United States: State Of Sandoz

On 12 June 2017, the Supreme Court of the U.S. (SCOTUS) held that the abbreviated Biologics License Application (aBLA) information exchange provision of the Biologics Price Competition and Innovation Act (BPCIA)¹ was not enforceable by injunction, and that biosimilar applicants can provide notice of commercial marketing prior to Food and Drug Administration (FDA) approval.² In doing so, the court agreed with the prior ruling that an injunction is not the appropriate remedy for a biosimilar applicant's failure to abide by the information disclosure provision of 42 USC § 262(l)(2)(A).³ But the court left open the possibility that compliance with the aBLA disclosure provision of the BPCIA could be compelled via a state court cause of action and remanded the issue to the U.S. Court of Appeals for the Federal Circuit for consideration in the context of Amgen's state-law unfair competition claims.⁴ The court also reversed the Federal Circuit's holding that the "notice" provision of the BPCIA required biosimilar applicants to give 180-days advance notice of commercial marketing to Reference Product Sponsors (RPS) following FDA approval, now allowing for notice of commercial marketing as early as the date the aBLA was filed.⁵ While this decision provides much needed guidance, questions remain. Specifically, regarding the availability of state-law claims and the potential for expedited litigation strategies.

Timeline Expedited?

The most immediate impact of SCOTUS' decision on the aBLA process is the opportunity for aBLA applicants to expedite the litigation process. The BPCIA prescribes two phases of litigation brought by the RPS; one involving a negotiated set of identified patents and the second including the remainder of its portfolio following the receipt of the commercial marketing notice.⁶ If the biosimilar applicant declines to share its submitted aBLA and manufacturing information, the RPS has the option to immediately file an declaratory judgment infringement action on any patent which it "believes a claim of patent infringement could reasonably be asserted".⁷  This declaratory judgment action could substantially accelerate the first litigation phase by eliminating nearly eight months of negotiations between the two parties over which patents to litigate. A pragmatic concern raised by Justice Thomas' opinion is that courts could potentially find that the RPS lacks the necessary information to make a good-faith filing.⁸ But it is equally possible that district judges will understand the constraints imposed on the RPSs and allow them to move forward.  

A second mechanism to shorten a suit under the BPCIA would be to collapse the two phases of litigation into a single action in a scenario where the biosimilar applicant provides its commercial marketing notice contemporaneously with its aBLA filing. This would effectively collapse the 180-day waiting period prior to marketing into the corresponding litigation, such that they run concurrently.  While this merger could allow the RPS to assert the entirety of its patent portfolio in one suit, without delay, it also allows an aBLA applicant to avoid waiting another 180 days before marketing its product once it receives FDA approval. 

Availability of State-Law Remedies

Although the SCOTUS' decision appears to close the door to any federal remedy for failing to disclose an aBLA, this issue has not gone away entirely, as the Federal Circuit is tasked with determining whether: (1) Sandoz's failure to disclose is unlawful under California's unfair competition statute and/or (2) does the BPCIA preempt Amgen's claims.⁹ The Federal Circuit may hold California's remedies are preempted by the BPCIA, or decline to answer the question finding Sandoz has waived this affirmative defence. If the Federal Circuit decides that state-law remedies are available, the existence of various unfair competition statutes could revive the issue of forum shopping. In any event, state-law claims have the potential to be brought against any party circumventing the provisions of the BPCIA. 

While SCOTUS' decision in Sandoz v. Amgen provides much needed guidance, it still leaves open the questions as to whether disclosure is required and whether the timeline of the BPCIA can be expedited.  The former question will remain open until the Federal Circuit has an opportunity to further consider Amgen's state-law unfair competition claims on remand and the latter could materialise through practice. Meanwhile, parties contemplating litigation under the BPCIA may find it prudent to investigate their desired jurisdiction's state-law statutes and be ready to assert or defend against all patents in a single action.

Footnotes

1 Pub L No 111-148, §§ 7001-7003, 124 Stat. 119, 804-21 (2010); see also 42 USC § 262(k), (l).

2 Sandoz Inc v. Amgen Inc, 137 S Ct 1664 (2017).

3 Id at 1674.

4 Id at 1675-76.

5 Id at 1677.

6 42 USC §§ 262(l)(6), 262(l)(8).

7 42 USC § 262(l)(3)(A)(i); Sandoz, 137 S Ct at 1675.

8 See Fed R Civ P 11(c).

9 Sandoz, 137 S Ct at 1676.

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