By Kevin E. Noonan --
Earlier this month, Judge Paul Crotty, U.S. District Court Judge for the Southern District of New York handed down rulings in two separate cases related to the biosimilars law (the Biologics Price Competition and Innovation Act, or BPCIA) and how the Act's dispute resolution provisions (also called the "patent dance") should be interpreted. While consistent with the recent Federal Circuit decision addressing similar issues (see "Sandoz Inc. v. Amgen Inc. (Fed. Cir. 2014)"), the determinations further explicate the metes and bounds of the law.
Both cases were brought as declaratory judgment actions. The Celltrion case involved a rheumatoid arthritis drug covered by patents owned by the Kennedy Institute (U.S. Patent Nos. 7,846,442; 8,298,537; and 8,383,120) and licensed to Janssen Biotech for sale as a combination of an anti-TNFα antibody (such as Janssen's Remicade®) and methotrexate. Claim 1 of the '442 patent is representative of these claims:
1. A method of treating an individual suffering from rheumatoid arthritis whose active disease is incompletely controlled despite already receiving methotrexate comprising adjunctively administering with methotrexate therapy a different composition comprising an anti-human tumor necrosis factor-α antibody or a human tumor necrosis factor-α binding fragment thereof to the individual, wherein the anti-human tumor necrosis factor-α antibody or fragment thereof (a) binds to an epitope on human tumor necrosis factor-α, (b) inhibits binding of human tumor necrosis factor-α to human tumor necrosis factor-α cell surface receptors and (c) is administered at a dosage of 0.01-100 mg/kg, and wherein such administration reduces or eliminates signs and symptoms associated with rheumatoid arthritis.
As the Court noted, these patents are also embroiled in reexamination and reissue proceedings and subject to a motion for stay by Celltrion (that motion was denied).
Celltrion applied for FDA approval of its Remsima® drug (a Remicade® biosimilar) and filed this declaratory judgment action instead of invoking the patent litigation provisions of the BPCIA. The Kennedy Institute filed a motion to dismiss Celltrion's DJ complaint under Fed. R. Civ. Pro. 12(b)(6) for failure to state a claim and the District Court granted the motion.
The Court's opinion sets out its understanding of the structure and purpose of the Act relating to patent disputes, the Court saying that these provisions were enacted to "ensure that patent disputes are resolved prior to the end of the reference product sponsor's exclusivity period," thus "enabling biosimilar products to enter the market promptly upon the expiration of the exclusivity." In particular, the Court noted that the Act provides that neither party can file a declaratory judgment action while the patent dance is on-going, but that the reference product sponsor can do so if the biosimilar applicant does not comply with the patent litigation provisions set forth in the Act.
In his opinion, Judge Crotty cited Second Circuit law for the jurisdictional requirements for declaratory judgment actions, particularly regarding whether there is an "actual controversy." Nike, Inc. v. Already, LLC, 663 F.3d 89, 95 (2d Cir. 2011). As the Court stated, the Second Circuit uses a totality-of-the-circumstances standard, relying on Medimmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126-27 (2007). Judge Crotty also cited Federal Circuit precedent to the effect that a district court retains its discretion "in determining whether and when to entertain an action under the Declaratory Judgment Act, even when the suit otherwise satisfies subject matter jurisdictional prerequisites." 3M Co. v. Avery Dennison Corp., 673 F.3d 1372, 1376 (Fed. Cir. 2012) (citing Wilton v. Seven Falls Co., 515 U.S . 277, 282 (1996)).
While the Court recognized that Celltrion had exhibited a "true intention" to bring its biosimilar drug to market (as demonstrated by "the amount of money it has invested in Remsima; the completion of its clinical trials; its close work with the FDA; its manufacturing facilities; and its ability to have stockpiles of Remsima prepared upon receiving FDA approval"), the opinion holds that "Celltrion is simply too far from receiving FDA approval of Remsima for the exercise of declaratory judgment jurisdiction to be proper." Part of Celltrion's deficiency was the number of events that would need to transpire for Remsima to get on the market before the patent(s) expired (August 1, 2016). These include "Celltrion's application would have to be accepted for review; Celltrion would have to become the first ever biosimilar approved by the FDA; Celltrion's application would have to include cA2 [an infringing antibody]; [and] Celltrion would have to receive approval of Remsima for the same use as Remicade." Any estimate of when the FDA might approve Remsima (by either party) was nothing more than "speculation" according to the Court, which amounted to "the disfavored 'hypothetical state of facts'" that cannot support declaratory judgment jurisdiction. Any allegation by Celltrion that the Kennedy Institute is likely to pursue infringement litigation was countered by examples of the Institute granting licenses to Celltrion in other jurisdictions. Under the totality of the circumstances applied in the Second Circuit, the Court determined that there was not a sufficient "justiciable controversy" to support declaratory judgment jurisdiction here.
With regard to the BPCIA, the Court exercised its discretion not to hear the case in deference to the statutory framework for patent litigation established under the Act. There was no allegation by Celltrion, and no evidence of record before the Court, that those provisions would be insufficient to resolve the dispute between the parties. Relying on the decision in the Amgen v. Sandoz case in the Northern District of California (2013 WL 600069 (N.D. Cal. 2013)), the Court opined that Celltrion was barred from bringing a declaratory judgment action because it did not comply with the application and patent exchange provisions of the Act, stating that "Celltrion's attempts to skirt the BPCIA's dispute resolution mechanisms while reaping the benefits of its approval process is improper." The Court also noted what it terms the "inherent tension" (and could also be called contradictions) of Celltrion arguing that the controversy was sufficiently ripe for declaratory judgment jurisdiction but not ready for the information-exchanging process mandated by the Act.
In sum the Court said:
The BPCIA purposefully keys its dispute resolution procedures to the occurrence of certain events on the path to FDA approval. Celltrion has failed to show why this carefully crafted and well-timed procedure should be avoided here. Should Celltrion have a ripened patent dispute against Kennedy once it properly engages in the BPCIA dispute resolution procedures and once it is further along the pathway towards approval of its biosimilar, Celltrion may litigate those issues at that time.
With regard to the Hospira case, Judge Crotty expressly relied on his own rationale from the Celltrion case. The basis for the dispute in this case was an agreement between Hospira and Celltrion that will permit Hospira to sell Celltrion's Remicade biosimilar infliximab under the name Inflectra upon FDA approval. The patents at issue here are the same patents as in the Celltrion case (the 442, '537, and '120 patents, owned by The Kennedy Institute) as well as two Janssen patents (U.S. Patent Nos. 6,284,471 and 7,223,396); claim 5 of the '471 patent is representative:
5. A chimeric antibody, comprising two light chains and two heavy chains, each of said chains comprising at least part of a human immunoglobulin constant region and at least part of a non-human immunoglobulin variable region, said variable region capable of binding an epitope of human tumor necrosis factor hTNFα, wherein said light chains comprise variable regions comprising SEQ ID NO: 3 and said heavy chains comprise variable regions comprising SEQ ID NO: 5.
The Court's opinion asserts that "motion to dismiss is granted for many of the same reasons as those discussed in the Court's dismissal order in Celltrion. Indeed, the instant case presents an even more compelling reason for dismissal than that presented in Celltrion" because "Hospira seeks to benefit from the BPCIA where it can, and ignore those features of the BPCIA that hinder its ambitions," and in the Court's view "Hospira cannot have it both ways."
The reasons the Court made this determination is that, in its view Hospira attempts to rely on Celltrion's efforts to bring the biosimilar drug to market for purposes of establishing declaratory judgment jurisdiction (characterizing these efforts as treating Celltrion as Hospira's "alter ego") but then distances itself from Celltrion with respect to the dispute resolution requirements of the BPCIA, on the grounds that Celltrion and not Hospira is the biosimilar applicant. In this case the Court relied even more heavily on the purported primacy of these dispute resolution provisions of the Act, again basing its decision on the Court's inherent discretionary powers. The Court finds that Congress intended with the BPCIA to "tie the dispute resolution process to events throughout the biosimilar approval process, ensuring that full information exchange occurs at relevant and crucial periods during the approval process." This intention would be frustrated, according to the Court, if "adjudicating this case would enable any biosimilar developer to partner with another distributor and thereby skirt the dispute resolution procedures Congress purposefully enacted for use in such situations." And Hospira's case was not helped by Celltrion's decision to voluntarily dismiss its case (In the District of Massachusetts) against Janssen and to begin the information exchange process mandated under the Act.