United States: Amgen v. Sandoz Federal Circuit Decision

On July 21, 2015, the Federal Circuit issued a divided decision in Amgen Inc. v. Sandoz Inc.,1 interpreting two provisions of the Biologics Price Competition and Innovation Act (BPCIA).2 The Federal Circuit decided two issues: 1) whether, as Amgen contends, the BPCIA requires Sandoz, and other biosimilar applicants, to provide a complete copy of their biosimilar application and manufacturing information within twenty days after the U.S. Food and Drug Administration (FDA) accepts the application, and 2) whether Sandoz's 180-day notice of commercial marketing was premature, as it was provided before the FDA approved and licensed Zarxio® (filgrastim-sndz), Sandoz's biosimilar to Amgen's Neupogen® product (filgrastim). These issues provided the Federal Circuit with its first real opportunity to substantively interpret the provisions of the BPCIA.

The majority opinion was authored by Judge Lourie and joined in parts by Judges Chen and Newman. The majority (Judges Lourie and Chen) affirmed the district court's interpretation of the "information exchange" provision of the BPCIA, finding that biosimilar applicants are not required to provide their biosimilar applications to the Reference Product Sponsor (RPS). However, the majority (Judges Lourie and Newman) partially reversed the district court's decision by holding that the 180-day notice of commercial marketing provision of the BPCIA is ineffective unless it is provided after a biosimilar applicant receives FDA licensure. The Court's decision therefore blunts Sandoz's earlier victory at the district court.

Quoting Winston Churchill and echoing statements made during oral argument, the majority opinion described the BPCIA as "a riddle wrapped in a mystery inside an enigma,"3 and noted that the Court did their "best to unravel the riddle, solve the mystery, and comprehend the enigma." Judge Chen, in his separate opinion, similarly noted that "[t]o fulfill our judicial obligation 'to say what the law is,' we must choose from a series of imperfect choices."4 In contrast, Judge Newman wrote that the "BPCIA as enacted leaves no uncertainty as to which of its provisions are mandatory and which are permissive."5

1. The "information exchange" provision does not require biosimilar applicants to give their application to RPSs.

Paragraph (l)(2)(A) (the "information exchange" provision) of the BPCIA provides that:

Not later than twenty days after the Secretary notifies the subsection (k) applicant that the application has been accepted for review, the subsection (k) applicant shall provide to the reference product sponsor a copy of the application submitted to the Secretary under subsection (k), and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application.6

The first portion of Judge Lourie's majority opinion, joined by Judge Chen, found that the "shall provide" language is permissive, rather than mandatory. Looking at the BPCIA as a whole, the majority found that the "shall" language cannot be read in isolation from the rest of the information exchange provision.7 Instead, when considering the statute as a whole, "latter provisions indicate that 'shall' in paragraph (l)(2)(A) does not mean 'must.'"8

The majority looked at other provisions of the BPCIA to determine Congress's intent in interpreting the "shall provide" language of (l)(2)(A).9 As was evident at the oral arguments, the majority's opinion indicated that the term "shall," when read in isolation, is mandatory, but like any other statutory term, its meaning is driven by context. The Court observed that the BPCIA "expressly contemplated" a situation that paralleled Sandoz's refusal to disclose their aBLA application by setting forth "consequence[s] for such failure."10 Seeing that "both 42 U.S.C. § 262(l)(9)(C) and 35 U.S.C.§ 271(e)(2)(C)(ii) are premised on a claim of patent infringement, and the BPCIA does not specify any non-patent-based remedies for a failure to comply with paragraph(l)(2)(A),"11 the majority concluded that "shall" in this instance does not institute a mandatory exchange of information. To bolster the holding, the majority stated that "mandating compliance with paragraph (l)(2)(A) in all circumstances would render paragraph (l)(9)(C) and 35 U.S.C. § 271(e)(2)(C)(ii) superfluous, and statutes are to be interpreted if possible to avoid rendering any provision superfluous."12

Judge Newman dissented from this section of the opinion, asserting that the majority disrupts the balance between the benefits and concessions made by both sides under the BPCIA. Judge Newman's dissent first noted that "Subsection (k) and subsection (l) are components of an integrated framework; to enjoy the benefits of subsection (k), the biosimilar applicant is obligated to comply with subsection (l) . . . . It is not denied that Sandoz obtained the benefit of the Amgen data in filing under subsection (k). Sandoz should be required to respect its obligations, in fidelity to the statute."13

Judge Newman's opinion also stresses textual interpretation, and criticizes the majority's failure to account for the plain language of the BPCIA. Citing firmly established Supreme Court precedent, Judge Newman asserts that "[t]he word 'shall' is ordinarily the language of command."14 Moreover, the term "shall" in the disclosure provision is followed immediately by the term "may," and thus "[w]hen the same Rule uses both 'may' and 'shall,' the normal inference is that each is used in its usual sense—the one act being permissive, the other mandatory."15

Finally, Judge Newman expresses concern about the majority's opinion regarding the alternate pathways for recourse. According to Judge Newman, the option for the RPS to file a declaratory judgment action in the event a biosimilar applicant fails to disclose its aBLA are limited to product or use claims, and do not include manufacturing process patents. Indeed, Judge Newman noted that "[a]bsent adequate factual support in a complaint for manufacturing method claims, declaratory jurisdiction may be unsupported."16

2. The "notice" provision requires biosimilar applicants to give RPSs 180 days advance notice of commercial marketing after receiving FDA licensure.

Paragraph (l)(8)(A) (the "notice" provision) provides that "[t]he subsection (k) applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k)."17

The second part of Judge Lourie's majority opinion, joined here by Judge Newman, found that the "notice" provision of the BPCIA requires a biosimilar applicant to first receive FDA licensure before giving the statutory 180 days' notice of commercial marketing to the RPS. Thus, the majority reversed the district court's holding that Sandoz may give notice at any point after the FDA had received their biosimilar application.

The majority supported its decision by noting that "[r]equiring that a product be licensed before notice of commercial marketing ensures the existence of a fully crystallized controversy regarding the need for injunctive relief . . . . If a notice of commercial marketing could be given at any time before FDA licensure, the RPS would be left to guess the scope of the approved license and when commercial marketing would actually begin."18

While Sandoz argued that requiring the 180-day notice after FDA approval would extend Amgen's exclusivity an additionalsix months, the majority stated that this was an anomaly predicated on the fact that Amgen's 12-year exclusivity period had already expired, but that this anomaly might not become the norm.19 Moreover, the majority pointed out that "[a] statute must be interpreted as it is enacted, not especially in light of particular, untypical facts of a given case."20

Judge Chen dissented to this portion of the opinion, arguing that the majority inconsistently interpreted the term "shall" in the two separate but related sections of the BPCIA.21 "To reach that inconsistent result, the majority takes the view that (l)(8)(A) should be read in a vacuum, apart from the context and framework of subsection (l), including the language of (l)(8)(B)."22

Judge Chen also writes that the 180-day notice provision of the BPCIA cannot be considered a "standalone" provision, and instead requires an integrated reading into the remainder of the statute like the information exchange portion. "The interwoven structure of subsection (l) indicates that Congress viewed the procedures of (l)(8) as inseverable from the preceding steps in (l)."23 According to Judge Chen, if a biosimilar applicant fails to disclose its application, none of the provisions of subsections (l)(3)-(l)(8) apply: "[T]he better reading of (l)(8) is that it does not apply, just as (l)(3)-(l)(7) do not apply, when the (k) applicant fails to comply with [the disclosure requirements of] (l)(2)."24 Thus, "[j]ust as 'shall' in (l)(2) does not mean 'must,' the same is true for the 'shall' provision in (l)(8)(A), once it is read in context with the entirety of subsection (l)."25

Finally, in addressing the majority's concern that the BPCIA does not provide a remedy for non-compliance with the 180-day "notice" provision, Judge Chen concludes that additional recourse is unnecessary, because failure to comply with the disclosure requirement allows the RPS to immediately bring a declaratory judgment suit for patent infringement on any patent, including product, use, and process patents.26

Conclusion

The Federal Circuit's decision in the Amgen v. Sandoz case provides much needed guidance on the comprehensive statute that governs the emerging biosimilar market. Given the dissenting opinions, one would be justified in wondering how long this guidance will last, and whether the case will be taken en banc by the Federal Circuit or appealed to the Supreme Court. But as it stands, the majority's opinion provides advantages for both biosimilar applicants and RPSs. The decision makes clear that, at least for now, the BPCIA does not mandate disclosure of the aBLA, opening the door for other biosimilar applicants to forego the patent exchange procedures outlined in the statute. The decision also provides that to be effective, the 180-day notice of commercial marketing must be given after FDA approval, which, in some circumstances, may extend RPSs' exclusivity by six months.

*Thomas J. Sullivan is a Summer Associate at Finnegan.
*Connor S. Houghton is a Summer Associate at Finnegan.

Footnotes

1. No. 2015-1499 (Fed. Cir. July 21, 2015).

2. Pub. L. No. 111-148, §§ 7001-7003, 124 Stat. 119, 804-21 (2010); see also 42 U.S.C. § 262(k), (l).

3. Slip op. at 3-4, n.1.

4. Chen Dissent at 11.

5. Newman Dissent at 7.

6. 42 U.S.C. § 262(l)(2)(A) (emphasis added).

7. Slip op. at 12.

8. Id. at 13.

9. Id. at 12.

10. Id.

11. Id. at 14.

12. Id.

13. Newman Dissent at 8-9.

14. Id. at 4 (citing Alabama v. Bozeman, 533 U.S. 146, 153 (2001)).

15. Id. at 7 (citing Anderson v. Yungkau, 329 U.S. 482, 485 (1947)).

16. Id. at 6 (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

17. 42 U.S.C. § 262(l)(8)(A).

18. Slip op. at 17.

19. Id. at 18.

20. Id.

21. Chen Dissent at 3.

22. Id.

23. Id. at 7.

24. Id. at 10.

25. Id. at 11.

26. Id. at 8.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
17 Nov 2018, Conference, Washington, DC, United States

Finnegan partner Clare Cornell will present “Covert Trademark Use in the Internet: Licit or Illicit” at the Asian Patent Attorneys Association Conference.

20 Nov 2018, Webinar, Washington, DC, United States

As part of Strafford Publications’ webinar series, Finnegan attorneys Tom Irving, Josh Goldberg, and Cory Bell will analyze Patent Trial and Appeal Board denials and partial denials, offering take-home lessons applicable in

21 Nov 2018, Workshop, London, UK

Finnegan partner Leythem Wall will consider European claim drafting strategy and lead the Chemical Workshop during a two-day course, hosted by Management Forum.

Similar Articles
Relevancy Powered by MondaqAI
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions