On remand from the Supreme Court of the United States, the US Court of Appeals for the Federal Circuit held that under the Biologics Price Competition and Innovation Act of 2009 (BPCIA), state law claims and remedies are not available in biosimilar patent litigation. Amgen Inc. v. Sandoz Inc., Case No. 15-1499 (Fed. Cir., Dec. 14, 2017) (Lourie, J).
This appeal relates to certain BPCIA provisions that establish processes for obtaining US Food and Drug Administration (FDA) approval of biosimilars and for resolving patent disputes between manufacturers of licensed biologics and manufacturers of biosimilars. At issue is Amgen’s filgrastim product, marketed under the name Neupogen®, and Sandoz’s biosimilar product, for which Neupogen was the reference product. After receiving notification from the FDA that it had accepted Sandoz’s application for review, Sandoz notified Amgen of its biosimilar application filing referencing Neupogen and its intent to launch its biosimilar product immediately upon FDA approval. Sandoz opted not to provide Amgen with its biosimilar application under the BPCIA notification provisions. Amgen sued Sandoz under 42 USC § 262(l)(9)(C) to require such disclosure, asserting violation of the BPCIA as well as claims of unfair competition, conversion and patent infringement. Sandoz counterclaimed for a declaratory judgment that its actions were permitted under the BPCIA and asserted in its answer as an affirmative defense that Amgen’s state law claims were preempted by the BPCIA.
Ultimately, the dispute reached the Supreme Court, where the issues before the Court were (1) whether 42 USC § 262(l)(2)(A)’s requirement that an applicant provide the sponsor with its application and manufacturing information is enforceable by an injunction either under federal or state law, and (2) whether under § 262(l)(2)(A) a biosimilar applicant may provide notice of commercial marketing to the manufacturer before or after obtaining a license from the FDA (IP Update, Vol. 20, No. 6). The Supreme Court held that § 262(l)(2)(A)’s requirement that an applicant provide the sponsor with its application and manufacturing information is not enforceable by federal law, and remanded the issue of whether California law would treat non-compliance with this regulation as “unlawful.” The Supreme Court also held that a biosimilar applicant may provide notice of commercial marketing to the manufacturer before or after obtaining a license from the FDA.
On remand, the Federal Circuit was tasked to consider whether California law would treat non-compliance with § 262(l)(2)(A) as “unlawful,” and if so, whether the BPCIA preempts any additional remedy available under state law for an applicant’s failure to comply with § 262(l)(2)(A), as well as whether Sandoz had forfeited any preemption defense. Starting with the issue of preemption, the Court acknowledged that neither the district court nor the Federal Circuit in its prior decision had addressed preemption on the merits. Although there is a general rule that a federal appellate court does not consider an issue not considered below, appellate courts have discretion to decide when to deviate from this rule. The Federal Circuit deviation was warranted in this case because the issue of preemption is a significant factor in interpreting BPCIA. Further, the Court found that the issue of preemption was fully briefed, and the Supreme Court expressly invited the Federal Circuit to address the issue on remand.
The Federal Circuit analyzed whether BPCIA preempts state law claims predicated on a failure to comply with § 262(l)(2)(A). First, the Court found that BPCIA is a complex, comprehensive scheme that provides a full set of standards governing the exchange of information in biosimilar patent litigation, including penalties for non-compliance. The Court viewed the comprehensive nature of BPCIA as strong evidence that Congress did not intend to authorize other remedies that were not expressly incorporated, such as state law remedies. Second, because Amgen sought to impose penalties on Sandoz through state law claims not available under BPCIA, the Court found a conflict between the methods of enforcement provided by BPCIA and by state law, and affirmed the dismissal of Amgen’s unfair competition and conversion claims, concluding that the state law claims were preempted on both field and conflict grounds.