In 2009, Congress passed the Biologics Price Competition and Innovation Act ("BPCIA") that provides a framework under which manufacturers can receive approval to market and sell a biosimilar of an existing biologic. The BPCIA framework is similar, but not identical to, the process pharmaceutical companies use when filing an abbreviated new drug application ("ANDA"). Although the BPCIA was passed in 2009, it has been rarely used, and, hence, there is little guidance as to how the act should be applied.

In 2013, Sandoz filed a declaratory judgment action against Amgen arguing that its products did not infringe Amgen's biologics patents. Amgen moved to dismiss the case for lack of controversy and because the BPCIA barred the suit until the parties complete the dispute resolution process proscribed by the BPCIA. The district court agreed with Amgen and dismissed the case. Sandoz appealed arguing that there was sufficient controversy and it did not need to complete the BPCIA dispute resolution process before filing suit. The Federal Circuit affirmed the district court holding that there did not (yet) exist a controversy because Sandoz had not even filed an application for approval of its product with the FDA, which is a necessary first step before it can sell its product. Sandoz Inv. v. Amgen Inc. (Fed. Cir. Dec. 5, 2014). If Sandoz cannot sell a product, there cannot possibly be any patent infringement controversy. Interestingly, the Federal Circuit did not take a position as to whether the BPCIA prohibits such a suit because it was able to decide the case without that analysis.

A second court, citing the Sandoz case, recently dismissed a declaratory judgment action for failure to comply with the BPCIA. In Celltrion Healthcare Co., Ltd. v. Kennedy Trust for Rheumatology Research (S.D.N.Y. Dec. 1, 2014), the plaintiff sought a declaratory judgment that the three patents held by the defendant were invalid. The court dismissed the case because the actions by the parties to date did not create a sufficient justiciable controversy that gave rise to declaratory judgment jurisdiction. The court went on to find that even if there was sufficient declaratory judgment jurisdiction, it still would had dismissed the case because the parties had not completed the dispute resolution framework established by the BPCIA.

In light of these cases, it appears that district courts are unwilling to entertain biologics cases unless the parties have completed the dispute resolution framework of the BPCIA. The Federal Circuit, however, refused to take a position on whether such suits are barred by the BPCIA. Hence, the ambiguity about the application of the BPCIA will persist. While a few companies may continue to test the application of the BPCIA, we likely will not see widespread use of the BPCIA until the Federal Circuit weighs in and interprets the act. If the Federal Circuit or other courts decide to allow biologics cases to proceed without following the BPCIA framework, there will likely be an increase in biologics cases without using the BPCIA dispute resolution process diminishing the relevance of the BPCIA. On the other hand, if the Federal Circuit affirms the use of the dispute resolution procedures and provides other guidance on the BPCIA, there will likely be an increase in cases brought under the BPCIA.