United States: Sandoz Was Disinvited To The Patent Dance: The Federal Circuit's First Interpretation Of The BPCIA Will Have To Wait

​Since the 1984 enactment of the Drug Price Competition and Patent Term Restoration Act, Hatch-Waxman litigation has dominated the sphere of life-sciences patent litigation.  The battle between proprietary and generic interests, which have often intertwined over the last thirty years, has changed the landscape of pharmaceutical small molecules. 

And so it is with the Biologics Price Competition and Innovation Act of 2009 ("BPCIA").  Industry observers expect the litigation of biologics and so-called biosimilars to be significant and to reshape the sale of biologics, just as the Hatch-Waxman Act did for small-molecule pharmaceuticals.  Thus far, however, every attempt to judicially define the contours of the BPCIA has failed.

On December 5, 2014, the U.S. Court of Appeals for the Federal Circuit issued its first decision on a case involving the BPCIA, upholding the dismissal of a declaratory judgment action that Sandoz, the generic arm of Novartis, filed with respect to two Amgen-licensed patents covering Amgen's blockbuster biologic, Enbrel®.  The court of appeals agreed with the district court that there was no case or controversy between the parties.  In so doing, the court of appeals expressly declined to hold that a failure to file an FDA approval application necessarily results in lack of declaratory judgment jurisdiction. 


In 1998, the FDA granted a Biologics License for etanercept to Amgen's predecessor, Immunex, Inc.  Amgen markets etanercept under the tradename Enbrel®.  In 2004, Sandoz began developing its own biosimilar entanercept product with the expectation that Amgen's last Enbrel® patent would expire in 2014.  Amgen then announced two previously unpublished U.S. patents , issued in 2011 and 2012, which it had licensed from Hoffman-La Roche.  Amgen took the position that these patents are "related to Enbrel®," and that they extended patent protection for Enbrel® until 2029.

In 2013, Sandoz initiated a Phase III clinical trial on its entanercept product.  Simultaneously, Sandoz filed a declaratory judgment action in the U.S. District Court for the Northern District of California against Amgen and Hoffman-LaRoche (collectively, "Amgen") seeking a judgment of noninfringement, invalidity, and unenforceability.  At the time of filing, Sandoz had not filed an application for a biosimilar product under the BPCIA (42 U.S.C. § 262(k)). 

At the Federal Circuit, the case was one of first impression. The BPCIA borrows liberally from, but is not identical to, the Hatch-Waxman Act.  Its framework is highly structured, requiring the biosimilar applicant to notify the biologic sponsor, engage in a mutual exchange of information, and enter into a mandatory negotiation over a fixed period to define the scope of the litigation.  However, in what is effectively a Catch-22, Sandoz could not avail itself of this statutory scheme because it had not yet filed an application under 42 U.S.C. § 262(k).

District Court Action

Sandoz argued that the BPCIA does not provide the exclusive remedy for judicial review of the status of Amgen's patents and that a declaratory judgment action was proper under the Declaratory Judgment Act, 28 U.S.C. § 2201, based on principles set out in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007).  According to Sandoz, the MedImmune test would be satisfied as to either party in a proceeding that the BPCIA governs, where the biosimilar applicant notified the reference product sponsor of commercial marketing no later than 180 days before such marketing.  Sandoz so notified Amgen.

Amgen argued that the declaratory judgment action was premature for two separate and distinct reasons.  First, it contended that the district court lacked statutory authority to consider a patent dispute involving a biosimilar product until after Sandoz filed an FDA biosimilar application.  In essence, Amgen argued that the statutory framework of the BPCIA provides the exclusive remedy for patent disputes involving biosimilar products.  Second, Amgen argued that the MedImmune test was not satisfied as no cognizable case or controversy exists between the parties.

In her decision of November 12, 2013, District Judge Maxine M. Chesney dismissed the action, adopting both of the grounds Amgen advanced:  i) That the BPCIA provided an exclusive remedy for the claims advanced and here its procedural requirements had not been satisfied; and ii) that Sandoz's intent to file an FDA application in the future was not enough to create a threat of injury concrete and immediate enough to support federal jurisdiction.

Federal Circuit Decision

On December 5, 2014, the Federal Circuit panel affirmed the dismissal, addressing solely the MedImmune test under the Declaratory Judgment Act.  In reaching this decision, the court of appeals considered Sandoz's failure to file an FDA biosimilars application to be highly probative of the absence of a "case or controversy," but it stopped short of establishing a bright-line rule that such a filing was an absolute predicate.  Instead, the panel focused on the "reality and immediacy" aspects required to establish a case or controversy, reasoning that there were too many contingencies for Sandoz to sustain its action.  Perhaps the most significant unknown was that Sandoz's biosimilar was still in Phase III trials, the success of which was far from guaranteed.

The Court expressly refused to rule on the district court's conclusion that the BPCIA framework provided the exclusive basis for a declaratory judgment.  The question will remain open until a declaratory judgment plaintiff satisfies the MedImmune test while concurrently not satisfying the prerequisites of the BPCIA.  It is not clear whether such a case is possible because there is no clear and apparent path for a plaintiff to establish a case or controversy without a pending FDA application. 

On the Horizon

The Federal Circuit may be revisiting these same issues again soon if Celltrion appeals the December 1, 2014 dismissal of its declaratory judgment action in Celltrion Healthcare Co. v. Kennedy Trust for Rheumatology Research, 2014 U.S. Dist. LEXIS 166491 (S.D.N.Y. Dec. 1, 2014).  Celltrion brought this action against patent owner Kennedy Trust on patents related to methods for treating rheumatoid arthritis ("RA").  Janssen Biotech, Kennedy's licensee, markets Remicade® for the treatment of RA. 

Celltrion began developing Remsina®, its biosimilar of Remicade®, in 2008 and successfully completed its clinical trials.  Celltrion competes with Janssen in other countries already and wanted the U.S. courts' guidance as to Celltrion's ability to compete in the U.S.  Celltrion submitted its FDA application under § 315(k) of the BPCIA (42 U.S.C. § 262(k)) in November 2013, and completed the application in August 2014.  Celltrion expects final approval in the first quarter of 2015.  Earlier this year, but before the 315(k) application was complete, Celltrion filed its declaratory judgment action. 

Judge Paul A. Crotty of the U.S. District Court for the Southern District of New York dismissed the action, ruling that Celltrion could not establish a case or controversy.  Despite Celltrion's significant investment in the development of Remsina® and Celltrion's diligent pursuit of FDA approval, Judge Crotty found "these approval preparations are simply not at a stage that can support a declaratory judgment action" under the MedImmune standard.

Judge Crotty seems to disagree with Judge Chesney as to the exclusivity of the BPCIA dispute resolution framework, as a technical matter:

Even if the Court were to find that Celltrion had [satisfied the requirements to establish a case or controversy], the Court would still exercise its discretion to decline to hear this case in light of the existence of the BPCIA statutory framework for the resolution of patent disputes in the licensing of biosimilars.

Celltrion Healthcare Co., at *12 (emphasis added).  Judge Crotty's language, then, suggests that a declaratory judgment action might be a discretionary avenue outside of formal BPCIA procedures. 

While a Celltrion appeal could theoretically place the exclusivity issues squarely before the Federal Circuit, the fact that Celltrion's application was not approved at the time of suit may provide the court with a simpler exit.  In the meantime, we continue to wait for the first BPCIA case to proceed to the merits. 

[1] U.S. Patents 8,063,182 and 8,163,522.

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