United States: Amgen v. Sandoz BPCIA Dispute Heads To The Federal Circuit

After a series of preliminary skirmishes, the first full-fledged litigation under the Biologics Price Reduction and Innovation Act is Amgen's lawsuit against Sandoz concerning Sandoz's Zarxio, a biosimilar version of Amgen's blockbuster biologic Neupogen.  Last month, the district court for the Northern District of California denied Amgen's motion for a preliminary injunction and granted judgment as a matter of law to Sandoz on Amgen's claims that Sandoz had violated the BPCIA by refusing to participate in the statutory pre-litigation "patent dance" and by serving a notice of commercial marketing before the license application was approved.

The parties in Amgen v. Sandoz  have now taken their case to the Federal Circuit on an expedited schedule.  Over the past month, both parties, as well as the district court and the Federal Circuit, have participated in a flurry of briefing and scheduling activity that seems poised to lead to an interim decision by the Federal Circuit early next month and a decision on the appeal by the summer or early fall.

The Expedited Schedule

Following the March 19 decision on Amgen's motion for a preliminary injunction, the parties and courts acted quickly to bring the appeal to the Federal Circuit.  On March 25, Judge Seeborg entered partial judgment for Sandoz, and Amgen filed a notice of appeal to the Federal Circuit the same day. The Federal Circuit quickly approved an expedited schedule that will see briefing completed by the end of the month. Amgen filed its opening brief on April 3, Sandoz filed its opposition on April 21, and Amgen's reply is due on April 28. The Federal Circuit has scheduled oral argument for June 3.

Meanwhile, an important (and potentially prophetic) interim decision on an injunction pending appeal is even closer at hand.  On April 15, the district court denied Amgen's motion for an injunction pending appeal, stating that "[w]hile Amgen raises significant and novel legal questions as to the merits of its case, as noted in the Court's prior order, its tenuous and highly contingent showing of irreparable harm forecloses injunctive relief."  Sandoz agreed to refrain from launching Zarxio until the earlier of May 11 or a decision by the Federal Circuit on Amgen's application for an injunction pending appeal, but has not agreed to stay off the market pending ultimate resolution of the appeal.

On April 17, Amgen moved in the Federal Circuit for relief pending appeal.  The parties agreed on a briefing schedule for the motion under which briefing would conclude by April 28, and the Federal Circuit quickly approved the schedule.  The court's prompt attention to the motion suggests that it is poised to decide the motion by May 11, the date until which Sandoz has agreed to stay off the market.

Arguments of the Parties and Amici

In the Federal Circuit briefing, Amgen and its amici argue that the district court's holding that the BPCIA "patent dance" procedures are optional undermines the basic purpose and structure of the statute.  In its opening brief, Amgen contends in particular that Judge Seeborg made four errors. First, Amgen argues that the district court erred in holding that Sandoz was not required to give Amgen a copy of its aBLA and its manufacturing process information, despite the BPCIA's language stating that a biosimilar applicant "shall provide" this information. Second, Amgen argues that the district court erred in holding that Sandoz had properly given notice of commercial marketing, since the BPCIA refers to a "licensed" biological product. Third, Amgen challenges the court's holding that the sole remedy for a BPCIA violation is a declaratory judgment for patent infringement, as opposed to a cause of action under federal or state law. Fourth, Amgen contends that the court erred by denying its motion for a preliminary injunction to compel Sandoz to comply with the BPCIA, "as properly construed."

Two major biotechnology companies, AbbVie and Janssen Biotech ¹, as well the Biotechnology Industry Organization (BIO), filed amicus briefs with the Federal Circuit supporting reversal of Judge Seeborg's decision. The amici contend that the BPCIA's intricate "patent dance" procedures were intended to be followed, and argue that the district court's decision, by permitting the biosimilar applicant to bypass them, would upset the statute's carefully calibrated balance of interests.  As the AbbVie brief puts it, "It is impossible to read subsection [42 U.S.C. 262](l) from beginning to end and conclude that Congress went through all of that effort, provided all of those details, and considered all of the potential alternatives, only to conclude by saying in (l)(9): 'but do whatever you want.'"

In its opposition brief, Sandoz presents a different view of the BPCIA.  According to Sandoz, the BPCIA procedures are merely "procedural means to a substantive goal: resolving patent disputes so that non-infringing biosimilars can be available to patients as expeditiously as possible."  As such, Sandoz contends that biosimilar applicants do not need to follow the statutory procedures when they do not find it in their interest to do so.  Sandoz argues that by describing the BPCIA procedures as steps the parties "shall" undertake, Congress did not mean that the parties would be in violation of the law if they failed to undertake them, but rather that the parties "shall" participate in the patent-exchange procedures if they wish the "patent-exchange process to continue."  Furthermore, Sandoz contends, the statutory limitations on declaratory judgment actions are the sole consequence for failing to participate in the statutory procedures, so that even if not participating in the statutory procedures were a violation, there could be no additional judicially enforceable remedies.  Sandoz's position is supported by amicus curiae the Generic Pharmaceutical Association.  The GPhA brief argues that Congress intended the BPCIA "patent dance" to be "non-mandatory" and that requiring participation in the statutory procedures would lead to absurd results in cases where the innovator did not have any relevant patents.

In sum, with the Federal Circuit briefing nearly complete and an expedited schedule in place, a decision on the BPCIA "patent dance" procedures is on the horizon.  Although it always remains a possibility that the court could decide the appeal on narrow grounds, the Federal Circuit's coming decision is likely to provide some guidance on the BPCIA's dispute resolution procedures.

Footnote

1 Patterson Belknap represents Janssen Biotech in its litigation with Celltrion and Hospira and in its amicus brief to the Federal Circuit supporting Amgen.

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