate to identify patents for immediate litigation.  The second phase begins when the 180 day notice of intention to commercialize is given.

Failure to comply with the procedural requirements under the first phase permits the approved drug owner to seek a declaration of infringement, invalidity or enforceability of any patent that claims the biological product or use of the biological product.  The penalty for the applicant is that it is foreclosed from initiating legal action.

Sandoz sought FDA approval to market a biosimilar of Amgen’s Neupogen.  Sandoz properly notified Amgen that it had submitted an application and also provided the notice that Sandoz intended to market its product immediately after receiving FDA approval.  However, rather than initiate an information exchange, Amgen advised that it did not intend to provide the manufacturing and other information.  Amgen sued Sandoz for patent infringement.  In addition, the lawsuit alleged that the failure to provide the information was an act of unfair competition under California State law and the notice of intent to commercialize was ineffective because the 180 day market notice could only be given after FDA approval.

While the case was pending, the FDA approved the Sandoz product and Sandoz provided Amgen with a second 180 day notice.

The District Court dismissed the unfair competition claims.  The Federal Circuit affirmed the dismissal of the state law claims holding that BPCIA provided the exclusive remedies for failure to meet its requirements.  The Federal Circuit also held that the 180 day can only take place after FDA approval.

The Supreme Court held that BPCIA does not preempt state law claims.  It, therefore, remanded the case to the Federal Circuit to determine the applicability of California State law.

With regard to the 180 days notice, the Supreme Court held that the statutory wording i.e., “not later than 180 days before the date the first commercial marketing of the biological product licensed” is not dependent upon FDA approval.  The notice can be given earlier.

It can now be expected that applicants for biosimilars will be providing early 180 notices and when approved the biosimilar will be available for sale earlier.  We await clarification whether failure to enter into the so-called “patent dance” carries with it consequences beyond immediate exposure to patent litigation, but as well, claims of unfair competition under State law.

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