UPDATE IN AMGEN V. SANDOZ FILGRASTIM AND PEGFILGRASTIM LITIGATION: FEDERAL CIRCUIT FINDS STATE LAW CLAIMS PREEMPTED AND DISTRICT COURT DISMISSES AMGEN’S INFRINGEMENT CLAIMS

 

By Laura W. Smalley[1]

 

The long-standing litigation between Amgen Inc. and Amgen Manufacturing Ltd. (collectively, “Amgen”) and Sandoz Inc. (“Sandoz”) may be drawing to a close.  On December 14, 2017, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) dismissed Amgen’s state law claims, finding that those claims were preempted by the Biologics Price Competition and Innovation Act of 2009 (“Act”).  The claims, sounding in unfair competition and conversion, sought relief based on violations of the Act.  Because the Act’s comprehensive framework demonstrates Congressional intent that federal law exclusively occupy the field of biosimilar patent litigation, Amgen’s state law claims are preempted. The Federal Circuit also found preemption based on the conflict between the state law claims seeking to enforce the Act and the Act’s detailed enforcement scheme. On December 19, 2017, the United States District Court for the Northern District of California granted Sandoz summary judgment of non-infringement of the remaining patent asserted in the Amgen v. Sandoz litigation.

 

Background    

In 2010, Congress enacted the Act, which established an abbreviated pathway for regulatory approval of follow-on biological products that are “highly similar” to a previously approved product (“reference product”).  Under the governing statutory scheme, the Food and Drug Administration (“FDA”) approves a biological product for commercial marketing by granting a biologics license under 42 U.S.C. § 262(a).  The original biologics license application must contain clinical data to demonstrate the safety and efficacy of the product for which approval is sought.  Under the abbreviated regulatory pathway created by the Act, codified at 42 U.S.C. § 262(k), an applicant filing an abbreviated biologics license application submits information to demonstrate that its product is “biosimilar” to, or “interchangeable” with, a previously approved reference product.  The Act thereby permits a biosimilar applicant to rely in part on the approved license of the reference product.

 

To balance the goals of innovation and price competition, Congress enacted the Act to provide a four-year and a twelve-year exclusivity period to a reference product, both beginning on the date the reference product is first licensed.  A biosimilar application may not be submitted until four years after the reference product was first licensed and cannot be approved until twelve years after the reference product was first licensed.  A sponsor of an approved reference product thus receives up to twelve years of exclusivity against follow-on products, regardless of patent protection.

 

The Act also established a biosimilar patent dispute resolution regime, including amending the Patent Act to create an artificial “act of infringement” to allow the commencement of an infringement suit based on the filing of a biosimilar application prior to FDA approval and/or marketing of the biological product.  See 35 U.S.C. § 271(e)(2)(C),(e)(4),(e)(6). The Act also contains provisions for the reference product sponsor and the applicant to exchange information about relevant patents before the infringement action occurs—the so-called “patent dance.” Under the first step of that exchange process, the applicant provides a copy of its biosimilar application to the reference product sponsor within 20 days after the FDA accepts the application for review.  42 U.S.C. § 262(l)(2)(A).  In later steps, the parties exchange lists of patents for which they believe a claim of patent infringement could reasonably be asserted; exchange their respective positions on infringement, validity, and enforceability; and negotiate regarding the patents for which an immediate infringement action may be brought. Id. § 262(l)(3)-(5).

 

The Act also contains a “notice of commercial marketing” provision that requires the biosimilar applicant to provide notice to the incumbent seller of the biological product “not later than 180 days before the date of the first commercial marketing of the biological product licensed under” this abbreviated pathway.  Id. § 262(l)(8)(A).  The reference product sponsor thus has a period of time to seek a preliminary injunction based on patents the parties initially identified during the information exchange, but which were not selected for an immediate infringement action, as well as any newly-issued or licensed patents.  Id. § 262(l)(7)-(8).  Paragraphs (l)(9)(B) and (l)(9)(C) permit the reference product sponsor, without the applicant, to seek declaratory relief with respect to infringement, validity or enforceability of certain patents in the event that the applicant fails to comply with certain provisions of subsection (l).  Id. § 262(l)(9)(B)-(C).  “The remedy provided by § 262(l)(9)(C) excludes all other federal remedies, including injunctive relief,” for failure to comply with § 262(l)(2)(A).  Sandoz Inc. v. Amgen Inc., 137 S. Ct. 1664, 1675 (2017).

 

Amgen has marketed filgrastim under the brand name Neupogen® since 1991.  In May 2004, Sandoz filed an abbreviated license application seeking FDA approval of a biosimilar filgrastim product for which Neupogen® was the reference product.  On July 7, 2014, Sandoz received notification from the FDA that it had accepted Sandoz’s application for review.  Sandoz notified Amgen on July 8, 2014 that it had filed the biosimilar application referencing Neupogen®, and later in July confirmed that the FDA had accepted its application for review.  Sandoz opted not to provide Amgen with Sandoz’s biosimilar application or manufacturing information as required by the Act and instead invited Amgen to sue Sandoz under § 262(l)(9)(C).

 

In October 2014, Amgen sued Sandoz in the United States District Court for the Northern District of California, asserting claims of (1) unfair competition by engaging in unlawful business practices under California law based on two alleged violations of the Act; (2) conversion for allegedly wrongful use of Amgen’s approved license on Neupogen®; and (3) infringement of an Amgen patent claiming a method of using filgrastim.  Amgen alleged that Sandoz violated the Act by failing to disclose the information required under § 262(l)(2)(A) and by giving a premature notice of commercial marketing under § 262(l)(8)(A) before FDA approval of its biosimilar product.

 

In March 2015, the district court granted partial judgment on the pleadings to Sandoz, holding that the Act renders permissible a biosimilar applicant’s decision not to disclose its license application and manufacturing information to the reference product sponsor, subject only to the consequences set forth in 42 U.S.C. § 262(l)(9)(C); and that the applicant may give notice of commercial marketing before FDA approval.  The district court also dismissed Amgen’s unfair competition and conversion claims with prejudice, concluding that Sandoz did not violate the Act or act unlawfully.  Amgen later amended its complaint in October 2015, adding a claim for infringement of a second Amgen patent.  Claims involving the first patent were dismissed by stipulation.  At the time of the Federal Circuit’s December 2017 decision, the parties’ claims and counterclaims relating to infringement, validity and enforceability of the second patent were still pending before the district court.  As of March 6, 2015, the FDA had approved Sandoz’s biologics license application for all approved uses of Amgen’s Neupogen®.

 

Prior Proceedings 

 

Amgen appealed from the district court’s decision dismissing its state law claims. The Federal Circuit decision, reported at Amgen Inc. v. Sandoz Inc., 794 F.3d 1347 (Fed. Cir. 2015), affirmed the dismissal of Amgen’s state law claims.  The Federal Circuit held that the biosimilar applicant could only give effective notice of commercial marketing under 42 U.S.C. § 262(l)(8)(A) after the FDA had licensed its biosimilar product.  The Federal Circuit also held the only remedy provided by the Act for a biosimilar applicant’s failure to disclose its license agreement and manufacturing information under § 262(l)(8)(A) is the ability to bring an immediate patent infringement action.  The Federal Circuit therefore upheld the dismissal of the state law claims alleging violation of the Act.  Sandoz launched its biosimilar after the Federal Circuit’s decision on the appeal.

 

Sandoz thereafter filed a petition for a writ of certiorari to the Supreme Court requesting review of the question of whether the biosimilar applicant could provide notice of commercial marketing under § 262(l)(8)(A) before licensing by the FDA.  Amgen filed a conditional cross-petition for a writ of certiorari requesting review of the Federal Circuit’s decision that the only remedy for failure to provide the license application under 42 U.S.C. § 262(l)(2)(A) is to commence a declaratory judgment action under 42 U.S.C. § 262(l)(9)(C) and/or a patent infringement action under 35 U.S.C. § 271(e)(2)(C)(ii).

 

The Supreme Court granted both Sandoz’s petition and Amgen’s conditional cross-petition and consolidated the cases.  On June 12, 2017, the Supreme Court rendered a decision reported at 137 S. Ct. 1664 (2017).  The Supreme Court held that an injunction is not available under federal law to enforce 42 U.S.C. § 262(l)(2)(A); and that a biosimilar applicant may provide the notice required by 42 U.S.C. § 262(l)(8)(A) either before or after receiving FDA approval.  The Supreme Court remanded the case for further proceedings consistent with its opinion, requesting the Federal Circuit to determine on remand whether California would treat non-compliance with § 262(l)(2)(A) as “unlawful” and if so, whether the Act preempts any additional remedy under state law for the applicant’s failure to comply with § 262(l)(2)(A).

 

The 2017 Federal Circuit Decision

 

The Federal Circuit held that the Act preempts state law remedies for an applicant’s failure to comply with § 262(l)(2)(A) and affirmed the district court’s dismissal of Amgen’s state law claims.  The Federal Circuit’s decision addressed whether the Act preempted state law by either field preemption or conflict preemption.  Under field preemption, state law is preempted where it regulates conduct in a field that Congress intended the federal government to occupy exclusively.  In this case, federal courts have exclusive jurisdiction over cases arising under any act of Congress relating to patents and the FDA has exclusive authority to license biosimilars.  The scheme under the Act is comprehensive and provides a full set of standards governing the exchange of information and biosimilar patent litigation, including the punishment for noncompliance.  As held by the Supreme Court, the remedies provided by the Act exclude all other federal remedies, including injunctive relief.  Amgen seeks through California law to impose penalties on Sandoz for failure to comply with § 262(l)(2)(A), including injunctive relief and damages, that the Act does not provide.  Because § 262(l)(9)(C) provides the exclusive federal remedy for failure to comply with § 262(l)(2)(A), federal law does not permit injunctive relief or damages for failure to provide the biologics license application and related manufacturing information.  Permitting the state to impose its own penalties for alleged violations of the Act would conflict with the careful framework Congress adopted.  The federal government has fully occupied the field of biosimilar patent litigation and therefore state law claims based on violations of the Act are preempted.

 

Conflict preemption occurs when it is impossible for a private party to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. Because of the differences in remedies between the federal scheme under the Act and the asserted state law claims, conflict preemption also bars Amgen’s state law claims.  Compliance with the Act’s detailed regulatory regime in the shadow of the tort regimes and unfair competition standards in 50 states could dramatically increase the burdens on biosimilar applicants beyond those contemplated by Congress in enacting the Act.  Amgen’s state law claims conflict with the Act and intrude upon a field (biosimilar patent litigation) that Congress reserved for the federal government.

 

The District Court Decision in Amgen v. Sandoz   

 

On December 19, 2017, the United States District Court for the Northern District of California (Judge Richard Seeborg) granted Sandoz summary judgment for non-infringement of the remaining patent at issue.  The products at issue were filgrastim and pegfilgrastim.  Filgrastim stimulates the production of a type of white blood cells (“neutrophils”) vital to the human immune system and is useful for treating patients undergoing certain kinds of cancer therapy that can cause neutrophil deficiency.  Pegfilgrastim is a modified version of filgrastim that remains in the circulatory system for a substantially longer period of time and thus is “long acting.”  As noted above, Amgen began selling filgrastim in 1991 under the brand name Neupogen® and launched a pegfilgrastim product, Neulasta®, in 2002.  Sandoz brought to market an FDA-approved biosimilar filgrastim product, Zarxio®, in 2015.  Sandoz has also submitted an application to offer a biosimilar pegfilgrastim product that is pending before the FDA.

 

The patent at issue relates generally to processes for purifying proteins.  Amgen asserts that one of the steps in Sandoz’s process for making and purifying pegfilgrastim and filgrastim infringes the asserted patent.  Sandoz argued that the claimed protein purification method required three distinct and sequential steps, as well as the application of three distinct solutions, whereas the relevant portions of its process involved only one step and one solution.  The district court found no literal infringement because, based on its construction of the claim, the method employed by Sandoz did not have the required sequential washing and eluting steps.  Amgen argued that the washing and eluting steps did occur sequentially in Sandoz’s process when viewed from any given location in the column, rather than viewing the column as a whole. At any given location in the column, the washing step and the eluting step are occurring sequentially consistent with the claim.  The district court rejected this argument.

 

The district court also granted summary judgment of non-infringement under the doctrine of equivalents, finding that the differences between the method claimed by the patent and the accused step as performed by Sandoz are substantial.  The claimed method and the accused step did not perform the same function; also, the different functions are performed in substantially different ways and the results produced by the claimed method and the accused step are substantially different.  The claimed method is a capture purification process that produces the protein in question in its purified form.  There are no steps beyond the eluting step in the element of the claim.  The accused step, on the other hand, produces a solution that contains the protein to be purified (filgrastim) and at least one fewer contaminant than before the step, but which requires further purification.

 

In addition to granting summary judgment of non-infringement, the district court also denied Amgen’s request for further discovery under Rule 56(d) regarding Sandoz’s modified process, holding that the final process parameters it hopes to discover are not material to the finding of noninfringement.

 

[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.

Biosimilar Naming Convention Rules in Place but Not Being Applied

  By Kristin A. Connarn [1]

It has been nearly ten months since the U.S. Food and Drug Administration (FDA) finalized its guidance regarding how biosimilars and their biologic reference products’ names should include a four letter suffix, designated by the FDA, at the end of the nonproprietary name. Nonetheless, out of all of the biologics and biosimilars approved since January 2017, only the biosimilars’ names have included the random suffix. This begs the question of if, or when, the FDA will ever go back and start renaming biologics’ nonproprietary names with the suffixes.
Any excuse of not wanting to hold up approval of originator biologics already under review is hard to believe, now that ten months have passed since the naming guidance was finalized. There is no question among industry executives that the FDA suffixes are intended to be applied to all biologics, including retroactively renaming products that were already approved. The fact that originator biologics have been approved since the guidance was issued, but without suffixes, is a problem leading to questions of inequity between biosimilars and biologics.
Safety was a primary driver behind the development of the naming convention. The naming convention was meant to make it easier to distinguish between a biosimilar and a reference product. At the moment, if there is a safety report from the field that contains only the core non-proprietary name, it is assumed that it relates to the reference product. As for physicians’ perceptions and effect on biosimilar sales as a result of the addition of the suffix to the nonproprietary names of biosimilars, it is really too early to say.
In the meantime, the World Health Organization (WHO) has decided not to proceed for now with its biological qualifier proposal in assigning international nonproprietary names for biosimilars, according to an October report. The proposed WHO system is similar to the FDA’s suffix naming system described above.
Nothing herein should be construed as legal advice or legal representation.
[1] Kristin A. Connarn is a partner in the Boston office of McDermott, Will & Emery.

FDA Provides Guidance on Classifying Medical Products

     

By Shana K. Cyr, Ph.D. [1], and Kathleen A. Daley [2]

The Food and Drug Administration (FDA) recently issued final guidance on the classification of medical products. FDA, Final Guidance for Industry and FDA Staff, Classification of Products as Drugs and Devices and Additional Product Classification Issues (Sept. 2017). With the Guidance, FDA seeks to provide additional clarity and predictability for the medical product industry. (Id.at 2.)
I. Formal Classifications Can Be Obtained with Requests for Classification
To obtain a formal classification for a product as a drug, device, biological product, or combination product, medical product sponsors can submit a Request for Designation to FDA’s Office of Combination Products. (Id. at 3.) Requests should include a recommended classification and bases for the recommendation. (Id.) The Office will respond to the Request in writing within sixty days; if not, the recommended classification becomes final. (Id. at 3-4.)
If FDA does not adopt the recommended classification, the sponsor can request reconsideration. (Id. at 4 n.8.) The sponsor can also submit a new Request for Designation if it develops or becomes aware of new information relevant to the product’s classification. (Id.) FDA can modify final classifications only with the sponsor’s written consent or for public health reasons based on scientific evidence. (Id. at 4.)
II. FDA Looks to Statutory Definitions When Classifying Products
All FDA-regulated medical products qualify as “drugs” under the statutory definition. (Id. at 5.) If a product also meets the definition of “biological product” but not “device,” FDA will generally classify the product as a biological product. (Id. at 11.) If a product meets the definitions of “drug” and “device,” but not “biological product,” FDA will generally classify the product as a device unless it falls within a special category. (Id. at 12.) If a product meets all three definitions, its classification is less clear and FDA recommends that sponsors of such products contact the Office of Combination Products about classification. (Id.)
III. FDA Provides Clarity on the Definition of “Device”
The definition of “device” requires, inter alia, that the product (1) be an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article; and (2) have primary intended purposes that are not achieved through chemical action within or on the body. (Id. at 5.)
A. “Other Similar or Related Article”
The Guidance indicates that some products in liquid, semi-liquid, gel, gas, or powder form qualify as “other similar or related articles.” (Id. at 6.) For example, FDA considers gels or powders put on the skin as a barrier, gases used as space fillers, and liquids used to clean either surgical instruments or contact lenses as “other similar or related articles.” (Id.)
B. “Chemical Action Within or on the Body”
The Guidance indicates that some products involving chemical action qualify as devices. (Id. at 6-7.) Chemical action occurs when a product interacts at the molecular level with bodily components (e.g., cells or tissues) to mediate a bodily response, or with foreign entities to alter the entities’ interactions with the body. (Id.) Interaction at the molecular level includes chemical reaction and intermolecular forces, not a mere exchange of non-chemical energy, such as electromagnetic or thermal energy. (Id. at 7 n.12.)
Products involving chemical action can qualify as devices if the chemical action does not achieve the products’ primary intended purposes. (Id. at 7.) For example, a hip joint replacement implant that restores movement as its primary intended purpose is a device, even if the implant also elicits a foreign body response through chemical action. (Id.) An absorbable suture that rejoins tissue as its primary intended purpose is a device, even if the body resorbs the suture through chemical action. (Id.)
Products involving chemical action can also qualify as devices if the chemical action is not within or on the body. (Id.) For example, an antimicrobial agent used to clean a surgical instrument before use does not involve chemical action within or on the body. (Id. at 8.) FDA has also determined that the chemical action in a kidney hemodialysis machine and the chemical action in a transport solution for preserving donor organs do not occur within or on the body. (Id.)
IV. Conclusion
FDA’s Guidance provides some clarity and useful examples as to when a product is classified as a drug or device. Medical product sponsors should consider the Guidance and related statutes and regulations early in product development, for example, to ensure that they are pursuing a workable classification and to better direct their scientific and regulatory efforts towards supporting a desired classification.
[1] Shana K. Cyr, Ph.D., is an attorney with Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. She represents clients in complex patent litigations, contentious proceedings before the USPTO, and appeals related to pharmaceuticals, biologics, combination products, diagnostics, and medical devices. She also counsels clients on issues arising under patent and FDA law.
[2] Kathleen A. Daley is an attorney with Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. She has significant experience in trial and appellate litigation. She has led litigation teams and been involved in all aspects of patent litigation, in district court and the U.S. International Trade Commission (ITC), and she has argued appeals before the U.S. Court of Appeals for the Federal Circuit.

Biosimilar Applicant Files 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 on October 6, 2017. This lawsuit is 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 seeks 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®. Amgen argues that 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. Genentech and City of Hope sued Amgen in the United States District Court for the 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). Genentech claims that Amgen’s lawsuit is an attempt to deprive Genentech of its statutory right to select the forum for litigation under 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 biologic product that is “highly similar” to a biologic 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 United States District Court for 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, if any, 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). The current 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. The defendants’ motion to dismiss must be filed by November 15, 2017.[2]
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.
Genentech also alleges that Amgen was prohibited from suing by the express provisions of the Act. Section 262(l)(9)(C) prohibits declaratory judgment lawsuits by any biosimilar applicant who fails to comply with its obligations under § 262(l)(2)(A) to provide the reference product sponsor with a copy of its application “and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application.” Because it failed to produce any information except its Application, Amgen is barred from bringing a declaratory judgment action against the reference product sponsor, Genentech. Further, § 262(l)(9)(B) prohibits biosimilar applicants from suing before the “patent dance” has concluded, and Amgen’s correspondence acknowledges that it had not satisfied its obligations under § 262(l)(5) before filing suit.
On October 18, 2017, Genentech filed another complaint against Amgen in the District of Delaware. The complaint was filed under seal, but Genentech asserts that the new, second action raises distinct claims against Amgen relating to Mvasi™. The 25 patents at issue in this suit include the 24 patents at issue in the first Genentech action and add an additional patent, U.S. Pat. No. 7,297,334. Amgen also moved to transfer that action to the Central District of California.
[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] The motion had not been filed as of the date this article was submitted.

REMS May Mitigate Patient Risk, But Increase Risk to Drug Manufacturers: Novo Nordisk Settles REMS-Related Claims for Over $58 Million

   By Lynn C. Tyler[1]

At the AIPLA’s 2017 Spring Meeting in San Diego, the Food and Drug Committee, together with the Antitrust Committee, put on a presentation covering, among other things, Risk Evaluation and Mitigation Strategy or REMS.[2]  As stated on the FDA’s website, “[e]ssentially, a REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use.”[3]

The Justice Department recently announced a settlement, however, that shows REMS carry significant legal risks for drug manufacturers. Earlier this month, the DOJ announced that Novo Nordisk will pay $58.65 million to resolve allegations that it failed to comply with a REMS for its Type II diabetes medication, Victoza. The DOJ stated the resolution includes disgorgement of $12.15 million for alleged violations of the Food, Drug, and Cosmetic Act (FDCA) from 2010 to 2012 and a payment of $46.5 million for alleged violations of the False Claims Act (FCA) from 2010 to 2014.

The DOJ filed a civil complaint on the day of the announcement, asserting claims for misbranding under the FDCA. The government alleged that, at the time of Victoza’s approval in 2010, the FDA required a REMS to mitigate the potential risk in humans of a rare form of cancer called Medullary Thyroid Carcinoma (MTC) associated with the drug. Some rodents had developed MTC during pre-clinical studies of Victoza, but the risk to humans could not be determined. The REMS required Novo Nordisk to provide information regarding Victoza’s potential risk of MTC to primary care physicians and endocrinologists. By allegedly failing to comply with the requirements of the REMS, Novo Nordisk was alleged to have sold a misbranded drug.

More specifically, the complaint alleged that some Novo Nordisk sales representatives gave information to physicians that created the false or misleading impression that the Victoza REMS-required message was erroneous, irrelevant, or unimportant. Novo Nordisk allegedly trained sales representatives to tell doctors that the risk of MTC only applied to mice and rats, that it was implausible humans would develop MTC was using Victoza, that all diabetes medicines include boxed warnings, so Victoza is no different, and MTC is easy to treat even if patients do contract it. Sales representatives were also allegedly trained to sandwich the risk discussion between promotional messages.

The complaint also alleged that, after a survey in 2011 showed that half of primary care doctors polled were unaware of the potential risk of MTC associated with Victoza, the FDA required Novo Nordisk to send a letter to doctors to increase awareness of the potential risk. Rather than appropriately implementing the modification, the complaint alleges that Novo Nordisk instructed its sales force to provide statements to doctors that obscured the risk information. The sales representatives were again instructed to sandwich the risk discussion between promotional messages and to tell doctors that the risk was no different than one previously discussed.

The settlement also resolved claims under the FCA and state false claims acts. Similar to the FDCA claim, the FCA claim arose out of the submission of false claims from 2010 to 2014 to federal health care programs for Victoza by creating a false or misleading impression with physicians about the potential risk of MTC associated with Victoza. Novo Nordisk was further alleged to have encouraged the sale to and use of Victoza by adult patients who did not have Type II diabetes. The FDA has not approved Victoza as safe and effective for use by adult patients who do not have Type II diabetes.

Over the last decade or more, there have been many eye-popping settlements announced by the DOJ with drug or medical device companies over allegations of off-label promotion. As the successful assertion of a First Amendment defense has created an obstacle to the government’s success on such claims, based on the Novo Nordisk settlement one wonders if claims arising out of the alleged failure to complete or properly implement a REMS requirement will become a replacement or additional source of government revenue.

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

[2] The slides from the presentations remain available on the Food and Drug Committee’s page on the AIPLA website, www.aipla.org.

[3] https://www.fda.gov/aboutfda/transparency/basics/ucm325201.htm.

FDA REGULATORY EXCLUSIVITY UPDATE

By John A. Hamilton[1]

This article reports on litigation initiated by United Therapeutics Corporation (UTC) by a Complaint recently filed against the United States Food and Drug Administration (FDA) based on the FDA’s refusal to grant exclusive orphan drug marketing rights for a treprostinil formulation branded as Orenitram®.
Earlier this month, UTC filed the Complaint seeking declaratory and injunctive relief against the FDA in the U.S. District Court for the District of Columbia alleging that FDA failed to follow the plain language of the Orphan Drug Act and grant UTC the statutory exclusivity required by law for Orenitram®, UTC’s extended-release oral formulation of treprostinil approved on December 20, 2013 (NDA 203496) for the treatment pulmonary arterial hypertension (PAH). (Case 1:17-cv-01577).
The Orphan Drug Act was enacted in 1983 to provide financial incentives to pharmaceutical companies to pursue development of drugs that treat rare conditions and diseases that might otherwise be unprofitable due to the limited market for those drugs. The law gives drug manufacturers seven years of exclusive drug sales free from competition. A pharmaceutical company may obtain an orphan drug designation by establishing that its drug is being investigated for a rare disease or condition and, if approved, would be approved for use in that disease or condition. The statute’s exclusivity provision provides in relevant part that
if the [FDA] approves an application filed pursuant to section 355 of this title . . . for a drug designated under section 360bb of this title for a rare disease or condition, the [FDA] may not approve another application under section 355 . . . for such drug for such disease or condition for a person who is not the holder of such approved application . . . until the expiration of seven years from the date of the approval of the approved application[.]
Two exceptions are provided under the statute: (i) if in FDA’s opinion the exclusivity holder cannot assure the availability of sufficient quantities of the drug, or (ii) such holder consents in writing for the approval of other applications…before the expiration of the seven-year period.
Orenitram® has the same active ingredient as two other FDA-approved drug products owned and marketed by UTC: Remodulin® (treprostinil) Injection and Tyvaso® (treprostinil) Inhalation Solution. Treprostinil was designated an orphan drug, and Tyvaso® was granted orphan drug marketing exclusivity. But, according to UTC’s Complaint, FDA denied orphan drug market exclusivity for Orenitram® on the basis that UTC “must demonstrate that oral treprostinil is clinically superior to the other treprostinil formulations by means of greater efficacy, greater safety or a major contribution to patient care (MCTPC).”
FDA’s clinical superiority standard was previously a central issue in Depomed, Inc. v. U.S. Dep’t of Health & Human Servs., 66 F. Supp. 3d 217, 237 (D.D.C. 2014). Depomed sued the FDA in 2012 after the FDA denied orphan drug exclusivity for Gralise® (gabapentin) because the drug “is the same drug as Pfizer’s Neurontin®, because it contains the same active moiety (gabapentin), was approved for the same use (post-herpetic neuralgia), and was not demonstrated to be clinically superior to Neurontin®.” Neurontin® had not been designated as an orphan drug, nor had FDA recognized orphan-drug exclusivity for Neurontin®.

The Depomed Court reviewed, under the Administrative Procedures Act (APA) and relevant administrative caselaw, FDA’s exclusivity implementing regulations , which included the “same drug” concept and required, among other things, an analysis of the potential clinical superiority of a drug that is being considered for orphan-drug designation under certain specified circumstances. The Court found unpersuasive the FDA’s argument that nothing in the Orphan Drug Act speaks to the precise question at issue, instead finding the statute’s language on point straightforward, and ordering FDA to recognize orphan-drug marketing exclusivity for Gralise®, without requiring proof of clinical superiority or imposing any additional conditions on Depomed, for the seven-year period commencing from the FDA approval date. The Court also opined that “the plain language of the Orphan Drug Act unambiguously requires the FDA to recognize that any drug that has been both designated as an orphan drug for treatment of a qualifying disease or condition and also approved for marketing is entitled to an exclusivity period”.

The FDA decided not to appeal the Depomed district court decision, opting instead to publish a “Policy on Orphan Drug Exclusivity; Clarification” in the Federal Register on December 23, 2014. The clarification reasserted FDA’s position that
given the limited terms of the court’s decision to GRALISE, FDA intends to continue to apply its existing regulations in part 316 to orphan-drug exclusivity matters. FDA interprets section 527 of the FD&C Act and its regulations…to require the sponsor of a designated drug that is the ‘‘same’’ as a previously approved drug to demonstrate that its drug is ‘‘clinically superior’’ to that drug upon approval in order for the subsequently approved drug to be eligible for orphan-drug exclusivity.

UTC’s Complaint asserts that FDA has violated the APA and that its “denial of orphan drug exclusivity for Orenitram upon approval of the drug for its orphan-designated indication was arbitrary and capricious, an abuse of discretion, exceeds Defendants’ statutory authority, and is otherwise not in accordance with the law, or that is in excess of statutory jurisdiction or authority or short of statutory right. 5 USC § 706(2)(A), (C).” UTC is seeking a declaration that (i) they are “entitled to seven years of orphan drug exclusivity for Orenitram for the treatment of PAH starting from December 20, 2013, the date [FDA] approved Orenitram for this indication”, and (ii) “FDA’s regulations at 21 C.F.R. §§ 316.3(b)(12), 316.31(a), 316.34(a), (c) are invalid under the FDC Act, as amended by the Orphan Drug Act, insofar as they purport to permit Defendants to not recognize orphan drug exclusivity for Orenitram.”

This case could strengthen or invalidate the orphan drug marketing exclusivity rules that FDA has promulgated, as they relate to the concepts of “same drug”, “clinical superiority” and the availability of alternative modes of treatment as a basis for additional exclusivity for the same underlying ingredients.

[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 and transactions, and FDA counseling.

 

 

BIOSIMILARS LITIGATION UPDATE

By Lynn C. Tyler[1]

 

This article reports on (1) a complaint recently filed by AbbVie against Boehringer Ingelheim for infringement of numerous patents allegedly covering AbbVie’s HUMIRA® biologic and (2) the Federal Circuit’s dismissal of Amgen’s attempted appeal of a discovery order in its infringement suit against Hospira arising out of a biosimilar to Amgen’s EPOGEN®.
I. AbbVie Sues Boehringer Ingelheim Over Biosimilar to HUMIRA®
Earlier this month, AbbVie Inc. and AbbVie Biotechnology Ltd. (collectively, “AbbVie”) filed a Complaint for patent infringement against Boehringer Ingelheim International GmbH and certain affiliates (collectively, “Boehringer”) based on Boehringer’s submission to the FDA of an application for approval of a biosimilar to AbbVie’s HUMIRA® biologic (adalimumab).
According to the Complaint, AbbVie owns over 100 patents related to HUMIRA®. In October, 2016, Boehringer filed its application with the FDA for approval of BI695501, its proposed biosimilar of HUMIRA®. The parties then engaged in the “patent dance” prescribed by the Biologics Price Competition and Innovation Act (“BPCIA”), although AbbVie alleges Boehringer did not fully comply with the procedures. AbbVie alleges that eventually it identified 74 patents infringed by BI 695501 or its method of manufacture. AbbVie further alleged that the outcome of the patent dance identified eight patents for litigation. AbbVie stated that it was reserving its right to assert the remaining 66 patents after Boehringer served a notice of commercial marketing or in other appropriate circumstances. The eight patents asserted by AbbVie are U.S. Patent No. 8,926,975; 9,018,361; 9,090,867; 9,096,666; 9,255,143; 9,266,949; 9,272,041; and 9,546,212.
According to published reports, HUMIRA® generated $16 billion in revenue for AbbVie in 2016, leading one to believe this litigation will be hotly-contested and take years to resolve. Eventually, it may resolve some of the many ambiguities in the patent dance provisions of the BPCIA. The steps involved in the patent dance include the generation of two sets of lists, a “Paragraph 3” list (named for its place in the statute) identifying all patents that either party thought “could reasonably be asserted,” and a “Paragraph 5” list identifying the patents that the parties thought should be involved in litigation.
In this case, the Paragraph 3 list (74 patents, after supplementation with three subsequently issued patents) is longer than the Paragraph 5 list (8 patents). Can AbbVie bring suit on patents that were included on the Paragraph 3 lists, but not the Paragraph 5 lists? The statute does not say that the sponsor cannot include such patents, only that the sponsor must include the patents on the agreed list or the patents on both parties’ lists if the parties did not agree. AbbVie appears to believe it cannot assert the other 66 patents at this time.
Further, section 271(e)(2) of the Patent Act was amended by the BPCIA to provide that an applicant infringes each patent on a Paragraph 3 list by filing an application for approval of the product (and recall that the lists are not generated until after the application has been filed). If the Paragraph 5 lists are exclusive, Congress would have eliminated key property rights of sponsors in some cases. These considerations make it appear that the statute does not limit patent infringement suits to patents on a Paragraph 5 list.
On the other hand, the provisions governing the creation of the Paragraph 5 lists would arguably be meaningless if they did not limit the potential patents-in-suit. What is the point of allowing the applicant to limit the number of patents on the Paragraph 5 lists if the sponsor can sue on any and all patents it chooses? One principle of statutory construction is that statutes are to be construed as a whole, giving meaning to all the provisions. This consideration suggests that the statute does limit litigation to patents on one of the Paragraph 5 lists, at least initially.
Another section of the statute addresses preliminary injunctions and creates further issues. This section, recently addressed by the Supreme Court’s Sandoz v. Amgen decision, provides that the applicant must give the sponsor 180 days advance notice of its intention to begin commercial marketing of the biosimilar. Between its receipt of the notice and the expiration of the 180 days, the sponsor can seek a preliminary injunction against sales of the applicant’s biosimilar based on any patent that (1) was included on a Paragraph 3 list but (2) was not included on a Paragraph 5 list (or, under another section of the statute, based on a patent that issued or was licensed after the sponsor created its Paragraph 3 list).
The preliminary injunction section raises the exclusivity issue again. On what patents can the patentee seek a preliminary injunction? If there is pending litigation involving the Paragraph 5 list patents (as here), can a patentee seek a preliminary injunction based on one or more of those? The statute does not expressly say that the sponsor cannot. If the answer is that the patentee can seek a preliminary injunction based on such patents, however, what is the point of the provision limiting the requests for preliminary injunctions to patents on Paragraph 3 lists but not the later lists? AbbVie asserts it can seek a preliminary injunction on the Paragraph 3 patents once Boehringer serves a notice of commercial marketing. The parties will likely identify other arguments on these issue and other issues relating to the provisions of the BPCIA.
Other than providing that the notice of commercial marketing must be given 180 days before the first sale of the biosimilar, the BPCIA does not specify any procedures for a preliminary injunction. The court and parties will face a variety of challenges if AbbVie seeks a preliminary injunction on 66 patents (or even a fraction of that number).
II. Federal Circuit Dismisses Amgen’s Attempted Appeal of Discovery Order.
In December, 2014, Hospira filed an application with the FDA for approval of a biosimilar to Amgen’s EPOGEN® biologic and, pursuant to the BPCIA, provided a copy to Amgen. In March, 2015, Amgen complained to Hospira that Hospira had not fully disclosed the composition of the cell culture medium used to manufacture its biosimilar. The parties then engaged in the exchange of lists of patents that could be asserted in litigation. Amgen stated that, based on the lack of information, it could not assess the reasonableness of asserting its patents covering cell culture media and did not include any such patents on its lists.
Amgen eventually filed an infringement suit on three patents, U.S. Patents Nos. 5,756,349, 5,856,298, and 6,632,637. Amgen sought discovery on the composition of the cell culture media used in Hospira’s manufacturing process, which Hospira opposed and the district court denied. Amgen then sought an interlocutory appeal and Hospira filed a motion to dismiss the appeal for lack of jurisdiction. The Federal Circuit ordered briefing on whether it had jurisdiction under the collateral order doctrine or the All Writs Act and ultimately dismissed the appeal. Amgen, Inc. v. Hospira, Inc., Case No. 2016-2179, slip op. (Fed. Cir. Aug. 10, 2017).
Summarizing the elements of the collateral order doctrine, the Federal Circuit stated that for an interlocutory order to be appealable “the order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment.” Slip op. at 6 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978)). The court noted that the discovery order appeared to satisfy the first two elements of this test, but fell short on the third, namely, being effectively unreviewable on appeal from a final judgment. Id. at 7. The court relied on Supreme Court cases, among other authorities, in support of its position. Id. The court did not accept Amgen’s argument that denying the immediate appeal would frustrate one of the purposes of the BPCIA – to enable patent owners to begin infringement litigation over biosimilars prior to FDA approval and commercial marketing. Id. at 7-8
Turning to the availability of mandamus under the All Writs Act as a potential jurisdictional hook for Amgen’s appeal, the court initially observed that “[m]andamus is a drastic remedy
reserved for the most ‘extraordinary causes.’” Id. at 8 (quoting Cheney v. U.S. Dist. Court for D.C., 542 U.S. 367, 380 (2004)). “The party seeking mandamus must ‘have no other adequate
means to attain the [desired] relief’ and must demonstrate that its right to the writ’s issuance is ‘clear and indisputable.’” Id. at 9. The court briefly considered and rejected several grounds on which Amgen might be entitled to the discovery sought: (1) under the Supreme Court’s decision in Sandoz, Inc. v. Amgen, Inc., 137 S. Ct. 1664 (2017), Amgen could not seek an injunction under federal law; (2) Amgen had not sought an injunction under state law; (3) Sandoz also “makes clear” that Hospira’s refusal to submit the information was not an artificial act of infringement under the BPCIA; (4) Amgen did not sue on its cell culture media patents, making the proposed discovery relevant, under one of two potentially applicable BPCIA provisions. Id. at 9-10.

Perhaps to assist Amgen or other litigants who find themselves in its position, the Federal Circuit suggested a means by which Amgen could have asserted one or more of its cell culture media patents without fear of Rule 11 or other sanctions or antitrust liability:

Paragraph (l)(3)(A) [of the BPCIA] merely requires the sponsor to list patents that it “believes . . . could reasonably be asserted.” (emphasis added). The statute provides no sanction for holding or asserting a mistaken belief in good faith. Moreover, once a patent is listed by the sponsor, the BPCIA’s information exchange further requires the applicant to “provide to the . . . sponsor, with respect to each patent listed . . . a detailed statement that describes, on a claim by claim basis, the factual and legal basis of the opinion of the subsection (k) applicant that such patent is invalid, unenforceable, or will not be infringed.” 42 U.S.C. § 262(l)(3)(B)(ii) (emphases added). In other words, once a sponsor lists a patent under paragraph (l)(3)(A), the applicant must once again come forward with additional disclosures under paragraph (l)(3)(B) that inform whether “a claim of patent infringement . . . could” or could not “reasonably be asserted.” If the applicant fails to comply with its obligation to respond under paragraph (l)(3)(B), the sponsor would have a reasonable basis for asserting a claim of patent infringement.
Id. at 12. The court concluded that Amgen has not shown a “clear and indisputable” right to the discovery sought and thus denied mandamus and dismissed the appeal for lack of jurisdiction. Id. at 14.

[1] Lynn 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.

Patent law update: Supreme Court of Canada Rejects the “Promise Doctrine”

By: Andrew Montague and Kenneth Ma

                          

In a unanimous and relatively short decision, the Supreme Court of Canada firmly rejected the “Promise Doctrine”, which has been frequently invoked to invalidate patents on the basis of a lack of utility.

This decision in AstraZeneca Canada Inc. v. Apotex Inc., 2017 SCC 36 reverses over a decade of previous case law, which saw numerous patents declared invalid in Canada. Under the (now rejected) “promise doctrine”, the utility of an invention could be measured against statements in the patent disclosure regarding the uses of the invention, with the patent being invalid if even one of those promises was not established or soundly predictable from the information in the description. The doctrine had particular impact on pharmaceutical patents, which tend to identify medical uses for the invention without providing clinical data in the description.

The Court concluded that the “Promise Doctrine” conflated the requirements for sufficiency and utility, which should be separate inquiries. The Court also held that a single use of the invention is sufficient to establish utility, even if this use has a “mere scintilla” of utility, so long as that use is related to the subject matter of the invention.

The Astrazeneca decision sets out a two-part test for utility in Canada, which requires the Courts to: (1) identify the subject matter of the claims and (2) determine whether at least one practical use related to that subject matter has been demonstrated or soundly predicted as of the filing date (even if that amounts to only ‘a mere scintilla’ of utility). The Court also re-affirmed the principle that there is no obligation to disclose the utility of the invention within the description.

The case at hand involved AstraZeneca’s patent no. 2,139,653, which was directed to optically pure salts of esomeprazole, a proton pump inhibitor (PPI). This drug was said to be useful for reducing gastric acid and reflux esophagitis, and for treating related maladies. The trial and appeal Courts had previously concluded that the patent explicitly promised that this drug would work more effectively for a wider range of persons than previous drugs, with less variation in patient responses, and that this promise was unfulfilled. The Supreme Court rejected this analysis and found that the drug would work as a PPI, which was sufficiently related to the subject-matter of the patent so as to make it useful within the meaning of the Patent Act. As a result, the patent was found to be valid.

The decision is welcome news to patentees in Canada, as it brings more certainty to the law and aligns Canada with the standard for utility of most other countries.

 

For more information, contact one of our IP professionals at http://www.ridoutmaybee.com.

This article is for information purposes only and does not constitute legal or professional advice.

Hatch-Waxman in the cross-hairs?

By Adrian Zahl[1]

Changes could be in the works for the Hatch-Waxman Act.

The Department of Health and Human Services, the parent department of the Food and Drug Administration, recently held a public hearing on the Hatch-Waxman Act, which governs the ANDA pathway for generic drug approvals and the “Orange Book” for listing pharmaceutical patents.  The Federal Register Notice of June 22, 2017 identified several broad issues of interest to the FDA, including how the “balance” between innovator and generic drugs is affected by patents, exclusivity periods, and other factors.  The FDA also identified possible market-based disincentives that might prevent approved drugs from reaching the market, and the failure of some drugs to become generic even after their patents have expired.

I attended the FDA meeting at the FDA main campus in Silver Springs, MD on July 18, 2017. The meeting was well attended, with representatives from generic and (a few) innovator pharma companies. There were a number of other organizations, academics, and others represented. There were quite a few presentations over a rather long day, with the bulk of these seeming to come from individuals representing generic drug companies and their industry organizations. As well, there were a few presentations by innovators and industry organizations representing these.  The FDA representatives gave a few brief introductory remarks, but it seemed that they were there primarily to listen, rather than to discuss any concrete proposals that they might be considering.

The general purpose of the meeting, according to the Federal Register Notice, was to solicit ideas from the public on “encouraging innovation and drug development and accelerating the availability to the public of lower-cost alternatives to innovator drugs.”  Although not expressly stated by the FDA officials at the meeting, the review seems to have been prompted by concerns around the rapid increase in drug costs.  Drugs are said to represent the fastest-growing component healthcare costs, with a large share of this being paid by the federal government.   Apart from its effect on consumers, the government has a direct interest in controlling the costs of pharmaceuticals.

Most of the comments were directed to ways to speed up the approval process for generics and focussed on the same core issues:

1. Improving access to samples of branded drugs, to allow generics to perform the required testing to obtain the bioequivalence data that they require. This is of particular concern for drugs in tightly controlled product pipelines, where it is difficult for the generics to obtain large enough samples.
2. Complaints about “pay for delay” arrangements between branded and generic companies.
3. Issues relating to the so-called evergreening issue, in which incremental improvements of existing drugs are used to extend the period of exclusivity for brand-name drugs. However, numerous speakers conceded that it is difficult to distinguish between useful, meaningful innovations and trivial ones that are simply introduced to extend exclusivity. A related topic is the use of labelling changes by the brand-based companies as a means to delay generic approvals.
4. Delays in generic approvals caused by “citizen petitions” filed with the FDA immediately before drug patents expire.

Coincidentally, topics 1 and 4 were discussed in a presentation by the Food and Drug Committee at the most recent AIPLA spring meeting.  Slides from that presentation are available on the committee page of the AIPLA website.

There was a bit of discussion at the FDA meeting of IP-related topics such as the role of patent term restoration and IPR challenges in delaying generic drug introductions.

One of the presenters raised the interesting topic of drug companies obtaining patents relating to drug distribution methods and listing these in the Orange Book to delay generic approvals. He did not provide any examples of such patents, but based on the general description, these appears to be a type of business method. The presenter conceded that such inventions would not likely be patented these days. A case study on this topic is also included among the slides from the spring meeting.

The FDA officials on the panel seem to be genuinely interested in what the presenters had to say and encouraged them to provide written submissions in support of their positions. They were particularly interested in data rather than unsupported opinions, which is what many presenters provided.

It will be interesting to see what, if anything arises from this process.  We will try to report developments as they arise.

[1] Adrian Zahl is a partner in the Ottawa office of Ridout & Maybee LLP. His practice is principally directed towards patent prosecution, licensing and related litigation, primarily in the pharmaceutical and biotechnology sectors.

The Supreme Court Interprets the Biologics Price Competition and Innovation Act in Favor of Biosimilar Applicants

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

The Biologics Price Competition and Innovation Act (“Act”) provides an abbreviated pathway for obtaining Food and Drug Administration (“FDA”) approval of a drug that is biosimilar to an already-licensed biological product (reference product). 42 U.S.C. § 262(k).  The Act also provides procedures for resolving patent disputes between biosimilar manufacturers (applicants) and manufacturers of reference products (sponsors). 42 U.S.C. § 262(l).  The Act treats the submission of a biosimilar application as an “artificial” act of infringement, enabling parties to bring patent infringement actions at certain points in the application process even if the applicant has not committed a traditional act of patent infringement, such as making or using an infringing product.  35 U.S.C. § 271(e)(2)(C)(i),(ii).  The Act “facilitates litigation during the period preceding FDA approval so that the parties do not have to wait until commercial marketing to resolve their disputes.” Sandoz Inc. v. Amgen Inc., Nos. 15–1039, 15–1195, 2017 WL 2507337, at *6 (Sup. Ct. June 12, 2017)(“Decision”).

On June 12, 2017, the Supreme Court decided important issues governing the Act’s mechanisms for resolving patent disputes in Sandoz Inc. v. Amgen Inc.  The Supreme Court held that Act’s requirement for the applicant to provide its application and manufacturing information (42 U.S.C. § 262(l)(2)(A)) is not enforceable by an injunction under federal law, but that an injunction under state law may be available.  The Supreme Court also held that an applicant may provide notice of commercial marketing under 42 U.S.C. § 262(l)(8)(A) before obtaining an FDA license.  While the Supreme Court did not expressly determine the issue, its rationale makes clear that noncompliance with other provisions of the Act’s information exchange procedures cannot be remedied by an injunction under federal law, but instead must be remedied by the immediate declaratory judgment action expressly authorized by the Act.

The Requirement to Provide the Biosimilar License Application and Manufacturing Information is not Enforceable by an Injunction under Federal Law, but State Law Remedies May be Available.

The first question decided by the Supreme Court is whether the requirement that an applicant provide its application and manufacturing information to the manufacturer of the reference biologic (42 U.S.C. § 262(l)(2)(A)) is enforceable by an injunction.  The Supreme Court held that an injunction is not available under federal law, but remanded for the Federal Circuit to decide whether an injunction is available under state law.

The Supreme Court reasoned that the express terms of the Act provide the sole remedy for failure to provide the licensing and manufacturing information, excluding other remedies under federal law, such as an injunction. When the FDA accepts an application for review, it notifies the applicant, who within 20 days “shall provide” to the sponsor a copy of the application and information about how the biosimilar is manufactured.  42 U.S.C. § 262(l)(2)(A).  The applicant also “may provide” the sponsor with any additional information that the sponsor requests.  42 U.S.C. § 262(l)(2)(B).  The statutory disclosures enable the sponsor to evaluate the biosimilar for possible infringement of patents it holds on the reference product.  If the parties comply with each step outlined in the Act, they will have the opportunity to litigate relevant patents before the biosimilar is marketed.

To encourage parties to comply with its procedural requirements, the Act includes various consequences for the lack of compliance. Under 42 U.S.C. § 262(l)(9)(C), if the applicant fails to provide its application and manufacturing information to the reference product sponsor, thereby effectively refusing to engage in the Act’s information exchange procedures, the sponsor (but not the applicant) may immediately bring an action “for a declaration of infringement, validity or enforceability of any patent that claims the biological product or a use of the biological product.”  When the applicant provides the application and manufacturing information, but fails to complete a subsequent step in the exchange process, § 262(l)(9)(b) again provides that the sponsor (but not the applicant) may bring a declaratory judgment action with respect to any patent included in the sponsor’s list of patents.

The Supreme Court agreed with the Federal Circuit that an injunction under federal law is not available to enforce 42 U.S.C. § 262(l)(2)(A), but based its conclusion on a different reading of the Act than the Federal Circuit.  The Federal Circuit’s holding was based on 42 U.S.C. § 262(l)(2)(A) and 35 U.S.C. § 271(e)(4), which explicitly outlines “the only remedies which may be granted by a court for an act of [artificial] infringement.” § 271(e)(4).  The Supreme Court stated that the flaw in the Federal Circuit’s reasoning was that the failure to disclose the biosimilar application and manufacturing information is not defined as an act of artificial infringement under the Act, and thus that failure is not remediable under § 271(e)(4).  While submitting the application constitutes an act of artificial infringement, see 35 U.S.C. § 271(e)(2)(C)(i),(ii), the Supreme Court determined that failing to disclose the biosimilar application and manufacturing information under 42 U.S.C. § 262(l)(2)(A) does not.

Clause (i) of 35 U.S.C. § 271(e)(2)(C) defines artificial infringement in the situation where the parties proceed through the list exchange process and the patents subject to suit are those contained in the 42 U.S.C. § 262(l)(3) lists, as supplemented under § 262(l)(7).  35 U.S.C. § 271(e)(2)(C)(i) provides that it is an act of artificial infringement to submit, “with respect to a patent that is identified in the list of patents described in [§262(l)(3)] (including as provided under [§262(l)(7)]), an application seeking approval of a biological product.” See Decision at *11 (emphasis in original).  Clause (ii) of § 271(e)(2)(C) defines artificial infringement in the situation where the applicant fails to disclose its application and manufacturing information at all, and the parties never prepare 42 U.S.C. § 262(l)(3) lists.  35 U.S.C. § 271(e)(2)(C)(ii) provides that the submission of the application represents an act of artificial infringement with respect to any patent that could have been included on the lists. See Decision at *11.  Both clauses of 35 U.S.C. § 271(e)(2)(C) treat submission of the application as the act of artificial infringement for which § 271(e)(4) provides the remedy.  Neither clause defines the failure to provide the application and manufacturing information as an act of artificial infringement, and thus in neither instance does § 271(e)(4) provide a remedy for such failure.

The Supreme Court held that a separate provision of 42 U.S.C. § 262 provides a remedy for the applicant’s failure to turn over its application and manufacturing information. When an applicant fails to comply with 42 U.S.C. § 262(l)(2)(A), § 262(l)(9)(c) authorizes the sponsor  (but not the applicant) to bring an immediate declaratory judgment action for artificial infringement (based on the submitted application and with respect to any patent that could have been included on the § 262(l)(3) patent lists).  The remedy provided by § 262(l)(9)(C) excludes other federal remedies, including injunctive relief, because where, as here, “a statute expressly provides a remedy, courts must be especially reluctant to provide additional remedies.” See Decision, at *12 (citing Karahalios v. Nat’s Federation of Federal Employees, 489 U.S. 527, 533 (1989)).  The Supreme Court held that the Act’s “carefully crafted and detailed enforcement scheme” strongly evidences the lack of intent on the part of Congress to authorize other remedies. Id.  Further, the Act explicitly provides an injunctive remedy for breach of the confidentiality requirements, but not for breach of 42 U.S.C. § 262(l)(2)(A)’s disclosure requirement. Based on the provision of a specific remedy for failure to provide the manufacturing and licensing information, and the failure to provide the remedy of an injunction for that violation as was done for other violations of the Act, the Supreme Court found that Congress intended that the sole federal remedy for failure to comply with § 262(l)(2)(A) is the ability to bring an immediate declaratory judgment action.  While the Supreme Court did not specifically address the failure to comply with other  provisions of the information exchange process (e.g., § 262(l)(3)), the Court is likely to hold that a federal injunction is not available for those violations based on its rationale that the Act explicitly provides that the sole remedy is an immediate declaratory judgment action.

The Supreme Court also held that the Federal Circuit erred in holding that an injunction was not available under state law because its decision was based on the determination that 35 U.S.C. § 271(e)(4) provides the only remedy for an applicant’s failure to disclose its application and manufacturing information. Because that failure is not an act of artificial infringement and § 271(e)(4) provides remedies only for acts of artificial infringement, that section provides no remedy at all for the failure to provide the application and manufacturing information.  Second, while the Act provides a federal scheme for resolving patent disputes relating to biosimilars, California law determines the question of whether the failure to provide the application and manufacturing information is “unlawful” conduct under the state unfair competition law.  The Supreme Court remanded for the Federal Circuit to determine whether the conduct was “unlawful” under California law and if so, whether the Act preempted any additional remedy under state law.

The Applicant May Provide Notice of Commercial Marketing to the Sponsor Before the Applicant’s Product is Licensed

 The second issue the Supreme Court decided is whether the applicant must give notice to the reference product sponsor after, rather than before, obtaining a license from the FDA for its biosimilar. The Supreme Court held that an applicant may provide notice of commercial marketing under § 262(l)(8)(A) before obtaining a license from the FDA. The applicant must give “notice” at least 180 days “before the date of the first commercial marketing.”  § 262(l)(8)(A).  “[C]ommercial marketing” must be “of the biological product licensed under subsection (k).” Id.  “Because this latter phrase modifies ‘commercial marketing’ rather than ‘notice,’ ‘commercial marketing’ is the point in time by which the biosimilar must be ‘licensed.’” See Decision, at *14.

Further, § 262(l)(8)(A) contains a single timing requirement: the applicant must provide notice at least 180 days prior to marketing its biosimilar.  The Federal Circuit’s interpretation, on the other hand, imposed two timing requirements: to provide notice after the FDA licenses the biosimilar and at least 180 days before marketing the biosimilar.  Because an adjacent provision in the Act expressly sets forth just that type of dual timing requirement, see § 262(l)(8)(B) (“After receiving notice under subparagraph (A) and before such date of the first commercial marketing of such biological product, the reference product sponsor may seek a preliminary injunction”), but Congress did not use that structure in § 262(l)(8)(A), the Act clearly did not intend that result.

The Supreme Court did not rely on the policy arguments advanced by the parties because they were both plausible and in any event “could not overcome the statute’s plain language, which is our ‘primary guide’ to Congress’ preferred policy.” See Decision, at *16.  Because Sandoz fully complied with § 262(l)(8)(A) when it first gave notice (before licensure) in July 2014, the Supreme Court held that the Federal Circuit erred in issuing a federal injunction prohibiting Sandoz from marketing its biosimilar until 180 days after licensure.