A theme emerging in biosimilar litigation is when –and how much—discovery is available to reference product sponsors. The Supreme Court in Amgen v. Sandoz grappled with this issue in the spring, as it decided whether biosimilar applicants are statutorily required to share their abbreviated Biologics License Applications (“aBLAs”) and other manufacturing information soon after the aBLAs are accepted by the FDA for review. The Federal Circuit in Amgen v. Hospira is also currently facing a question on the scope of discovery into biosimilars’ manufacturing information. And numerous district courts have grappled with disputes over protective orders, including debates over who has access to information and under what terms.
Now, the disclosure war has spread to the balance sheet, and Amgen (as the reference product sponsor) has won this particular battle. On July 12, 2017, Sandoz asked the district court to hear arguments over Amgen’s discovery requests into financial projections (including projected pricing, sales, costs, profits, and competitive market analyses) for Sandoz’s yet-to-be-approved Neulasta® (pegfilgrastim) biosimilar. Sandoz requested that the court issue a protective order deferring Amgen’s discovery into what it calls the “the most competitively sensitive information available to each party at the present time.” In the alternative, Sandoz requested that the information be limited to outside counsel only, not the two in-house counsel from Amgen approved under the current protective order. Sandoz claimed its relief was necessary to prevent “the risk of a serious competitive injury to Sandoz now.” As discussed below, Magistrate Judge James in the Northern District of California denied Sandoz’s relief.
Sandoz argued that the requested projected sales and marketing strategies for pegfilgrastim are irrelevant to the trial scheduled for March 2018, which will address whether the purification procedures Sandoz uses to manufacture its pegfilgrastim product will infringe Amgen’s patents. According to Sandoz, a declaratory judgment for infringement is, under the Biologics Price and Competition Innovation Act (“BPCIA”), the “sole statutory base for suit prior to FDA approval,” and no monetary relief is available. Sandoz also noted that the “the BPCIA provides that the Court will resolve the existing action regarding infringement and validity before addressing injunctive relief.”
Sandoz further argued that the requested information would not be helpful even in deciding injunctive relief because: (1) Sandoz expects to change its accused purification process; (2) the current financial and market projections will be “stale” by the time an injunction is at issue; and (3) the likelihood of future harm to Amgen’s sales is not in dispute. Sandoz reasoned that because “[b]oth parties agree that Sandoz’s product is likely to take future sales from Amgen’s product and cause prices to decline,” the key issue in deciding whether an injunction is appropriate will be whether Sandoz’s redesigned purification procedures will avoid Amgen’s patent, an issue which was not ripe. Further, to allow time for Amgen to address issues of injunctive relief, Sandoz “agree[d] not to launch its product until 90 days after the March 2018 trial.”
Amgen countered that Sandoz, who bore the burden of demonstrating the need for protection from discovery, attempted to argue the merits of Amgen’s request for an injunction or damages, rather than the relevance of the requests. Amgen argued that the requested information is directly relevant to the balance of hardships and whether Amgen will be irreparably harmed. Amgen also claimed that the data will show the magnitude of harm as well as factor into the determination of a reasonable royalty. Amgen also noted that the March 2018 jury will also decide issues regarding Sandoz’s launched filgrastim product, Zarxio®, and information regarding the pegfilgrastim product could bear on damages for the filgrastim product.
Amgen also dismissed Sandoz’s arguments as irrelevant. First, Amgen noted that the discovery will be sufficiently protected under the current protective order; Amgen’s attorneys are bound by the protective order, and there had been no showing of a risk of inadvertent disclosure of confidential information. Second, Amgen asked the court to disregard Sandoz’s “speculative” arguments for delaying the discovery based on changes to its purification process (and thus the potential for non-infringement) or the timing of FDA approval. Third, Amgen noted that that deferring discovery for a separate hearing on remedies and damages related to pegfilgrastim would be “a wasteful and unnecessary imposition on this Court’s time and resources.”
On July 17, 2017, the magistrate judge decided this discovery dispute narrowly, stating that:
Unless and until Sandoz seeks bifurcation, and the Presiding Judge limits the issues to be heard at trial, Amgen’s claims for injunctive relief are set to be tried before a jury in March 2018. As such, the undersigned finds Amgen is, at this point, entitled to discovery about Sandoz’s expected pegfilgrastim approval, marketing, and sales. If Amgen’s injunctive relief claim is later bifurcated, the parties may raise this issue anew with the undersigned.
Although Amgen (the reference product sponsor) won this round, it remains to be seen how other courts will address these types of discovery issues, especially if there is a motion to bifurcate. In light of the Supreme Court’s ruling that the BPCIA’s “patent dance” is not enforceable with an injunction under federal law, more declaratory judgment suits may be filed early in the FDA approval process. Thus, the availability of certain remedies and discovery prior to FDA approval may take on greater importance to BPCIA litigants, and other courts may have opportunity to weigh in.