United States: 180-Day Notice Of Commercial Marketing Mandatory Even When Biosimilar Applicants Do The "Patent Dance"

On July 5, 2016, the Federal Circuit issued another important decision regarding the meaning of certain provisions of the Biologics Price Competition and Innovation Act of 2009 ("BPCIA"). See Amgen Inc. v. Apotex Inc., Fed. Cir. Case No. 2016-1308 (Fed. Cir. July 5, 2016). The court held that the commercial marketing provision in 42 U.S.C. § 262(l)(8)(A) ("(8)(A)") is mandatory and enforceable by injunction, even where the biosimilar applicant has triggered the so-called "patent dance" by providing its application and information to the reference product sponsor under 42 U.S.C. § 262 (l)(2)(A) ("(2)(A)").

This is the Federal Circuit's second decision interpreting the BPCIA. The first was Amgen Inc. v. Sandoz Inc., 794 F.3d 1347 (Fed. Cir. 2015). In Amgen v. Sandoz, the court held that the (2)(A) initial disclosures were optional but that the (8)(A) notice of commercial marketing was mandatory and could be provided only after the FDA had approved the biosimilar application. The court held that Sandoz was free to withhold information about its product from Amgen, but under that circumstance, Sandoz had to provide a notice of commercial marketing after FDA licensure and could not enter the market for 180 days after doing so.

In Amgen v. Apotex, Apotex seized upon what it saw as a key distinction between itself and Sandoz, and argued that the (8)(A) notice of commercial marketing was mandatory only if the applicant failed to provide the initial disclosures under (2)(A). In addition to the factual differences between the two cases, Apotex argued that requiring the biosimilar applicant to provide notice of first commercial marketing after receipt of FDA approval would unfairly give the reference product sponsor ("RPS") an extra 180 days of exclusivity. Apotex also argued that the BPCIA provides the RPS with the right to bring a declaratory-judgment action under 42 U.S.C. 262 (l)(9)(B) if the RPS fails to provide the notice of first commercial marketing required by (8)(A). Thus, Apotex argued that the BPCIA does, indeed, provide the RPS with a remedy if the biosimilar applicant fails to comply with (8)(A).

As we previously reported in December 2015, the district court ruled in favor of Amgen and enjoined Apotex from entering the market until it has given Amgen notice after receiving the requested FDA license and then waited 180 days.

Apotex appealed to the Federal Circuit, which considered two issues:

• Whether a biosimilar applicant must provide the (8)(A) 180-day notice of commercial marketing after FDA licensure where the applicant provided the (2)(A) initial disclosures; and
• Whether § 262(l)(9) makes a declaratory-judgment action the exclusive remedy for violations of (8)(A).

As to the first issue, the court rejected Apotex's proposed distinction of Amgen v. Sandoz, holding that the commercial-marketing provision is mandatory and enforceable by injunction even if the biosimilar applicant provided the (2)(A) initial disclosures:

In Amgen v. Sandoz, we held that the commercial-marketing provision is mandatory, with the 180-day period beginning only upon post-licensure notice, and that an injunction was proper to enforce the provision against Sandoz, a biosimilar-product applicant that had entirely skipped the statutory process of information exchange and patent-litigation channeling.... Apotex argues that a different result is required here—that the commercial-marketing provision is not mandatory and may not be enforced by an injunction—because it, unlike Sandoz, did launch the statutory process for exchanging patent information and channeling patent litigation. We reject the asserted distinction. We hold that the commercial-marketing provision is mandatory and enforceable by injunction even for an applicant in Apotex's position.

Slip. Op. at 3-4.

The court affirmed its prior ruling that (8)(A) is a "standalone" provision—that is, one "not dependent on the information-exchange processes that begin with (2)(A)." Id. at 16.

The court also rejected Apotex's argument that giving (8)(A) its plain meaning would effectively extend, by six months, the 12-year exclusivity period: 

Even when entry is delayed under (8)(A) to what amounts to 12 years plus 180 days after the reference product sponsor's licensure, the result is consistent with § 262(k)(7). Moreover, it 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, § 262(k)(7)(b), can seek approval long before the 12-year exclusivity period is up.... In such circumstances, we have been pointed to no reason that the FDA may not issue a license before the 11.5-year mark and deem the license to take effect on the 12-year date.

Slip. Op. at 16-17.

The court then emphasized that the purpose of (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 fairness and accuracy." Slip. Op. at 17.

The court next addressed whether 42 U.S.C. § 262(l)(9) makes a declaratory-judgment action the exclusive remedy for violations of (8)(A).

The court dismissed Apotex's argument for an implied exclusivity of declaratory-judgment remedies, stating that bringing a declaratory-judgment action "would reintroduce the very problems of rushed litigation—over patents the applicant is empowered to prevent being litigated earlier—that (8)(A) was enacted to avoid. The inference that Congress rendered unavailable direct injunctive enforcement of (8)(A)'s plain terms is unwarranted." Slip. Op. at 25.

Conclusion

In summary, the Federal Circuit concluded that "an applicant must provide a reference product sponsor with 180 days' post-licensure notice before commercial marketing begins, regardless of whether the applicant provided the (2)(A) notice of FDA review." Slip. Op. at 14.

Separately, the U.S. Supreme Court now has asked the Solicitor General to weigh in on whether it should grant certiorari to review Amgen v. Sandoz. If Apotex files a petition for a writ of certiorari asking the Supreme Court also to review the Federal Circuit's decision in Amgen v. Apotex, the Court might choose to address the two Federal Circuit decisions together.

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