On October 24, 2014, Amgen filed a complaint against Sandoz, the generic arm of Novartis Group, asserting three causes of action: 1) unfair competition under Cal. Bus. & Prof. Code § 17299 et seq.; 2) conversion; and 3) patent infringement. Amgen filed the complaint in response to Sandoz’s July 2014 application for a biosimilar that mirrors Amgen’s Neupogen (filgrastim, a drug used to reduce incidence of infection in patients receiving myelosuppressive anticancer drugs), which Sandoz will market under the brand name Zarzio. Sandoz’s Biologics License Application (BLA) was a milestone as it was the first accepted by the U.S. Food and Drug Administration (FDA) under the Biologics Price Competition and Innovation Act (BPCIA).

A biosimilar is biopharmaceutical that is “highly similar” to an FDA-licensed biological product—a medicine made from biological sources (living organisms). While some minor differences in active components may exist, biosimilars are functionally the same as their reference products. Biosimilars are often compared to generic drugs, which replicate traditional, small-molecule prescription drugs made through chemical processes. But biosimilars instead mirror biological products, and cannot be substituted for their reference product until they are deemed “interchangeable” (produce the same clinical results).

The Biologics Price Competition and Innovation Act (BPCIA) created an abbreviated licensing pathway for biosimilars. The BPCIA was signed into law on March 23, 2010 as part of the Affordable Care Act to facilitate affordable access to biological products. Biologics are expensive to produce and consequently cost 20 times more on average than chemical drugs. By allowing biosimilar producers to piggyback the original inventor’s extensive clinical trials required to prove the product is safe, pure, and potent, the BPCIA will reduce market barriers for companies creating biosimilars, thereby sparking industry growth and price reductions. Biosimilars will be sold at an estimated 30% discount.

Under the BPCIA patent litigation framework, the creator of a biosimilar first files a BLA with the FDA, prompting the maker of the reference product to bring an action against the applicant for infringement. Pursuant to 42 U.S.C. § 262, the applicant must provide its BLA to the reference product sponsor before the action commences, who in turn provides the applicant with a list of patents for which it believes a claim of infringement can be brought. The applicant and the innovator must then engage in “good faith negotiations” to agree upon which patents will be litigated before patent infringement claims can be brought.

After filing its July 2014 application, Sandoz was required by § 262 to submit a copy of its BLA and other relevant manufacturing information to Amgen within 20 days. Sandoz instead proposed an alternative method for exchanging information, which Amgen rejected. Nevertheless, Sandoz still refused to follow the statutory requirement. Amgen’s complaint alleges that “Defendants’ failure to provide their BLA and manufacturing information was an attempt to prevent Amgen from learning the details of their process(es) for manufacture, to avoid patent infringement litigation on any manufacturing patents, and to avoid the patent exchanges required by the statute; and instead to go directly to litigation.”

Amgen’s complaint requested an injunction preventing Sandoz from commercially marketing Zarzio until Amgen is “restored to the position they would have been had Defendants met their obligations under BPCIA” by providing the required application and manufacturing information. Significantly, the complaint asked that the court prevent Sandoz from providing initial notice of its commercial marketing until on or after FDA licensure, which would delay the launch of Zarzio by six months. In addition Amgen requested an injunction suspending FDA review of Sandoz’s application until it receives permission from Amgen to use the Neupogen license and a court judgment that Sandoz committed patent infringement by submitting its application to the FDA for approval without providing the required application information to Amgen.

The court’s interpretation of the statutory requirements will set the stage for future biosimilar applications. Such statutory interpretation will undoubtedly create further controversy as more companies begin filing biosimilar applications, and has already proven critical to the approval process in other patent disputes under the BPCIA even in its infancy.

Another key concern of the patent framework regards the process by which biosimilar developers can seek adjudication of patent resolution early in the product development phase. Because of the substantial upfront costs of developing and testing biosimilars, companies face a serious disincentive if they cannot adjudicate their legal rights to release the product until it is ready to be submitted for approval—a disincentive that seems to undermine the BPCIA’s goal of relaxing biologics market barriers to entry.

The District Court of Northern California was the first to interpret the BPCIA when it addressed this question in another dispute between Sandoz and Amgen. In June 2013, Sandoz filed a complaint against Amgen seeking declaratory judgment that two of Amgen’s patents on Enbrel (etanercept) were invalid. Sandoz claimed that it had timed the release of its biosimilar to coincide with the expiration of Amgen’s other patents, and that the patents in dispute would cause significant delay in the release of Sandoz’s product. The court granted Amgen’s motion for dismissal, concluding that it did not have subject matter jurisdiction because Sandoz had not yet filed an application with the FDA, as required by § 262. The court also found that Sandoz had not presented a “real and immediate injury or threat of future injury” because the Amgen had not yet indicated any intent to sue.

Sandoz appealed the judgment in December 13, 2013, but if affirmed, it will limit the scope of actions allowed by biosimilar developers. Resolution of this appeal will thus likely play a crucial role in the future of early stage biosimilar patent litigation.

 

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