On July 21, 2015, the Federal Circuit issued an opinion addressing two issues of first impression relating to the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  First, the Court held that 42 U.S.C. § 262(l)(2)(A) does not require a biosimilar applicant to disclose its abbreviated biologics license application (“aBLA”) and manufacturing information to the reference product sponsor (“RPS”).  Second, the Court concluded that 42 U.S.C. § 262(l)(8)(A) requires the biosimilar applicant to provide notice of commercial marketing to the RPS, but that effective notice under that section of the statute can only be given after the United States Food & Drug Administration (“FDA”) licenses the aBLA product.

Background

The BPCIA established an abbreviated regulatory pathway for FDA approval of follow-on biologic products that are “highly similar” to a previously-approved product (“reference product”).  In particular, the BPCIA permits an aBLA applicant to rely on an RPS’s clinical safety and efficacy data when seeking FDA approval to market a biosimilar product. The BPCIA’s § 262(l) also creates a framework for biosimilar patent infringement litigation, including “early phase” litigation involving information exchanges between the biosimilar applicant and the RPS (see 42 U.S.C. § 262(l)(2)-(7)) and “late phase” litigation triggered by the biosimilar applicant’s 180-day notice of intent to market (see id. at § 262(l)(8)(A)).

Proceedings Below

Amgen’s drug Neupogen® (filgrastim) is a biopharmaceutical used to boost the production of white blood cells in a variety of patients including cancer patients receiving chemotherapy or undergoing bone marrow transplantation, and patients with severe chronic neutropenia.  Amgen has marketed Neupogen® since 1991.  In May 2014, Sandoz filed an aBLA seeking FDA approval of a biosimilar filgrastim product, Zarxio™.  Sandoz received notification on July 7, 2014, that the FDA accepted its aBLA for review, and on March 6, 2015, the FDA approved Sandoz’s aBLA for Zarxio™ for all approved uses of Neupogen®.

Sandoz notified Amgen on July 8, 2014 (the day after learning its aBLA had been accepted) that it had filed an aBLA referencing Neupogen® and that it intended to launch its biosimilar product upon FDA approval, which it expected in the first or second quarter of 2015.  Sandoz did not disclose its aBLA or manufacturing information to Amgen, nor did it engage in any of the other § 262(l) information exchanges.  Upon receiving FDA approval of its aBLA in March 2015, Sandoz again informed Amgen of its intention to commercially market Zarxio™.

Amgen sued Sandoz, asserting California state law unfair competition claims based on alleged violations of the BPCIA, conversion based on the allegedly unlawful use of Amgen’s Neupogen® license, and patent infringement.  The district court granted Sandoz partial judgment on the pleadings, holding that (1) the BPCIA permitted Sandoz’s decision not to disclose its aBLA and manufacturing information, (2) Sandoz’s decision, alone, was not a basis for injunctive relief, and (3) Sandoz could give notice of commercial marketing prior to FDA licensure.  Accordingly, the district court dismissed Amgen’s unfair competition and conversion claims with prejudice, as it found Sandoz had not violated the BPCIA.

Federal Circuit Opinion

Judge Lourie filed the opinion for the Court, joined in different parts by Judge Newman and Judge Chen.

First, the Court stated that the plain language of § 262(l)(2)(A), which recites that the biosimilar applicant “shall provide” to the RPS a copy of the aBLA and manufacturing information, would require the biosimilar applicant to disclose the recited documents and information if that section were read in isolation.  However, the Court concluded that subsection (l)(2) had to be read in the context of other BPCIA provisions explicitly contemplating that the biosimilar applicant may fail to disclose the recited information by the statutory deadline.  In particular, the Court stated that the consequence of such a failure is that the RPS may bring an infringement action under 42 U.S.C. § 262(l)(9)(C) and 35 U.S.C. § 262(e)(2)(C)(ii).  Thus, the Court concluded that “‘shall’ in paragraph (l)(2)(A) does not mean ‘must.’”

Second, the Court held that a biosimilar applicant can only give effective notice of commercial marketing under § 262(l)(8)(A) after the FDA has licensed its product, based on that paragraph’s reference to “the biological product licensed under section (k).”  The Court reasoned that requiring the product to be licensed before notice “ensures the existence of a fully crystallized controversy regarding the need for injunctive relief.”  Although the Court recognized that its ruling would give Amgen an additional 180 days of market exclusivity in this case, it said that “will not likely be the usual case, as aBLAs will often be filed during the 12-year exclusivity period for other products.”  The Court further concluded that the paragraph (l)(8)(A) notice is mandatory because paragraph (l)(8)(A)’s phrase “shall” presumptively signals a statutory requirement and, unlike for paragraph (l)(2)(A), there is no BPCIA provision contemplating non-compliance with paragraph (l)(8)(A).  In this case, the Court concluded that Sandoz’s July 2014 notice was ineffective, but its March 2015 “further” notice was effective.  Accordingly, the Court held that Sandoz may not market its biosimilar product before 180 days from March 6, 2015, i.e., September 2, 2015.

The Court then affirmed the dismissal of Amgen’s state law unfair competition and conversion claims, because Sandoz did not violate the BPCIA.

The Dissents-in-Part

Judge Newman concurred that § 262(l)(8)(A) requires the biosimilar applicant to provide notice of the FDA license, which starts the 180-day stay of commercial marketing.  However, she dissented from Judge Lourie’s opinion with respect to § 262(l)(2)(A), opining that notice of the FDA’s acceptance of a biosimilar application is also mandatory, as are the accompanying documentary and information exchanges under § 262(l)(2).

Judge Chen agreed with Judge Lourie that the BPCIA does not require a biosimilar applicant to submit § 262(l)(2) information to the RPS.  However, he opined that the § 262(l)(8) notice of commercial marketing is also not required because, in his view, § 262(l)(3)-(l)(8) cease to matter if the biosimilar applicant does not comply with § 262(l)(2).  Judge Chen opined that, in such a situation, the RPS has the right to immediately pursue patent infringement litigation unfettered by the timing controls and limits on the number of asserted patents imposed by § 262(l)(2)-(l)(8).  Judge Chen further opined that the majority’s interpretation of § 262(l)(8) provides an inherent right to an automatic 180-day injunction, which he views as “an atextual 180-day exclusivity windfall” in tension with the purpose of paragraph (l)(8).