AMGEN INC. et al. v. APOTEX INC. et al. 827 F. 3d 1052 (Fed. Cir. 2016) Notice Requirements for Biosimilar Applicants under the Biologics Price Competition and Innovation ActMay 21st, 2017 by Thomas J Germinario
I. STATUTORY BACKGROUND
The Biologics Price Competition and Innovation Act of 2009 (the “BPCIA”, 42 U.S.C. §262) authorizes a generic drug manufacturer to gain FDA approval for a product sufficiently similar to a previously licensed “reference product” by demonstrating, among other things, that its product is “biosimilar” to the reference product. The statute provides that the biosimilar product application may not be submitted until four years after the reference product was first licensed, and that the biosimilar product license may not become effective until twelve years after the reference product’s licensing date.
Subsection 262(l) of the BPCIA sets forth a detailed procedure for resolving potential patent infringement issues before the biosimilar generic product is commercially marketed. Under paragraph (2)(A), within 20 days after the FDA notifies the biosimilar applicant that its application has been accepted for review, the applicant can give notice to the reference product sponsor, initiating a series of informational exchanges designed to narrow the scope of potential infringement litigation.
While these procedures relieve the biosimilar applicant of defending numerous infringement claims prior to getting its FDA license, they can also defer resolution of some claims until after licensure. Congress recognized that certain infringement issues may not become ripe for adjudication until after FDA approval, when the biosimilar product, its therapeutic uses, and its manufacturing processes become fixed. Therefore, it provided in paragraph (8)(A) of the BPCIA that the biosimilar applicant shall provide notice to the reference product sponsor not later than 180 days prior to the first commercial marketing of the FDA-licensed biosimilar product. This 180 day window affords time to the reference product sponsor to consider the need for further infringement claims not yet resolved by the (2)(A) process, and it also gives the courts time to review such claims without the pressure of imminent marketing of the generic product.
II. AMGEN v. SANDOZ
In Amgen Inc. v. Sandoz Inc, 794 F.3d 1347 (Fed. Cir. 2015), the Federal Circuit had held that the commercial-marketing provision of paragraph 8(A) is mandatory, with the 180-day period beginning only upon post-licensure notice, and that an injunction was proper to enforce the provision against Sandoz, a biosimilar-product applicant that had entirely skipped the paragraph (2)(A) statutory process of information exchange and patent litigation channeling.
The court held that the (8)(A) notice must be given after FDA licensure of the biosimilar product, and that pre-licensure notices are of no legal effect for purposes of (8)(A). It explained that the statutory 180- day period runs from licensure, “at which time the product, its therapeutic uses, and its manufacturing processes are fixed” by licensure. Id. at 1358. The purpose, the court explained, is to “provide a defined statutory window during which the court and the parties can fairly assess the parties’ rights prior to the launch of the biosimilar product,” the alternative being rushed decision-making about requesting or issuing a preliminary injunction. Id. at 1360.
The court concluded that (8)(A) is “mandatory”: “A question exists . . . concerning whether the ‘shall’ provision in [(8)(A)] is mandatory. We conclude that it is.” Id. at 1359. The court added that (8)(A) is “a standalone notice provision,” not dependent on the earlier information-exchange provisions. Id. at 1359–60. The biosimilar applicant Sandoz had not provided notice of FDA review under (2)(A).
III. AMGEN v. APOTEX in District Court
In October 2014, Apotex filed a biologics license application with the FDA under the BPCIA and listed Amgen’s Neulasta® as the reference product. In December 2014, the FDA accepted Apotex’s application for review, and Apotex notified Amgen of the application in accordance with (2)(A), thereby initiating the statutory patent litigation channeling procedure. In April 2015, Apotex sent a letter to Amgen purporting to serve as notice of future commercial marketing of its generic product pursuant to (8)(A), although it lacked an FDA license at that time.
Amgen filed a motion in October 2015 asking the District Court to issue a preliminary injunction that would require Apotex to provide an (8)(A) notice if and when it receives a license and to delay any commercial marketing for 180 days from that notice. The parties stipulated that Amgen would be irreparably harmed if Apotex entered the market without giving the requested 180 days’ notice, the balance of the hardships favored Amgen, and the public interest favored the issuance of an injunction. The decision whether to grant the preliminary injunction motion, therefore, turned on Amgen’s likelihood of success on the legal question presented: whether the (8)(A) notice requirement is a mandatory and enforceable by injunction as to a biosimilar applicant (Apotex in this case) that, unlike Sandoz in Amgen v. Sandoz, gave the (2)(A) notice to launch the infringement information-exchange process.
The District Court granted a preliminary injunction, noting that “[t]he [BPCIA] is intended to provide an orderly process for evaluating patent claims in the context of biosimilar products.” J.A. 6. In particular, the (8)(A) notice-of-commercial-marketing requirement “‘provides a defined statutory window during which the court and the parties can fairly assess the parties’ rights prior to the launch of the biosimilar product.’” Id. (quoting Amgen v. Sandoz, 794 F.3d at 1358). The court concluded: “That defined statutory window exists for all biosimilar products that obtain FDA licenses, regardless of whether the [biosimilar] applicant complies with § 262(l)(2) [paragraph (2)(A)].” Id. The court disagreed with Apotex’s contention that this conclusion should be rejected in order to avoid adding 180 days to the BPCIA’s 12-year exclusivity period for reference product sponsors. J.A. 7. The court also disagreed with Apotex’s contention that paragraph (9) establishes, as the exclusive remedy for failure to provide the (8)(A) notice of commercial marketing, a declaratory judgment on the patent-law merits of the patents at issue, regardless how rushed the litigation of those issues might be without the 180 days’ notice. Id.
IV. AMGEN v. APOTEX in the Federal Circuit
On appeal, the Federal Circuit agreed with the District Court that the fact that Apotex gave a (2)(A) notice was not a legally material distinction between its situation and that of Sandoz in Amgen v. Sandoz. The (8)(A) requirement of 180 days’ post-licensure notice before commercial marketing, the Court concluded, is a mandatory one enforceable by injunction, whether or not a (2)(A) notice was given.
The Court noted that paragraph (8)(A) provides that “[t]he subsection (k) [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).” § 262(l)(8)(A) (emphasis added). They observed that the word “shall” generally indicates that the directive is mandatory, and that they had ruled in Amgen v. Sandoz that this language is, indeed, “mandatory,” and that the scope of their earlier ruling was not restricted to circumstances when no (2)(A)-notice is given by the biosimilar applicant. 827 F.3d at 1061.
The Federal Circuit held that Amgen v. Sandoz likewise disposed of Apotex’s argument that giving (8)(A) its plain meaning would effectively extend, by six months, the 12-year exclusivity period given to a reference product sponsor by the BPCIA. They noted that the statute by its terms establishes the 12-year date only as an earliest date on which a biosimilar license can take effect. The Court reasoned that, even when market entry is delayed under (8)(A) by a total of 12 years plus 180 days after the reference product’s licensure, the result is consistent with the BPCIA.
Moreover, they noted, it’s implicit in the BPCIA that any such delay beyond 12 years should occur less frequently as time goes by. Although there would be some exclusivity periods beyond 12 years in the early years of the BPCIA, because biosimilars are still being introduced for reference products licensed before the Act was adopted in 2010, as time passes, an increasing percentage of the reference products will be licensed after 2010. For these more recent products, a biosimilar product applicant, entitled to file an application four years after licensure of the reference product, can seek approval long before the 12-year exclusivity period ends. In such circumstances, the Court found no reason that the FDA could not issue a license before the end of the exclusivity period and deem the license to take effect on the 12-year date—a possibility suggested by the BPCIA’s reference to when the FDA approval may “be made effective.” They 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 further noted that the evident purpose of (8)(A) covers applicants that file (2)(A) notices as well as those that do not. As they had explained in Amgen v. Sandoz, the purpose is to ensure that, starting from when the applicant’s product, uses, and processes are fixed by the FDA license, the necessary decision-making regarding further patent litigation is not conducted under time pressure that will impair its fairness and accuracy. At a minimum, the reference product sponsor needs time to make a decision about seeking relief based on yet-to-be-litigated patents, and a district court needs time for parties to prepare for complex litigation. The 180-day period gives the reference product sponsor time to assess its infringement position for the final FDA-approved product as related to yet-to-be-litigated patents. And if further infringement litigation ensues, the 180-day window affords the parties and the district court the time for adjudicating such matters without the rush attending requests for emergent relief against immediate market entry. The Court noted that “the Act’s legislative history confirms the aim to avoid the uncertainties and deficiencies associated with a process in which requests for temporary restraining orders and preliminary injunctions are presented and adjudicated on short notice.” Id. at 1061-1063
The Court then proceeded to reject Apotex’s final argument that the BPCIA makes a declaratory judgment action the exclusive remedy for violation of (8)(A). Apotex argued that the only remedy for an applicant’s failure to give the reference product sponsor the 180-day period for post-licensure litigation decision-making is a declaratory-judgment action on a patent—which the Act permits if the applicant fails to complete any one of the BPCIA’s several procedural steps. The Court found that such exclusivity does not appear explicitly in the Act, nor can it be logically inferred from the purpose of the (8)(A) notice provision. In particular, they noted, relegating a reference product sponsor to a patent-merits declaratory-judgment action would introduce the very problem of rushed decision-making as to the patent merits that it is (8)(A)’s purpose to avoid. Id. at 1063-1065
Noncompliance with (8)(A) can occur by the biosimilar applicant either entering the market without giving a post-licensure notice or giving a notice and then entering the market before 180 days have passed. In either event, a reference product sponsor is not likely to know that the applicant will fail to provide the actual 180-day commercial-marketing notice required by (8)(A) until the applicant begins commercial marketing or declares its intention to begin such marketing imminently.
“The reference product sponsor will have to race to court for immediate relief to avoid irreparable harm from market entry, and the parties and the court, in dealing with a request for a temporary restraining order or a preliminary injunction, will engage in precisely the hurried motion practice that (8)(A) is designed to replace by ensuring a defined amount of time for pre-launch litigation.” Id. at 1065
The Court therefore concluded that “declaratory judgment as a remedy is so gross a mismatch for the (8)(A) right that it cannot fairly be treated, in the absence of any statutory language so stating, as the exclusive remedy for (8)(A)’s violation.” Id.
The Federal Circuit rejected Apotex’s exclusivity inference, because it would implicitly render (8)(A) neither mandatory nor standalone and would engender the very problems of rushed litigation that (8)(A) was enacted to avoid. They held that any inference that Congress rendered unavailable direct injunctive enforcement of (8)(A)’s plain terms is unwarranted.
In conclusion the Court held that a biosimilar applicant must provide a reference product sponsor with 180 days’ post-licensure notice before commercial marketing begins, regardless of whether the applicant provided the (2)(A) notice of FDA review. Id. at 1066
As the Federal Circuit observed, the type of problem faced by Apotex in this case will diminish with time, as newer reference products gain FDA approval after the 2010 adoption of the BPCIA, given the 8-year period between when the biosimilar product sponsor can apply for FDA approval and when the reference product’s exclusivity period expires. In the meantime, however, biosimilar applicants under the BPCIA are well advised to follow the Court’s suggestion by seeking early issuance of an FDA license to take effect on the 12-year date, since the Act pegs the beginning of the (8)(A) 180-day notice period to the date of issuance of an FDA license issuance rather than its effective date.