On August 8, 2017, Sanofi-Aventis (“Sanofi”) filed a patent infringement suit in the United States District Court for the District of New Jersey against Merck Sharp & Dohme (“Merck”) for infringement of U.S Patent Nos. 7,476,652 and 7,713,930. The suit relates to Merck’s insulin glargine vial drug product, a proposed follow-on biologic of Sanofi’s Lantus. Sanofi alleges that by submitting an NDA to the FDA seeking approval for its insulin glargine vial product, Merck committed an act of infringement under 35 U.S.C. §271(e)(2)(A). Recently, on September 14, 2017, Merck filed an Answer asserting several affirmative defenses and seeking a declaratory judgment of noninfringement and invalidity.

In relation to this lawsuit, Merck filed an NDA through the 505(b)(2) application pathway seeking FDA approval for its proposed follow-on biologic, an insulin glargine [rDNA origin] vial product. Merck also similarly filed another NDA on its other proposed follow-on biologic, an insulin glargine [rDNA origin] cartridge product. Unlike most biosimilar products, these applications are covered by the Federal Food Drug and Cosmetic Act (“FDCA”) rather than the Public Health Services Act (“PHSA”).

Currently, biosimilars (or follow-on biologics) are regulated by two different statutes and are therefore reviewed through two different approval pathways. The majority of biosimilar applications are filed as Biologics License Applications (“BLAs”) under the 351(k) pathway. The Biologics Price Competition and Innovation Act (“BPCIA”), enacted in 2010 as part of the Affordable Care Act, amended the PHSA by creating an abbreviated licensure pathway for products that are shown to be biosimilar to or interchangeable with an FDA-approved biological reference product. Section 351(k) of the PHSA requires that the application contain information showing that the biological product is biosimilar to the reference product. Section 351(i) defines “biosimilar” to mean “(a) that the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components; and (b) there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.” See 42 U.S.C. § 262(i).

By contrast to the 351(k) pathway, some biosimilar applications are filed under section 505(b)(2) of the FDCA. In its enactment, the BPCIA provided a transition provision where applications for biological products may be submitted under section 505(b)(2) until March 23, 2020, if the biological product is in a product class for which a biological product in said product class was approved under section 505 of the FDCA by March 23, 2010. The FDA has interpreted “product class” to mean “both products are homologous to the same gene-coded sequence (e.g., the INS gene for insulin and insulin glargine) with allowance for additional novel flanking sequences (including sequences from other genes). Products with discrete changes in gene-coded sequence or discrete changes in post-translational modifications may be in the same product class as the previously approved product even if the result may be a change in product pharmacokinetics.” See US Food and Drug Administration. Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009 Guidance for the Industry, April 2015. For naturally derived protein products, a biological product is in the same product class if both products share a primary biological activity. See id.

There are a variety of differences between the two regulatory pathways with respect to the criteria necessary for approval. For a 351(k) application, an applicant must submit information demonstrating that the biological product: (1) is biosimilar to the reference product, (2) that it uses the same mechanism of action for the proposed condition of use, (3) conditions of use proposed have already been approved for the reference product, (4) requires the same dosage form, route of administration, and strength as the reference product, and (5) is processed, manufactured, and packaged in a location that meets the standard required to guarantee that the product is safe. Additionally, to demonstrate “biosimilarity,” the applicant must submit data taken from animal studies, analytical studies, and clinical studies.

By contrast, for a 505(b)(2) application, an applicant submits investigations of safety and effectiveness but at least one or more of the investigations relied upon were not conducted by the applicant and instead are either published literature or the FDA’s previous finding of safety or effectiveness for a listed drug. If the 505(b)(2) application relies on a listed drug, the applicant must submit adequate information to show that the proposed biological product is sufficiently similar to the listed drug. However, in a 505(b)(2) application, the biological product can differ from the reference product in its dosage form, strength, route of administration, or active ingredient (but still must have the same active moiety). An applicant must support any differences with adequate information to prove the safety and efficacy of the proposed product.

The two pathways also differ considerably with respect to patent submissions. In the 505(b)(2) pathway, like generic drug applicants, an applicant for a biological product will submit Paragraph IV patent certifications to the listed drug and final approval may be subject to a 30-month stay if an action for infringement is brought within 45 days of receipt of the Notice of Certification. In the 351(k) pathway, applicants will engage in the statutory “Patent Dance” wherein the applicant and reference product sponsor will privately discuss the potential patents at issue to arrive at a list of the patents to be litigated.

The 505(b)(2) is notably a more familiar and predictable pathway than 351(k). However, § 7002(e)(4) of the Affordable Care Act provided a provision such that as of March 23, 2020, every biological product approved under the 505(b)(2) pathway will be deemed to be a license for the biological product under 351(k). In March 2016, the FDA issued a draft guidance on its interpretation of this provision, stating that it interprets the provision to mean that as of March 23, 2020, approved section 505[1] applications for biological products will no longer exist as NDAs and will be replaced by approved BLAs[2]. The FDA also interpreted the provision to apply only to approved 505(b)(2) applications and stated that the FDA will not approve any pending or tentatively approved applications on March 23, 2020, even though the provision allows 505(b)(2) application submissions up to March 23, 2020. Thus, according to the FDA, any 505(b)(2) applications that are pending on March 23, 2020, will not be approved.

Therefore, although the 505(b)(2) pathway provides an approval pathway for biosimilars for the next two and a half years, the FDA’s interpretation suggests that applicants may want to consider other options if they don’t anticipate receiving final approval before March 23, 2020. In Merck’s case, its NDA appears to be subject to the 30-month stay pending the outcome of the litigation. Under the Hatch-Waxman Act, if a patentee files suit under 35 U.S.C. §271(e)(2)(A) for patent infringement within 45 days of receipt of the Notice of Certification, final approval of a product may only be granted “upon expiration of a 30-month period beginning date of the receipt of the notice provided under paragraph (2)(B)(i) or such shorter or longer period as the court may order because either party to the action failed to reasonably cooperate in expediting the action.” See 21 U.S.C. § 355(j)(5)(b)(iii). Presumably following the 30-month stay, the timing of a potential final approval of Merck’s second follow-on biologic should be within the March 23, 2020 date, and thus, Merck’s NDA will likely be transitioned to a BLA. Even though any 30-month stay in Merck’s case would expire a few months prior to the March 23, 2020 date, it demonstrates how the 30-month stay could cause an applicant to be in danger of not obtaining final approval in time.

In light of the FDA’s draft guidance and its interpretation of the statute, in the years remaining until the March 23, 2020, we may see a decline in the number of applicants choosing the 505(b)(2) pathway.