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.

shutterstock_430169764The recent decision in Dow Chemical1 confirmed the Federal Circuit’s earlier position in Teva Pharma2, that in instances where multiple methods of measurement exist for a parameter, a patentee must make sure to tell the public which one is being used.

Nova Chemicals Corporation appealed a U.S. District Court decision in which Dow Chemicals was awarded supplemental damages in the form of lost profits and reasonable royalties, but denied enhanced damages, related to Nova’s infringement of two of Dow Chemical’s patents.3 In the period between the decision from the District Court and Nova’s appeal, the Supreme Court decided Nautilus.4 The Federal Circuit determined that it was appropriate to reopen their previous decision under the change of law exception for both law of the case and issue preclusion.5 Specifically, the Federal Circuit determined that Nautilus changed the law of indefiniteness,6 second that the prior decision applied pre-Nautilus law,7 and third that the original decision would have been different under the Nautilus standard.8

The claims at issue in the infringed patents were directed to ethylene polymer compositions having a series of characteristic properties. One of the properties was directed to the “slope of strain hardening coefficient” or “SHC” of the polymer compositions.9 While the patents defined how to calculate SHC, the mathematical formulation required that the “slope of strain hardening” be determined.10 Nova argued that the term “slope of strain hardening coefficient” was indefinite because the patents failed to teach, with reasonable certainty, where and how the “slope of strain hardening” was to be measured from the stress/strain curve of the polymer.11

The specifications of Dow’s patents taught that “[t]he slope of strain hardening” was calculated by drawing “a line parallel to the strain hardening region of the . . . stress/strain curve,” and both parties agreed that the slope was to be measured at its maximum value.12 However, the Federal Circuit found that at least four different methods existed to determine the maximum slope, with each providing “simply a different way of determining the maximum slope,” and each of which may produce a different slope calculation.1314 Thus, because the methods did not always produce the same results, the Federal Circuit stated concern that the method chosen for calculating the slope of strain hardening could affect whether or not a given product infringed the claims.15

The Federal Circuit also noted that, prior to Nautilus, the existence of multiple methods to determine a characteristic (such as the slope of a stress/strain curve) would not have rendered the claims indefinite.16 However, under the current law from the Supreme Court, claims would be found invalid for indefiniteness if, when “read in light of the specification . . . and the prosecution history, failed to inform with reasonable certainty, those skilled in the art about the scope of the invention.”17 As in their decision in Teva Pharms.18, the Federal Circuit cited the lack of a definition, in either the specification or file history, for the term at issue when multiple, different ways of measuring the term were known in the art and encompassed by the claims, as the reason for finding the claims indefinite.19

These two indefiniteness cases from the Federal Circuit highlight the need for including explicit definitions, or specifying the exact methodology employed, when the characteristic of a claimed product or process can be determined in more than one way. While Teva Pharms and Dow Chemical related to chemical (molecular weight) and material (SHC) characteristics of a product, the lessons learned should also be applied to pharmaceutical and biotech patents. For example, if multiple methods exist for determining an end-point of an in vitro or in vivo pharmacology study (e.g., effective dose, or drug tissue concentration) it is important to specifically delineate and define which methodology is used, and how those determinations are made. Similarly, measurements related to characteristics of a bioprocess (e.g., impurity levels, protein production rate) should be carefully set forth and clearly outlined to ensure that they meet the “reasonable certainty” requirement that will be applied when determining if the claims are indefinite.20

1 Dow Chem. Co. v. Nova Chems. Corp., 14-1431, (Fed. Cir. August 28, 2015).
2 Teva Pharms. U.S. A., Inc. v. Sandoz, Inc., 789 F.3d 1335 (Fed. Cir. 2015).
3 Dow Chem., 14-1431 at page 2.
4 Nautilus Inc. v. Biosig Instruments, Inc., 134 S.Ct. 2120 (2014).
5 Dow Chem., 14-1431 at page 14.
6 Id. at page 16
7 Id. at page 17
8 Id. at page 18
9 Id.
10 Id.
11 Id. at pages 20-21
12 Id. at page 21
13 Id.
14 Id. at page 22
15 Id. at page 23
16 Id.
17 Id. at page 23-24 citing Nautilus, 134 S.Ct. at 2124
18 Teva Pharms., 789 F.3d at 1338.
19 Id. at page 24
20 Id. at page 23-24 citing Nautilus, 134 S.Ct. at 2124

shutterstock_343542155On July 21, 2015, the Federal Circuit issued its decision in Amgen v. Sandoz in-terpreting two key provisions in the Biologics Price Competition and Innovation Act (BPCIA).1 The case involved Sandoz’s Zarxio, a biosimilar drug to Amgen’s Neupogen and the first approved abbreviated biologics license application (ABLA) under the provisions of the BPCIA. Judges Newman, Lourie, and Chen were on the panel.

I. 42 U.S.C. § 262(l)(2)(A): A Follow-On Applicant does not have to give the Reference Product Sponsor access to the content of its ABLA

The BPCIA establishes a protocol for information exchange between the Follow-On Applicant (FOA, i.e. subsection (k) applicant) and the Reference Product Sponsor (RPS). The first step of the exchange is delineated by 42 U.S.C. § 262(l)(2):

Not later than 20 days after the Secretary notifies the subsection (k) applicant that the application has been accepted for review, the subsection (k) applicant—

(A) 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 . . .2

The consequences for not disclosing the application are provided in 42 U.S.C. § 262(l)(9)(C):

If a subsection (k) applicant fails to provide the application and information required under paragraph (2)(A), the reference product sponsor, but not the subjection (k) applicant, may bring an action under section 2201 of title 28, for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.3

Additionally, 35 U.S.C. § 271(e)(2)(C)(ii) provides that:

It shall be an act of infringement to submit . . . if the applicant for the application fails to provide the application and information required under section 351(l)(2)(A) of such Act, an application seek-ing approval of a biological product for patent that could be identi-fied pursuant to section 351(l)(3)(A)(i) . . .4(emphasis added)

In Amgen’s view, the language “shall provide” in § 262(l)(2)(A) and the designa-tion of this information as “required” indicated that the FOA’s sharing of the ABLA was mandatory.5 Amgen contended that Sandoz was acting illegally by not sharing its ABLA.6

Sandoz, on the other hand, argued that the information sharing in § 262(l)(2)(A) was not mandatory, as the BPCIA provided an alternative procedure path: the RPS can bring an action under § 262(l)(9)(C), and obtain the information via discovery.7 Sandoz contended that it could not be unlawful to follow a procedural path explicitly laid out in the statutes.8

The Federal Circuit ruled in favor of Sandoz on this issue. The court reasoned that mandating compliance with § 262(l)(2)(A) would render the provisions in § 262(l)(9)(C) and 35 U.S.C. § 271(e)(2)(C)(ii) superfluous, which should be avoided when interpreting statutes.9

Judge Newman, however, was unconvinced that § 262(l)(9)(C) excused the performance of information sharing under § 262(l)(2)(A). She pointed out that § 262(l)(2)(A) emphasizes the “information that describes the process or processes used to manufacture the biological product,” whereas § 262(l)(9)(C) only provides a remedy for “any patent that claims the biological product or a use of the biological product.”10 In Judge Newman’s dissent, she opined that the information sharing under § 262(l)(2)(A) was mandatory.11

II. 42 U.S.C. § 262(l)(8)(A): A Follow-On Applicant may have to wait 180 days to market its biosimilar product after the approval of its ABLA

The BPCIA has another provision under 42 U.S.C. § 262(l)(8)(A) that the Follow On Applicant “shall” provide notice to the Reference Product Sponsor before the commercial marketing of a biosimilar product:

The 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).12

Amgen interpreted the statute to mean that the Follow On Applicant could not give the 180-day notice until the ABLA is approved by the FDA.13 Sandoz argued that such an interpretation would amount to “an automatic, additional, six-month bar against marketing of every licensed biosimilar product.”14 Sandoz’s position was that the word “licensed” merely required that the biosimilar product be licensed at the time of marketing.15

The court ruled for Amgen on this issue. The court examined the textual structure of the statute. The statute refers to the product as “the biological product that is the subject of” the application in many other places.16 The court therefore inferred from the choice of language that Congress intended for giving marketing notice after the FDA approval of the biosimilar product.17

Judge Chen was troubled by the fact that the majority treated the two “shall” obli-gations differently.18 In his dissent, he opined that the § 262(l)(8)(A) noticing ob-ligation was preconditioned on the earlier steps in § 262(l).19 Because Sandoz did not share its ABLA with Amgen under § 262(l)(2)(A) at the very beginning, all the subsequent steps, including the giving of marketing notice under § 262(l)(8)(A), simply would not apply.20

The case is now remanded to the Northern District of California for other claims related to patent infringement.21

1 Amgen Inc. v. Sandoz Inc., No. 2015-1499, 2015 WL 4430108 (Fed. Cir. Jul. 21, 2015).
2 42 U.S.C. § 262(l)(2) (2013) (emphasis added).
3 42 U.S.C. § 262(l)(9)(C) (2013) (emphasis added).
4 35 U.S.C. § 271(e)(2)(C)(ii) (2013) (emphasis added)
5 Amgen, 2015 WL 4430108, at *5.
6 Id. at *4
7 Id.
8 Id.
9 Id. at *7 (citing Marx v. Gen. Revenue Corp., 133 S. Ct. 1166, 1178 (2013), TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001))
10 Id. at *15.
11 Id. at *17 (“Such obligation is mandatory.”).
12 42 U.S.C. § 262(l)(8)(A) (2013) (emphasis added).
13 Amgen, 2015 WL 4430108, at *7.
14 Id. at *8
15 Id.
16 E.g., 42 U.S.C. § 262(l)(3)(B)(ii)(I), (l)(3)(C) (2013).
17 See id. at *8.
18 Id. at *17
19 Id. at *20
20 Id. at *22
21 Id. at *13

shutterstock_511677256In a previous blog post, we discussed the Federal Circuit’s reluctance to relinquish control of claim construction after the Supreme Court’s Teva1 ruling as exemplified in the Enzo2 decision. The trend continues with the Federal Circuit’s decision in Teva on remand from the Supreme Court just last month. A divided panel still found the asserted claims, specifically the term “molecular weight,”3 indefinite and therefore invalid, reversing the district court.4 The Supreme Court in Teva agreed with Teva that the Federal Circuit precedent5 of reviewing all aspects of claim construction de novo is inconsistent with Fed. R. Civ. P. 52(a)(6), which provides that factual findings of the district court may only be set aside if “clearly erroneous.”6 The Court explained that claim construction is ultimately a question of law, but subsidiary factual findings must be given deference and reviewed under the “clear error” standard of review.7 Also, while Teva was pending, the Supreme Court issued the Nautilus II8 decision, which modified the Federal Circuit’s “insolubly ambiguous” standard for indefiniteness under 35 U.S.C. § 112, ¶2 to a more stringent “reasonable certainty” standard.9

The Federal Circuit on remand relied heavily on key phrases from the Supreme Court’s Teva decision in order to strategically classify the “factual findings” of the district court. First, the majority noted that the intrinsic evidence (claims, specification, prosecution history) is entitled to de novo review, whereas factual findings based on extrinsic evidence, such as expert testimony, receive deference under review for clear error.10 The majority clarified their view that only those things outside of the patent documents are factual in nature because “[t]he Supreme Court made clear that the factual components include ‘the background science or the meaning of a term in the relevant art during the relevant time period.’”11 Second, the majority seemed to warn that “[a] party cannot transform into a factual matter the internal coherence and context assessment of the patent simply by having an expert offer an opinion on it.”12

Based on this reasoning, the majority classified the factual findings of the district court very specifically, as “how a skilled artisan would understand the way in which SEC-generated chromatogram data reflects molecular weight.”13 Although the factual findings, which were based on expert testimony, were found not to be clearly erroneous, they did not resolve the meaning of the claim term, according to the majority.14

Turning then to the prosecution history of two continuations of the patent-in-suit,15 the majority noted that both received indefiniteness rejections because the term “molecular weight” was meaningless without more specificity.16 In response to this rejection in the first continuation, the applicants successfully argued that “[o]ne of ordinary skill in the art could understand that kilodalton units implies a weight average molecular weight, [Mw].”17 In response to a similar rejection in the second continuation, applicants successfully argued that a similar claim term meant “peak average molecular weight.”18

Caught in an apparent contradiction, Teva provided expert testimony that one of skill in the art would conclude the definition in the first continuation was scientifically erroneous because each measure of “molecular weight” could be expressed in kilodaltons.19 The majority parsed this as follows: the only factual finding was that a skilled artisan would understand that each type of “molecular weight” can be expressed in kilodaltons, but the legal conclusion is that a skilled artisan “would have understood that the applicants defined the term ‘molecular weight’ as Mw to gain allowance of the claims.”20

Thus, the majority concluded that the claim was invalid for indefiniteness “because read in light of the specification and the prosecution history, the patentee has failed to inform with reasonable certainty those skilled in the art about the scope of the invention.”21

Judge Mayer in his dissent criticized the majority for being “once again led astray by its failure to afford sufficient deference to the trial court’s findings of fact” due to “first embarking on an independent review of the record and then considering, as an afterthought, the important and carefully considered factual findings made by the trial court.”22 Judge Mayer’s criticisms seem to align with those of Judge Newman in her dissent in Enzo, where she argued that the majority ignored the factual determinations that the district court reached based on the “conflicting testimony [of the experts], along with concessions on cross-examination,” in disregard for the instruction in Teva.23

So far the Federal Circuit seems to remain reluctant to give deference to the district court even when the district court relies heavily on expert testimony.

1 Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (2015).
2 Enzo Biochem, Inc. v. Applera Corp., 780 F.3d 1149, 1157-59 (Fed. Cir. 2015).
3 Molecular weight may be calculated in at least three different ways: peak average molecular weight (Mp), number average molecular weight (Mn), and weight average molecular weight (Mw). Each results in a different value. See Teva Pharm. USA, Inc. v. Sandoz, Inc., No. 2012-1567, 2015 WL 3772402, at *1 (Fed. Cir. June 18, 2015).
4 Id. The district court had found the claims to be definite and construed the “molecular weight” term as peak average molecular weight (Mp). Teva Pharm. USA, Inc. v. Sandoz, Inc. (Markman Order), 810 F. Supp. 2d 578, 592 (S.D.N.Y. 2011).
5 Lighting Ballast Control LLC v. Phillips Elecs. North America Corp., 744 F.3d 1272 (Fed. Cir. 2014) (en banc); Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc).
6 Teva, 135 S. Ct. at 838.
7 Id. at 837-38.
8 Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124 (2014) (“[W]e hold that a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.”)
9 Teva, 2015 WL 3772402, at *3.
10 Id. at *2.
11 Id. at *5 (quoting Teva, 135 S. Ct. at 841).
12 Id.
13 Id. at *4
14 Id.
15 The Court rejected Teva’s argument that “the prosecution history of later patents . . . cannot override the specification or invalidate the patent” by stating that “we have said before, and reaffirm today, that past and future prosecution of related patents may be relevant to the construction of a given claim term.” Id. at *5 n. 5; see also Microsoft Corp. v. Multi–Tech Sys., Inc., 357 F.3d 1340, 1350 (Fed.Cir.2004) (previously cited in the opinion for support that prosecution history of related patents may be properly considered “regardless of whether the statement pre- or post-dates the issuance of the particular patent at issue.”).
16 Id. at *5
17 Id. at *6
18 Id. at *7
19 Id.
20 Id.
21 Id.
22 Id. at *9, 11
23 Enzo Biochem, Inc. v. Applera Corp., 780 F.3d 1149, 1159 (Fed. Cir. 2015).

shutterstock_376098292Last month, the United States Court of Appeals for the Third Circuit overturned a district court’s dismissal of an antitrust suit challenging a Hatch-Waxman Act settlement that GlaxoSmithKline PLC (Glaxo) signed with Teva Pharmaceutical Industries Ltd. (Teva), over the epilepsy drug Lamictal.1

At issue was the agreement made between Glaxo and Teva that, in exchange for Teva delaying entry of its generic version of Lamictal, Glaxo would agree to not enter the generic market itself with an “authorized generic (AG)” of its own. Plaintiffs, direct purchasers of brand-name Lamictal, challenged the so called “no-AG” agreement as violating Sections 1 and 2 of the Sherman Act for generating an anti-competitive market place. The end result of the agreement was that, for the 180-day exclusivity period afforded to Teva as the first Abbreviated New Drug Application (ANDA) filer, Teva would be the only generic. They would not have to split any profits with any generic competitor, including any potential generic authorized by, or even produced by, Glaxo. Thus, only the Glaxo brand and the Teva generic would be available for the 180 exclusivity day period.

The Third Circuit sided with the plaintiffs, agreeing that the Glaxo-Teva agreement failed a rule of reason analysis and violated the antitrust laws.2 The Third Circuit held that the agreement represented “an unusual, unexplained transfer of value from the patent holder to the alleged infringer that cannot be adequately justified – whether as compensation for litigation expenses or otherwise,” and violated the antitrust rule of reason analysis.3 Thus, it appears that regardless of the type of compensation, “pay-for-delay” agreements will be more closely scrutinized by the courts as the breadth of the holding in Actavis is applied to various settlement arrangements.

One point of note in King Drug, however, may be how much weight the Third Circuit placed on the fact that Glaxo’s patent was most likely going to be found invalid.4 While it is not clear that a no-AG agreement, if made earlier in the patent validity litigation, would have still run afoul of the rule of reason analysis, the Third Circuit perhaps felt confident that the agreement was made to save an invalid patent.5 It will be interesting to see in other “pay-for delay” settlements, if the timing of the agreement plays any role in the final analysis under the rule of reason.

1 King Drug Co. of Florence, Inc. v. Smithkline Beecham Corp., No. 14-1243, slip op. (3d Cir. June 26, 2015)
2 Id. at 44
3 Id. (citing FTC v. Actavis 133 S.Ct. 2223, 2236 (2013) (“There may be other justifications.”)).
4 Id. at 9 (“After the judge presiding over the patent litigation ruled the patent’s main claim invalid, GSK and Teva settled.”)
5 Id. at 16-17 (citing Plaintiff’s assertion that “it was highly likely that Teva would prevail with respect to the remaining patent claims,” which “were extremely weak in view of Judge Bissell’s ruling that claim 1 was invalid.”)