Seyfarth Shaw Offers Hatch-Waxman And Biosimilars Litigation: 2017 Year-in-Review

Today’s rapid scientific and technological advances demand not only a thorough understanding of the complex technology, but also a meticulous application of intellectual property law to protect the technology.

Seyfarth’s Intellectual Property and Hatch-Waxman Litigation practitioners are pleased to announce the release of Hatch-Waxman And Biosimilars Litigation: 2017 Year-in-Review which provides a brief overview of the Hatch-Waxman Act, a summary of the recently released FDA Draft Guidance, a general timeline of Hatch-Waxman and Biosimilars litigation and summaries of some of the related decisions issued by the U.S. Supreme Court and Court of Appeals for the Federal Circuit in the year 2017.

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BioLoquitur has reported on legislative developments in the past, but never did we expect to discuss a tax bill. Last week, however, the U.S. House of Representatives passed the “Tax Cut and Jobs Act” Bill (H.R. 1) and H.R. 1 deserves a spotlight. After all, one of our goals is to provide the life science industry with the latest news that could affect the industry.

Below are a few provisions that could affect U.S. pharma and biotechnology companies and others investing in those companies.[1]

  • Section 3001 reduces the U.S. corporate tax rate from 35% to 20%. If the bill goes into law, the reduction will be the largest corporate tax cut in over 100 years.
  • Under Title IV, the U.S. will only tax the U.S. income of a corporation and exempt most or all foreign income. Currently, a corporation headquartered in the U.S. pays corporate income tax on all income, both U.S. and foreign income that has been brought back into the U.S.
  • Section 3401 eliminates the Orphan Drug Tax Credit (“ODTC”). Currently, the U.S. provides an orphan drug manufacturer a tax credit of 50% of qualified clinical research costs incurred between the date of approval for the drug and the date that the U.S. Food and Drug Administration (“FDA”) designates the drug as an orphan drug. According to the U.S. Department of the Treasury, the tax expenditures attributable to the ODTC credit are expected to be $2.3 billion in 2017 and would grow substantially over the next ten years; eliminating the credit would thus generate billions in revenue for the United States.
  • After December 31, 2022, Section 3315 provides that research and experimental expenditures are not deductible unless they are charged to a capital account, where they must be amortized over a five year period. Currently, the tax code allows such research and experimental expenses as a deduction without requiring amortization under 26 U.S.C. § 174(a).
  • Section 3312 changes the tax treatment for self-created patents, taxing the gains from sales of such patents as ordinary income rather than capital gains.
  • Section 3307 narrows the ability to deduct certain business expense, eliminating deductions for membership dues, any payments relating to “entertainment, amusement, or recreation,” and on-premises athletic facilities, among others.
  • Section 1308 repeals the deduction for medical expenses. The tax code provides for the deduction of medical expenses that exceed 10% of an individual’s adjusted gross income. H.R. 1 eliminates this deduction. Critics suggest the elimination may potentially leading to reduced consumer spending on medical needs and/or increased reliance on government healthcare resources.

At 450 pages, H.R. 1 is a complex and dense bill — the list above is not exhaustive, of course.  We will keep you updated as tax reform continues.


[1]          Title V amends several provisions relating to exempt organization that are beyond the scope of this article, but may be of interest to research universities and foundations. If you have questions on the potential impact of Title V, please contact us and we will refer you to our tax and benefits colleagues for further information.

Finding against the Federal Circuit once again on a patent case, the Supreme Court issued a unanimous decision in Sandoz v. Amgen relating to the interpretation of the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) in its first decision on the Act.  The Supreme Court’s decision firmly establishes the availability of a third biosimilar “dance,” at least as far as Federal law is concerned.

The BPCIA provides the mechanism by which companies can bring to market “biosimilar” compounds, i.e., products that can compete with biological drugs much the same way as generic drugs compete with traditional “brand” pharmaceutical products.  On appeal, the Supreme Court considered two issues.  First, the biosimilar applicant, Sandoz, challenged the Federal Circuit’s interpretation of the BPCIA as requiring an applicant to wait until after the FDA approved its biosimilar application before providing the requisite 180-day notice of commercial marketing to the brand company.  This meant that a biosimilar applicant had to wait an additional 180 days after its application was granted before it could launch a competing product.  The FDA cannot approve (“license”) a biosimilar product until twelve years after the biologic was first approved by the agency.  Thus, the Federal Circuit’s decision effectively provided the brand manufacturer with 12½ years rather than 12 years of market exclusivity.

The Supreme Court reversed the Federal Circuit and explicitly determined that applicants can provide notice before or after FDA approval. According to the Supreme Court, the pertinent statutory language in the BPCIA has two separate requirements:  (1) that the biosimilar application is “licensed” before it is marketed; and (2) that the biosimilar applicant gives notice 180 days before marketing occurs.  The Federal Circuit thus erred in requiring licensure before notice could be given.

The second issue tackled by the Supreme Court relates to the “patent dance” provisions of the BPCIA. The “patent dance” is a statutory scheme through which the biosimilar applicant and the brand manufacturer exchange information and legal theories until deciding upon which patents to litigate first.  Sandoz refused to provide the biosimilar application and manufacturing information contemplated in the dance, leading Amgen to seek an injunction under federal and state law to compel participation.  The district court and Federal Circuit determined that an injunction was not available.

On cross-appeal, the Supreme Court agreed with the Federal Circuit that injunctions under federal law are not permitted, but remanded the case to review state law remedies.  According to the Court, the BPCIA allows the brand company immediately to bring a declaratory judgment action against the biosimilar applicant if they do not provide their application and manufacturing information.  This remedy deprives the applicant of the ability to control the scope of the litigation (i.e., which patents to litigate) and the timing of the suit.  The Supreme Court determined that the remedy of immediate suit was the only federal remedy contemplated for an applicant’s failure to dance.  The Supreme Court remanded the case to address whether non-compliance with the BPCIA can be considered a violation of California law entitling Amgen to an injunction and/or whether the BPCIA’s remedy pre-empts any state law remedies.

Seyfarth will be closely monitoring the remand of Sandoz in the coming months.

The SANDOZ Dance

Step 1:   Skip
42 U.S.C. § 262(l)(2)(A)

 BIOSIM good Applicant refuses to provide aBLA and information describing manufacturing

Step 2: File Suit
42 U.S.C. § 262(l)(9)(C)

 BRAND good Reference sponsor chooses what patents to sue upon and when to bring suit against Applicant



Step 1:   Disclose
42 U.S.C. § 262(l)(2)(A) – 20 days

BIOSIM good Applicant provides a copy of aBLA and information describing manufacturing

Step 2: Disclose
42 U.S.C. § 262(l)(3)(A) – 60 days

 BRAND good Reference sponsor provides list of assertable patents and identifies any patents it is willing to license

Step 3:   Disclose
42 U.S.C. § 262(l)(3)(B) – 60 days

BIOSIM good Applicant provides its own list of assertable patents, responds to licensing offer, and gives “detailed statements” why all listed patents are invalid, unenforceable, or will not be infringed

Step 4: Disclose
42 U.S.C. § 262(l)(3)(C) – 60 days

 BRAND good Reference sponsor gives “detailed statements” why the claims of all listed patents are infringed and responds to Applicant’s detailed statements

Step 5: Negotiate
42 U.S.C. § 262(l)(4)(A)

NEG SUCCESS Applicant and Reference sponsor negotiate to develop a final and complete list of patents for the initial patent infringement lawsuit and agree

Step 6:  File Suit
42 U.S.C. § 262(l)(6)(A) – 30 days

 BRAND good Reference sponsor files suit on agreed-upon patents



Step 1:   Disclose
42 U.S.C. § 262(l)(2)(A) – 20 days

BIOSIM good Applicant provides a copy of aBLA and information describing manufacturing

Step 2: Disclose
42 U.S.C. § 262(l)(3)(A) – 60 days

 BRAND good Reference sponsor provides list of assertable patents and identifies any patents it is willing to license

Step 3:   Disclose
42 U.S.C. § 262(l)(3)(B) – 60 days

BIOSIM good Applicant provides its own list of assertable patents, responds to licensing offer, and gives “detailed statements” why all listed patents are invalid, unenforceable, or will not be infringed

Step 4: Disclose
42 U.S.C. § 262(l)(3)(C) – 60 days

 BRAND good Reference sponsor gives “detailed statements” why the claims of all listed patents are infringed and responds to Applicant’s detailed statements

Step 5: Negotiate
42 U.S.C. § 262(l)(4)(B) – 15 days


Applicant and Reference sponsor negotiate to develop a final and complete list of patents for the initial patent infringement lawsuit but FAIL TO agree

Step 6:  Choose
42 U.S.C. § 262(l)(5)(A)

 BIOSIM good Applicant gives reference sponsor the number of patents it proposes to litigate

Step 7:  Exchange
42 U.S.C. § 262(l)(5)(B) – 5 days

Exchange Applicant and Reference sponsor simultaneously exchange list of patents that should be part of infringement action; Reference sponsor’s list limited to same number given by Applicant

Step 8:  File Suit
42 U.S.C. § 262(l)(6)(B) – 30 days

BRAND good Reference sponsor files suit on all patents on lists.


shutterstock_279495203One goal of BioLoquitur is to provide commentary and analysis on important developments in U.S. law affecting the pharmaceutical and biologics industry. It can be easy to forget that legal developments are not limited to the latest court decisions or agency actions, however.  The most profound changes in U.S. law arise from legislation.   This post thus provides a snapshot of relevant legislative proposals for the first quarter in 2017.

While the bills highlighted in this post have yet to make significant progress in the legislative process, they provide insight into what issues Congress is concerned about and how they might address such issues.

Currently, there over a dozen bills pending in the House of Representatives and Senate relevant to pharmaceutical and biologics companies. Common themes include (1) expediting the market entry of generic drugs and biosimilar products; (2) addressing drug shortages; and (3) discouraging certain settlement provisions between brands and generic companies that are thought to have anti-competitive effects, such as “pay-for-delay” requirements.  Below is a short summary of key bills and their status to date.  For a Quick View table, click here.

“Improving Access to Affordable Prescription Drugs Act,” H.R. 1776; S. 771. On March 29, 2017, Representative Janice Schakowsky and Senator Al Franken, both democrats, introduced identical bills that would enact comprehensive reforms relating to pharmaceutical drugs and biologics products. Provisions of the bills would impose reporting requirements, levy taxes and eliminate tax deductions for certain actions, reduce market exclusivity periods, and imposing de facto limits on settlements between generic drug companies and brand companies. The bills have been referred to committees. Significant provisions include:

  • Sec. 101. Requiring Mandatory reporting for drug and biologic manufacturers, including disclosure of sales volume, gross and net revenue and profit, drug pricing, information executive compensation, and a breakdown of expenditures for research and development, costs of goods sold, acquisition and licensing costs, and marketing and advertising spend.
  • Sec. 202. Imposing a tax on revenue earned because of any “price spike” in prescription drug pricing.
  • Sec. 204. Permitting the importation and sale of drugs by foreign wholesale distributors and licensed foreign. pharmacies, starting initially with Canadian pharmacies.
  • Sec. 303 (a)(1). Allowing the early submission of an abbreviated new drug application (ANDA) for a new chemical entity (NCE) (three years after approval) and shortening the approval time for ANDAs under certain conditions. Currently, the earliest date for submitting an ANDA is four years after the approval of the NCE.
  • Sec. 303(a)(2). Restricting the current three year supplementary regulatory exclusivity granted for new indications, formulations, dosages and the like to only those approvals that show a “significant clinical benefit over existing therapies.
  • Sec. 303(a)(3). Slashing the market exclusivity afforded to new biologic drugs from 12 years to 7 years.
  • Sec. 304. Revoking market exclusivities for drugs and biologics for certain violations, including misbranding, illegal marketing, kickbacks, and other acts of fraud.
  • Sec. 404. Creating a legal presumption that the Federal Trade Commission (FTC) can rely on that the following settlements between brand companies and ANDA filers have an anticompetitive effect:
    • Settlements that provide the ANDA filer with anything of value, including an exclusive license, other than the right to market before the expiration of the patents covering the drug, payment of legal expenses up to $7.5 million, and/or a covenant not to sue;
    • Settlements where the ANDA filer agrees to limit or forego research and development, manufacturing, marketing or sales of the ANDA product for any period of time.
  • Sec. 405. Preventing deductions for direct-to-consumer advertising of prescription drugs.
  • Sec. 406. Requiring the FTC to prepare a report accessing the impact of “product hopping,” where “product hopping” refers to when a manufacturer develops a new formulation of a known drug or biologic product for a particular indication and then acts to reduce or eliminate demand for the original product,

“Medical Innovation Prize Fund Act,” S.495. Introduced by Independent Senator Bernie Sanders on March 2, 2017, this bill would broadly eliminate patent and market exclusivity provisions for drugs and biologics and instead establish a fund to award prizes and payments for medical innovations. The bill has been referred to committee.

Affordable and Safe Prescription Drug Importation Act, H.R. 1245; S. 469. On February 28, 2017, Democratic Representative Elijah Cummings and Independent Senator Bernie Sanders introduced identical bills to permit importation of drugs from foreign wholesales and foreign pharmacies. The provisions of these bills are largely subsumed within the more comprehensive “Improving Access to Affordable Prescription Drugs Act.” The bills are currently in committee.

The “OPEN ACT,” H.R. 1223. On February 27, 2017, Republican Representative Gus Bilirakis introduced the OPEN ACT, i.e., the Orphan Products Extension Now Accelerating Cures and Treatments Act of 2017. The OPEN ACT would grant an additional 6 months of market exclusivity for an approval of a new indication treating rare diseases and conditions. This exclusivity would extend any existing market exclusivity, such as the five-year exclusivity period for NCE products. The bill has been referred to committee.

“Increasing Competition in Pharmaceuticals Act,” S. 297; “Lower Drug Costs through Competition Act,” H.R. 749. Senator Susan Collins, Republican, and Representative Kurt Schrader, Democrat, introduced these related bills on February 2, 2017 and January 30, 2017 respectively. The legislation requires the FDA to prioritize and complete an expedited review of ANDA applications for generic drugs where there is a shortage or where there is only one current manufacturer and no more than two tentative approvals for other manufacturers. The bills also authorize a study on the REMS program, which allows the FDA to require Risk Evaluation and Mitigation Strategies from manufacturers of drugs or biological products that have known or potential serious risks. The bill is currently referred to committee.

“Short on Competition Act,” S. 183. Introduced by Democratic Senator Amy Klobuchar on January 20, 2017, the Short on Competition Act also addresses drug shortages. In addition to authorizing expedited reviews of ANDA applications, the Act would permit temporary importation of drugs from foreign countries. The bill is currently referred to committee.

“Preserve Access to Affordable Generics Act,” S. 124. On January 12, 2017, Senator Klobuchar (D) introduced a bill directed to prohibiting certain settlement agreements provisions between brand and generic drug companies. The provisions of this Act are mostly subsumed within the more comprehensive “Improving Access to Affordable Prescription Drugs Act.” Senator Klobuchar’s bill has been referred to committee.

Bioloquitur will continue to track legislative proposals throughout the year and report on any relevant developments.

shutterstock_96589270The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) amended Section 351(k) of the Public Health Service Act (42 U.S.C. § 262(k)) in providing ways to obtain licenses for certain biological products via abbreviated applications from the Food and Drug Administration (“FDA”) in order to market biosimilar products or interchangeable products for therapeutic uses. According to 42 U.S.C. § 262(i)(1), the term “biological product” is defined as “a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein (except chemically synthesized polypeptide), or analogous product, or arsphenamine or derivative of arsphenamine (or any other trivalent organic arsenic compound)” useful for preventing, treating, or curing a human disease or condition. By allowing abbreviated applications for biological products biosimilar to, or interchangeable with, FDA-licensed reference biological products, BPCIA could do for therapeutic biological products, similar to what the Hatch-Waxman Act does for small molecule drugs, in fostering the development of generic therapeutic products.

A biosimilar product is a biological product (a) highly similar to a reference product even though there could be minor differences in clinically inactive components; and (b) having no clinically meaningful differences from the reference product regarding safety, purity, and potency (42 U.S.C. § 262(i)(2)). A reference product is a biological product which has obtained a biologics license via 42 U.S.C. § 262(a), i.e., a biological product for which a Biologics License Application (“BLA”) has been approved by the FDA for its introduction into interstate commerce. An interchangeable product is a biological product that (a) is biosimilar to a reference product;  (b) “can be expected to produce the same clinical result as the reference product in any given patient;” and (c) would have a risk based on safety or diminished efficacy not greater than the risk of using the reference product alone without any switch or alternation, when the biological product is switched or alternated with the reference product administered more than once, so that the interchangeable product “may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product.” 42 U.S.C. § 262(i)(3) and (k)(4).

One of the requirements of an abbreviated BLA (“aBLA”) to show that a proposed biological product is interchangeable with a reference product is to demonstrate that the proposed biological product and the reference product are biosimilar. Biosimilarity must be demonstrated with data obtained from (a) analytical studies showing that the proposed biological product and the reference product are highly similar other than minor differences in clinically inactive components; (b) animal studies including toxicity assessments; and (c) a clinical study or studies, including assessments of pharmacokinetics, pharmacodynamics and immunogenicity to show safety, purity, and potency in at least one of the therapeutic uses licensed for the reference product. 42 U.S.C. § 262(k)(2)(A)(i)(I).

As mentioned above, the terms “biosimilar product” and “interchangeable product” pertain to certain biological products, and the term “biological product” covers a number of biological substances. However, regarding guidance on the various studies that should be performed to gather the data or information needed for the aBLA, FDA has taken a stepwise approach in concentrating on only therapeutic protein products so far, but not on other biological products such as viruses, therapeutic sera, etc.  For proposed therapeutic protein products, FDA has published a guidance document on analytical studies that should be conducted to obtain the needed chemistry, manufacturing, and controls (CMC) information relevant to the assessment of whether the reference product and the proposed therapeutic protein product are highly similar.[1] There is also an FDA guidance document pertaining to only proposed therapeutic protein products for gathering data or information in order to demonstrate biosimilarity based on structural studies, functional assays, animal studies, and clinical studies.[2]   Nevertheless, despite the focus of the above mentioned guidance documents on only therapeutic protein products,  FDA did publish a guidance to help sponsors of biosimilar products in general to design and use clinical pharmacology studies to gather pharmacokinetic and pharmacodynamic data on proposed biological products, without limitation on the types of the biological products.[3]

The FDA guidance documents referred to above concern only the demonstration of biosimilarity, but not interchangeable products per se. In fact, in one of the guidance documents, the FDA cautioned that the document was not intended to present the FDA’s approach to determining interchangeability, which would be dealt with in a separate guidance document.[4] Recently, the FDA finally published a draft guidance on the demonstration of interchangeability for therapeutic protein products.[5] The intention of the draft guidance is to help sponsors in showing that a proposed therapeutic protein product is interchangeable with a reference product. The FDA invited public comments for the draft guidance, and at the closure of the comment period on March 20, 2017, nine public comments have been received.

As pointed out in the draft guidance, to show interchangeability, an aBLA is required to also demonstrate that the proposed biological product is biosimilar to the reference product.[6] In addition, the sponsor of the proposed interchangeable biological product must show that the proposed product is “expected to produce the same clinical result as the reference product in any given patient” as set forth in 42 U.S.C. § 262(k)(4)(A)(ii). Based on this statutory requirement, the FDA expects data and information to show that the proposed interchangeable biological product can be expected to produce the same clinical results as the reference product in all of the conditions of use licensed by the FDA for the reference product.[7] However, that is only a recommendation by the FDA, and the draft guidance indicates that an aBLA is permitted to demonstrate the same clinical results in less than all of the conditions of use.[8] The data and information needed may vary depending on the nature of the proposed interchangeable biological product, and may include (a) any analytical differences between the proposed product and the reference product, and an analysis of the resulting potential clinical impact, if any; (b) “an analysis of the mechanism(s) of action in each condition of use,” including the target receptor(s), binding to the target receptor(s),  molecular signaling associated with the binding, dose or concentration response, the expression and location of the target receptor(s), and the relationship between product structure and interactions with the target receptor(s); (c) pharmacokinetics and distribution of the proposed product in the bodies of different patients; (d) immunogenicity; (e) any differences in expected toxicities in each condition of use and patient population; and (f) any other factor that may influence the efficacy or safety of the proposed product in each condition of use and patient population.[9]

Furthermore, for any biological product expected to be administered more than once, the statute requires that “the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch,” 42 U.S.C. § 262(k)(4)(B). The FDA expects that the aBLA would present data from a switching study or studies in one or more conditions of use, and that the data will be useful in assessing the safety risk and risk of diminished efficacy of switching or alternating between the proposed product and the reference product.[10]

The draft guidance includes detailed description of the scientific studies recommended by the FDA for the sponsors to perform in order to gather data and information useful for assessing interchangeability.  A discussion of all the scientific studies is beyond the scope of this blog post, which is merely a summary intended to alert the blog readers of the existence of the draft guidance, so that the readers could consult with the draft guidance directly if more scientific information is needed.

The draft guidance shows that more data and information, as a result more studies, would be needed in an aBLA for an interchangeable product, than for a biosimilar product, which is consistent with the statutory requirements. That may explain why as of today the FDA has not approved any interchangeable product, while four biological products have been licensed by the FDA as biosimilar to reference products.[11]  However, a sponsor putting in more effort and expenses for getting a biologics license for an interchangeable product, compared with only a biologics license for a biosimilar product, could be rewarded in at least two ways. First, under the statute, an interchangeable product may be substituted for the corresponding reference product without the intervention of the health care provider who prescribed the reference product. 42 U.S.C. § 262(i)(3). That means if a prescription of the reference product does not specify no generic substitution, a pharmacy could legally fill the prescription by substituting the prescribed reference product with an interchangeable product upon the patient’s request. Second, if the sponsor obtains an FDA license on the first interchangeable product for any condition of use of a reference product, the sponsor will obtain exclusivity so that the FDA will not determine whether a proposed biological product of the second or later aBLA is interchangeable for any condition of use until the earlier of (a) one year after the first commercial marketing of the first interchangeable product licensed for the reference product; (b) 18 months after a final court decision on all patents in suit in an action instituted against the aBLA applicant for the first interchangeable product, or after the dismissal of the court action; or (c) 42 months after approval of the first interchangeable product if the applicant has been sued and such litigation is still ongoing within the 42 months, or 18 months after approval of the first interchangeable product if the applicant has not been sued. 42 U.S.C. § 262(k)(6).


It should be noted that “FDA’s guidance documents do not establish legally enforceable responsibilities.  Instead, guidances describe the Agency’s current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited.”[12] That means the FDA could not properly force a sponsor of a proposed interchangeable therapeutic protein product to perform all the studies mentioned in the guidance documents discussed herein. However, the FDA guidance documents are useful for the sponsor to design studies to be carried out in order to gather the required information to demonstrate that a proposed therapeutic protein product is interchangeable with a reference product because the guidance documents show how the FDA interprets the law pertaining to biosimilar and/or interchangeable products.

[1] See the guidance for industry, Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product, April 28, 2015.

[2] See the guidance for industry, Scientific Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product, April 28, 2015.

[3] See the guidance for industry, Clinical Pharmacology Data to Support a Demonstration of Biosimilarity to a Reference Product, December 28, 2016.

[4] See Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product, 2015, page 4, Section III.

[5] See the draft guidance for industry, Considerations in Demonstrating Interchangeability with a Reference Product, January 17, 2017.

[6] Id, page 3.

[7] Id, page 3, emphasis added.

[8] Id, page 3.

[9] Id, page 3.

[10] Id, page 4.

[11] See CDER List of Licensed Biological Products with (1) Reference Product Exclusivity and (2) Biosimilarity or Interchangeability Evaluations to Date,

[12] See Clinical Pharmacology Data to Support a Demonstration of Biosimilarity to a Reference Product, 2016, page 1.

shutterstock_350539772In a recent case involving Apotex’s proposed biosimilar product to Amgen’s Neulasta® (pegfilgrastim), Amgen sought a preliminary injunction to enforce the Biologic Price Competition and Innovation Act (BPCIA) provision that requires an applicant to give notice 180 days before marketing an FDA-licensed product.1 In Amgen v. Sandoz, a divided Federal Circuit held that “the 180-day period runs from post-licensure notice.”2 In that case, the biosimilar applicant defaulted on the statutory process for exchanging patent information and channeling patent litigation (“information exchange”) required by 42 U.S.C. § 262(l), by not providing the reference product sponsor with a copy of the biosimilar application, as required by 42 U.S.C. § 262(l)(2)(A).

In the instant case, Apotex argued that the commercial marketing provision of the BPCIA was not mandatory because it did engage in the information exchange.3 Apotex filed a biologics application for Amgen’s Neulasta® in October 2014, and the FDA accepted the application for review on December 15, 2014.4 Apotex and Amgen engaged in the required information exchange, during which Apotex provided notice of future commercial marketing pursuant to paragraph (l)(8)(A) of the BPCIA, even though Apotex lacked an FDA license.5 In October 2015, Amgen asked the district court to issue a preliminary injunction that would require Apotex to provide paragraph (l)(8)(A) notice “if an when it receives a license, and to delay any commercial marketing from that notice.”6 The district court agreed with Amgen, and granted a preliminary injunction.7

On appeal, a unanimous Federal Circuit affirmed the district court ruling, and determined that the notice provision is mandatory regardless of whether the applicant provides the paragraph (2)(A) notice that begins the information-exchange process.8 The court also rejected Apotex’s argument that its decision would give reference product sponsors 12.5 years of exclusivity, rather than the 12 years envisioned by the statute.9

The court stated:

[I]t is implicit in the Biologics Act that any such delay beyond 12 years should occur less and less as time goes by. Doubtless, there will be some exclusivity periods beyond 12 years in the early years of the Biologics Act, as biosimilars are introduced for reference products licensed well before the Act was adopted in 2010. But as time passes, more and more of the reference products will be newer, and a biosimilar-product applicant, entitled to file an application a mere four years after licensure of the reference product … can seek approval long before the 12-year exclusivity period is up.10

The court concluded that the purpose of paragraph (8)(A) is “to ensure that, starting from when the applicant’s product, uses, and processes are fixed by the license, the necessary decision-making regarding further patent litigation is not conducted under time pressure that will impair its fairness and accuracy,” covers applicants that file paragraph (2)(A) notices as well as those who do not.11

1 42 U.S.C. § 262(l)(8)(A).
2 Amgen v. Sandoz Inc., 794 F.3d 1347, 1357-68 (Fed. Cir. 2015).
3 Amgen v. Apotex Inc., No. 16-1308, slip op. at 4 (Fed. Cir. 2016).
4 Id. at 11.
5 Id. at 11-12
6 Id. at 13.
7 Id. at 14
8 See id. at 15.
9 See id. at 16.
10 Id. at 17.
11 Id.

shutterstock_418713547In only the second decision of its kind, the U.S. Food and Drug Administration (FDA) approved Celltrion’s biosimilar Inflectra™ (infliximab-dyyb), a reproduction of Janssen Biotech’s immunosuppressant Remicade® (infliximab). Inflectra is, however, the first biosimilar monoclonal antibody to be approved in the U.S.

The FDA’s Arthritis Advisory Committee had overwhelmingly recommended the approval of Inflectra by a vote of 21-3 in February. Inflectra has also previously been approved in Canada, Mexico, Australia, and several European markets.

Although now approved by the FDA, it is unclear when Pfizer, which has the marketing rights to Inflectra, will actually enter the U.S. market. Pfizer will likely wait for the conclusion of ongoing litigation between Celltrion and Janssen including whether Celltrion met the disclosure and advance-notice provisions of the Biologics Price Competition and Innovation Act (BPCIA).

The BPCIA is an analog of the ‘Hatch-Waxman Act’ which regulates generic small molecule drugs. To meet the ‘highly similar’ standard laid out in the BPCIA, a biosimilar product must have “no clinically meaningful difference” in terms of safety and effectiveness from the reference product. A generic small molecule drug on the other hand, need only show ‘substantial equivalence’ between the generic and reference drug which can be satisfied with analytic and purity data. Although the market for biosimilars is highly profitable (a single dose of Remicade can cost from $1,300 to $2,500), the price of developing a biosimilar is similarly as costly, upwards of $50m – a large difference from the $1-5m to develop a generic.

In a previous case, the Federal Circuit in Amgen Inc. v. Sandoz Inc. interpreted the BPCIA as provided two alternative routes for an abbreviated Biologics License Application (aBLA) filer to enter the market.1 An aBLA could 1) participate in the BPCIA’s so called “patent dance” by exchanging specific product and patent information regarding their aBLA to the reference product sponsor according to a prescribed timeline,2 or 2) provide the reference product sponsor with a 180-day notice including manufacturing information before commercial launch.3 The court ruled that a biosimilar applicant that opts out of the BPCIA’s so-called “patent dance” must wait 180 days after it provides a post-approval notice of commercial marketing to the reference product sponsor before it can market its biosimilar. The court also held that effective notice of commercial marketing can only be given after the FDA has licensed (approved) the product. Both Amgen and Sandoz havefiled a writ of certiorari with the Supreme Court.

The Federal Circuit in Amgen Inc. v. Sandoz Inc. had left open the question of whether the 180-day advance notice provision of the BPCIA is mandatory even when the biosimilar applicant participates in the patent dance – i.e. if the 180-day advance-notice mandatory in all circumstances. This is currently before a Massachusetts federal district court in Janssen Biotech Inc. v. Celltrion Healthcare Co. Ltd.4 Celltrion is arguing that because it did in fact participate in the patent dance, it is not required to provide a 180-day notice of commercial marketing. Janssen, on the other hand, is arguing that the 180-day notice is mandatory in all circumstances.

If the Massachusetts’ court finds the 180-day notice mandatory in all circumstances, it will in effect grant the branded biologics companies six months of exclusivity beyond the FDA’s approval. A finding that that the 180-day notice is not mandatory in all circumstances, on the other hand, thus allowing aBLA filers earlier entry into the market, may incentivize companies to participate in the patent dance regardless of the potentially cumbersome and unpredictable nature of the patent information exchange requirements.

1 Amgen Inc. v. Sandoz Inc., 794 F.3d 1347 (Fed. Cir. 2015).
2 See 42 U.S.C. § 262(l)(2) – 262(l)(7).
3 See 42 U.S.C. § 262(l)(8)(A)
4 Janssen Biotech Inc. v. Celltrion Healthcare Co. Ltd., case no. 1:15-CV-10698 (D. Mass).

shutterstock_148390613On October 16, 2015, the Federal Circuit denied petitions for panel rehearing and rehearing en banc in Amgen Inc. v. Sandoz Inc.1 The petitions arose from the Federal Circuit’s July 21, 2015, decision2 interpreting key provisions of the BPCIA.

The BPCIA, or Biosimilars Act was designed to create an abbreviated licensure pathway for biological products that are demonstrated to be “biosimilar” to or “interchangeable” with a biological product that has already been approved by the FDA. Popularly referred to as the “patent dance,” 42 U.S.C. § 262(l) provides a procedure for exchanging patent information between the biosimilar applicant and the reference product.

A summarized in a previous post, in interpreting two provisions (42 U.S.C. § 262(l)(2)(A)3 and 42 U.S.C. § 262(l)(8)(A)4) of the BPCIA “patent dance” the panel (Judges Lourie, Newman, and Chen) held that:

A. because the BPCIA, in other provisions (42 U.S.C. § 262(l)(9)(C) and 35 U.S.C. § 271(e)(2)(C)(ii)), provides the consequence for failing to disclose the required information, the “shall” provision in paragraph (l)(2)(A) does not mean “must,” and hence a subsection (k) applicant does “not violate” the BPCIA by withholding the required information.5

B. under paragraph (l)(8)(A), a subsection (k) applicant may only give effective notice of commercial marketing after the FDA has licensed its product; and that when a subsection (k) applicant completely fails to provide its aBLA and the required manufacturing information to the RPS by the statutory deadline, the requirement of paragraph (l)(8)(A) is mandatory.6

Thus, the Federal Circuit concluded that:
1. Sandoz took a path expressly contemplated by paragraph (l)(2)(A), and hence it did not violate the BPCIA by not disclosing its aBLA and the manufacturing information by the statutory deadline;7 and

2. Based on paragraph (l)(8)(A), Sandoz may not market its biosimilar product Zarxio until 180 days after it provided a post-approval notice of commercial marketing, because as a subsection (k) applicant, Sandoz, failed to provide its aBLA and the required manufacturing information to Amgen by the statutory deadline.8

However, the panel’s decision was divided, with Judges Lourie and Chen holding that the patent dance provisions were optional, with Judge Newman dissenting; and Judges Lourie and Newman holding that notice of commercial marketing cannot be given until product approval, with Judge Chen dissenting.

Following the court’s July 21, 2015 decision, both Amgen and Sandoz filed petitions for en banc review. The petitions essentially highlighted the arguments Amgen and Sandoz made in their briefing on Appeal. Amgen contended that the “shall” language in paragraph (l)(2)(A) is mandatory, and that the other provisions highlighted by the Court do not provide remedies for failure to providing the required information. Sandoz argued that word “licensed” in paragraph (l)(8)(A) does not refer to the product at the time of notice, rather to the product that will be marketed, and that the panel erred by holding that the notice was mandatory and enforceable.

Given the amicus briefs filed by the Biotechnology Industry Organization, Abbvie Inc. and Janssen Biotech, Inc., urging that the BPCIA patent dispute resolution procedures should be mandatory coupled with the Federal Circuit’s clearly divided decision, the denial to grant en banc review may not have been anticipated.

Although neither party sought a stay of the mandate issued by the Federal Circuit on October 23, 2015, it wouldn’t be surprising if one or both parties petition the Supreme Court for certiorari (due January 14, 2016).

Even if neither Amgen nor Sandoz decide to file for certiori, the Supreme Court will most likely have to tackle the “patent dance” provisions in the future, particularly in view of the complaint9 filed by Amgen against Apotex, which raises issues similar to those addressed in Amgen v. Sandoz. Sooner or later, it appears that the Supreme Court may step in to interpret the boundaries of the “patent dance” floor.

1 Amgen, Inc. v. Sandoz, Inc., slip op. no. 2015-1499 (Fed. Cir. Oct. 16, 2015).
2 Amgen, Inc. v. Sandoz, Inc., 794 F.3d 1347 (Fed. Cir. 2015). In characterizing the biosimilars statute, the panel decision quoted Winston Churchill’s description of Russia as “a riddle wrapped in a mystery inside an enigma.”
3 42 U.S.C. § 262 (l)(2)(A) of provides that “[n]ot later than 20 days after the Secretary notifies the subsection (k) applicant that the application has been accepted for review, the subsection (k) applicant shall provide to the reference product sponsor a copy of the application submitted to the Secretary under subsection (k), and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application . . .”
4 42 U.S.C. § 262 (l)(8)(A) provides that “[t]he 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).”
5 Amgen, 794 F.3d 1347 at 1349-1361.
6 Id. at 1354-1368.
7 <span id=”seven”Id. at 1361.
8 Id. at 1368
9 Amgen v. Apotex, Case No. 15-cv-61631-JIC (S.D. FL. Aug. 6, 2015).

shutterstock_573292615On October 28, 2015, the Federal Trade Commission (FTC) submitted a comment to the U.S. Food and Drug Administration’s (FDA) draft guidance addressing nonproprietary names for biosimilar drug products.1

In the draft guidance, the FDA proposed to require that each biological product licensed under the Public Health Service Act bear a nonproprietary name that includes a “unique FDA-designated suffix,” in order to improve pharmacovigilance and to help minimize inadvertent substitution of biological products that the FDA has not determined to be interchangeable.2 The FDA would require that the proposed suffix be unique and devoid of meaning, and not make any misrepresentation with respect to safety or efficacy.3 In addition, the suffix should not include abbreviations commonly used in clinical practice so as to be misinterpreted as another element on the prescription order.4 The guidance specifically requires that the suffix should not “look similar or . . . be mistaken for the name of a currently marketed product” so as to reduce the risk of confusion or medical errors with the product and/or other products in the clinical setting.5 Thus, under the FDA proposal, a biosimilar and each of its reference biologics would have different suffixes.

The FTC however, cites a concern that the “FDA’s proposal – to assign different suffixes to the drug substance names of biosimilars and their reference biologics – could result in physicians incorrectly believing that biosimilars’ drug substances differ in clinically meaningful ways from their reference biologics’ drug substances.” According to the FTC, this misperception that the drug substance in a biosimilar differs in a clinically meaningful way from that in the reference biologic could deter physicians from prescribing biosimilars, thus impeding the development of biosimilar markets and competition.6

As alternatives to the agency’s proposed “unique FDA-designated suffix,” the FTC suggests simply relying on trade names to identify the manufacturer of a product, and confirm that such a product has been determined to be interchangeable.7 Similarly, the FTC argues that consultation of the Purple Book can prevent inadvertent substitutions by pharmacists simply following the established generic-for-brand substitution that has worked for decades for small molecule prescription drugs.8

While it remains to be seen if the FDA will revise its guidance for nonproprietary naming, the FTC’s rationale does not appear to address that the proposed naming convention is itself designed to promote both safety and competition.

As indicated in the FDA guidance, the use of the suffix is designed at least in part, to allow differentiation between products that meet the “biosimilar product” standard, and those that meet a higher standard so as to be considered an “interchangeable product.”9 Allowing a pharmacist or prescribing physician to differentiate between these classes of products rapidly and easily based on a designated suffix could help ensure safety of the substitute for the originator biological product. It would likely not hinder competition between the branded drug and substitutes, but rather would increase competition at the brand/generic level, as well as between the generics themselves. Companies that invested more time and money in a biologic so as to obtain the “interchangeable” designation should be able to differentiate from their competitors that chose not to do so. By allowing rapid and simple determination of these differences, the use of an FDA-designated suffix would likely increase competition between not only brands and generics, but between the generics themselves. The FTC’s comment does not appear to address these issues.

1 “FTC Staff Provides Comments to FDA on Naming Proposal for Biologic Products,” October 28, 2015. Available at (hereinafter “FTC Comments”)
2 Food & Drug Admin., Dep’t Health & Hum. Servs., Nonproprietary Naming Of Biological Products: Guidance For Industry (2015) available at: (hereinafter “FDA Guidance”)
3 Id. at page 10.
4 Id.
5 Id.
6 FTC Comments at page 2.
7 <span id=”seven”Id. at 14.
8 Id.
9 FDA Guidance at page 2.

shutterstock_546475333Section 27 of the America Invents Act, passed on September 16, 2011, requires the USPTO to conduct a study on genetic testing and provide Congress with recommendations for providing confirmatory genetic diagnostic testing where those tests or the information needed to conduct those tests are covered by patents and exclusive licenses.1 Confirmatory genetic diagnostic testing is “the performance of a genetic diagnostic test, by a genetic diagnostic test provider, on an individual solely for the purpose of providing the individual with an independent confirmation of results obtained from another test provider’s prior performance of the test on the individual.”2

Congress directed the USPTO to study four areas: (1) the impact that the current lack of independent second opinion testing has had on the ability to provide the highest level of medical care to patients and recipients of genetic diagnostic testing, and on inhibiting innovation to existing testing and diagnoses; (2) the effect that providing independent second opinion genetic diagnostic testing would have on the existing patent and license holders of an exclusive genetic test; (3) the impact that current exclusive licensing and patents on genetic testing activity has on the practice of medicine, including but not limited to: the interpretation of testing results and performance of testing procedures; and (4) the role that cost and insurance coverage have on access to and provision of genetic diagnostic tests.3

This September, four years after this initial mandate, the USPTO released a report on its findings.4 In its report, the USPTO evaluated the availability of confirmatory testing with regard to the Supreme Court’s recent rulings in Mayo and Myriad, which effectively changed the legal landscape of patents covering gene-based diagnostics.5 Due to this new legal backdrop, the USPTO noted that it is extremely unlikely that patents will be able to impose significant barriers to the availability of genetic testing, let alone confirmatory testing.6

The USPTO came to four main conclusions, first revealing that the evidence they had was not only sparse, but also at times contradictory.7 First, demand for confirmatory genetic testing is very small, and for some tests the need can already be met by several sources.8 Second, the USPTO found that providing confirmatory genetic testing would not have a significant negative impact on the existing patent and license holders of an exclusive genetic test.9 Because demand for confirmatory testing is so small, lost profits associated with it would be comparatively small. Further, where an exclusive licensee already has the right to exclude others from conducting the primary test, there will be little economic harm done by an independent entity doing a confirmatory test, provided that independent entity does not attempt to unlawfully enter the market for primary testing. Third, due to the findings in Myriad10 and Mayo,11 the impact exclusive licensing and patents has on genetic testing activity will likely become moot. The underlying correlations between gene mutations and their medical effects are now likely going to be unpatentable subject-matter, making genetic diagnostic tests using those methods and materials non-infringing.12 Finally, the USPTO found that the availability of insurance does play a role in the decision to have confirmatory testing done, especially when the cost of the test is substantial.13

The USPTO concluded its report by stating that due to the findings of Myriad and Mayo, Congress does not need to take any immediate action with respect to confirmatory genetic diagnostic testing.14 Multiple providers are now able to enter the business of providing genetic testing without the potential of infringement, meaning patent and license exclusivity will not impede the availability of and access to these tests. However, this public availability could also lead large commercial entities to stop developing and marketing tests due to the risk of not being able to recoup their investments.15 In closing, the USPTO left Congress with three recommendations for the future: (1) continue to monitor confirmatory testing for barriers to access; (2) create a mechanism to facilitate sharing test results across providers to improve testing and analytic quality; and (3) consider the importance of cost and insurance on any policy discussions of confirmatory genetic diagnostic testing.16

For the biotech industry, this report merely confirms and reinforces the Supreme Court’s rulings in Mayo and Myriad. While the USPTO was given an opportunity to inform Congress on the appropriate policy decisions to help the biotech industry in the aftermath of this new legal landscape that are considered by many to be an emotional response to a nonexistent problem, it instead chose a more cautious route. Mayo and Myriad and the USPTO’s conclusions in this report could lead many entities, large and small, to forgo research and development that in the past has lead to major medical breakthroughs and instead find other ways of preserving their exclusivity and funding their investments.

1 Leahy-Smith America Invents Act, Pub. L. No, 112-29, §27, 125 Stat. 284 (2011).
2 Id.
3 Id.
4 USPTO, USPTO Report on Confirmatory Genetic Diagnostic Testing, (Sept. 28, 2015) at 8-9.
5 Id. at 5.
6 Id. at 13.
7 <span id=”seven”Id. at 14.
8 Id. at 15.
9 Id. at 21.
10 Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013)
11 Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012).
12 Id. at 24.
13 Id. at 26.
14 Id. at 32.
15 Id. at 32.
16 Id. at 29-30.