United States: Commentary: Federal Circuit Delays Launch Of First U.S. Biosimilar

Originally published in the Daily Record

On July 21 the U.S. Court of Appeals for the Federal Circuit issued an opinion interpreting key provisions of the Biologics Price Competition and Innovation Act of 2009 in Amgen, Inc. v. Sandoz, Inc.

The BPCIA allows the Food and Drug Administration to approve new biological drugs, or biologics, that function identically to previously-licensed biologics. The BPCIA creates an abbreviated approval pathway that enables an applicant for a so-called "biosimilar" to rely on much of the clinical data used during approval of the drug that the biosimilar is intended to imitate, i.e., the reference biologic.

On March 6, the FDA granted the first biosimilar license in the U.S. to Sandoz's Zarxio, which is biosimilar to Amgen's Neupogen. Due to the Federal Circuit's decision in Amgen, however, Sandoz will not be able to launch Zarxio until September.

A primary objective of the BPCIA is to lower the cost of biologics by encouraging the development of biosimilars to compete with existing biologics in the relevant markets. The BPCIA is modeled on the Drug Price Competition and Patent Term Restoration Act of 1984, commonly called the "Hatch-Waxman Act," which has been highly successful at creating a market for generic competition to chemical drugs, i.e., synthetically-derived compounds, often called "small-molecule" drugs.

The Hatch-Waxman Act provides an expedited mechanism for FDA approval of new small-molecule drugs that are structurally identical to previously-licensed drugs. The BPCIA seeks to emulate the success of the Hatch-Waxman Act while addressing the unique issues that arise in the approval process for biologics, which are inherently more complex than small-molecule drugs.

An important difference between the Hatch-Waxman Act and the BPCIA pertains to the requirements for disclosure of patents that protect approved drugs. Under the Hatch-Waxman Act, the sponsor of an approved drug must disclose all patents that cover the drug's structure and method of use. The patents, along with other information about the drug, are listed in a public compendium commonly called the "Orange Book."

Care to dance?

An applicant for approval of a generic small-molecule drug must certify that marketing of its product would not create liability for infringing any of the listed patents that protect the approved, brand-name version. In contrast, the approval pathway for novel biologics does not require sponsors to disclose patents related to their products. Consequently, the BPCIA establishes a mechanism in which patent information is exchanged privately between a biosimilar applicant and the reference product sponsor, or RPS. This novel and complex process, sometimes called the "patent dance," was at the core of the dispute in Amgen.

The first BPCIA-related issue in Amgen was whether a biosimilar applicant is required to participate in the patent dance. According to the BPCIA, a biosimilar applicant "shall provide to the reference product sponsor a copy of the application" within 20 days of receiving notice that the FDA has accepted the application for review.

Sandoz was informed that its Zarxio application, which referenced Neupogen, had been accepted for review on July 7, 2014. The following day, Sandoz notified Amgen of the filing but did not provide a copy of the application. When Amgen requested a copy, Sandoz responded that it had "opted not to provide" the application within the statutory time frame.

A separate provision of the BPCIA states that a biosimilar applicant that fails to provide the application to the RPS constructively infringes any patent that claims the biologic or its use. Consequently, Amgen sued Sandoz in October 2014 for patent infringement as well as unfair competition and conversion.

In a split decision, two members of the Federal Circuit's three-judge panel held that the BPCIA does not require Sandoz to engage in the patent dance. Writing for the majority, Judge Alan D. Lourie noted that the subsection of the statute containing the relevant provision uses the verb "shall," whereas the following subsection uses the verb "may." Lourie conceded that such a language distinction would support a reading that the "shall" provision is mandatory if the provision were taken in isolation. According to Lourie, however, this provision "cannot be read in isolation."

As indicated above, other sections of the statute allow the RPS to sue for patent infringement if the biosimilar applicant fails to disclose the application within the prescribed period. Thus, Lourie reasoned, the BPCIA contemplates that a biosimilar applicant might take such a course of action because the statute affords the RPS recourse for when it occurs. Consequently, compliance with the statutory provision to provide the biosimilar application to the RPS is optional, and Sandoz had the right not to share its application with Amgen.

Also contested in Amgen was the BPCIA's provision on notice of commercial marketing. Under the BPCIA, a biosimilar 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)."

The first issue related to this provision was whether notice could be provided before the biosimilar has received FDA approval. In its communication to Amgen on July 8, 2014, Sandoz indicated that it intended to market Zarxio immediately upon approval. When Zarxio was approved on March 6, Sandoz again notified Amgen of its intent to market the biosimilar. Sandoz argued, however, that it had fulfilled the statutory requirements with its July 2014 notice and was therefore entitled to begin marketing Zarxio in March.

On the only issue on which the panel was unanimous, the Federal Circuit held that Sandoz's July 2014 notice of commercial marketing was ineffective. According to the court, the BPCIA requires a biosimilar applicant to give notice to the RPS after the biosimilar has been approved. The court noted that the provision for notice of commercial marketing refers to "the biological product licensed under subsection (k)," whereas other provisions related to the patent dance describe "the biological product that is the subject of [the] application." The court also observed that products can change during the application process. Consequently, an RPS may not know which of its patents to assert until the biosimilar and its uses have been finalized.

A related issue was whether providing notice of commercial marketing is mandatory for a biosimilar applicant. The majority answered this question in the affirmative. Here Lourie found that the "shall provide" language of the provision was not countervailed by other provisions that specify the consequences of failing to do so.

In contrast to the provisions relating to the patent dance, the provisions on notice of commercial marketing provide no remedy to the RPS for the applicant's failure to disclose its plans. Thus, because the BPCIA does not contemplate noncompliance with this provision, it is obligatory. Adopting this interpretation, the court found that Sandoz had not fulfilled its notice obligations until its communication on March 6 and therefore could not market Zarxio until Sept. 2.

Perhaps the most surprising outcome of Amgen is its effect on patent-independent market exclusivity of biologics. The BPCIA forbids FDA approval of a biosimilar until 12 years after licensure of the reference biologic. Amgen effectively extends this period of market exclusivity by nearly six months. Nonetheless, given the complexity of the BPCIA and the divergent opinions of the Amgen panel members, it seems unlikely that we've heard the final word on this case.

Mark E. Nickas is an associate at McLane, Graf, Raulerson & Middleton, where he specializes in patent prosecution and client counseling in the life sciences. He holds a doctorate in biology. A version of this column originally appeared in Massachusetts Lawyers Weekly, sister publication to The Daily Record.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
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.


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.


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