Under the Biologics Price Competition and Innovation Act (“BPCIA”), the Food and Drug Administration (FDA) provided a pathway for approval of abbreviated applications for biological products (“BLAs”) that are shown to be “biosimilar” to an already-approved biologic (“reference product”). A biosimilar drug is essentially a copy of a biologic medical product, which is any medicinal product manufactured in, or extracted from biological sources.

Under the BPCIA, once a biosimilar application is submitted to the FDA, there is a  procedure, commonly referred to as the “patent dance,” for resolving patent disputes.  The  patent  dance procedure has strict timing requirements and involves several rounds of detailed information exchanges between the reference product sponsor (usually the innovator company) and the biosimilar applicant. For example, the patent dance requires a prompt exchange of information and materials between the parties describing infringement  and  invalidity positions. In addition,  the  BPCIA  requires  a biosimilar applicant to give the sponsor at least 180 days’ advance notice prior to the first commercial marketing of its biosimilar.

There     has     been     some    uncertainty     in    the pharmaceutical  industry  as  to how the patent dance procedures  and  the  180-day  notice  provision would be   enforced   by   United   States   district   courts. Recently,  a  District Court for  the Northern District of California  issued  an  important  ruling  about  both of those issues in Amgen, Inc. v.  Sandoz, Inc.,  14-cv- 4741  (March  19,  2015).       In  that  case,  Amgen had alleged   that   Sandoz,   which   filed   the   first  U.S. abbreviated   biosimilar   application   in   2014   for   a biosimilar  of  an  Amgen   cancer   treatment  product called Neupogen, failed to “follow the rules” set forth by  the  BPCIA  by  refusing  to  engage  in  the patent dance.   Amgen  also  argued  that  under the BPCIA, biosimilar   applicants   cannot   provide   the  180-day required notice until after FDA approves the product. Sandoz  argued  that  the  patent  dance  was optional under the law, and also contended that the 180 days notice requirement  would be  fulfilled  as long as the BLA            applicant  provided    sufficient      notice   before marketing its biosimilar.

On March 19, 2015, Judge Richard Seeborg of the Northern   District   of   California   rejected   Amgen’s argument, and ruled that participation in the patent dance is, indeed,  optional.  The  Court determined that while the BPCIA does set forth an elaborate procedure for exchanging information (i.e., the patent dance), parties may nonetheless opt out of these procedures and proceed directly to patent litigation. The Court indicated that the use of the word “shall” in the BPCIA did not require the parties to participate in the patent dance, but instead indicated what the parties must do if they choose to dance.

Judge  Seeborg  also  found  Amgen’s argument about the  180-day  notice  period  “problematic”  because it “would  tack  an  unconditional  extra  six  months  of market  exclusivity  onto  the  twelve  years reference product  sponsors  already  enjoy”  under  the   law. Accordingly,  the  Court  rejected  Amgen’s argument, and confirmed that under the BPCIA, it was sufficient for  Sandoz   to  provide  Amgen  with  its  180 days’ notice in advance of receiving FDA approval.

The parties in Amgen v. Sandoz have taken their case to the Federal Circuit on an expedited appeal schedule; the Federal  Circuit should settle the issue of whether the patent dance is  optional  by this summer or early fall at the latest.