This week’s election of Donald Trump as the next President of the United States undoubtedly impacts many sectors of the American economy, and the bio/pharmaceutical industry is no exception. Two of Trump’s stated policies might bear directly on how biologics will be protected and litigated in this country and abroad: the repeal of the Affordable Care Act of 2010 (ACA), also known as Obamacare, and the repudiation of the Trans-Pacific Partnership (TPP).
The Biologics Price Competition and Innovation Act (BPCIA) was enacted in March 2010 as Title VII to the ACA. It created a new regulatory pathway, allowing approval of biosimilars, i.e., biologics that are highly similar to though not identical to innovator biologic medical products. Since then, four biosimilars have been approved in the U.S. via the BPCIA’s abbreviated pathway for regulatory approval. The BPCIA has also provided the framework for patent litigation for biosimilars, including a series of pre-suit information exchanges between the biosimilar maker and the innovator company (referred to as the “patent dance”), starting with the provision of the biosimilar regulatory application and manufacturing information, to determine what patents are infringed by the biosimilar maker and need to be litigated. The BPCIA’s provisions have seen increasing use in the last two years, as biosimilar applications and litigations grew in number.
During the high-profile court challenges to the ACA in 2010-2012, the BPCIA was never seriously at issue. However, when the ACA was briefly held unconstitutional by a district court in the case that became Nat’l Federation of Independent Business v. Sebelius, the BPCIA went with it, due to the ACA’s lack of a severability clause. That decision was overturned by the Supreme Court. Subsequently, the BPCIA survived a direct constitutional challenge. FDA recently denied a citizen petition alleging that the BPCIA’s biosimilar approval procedures constituted an unconstitutional taking for innovator biologics submitted to FDA prior to the BPCIA’s enactment.
With Trump’s election, the ACA is in question again. Among Trump’s foremost campaign promises has been the repeal of the ACA, and Senate Majority Leader Mitch McConnell recently stated that repealing the ACA is a “high item” on the new Congress’s agenda. Commentators, however, have noted that a total repeal is impractical, and that a piecemeal reworking of the law is more likely. What would take the law’s place if repealed is unknown, as Trump has not outlined a comprehensive plan to replace it. That said, it seems unlikely that the recently-enacted BPCIA, both the regulatory pathway and its litigation framework, will come to an end under Trump.
Uncertainty as to the new administration’s views may impact the actions of the Solicitor General in Amgen v. Sandoz, in which cross-petitions for writs of certiorari are pending before the Supreme Court. In that case, the Federal Circuit held in a 2015 split decision that, among other things, the disclosure provisions of the BPCIA are optional and that the biosimilar maker could choose not to participate in the patent dance at all, a ruling adverse to Amgen. But Amgen did not initially file a petition on that issue. Instead, the biosimilar maker, Sandoz, sought cert first, on the issue of when a biosimilar applicant can provide an effective 180 days’ “notice of commercial marketing.” The Federal Circuit held such notice could not come prior to marketing approval of the biosimilar by FDA. Amgen subsequently filed a conditional cross-petition on the patent dance issues arguing that the Federal Circuit’s decision upends the balance struck in the BPCIA by allowing biosimilar makers to determine whether the patent dance will be followed or not . Earlier this summer, the Court asked the Solicitor General to express the views of the United States on both petitions. But with the executive administration in transition, the Solicitor General may wait until after Trump’s inauguration to weigh in.
As to the TPP, the free trade agreement among a dozen Pacific Rim nations that the Obama administration has worked on for years, Trump has expressed strong disapproval. With a Trump presidency and Republican majorities in both chambers of Congress, the deal has “no chance” of passing, according to McConnell. Today, the Obama administration acknowledged that the TPP will not pass. Without the U.S., the deal is unlikely to come together at all, given that much of its appeal centered on access to the U.S. market. The final text of the TPP addresses intellectual property protection in Articles 18.50 and 18.52. With respect to protection for biologics, the TPP largely maintains the status quo: it gives countries a choice between at least eight years of non-patent exclusivity or at least five years of exclusivity plus “other methods” of protection. The United States already provides twelve years of non-patent exclusivity for biologics, and would not have to change its laws. Japan provides eight years and Australia and New Zealand provide five years of market exclusivity. The demise of the TPP may, however, nonetheless hamper efforts to attain multinational assent and cooperation on these issues.