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<img class="alignright wp-image-3143" src="https://healthlawupdate.bakerhostetlerblogs.com/wp-content/uploads/sites/19/2015/06/supreme-court-iStock_000000865139_Large-646x1000.jpg" alt="" width="250" height="387" />On June 13, 2017, the U.S. Supreme Court issued its opinion in <a href="https://www.bakerlaw.com/LindsayPHolmes">Sandoz v. Amgen</a>. In doing so, it answered two questions raised under the Biologics Price Competition and Innovation Act of 2009 (BPCI). First, is an injunction available under federal law if the biosimilar applicant fails to provide its application and manufacturing information to the manufacturer of the biologic? Second, when does the 180-day notice requirement begin? Both of these questions have serious ramifications for manufacturers, providers and payers moving forward.

Background

BPCI is the biological product counterpart to the Hatch-Waxman Act, which governs the generic drug approval process. BPCI enacted 42 U.S.C., § 262, which governs the biosimilar approval process. Biosimilar biological products that are designated as interchangeable are analogous to generic medications. When a drug is prescribed, a generic is commonly dispensed when available. Generics are usually more cost-effective than brand-name medications. However, as of June 1, 2017, there are only a handful of FDA-approved biosimilar products.

Under BPCI, a biosimilar is defined as a biological product that is “highly similar to the reference product” and has “no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.” 42 U.S.C. § 262(i)(2)(A)-(B). However, it should be noted that for payers and providers, there is a difference between a biosimilar and an interchangeable product from a substitution perspective. Specifically, only if the biosimilar is found to be interchangeable, based on the submitted application and testing requirements, may the biosimilar be substituted for the reference product without the intervention of the prescribing healthcare practitioner.

In Sandoz, the case involved Neupogen® (filgrastim) as the biological reference product at issue. Neupogen® is a leukocyte growth factor with an approved indication for use in a variety of patient populations. Neupogen® is typically used in patients to stimulate the body’s production of white blood cells. Amgen has marketed Neupogen® since 1991 and claims to hold patents for its manufacturing and use. Sandoz filed an application with the FDA seeking biosimilar approval for Zarxio®, a filgrastim product, with Neupogen® as the reference product pursuant to 42 U.S.C. § 262.

Prior to receiving FDA approval, Sandoz informed Amgen that it intended to market Zarxio® immediately upon receiving approval. In addition, Sandoz notified Amgen that it declined to provide Sandoz’s application and manufacturing information to Amgen. Amgen sued Sandoz for patent infringement and asserted two claims under California’s unfair competition statute that Sandoz violated federal law – when it did not submit “its application and manufacturing information under 42 U.S.C. § 262(l)(2)(A), and when it provided notice of commercial marketing under 42 U.S.C. § 262(l)(8)(A) before rather than after, the FDA licensed” Zarxio®.

Tuesday’s decision answered the outstanding questions at issue:

Is the requirement under BPCI that a biosimilar applicant provide its application and manufacturing information to the reference product sponsor enforceable by federal injunction?

No. BPCI provides a procedure that biosimilar applicants and reference products must engage in order to permit patent litigation before the biosimilar is marketed. Parties are subject to various consequences if the procedure is not followed. Furthermore, BPCI contains remedies for failure to comply with the procedural requirements. Therefore, the Court held that it is not an act of artificial infringement under 35 U.S.C. § 271(e)(2)(c)(i),(ii) for the applicant to fail to disclose its application and manufacturing information to the sponsor of the reference product. Consequently, there is no provision to enforce by injunction under federal law.

When must the biosimilar applicant notify the reference product sponsor regarding the marketing of a biosimilar?

The plain language of BPCI provides that “[t]he subsection (k)[biosimilar] applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product [biosimilar] licensed under subsection (k).” 42 U.S.C. § 262(l)(8)(A). Subsection (k) describes the licensure process by which biological products are licensed as biosimilar and/or interchangeable biosimilar products.

In Sandoz, Amgen argued that the word “licensed” in the statute means that the biosimilar must be licensed by the FDA before notice may be provided to the sponsor. The Supreme Court disagreed. Specifically, the Court interpreted the statutory language as requiring that the applicant provide the reference product sponsor “notice at least 180 days prior to marketing its biosimilar.” The Court explained that the word “licensed” in the statute simply means that the product must be “licensed” “on the date of first commercial marketing.” In other words, the biosimilar product does not have to be licensed prior to the applicant providing the reference product sponsor notice.

So, what does this really mean and how does it impact your business?

For manufacturers, the Supreme Court’s ruling in Sandoz clarifies the notification requirements applicable to biosimilar applicants. Specifically, the Court has clarified that applicants can notify reference product sponsors before obtaining FDA licensure. In other words, the biosimilar applicant can notify the reference product sponsor of its intention to commercially market a biosimilar while awaiting FDA approval. By doing so, biosimilar applicants can drastically shorten their wait time to market newly FDA-approved products.

For payers and providers, 180 days may not seem like a long period of time. However, when a product has more than a billion dollars of sales in a year, 180 days can mean an impact of $500 million or more on sales. Why does this matter for payers and providers? Because the earlier the competition gets to market, the faster the market typically sees a decrease in pricing. Therefore, the Court’s decision in Sandoz could have a drastic impact on how fast a product gets to market and how fast the market sees a decrease in pricing for these products.

Marc Wagner contributed to this article.

Branded Biologic Products Lose 180 Days of Patent Exclusivity in Unanimous Decision From Supreme Court