March 14, 2016 Articles

Analysis of the Five Amicus Briefs in Amgen v. Sandoz

They address whether the patent dance is mandatory and whether notice of pre-FDA-approved commercial marketing is effective

By Christopher VanDeusen

Five amicus briefs were filed at the Federal Circuit before the court's recent decision in Amgen Inc. v. Sandoz Inc., 794 F.3d 1347 (Fed. Cir. 2015). Three briefs supported the plaintiff-appellant, Amgen, in seeking to overturn the district court's conclusions, while two amici supported the defendant-appellee, Sandoz, in requesting that the district court be affirmed. This analysis will summarize the arguments made by each amicus on the two issues presented under the Biologics Price Competition and Innovation Act (BPCIA).

First Issue: Does 42 U.S.C. section 262(l)(2)(A) require aBLA applicants to participate in the "patent dance"?

Amicus: AbbVie, for Amgen. The brief first highlights the juxtaposition between "shall" in section 262(l)(2)(A) and "may" in section 262(l)(2)(B) as evidence that "shall" is a mandate, not an option. The brief identifies a large body of case law that supports the mandatory interpretation as being the default. Further, and perhaps more convincingly, AbbVie argues that the presence of "may" removes any doubts about the meaning of "shall." The brief points out other uses of "shall" within section 262 that appear to be mandatory, and argues that "shall" in section 262(l)(2)(A) should similarly be interpreted as mandatory. Last, AbbVie argues that the existence of a penalty does not make the directive optional.

The brief's second argument is that Congress intended to make the provisions of section 262(l)(2)(A) mandatory. First, the brief points to a change in the statutory language during drafting. A previous version of the BPCIA expressly gave abbreviated biologics license application (aBLA) applicants the option of participating in the patent exchange program, while the final language does not; AbbVie believes this signals a shift in Congress's intent. Second, the brief cites a House report and a Congressional Research Service report, both of which indicate that Congress intended the provisions to be mandatory, not optional.

Last, the brief looks to the purposes of the BPCIA. The brief compares the BPCIA to the Hatch-Waxman Act, which includes a mandatory patent disclosure process for generic drug sponsors. AbbVie argues that the acts are both intended to compel identification of patent information, despite their differing mechanisms for doing so. Second, the brief asserts that the pioneer biologics are entitled to the information at issue in order to effectively assert their patent rights. AbbVie frames the BPCIA as a compromise between pioneers and follow-on manufacturers, one which requires that aBLA applicants submit the information in section 262(l)(2)(A) as a quid pro quo for access to an abbreviated regulatory pathway.

Amicus: Janssen Biotech, for Amgen. Janssen's argument begins within a reference to Justice Holmes's theoretical "bad man" to illustrate that compliance with the law is always optional, but only some laws allow for deviation within their confines. Janssen argues that the district court's interpretation creates a one-sided option for the aBLA applicant to claim or ignore, and that this is at odds with the compromise and mutual benefits of the act. Second, the brief considers that courts have implied power to enforce the BPCIA's provisions where no penalty is provided by statute. The brief contemplates that courts could act under either private rights of action or the All Writs Act to compel aBLA applicants into compliance with section 262(l)(2)(A).

Amicus: Biotechnology Industry Organization (BIO), for Amgen. BIO's brief argues that both the "early" and "late" disclosures under section 262(l)(2)(A) and section 262(l)(8) are mandatory, as a matter of honoring what it considers the purpose of the statute: resolving patent disputes in an orderly, timely manner. The brief contends that the timely resolution of patent disputes would be difficult without disclosures at the early and late stages, because aBLA sponsors could file their applications without any notice to the reference product sponsor (RPS); without notice, the RPS would have no reason to file suit and obtain information through discovery. BIO further argues that it would have made little sense for Congress to orchestrate the specific timing and disclosure requirements of section 262, only to allow aBLA applicants to opt out.

Amicus: Generic Pharmaceutical Association (GPhA), for Sandoz. GPhA contends that disclosure is optional, first by framing the quid pro quo of the BPCIA as granting aBLA applicants safe harbor from immediate litigation in exchange for disclosure under section 262(l)(2)(A).

Second, the brief argues, the option of disclosure allows aBLA applicants to proceed according to their specific risk tolerance. If an aBLA applicant is risk-averse, it can disclose under section 262(l)(2)(A); if it does not think that the RPS has a valid patent to assert against it, though, the aBLA applicant can opt out of disclosure and expedite the U.S. Food and Drug Administration (FDA) approval process. The brief sees mandatory disclosure where no patents are at issue to be an absurd result, and asserts that Congress intended to give aBLA applicants the flexibility to proceed in the manner most efficient in their circumstances.

Third, the brief asserts that the penalties for noncompliance indicate a broader statutory purpose of optional disclosure, and that the mandatory "shall" would render those provisions superfluous. GPhA goes on to address AbbVie's argument about prior congressional drafts of the BPCIA, arguing that the panel should not read too much into a discarded draft or reports that set forth the views of a congressional subgroup.

Last, GPhA asserts that the BPCIA's purpose is sufficiently protected under the conclusion that "shall" is optional. The brief points to the 12-year period of regulatory exclusivity granted to the RPS as the benefit traded for by disclosing its biologic, and argues that this exclusivity is still honored regardless of an aBLA's compliance with section 262(l)(2)(A).

Amicus: Hospira and Celltrion, for Sandoz. This brief does not address the first issue.

Federal Circuit's ruling. The panel ultimately found for Sandoz on this issue; it found that the penalties laid out in section 262(l)(9)(c) and 35 U.S.C. section 271(e)(2)(C)(ii) made "shall" permissive in this instance. The panel also noted that the RPS has recourse through patent litigation discovery to obtain the information which "shall" be disclosed under section 262(l)(2)(A), preventing aBLA applicants from escaping disclosure entirely. This reflects the argument advanced by GPhA that a mandatory "shall" would render other statutory provisions superfluous.

Second Issue: Is notice of commercial marketing under 42 U.S.C. section 262(l)(8) premature before the FDA has approved the aBLA application?

Amicus: AbbVie, for Amgen. This brief does not address the second issue.

Amicus: BIO, for Amgen. Continuing from the arguments made with respect to the first issue, BIO asserts that the notice prior to commercial marketing provides an RPS a final opportunity to litigate any patent claims it has against the aBLA. The brief asserts that the 180-day window between notice and marketing is not, however, an extension of the RPS's term of regulatory exclusivity. Instead, BIO contends that an aBLA could be "licensed" before the RPS's term of exclusivity has tolled, and that such licenses would simply not be effective until the end of exclusivity. Under this reading of the statute, the aBLA sponsor could control the timing of the notice within the eight-year window between data exclusivity and market exclusivity, assuming that the FDA is able to approve the aBLA within that timeframe.

Amicus: Janssen Biotech, for Amgen. Janssen's argument begins by asserting that an FDA license is necessary for the RPS to secure an injunction. The brief argues that a license is necessary to prove imminent harm to the RPS, and therefore to secure the injunctive relief offered by section 262(l)(8)(B). The 180-day window to pursue an injunction would, according to Janssen, be a useless remedy if the RPS lacked the information necessary to enable a court to issue the injunction.

Janssen's second argument is that the plain language of the statute requires that the biosimilar be "licensed" at the time of notice. Simply put, a biosimilar is not licensed until the aBLA is approved by the FDA. Janssen points to other statutory provisions that refer to the biosimilar while under FDA review as "the subject of the subsection (k) application," which indicates that Congress's choice of the term "licensed" in section 262(l)(8)(A) was deliberate and meaningful.

Janssen further argues that section 262(l)(8)(B) requires that the FDA have already licensed the biosimilar before notice be given. Section 262(l)(8)(B) allows an injunction to be pursued for patents beyond those listed during the "patent dance" disclosure process; if notice could be provided before the license is obtained, notice could be provided any time after the aBLA is filed. At that point, the list may not have been determined, and so the 180-day window to enforce off-list patents could expire before it is clear which patents are enforceable through section 262(l)(8).

The brief's fourth argument is similar to its second: a license is necessary to evaluate the RPS's patent enforcement claims. In order to effectuate the statute's purpose and enable the RPS to assert its claims against the aBLA, the dispute must have fully crystallized; otherwise, a court might not be able to evaluate the RPS's request for an injunction.

Janssen further considers that its interpretation would not require a 180-day extension of market exclusivity. Similar to the argument advanced by BIO, Janssen's brief asserts that licensing can occur during the 12-year term of market exclusivity. Accordingly, the 180-day window for the RPS to pursue an injunction would not extend market exclusivity unless the aBLA applicant either delays notice until the final 180 days of the RPS's market exclusivity, or the FDA's approval is not obtained until that same timeframe.

Last, the brief argues that compliance with section 262(l)(8)(A) is mandatory, and can be enforced by courts. This is in response to a footnote from the district court's opinion, which stated that "shall" in section 262(l)(8)(A) was optional, just as it was in section 262(l)(2)(A). Janssen asserts that the notice of commercial marketing gives an RPS one final chance to enforce its patents before the biosimilar goes to market. The brief also argues that courts have the power to compel compliance, because an RPS's claim for injunctive relief after distribution of the biosimilar has begun would be unreasonably burdensome on the court and on the RPS.

Amicus: GPhA, for Sandoz. GPhA begins by addressing the plain meaning of "licensed," arguing that it refers to the aBLA product's status at the time of marketing, not at the time of notice.

Next, the brief asserts that requiring notice after FDA approval of the aBLA would confer unintended benefits to the RPS. First, GPhA argues that the postapproval notice requirement would grant an automatic 180-day injunction to the RPS, whereas an injunction typically requires the party seeking it to make considerable showings before an injunction issues. Second, the brief argues that a postapproval notice requirement would extend an RPS's term of regulatory exclusivity beyond the dickered compromise of the BPCIA.

Amicus: Hospira and Celltrion, for Sandoz. The brief begins by asserting that a postapproval notice requirement would be at odds with the purpose of the BPCIA, which is to resolve patent disputes early, possibly before FDA approval. The brief points to other statutory provisions that do not require a dispute to be "fully crystallized" before resolution begins, including under section 262(l)(9)(C), and goes on to argue that FDA approval may not be necessary to achieve this level of predictability in litigation.

Second, Hospira and Celltrion argue that a postapproval notice requirement would create an automatic 180-day injunction against the aBLA applicant, which is inconsistent with eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). The brief asserts that Amgen seeks an automatic injunction under the Patent Act, and that such injunctions are precluded by eBay. The brief points to Supreme Court language from eBay that places the evaluation of injunctions squarely within the purview of the courts, and which would, according to Hospira and Celltrion, prevent an injunction from being implied here. The brief relies on other language in the BPCIA that explicitly grants an injunctive remedy as evidence that Congress chose not to make that remedy available for violations of section 262(l)(8).

Last, the brief argues that the BPCIA does not create a private right of enforcement, as is present in the Hatch-Waxman Act. The brief points to the lack of language enabling the RPS to seek an injunction within the BPCIA as an indication that Congress did not intend for the 180 days of market exclusivity to be privately enforced.

Federal Circuit's ruling. The panel found for Amgen on this issue, concluding that "licensed" in section 262(l)(8) requires FDA approval, and that such approval cannot be issued prior to the 12-year term of market exclusivity for the RPS. This is effectively the approach advocated by Janssen's amicus brief, and aligns with the plain meaning of the term as well as the rest of the statute, as far as "licensed" is concerned. The majority declined to follow the interpretation of Amgen's amici as to the timing of the license—the panel's interpretation does extend market exclusivity by 180 days, as it found that a license could not be issued before the 12-year term of market exclusivity.

Will the Supreme Court Weigh In?

Both Amgen and Sandoz petitioned for rehearing en banc, which petitions were denied. Sandoz subsequently filed a petition for a writ of certiorari, asking the U.S. Supreme Court to decide whether the aBLA applicant must await FDA approval before giving the 180-day notice of commercial marketing. Perhaps these amici will again submit briefs in support of their party's positions.

Keywords: litigation, intellectual property, BPCIA, biologics, Amgen, amicus briefs


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