Continued Uncertainty Over BPCIA Leads to Duplicative Lawsuits

  By Lynn C. Tyler [1]

Earlier this year, Genentech, Inc., Biogen, Inc., Hoffmann-La Roche Inc., and City of Hope (collectively, “Genentech”) filed a suit under the Biosimilars Price Competition and Innovation Act (“BPCIA”) against Celltrion, Inc., Celltrion Healthcare Co., Ltd., Teva Pharmaceuticals USA, Inc., and Teva Pharmaceuticals International GmbH (collectively, the “Defendants”) in the District of New Jersey. [2] The New Jersey Complaint alleged the Defendants would infringe forty patents with their proposed marketing of a biosimilar to Genentech’s Rituxan®.
Also earlier this year, the same plaintiffs (excluding Biogen) also sued the same Defendants under the BPCIA in Delaware. [3] The Delaware Complaint alleged the Defendants would infringe forty patents with their proposed marketing of a biosimilar to Genentech’s Herceptin®.
As regular readers of the Flash! are aware, the BPCIA sets forth a series of steps, known as the “patent dance,” through which patent owners and biosimilar developers may engage before beginning patent litigation. The dance begins when the biosimilar applicant, called a subsection (k) applicant by the statute, submits to the FDA an application for approval of a biosimilar drug. The statute states that “[w]hen a subsection (k) applicant submits an application” to the FDA, the applicant will give a copy of the application to one in-house lawyer for the patent owner, called the reference product sponsor, and to outside counsel for the sponsor, subject to certain confidentiality restrictions. 42 U.S.C. § 262(l)(1). Later, the statute states that the copy of the application must be provided to the sponsor “[n]ot later than 20 days after the Secretary [through the FDA] notifies the subsection (k) applicant that the application has been accepted for review.” § 262(l)(2). In addition, at that point the applicant must also provide “such other information that describes the process or processes used to manufacture the biological product that is the subject of the application.” Id.
The next step is that, within 60 days after the receipt of the application and process information, the sponsor must provide the applicant with a list of patents which the sponsor believes “could reasonably be asserted” and identify any that are available for license. § 262(l)(3)(A). Sixty days after receiving the sponsor’s list of patents, the applicant must provide the sponsor with (1) its own list of patents that it believes could be asserted, and either (2) a detailed statement, on a claim by claim basis, of the factual and legal basis why each patent on the sponsor’s and applicant’s (if any) list(s) is invalid, unenforceable, or would not be infringed, or (3) a statement that the applicant does not intend to market the product before the patent expires. The applicant must also provide a response to the sponsor’s indication of patents that are available for license. § 262(l)(3)(B).
The final step in this phase is that, within 60 days of receiving the applicant’s detailed statement, the sponsor must provide its own detailed statement, again on a claim by claim basis, of the factual and legal basis why each patent will be infringed and a response to the applicant’s statement on validity and enforceability. § 262(l)(3)(B).
After providing a relatively brief period for the parties to agree on patents to be litigated (§ 262(l)(4)), if the parties cannot agree the statute goes on to prescribe another set of steps in the pre-litigation dance. § 262(l)(5). The first of these is that the applicant notifies the sponsor of the number of patents the applicant will include on a list of patents to be litigated. § 262(l)(5)(A). Five days later, the parties simultaneously exchange lists of patents that each believes “should be the subject of an action for patent infringement.” § 262(l)(5)(B). The number of patents on the sponsor’s list cannot exceed the number on the applicant’s list, unless the applicant’s list does not include any patents, in which case the sponsor can list one patent. Id.
Whether the parties agreed on a list of patents to be litigated or exchanged lists, within 30 days of completing the applicable process the sponsor must file an infringement suit. If the parties agreed on patents to be included, the sponsor’s suit must include those patents. If the parties did not agree, the sponsor’s suit must include all the patents on the respective lists. § 262(l)(6).
Genentech’s Delaware and New Jersey Complaints both alleged that the Defendants had initially engaged in the patent dance, but withdrew before reaching the agreed or exchanged lists of patents to be litigated. Genentech’s Delaware Complaint alleges that the Defendants filed suit in the Northern District of California seeking a declaratory judgment. Both cases allege the Defendants gave Genentech a notice of commercial marketing.
Recently, Genentech filed new Complaints in Delaware [4] and New Jersey [5], asserting the same patents against the same proposed biosimilars. Both Complaints were accompanied by a letter to the Court [6] explaining the reasons for the duplicative filing. According to the letters, after previously abandoning the patent dance as described above, the Defendants allegedly sought to re-engage in the dance and complete the lists of patents to be litigated. As a result, Genentech alleged it was unclear under the BPCIA if it had to file a lawsuit within thirty days of the completion of that step and, if it did not, whether its damages could be limited to a reasonable royalty. To avoid those issues, Genentech filed the duplicative suits and advised the Courts it would seek to have them consolidated with the earlier ones by stipulation or motion.
In all likelihood, the Defendants will have a different view of what happened, why, and its legal effect. What seems beyond dispute, however, is that the BPCIA is full of ambiguities that will be litigated for years to come. Within a few months of its passage, it was deemed “the statute most likely to be amended or repealed” by panelists at a CLE, but sadly so far Congress has not taken any action to clarify the patent dance provisions. The current ambiguities likely do not benefit either patent owners or biosimilar applicants.
[1] Lynn C. Tyler is a registered patent attorney and a partner in the Indianapolis office of Barnes & Thornburg LLP. He is currently the chair of AIPLA’s Food and Drug Committee. He concentrates his practice in intellectual property litigation and FDA counseling.
[2] Case No. 1:18-cv-00574 (RMB) (KMW).
[3] C.A. No. 18-095.
[4] C.A. No. 18-1025.
[5] Case No. 1:18-cv-11553.
[6] ECF No. 39 in Delaware and ECF No. 49 in New Jersey.

FDA Issues Guidance on Formal Meetings between the FDA and Sponsors or Applicants of BsUFA Products

By Huihong Qiao [1]

Meetings between the FDA review staff and sponsors or applicants of biosimilar products often represent critical points in the regulatory and development process. To have consistent procedures for the timely and effective conduct of such meetings, the Food and Drug Administration (FDA) recently issued a draft guidance for industry. The draft guidance provides recommendations to a sponsor or applicant (Requester(s)) on formal meetings between the Center for Drug Evaluation and Research (CDER) or the Center for Biologics Evaluation and Research (CBER) and Requester relating to the development and review of biosimilar or interchangeable biological products. For the guidance, formal meeting includes any meeting that is requested in any format.

 

Types of the meetings. There are five types of formal meetings:  Biosimilar Initial Advisory (BIA), Biosimilar Biological Product Development (BPD) Type 1, BPD Type 2, BPD Type 3, and BPD Type 4. Please see table 1 for details. In general, for a particular biosimilar or interchangeable product, Requesters can request one BIA meeting and one BPD Type 4 meeting, but as many BPD Type 2 and Type 3 meetings as needed, and Requesters are not required to request meetings in sequential order.

 

Fee and format. No fee is associated with a BIA meeting. Concerning the assessment of BPD fees and the consequences for failure to pay any required BPD fees, refer to the draft guidance for industry, “Assessing User Fees Under the Biosimilar User Fee Amendments of 2017.” The formats of meetings include face to face, teleconference/videoconference, or written response only (WRO).

 

The procedure could be simplified as: submitting a meeting request and meeting package –> the FDA granting the request –> the FDA providing preliminary responses –> parties conducting a meeting –> the FDA providing meeting minutes to the requesters.

 

Each step is explained in the following paragraphs.

 

Requesting a meeting. The procedure begins with a request. Requesters should combine related product development issues into the fewest possible meetings. A request must be submitted in writing via paper submission or electronic gateway. Meeting requests sent by fax or email are considered copies of formal requests. The request should be submitted to the division that has regulatory oversight of the reference product if the proposed biosimilar or interchangeable product has multiple indications that span multiple review divisions. Requesters should consider the complexity of the questions it intends to submit and keep the questions limited to those can be reasonably answered within the allotted time in a single meeting. The planned attendees can change during the time between the request and the meeting. If there are changes, an updated list of attendees with their titles and affiliations should be provided to the appropriate FDA contact at least one week before the meeting. The draft guidance lists information that the FDA requires the request to include (Appendix I below) and a list of information recommended by the FDA (Appendix II below).

 

Meeting package. The meeting request should be accompanied by a meeting package. CDER strongly recommends submitting the package electronically and provide paper copies (desk copies) as well. CDER project manager will advise on the number of desk copies needed for the meeting attendees.  CDER neither requests nor accepts desk copies of meeting packages that have been electronically submitted. To facilitate FDA review, the meeting package content should be organized according to the proposed agenda.  “The meeting package should be a sequentially paginated document with a table of contents, appropriate indices, appendices, and cross references.  It should be tabbed or bookmarked to enhance reviewers’ navigation across different sections within the package, both in preparation for and during the meeting,” the guidance states. Meeting packages generally should include the information in the order listed in Appendix III below.

 

Denial of a meeting. The FDA generally honors requests for BPD Type 2, 3, and 4 meetings; however, it has the discretion to grant or deny BIA and BPD Type 2 meeting requests. If a meeting request is denied, the FDA will notify the requester in writing within 21 calendar days from receipt of the meeting request and meeting package (14 days for BPD Type 1 meeting). The reasons to deny a request include that it is premature for the stage of product development, clearly unnecessary, or inappropriate for the format requested. A subsequent request to schedule the meeting will be considered as a new request.

 

Grant of a meeting. The FDA will notify the applicant of the grant of a request in writing within the same time frame as the denial of a request.  For face-to-face and teleconference/videoconference meetings, the notification includes logistic information and expected FDA participants.  For BIA and BPD Type 2 WRO meetings, the notification will include the date the FDA intends to send the written response. The FDA will schedule the meeting consistent with the time frame outlined in Table 2 below.

 

Preliminary responses. Communications before the meeting between requesters and the FDA, including preliminary responses, can serve as a foundation for discussion or as the final meeting responses. The FDA holds internal meetings to discuss the content of meeting packages and generate preliminary responses. Except for WRO requests, the FDA will send the requesters its preliminary responses to the questions in the meeting package no later than 2-5 calendar days before the meeting date. Preliminary responses should not be construed as final unless agreed by the FDA and Requesters otherwise, nor intended to generate the submission of new information or new questions.

 

Rescheduling meetings. A meeting should be rescheduled as soon as possible after the original date, if the FDA or a Requester decides that it is necessary to do so. The exemplary situations in which the FDA may reschedule a meeting are: the review team determines that additional information is needed to address the requester’s questions or other important issues or essential attendees are not available for the scheduled date and time.

 

Canceling meetings. Some situations may result in canceling meetings, such as failure to pay required BPD fees for a product within the required time frame or the FDA determines that the meeting package is inadequate. If the requester determines that preliminary responses to its questions are sufficient for its needs and additional discussion is not necessary, the requester should contact the FDA regulatory project manager to request cancellation of the meeting.  The FDA will consider whether it agrees that the meeting should be canceled.  Some meetings can be valuable because of the discussion they generate and the opportunity for the division to ask about relevant matters.

 

Meeting conduct. An FDA staff member will chair the meeting and begin with introductions and an overview of the agenda.  Attendees should not make audio or visual recordings of discussions at meetings. Presentations by requesters generally are not needed. According to the guidance, “[i]f a Requester plans to make a presentation, the presentation should be discussed ahead of time with the FDA project manager,” the Guidance states. If the presentation includes content other than clarifying or explaining of previous data, the FDA staff may not be able to provide commentary.

 

Either a representative of the FDA or the requester should summarize the important discussion points, agreements, clarifications, and action items. A summary can be done at the end of the meeting or after the discussion of each question.  Generally, the requester will be asked to present the summary to ensure that there is a mutual understanding of meeting outcomes and action items. “At BPD Type 4 meetings, the requester and the FDA should also summarize agreements regarding the content of a complete application and any agreements reached on delayed submission of certain minor application components,” the guidance states.

 

Meeting minutes. The FDA will issue the official, finalized minutes to the requester within 30 calendar days after the meeting. The following steps should be taken when a requester disagrees that the minutes are an accurate account of the meeting: the requester should contact the FDA project manager and describe the concern. If after contacting the FDA project manager, the requester still disagrees with the content of the minutes, the requester should submit a description of the specific disagreements either:

‒ To the application; or

‒ If there is no application, in a letter to the division director, with a copy to the FDA project manager.

To request information on additional issues that were not addressed at the meeting, the requester should submit a new meeting request or a submission containing specific questions for FDA feedback.

 

Tables and Appendices: the tables and appendices are reproduced from the draft guidance.

Table 1 – Types of meetings between the FDA and Sponsors or Applicants of BsUFA Products

Type	Purpose	Contents
BIA	An initial assessment limited to a general discussion about feasibility for a biosimilar product, and general advice on the expected content of the development program.	Preliminary comparative analytical similarity data from at least one lot of the proposed biosimilar or interchangeable product compared to the U.S.-licensed reference product.
BPD Type 1	A meeting that is necessary for an otherwise stalled development program to proceed or a meeting to address an important safety issue.	Exemplary topics: • discuss clinical holds: (1) in which the requester seeks input on how to address the hold issues; or (2) in which a response to hold issues has been submitted, and reviewed by the FDA, but the FDA and the requester agree that the development is stalled and a new path forward should be discussed • in response to an FDA nonagreement Special Protocol Assessment letter • discussion of an important safety issue • In response to an FDA regulatory action other than an approval •  discussion of whether FDA should file the application within 30 days of the FDA issuance of a refuse-to-file letter
BPD Type 2	A meeting to discuss a specific issue or questions for which the FDA will provide targeted advice regarding an ongoing development program. This type of may include substantive review of summary data but does not include review of full study reports.	Exemplary issues: ranking of quality attributes; chemistry, manufacturing, and controls such as control strategy; study design or endpoints; post- approval changes
BPD Type 3	This meeting type includes substantive review of full study reports or an extensive data package, and FDA advice regarding the need for additional studies, including design and analysis, based on a comprehensive data package.	Exemplary submission: datasets that support the full study reports; full study report(s) for a clinical study or clinical studies; proposal for any planned additional studies; proposal for extrapolation
BPD Type 4	The meeting is to discuss the format and content of the planned submission and other items	Exemplary topics: • identification of studies that the sponsor is relying on to support a demonstration of  biosimilarity or interchangeability • discussion of any potential review issues identified based on the information provided • identification of the status of ongoing or needed studies to adequately address the Pediatric Research Equity Act • acquainting FDA reviewers with the general information to be submitted in the marketing application (including technical information) • Discussion of the best approach to the presentation and formatting of data in the marketing application

 

Table 2:  FDA Meeting Scheduling Time Frames

Meeting Type	Meeting Scheduling (calendar days from receipt of meeting request and meeting package)
BIA	75 days
BPD 1	30 days
BPD 2	90 days
BPD 3	120 days
BPD 4	60 days

 

Appendix I: The meeting request must include the following information:

1. Type of the meeting being requested and rationale of the requesting.
2. The proposed format of the meeting.
3. A brief statement of the purpose of the meeting. This statement should include a brief background of the issues underlying the agenda.  It also can include a brief summary of completed or planned studies or data that the requester intends to discuss at the meeting, the general nature of the critical questions to be asked, and where the meeting fits in overall development plans.  Although the statement should not provide the details of study designs or completed studies, it should provide enough information to facilitate understanding of the issues, such as a small table that summarizes major results.
4. A list of the specific objectives or outcomes the requester expects from the meeting.
5. A proposed agenda, including estimated times needed for discussion of each agenda item.
6. A list of questions, grouped by FDA discipline. For each question there should be a brief explanation of the context and purpose of the question.
7. A list of planned attendees from the requester’s organization, which should include their names and titles. The list should also include the names, titles, and affiliations of consultants and interpreters, if applicable.
8. A list of requested FDA attendees and/or discipline representative(s). Note that requests for attendance by FDA staff who are not otherwise essential to the application’s review may affect the ability to hold the meeting within the specified time frame of the meeting type being requested.  Therefore, when attendance by nonessential FDA staff is requested, the meeting request should provide a justification for such attendees and state whether or not a later meeting date is acceptable to the requester to accommodate the nonessential FDA attendees.
9. Suggested dates and times (e.g., morning or afternoon) for the meeting that are within or beyond the appropriate scheduling time frame of the meeting type being requested (see Table 2 in section VII.B., Meeting Granted). Dates and times when the requester is not available should also be included.

Appendix II: The FDA recommends a meeting request should include the following information:

1. The application number (if previously assigned).
2. The development-phase code name of product (if pre-licensure).
3. The proper name (if post-licensure).
4. The structure (if applicable).
5. The reference product proper and proprietary names.
6. The proposed indication(s) or context of product development.
7. Pediatric study plans, if applicable.
8. Human factors engineering plan, if applicable.
9. Combination product information (e.g., constituent parts, including details of the device constituent part, intended packaging, planned human factors studies), if applicable.

Appendix III: The FDA recommends the meeting package include the information listed in the order  below:

1. The application number (if previously assigned).
2. The development-phase code name of product (if pre-licensure).
3. The proper name (if post-licensure).
4. The structure (if applicable).
5. The reference product proprietary and proper names.
6. The proposed indication(s) or context of product development.
7. The dosage form, route of administration, dosing regimen (frequency and duration), and presentation(s).
8. Pediatric study plans, if applicable.
9. Human factors engineering plan, if applicable.
10. Combination product information (e.g., constituent parts, including details of the device constituent part, intended packaging, planned human factors studies), if applicable.
11. A list of all individuals, with their titles and affiliations, who will attend the requested meeting from the requester’s organization, including consultants and interpreters, if applicable.
12. A background section that includes the following:
13. A brief history of the development program and relevant communications with the FDA before the meeting
14. Substantive changes in product development plans (e.g., manufacturing changes, new study population or endpoint), when applicable
15. The current status of product development (e.g., chemistry, manufacturing, and controls; nonclinical; and clinical, including any development outside the United States, as applicable)

[1] Huihong Qiao is a registered patent attorney before the U.S. Patent and Trademark Office (USPTO). She is a former postdoctoral researcher at the National Institutes of Health, and examined patent applications as an extern at the Biotechnology Center of the USPTO. She was admitted to the DC Bar in February, 2018.

D.C. DISTRICT COURT HOLDS (AGAIN) THAT THE PRE-2017 ORPHAN DRUG ACT PERMITS SERIAL AND SHARED MARKET EXCLUSIVITY

By John Hamilton [1]

 

On June 8, 2018, the U.S. District Court for the District of Columbia (“the Court”) issued its opinion in Eagle Pharmaceuticals, Inc. (Eagle) v. Azar [2] announcing its intention to order the Food and Drug Administration (FDA) to recognize orphan drug exclusivity pursuant to 21 U.S.C. § 360cc(a) (2012) for Bendeka®.  Eagle had challenged in 2016 under the Administrative Procedure Act (5 U.S.C. § 551 et seq) the FDA’s denial under the pre-2017 version of the Orphan Drug Act (the pre-2017 ODA) [3] of Eagle’s request for the seven-year exclusivity for Bendeka®.  The exclusivity period serves as an incentive to develop drugs for rare diseases (i.e., affecting fewer than 200,000 patients in the U.S.), during which the FDA may not approve any other manufacturer’s application to market the same drug to treat the same rare disease.  Eagle claimed that it has a statutory right to such exclusivity for Bendeka®, which the FDA designated as an orphan drug and approved to treat two rare forms of cancer.  The FDA had argued that its denial was proper under its implementation of the ODA because the drug is the same as another drug, Treanda®, to which FDA had previously granted orphan-drug exclusivity.

 

In 1983, Congress enacted the ODA to encourage pharmaceutical companies to develop drugs for rare diseases. [4]  Under the ODA, if FDA designates a drug under development as an orphan drug, benefits such as a streamlined approval process and tax advantages accrue to the drug’s sponsor.  If the FDA then later approves the application to market the designated drug, the FDA “may not approve” any other application for “such drug” to treat the same rare disease until seven years have passed. [5]  The ODA does not explain when two “such drugs” are the same or different.  With the stated intent of preventing “evergreening” (or “serial exclusivity”), the FDA promulgated regulations providing that a new drug is generally the same as a previously approved drug if both share the same active ingredient – except if the new drug is “clinically superior” (i.e., is more effective, safer or “otherwise makes a major contribution to patient care”) to the previously approved drug, in which case the new drug is considered different. [6] The FDA applies the same drug concept first at designation stage [7], and then at marketing approval, with distinct evidentiary standards for determining “clinical superiority”. [8]

 

In Depomed, Inc. v. U.S. Dep’t of Health & Human Servs., [9], the Court had previously held FDA’s conditioning of exclusivity on “clinical superiority” at the marketing approval stage to be improper under the pre-2017 ODA, and that a grant of exclusivity was required following approval of a designated orphan drug.  FDA, after dropping its appeal, announced it would continue to apply its regulations as written, effectively taking the position that Depomed was wrongly decided. [10]  In 2017, Congress amended the ODA to supercede the Depomed holding [11], but the amendments did not apply retroactively to the FDA’s 2014 orphan drug designation and 2015 marketing approval determinations regarding Bendeka®.  FDA had concluded in its orphan drug designation that Eagle had shown a plausible hypothesis of clinical superiority for Bendeka® over Treanda® for the same two types of cancer, despite both drugs having bendamustine as their active ingredient.  But the FDA denied Eagle’s request for exclusivity for Bendeka® upon marketing approval, over Eagle’s argument that the drug was entitled to automatic exclusivity under Depomed, and also found inadequately supported Eagle’s additional arguments that Bendeka® was safer than Treanda® and provided a material contribution to patient care. [12] The FDA reasoned that the Depomed decision failed to consider that a dispositive showing of clinical superiority was not possible at the designation phase, which would lead to “absurd” results, including serial exclusivity and high drug costs for patients in dire need of care. [13]

 

The Court analyzed FDA’s interpretation of the pre-2017 ODA in its Bendeka® exclusivity decision under the two-step framework of Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc. [14], as well as cases relating to court interpretations of ambiguous statutes [15] and found that the ODA unambiguously requires the FDA to afford Bendeka® the benefit of orphan-drug exclusivity.  The Court agreed with the conclusion of Depomed that nothing in the statute’s text would leave room for the FDA to apply its “clinical superiority” requirement after an orphan drug has been designated and approved. [16]  The Court rejected FDA’s argument that the pre-2017 ODA was ambiguous on the issue of “serial exclusivity” and the statute’s silence on the subject justifies FDA’s regulations prohibiting that practice.  In contrast, the Court found dispositive in its first Chevron analysis step that the plain language makes no distinction between a first sponsor to meet the statutory requirements of designation and approval and a second such sponsor, allowing for a duopoly between the sponsors. [17]

 

The Court also found unconvincing the FDA’s arguments that consideration of the pre-2017 ODA’s “legislative history, structure, and purpose” reveals the statutory ambiguity that FDA’s clinical superiority policy resolves.  First, the FDA argued that the statute’s purpose of incentivizing sponsors is furthered only if the benefit of exclusivity is reserved for the first manufacturer to earn it.  Secondly, the FDA argued that the “timing structure” of the ODA indicated Congressional intent that orphan drug designations (and attendant benefits) were to be handed out liberally to assist in drug development, while exclusivity grants were intended for a single manufacturer meeting stricter requirements. [18]  Thirdly, the FDA presented a number of contemporaneous legislator statements supporting FDA’s policy, and argued that an inference could be drawn that Congress’s 2017 amendment of the ODA to authorize the FDA to require a showing of clinical superiority before recognizing orphan-drug exclusivity was a ratification of FDA’s policy [19] (despite Congress’s express instruction that “[n]othing in the amendments . . shall affect any determination under” the prior orphan-drug exclusivity provision.) [20]  But again, the Court held the statute’s unambiguous text controlling over the broadly stated statutory purpose, and that the FDA’s arguments were essentially just policy arguments for revising the statute in order for it to work better.

 

As a result of the Court’s decision, the FDA will not be able to approve any drug applications referencing Bendeka® until the orphan drug exclusivity expires in December 2022.

 

[1]  John Hamilton is the founder of the Law Office of John A. Hamilton LLC, located west of Boston.  He worked 12 years for FDA’s CDRH and New England District Office, and now concentrates his law practice in IP prosecution, transactions, and FDA counseling.

[2]  Eagle Pharmaceuticals v. Alex M. Azar. 16-CV-790 (D.D.C. Jun. 8, 2018)

[3] Orphan Drug Act, Pub. L. No. 97-414, 96 Stat. 2049 (1983), a part of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq.

[4] Eagle, page 2, citing Spectrum Pharm., Inc. v. Burwell, 824 F.3d 1062, 1064 (D.C. Cir. 2016); Genentech, Inc. v. Bowen, 676 F. Supp. 301, 302-03 (D.D.C. 1987).

[5] 21 U.S.C. § 360cc(a) (2012).

[6] Eagle, page 3. See also 21 C.F.R. § 316.3(b)(14).

[7] “a medically plausible hypothesis for the possible clinical superiority of the subsequent drug.” 21 C.F.R. § 316.25(a)(3).

[8] Actual clinical superiority, in order to obtain orphan-drug exclusivity. 21 C.F.R. § 316.34(c).

[9] Depomed, Inc. v. U.S. Dep’t of Health & Human Servs., 66 F. Supp. 3d 217, 226 (D.D.C. 2014),

[10] Eagle, page 5, citing FDA’s Policy on Orphan-Drug Exclusivity; Clarification, 79 Fed. Reg. 76,888 (Dec. 23, 2014).

[11] See FDA Reauthorization Act of 2017, Pub. L. No. 115-52, sec. 607(a), § 527(c)-(d), 131 Stat. 1005, 1049-50 (amending U.S.C. § 360cc).

[12] Eagle, page 6.  Administrative Record for Bendeka® as provided by FDA, FDA_AR 13, 470, 487.

[13] Id. AR 35-37

[14] Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984)).

[15] Eagle, page 10. Citing Lindeen v. SEC, 825 F.3d 646, 653 (D.C. Cir. 2016), Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 739 (1989)), Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973, 985 (2017), Kelly v. Robinson, 479 U.S. 36, 43 (1986)), et al.

[16] Id., page 11, citing Depomed.

[17] Id., page 17.

[18] Id., pages 16-17.

[19] Id., pages 19-20.

[20] FDA Reauthorization Act] of 2017, sec. 607(b), 131 Stat. at 1050.

Recent Developments in Regulation of Software as a Medical Device

 

Andrea Berenbaum and Noel Courage [1]

The digital health technology sector has undergone rapid expansion in recent years, and its growth is forecasted to continue. One noteworthy class of technology in this sector is software as a medical device (SaMD). SaMD has been defined by the International Medical Device Regulators Forum (IMDRF) as “software intended to be used for one or more medical purposes that perform these purposes without being part of a hardware medical device.” [2] However, it is not always straightforward to distinguish between SaMD and other software such as medically-related non-SaMD. [3]

As new innovations emerge and the field continues to evolve, some medical device regulators are working to adapt their policies and processes to uphold safety and efficacy, while also better aligning with the rapid design, development and modification cycle associated with SaMD. There is also a need for clarity as to what software fits within the definition of SaMD. This article provides an overview of a few of the recent developments in this regard at the US Food and Drug Administration (FDA) and Health Canada. Companies making SaMD should keep on top of regulatory developments because the clear trend appears to be to try to accelerate the regulatory path to approval.

United States – Working Model for Software Precertification Program Released

As part of its Digital Health Innovation Action Plan, the FDA recently released an update to its Software Precertification Pilot Program. It includes a working model [4] that outlines its vision for the pilot. It also asks for specific input from stakeholders.

The Software Precertification Program (the “program”) is envisioned by the FDA as a voluntary pathway more tailored to suit software technologies than the existing regulatory regime. Its scope is currently limited to FDA-regulated SaMD, as defined by the above IMDRF definition. It therefore does not apply to other types of medically-related software such as software in a medical device (SiMD). It also does not apply to certain software excluded from being regulated as a medical device, for example because it relates to health administration or encouraging a healthy lifestyle. [5]

In contrast to the existing regulatory regime for medical devices, in which the obligations and procedures depend primarily on the classification of the medical device, the new program would use an organization-based approach comprising precertification of SaMD manufacturers. The program itself would be divided into four components: 1) excellence appraisal and precertification of the organization; 2) review pathway determination; 3) streamlined premarket review; and 4) real world performance.

According to the working model, the FDA will evaluate organizational excellence based on principles of product quality, patient safety, clinical responsibility, cybersecurity responsibility and proactive culture. Then, leveraging the data gathered from this precertification process, the FDA would determine the review pathway of the SaMD.

It is envisioned there would be two levels of companies demonstrating capabilities in all five excellence principles; those without a track record in delivering SaMD (“Level 1 Pre-Cert”) and those having a demonstrated track record in delivering SaMD and/or medical devices (“Level 2 Pre-Cert”). This level would be used as one of three factors in determining premarket review pathway. The second factor in the initial model is the risk category of the SaMD. In contrast to the existing regulatory regime for medical devices, with its three classes and the classification regulations contained in 21 CFR 862-892, the working model proposes using IMDRF types I to IV and subtypes 1 to 9. [6] The third factor considers whether the SaMD is a new device, an iteration of an existing device with major changes or an iteration of an existing device with minor changes.

In the proposed new regulatory regime, there is a significant number of cases where a precertified organization would not need to make a premarket submission. This includes all instances of minor changes, many instances of major changes (subtypes 1-8 for Level 2 organizations and subtypes 1-5 for Level 1 organizations) and even a number of new products (subtypes 1-6 for Level 2 organizations and subtypes 1-3 for Level 1 organizations). For the remaining categories of SaMD, i.e. those deemed to have the highest risk, streamlined premarket review would be required. According to the working model, this would take advantage of the information available from precertification and would potentially be supported by automated analysis with the goal of providing a decision more rapidly than with a traditional premarket review process.

Finally, the working model indicates that the FDA intends to use real world performance data [7] for monitoring and feedback at product, organizational and program levels.

Nine companies (Apple, Fitbit, Johnson & Johnson, Pear Therapeutics, Phosphorus, Roche, Samsung, Tidepool and Verily) were selected to participate in the development of the pilot program. The FDA hosted an interactive session on May 10, 2018 to discuss progress the agency has made on the Software Precertification Pilot Program to date [8] and sought public feedback (until May 31, 2018) on the initial version of the working model. It will be of interest to watch for further developments regarding this initiative.

Canada – New Digital Health Review Division and SaMD Scientific Advisory Panel

Health Canada recently announced it is establishing a new Digital Health Review Division “to allow for a more targeted pre-market review of digital health technologies, to adapt to rapidly changing technologies in digital health, and to respond to fast innovation cycles”. [9] SaMD is considered a “key area of focus” [10] under this new initiative.

Like other medical device products, SaMD are currently regulated by Health Canada using a risk-based classification system governed by the provisions of the Canadian Food and Drugs Act [11] and Medical Devices Regulations [12]. Schedule I to the Regulations sets out the rules for sorting a medical device into one of four classes, where Class I devices are perceived to represent the lowest risk and Class IV devices are perceived to represent the highest risk. There are two sets of risk-based classification rules in Schedule I; one for in vitro diagnostic devices (IVDDs) and another for non-IVDDs.

Comparable to the system in the US, regulatory obligations vary by class. For example, under the Canadian regulatory regime, medical devices in Classes II, III and IV generally require a medical device license to be imported, sold or advertised for sale whereas those in Class I are exempt from this requirement. Additionally, the information required in the application for a medical device license varies depending on class, with more onerous information requirements correlating with increased perceived risk.

Given the varying obligations depending on class, it is important to stakeholders that there be clarity and certainty in how the rules of Schedule I of the Regulations are applied to new digital health technologies such as SaMD. Encouragingly, Health Canada appears to have recognized this and has developed a draft guidance document intended to provide a definition of SaMD and guidance as to how SaMD may be classified. [13] A Scientific Advisory Panel has been engaged to solicit feedback on the draft guidance prior to external consultation as well as provide comments on the future of medical device software including SaMD and Health Canada’s regulatory approach.

While the draft guidance is not yet publically available, the questions considered by the panel shed some light on potential future directions. For example, Health Canada was seeking feedback on whether SaMD should be regulated within the current regulatory framework or alternatively whether the regulatory framework should be modified or even a new framework created to address SaMD. [14] It is still very early in the consultation process and it will be of interest to watch for the public release of draft guidance as well as the record of proceedings of the panel which met earlier this year.

 

[1] Andrea Berenbaum is a lawyer in Toronto, Canada. Noel Courage is a lawyer with Bereskin & Parr LLP, in Toronto, Canada.
[2] IMDRF SaMD Working Group “Software as a Medical Device (SaMD): Key Definitions” (9 December 2013), online: IMDRF
[3] The FDA has provided some examples of software considered to be SaMD and that considered not to be SaMD. See: “What are examples of Software as a Medical Device?” (6 December 2017), online: FDA
[4] “Developing a Software Precertification Program: A Working Model” (26 April 2018), online: FDA 
[5] Such software functions were excluded from the definition of “device” in the Food, Drug and Cosmetic Act by the 21st Century Cures Act. See: 21 USC § 360j(o). Software excluded includes certain software intended for administrative support of a health care facility, for maintaining or encouraging a healthy lifestyle, to serve as electronic patient records and for transferring, storing, converting formats, or displaying clinical laboratory test or other device data and results, findings by a health care professional with respect to such data and results, general information about such findings, and general background information about such laboratory test or other device.
[6] Adopted by the FDA as a guidance document: “Software as a Medical Device (SAMD): Clinical Evaluation: Guidance for Industry and Food and Drug Administration Staff” (8 December 2017), online: FDA 
[7] Defined in the working model as “all data relevant to the safety, effectiveness, and performance of a marketed SaMD product from a precertified manufacturer”.
[8] “User Session – Digital Health Software Precertification (Pre-Cert) Pilot Program” (10 May 2018), online: FDA 
[9] “Notice: Health Canada’s Approach to Digital Health Technologies” (10 April 2018), online: Health Canada
[10] Ibid. The other six key areas of focus listed in the notice are wireless medical devices, mobile medical apps, telemedicine, artificial intelligence, cybersecurity and medical device interoperability.
[11] Food and Drugs Act, RSC 1985, c F-27.
[12] Medical Devices Regulations, SOR/98-282 [“Regulations”].
[13] “Scientific Advisory Panel on Software as a Medical Device (SAP-SaMD) – Questions” (26 January 2018), online: Health Canada
[14] Ibid. Question 2.1.

Recent Sandoz Inc. Petitions against AbbVie Result in Grant of Inter Partes Review of Patents Covering Methods of Treatment using Humira®

By Laura W. Smalley[1]

 

Humira®, used for the treatment of autoimmune diseases such as Crohn’s disease and rheumatoid arthritis, was the number one selling drug in the world in 2017.[2]  Because of the drug’s success, several competitors have sought to enter the market by developing biosimilars, including Amgen Inc. (“Amgen”), Boehringer Ingelheim and Samsung Bioepis.  AbbVie Biotechnology Ltd. (“AbbVie”) has assembled a shield of over 100 patents covering different formulations, methods of production and dosages of the drug.[3]  While biosimilars to Humira® have been approved by the Food and Drug Administration, they have not yet come to market in the United States. Settlements with Amgen and Samsung Bioepis have delayed the marketing of their Humira® biosimilars in the United States until 2023.[4]

 

The Patent Trial and Appeal Board (“Board”) has heard numerous petitions for inter partes review (“IPR”) relating to Humira®. Coherus BioSciences, Inc. filed ten IPR petitions from November 2015 through March 2017—two were dismissed; five denied institution and three resulted in determinations of unpatentability, which are on appeal to the United States Court of Appeals for the Federal Circuit.[5]  Boehringer Ingelheim also had two IPRs result in successful patentability challenges, which are also on appeal.[6] AbbVie thereafter sued Boehringer Ingelheim for patent infringement.  Amgen filed two unsuccessful challenges against Humira® patents, and thereafter settled patent infringement litigation over its biosimilar.[7]

 

Sandoz Inc. (“Sandoz”) filed eight IPR petitions against AbbVie in 2017.  The Board denied institution in four of these proceedings. On February 9, 2018, the Board denied Sandoz’s petition on U.S. Patent No. 9,512,216, disclosing a method of treating plaque psoriasis by subcutaneously administering a specific regimen of adalimumab (the active ingredient in Humira®).  On the same day, the Board denied Sandoz’s petition on U.S. Patent No. 8,802,100, which discloses stable aqueous pharmaceutical formulations comprising an anti-TNFα antibody.  On March 9, 2018, the Board denied institution of IPR2017-01987 and IPR2017-01988, which sought to challenge U.S. Patent Nos. 8,911,737 and 8,974,790.  These patents, titled “Methods of Administering Anti-TNFα Antibodies,” claimed, respectively, a method of treating Crohn’s disease by administering adalimumab and a method of treating ulcerative colitis by administering adalimumab.

 

The Board, however, granted Sandoz’s petitions in IPR2017-02105 and IPR2017-02106, finding that Sandoz had demonstrated a reasonable likelihood that it would prevail on demonstrating unpatentability of certain claims of the challenged patents.  The first proceeding involved U.S. Patent No. 9,090,689 B1 (“the ´689 patent”), titled “Use of TNFα Inhibitor for Treatment of Psoriasis,” which related to methods of treating disorders in which tumor necrosis factor alpha (TNFα) activity is detrimental by administrating the TNFα inhibitor adalimumab.  The second proceeding involved U.S. Patent No. 9,067,992 B2 (“the ´992 patent”), entitled “Use of TNFα Inhibitor for Psoriatic Arthritis,” which also related to methods of treating disorders in which TNFα activity is detrimental by administrating adalimumab.

 

IPR Challenging Method of Treating Moderate to Severe Chronic Plaque Psoriasis  

The ´689 patent discloses a method where the TNFα inhibitor is used to treat skin and nail disorders, such as psoriasis.  The patent disclosed a study demonstrating that adalimumab administered for 12 weeks was effective in treating moderate to severe chronic plaque psoriasis.

 

The independent claims of the ´689 patent disclose a method of administering adalimumab for the treatment of moderate to severe chronic plaque psoriasis, comprising filling the adalimumab into vessels and subcutaneously administrating 40g of adalimumab to the patient every other week.  Sandoz argued that the claimed methods of treatment were obvious under 35 U.S.C.  § 103.  The cited prior art references disclosed, among other things: (1) the results of a dose-ranging study showing that adalimumab administered subcutaneously in combination with methotrexate to rheumatoid arthritis patients every other week was better than a placebo; (2) describing studies demonstrating that TNFα targeted therapies (already shown to be a success with rheumatoid arthritis) were a new therapeutic option for patients with psoriatic arthritis and psoriasis; (3) describing a clinical trial demonstrating that treating psoriatic arthritis and psoriasis patients with another TNFα inhibitor improved their conditions; and (4) disclosing that patients with moderate or severe plaque psoriasis treated with another TNFα inhibitor experienced a higher decree of clinical benefit from the baseline.

Based on the references, the Board held that one of ordinary skill in the art would have had a reasonable expectation of success in using adalimumab in treating moderate to severe chronic plaque psoriasis and in using 40g of adalimumab administered every other week to treat moderate to severe chronic plaque psoriasis.  The record indicated that a person of ordinary skill in the art: (1) “knew that TNFα was implicated in the pathogenesis of chronic inflammatory diseases, including rheumatoid arthritis and psoriasis”; (2) “were using TNFα inhibitors to treat rheumatoid arthritis and to treat psoriasis based on the known role of TNFα in those conditions”; and (3) “would have predicted success in using adalimumab—one of the handful of TNFα inhibitors already known to treat rheumatoid arthritis—in treating moderate to severe chronic plaque psoriasis based on the successes [of other such drugs] in treating both rheumatoid arthritis and psoriasis.”  Further, the record demonstrated that a person of ordinary skill in the art “would have had a reason to use the same dose of adalimumab to treat both rheumatoid arthritis and moderate to severe chronic plaque psoriasis based on the prior art’s disclosure of using the same or similar doses and dosing regimens to effectively treat both disorders.”

 

IPR Challenging Method of Treating Psoriatic Arthritis  

The ´992 patent discloses a method where the TNFα inhibitor is used to treat disorders in which TNFα activity is detrimental, such as psoriatic arthritis.  The patent disclosed a study demonstrating that adalimumab administered for 24 weeks was “effective in treating erosive polyarthritis and radiographic disease progression” in patients with psoriatic arthritis.

 

The independent claims of the ´992 patent disclose a method of administering adalimumab for the treatment of moderate to severe psoriatic arthritis, comprising subcutaneously administrating 40g of adalimumab to the patient every other week.  Sandoz argued that the claimed methods of treatment were anticipated under 35 U.S.C. § 102 and/or obvious under 35 U.S.C.  § 103.  The cited prior art references disclosed, among other things: (1) the results of a study showing that adalimumab administered subcutaneously to psoriatic arthritis patients every other week was better than a placebo, and that a majority of the patients achieved an ACR20 response at week 24 and that a significant number of patients achieved an ACR70 response at week 24; (2) the results of a dose-ranging study showing that adalimumab administered subcutaneously in combination with methotrexate to rheumatoid arthritis patients every other week was better than a placebo; (3) describing studies demonstrating that TNFα targeted therapies (already shown to be a success with rheumatoid arthritis) were a new therapeutic option for patients with psoriatic arthritis and psoriasis; (4) describing a clinical trial demonstrating that treating psoriatic arthritis and psoriasis patients with another TNFα inhibitor improved their conditions; (5) describing a clinical trial involving another TNFα inhibitor which demonstrated that the drug was effective in treating psoriatic arthritis; and (6) disclosing several clinical studies where the patients were administered adalimumab which halted the damage of psoriatic arthritis.

 

Even though the Board held that the outcome limitations recited in the wherein clauses (that the patient achieves an ACR50 or ACR70 score at week 24 of the treatment) were entitled to patentable weight, it nevertheless held that the claims of the ´992 patent were anticipated by the first reference.  The Board also held that one of ordinary skill in the art would have had a reasonable expectation of success in using adalimumab in treating psoriatic arthritis and in using 40g of adalimumab administered every other week to treat psoriatic arthritis.

 

The record indicated that a person of ordinary skill in the art: (1) “knew that TNFα was implicated in the pathogenesis of chronic inflammatory diseases, including rheumatoid arthritis and psoriatic arthritis”; (2) “were using TNFα inhibitors . . . to treat rheumatoid arthritis and to treat psoriatic arthritis based on the known role of TNFα in those conditions”; and (3) “would have predicted success in using adalimumab—one of the handful of TNFα inhibitors already known to treat rheumatoid arthritis—in treating psoriatic arthritis based on the successes of [other such drugs] in treating both rheumatoid arthritis and psoriatic arthritis.”  The current record demonstrates “that a person of ordinary skill in the art would have had a reason to use the same dose of adalimumab to treat both rheumatoid arthritis and psoriatic arthritis based on the prior art’s disclosure of using the same or similar doses and dosing regimens to effectively treat both disorders.”
 

Nothing herein should be construed as legal advice or legal representation. Laura W. Smalley lsmalley@harrisbeach.com Harris Beach PLLC 99 Garnsey Road Pittsford, NY 14534

[1] Laura W. Smalley is a member of Harris Beach PLLC in its Rochester, NY office. Her practice focuses on protection and enforcement of intellectual property rights and clients’ development of their technology.

[2] https://www.biospace.com/article/unique-world-s-top-5-best-selling-drugs-in-2017.

[3] https://www.bloomberg.com/news/articles/2017-09-07/this-shield-of-patents-protects-the-world-s-best-selling-drug.

[4] https://www.reuters.com/article/us-abbvie-biogen/abbvie-samsung-bioepis-in-deal-humira-biosimilar-u-s-release-in-2023-idUSKCN1HC1SP

[5] http://www.biosimilarsip.com/2017/11/13/humiras-wall-patents-continues-come-attack.

[6] Id.

[7] Id.

FEDERAL CIRCUIT STAYS PTAB IPR PROCEEDINGS WHILE IT CONSIDERS TRIBAL SOVEREIGN IMMUNITY CLAIM

By John Hamilton [1]

On March 28, 2018, the Federal Circuit issued an order in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc.[2] requiring the Patent Trial and Appeal Board (PTAB) to halt inter partes reviews (IPRs [3]) initiated by generic drug producers Mylan, Teva Pharmaceuticals USA, Inc., and Akorn, Inc., related to a number of branded drug (Restasis®) patents [4] that the Saint Regis Mohawk Tribe (St. Regis) had acquired from and licensed back to Allergan, Inc., after initiation of the IPRs. Following the patents acquisitions, St. Regis asserted to the PTAB a claim of sovereign immunity and moved to terminate all IPR proceedings. The Federal Circuit has held that the sovereign immunity appeal divests the PTAB of jurisdiction over the entire matter, and that exclusive jurisdiction resides with the Court. [5]

The Federal Circuit case is an appeal from a February 23, 2018, order by the PTAB which rejected St. Regis’ sovereignty claim, found that the proceedings could continue against Allergan, and declined to stay the IPR proceedings. [6] In its analysis, the PTAB identified the sovereignty claim as one of first impression. Although the PTAB had made decisions regarding State Eleventh Amendment sovereignty in the context of IPR [7], there had been no decision applying tribal sovereign immunity, and the PTAB held it was not bound by the State cases. Additionally noted was that no state university had accepted a patent transfer from a corporate patentee for the purpose of avoiding IPR. The PTAB concluded that St. Regis “have not pointed to any federal court or Board precedent suggesting that FMC’s [8] holding with respect to state sovereign immunity can or should be extended to an assertion of tribal immunity in similar federal administrative proceedings.” The PTAB noted that “the immunity possessed by Indian Tribes is not co-extensive with that of the States”, and that “[a]s a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity.” [9] The PTAB found no evidence, however, that Congress intended Indian Tribe-owned patents to be immune to IPR under tribal sovereign immunity.

The PTAB provided a second reason for not terminating the proceedings. The Board analyzed the specific terms of the license back to Allergan and concluded that the arrangement conveyed “all substantial rights” in the patents to Allergan, including exclusive right to exploit the challenged patents for all FDA-approved uses, the right to sue for infringement, the right to sublicense, reversionary rights, the right to substantial litigation or licensing proceeds, the right to pay maintenance fees and control prosecution and other PTO proceedings, and the right to assign interests in the patents. The PTAB opined that the license left St. Regis with only “illusory or superficial” rights that do not provide a bar to IPR. The PTAB, therefore, held that Allergan should be treated as the “true owner” of the patent for the purpose of the IPR, and St. Regis a dispensable party, reasoning that in personam jurisdiction was not being asserted over St. Regis, rather in rem jurisdiction over the challenged patent. [10] It is worth noting that, by extension, the PTAB’s view of effective patent ownership may apply equally to State sovereigns and their corporate partners considering similar conveyance and licensing arrangements.

On March 16, 2018, St. Regis and Allergan appealed the PTAB’s rejection to the Federal Circuit and moved to stay the PTAB’s procedures until the Court decides their appeals. The Federal Circuit sua sponte expedited briefings and scheduled an oral hearing in June on the merits of the sovereign immunity claim and related issues. In light of the Court’s order, the PTAB’s IPR proceeding on the subject patents is stayed until granted leave by the Federal Circuit.

The high-profile dispute has garnered the attention of many interested parties [11], weighing in on both sides of the sovereignty matter, with opponents of the Tribe’s strategy dismissing the arrangement between St. Regis and Allergan as a “sham” or a “calculated technical ploy” in addition to a variety of more specific substantive objections. The House Judiciary Committee, Subcommittee on Courts, Intellectual Property and the Internet, held hearings in November on related issues. Multiple US Senators have characterized Allergan’s actions, including a one-time payment of $13.75 million plus annual payments of up to $15 million in return for the benefit of St. Regis’s invocation of sovereign immunity to avoid further legal challenges to the patents, as a “blatantly anti-competitive attempt to shield its patents from review and keep drug prices high.” [12] A bipartisan group of five senators introduced on October 5, 2017, bill S. 1948, which has been referred to the Committee on Indian Affairs, and which includes the provision, “Notwithstanding any other provision of law, an Indian tribe may not assert immunity as a defense in a review that is conducted under chapter 31 of title 35, United States Code.” If passed, the bill would appear to foreclose any future similar attempts at invoking tribal sovereign immunity to avoid IPR.

As noted, tribal sovereign immunity does not protect the patents from district court validity challenges, since the filing of suit waives immunity for such proceedings. As a result, Allergan’s arrangement with St. Regis did not prevent the District Court for the Eastern District of Texas from holding in October 2017 in Allergan, Inc. v. Teva Pharmaceuticals USA, Inc. et al. (2:15-cv-01455) that all of the asserted claims from the six Restasis® patents at issue (which are not co-extensive with those at issue in the IPR) are invalid as obvious over prior art. Judge William Bryson wrote that the court “has serious concerns about the legitimacy of the tactic that Allergan and the Tribe have employed. The essence of the matter is this: Allergan purports to have sold the patents to the Tribe, but in reality it has paid the Tribe to allow Allergan to purchase—or perhaps more precisely, to rent—the Tribe’s sovereign immunity in order to defeat the pending IPR proceedings in the PTO.” [13] Allergan has since appealed the invalidity decision to the Federal Circuit.

Critics of sovereignty “rental” arrangements have indicated that if this type of transaction is successful, it would weaken PTO review that is essential to a healthy patent system, and tribal immunity could threaten to limit judicial proceedings as well. [14] Any setbacks encountered to date by St. Regis with respect to the Restasis matter have not stopped Saint Regis from doubling down on the strategy, as it has entered into a similar arrangement with SRC Labs, LLC, with respect to patents they have asserted against Amazon [15] and Microsoft [16] with other corporate partners. In light of the invalidity determination for the Restasis patents, it may turn out that this particular tribal sovereign immunity dispute may become irrelevant in the short term to Allergan and Saint Regis. Regardless of the outcome, however, resolution of the broader legal effect of such arrangements on IPR is clearly needed.

[1] John Hamilton is a 12-year veteran of the FDA, and sole proprietor of the Law Office of John A. Hamilton LLC located west of Boston. He concentrates his practice in IP prosecution, transactions, and FDA counseling.

[2] Saint Regis Mohawk Tribe v. Mylan Pharms. Inc., Fed. Cir. Docket 18-1638.

[3] IPR2016-01127, IPR2016-01128, IPR2016-01129, IPR2016-01130, IPR2016-01131, and IPR2016-01132.

[4] U.S. Patent Nos. 8,629,111; 8,633,162; 8,642,556; 8,648,048; 8,685,930 and 9,248,191.

[5] Citing Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58 (1982); Princz v. Fed. Republic of Ger., 998 F.2d 1 (D.C. Cir. 1993); Apostol v. Gallion, 870 F.2d 1335 (7th Cir. 1989); and In re Graves, 69 F.3d 1147, 1149 (Fed. Cir. 1995).

[6] Mylan Pharms. Inc., Teva Pharms. USA, Inc., and Akorn Inc., Petitioners, v. Saint Regis Mohawk Tribe, Patent Owner. Paper 129.

[7] PTAB decision at 8. (citing Covidien LP v. Univ. of Fla. Research Found. Inc., Case IPR2016-01274 (PTAB Jan. 25, 2017) (Paper 21) (“Covidien”); Neochord, Inc. v. Univ. of Md., Case IPR2016-00208 (PTAB May 23, 2017) (Paper 28); Reactive Surfaces Ltd, LLP v. Toyota Motor Corp., Case IPR2016-01914, (PTAB July 13, 2017) (Paper 36). For example, the PTAB decided in Covidien that Eleventh Amendment sovereign immunity applied to PTAB proceedings and, therefore, insulated arms of a state, such as state universities, from PTAB actions absent consent. See also Ericsson v. Regents of the Univ. of Minn., IPR2017-01186, -01197, -01200, -01213, -01214, and -01219 (Dec. 19, 2017), in which the PTAB denied several motions to dismiss filed by the University of Minnesota in IPRs filed by Ericsson, ruling that the university had waived its Eleventh Amendment sovereign immunity as to IPR by asserting the challenged patents in district court litigation.

[8] Federal Maritime Comm’n v. South Carolina State Ports Authority, 535 U.S. 743 (2002) holding that “State sovereign immunity extends to adjudicatory proceedings before federal agencies that are of a ‘type . . . from which the Framers would have thought the States possessed immunity when they agreed to enter the Union.’”

[9] PTAB decision at 7, citing Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754 (1998).

[10] Id. at 16.

[11] For example, see letter from the Biotechnology Innovation Organization dated October 12, 2017, to the Senate Judiciary Committee, requesting a review of “numerous deficiencies” in the IPR system, and suggesting that it is the misuse of IPR, and not the assertion of sovereign immunity, that has introduced imbalance into the Hatch-Waxman Act framework. Papers were also filed by other sovereign tribes, scholars, public interest groups, and industry representatives. All briefs are available through the Patent Office’s public portal, available by searching for AIA Review Number IPR2016-01127.

[12] Letter dated September 27, 2017, from four US Senators to the Chairman and Ranking Member of the US Senate Judiciary Committee.

[13] Page 4 of Order dated 10/16/17 in Allergan Inc. v. Teva Pharms. USA, Inc. et al. (2:15-cv-01455).

[14] Testimony of William M. Jay before the House Judicial Committee on November 7, 2017.

[15] SRC Labs, LLC et al v. Amazon Web Services, Inc. et al., 2:17-cv-00547, E.D. Va.

[16] SRC Labs, LLC et al v. Microsoft Corporation, 1:17-cv-01172, E.D. Va.

FDA Provides Guidance Targeting More Efficient Generic Drug Application Submissions and Assessments

By John Hamilton [1]
The Food and Drug Administration (FDA) issued in January a “Good ANDA Submissions Practices” industry guidance (the Guide Notice, 83 FR 532, January 4, 2018) and a Manual of Policies and Practices MAPP 5241.3 entitled “Good ANDA Assessment Practices” (the MAPP) covering abbreviated new drug application (ANDA) assessment practices for the Office of Generic Drugs (OGD) and the Office of Pharmaceutical Quality (OPQ). With these documents, developed as part of FDA’s “Drug Competition Action Plan”, the agency seeks to decrease the number of review cycles to approve ANDAs that meet the requirements for approval. (Guide at 1; MAPP at 1.)

The Guide highlights common, recurring deficiencies that may lead to a delay in the approval of an ANDA with respect to (1) patents and exclusivities, (2) labeling, (3) product quality, and (4) bioequivalence (BE). The FDA hopes that identification of such common deficiencies will help applicants to avoid them. Approximately half of all ANDAs with generic drug review goals require three or more review cycles to reach approval or tentative approval. (Guide at 2.)

With regard to patent and exclusivity deficiencies, the Guide states that applicants have often not submitted to FDA written documentation in a timely fashion: (i) of their timely sending notice of a paragraph IV certification [2] and of the dates that the patent owner(s) and new drug application (NDA) holder received notice of a paragraph IV certification; (ii) that the patent owner(s) and/or exclusive patent licensee have filed a legal action; and/or (iii) that includes a statement that the patent owner(s) and exclusive patent licensee did not file a legal action within 45 days of receipt of the notice of the paragraph IV certification. (Guide at 5-6.)

Applicants have also on occasion failed to notify FDA, and/or update the patent certification, in a timely manner with regard to decisions or developments in litigation brought against the applicant, such as adverse judgements, appeals, settlements, or changes to information related to patent(s) listed for the reference listed drug in FDA’s Approved Drug Products With Therapeutic Equivalence Evaluations (the Orange Book.) (Guide at 6-7.) Applicants have either: (i) provided “serial submissions” of amendments with paragraph IV certifications and sent multiple notices of paragraph IV certifications in anticipation of a newly issued patent being listed in the Orange Book, which is not permissible under FDA’s regulations [3]; or (ii) failed to submit an appropriate patent certification or statement for each newly listed patent or revised patent information. (Guide at 7.) FDA recommends that applicants monitor the Orange Book and address exclusivities in a timely manner to avoid unnecessary delays to ANDA approval.

Regarding labeling deficiencies, applicants have improperly submitted draft container labels that do not accurately portray the formatting factors used with the final printed labels, and/or provided container labels with insufficient color differentiation for the different strengths of a drug product. (Guide at 9-10.) The Guide identifies numerous product quality deficiencies, including insufficient drug master file information, validation documentation, and information regarding manufacturing and impurities. (Guide at 13-25.) Finally, with respect to BE deficiencies, applicants have submitted clinical summary tables that are incomplete and/or improperly prepared. (27)

The MAPP establishes good ANDA assessment practices for the OGD and the OPQ, with a stated goal of increasing their operational efficiency and effectiveness. Although nothing in the MAPP alters the regulatory requirements for ANDA approval, the MAPP makes significant changes to FDA’s ANDA assessment practices. A more streamlined generic drug assessment process is set forth, which clarifies the roles and responsibilities of primary assessors, secondary assessors, and division directors, and includes new templates and assessment tools that are expected to make each cycle of the review process more efficient and complete. When the FDA determines that an ANDA cannot be approved in its current form, reviewers are instructed to: (1) provide more detail to generic-drug applicants to explain the deficiencies with the application; (2) outline details on how this information should be provided; and (3) provide more detail, when available, on the additional information that the generic-drug applicant must provide to the agency to support an approval decision during the next application cycle. (MAPP at 3-5)

The Guide and MAPP comprise part of the FDA’s efforts to encourage generic-drug competition, which also include plans to accelerate generics approvals, and address citizen petition process abuses. If successful, improvement to the submission and assessment processes will benefit industry, FDA, and the public.

[1] John Hamilton is a 12-year veteran of the FDA, and sole proprietor of the Law Office of John A. Hamilton LLC located west of Boston. He concentrates his practice in IP prosecution, transactions, and FDA counseling.

[2] An ANDA applicant generally must submit to FDA one of four specified certifications regarding the patents for the RLD under section 505(j)(2)(A)(vii) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 355(j)(2)(A)(vii)).

[3] 81 FR 69610 (Oct. 6, 2016).

 

District Court Dismisses Biosimilar Applicant’s Complaint for Declaratory Judgment against Reference Product Sponsor under the Biologics Price Competition and Innovation Act of 2009

By Laura W. Smalley [1]

Amgen Inc. (“Amgen”) sued Genentech, Inc. (“Genentech”) and City of Hope in the United States District Court for the Central District of California (“Central District of California”) on October 6, 2017.  This lawsuit was apparently the first action brought by a biosimilar applicant against a reference product sponsor under the Biologics Price Competition and Innovation Act of 2009 (the “Act”).  Amgen sought a declaration of non-infringement, invalidity and/or unenforceability of 27 patents relating to an antibody product (bevacizumab) marketed by Genentech under the brand name Avastin®.  Genentech and City of Hope sued Amgen in the United States District Court for the District of Delaware (“District of Delaware”) for patent infringement, also on October 6, 2017, claiming that Amgen failed to complete the “patent dance” procedures because it did not provide manufacturing information as required by the Act and did not satisfy its obligations under § 262(l)(5).  On October 18, 2017, Genentech and City of Hope filed another complaint against Amgen in the District of Delaware, asserting that the parties completed the final step of the “patent dance”—the exchange of lists of patents pursuant to § 262(l)(5)—on October 13, 2017, and that plaintiffs filed suit to address Amgen’s  infringement.

Genentech and the City of Hope moved to dismiss the Central District of California action under Rule 12(b)(1) of the Federal Rules of Civil Procedure (hereinafter “Rule 12(b)(1)”), claiming that Amgen’s lawsuit was anticipatory and that Amgen was barred from seeking declaratory relief because it failed to comply with the Act’s detailed pre-litigation procedures. Amgen claimed that it was permitted to seek declaratory relief because 42 U.S.C. § 262(l)(9) lifts the limitations on declaratory judgment actions relating to patent infringement, enforceability or validity once the applicant provides notice of commercial marketing.  The Central District of California, Judge George H. Wu, dismissed Amgen’s complaint, declining to exercise his discretion to hear the case.  The district court found that the Act did not authorize Amgen to side-step the Act’s negotiation and exchange requirements and sue on any patent simply because Amgen filed its notice of commercial marketing under 42 U.S.C. § 262(l)(8)(A). Allowing that result would vitiate the Act’s provisions, which provide for a “first phase” of litigation where the parties collaborate to identify patents that they want to litigate immediately and then a “second phase” of litigation after the notice of commercial marketing wherein the parties can litigate the patents not selected for the first phase of litigation.  The district court declined to exercise its discretion to hear the case because Amgen’s suit was “highly anticipatory” and it was not entitled to “short circuit” the Act’s requirements by filing litigation in California before completing the negotiations contemplated by the Act.

 Background

Genentech’s Avastin^® brand of bevacizumab was first approved on February 26, 2004.  In 2011, Amgen announced that it would develop and commercialize several oncology antibody biosimilar drugs, including a biosimilar version of Avastin^®. Amgen thereafter developed Mvasi™, including a proprietary cell line and cell culture used to produce the antibody that is the active ingredient of Mvasi™. Amgen also conducted numerous clinical studies in which it successfully tested Mvasi™ in humans.  On November 14, 2016, Amgen filed its Biologics License Application (“Application”) for Mvasi™ pursuant to 42 U.S.C. § 262(k).

The Act

The Act created a new pathway for FDA review and approval of “biosimilar” biological products, as well as new mechanisms to resolve patent disputes that may arise with respect to such products.  A biosimilar is a biological product that is “highly similar” to a biological product that has already been approved by the FDA. The Act provides an abbreviated pathway for FDA approval of biosimilars.  42 U.S.C. § 262(k). Because the reference product sponsor may have patents relating to the biological product, as well as patents related to therapeutic uses for and/or processes used to manufacture the biological product, and in light of the fact that patent disputes may arise between the reference product sponsor and the biosimilar applicant, the Act “sets forth a carefully calibrated scheme for preparing to adjudicate, and then adjudicating, claims of [patent] infringement.”  Sandoz Inc. v. Amgen Inc., 137 S.Ct. 1664, 1670 (2017) (citing 42 U.S.C. § 262(l)).

The Act’s so-called “patent dance” procedures describe a process whereby the reference product sponsor and the biosimilar applicant exchange information in advance of a specific and statutorily-prescribed action for patent infringement.  First, the applicant provides the sponsor a copy of its subsection (k) application and “such other information that describes the process or processes used to manufacture the biological product that is the subject of such application.”  42 U.S.C. § 262(l)(2)(A).  The reference product sponsor is then required to provide a list of patents for which it “believes a claim of patent infringement could reasonably be asserted” by the manufacture, sale or importation of the biological product that is the subject of the subsection (k) application.  42 U.S.C. § 262(l)(3)(A).  Then, the applicant must provide a “detailed statement” describing, “on a claim by claim basis,” the basis for its opinion that the patents listed by the sponsor are invalid, unenforceable, or will not be infringed by the commercial marketing of the biological product that is the subject of the subsection (k) application.  42 U.S.C. § 262(l)(3)(B)(ii)(I).  The Act then requires the reference product sponsor to provide the applicant a “detailed statement”: (1) describing with respect to each patent for which the applicant has provided a detailed statement, “on a claim by claim basis,” the basis for the sponsor’s opinion that the patent will be infringed by the commercial marketing of the biological product, and (2) responding to the applicant’s statements concerning validity and enforceability.  42 U.S.C. § 262(l)(3)(C).

After the information exchange, the Act requires the reference product sponsor and the applicant to engage in good faith negotiations to agree on which patents listed by the applicant or the reference product sponsor will be the subject of a statutory action for patent infringement.  42 U.S.C. § 262(l)(4).  If agreement cannot be reached, the Act provides a mechanism of further exchanges to determine which patents will be the subject of an early patent infringement action.  42 U.S.C. § 262(l)(4)(B)‑(5).  Paragraph (l)(8) of the Act requires the applicant to provide 180 days’ notice to the reference product sponsor prior to the first commercial marketing of the biological product.  42 U.S.C. § 262(l)(8)(A).  Once the applicant’s notice of commercial marketing is received by the reference product sponsor, the limitations under the Act on bringing a declaratory judgment action are lifted.  42 U.S.C. § 262(l)(9).

The Parties’ Exchanges under the Act

Amgen received notification from the FDA that its application had been accepted for review on January 4, 2017. Genentech wrote Amgen on January 13, 2017 requesting information relating to the processes used in the production of Mvasi™, and including “exemplary citations” to approximately 30 patents. On January 20, 2017, Amgen provided its disclosure pursuant to 42 U.S.C. § 262(l)(2)(A), containing “extensive information regarding the manufacturing processes used to make Mvasi™.”  Amgen believed that its disclosure contained sufficiently detailed information regarding its biosimilar product and manufacturing process to satisfy its production obligations under § 262(l)(2)(A). Genentech requested additional information, allegedly insisting that Amgen had an obligation to produce “all” documents relating to its manufacturing processes. Amgen allegedly communicated its willingness to reasonably cooperate with Genentech in response to specific requests for “noncumulative” information.  Rather than making additional requests, Genentech filed suit against Amgen on February 15, 2017 in the District of Delaware, alleging that Amgen had violated its obligations under the Act.  Genentech’s complaint was dismissed and it did not, as invited by the district court, file an amended complaint alleging patent infringement pursuant to 42 U.S.C. § 262(l)(9)(C).

On March 24, 2017, Genentech provided Amgen with its list of patents pursuant to 42 U.S.C. § 262(l)(3)(A)—those that it believed reasonably could be asserted against Amgen’s proposed biosimilar based on a review of Amgen’s Application.  The list included 27 patents. Amgen thereafter provided Genentech on May 23, 2017 its detailed statement pursuant to § 262(l)(3)(B)(ii)(I) describing on a claim by claim basis why it believed the patents on Genentech’s list were not infringed, or are invalid and/or unenforceable.  Genentech’s § 262(l)(3)(C) statement, received by Amgen on July 22, 2017, allegedly did not address all of the patents identified in Amgen’s (3)(B) statement. The parties subsequently exchanged correspondence regarding Genentech’s infringement contentions and § 262(l)(3)(C) statement, but Genentech did not withdraw any patents or claims from its § 262(l)(3)(A) list.

On September 14, 2017, the FDA approved Amgen’s Mvasi™ as a biosimilar to Genentech’s Avastin^®, making it the first biosimilar approved in the United States for the treatment of cancer. The parties’ negotiations under § 262(l)(4) ended on September 29, 2017 without agreement on a final list of which patents on Genentech’s (3)(A) list would be the subject of an action for patent infringement under § 262(l)(6).

On October 6, 2017, Amgen provided notice of commercial marketing for its Mvasi™ biosimilar to Genentech pursuant to 42 U.S.C. § 262(l)(8)(A). Amgen’s California lawsuit, also filed on October 6, 2017, involves the 27 patents identified by Genentech on the list of patents it provided pursuant to 42 U.S.C. § 262(l)(3)(A), thereby representing that those patents could reasonably be asserted against Amgen if it were to manufacture, use, offer for sale or sell in the United States, or import into the United States, its Mvasi™ biosimilar.  Amgen seeks a declaratory judgment of patent non-infringement, invalidity and/or unenforceability against Genentech and City of Hope, which has an interest as the co-owner of one or more of the patents-in-suit.  Genentech alleges that there is “a real, substantial and justiciable controversy” between the parties concerning whether commercial marketing of its Mvasi™ biosimilar would infringe any valid and enforceable claim of the patents-in-suit.  Genentech and City of Hope moved to dismiss the complaint under Rule 12(b)(1).  The parties subsequently completed the negotiations over the § 262(l)(5) list on October 13, 2017.

The Delaware Lawsuit

Hours after Amgen filed its complaint in the Central District of California, Genentech and City of Hope filed a complaint against Amgen in the District of Delaware. The complaint alleges that Amgen refused to provide Genentech with any information regarding its manufacturing processes except the Application. Further, although Genentech provided a list of “other information” relevant to its patent assessment 10 days before Amgen’s production under § 262(l)(2)(A) was due, Amgen ignored this “targeted request” and took the position that producing the Application alone satisfied its obligations under the Act.  The redacted portions of the complaint also reference a promise allegedly made by Amgen relating to the timing of its marketing. Genentech also alleges that Amgen’s manufacturing activities are not protected from infringement pursuant to 35 U.S.C. § 271(e)(1).

Genentech claims that Amgen refused to complete the activities required to determine the scope of the statutory action for patent infringement as required by § 262(l)(4) and/or (l)(5). Under the Act’s procedures, Genentech—but not Amgen—would have had the opportunity to file an action for patent infringement in the appropriate venue of its choosing. Genentech alleges that Amgen sought to delay the initiation and, by extension, the termination of the negotiations required by § 262(l)(4) in order to prevent Genentech from filing suit. According to Genentech, Amgen, following a lengthy and unexplained delay, agreed to an in-person meeting to initiate § 262(l)(4) negotiations.  At that meeting, Genentech proposed to Amgen that the litigation pursuant to § 262(l)(6) encompass all the patents asserted in Genentech’s list of patents. Amgen disagreed, but suggested it would provide a counter-proposal concerning the scope of the litigation.  Amgen never sent a counter-proposal but, instead, sent Genentech a letter stating that the 15-day window for “good faith negotiations” had elapsed and that it would “be in touch regarding § 262(l)(5).” On October 6, 2017, Amgen sent Genentech another letter asking if Genentech was “available to conduct § 262(l)(5) negotiations next week.” That letter did not mention that Amgen had served Genentech with notice pursuant to § 262(l)(8) that it intended to begin commercial marketing nor that it had, just hours earlier, filed a lawsuit against Genentech in the Central District of California.  Genentech alleges that Amgen purposefully tried to deprive it of its rights under the Act to thoroughly evaluate potential infringement before Amgen’s biosimilar comes to market and of its right to select a forum for litigation pursuant to the Act.  The complaint alleges infringement of 24 patents, and seeks a declaratory judgment and additional appropriate relief, specifically an order declaring that Amgen’s actions are contrary to the Act and that the manufacture, use, offer for sale, and/or sale of Amgen’s proposed biologic product infringes Genentech’s intellectual property rights.

On October 10, 2017, Amgen sought to transfer the case to the Central District of California under 28 U.S.C. § 1404(a) on the grounds of inconvenience.  Genentech opposed the transfer, claiming that Amgen’s lawsuit was anticipatory and entitled to no deference in the transfer analysis. Genentech also argued that the forum was not inconvenient because Genentech is incorporated in Delaware and has litigated in Delaware numerous times.

 On October 18, 2017, Genentech and City of Hope filed another complaint against Amgen in the District of Delaware, asserting that the parties completed the final step of the “patent dance”—the exchange of lists of patents pursuant to § 262(l)(5)—on October 13, and that plaintiffs promptly filed suit as required by the Act to address Amgen’s § 271(e) infringement.  The 25 patents at issue in this suit include the 24 patents at issue in the first Genentech action.  Amgen also moved to transfer the new action to the Central District of California.

On December 13, 2017, Genentech and City of Hope filed an amended complaint, asserting an additional patent based on a November 2 supplement to Genentech’s § 262(l)(3)(A) list.  The amended complaint also seeks declaratory judgment (1) for violations of the exchange and negotiation provisions of the Act, and (2) under 42 U.S.C. § 262(l)(9)(B) for violation of alleged representations made by Amgen that it would not market its biosimilar prior to a certain date.[2]  The date appears to be later than 180 days from Amgen’s notice of commercial marketing.  Genentech and City of Hope also seek a declaratory judgment that Amgen may not market its biosimilar earlier than represented.  Amgen has moved to dismiss the count seeking a declaratory judgment based on its representation on the grounds that: (1) it did not make a legally binding and enforceable representation concerning the expected date of its first commercial marketing; and (2) plaintiffs have not established reasonable reliance on the representation.  Amgen also alleges that the Court lacks subject matter jurisdiction over the claim because the relief sought by plaintiffs is not available under the Act.

The Motions to Dismiss and Transfer

 As noted above, Genentech and City of Hope moved to dismiss Amgen’s complaint in the Central District of California under Rule 12(b)(1).  Defendants claimed that Amgen’s lawsuit was anticipatory and that Amgen was barred from seeking declaratory relief because it did not comply with the Act’s detailed pre-litigation procedures.  The Act provides reference product sponsors “early, pre-litigation access to an applicant’s [license application] and other manufacturing information; time to assess the existence and extent of infringement; a pre-litigation process for identifying and narrowing patent disputes; and then, if necessary, the right to initiate an ‘immediate patent infringement action,’ even before the manufacturer obtains FDA approval.”

Amgen’s suit is barred by § 262(l)(9)(C) because it failed to provide “other information that describes the process or processes used to manufacture” its biosimilar under § 262(l)(2)(A) or to participate in “good-faith negotiations” over the scope of the first phase of the litigation under § 262(l)(4). Under Sandoz, failure to comply with the Act’s information exchange procedures bars the biosimilar applicant from bringing a declaratory judgment action against the reference product sponsor.  137 S.Ct. at 1666.  Section 262(l)(9)(B) bars an applicant who fails to complete a subsequent step in the patent dance procedure from bringing a declaratory judgment action against the sponsor.  Id.  Serving notice of commercial marketing did not lift these prohibitions against declaratory judgment suits by applicants.  Further, even if Amgen had complied with its obligations under the Act, defendants argued, the statue grants the applicant only a limited right to seek declaratory relief after notice of commercial marketing is given—the applicant may initiate the second phase of litigation contemplated by the Act.  Finally, even if  subject-matter jurisdiction existed, the district court should decline to exercise its discretion to hear the case because Amgen’s suit is anticipatory and inconsistent with the purposes of the Act.

Amgen argued that the district court should hear the case because: (1) § 262(l)(9) is a “claim-processing rule,” not a jurisdictional bar to suit; (2) its declaratory judgment action is expressly authorized under the Act; and (3) the suit was a good faith attempt to resolve the parties’ disputes.  The text of the relevant provisions demonstrates that the Act is non-jurisdictional because it lacks a “clear statement” showing that Congress imbued the Act’s procedural bar with jurisdictional consequences.  By its plain terms, § 262(l)(9)(A) allows either party to bring a declaratory judgment action after the applicant’s notice of commercial marketing is provided under § 262(l)(8)(A).  Further, Sandoz stated that the Act “facilitates litigation during the period preceding FDA approval” and therefore applicants may provide their notice of commercial marketing before receiving FDA approval, thereby triggering the parties’ ability to initiate declaratory actions.  137 S.Ct. 1669-70 (emphasis added).  Limiting declaratory judgment actions until after the § 262(l) process is complete would de facto delay litigation until after the date of FDA approval.

Amgen also maintains that its declaratory judgment action is proper because it timely provided its Application to Genentech, including sufficient information for Genentech to determine which patents it could reasonably assert against Amgen.  Further, nothing in the text of § 262(l)(9)(B) required completion of all steps under § 262(l) prior to seeking declaratory relief—unlike § 262(l)(9)(A), the text contains no express timing requirement.  Sandoz held, according to Amgen, that the ability to initiate declaratory judgment actions under the Act is triggered when the applicant gives the sponsor notice of commercial marketing, which can be done any time before or after receiving FDA approval.  In any event, Amgen did not fail to complete the various procedures specified in § 262(l)(9)(B).  The district court has jurisdiction and should exercise its discretion to hear the matter because the general rule in patent cases favors Amgen’s first-filed action and its suit is not anticipatory.  The suit was brought after Genentech failed to amend its complaint in the first Delaware action.  Finally, the Central District of California is the most convenient forum for the dispute because the parties are headquartered in California and the majority of evidence and witnesses are located in California.

The Decisions on the Motion to Dismiss the Central District of California Action

 The district court rendered two decisions—a tentative ruling and a final ruling—on the motion to dismiss.  The tentative ruling was stayed until the District of Delaware determined Amgen’s motion to transfer venue to the Central District of California.  The final ruling was rendered after the District of Delaware denied Amgen’s motion to transfer.

The district court granted the motion to dismiss Amgen’s complaint, declining to exercise jurisdiction over the dispute.  As stated in Sandoz, the Act “channels the parties into two phases of patent litigation” following the exchanges under the Act regarding the patents listed under § 262(l)(3).  137 S.Ct. at 1671.  “In the first phase, the parties collaborate to identify the patents that they would like to litigate immediately,” id., and the Act sets out a period for “good faith patent resolution negotiations.”  § 262(l)(4).  In this case, the parties negotiated, but were unable to reach agreement during the statutory period.  In the absence of agreement, the Act provides a final procedure to exchange patent lists to determine the patents on which the reference product sponsor can bring suit (§ 262(l)(5)) after which the sponsor has 30 days to initiate the first phase of litigation.

“The second phase [of litigation] is triggered by the [biosimilar] applicant’s notice of commercial marketing and involves any patents that were included in the parties’ § 262(l)(3) lists but were not litigated in the first phase.”  Sandoz, 137 S.Ct. at 1671. Here, after expiration of the statutory period for negotiating the patents to be included in the first phase, Amgen provided its notice of commercial marketing.  But, instead of proceeding with the final patent exchange procedures set forth by the Act,  Amgen filed suit for declaratory judgment as to all 27 patents on Genentech’s § 262(l)(3) list.  Genentech shortly thereafter filed suit in Delaware on 24 of the 27 patents.  After the parties completed the process under §262(l)(5), Genentech filed its “first phase” suit in Delaware, asserting 25 of the patents.

Here, although it was not convinced that either party “fully adhered to the letter or the spirit” of the Act, the district court exercised its discretion and declined to hear Amgen’s complaint for declaratory relief.  The Supreme Court’s decision in Sandoz “expressed an expectation” that “the parties finish the exchanges and negotiations contemplated by” the Act, and “allow the product sponsor the first opportunity to file suit on those first phase patents….”  The Act is structured so that after the applicant provides notice of commercial marketing, “either party can bring suit with respect to the leftover patents that were not selected for litigation through the parties’ negotiations and exchanges.”  Allowing Amgen to bring suit on any patent by filing its notice of commercial marketing would allow Amgen to sidestep the Act’s requirements.  “Such a result would override congressional intent and do away with the ‘carefully calibrated scheme for preparing to adjudicate, and then adjudicating, claims of infringement’ set out in the” Act (citing Sandoz, 137 S.Ct. at 1670).  The district court therefore rejected Amgen’s argument that it was entitled to bring suit on all the patents at issue after providing notice of commercial marketing but before finishing the Act’s exchange steps.

The district court did not determine the issue of whether the Act’s provisions were jurisdictional or simply “claim processing” rules, but declined to hear the case in its discretion. Given its timing, Amgen’s lawsuit was anticipatory and an attempt to shortcut the Act’s requirements.

     The Decision on the Motion to Transfer

The District of Delaware denied Amgen’s motion to transfer the two Delaware actions to the Central District of California on January 22, 2018.  Amgen argued that the factors that traditionally guide the court’s analysis on a motion to transfer weighed heavily in its favor, and that transfer was warranted under the first-to-file rule.

The district court found that the private interest factors did not favor a transfer because plaintiffs’ choice of forum was entitled to great weight.  Genentech was incorporated in Delaware and it was rational and legitimate for a plaintiff to sue where the defendant (Amgen) was also incorporated.  While the development of the accused biosimilar occurred in California, it is sold nationwide.  While all of the parties are physically located in California, litigating in Delaware would not impose an undue financial burden in light of the parties’ size and resources.  Only seven inventors were clearly within the subpoena power of the Central District of California but not within the subpoena power of the District of Delaware.  Further, both courts were in a similar position in terms of familiarity with the parties and the patents at issue. Based on all of the factors, the district court determined that Amgen had not carried its burden of demonstrating that transfer was warranted.

Finally, the district court denied transfer under the first-to-file rule because it found that Amgen’s suit in California was anticipatory.  The convenience factors, in addition to the anticipatory nature of the California action, weighed against giving the California litigation priority status.

[1] Laura W. Smalley is a member of Harris Beach PLLC in its Rochester, NY office. Her practice focuses on protection and enforcement of intellectual property rights and clients’ development of their technology.

[2] Based on the briefing, the representation appears to: have been made in response to Genentech’s list under 42 U.S.C. § 262(l)(3)(A); and relate to a statement or agreement that Amgen would not market its biosimilar until one or more of the Genentech patents had expired.

REGULATORY EXCLUSIVITY UPDATE: AMGEN V. HHS, CHALLENGING FDA’S INTERPRETATION OF PEDIATRIC EXCLUSIVITY STATUTE’S RESPONSE REQUIREMENT

By John A. Hamilton [1]

On January 26, 2018, the U.S. District Court for the District of Columbia issued a memorandum opinion and order in Amgen v. Hargan et al. [2] (the Opinion) regarding motions and cross-motions for summary judgement relating to the Food and Drug Administration’s (FDA) denial of Amgen’s request for pediatric market exclusivity for Sensipar® (cinacalcet hydrochloride). Under the Food and Drug Modernization Act of 1997 and Best Pharmaceutical for Children Act (2002), six months of market exclusivity may be granted to the sponsor of a brand-name drug if the sponsor conducts pediatric studies that “fairly respond” to a “written request” from the FDA. 21 U.S.C. § 355a(d)(4). Written requests generally detail specific study-design requirements. To become eligible for pediatric exclusivity, the New Drug Application (NDA) holder must formally accept FDA’s written request in its entirety, though the NDA holder may request amendments up until submission of its final report. Id. § 355a(d)(2)(A). To complete the grant of pediatric exclusivity, the study reports must be “submitted to and accepted” by the FDA. 21 U.S.C. § 355a(b)(1).

The Amgen case has centered on the interpretation of the “fairly respond” requirement, in the context of pediatric studies submitted in relation to FDA written requests. The Opinion describes an ‘evolution’ of FDA’s interpretation of the “fairly respond” statutory language, owing in part to the decision in Merck & Co. v. FDA, 148 F. Supp. 2d 27 (D.D.C. 2001), which concluded that FDA’s denial of pediatric exclusivity “for failure to meet a single term of a written request would not be in accordance” with the statute. Id. The Opinion also cites the letter decision issued by the Deputy Director for Clinical Science, Center for Drug Evaluation and Research on August 2, 2017, resolving Amgen’s administrative appeal of the Sensipar® exclusivity denial, wherein the FDA indicated that the “fairly respond” requirement could be satisfied even where “specific terms” of the written request are not met, if the agency, “apply[ing] its scientific expertise,” determines that the underlying “objectives of the [written request] have . . . been met.” Id. That is, the studies will be accepted if the FDA determines that the studies yielded information that is “clinically meaningful across all age groups and uses cited in the” written request. Id.

At the urging of Amgen, in May 2010 the FDA issued a written request asking that Amgen conduct pediatric studies of Sensipar®. Per the factual background set forth in the Opinion, the written request had been preceded by five amendments leading to a final, operative version requiring completion of four clinical studies. Id. A partial clinical hold affected the ability to complete “Study 3”, which focused on the drug’s safety in the youngest pediatric patients. In late 2015, the FDA rejected Amgen’s request to lower the minimum number of completers for Study 3 from 15 to four patients. Amgen submitted the studies as completed and, on May 22, 2017, the FDA denied Amgen’s request for pediatric exclusivity, where the only discrepancy between Amgen’s studies and the written request was “the number of completers” for Study 3. Id. The FDA concluded that Amgen’s studies did not “fairly respond” to the written request because the Agency could not draw “any conclusions about the safety” of the drug in a key age group—patients aged 28 days to < 6 years—because of “Amgen’s failure to provide sufficient safety data.” Id.
On May 25, 2017, Amgen filed a Complaint and a Motion for Temporary Restraining Order and/or Preliminary Injunction, “to compel the FDA” to accept Amgen’s reports and to grant pediatric exclusivity for Sensipar®. (Compl. ¶ 1). Amgen claimed (1) that the FDA’s interpretation of “fairly respond” was contrary to the pediatric exclusivity statute under the Administrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq., (Compl. ¶¶ 50–56); (2) that the FDA’s denial of pediatric exclusivity for Sensipar® was arbitrary and capricious because the FDA treated Amgen differently from similarly situated entities and refused to consider evidence on the challenges of enrolling participants in Study 3, (Compl. ¶¶ 76–88); and (3) that the FDA’s application of its “fairly respond” standard to Amgen “without any notice” standard violated Amgen’s procedural due process guarantees of the Fifth Amendment to the United States Constitution, (Compl. ¶¶ 89–90). The FDA responded that its interpretation of “fairly respond” is entitled to deference under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984); that it correctly and fairly applied the standard in rejecting Amgen’s studies; and that Amgen was fully aware of the FDA’s interpretation. Id.
The Opinion relates to summary judgement motions and cross-motions regarding these issues. With regard to the FDA’s interpretation of the “fairly respond” statutory requirement, the Court applied the two-step inquiry set forth in Chevron. Safari Club Int’l v. Zinke, 878 F.3d 316, 326 (D.C. Cir. 2017). First, in finding no unambiguously expressed intent by Congress on the construction of the requirement, the Court inferred that Congress must have intended to confer interpretative authority on the FDA. Id. The Court rejected Amgen’s arguments that its efforts to complete the studies were exhaustive and expensive and met the standard as untenably focused on the sponsor’s efforts rather than the studies themselves. Id. Second, the Court examined the FDA’s two-prong interpretation noted above that the “fairly respond” requirement could be met by either perfect compliance with the written request, or by studies that generate information that is clinically meaningful, and found the interpretation to be eminently reasonable in light of the goals of the statute and “rationally related” to those objectives. Thus, the Court deferred to the FDA’s statutory construction. Id.

With regard to Amgen’s arguments that FDA’s application of the “previously unannounced” interpretation of “fairly respond” violated the “fair notice” principle of the APA and the due process clause, and constituted impermissible retroactive rulemaking, the Court found that it is common for regulatory agencies to set forth their statutory interpretations in the adjudicative process. Id. Further, the FDA’s adoption of a more generous reading of the statute rather than requiring perfect compliance with the written request does not constitute an unfair surprise. Id. Citing Am. Tel. & Tel. Co. v. FCC, 454 F.3d 329, 332 (D.C. Cir. 2006), the Court noted that “[r]etroactivity is the norm in agency adjudications no less than in judicial adjudications”, and that in this case FDA’s retroactive application of its “clinically meaningful information” standard did not work a “manifest injustice” that could lead to setting aside the agency decision under legal principles set forth in Am. Tel. & Tel. Id.

With respect to Amgen’s arbitrary and capricious claim, the Court granted summary judgment to the FDA in part and to Amgen in part, and remanded in a limited manner the matter to the FDA for further consideration of whether its Amgen decisions rise to the level of inconsistent treatment without an adequate explanation when compared to a prior approach taken with respect to a potentially similarly situated entity (citing Burlington N. & Santa Fe Ry. Co. v. Surface Transp. Bd., 403 F.3d 771, 776 (D.C. Cir. 2005)). Amgen contended that the FDA’s decisions granting pediatric exclusivity for Orencia® (abatacept) and Ortho Tri-Cyclen® (ethinyl estradiol; norgestimate) are inconsistent with its denial for Sensipar®, and that the agency has failed to “provide a legitimate reason” for treating Sensipar® differently. Id. The Court found the former precedent unconvincing, but with regard to Ortho Tri-Cyclen® found the FDA’s administrative record lacking a reasoned explanation and substantial evidence for potential disparate treatment. On remand, the FDA needs to explain, if possible, said rationale and identify the relevant evidence for its conclusions in the administrative record. Id.

A final open question raised in the Opinion is whether the matter should be remanded with or without vacatur of the FDA’s denial of pediatric exclusivity. Rather than decide the issue without input from the parties, the Court ordered the parties to appear for a status conference: (1) to address whether the limited remand required by this decision should be with or without vacatur; and (2) to develop a schedule for the FDA promptly to address the Ortho Tri-Cyclen® precedent on remand.

[1] John Hamilton is a 12-year veteran of the FDA, and sole proprietor of the Law Office of John A. Hamilton LLC located west of Boston. He concentrates his practice in IP prosecution, transactions, and FDA counseling.

[2] Amgen v. Eric D. Hargan, Acting Secretary, Department of Health and Human Services et al., and Teva Pharmaceuticals USA, Inc. et al. (Civil Action No. 17-1006). Generic drug manufacturers and ANDA applicants Teva Pharmaceuticals USA, Inc., Barr Laboratories, Inc., Watson Laboratories, Inc., and Amneal Pharmaceuticals LLC are intervenor-defendants.

FOOD AND DRUG COMMITTEE PRESENTS TRACK SESSION AT MID-WINTER INSTITUTE

  By Lynn C. Tyler [1]
On Friday afternoon of the AIPLA’s recently-concluded Mid-Winter Institute in LaQuinta, California, the Food and Drug Committee was honored to present a track session titled, “New Frontiers: Advancing Technology and the Evolving IP Landscape.”
Jeremy McKown, Associate Patent Counsel with Johnson & Johnson, was the first speaker and addressed patent exhaustion after Impression Prods., Inc. v. Lexmark Int’l, Inc., 137 S. Ct. 1523 (2017). In that case, Lexmark sold printer ink cartridges under two different plans: (i) at full price which permitted buyers to use them as they wished, and (ii) at a discounted price discount, subject to an express single-use/no-resale restriction. Some of the cartridges sold in foreign countries and all of the domestically sold cartridges at issue were sold subject to the single-use/no-resale restriction. Impression Products later acquired restricted cartridges to resell them in the United States after a third party had physically modified them to enable re-use in violation of the single-use/no-resale restriction.
Jeremy described the holding of Impression Products as: “A patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose on the location of the sale.” As noted above, both domestic and foreign sales were at issue and the conclusion applies to both. The Court did suggest that post-sale restrictions could be enforced through contract law, but not patent law.
Jeremy discussed the implications of Impression Products for sales in the EU. He noted the EU is the region where industry sees the most parallel imports (PI), driven by price differences among different EU member states. For example, prices for pharmaceuticals are typically set by the governments of each member state reflecting national policy considerations and social security systems. Importers take advantage of resulting price differences between member states by purchasing pharmaceuticals in low price markets and reselling them in higher price markets. In the EU, the first unrestricted sale of a patented item within the EU exhausts the patentee’s control over that item.
Jeremy discussed the following practical considerations, among others, for counsel advising clients confronting these issues:
• Reconsider selling products in low price / margin countries
• Manage Distribution of Products in Least Developed and Developing Countries
• Appropriate contracts with Distributors and Licensees
• Understand market share / opportunity
• Pricing
• Renegotiate Contracts/Licenses:
• Can you license/lease your product?
• Do you have a product that is used once, or needs/can be recycled/sterilized?
• Draft agreements to include provisions supporting a potential breach of contract claim since a patent infringement claim is no longer available
• Limited use license?
• Importation Rules / Regulations
• Regulatory hurdles for importing into U.S. or other countries?
• Are U.S. labels different than OUS labels (or among countries)?
• Legislation

Ray Harmuth, a Vice President at Bayer CropScience, was the second speaker and gave a presentation titled, “Farming in the Digital Age.” Ray noted that the modern farm is a highly digital environment and the tractor has become a highly sophisticated collector of information. Further, many of the pieces of equipment attached to the tractor include their own sensors and digital data collection systems which transmit the collected data over cell phone or wireless WiFi systems to the grower’s personal computer. There are many parties interested in some or all of this data, including but not limited to: the grower, suppliers, consultants, lenders and others with a financial interest in the grower’s operations, food processors and retailers, and government entities.
Ray then identified a host of legal issues for practitioners in this space to consider:
• All the standard data issues are in play
• Data agreements regarding
• Who will own it
• Individually or jointly with others
• Who will collect it
• How will it be used
• How long will it be kept
• Will it be licensed
• Exclusively or non-exclusively
• Who will pay, who will receive and for how long
• And of course negotiation, arbitration ,and/or litigation to resolve differences that so often develop when agreements are construed differently by parties over time
• Patentable inventions
• In equipment used to collect the data
• In methods and processes for manipulating or using the data
• This includes “agroinformatics” such as algorithms to optimize methods and outputs based upon inputted data
• Interesting additional possibilities
• Divided creation
• Divided Infringement
• Software and apps raise IP issues
• Implicates issues of copyrights
• Again, agreements are needed
• Again, dispute resolution means are needed
Last, but certainly not least, Larry Millstein, a Director with Millen, White, Zelano & Branigan, PC, addressed tips for the IP lawyer working with startup companies. Among the challenged he noted in working with startups are that they are typically (1) naïve about IP and IP-related costs, (2) cash poor, (3) understaffed, (4) technology-focused, (5) on a steep learning curve, (6) entangled with other institutions, such as universities and governmental agencies, (7) continually on the brink of failure. Particularly in the biotech and pharmaceutical areas, their products face long time lines to success and there is a high rate of failure (for both products and companies).
The cash position of the typical start-up leads naturally to issues with fee arrangements and other aspects of the lawyer’s engagement. The lack of IP sophistication requires the lawyer to explain carefully, and perhaps repeatedly, investigate, and document seemingly basic issues such as:
• Patents / Right to exclude, not to practice
• FTO / Other’s patent rights
• US Patent / US only etc.
• Claims / Define the patented subject matter
• Disclosure / Necessity, US vs. Int’l
• Inventorship
• Assignment and License
Larry noted that when it comes time for the startup to cash in or cash out, the party(ies) providing the money will have experienced counsel examining inventorship, ownership, issued patents, pending applications, and other IP matters with a fine-toothed comb, so it has to be done right from the beginning, notwithstanding the cost pressures. For similar reasons, he strongly recommended that if at all possible provisional applications be treated like standard applications.
If the client will seek international protection, Larry stressed the importance of understanding the difference between US standards and those of other jurisdictions on issues such as support, enablement, prior art, novelty, inventive step, claiming language, multiple dependency practice, incorporation rules, and reliance on IPRPs. He recommended knowing the major conundrums and having proactive foreign associates. He concluded with specific examples from support requirements in the EU and double-patenting practice in Canada.
The Committee again thanks Messrs. Harmuth, McKown, and Millstein for their presentations and sharing their wealth of experience in the respective areas.
The slides from the three presentations are available on the Food and Drug Committee page on the AIPLA’s website (www.aipla.org, Committee Center, Committee Pages, Food and Drug).

[1] Lynn C. Tyler is a partner and registered patent attorney in the Indianapolis office of Barnes & Thornburg LLP. He concentrates his practice in intellectual property litigation and FDA counseling. He is chair of the Food and Drug Committee