Biosimilar dispute headed to the Supreme Court

Biosimilar manufacturers will soon have a definitive answer on the timing of giving notice of commercial marketing, thanks to the Supreme Court. On January 13, 2017, the Court granted and consolidated Sandoz, Inc.’s petition for writ of certiorari and Amgen, Inc.’s conditional cross-petition for writ of certiorari. The dispute appeals the Federal Circuit’s July 21, 2015 decision holding that Amgen was entitled to an additional 180-day marketing exclusivity period because of Sandoz’s late notification of its intention to market a biologic product that is biosimilar to Amgen’s Neupogen® (see Court interprets biosimilar ‘enigma’ in favor of abbreviated biologic license applicant, Health Law Daily, July 22, 2015).

The Court also granted Apotex, Inc.’s motion for leave to file a brief as amici curiae; Apotex was involved in a similar dispute with Amgen (see Biosimilar applicant must give 180-day post-licensure notice to reference sponsor, Health Law Daily, July 6, 2016), though the Court denied Apotex’s petition for writ of certiorari earlier this term (see SCOTUS denies cert in biosimilar licensing dispute, Health Law Daily, December 12, 2016).

The Biologics Price Competition and Innovation Act (BPCIA), which was passed in 2010 as sections 7001-7003 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), created an abbreviated pathway for FDA approval of a “biosimilar” biologic product. Amgen originally brought suit against Sandoz in federal court asserting various violations of Amgen’s approved license for its cancer-fighting biologic Neupogen (filgrastim) and infringement of Amgen’s patent for a particular method of using filgrastim. The Court will be hearing arguments relating to Sandoz’s question regarding the 180-day notice of commercial marketing and Amgen’s cross-petition on the optionality of a process to settle patent disputes known as the “patent dance” (see Shall we dance? Biosimilars step toward new legal and regulatory future, Health Law Daily, March 31, 2016).

Makeup of the Court

Since the February 13, 2016, death of Justice Antonin Scalia, there have been eight Justices sitting on the Court. President Barack Obama’s nominee to replace Scalia, D.C. Court of Appeals Chief Judge Merrick Garland, was not considered by the Senate; President-elect Donald Trump plans to nominate a successor early into his term. In order to receive a vote in cases pending before the Court, a Justice must be seated on both the day of the oral argument and the day the written decision is released. Trump’s nominee will only be part of the decision if he or she is confirmed and duly sworn in before the oral arguments, which are not yet scheduled.

Don’t ignore biosafety when planning a compliance program

Compliance professionals sometimes avoid auditing institutional biosafety programs because they do not fully understand them, but that is detrimental, warned Bret S. Bissey, MBA, FACHE, CHC, CMPE, Senior vice president of Compliance Services at MediTract. Speaking at a Health Care Compliance Association (HCCA) webinar titled, “Performing a Compliance Assessment of the Institutional Biosafety Program,” Bissey and Joan M. Robbins, Ph.D., Senior Vice President of Biosafety & Gene Therapy at WIRB Copernicus Group, warned attendees of the need for strong biosafety programs to combat increased biological risks. Biosafety programs should be viewed as investments, rather than expenses, according to Bissey; a compliance professional should not feel comfortable at an institution where a biosafety assessment discussion is not part of the work plan.

Biosafety measures are required for the safe handling and containment of infectious or potentially infectious biological materials, which may occur in both laboratories and clinical settings, such as a hospital where a clinical trial is occurring. To be effective, they require a fundamental understanding of the particular biological material or agent at issue. They also require an agent-specific risk assessment and a risk group classification, rather than general safety measures. Facilities should institute standard microbiological practices and ensure that appropriate safety equipment is used and appropriate safeguards are put in place. Unlike basic infection prevention control, which protects the patient, effective biosafety protects workers, the environment, and the community.

Institutions should generally perform two types of biosafety reviews: document reviews and facilities reviews. Documents reviewed should include exposure control plans, biosafety policies, environmental health and safety policies, and training plans. Employees should be trained in agent-specific safety polices, rather than mere general policies. For example, certain biologicals can affect the eyes, and employees must understand the need to wear eye shields when dealing with them. Protocols must be in place regarding actions that employees should take if they are exposed to biologicals, for example, through an infected needle.

Auditors should review all sites where a biological will be received, stored, manipulated, administered, or disposed of. Lax access controls over administration and storage are a huge issue. Only those people who need to access certain areas, including refrigerators and freezers should be able to access them; employee lunches should never be stored in the same refrigerator as biological materials. Cabinets, floors, and other surfaces must not only be clean at the time of review, but be easy to clean to ensure that the condition can be maintained. It is typically easier to implement effective biosafety in a laboratory, which may handle biosafety levels 1 and 2 on a regular basis, compared to a clinical setting, which may not deal with the issue as frequently.

Failure to implement biosafety is costly beyond the obvious risks to health and safety. A lack of biosafety can result in delayed research and a diminished public support; they can also result in monetary settlements, such as a hospital’s settlement with a nurse resulting from her exposure in Ebola in the hospital setting. Nurses at that particular institution reportedly were given protective equipment, but not trained it its use.

Compliance officers should ensure that biosafety is addressed at their institution. A biosafety officer will likely have greater understanding of the details and more direct oversight over the program, but compliance officials need to ensure that the program is in place and is working as it should. As Bissey said, it is up to the compliance department to act proactively, rather than retroactively, when it comes to biosafety.

Reversal of fortune: Sandoz seeks Supreme Court review in Amgen biosimilars battle

Sandoz filed a petition for a writ of certiorari, asking the Supreme Court to review the Federal Circuit’s interpretation of the Biologics Price Competition and Innovation Act’s (BPCIA) “notice of commercial marketing” provision. In its February 16, 2016, filing, Sandoz asked the Court to decide the validity of the Federal Circuit’s ruling in Amgen v. Sandoz, which held that the 180-day notice of commercial marketing can only be given after a proposed biosimilar product receives FDA approval (see Court interprets biosimilar ‘enigma’ in favor of abbreviated biologic license applicant, Health Law Daily, July 22, 2015).

Just last month Amgen declined to file its own free-standing cert petition. Under the Supreme Court’s rules, however, Amgen could file a “conditional cross-petition,” requesting that if the Court chooses to take up Sandoz’s petition, it would address the issue Amgen lost before the Federal Circuit, specifically whether the BPCIA’s patent “dance” was mandatory.

In an interview with Wolters Kluwer, Courtenay C. Brinckerhoff, a partner with Foley & Lardner and editor of Foley’s PharmaPatents blog, noted that the Supreme Court may be inclined to hear the case because (1) Sandoz presented an issue of statutory construction of an important provision of the BPCIA; and (2) district courts are already applying the Federal Circuit’s interpretation of the BPCIA in other biosimilars cases.

Federal Circuit ruling

The BPCIA, which was passed in 2010 as sections 7001-7003 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), created an abbreviated pathway for FDA approval of a “biosimilar” biologic product. Amgen brought originally brought suit against Sandoz in federal court asserting various violations of Amgen’s approved license for its cancer-fighting biologic Neupogen® (filgrastim) and infringement of Amgen’s patent for a particular method of using filgrastim. The FDA previously accepted Sandoz’s application for the filgrastim biosimilar Zarxio in July 2014 and approved the application in early 2015 (see FDA enters new era with approval of first biosimilar, Health Law Daily, March 6, 2015). Although the BPCIA includes a complicated process for addressing patent disputes surrounding biosimilar products, known as the “patent dance,” Sandoz chose not to engage in that process (see Shall we dance? Biosimilars step toward new legal and regulatory future, Health Law Daily, August 5, 2015).

Amgen sued Sandoz for violating the BPCIA. Upon reviewing the lower court’s decision, the Federal Circuit decided that an abbreviated biologic license application (aBLA) applicant did not need to engage in the patent dance with the reference product sponsor (RPS), but did need to comply with the pre-marketing notice provision of 42 U.S.C. §262(l)(8). Specifically to the latter, the appellate panel held that notice of commercial marketing, to be effective under the BPCIA, must be given only after the product is licensed by the FDA. In a dissent from this portion of the decision, Judge Chen wrote that the majority’s position extra-statutorily extended RPS’ 12-year market exclusivity as established in the BPCIA by an additional six months.

Commercial marketing notice

The majority’s decision in Amgen v. Sandoz acknowledged that its ruling could establish additional six months exclusivity for the RPS, but found that it was consistent within the four- and 12-year exclusivity periods in the BPCIA. Under the Federal Circuit’s interpretation of 42 U.S.C. §262(l)(8)(A), actions authorized by §262(l)(8)(B) cannot be commenced until the biosimilar product has been approved. Sandoz’s argument is that this interpretation is not supported by either the BPCIA’s language or purpose. According to Brinckerhoff, the majority’s rationale seems to rest on the assumption that, if a biosimilar application is filed during the 12-year exclusivity period, the FDA will “license” the biosimilar product before the 12-year period has run, in which case the pre-marketing notice could be given before the 12-year period has run. However, the 12-year period is embodied in 42 U.S.C. §262(k)(7)(A), which states that “[a]pproval of [a biosimilar application] may not be made effective” until the 12-year period has run. Thus, Brinckerhoff said, it is not clear that the FDA has the statutory authority to “license” a product before the 12-year period has run.

In addition, the appellate ruling leaves some uncertainty about whether an aBLA applicant engaging in the BPCIA’s patent dance needs to provide this notice of commercial marketing to an RPS if the patents cannot be litigated until after FDA approval. Brinckerhoff said one purpose of the pre-marketing notice is to give the RPS an opportunity to seek a preliminary injunction based on patents that were not litigated in the patent dance litigation, for instance with patents that were not selected after the exchange of patent lists. Thus, there is still some benefit in the patent dance, as it provides a mechanism to litigate patents before the biosimilar is approved.

Biosimilar availability

Sandoz also noted in its petition that the Federal Circuit’s ruling would create a delay in availability for all biosimilars. Brinckerhoff stated that whether the post-approval notice requirement itself would keep a biosimilar product off the market in another case would depend on the circumstances, including whether the RPS had obtained a preliminary injunction based on any patents being litigated. She noted that it was possible that in other cases the notice requirement would be the only factor keeping the biosimilar product off the market.

Patent dance

As discussed earlier, while not addressed in Sandoz’s petition, the Federal Circuit also held that the patent dance was optional. A consequence of an optional patent dance is that the biosimilar applicant would be subject to patent infringement action. By not filing a petition, Amgen implied that it was content with an optional patent dance.

Under an optional patent dance scheme, Brinckerhoff said that the RPS can benefit because it can bring an immediate declaratory judgment action without having to go through the patent dance procedures. The RPS can litigate all patents that it believes should be litigated instead of being limited to the patents agreed upon after the exchange of patent lists. Conversely, biosimilar applicants may find it beneficial not to share the confidential information that may be in their biosimilar applications with the RPS during the patent dance, or at least be able to keep the information confidential unless and until the RPS initiate litigation (when the application may be discoverable).

Brinckerhoff also said that the latter strategy presented its own problems for the biologic applicant. If the patents are not litigated until later in the approval process or after the product is approved, the biosimilar applicant may have to choose between delaying market entry until the patent litigation is resolved or launching at risk, e.g., entering the market at the risk of being held liable for willful patent infringement. Brinckerhoff said that given the costs of biologics and the risk of treble damages, a launch at risk could be associated with significant financial risk.