On June 12, the Supreme Court decided Sandoz Inc. v. Amgen Inc., the first case under the Biologics Price Competition and Innovation Act of 2009 (BPCIA) to reach the high court. The BPCIA establishes a regulatory pathway for approval of “biosimilar” drugs and sets forth a complex scheme for resolving patent disputes between the biosimilar applicant and the sponsor of the reference biological product. The Court considered whether two key provisions of the BPCIA — the pre-litigation exchange of information (commonly known as the “Patent Dance”) and the biosimilar applicant’s 180-day notice of commercial marketing — are mandatory and enforceable by injunction, and whether the 180-day notice must await biosimilar approval. The Court issued a unanimous decision, holding that: (1) the failure of a biosimilar applicant to provide its application to the reference product sponsor is not enforceable by injunction under federal law; and (2) the biosimilar applicant’s 180-day notice of commercial marketing may be given prior to FDA approval of the biosimilar application. Justice Breyer issued a separate concurring opinion.
In a split decision in the case below, a majority of the Federal Circuit held that a biosimilar applicant can opt out of the Patent Dance exchanges, but must wait to provide 180-day notice of commercial marketing until after receiving FDA approval. Amgen, Inc. v. Sandoz, Inc., 794 F.3d 1347 (Fed. Cir. 2015).
The Federal Circuit held that 42 U.S.C. § 262(l)(2)(A), which sets forth that a biosimilar applicant “shall” provide a copy of its application and manufacturing information to the reference product sponsor, the first step of the Patent Dance, is a voluntary provision and a reference product sponsor’s only remedy is to bring a declaratory judgment action pursuant to 42 U.S.C. § 262(l)(9)(C) and/or a patent infringement action pursuant to 35 U.S.C. § 271(e)(2)(C)(ii). Id. at 1356-57. The Federal Circuit further held that the 180-day notice of commercial marketing provision of 42 U.S.C. § 262(l)(8)(A) is a “stand-alone” provision and that such notice is mandatory and may be given only after the FDA approves the biosimilar application, in effect providing an additional 180-day exclusivity to the reference product sponsor. Id. at 1358-59.
Sandoz and Amgen filed cross-petitions for a writ of certiorari requesting that the Supreme Court consider the following issues: (1) whether a biosimilar applicant is required by 42 U.S.C. § 262(l)(2)(A) to provide the reference product sponsor with a copy of its abbreviated biologics license application and related manufacturing information;1 (2) whether a biosimilar applicant’s failure to provide such information is enforceable by injunction or whether the sole remedy is to bring a declaratory judgment action under 42 U.S.C. § 262(l)(9)(C) and/or a patent infringement action under 35 U.S.C. § 271(e)(2)(C)(ii);2 (3) whether the notice of commercial marketing set forth in 42 U.S.C. § 262(l)(8)(A) can be effective if given before FDA approval of the biosimilar;3 and (4) whether the notice of commercial marketing is a stand-alone requirement enforceable by injunction.4 The Court granted cert and, on April 26, 2017, heard oral argument.
Supreme Court Decision
Justice Thomas, writing for a unanimous Court, held that the § 262(l)(2)(A) step of the Patent Dance is not enforceable by an injunction under federal law. As the Court reasoned, “[w]hen an applicant fails to comply with § 262(l)(2)(A), § 262(l)(9)(C) authorizes the sponsor, but not the applicant, to bring an immediate declaratory judgment action for artificial infringement as defined in § 271(e)(2)(C)(ii)” and “Section 262(l)(9)(C) thus vests in the sponsor the control that the applicant would otherwise have exercised over the scope and timing of the patent litigation.”5 Although the Court characterized the § 262(l)(2)(A) step of the Patent Dance as a “requirement,” the Court said it was not reaching the decision of whether it was “mandatory.”6 The Court remanded to the Federal Circuit to decide Amgen’s state unfair competition claims, specifically to decide whether “California law would treat noncompliance with § 262(l)(2)(A) as ‘unlawful,’” and if so, whether the state law claims are pre-empted by the BPCIA.7
As to the notice of commercial marketing provision of § 262(l)(8)(A), the Court held that notice may be given prior to FDA approval of the biosimilar. The Court reasoned that “[t]he statute’s use of the word ‘licensed’ merely reflects the fact that, on the ‘date of the first commercial marketing,’ the product must be ‘licensed.’”8 Thus, the Court held that “because Sandoz fully complied with § 262(l)(8)(A) when it first gave notice of commercial marketing (before receiving FDA approval), the Federal Circuit erred in issuing a federal injunction prohibiting Sandoz from marketing its biosimilar, Zarxio, until 180 days after licensure.”9 In reaching this decision, the Court therefore rejected the Federal Circuit’s effective grant of a 180-day extension to the reference product’s regulatory exclusivity.
In a brief concurrence, Justice Breyer noted that “Congress implicitly delegated to the [FDA] authority to interpret [the statutory terms]” and “so, if that agency, after greater experience administering this statute, determines that a different interpretation would better serve the statute’s objectives, it may well have authority to depart from, or to modify, today’s interpretation.”10
Although this decision finally resolves the questions of whether a reference product sponsor may enforce § 262(l)(2)(A) by an injunction under federal law and whether the notice of commercial marketing extends regulatory exclusivity by 180 days, it remains to be seen whether state law claims remain a viable avenue for reference product sponsors to enforce compliance with the BPCIA’s requirement that a biosimilar applicant provide its application and manufacturing information.