Patent Docs

FDA Approves Biosimilar Drug for Treating Macular Degeneration

By Kevin E. Noonan --

The U.S. Food and Drug Administration approved the first biosimilar drug for treating macular degeneration under the provisions of the Biologics Price Competition and Innovation Act (BPCIA, codified at 42 U.S.C. § 262) as part of the Affordable Care Act of 2010 (colloquially known as "Obamacare").  The drug is Byooviz (ranibizumab-nuna), a biosimilar to Genentech's Lucentis®, and like Lucentis® has been approved for treating several eye diseases and conditions.  Specifically, according to the FDA announcement, Byooviz is approved for "neovascular (wet) age-related macular degeneration (nAMD)[,] macular edema (fluid build-up) following retinal vein occlusion (blockage of veins in the retina) and myopic choroidal neovascularization, a vision-threatening complication of myopia (nearsightedness)."  In the announcement, Sarah Yim, M.D., director of the Office of Therapeutic Biologics and Biosimilars in the FDA's Center for Drug Evaluation and Research (CDER) was quoted as saying:

Today's approval provides another treatment option for millions of people whose vision is impaired and is another step forward in our commitment to provide access to safe, effective and high-quality biological products.  Continuing to grow the number of biosimilar approvals is a key part of our efforts to provide greater access to treatment options for patients, increase competition and potentially lower costs.

For those keeping score, this is the 31st biosimilar product approved by the FDA (and the last one, Semglee (insulin glargine-yfgn), was the first approved interchangeable product).  The details regarding these approved products are set forth in this table:

It is certainly the case that the pace of these approvals is not what their proponents envisioned or expected, and that has led to some frustration (never a good thing when it is experienced by impatient policy makers; see, e.g., "A Solution in Search of a Problem").  Nevertheless, the pace of agency approvals is increasing, despite some slowdown due to the COVID-19 pandemic, and all signs indicate that it will increase (see, e.g., Biosimilars Council, New Analyses Point to Opportunities to Increase Savings from Biosimilar Adoption).  Which seems to be what everyone wants.

FDA Approves First Interchangeable Biological Product

By Kevin E. Noonan --

Last week the U.S. Food and Drug Administration approved an interchangeable biosimilar to insulin glargine, an approval notable because it is the first approved interchangeable biosimilar product.  The product is Semglee (insulin glargine-yfgn), produced by Mylan Pharmaceuticals, Inc., and under this approval, it is interchangeable with Lantus (insulin glargine) made by Sanofi.

The approval was based on the provisions of the Biological Price Competition and Innovation Act of 2009 (BPCIA), enacted with the Affordable Care Act (commonly known as "Obamacare") codified at 42 U.S.C. § 262 et seq.  Subsection (k) relates to the standards for biosimilarity; the FDA (and the statute itself) distinguish between biosimilarity and interchangeability inter alia by applying a heightened standard for interchangeability.  Specifically, the statute requires that an interchangeable product is biosimilar and can be expected to produce the same clinical result as the reference product in any given patient; and that for a biological product that is administered more than once to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch.  42 U.S.C. §§ 262(I)(3) and 262(k)(4).

Insulins are in a unique class of biologic drugs that, for historical reasons, were approved under the Food, Drug, and Cosmetics Act (codified at 21 U.S.C. § 301 et seq.).  The BPCIA provided a sunset date of March 23, 2020 for such approvals; the FDA finalized rulemaking on this change on February 20, 2020.  Under the revised rule, any protein having a defined amino acid sequence of 40 amino acids or longer falls within the statutory definition of the term "protein" and hence is considered to be a "biological product" as defined by the BPCIA (42 U.S.C. § 262(I)).

Semglee (insulin glargine-yfgn) was approved for treatment of Type 1 diabetes (i.e., the juvenile form) diabetes as well as Type 2 diabetes (i.e., the adult-onset form).  The FDA announcement prophesied that "[a]pproval of these insulin products can provide patients with additional safe, high-quality and potentially cost-effective options for treating diabetes."  Acting FDA Commissioner Janet Woodcock, M.D. stated that this approval has "the potential to greatly reduce healthcare costs" (a sentiment that, if true, would be a boon to the sometimes overheated debate over drug prices having insulin as a poster child; see, e.g., "Insulin's Out-Of-Pocket Cost Burden To Diabetic Patients Continues To Rise Despite Reduced Net Costs To PBMs").  This is clearly significant to the over 34 million individuals in the U.S. diagnosed with diabetes.  The Acting Commissioner also hailed FDA's "longstanding commitment to support a competitive marketplace for biological products and ultimately empowers patients by helping to increase access to safe, effective and high-quality medications at potentially lower cost."

As set forth in the FDA's announcement, Semglee (insulin glargine-yfgn) was approved for dispensing in 10 mL vials and 3 mL pens for administration twice daily.

It is not surprising, perhaps, that insulin, a biologically derived drug known since the 1930's would, in its modern embodiments, be the first molecule to satisfy FDA guidance on the standards for interchangeability (see "FDA Issues Final Guidance Regarding Biosimilar Interchangeability").  While there has been some concern with the perceived slow pace of biosimilar uptake by physicians and patients (see "FDA Issues Plan for Further Facilitating Biosimilar Development"), one of the benefits of interchangeability is that physicians' input (and approval) is not needed and can be implemented at the pharmacy level.  While this pathway for FDA approval is less advantageous than with small molecule drugs (which are typically administered by the patient herself as a pill, as opposed to biologic drugs which are infused by a physician or other healthcare provider), the FDA's exultations regarding Semglee's approval are well-taken as an indication not only that the FDA is willing (under the appropriate circumstances) to approve an interchangeable biological product but also as a teaching opportunity for other biosimilar drug makers on how to successfully navigate the FDA's pathway to interchangeability (desirable in addition for the exclusivity provisions only available to interchangeable biosimilar drugs).  Whether a dam-burst of interchangeable biosimilar drug products will now arise of course remains to be seen.

Genentech, Inc. v. Immunex Rhode Island Corp. (Fed. Cir. 2020)

By Kevin E. Noonan --

In a procedurally unusual decision (but one unsurprising in all other respects), the Federal Circuit on Monday affirmed a district court's denial of a temporary restraining order to keep off the market Amgen's biosimilar product Mvasi in Genentech, Inc. v. Immunex Rhode Island Corp.

The issue arose over the notice of commercial marketing requirement under 42 U.S.C. § 262(l)(8)(A):

(8) Notice of commercial marketing and preliminary injunction

(A) Notice of commercial marketing

The 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).

Genentech manufactures and sells bevacizumab, a biological product used to treat certain types of cancer, under the name Avastin.  Amgen's biosimilar, Mvasi, was granted FDA approval on September 14, 2017, and Amgen provided notice of intent to commercially market on October 6, 2017.  However, Amgen did not market at that time, but filed supplements to its abbreviated biologic licensing application (aBLA) in August 2018, wherein Amgen added a new manufacturing facility and amended its label.  Amgen decided to launch on July 8, 2019, and Genentech moved in district court for a temporary restraining order (TRO) to prevent launch, on the grounds that the aBLA supplements triggered a requirement for a new notice of intent to commercially market.  The District Court denied the motion and Genentech appealed.

The Federal Circuit affirmed, in an opinion by Judge Moore joined by Judges O'Malley and Hughes.  The panel held that the plain meaning of the statute "makes clear that the biosimilar applicant must provide notice to the reference product sponsor prior to commercially marketing the biological product" (emphasis in opinion).  There was no evidence that the product had changed and thus the court held that "Genentech . . . had notice of Amgen's intent to commercially market Mvasi as required under Section 262(l)(8)(A) as early as October 6, 2017."  Genentech's argument was that the phrase "licensed under subsection (k)" in the statute is defined "by particular manufacturing facilities and labeling" and that the supplements Amgen submitted involved adding a manufacturing facility and amending the Mvasi label, and this constituted a distinct biological product that triggered a requirement for a new notice.  The panel recognized Section 262(k), not Section 262(l)(8)(A) specifies the disclosure required for licensure, and that Section 262(l)(8)(A), in contrast, involves timing of notice and when the biosimilar product is marketed.

The opinion expressly relied on the Supreme Court's decision in Sandoz v. Amgen that construed the licensing requirement Section 262(l)(8)(A) narrowly to merely mean that the biosimilar product must be licensed on the date of first commercial marketing.  (It could be argued, of course, that in that case the word is surplusage because no drug can be marketed without FDA approval.)  But the Court had been clear that "Section 262(l)(8)(A)'s notice requirement is separate from Section 262(k)'s licensure requirements" and the Federal Circuit's opinion applied the law in the same way here, stating "[a] biosimilar applicant that has already provided Section 262(l)(8)(A) notice regarding its biological product need not provide another notice for each supplemental application concerning the same biological product."

There has been discussion elsewhere regarding the unconventionality (if not the potential procedural impropriety) of the Federal Circuit hearing the appeal on denial of a motion for a temporary restraining order (this being the first time the Court has done so), especially in view of precedent where the Court denied such relief, see, Nikken USA, Inc. v. Robinson-May, Inc., 217 F.3d 857 (Fed. Cir. 1999).  While that decision was consistent with Supreme Court precedent, see Office of Personnel Management v. American Fed'n of Gov't Employees, AFL-CIO, 473 U.S. 1301 (1985) (and arguably this one is not), the Nikken decision was nonprecedential.  Under such circumstances, it is unlikely that policy concerns did not play a role.  After all, the decision was consistent with facilitating an early appearance of Amgen's Mvasi biosimilar on the market which should reduce pubic drug costs, which has been the policy goal and justification for the biosimilar licensing provisions of the BPCIA since its inception.  An argument could be made that refusing to take the appeal would have led to the same result, but by speaking to the issue the Court made it less likely that any such attempts to delay marketing would occur for other biosimilars in future.  That outcome in itself might be sufficient justification for the Court to resolve this issue here.

Genentech, Inc. v. Immunex Rhode Island Corp. (Fed. Cir. 2020)
Panel: Circuit Judges Moore, O'Malley, and Hughes
Opinion by Circuit Judge Moore

FDA Continues to Approve Biosimilars

By Kevin E. Noonan --

The prevailing attitude in many quarters is that the Biologics Price Competition and Innovation Act (BPCIA) has not facilitated approval of drugs biosimilar to reference biologic drug products with sufficient alacrity and has not reduced biologic drug prices that was the hope and justification for its enactment.  For example, on February 3rd, the Federal Trade Commission and Food and Drug Administration issued a Joint Statement aimed at advancing competition in the biologic drug market.  Earlier, the FDA itself had issued a Biosimilars Action Plan (BAP) providing specific goals to accelerate biosimilars competition, and the Trump Administration was reported to be considering a reduction of the 12-year exclusivity period for reference biologic drug products.  Congress has not been silent (albeit has not passed any biologic drug legislation either), its members introducing bills such as the Biologic Patent Transparency Act (see "A Solution in Search of a Problem") and raising questions regarding settlements between biologic drug suppliers and biosimilar drug makers (see "Senators Ask FTC to Investigate Biosimilar Litigation Settlement Agreement").

With this backdrop the FDA recently released a synopsis of the cumulative state of biosimilar drug approval to date, amounting to 26 approved biosimilar drugs (click on table to enlarge):

While encouraging, some sobering statistics are evident from this information.  First, there have been a select few drugs that have been "targets" for competitors to make biosimilar versions, including Herceptin® (trastuzumab) (6 biosimilar versions); Humira® (5 biosimilar versions); Remicade® (infliximab) (4 biosimilar versions); Neupogen®/Neulasta® (filgrastim and pegfilgrastim, respectively) (2 and 3 biosimilar versions, respectively); Avastin® (bevacizumab) (2 biosimilar versions); Rituxan® (rituximab) (2 biosimilar version); Enbrel® (etabercept) (1 biosimilar version); and Epogen® (epoetin alfa) (1 biosimilar version).  Part of the reason is that all of these drugs were approved prior to the enactment of the BPCIA and are outside the 12-year exclusivity period.  In addition, these drugs were previously approved in Europe, and biosimilar applicants have benefited from FDA's decision to permit them to use in the U.S. comparative information and data between the reference product and the biosimilar submitted to the European authorities.

The biosimilar pipeline has 74 programs for 38 different reference products pending at the FDA, according to Dr. Sarah Yim, Acting Director of FDA's Office of Therapeutic Biologics and Biosimilars (although at least some of these are directed to the nine reference products for which FDA has already approved one or more biosimilars.  This raises the question:  at what point will the market saturate for any reference product, and will competition continue to decrease costs despite the belief that price reductions of more than 25-30% will be inhibited due to the expense of producing a biosimilar drug and obtaining regulatory approval?  And other biologic drugs will (eventually) exhaust the 12 years of market exclusivity under the BPCIA).  Despite Congressional and public impatience, the pace of biosimilar approval is increasing and this trend can be expected to continue.

Trump Administration Considering Reduction in Biologics Exclusivity Period

By Donald Zuhn --

On Monday, The Wall Street Journal reported that the Trump administration is considering reducing the 12-year data exclusivity period for biologic drugs set forth in the Biologics Price Competition and Innovation Act (BPCIA) to ten years.  According to The Wall Street Journal, the Trump administration is considering the change in order to persuade Democrats to support the U.S.-Mexico-Canada Agreement (USMCA), a replacement for the North American Free Trade Agreement (NAFTA), that the administration negotiated last year.  The USMCA would establish at least a 10-year data exclusivity period for biologic drugs, which would double the exclusivity period in Mexico and increase the exclusivity period in Canada by two years.

As Patent Docs readers may recall, the data exclusivity period in the BPCIA (and prior biosimilars legislation packages) was a hotly contested topic of debate, with some supporting a 14-year period, the Obama administration preferring a 7-year period, and others calling for a 5-year period (see "Congress Jumps on Bandwagon to Reduce Biologic Drug Exclusivity Term"; "President's Latest Budget Proposal Seeks Decrease of Data Exclusivity Period and Elimination of Pay-for-Delay Agreements"; "Senators Send Letter on Biosimilars to FDA"; "Senators Back 12-Year Data Exclusivity Period for Biosimilars and President Obama (Once Again) Does Not"; and "President's Latest Budget Proposal Seeks Decrease of Data Exclusivity Period and Elimination of Pay-for-Delay Agreements").

FDA Issues Final Guidance Regarding Biosimilar Interchangeability

By Kevin E. Noonan --

Late last week, the U.S. Food and Drug Administration issued a final version of its "Guidance for Industry," entitled "Considerations in Demonstrating Interchangeability With a Reference Product" regarding the as-yet unexercised provision of the Biologic Price Competition and Innovation Act (BPCIA).  This Guidance is facially similar to the draft Guidance issued this past January for notice and comment, and thus reflects the agency's response to those comments (see "FDA Issues Guidance Regarding Interchangeability of Biosimilar and Biologic Drugs").

To recap, interchangeability, which is the standard for conventional, small molecule generic drugs, is challenging for biologic drugs because of their size and complexity, and because the biosimilarity standard encompasses molecules that are not atom-for-atom identical to the reference biologic drug product.  Accordingly, the ease with which conventional generic drugs are substituted for brand name versions is not appropriate for biosimilar drugs, and the statute sets out standards for interchangeability status (§ 351(k)(4) of the PHS Act), wherein the FDA must find that:

(A) the biological product—
    (i) is biosimilar to the reference product; and
    (ii) can be expected to produce the same clinical result as the reference product in any given patient; and
(B) for a biological product that is administered more than once to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch.

Interchangeability is important for a variety of reasons, particularly with regard to biosimilar drug acceptance and the ability for the interchangeable biosimilar to be substituted for a reference biologic drug product without intervention or approval of a health care provider.  Accordingly, such drugs are rewarded with additional layers of exclusivity (indeed, the only exclusivity for biosimilar drugs contained in the statute, as set forth in the PHSA under § 351(k)(6)), wherein the FDA shall not grant interchangeability status for any second biosimilar drug until the later of:

(A) 1 year after the first commercial marketing of the first interchangeable biosimilar biological product to be approved as interchangeable for that reference product; [or]
(B) 18 months after –
    (i) a final court decision on all patents in suit in an action instituted under subsection (l)(6) against the applicant that submitted the application for the first approved interchangeable biosimilar biological product; or
    (ii) the dismissal with or without prejudice of an action instituted under subsection (l)(6) against the applicant that submitted the application for the first approved interchangeable biosimilar biological product; or
(C)(i) 42 months after approval of the first interchangeable biosimilar biological product if the applicant that submitted such application has been sued under subsection (l)(6) and such litigation is still ongoing within such 42-month period; or
    (ii) 18 months after approval of the first interchangeable biosimilar biological product if the applicant that submitted such application has not been sued under subsection (l)(6).

The Guidance provides the FDA's attempt to operationalize the statutory requirements and give the biopharmaceutical industry guidance on what the agency will require to grant interchangeability status to a biosimilar drug.

Like the draft Guidance, this final version of the Guidance is expressly focused on therapeutic protein products with regard to the evidence necessary to establish interchangeability with a reference biologic drug product that is a therapeutic protein.  As with almost all other FDA Guidances on biosimilars, this one recites that interchangeability determinations shall be made after consideration of the totality of the evidence that a biosimilar dug satisfies the statutory requirements.  Thus, the first requirement is that a biosimilar applicant show that its drug is biosimilar to the reference biologic drug product, and envisions that first licensure will be on biosimilarity grounds.  With regard to the requirement that a purportedly interchangeable biosimilar drug would be "expected to produce the same clinical result as the reference product in all of the reference product's licensed conditions of use," the Guidance sets forth a nonlimiting set of data and information:

• The identification and analysis of the critical quality attributes
• The identification of analytical differences between the reference product and the proposed interchangeable product, and, in addition, an analysis of the potential clinical impact of the differences
• An analysis of mechanism(s) of action in each condition of use for which the reference product is licensed, which may include the following:
    - The target receptor(s) for each relevant activity/function of the product
    - The binding, dose/concentration response, and pattern of molecular signaling upon engagement of target receptor(s)
    - The relationship between product structure and target/receptor interactions
    - The location and expression of target receptor(s)
• The pharmacokinetics and biodistribution of the product in different patient populations
• The immunogenicity risk of the product in different patient populations
• Differences in expected toxicities in each condition of use and patient population (including whether the expected toxicities are related to the pharmacological activity of the product or to off-target activities)
• Any other factor that may affect the safety or efficacy of the product in each condition of use and patient population for which the reference product is licensed

If there are differences between the reference biologic drug product and the biosimilar with respect to any of these factors, the Guidance asserts that the biosimilar applicant must supply a scientific justification as to why those differences don't preclude a determination of interchangeability.  However, the Guidance does not envision that satisfying this standard will necessarily require additional clinical studies.  Also, an applicant can (but the FDA recommends that it does not) seek approval for less than all the indications approved for the reference biologic drug product (and in this regard, the Guidance envisions that an applicant may "extrapolate" the data and information supporting interchangeability for one indication to support interchangeability for additional indications).

As for the other statutory requirement, that "for a biological product that is administered more than once to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch," the Guidance expects a biosimilar applicant will need to do one or more "switching studies" (the general requirements being set forth with some specificity in the Guidance) that will be used to assess the risk to safety or efficacy of alternating between the reference biologic drug product and the biosimilar.  Provided as an attachment is a generic description of a switching study design:

The Guidance provides "an overview of important scientific considerations in demonstrating interchangeability with a reference product," including:

• Data and information needed to support a demonstration of interchangeability
• Considerations for the design and analysis of a switching study or studies to support a demonstration of interchangeability
• Recommendations regarding the use of a U.S.-licensed reference product in a switching study or studies
• Considerations for developing presentations, container closure systems, and delivery device constituent parts for proposed interchangeable products.

And the Guidance then sets forth more detailed explication of these considerations, including product-dependent factors that could influence the data needed to show interchangeability (again urging a "stepwise" approach to establishing interchangeability as the FDA has urged for establishing biosimilarity) and showing a high degree of biosimilarity (with reference to biosimilarity Guidances regarding so-called "fingerprint identity" measures of biosimilarity).  The information and data should be aimed at reducing the amount of residual uncertainty, which is expected to depend on the structural and functional complexity of the biosimilar drug.  Particularly called out in this regard is the risk of product-specific immunogenicity, which may be more relevant to some biosimilar drugs than others depending on the nature of the reference biologic drug product.

The Guidance also envisions that interchangeability may require biosimilar product postmarketing data, and that such data would not obviate the need for other, interchangeability-related data (e.g., from switching studies, particularly with regard to comparison of pharmacokinetic or pharmacodynamics parameters).

The Guidance provides a detailed discussion of the characteristics of switching studies expected to be required to satisfy interchangeability requirements, for those drugs expected to be administered to a patient more than once (presumably this category encompasses many of not most biologic drugs).  These studies will depend on how the drug will be used in practice, according to the Guidance, and the Guidance sets out considerations regarding study endpoints, design and analysis, sample size and number of switches, sampling for PK, PD and immunogenicity, study population, and study analysis, as well as conditions of use and routes of administration.

There is also a section regarding the conditions under which data can be extrapolated (e.g., from one condition of use to another for which the reference biologic drug product is licensed), supported by scientific justification based on mechanism of action, immunogenicity risk, expected toxicities, or "[a]ny other factor that may affect the safety or efficacy of the product in each condition of use and patient population for which the reference product is licensed."

Unlike the Guidances concerning the grounds for establishing biosimilarity, which permit comparative data with a non-U.S. licensed reference biologic drug products to be submitted, the Guidance states that switching studies must be performed using a U.S. licensed reference biologic drug product.  This is because in these studies the reference biologic drug product is not used just as a control but is also part of the study, administered in both the switching arm and the non-switching arm.  This limitation appears to be based on concerns regarding unpredictable differences in immunogenicity or PK profiles, as well as the existence of several ex-U.S. versions of biosimilar drugs having slight but perhaps clinically relevant differences when used in a switching study that could negatively impact the reliability of study results.

The Guidance ends with a detailed description of presentation designs for the data and information supporting an interchangeability determination (referencing Section VII of the FDA's earlier Guidance entitled Scientific Considerations in Demonstrating Biosimilarity to a Reference Product) and a section on postmarketing safety monitoring.

Despite its status as being "Final," this Guidance, like all such Guidances, contains an express disclaimer:

This guidance represents the current thinking of the Food and Drug Administration (FDA or Agency) on this topic.  It does not establish any rights for any person and is not binding on FDA or the public.  You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.  To discuss an alternative approach, contact the FDA office responsible for this guidance as listed on the title page.

In a press release accompanying release of this Guidance, Acting FDA Commissioner Ned Sharpless, M.D. provides some insight into the need for and timing of this Guidance.  In addition to generic statements about the economic desirability of biosimilars to provide lower cost access to biologic drugs (recognized as being more costly that conventional, small molecule drugs), Acting Commissioner Sharpless states that:

The final interchangeability guidance is informed by the FDA's cumulative experience providing development-stage advice to sponsors of proposed interchangeable products.  The FDA meets regularly with sponsors of proposed interchangeable products through the agency's Biosimilar Product Development Program.  The agency also considered the numerous comments on the draft interchangeability guidance and made changes to provide increased clarity to stakeholders.  Our rigorous scientific standards for approval will be maintained for interchangeable biologics and should serve as assurance to health care professionals and patients that they can be confident in the safety and effectiveness of both interchangeable products and biosimilar products, just as they would be for reference products.

And in particular:

Separately, and of particular importance to the millions of Americans with diabetes, the final interchangeability guidance will help enable biosimilar or interchangeable insulin products to come to market in the future.  There are currently no approved insulin products that can be substituted at the pharmacy level.  But, under the BPCI Act, on March 23, 2020, insulin and other biological products that were approved as drugs under the Federal Food, Drug, and Cosmetic Act will be deemed biological products licensed and regulated under the PHS Act.  After this transition, the FDA will be able to license biosimilar and interchangeable insulin products that meet the requirements of the PHS Act, and today's guidance will, among other things, help developers seek licensure for such products.

An interchangeable insulin product may be substituted at the pharmacy, potentially leading to increased access and lower costs for patients.  For chronically used biologic medications patients get at the pharmacy, such as insulin, the ability to have a licensed interchangeable that can be substituted at the pharmacy without the intervention of the prescribing health care professional -- much like how generic drugs are routinely substituted for brand name drugs -- could be integral to the success of reducing drug prices for patients.

In view of the political firestorm that has arisen over the increased cost of insulin, the FDA's timing of this guidance seems directly applicable to the political response by the Trump administration.  This impression is bolstered by Acting Commissioner Sharpless's further comments, that "the agency [intends to] hear from patients, advocates and industry about what factors the agency should consider when evaluating data and other information submitted by an applicant, including from analytical and clinical studies, to determine whether an insulin product is biosimilar to or interchangeable with a reference product" and that the agency "expect[s] to hear stakeholder feedback on whether certain insulin products -- for example, those that use insulin pumps for continuous subcutaneous infusion among the approved uses -- raise unique scientific considerations that we should be considering when evaluating biosimilar or interchangeable insulin products."  More ominously for the industry, the Acting Commissioner states that "we'll also be seeking input directly from patients about their experience with insulin products and this input will inform the FDA's approach to implementing the regulatory pathway for biosimilar and interchangeable insulin products."  It is rare but perhaps welcome that an agency official so transparently informs stakeholders of both the government's intentions and the information it will consider in determining a regulatory regime for (in this case) reducing particular drug prices, but in the current political climate and with this Administration, perhaps it is not that surprising.

A Solution in Search of a Problem

By Kevin E. Noonan --

On March 8th, a canonical "bipartisan of Senators" (a phrase used to signal bills that must be in the public interest because these Senators put aside business as usual to reach across the aisle) introduced S.659, entitled "The Biologic Patent Transparency Act."  These Senators (Collins, R-ME; Kaine, D-VA; Portman, R-OH; Shaheen, D-NH; Braun, R-IN; and Stabenow, D-MI) are purportedly motivated by a desire to reduce prescription drug prices (according to their websites) and have focused on differences between the Biologics Price Competition and Innovation Act (BPCIA) and the Hatch Waxman Act that, in their view, reduces "transparency" to the public's detriment.  But a close look at the provisions of the bill suggest that it solves a problem that doesn't exist and instead focuses on cosmetic changes that have little chance to resolve the issues that have arisen in the implementation of the BPCIA.

The bill provides for improvements to the so-called "Purple Book," established by the U.S. Food and Drug Administration but insufficiently utilized because listing is not tied to any penalty or disadvantage for failure to list.  The provisions of the bill (Section 2) mandate that Biologics License Applications granted under Section 351(a) of the Public Health Service Act (codified at 42 U.S.C. § 262) or abbreviated Biologics License Applications granted under Section 351(k) of the PHSA must submit to the Secretary of Health and Human Services:

[A]ny patent for which the holder of a biological product license approved under subsection (a) or (k), or a biological product application approved under section 505 of the Federal Food, Drug, and Cosmetic Act and deemed to be a license for a biological product under this section on March 23, 2020, believes a claim of patent infringement could reasonably be asserted by the holder, or by a patent owner that has granted an exclusive license to the holder with respect to the biological product that is the subject of such license, if a person not licensed by the holder engaged in the making, using, offering to sell, selling, or importing into the United States of the biological product that is the subject of such license.

In addition, the bill would amend 35 U.S.C. § 271 to include a penalty for non-compliance with this disclosure requirement:

(7) The owner of a patent that should have been included in the list described in section 351(o)(1) of the Public Health Service Act (42 U.S.C. 262(o)(1)), including any updates require under subparagraph (C) of that section, but was not timely included in such list, may not bring an action under this section for infringement of the patent.

The Senators, in introducing this bill, seem to believe that implementation of the BPCIA has been inhibited by non-disclosure by reference product sponsors (RPS) of patents that can be asserted against biosimilar applicants to their detriment.

This sentiment ignores some important facts.  First, the BPCIA already includes a provision, codified at 35 U.S.C. § 271(e)(6)(C), that seriously disincentives a reference product sponsor from failing to notify a biosimilar applicant of relevant patents:

The owner of a patent that should have been included in the list described in [paragraph 3(A), the patent disclosure of the "patent dance"], but was not timely included in such list, may not bring an action under this section for infringement of the patent with respect to the biological product [emphasis added].

Second, if any party has been disadvantaged under the BPCIA, it has been the reference product sponsor, as the result of judicial imprimatur of a strategy first employed by Sandoz to not disclose its aBLA or relevant manufacturing information to the RPS.  Enactment of S.659 will not address these issues, which include judicial interpretation of a Congressional mandate ("A biosimilar applicant shall [disclose its aBLA and relevant manufacturing information]"; emphasis added) to be optional.

Another justification for these changes in the law involves the potential difficulty in a potential biosimilar applicant identifying before the fact (i.e., before a RPS competitor committed to pursuing a biosimilar) multiple patents that might be asserted against the biosimilar applicant.  But these concerns fly in the face of available outlets (for example, www.drugpatentwatch.com) that has this information readily available.

On the other hand S.659 contains provisions that could increase transparency in useful ways, by establishing "a single, easily searchable, list that includes:

(i) the official and proprietary name of each biological product licensed under subsection (a) or (k), and of each biological product application approved under section 505 of the Federal Food, Drug, and Cosmetic Act and deemed to be a license for the biological product under this section on March 23, 2020;

(ii) with respect to each biological product described in clause (i), each patent submitted in accordance with paragraph (1);

(iii) the date of licensure and application number for each such biological product;

(iv) the marketing status, dosage form, route of administration, strength, and, if applicable, reference product, for each such biological product;

(v) the licensure status for each such biological product, including whether the license at the time of listing is approved, withdrawn, or revoked;

(vi) any period of any exclusivity under subsection (k)(7)(A) or subsection (k)(7)(B) of this section or section 527 of the Federal Food, Drug, and Cosmetic Act, and any extension of such period in accordance with subsection (m) of this section with respect to each such biological product, and the date on which such exclusivity expires;

(vii) information regarding any determination related to biosimilarity or interchangeability for each such biological product; and

(viii) information regarding approved indications for each such biological product, in such manner as the Secretary determines appropriate.

Political posturing is in vogue and particularly posturing regarding prescription drug prices.  'Twould be pretty if 'twere so that patents are the problem; bills like this one promote that narrative but at the cost of addressing systemic issues with drug pricing that will be unaffected by any changes or diminution of patent protection that protects biologic drug innovation.

FDA Issues Revised Draft Guidance Regarding Biologic Drug Naming

By Kevin E. Noonan --

More than two years ago, on January 17, 2017, the U.S. Food and Drug Administration released its Guidance for Industry relating to the biosimilar application process set forth in the Biologic Price Competition and Innovation Act of 2009 (BCPCIA).  This Guidance, entitled Nonproprietary Naming of Biological Products, extended to both reference biologic drug products and their biosimilar counterparts.  The basis for this naming regime, and its extension to both types of biologic drugs, reflected the agency's rationale for providing a naming convention in the first place and was based on FDA's dual responsibilities to protect the public and at the same time facilitate availability of biosimilar drugs according to Congress's intentions in passing the BPCIA.

On March 8th, the FDA released its updated, revised, draft Guidance on non-proprietary naming of biological products, for comment purposes only.  The draft Guidance announces the update in the Introductory Section, stating that nonproprietary names of products that did not have an FDA-designated suffix would no longer be required to be revised in order to accomplish the objectives of the naming convention described in the January 2017 Guidance.  Similarly, the FDA does not intend to apply this naming convention (wherein the nonproprietary name is the combination of a core name, equivalent to a generic name for small molecule drugs combined with a four-letter suffix to designate its source but that was devoid of any meaning that would indicate its source, a so-called "nonsense" suffix).  Further, the draft Guidance states that this naming convention would not be applied to any biologic drug approved under Section 202 of the Food, Drug, and Cosmetics Act as of March 23, 2020, the sunset date wherein such drugs will be considered to be approved under a biologics license application (BLA) under section 351 of the PHS Act (known as transition biologic products).

New in this draft Guidance is "FDA's current thinking" regarding the naming convention to be applied to interchangeable biosimilar products under Section 351(k) of the PSHA.  Like biosimilar products under the earlier Guidance, the FDA intends to designate a proper name that is a combination of the "core name" and a distinguishable suffix equally devoid of meaning composed of four lowercase letters.  While not decided the draft Guidance indicates that the FDA is considering whether to include vaccines within this naming convention.

As in the earlier Guidance, the FDA justifies this draft Guidance by stating the purported advantages: to facilitate pharmacovigilance, facilitate accurate identification of these products by source and/or manufacture, and help minimize (preferably, prevent) inadvertent substitution of biological products.

The first substantive section, entitled "Scope," sets forth the biological products falling within the scope of this draft Guidance as including "therapeutic protein products, vaccines, allergenic products, and blood derivatives, and do not include in vitro reagents (e.g., antibody to hepatitis B surface antigen, blood grouping reagents, hepatitis C virus encoded antigen), blood donor screening tests (e.g., HIV and hepatitis C), and those reagents used in determining donor/recipient compatibility in transfusion medicine.  Section III provides background, including the earlier naming convention Guidance.

Section IV of the draft Guidance announces that the FDA will no longer impose a modification of previously licensed biological products to contain FDA-designated suffix because the Agency has determined that "the core objectives of the naming convention — pharmacovigilance and safe use — can be accomplished by applying the naming convention to biological products at the time they are licensed under section 351 of the PHS Act, and without applying it to licensed biological products that do not contain a suffix in their proper names."  The change is intended to "minimize the potential burden upon sponsors and the healthcare system and avoid the possibility of confusion regarding previously approved biological products.  The Guidance also espouses the FDA's belief that "applying the naming convention to all biological products at the time they are licensed under 351(a) or 351(k) is expected to mitigate the risk of inaccurate perceptions of the relative safety and effectiveness of biological products based on licensure pathway."

Turning to vaccines, the draft Guidance asserts that vaccines are within the scope of the current Guidance, and notes that it will determine whether currently available identification systems used for vaccine administration are sufficiently robust to provide "optimal pharmacovigilance" and safe dispensing practices without using distinguishable proper names.

Turning to interchangeable products, the draft Guidance states that the FDA considered two approaches: either providing a unique suffix that would distinguish the interchangeable product from other products having the same core name, or using a suffix shared with the reference product.  The Agency has concluded that interchangeable products need their own unique suffix, to permit adequate pharmacovigilance (i.e., providing a means to track which biological product is dispensed to particular patients).  Using a unique suffix will also avoid having to change those products first licensed as a biosimilar and later licensed as an interchangeable product.  The draft Guidance imposes on the applicant for an interchangeable product the requirement to suggest "a suffix composed of four lowercase letters for use as the distinguishing identifier included in the proper name designated by FDA at the time of licensure," for example during the investigational new drug (IND) phase or when a BLA is submitted.  The FDA requires "up to 10 proposed suffixes," in Applicant preference order.  In a supplement to an approved 351(k) application the draft Guidance directs that the applicant would keep the nonproprietary name of the biological product and the FDA-designated suffix and not submit further suffixes; this will be the name used throughout the propose labeling of the interchangeable product.

For the absence of doubt, the draft Guidance closes with a glossary of several of the terms used throughout the Guidance.

And like all such Guidances, this draft Guidance contains an express disclaimer:

The period for comments by the public extends until 60 days after the draft Guidance is published in the Federal Register, or until May 7, 2019.  Comments should be directed to https://www.regulations.gov (if electronic) and written comments to the Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.  The draft Guidance directs that all comments should be identified with the docket number listed in the notice of availability that publishes in the Federal Register.

Finally, questions regarding this draft Guidance should be directed to Sandra Benton, 301-796-1042, or (CBER) Office of Communication, Outreach and Development, 800-835-4709 or 240-402-8010.

Amgen Inc. v. Hospira, Inc. (D. Del. 2018)

Intent Matters in Safe Harbor under BPCIA

By Kevin E. Noonan --

Earlier this week, Judge Richard G. Andrews, U.S. District Court Judge for the District of Delaware decided a veritable plethora of post-trial motions (by both parties) in Amgen Inc. v. Hospira, Inc. (he denied them all).  These included Hospira's Rule 50(a) Motion for Judgment as a Matter of Law on the Issues of Safe Harbor, Noninfringement, Invalidity, and Damages and related briefing, Hospira's Motion for Judgment as a Matter of Law Under Rule 50(b) and, in the Alternative, For Remittitur or New Trial Under Rule 59 and related briefing, Hospira's Motion to Seal Confidential Exhibits Admitted at Trial and related briefing, Amgen's Renewed Motion for Judgment as a Matter of Law of Infringement of the '349 Patent or, in the Alternative, for a New Trial and related briefing, and Amgen's Motion for Prejudgment and Post-judgment Interest and related briefing.  Of note is the basis for the Court's denial of Hospira's safe harbor motion under the provisions of the Biologics Price Competition and Innovation Act (BPCIA).

The case arose over Amgen's complaint that Hospira infringed its U.S. Patent Nos. 5,865,298 and 5,756,349.  The jury found that Hospira had not carried its burden of showing either patent to be invalid by clear and convincing evidence; that Hospira infringed claims 24 and 27 of the '298 patent but had not infringed claims 1-7 of the '349 patent:

'298 patent claims at issue:

24.  A method of preparing erythropoietin molecules having a predetermined number of sialic acids per molecule said number selected from the group consisting of 1-14, comprising applying material containing erythropoietin to an ion exchange column and selectively eluting said molecules from the column.

27.  A method for obtaining an erythropoietin composition having a predetermined in vivo specific activity comprising preparing a mixture of two or more erythropoietin isoforms of claim 1.

Where independent claim 1 recites:

1.  An isolated biologically active erythropoietin isoform having a single isoelectric point and having a specific number of sialic acids per molecule, said number selected from the group consisting of 1-14, and said isoform being the product of the expression of an exogenous DNA sequence in a non-human eucaryotic host cell.

'349 patent claims at issue:

1.  Vertebrate cells which can be propagated in vitro and which are capable upon growth in culture of producing erythropoietin in the medium of their growth in excess of 100 U of erythropoietin per 10⁶ cells in 48 hours as determined by radioimmunoassay, said cells comprising non-human DNA sequences which control transcription of DNA encoding human erythropoietin.

2.  Vertebrate cells according to claim 1 capable of producing in excess of 500 U erythropoietin per 10⁶ cells in 48 hours.

3.  Vertebrate cells according to claim 1 capable of producing in excess of 1000 U erythropoietin per 10⁶ cells in 48 hours.

4.  Vertebrate cells which can be propagated in vitro which comprise transcription control DNA sequences, other than human erythropoietin transcription control sequences, for production of human erythropoietin, and which upon growth in culture are capable of producing in the medium of their growth in excess of 100 U of erythropoietin per 10⁶ cells in 48 hours as determined by radioimmunoassay.

5.  Vertebrate cells according to claim 4 capable of producing in excess of 500 U erythropoietin per 10⁶ cells in 48 hours.

6.  Vertebrate cells according to claim 4 capable of producing in excess of 1000 U erythropoietin per 10⁶ cells in 48 hours.

7.  A process for producing erythropoietin comprising the step of culturing, under suitable nutrient conditions, vertebrate cells according to claim 1, 2, 3, 4, 5 or 6.

The Court also assessed damages in the amount of $70 million, inclusive of pre- and post-judgment interest.

Hospira contended that the jury instructions were "legally erroneous and prejudicial," inter alia, because "ulterior motives and intent are irrelevant to [entitlement to] the Safe Harbor."  Specifically, Hospira argued that the instructions did not clarify the use of the terms "use" and "make" as relevant to whether an activity was entitled to the safe harbor provisions of the statute.  ("We would urge the broader standard for uses, but focus on the instruction should be on the uses and not the motives or purposes in making [a] batch.  The statutory exemption is premised on the use aspect.")  According to Hospira, the jury was asked to determine whether "manufacture" of the accused infringing article (biosimilar erythropoietin, bEPO) fell under the safe harbor when the only burden Hospira rightfully was obliged to meet was whether "use" of the allegedly infringing bEPO was "reasonably related to obtaining FDA approval."  The Court disagreed, stating that "Hospira's potentially infringing 'use' of Amgen' s patented invention is Hospira's manufacture of the EPO drug substance referred to in its BLA (i.e., Hospira's performance of the steps of Amgen's method claims), not Hospira's subsequent use of the EPO drug substance (i.e., Hospira's subsequent use of the product obtained by practicing Amgen's method claims)."  Thus, the safe harbor is available to Hospira only if manufacture of its bEPO was "reasonably related to obtaining FDA approval."  Hospira's subsequent use of the bEPO is "probative in determining whether Hospira's manufacture of its EPO drug substance was reasonably related to obtaining FDA approval, [but] it is the manufacture itself (not Hospira's subsequent uses of EPO drug substance) that is the potentially infringing act which must be evaluated for safe harbor protection."

In addition, Hospira argued that it was unduly prejudicial for the Court not to instruct the jury that "intent is irrelevant to evaluating safe harbor protection."  The Court interpreted Hospira's position to be that "intent is entirely irrelevant to the safe harbor analysis" but with that the judge expressly disagreed as being unsupported by the cited case law.  Specifically, the Memorandum Opinion interprets Abtox, Inc. v. Exitron Corp., 122 F.3d 1019 (Fed. Cir. 1997), to mean that a party can use the benefit of the safe harbor "to use its data from the tests for more than FDA approval" and "does not look to the underlying purposes or attendant consequences of the activity (e.g., tests led to the sale of the patent), as long as the use is reasonably related to FDA approval" but "did not state that intent was irrelevant in determining whether an activity is reasonably related to obtaining FDA approval."  On the contrary, the opinion states that "evidence of intent can be a relevant factor in determining whether an activity is reasonably related to obtaining FDA approval, and that these cases stand for the proposition that evidence of commercial intent is not determinative of the safe harbor inquiry."  "[O]nce it is determined that 'the activity is reasonably related to obtaining FDA approval,' [] intent or alternative uses are irrelevant to its qualification to invoke the section 271(e) shield," according to the opinion.  And further:

[A]dopting Hospira's interpretation of the safe harbor defense would expand the defense beyond recognition and create a loophole that would make it virtually impossible to prove infringement in cases involving products regulated by the FDA.  Since Hospira's interpretation requires ignoring intent in deciding whether the safe harbor applies, a party could manufacture 200 drug substance batches and earmark them for future use as commercial inventory without infringing, so long as the party used each of those batches for at least one test to generate data of the type used by the FDA in determining whether to approve the drug.  In that scenario, each batch would be tested to generate data that could conceivably be used to respond to inquiries from the FDA, making each batch reasonably related to obtaining FDA approval.  Essentially, Hospira's interpretation allows a single "token" submission of information derived from a potential infringing act to exempt that act from infringement, without regard to the realities surrounding the potentially infringing act.  It seems to me that Hospira's interpretation reads the words "solely" and "reasonably" out of the statute, and that a party's stated intent may be considered as part of whether the manufacture or use of a patented drug was "solely for uses reasonably related to" obtaining FDA approval.  I think that the jury instructions properly recited the role of intent in the safe harbor analysis.

The hypothetical nicely illustrates the practical considerations behind the scope of the safe harbor, and how these considerations influence how courts evaluate the safe harbor's proper scope.

Amgen Inc. v. Hospira, Inc. (D. Del. 2018)
Memorandum Opinion by Judge Andrews

FDA Issues Plan for Further Facilitating Biosimilar Development

By Kevin E. Noonan --

Earlier this month, the U.S. Food and Drug Administration announced a new initiative, the Biosimilars Action Plan: Balancing Innovation and Competition in furtherance of its efforts "to ensure that this balance between innovation and competition exists across the spectrum of pharmaceutical products."  The hoped-for outcome of the BAP:  that "[a]fter patents or other exclusivities expire on these novel products, prices can fall dramatically once follow-on products are available, potentially lowering costs for patients and payors and expanding access to these innovations."

The Introduction states that:

The agency is taking steps to more efficiently manage our review and licensure pathways to facilitate biosimilar competition.  We are modernizing our policies that govern the development of biosimilar to make it more efficient.  We are also educating clinicians, payors and patients about biosimilar products and the rigorous evaluation they must go through.  And, we are modernizing regulatory policies to accommodate new scientific tools that can better enable comparison between biosimilars and reference products that may reduce the need for clinical studies.

Some of the bureaucratic measures the agency intends to implement in furtherance of these efforts include:

1.  Introducing new FDA tools to improve efficiency of FDA review (e.g., templates "tailored to marketing applications for biosimilar and interchangeable products")
2.  Creating information resources and development tools for biosimilar applicants (in silico models and simulations for correlating PK/PD responses to clinical outcomes)
3.  Enhancing the Purple Book
4.  Looking into data sharing agreements with foreign regulators
5.  Establishing a new Office of Therapeutic Biologics and Biosimilars to improve coordination under the BsURA program
6.  Providing critical education to health care professionals
7.  Finalizing Guidance on labeling
8.  Providing finalized Guidance on interchangeable biosimilars
9.  Improving analytical approaches for structure/function for demonstrating biosimilarity including statistical methods
10.  Implementing standards for manufacturing quality control
11.  Improving public dialog with hearings and requests for public input on FDA actions to evaluate and promote biosimilars

Why now?  The FDA contends that "[t]his is a crucial time in the emergence of the marketplace of biosimilar and interchangeable products."  The agency expects continued expansion in the number of approved biosimilar and interchangeable products in the coming years.  The announcement of this new initiative recognizes "barriers to marketing a biosimilar or interchangeable product that are outside of the FDA's purview," but assert that it is part of the agency's mandate to "advance[e] policies to facilitate the efficient development and approval of these products."  Hence, the enunciation of the BAP.

There are four "key elements" of the BAP:

1.  Improving the efficiency of the biosimilar and interchangeable product development and approval process

How?

• Providing application review templates, formatted for 351(k) BLA requirements
• Transitioning to a Therapeutic Biologics and Biosimilars Staff (TBBS) from the Office of New Drugs under Center for Drug Evaluation and Research (CDER) to the Office of Therapeutic Biologics and Biosimilars (OTBB), intended to "improve coordination and support" of activities under the Biosimilar User Fee Act (BsUFA), increase agency response times, and improve efficiencies in policy development and response to applicants
• Improve coordination with CDER
• Develop information resources for biosimilar applicants, such as an "index of critical quality attributes" for comparing reference products to biosimilars, and comparison metrics that will reduce the size of clinical studies

2.  Maximizing scientific and regulatory clarity for the biosimilar product development community

How?

The FDA has issued six final (see "Nonproprietary Naming of Biological Products"; "Considerations in Demonstrating Interchangeability with a Reference Product"; "Clinical Pharmacology Data to Support a Demonstration of Biosimilarity to a Reference Product"; "Scientific Considerations in Demonstrating Biosimilarity to a Reference Product"; "Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product"; and "Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009") and four draft (see "Scientific Considerations in Demonstrating Biosimilarity to a Reference Product"; "Quality Considerations in Demonstrating Biosimilarity to a Reference Protein Product"; "Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009," as discussed in "FDA Publishes Draft Guidelines for Biosimilar Product Development" and "More on FDA Draft Guidelines for "Follow-on" Biologic Drug Approval Pathway") Guidance documents relating to biosimilars.  The FDA expects additional Guidances to be forthcoming that will involve public hearings, prioritizing the following issues:

• Final or Revised Draft Guidance: Reference Product Exclusivity for Biological Products Filed Under Section 351(a) of the PHS Act
• Final or Revised Draft Guidance: Implementation of the "Deemed to be a License" Provision of the Biologics Price Competition and Innovation Act of 2009
• Final or Revised Draft Guidance: Considerations in Demonstrating Interchangeability with a Reference Product
• Final or Revised Draft Guidance: Statistical Approaches to Evaluate Analytical Similarity
• Draft Guidance: Processes and further considerations related to post-approval manufacturing changes for biosimilar biological products

The agency is also developing guidance for biosimilar applicants who will seek approval for fewer than all conditions for which the reference product is licensed, and developing a formal rule for interpreting the definition of "biological product" under the BPCIA, to provide additional "clarity."  FDA is evaluating regulations regarding aBLA submission, and working on an enhanced Purple Book (which will contain "information about newly approved or withdrawn BLAs and about reference product exclusivity determination").

Finally, under this part of the BAP, the agency will be "[s]trengthening its partnerships with regulatory authorities in Europe, Japan and Canada" by "harmonizing requirements for their development as well as sharing regulatory experience across national boundaries," including data sharing agreements to increase the use of non-U.S.-licensed comparator products to support biosimilar application.

3.  Developing effective communications to improve understanding of biosimilars among patients, clinicians, and payors

How?

This portion of the Plan is aimed at increased educational efforts according to the Biosimilar Education and Outreach Campaign released in October 2017; continuing efforts including videos, webinars, information on the webpage, and providing educational materials for patients, pharmacists, and other stakeholders.

4.  Supporting market competition by reducing gaming of FDA requirements or other attempts to unfairly delay competition

How?

In many ways the most provocative part of the Plan, the announcement states that:

The FDA will clarify our position on issues affecting reference product exclusivity to better effectuate balance between innovation and competition.  We will also take action, whenever necessary, to reduce gaming of current FDA requirements, and coordinate with the Federal Trade Commission to address anti-competitive behavior.  Additionally, we will work with legislators, as needed to close any loopholes that may effectively delay biosimilar competition beyond the exclusivity periods envisioned by Congress.

The FDA intends to take steps for biosimilars analogous to the Drug Competition Action Plan (DCAP) the agency has implemented for generic drugs, where it was "a priority to address practices that delay or block competition from entering the market."  For generic drugs, these efforts were aimed at preventing branded drug makers from activities such as "refusal to sell the samples necessary for developing generic drugs [a practice we've seen with products under limited distribution, whether the drug maker limits distribution voluntarily or does so in connection with a Risk Evaluation and Mitigation Strategy (REMS) program]."  Insofar as such practices are being used by reference product sponsors (and the announcement does not provide any examples of such behavior, the agency states that "[w]e will apply the same principles used in DCAP to our BAP to address circumstances in which drug makers refuse to sell samples, or use any other anticompetitive strategies, to delay the entry of biosimilar or interchangeable development and competition."

In conclusion, the FDA says it expects development of biosimilar and interchangeable drugs to "continue to evolve" and thus implementation of the BAP to be "dynamic."  And:

The FDA is committed to transparent, science-based regulation of biosimilar and interchangeable products that maintains the dynamic balance between innovation and timely access, as Congress intended.  Appropriate market exclusivities allow innovators to recoup their investments, and compensate them for the time, risk and uncertainty that make the cost of capital to undertake these endeavors high.  These rewards provide incentives for research and development of new treatment options, as well as help advance medical innovation and improve outcomes.

While a good deal of this announcement is conventional bureaucratic promotion, there are a few nuggets that suggest that the FDA under this Administration may be more confrontational and aggressive towards perceived "bad behavior" by certain of its shareholders.  It is certainly the case that the price of drugs, particularly biologic drugs, is high and poses a significant cost burden on the health care system as a whole (both public and private).  The BAP appropriately addresses these concerns and recognizes that they must be addressed.  But it is also good to try to understand the economic realities that have created the situation (without excessive and unproductive finger-pointing).  It is a truism that everything has increased in price (and many things even adjusted for inflation); after all, it isn't just the elderly that are confronted with prices that seem ridiculously excessive.  But for drugs it also must be recognized, by policy makers as well as the public, that the low-hanging fruit of small molecule drugs and those with (relatively) simple etiologies have been discovered in the first flowering of the modern pharmaceutical intervention in human disease (see, e.g., Epstein, 2006, Overdose: How Excessive Government Regulation Stifles Pharmaceutical Innovation; and Rosen, 2017, Miracle Cure: The Creation of Antibiotics and the Birth of Modern Medicine).  And federal regulation, particularly by the FDA, is more extensive and costly than it was prior to the thalidomide tragedy in 1962.  While it is convenient and politically expedient to castigate the pharmaceutical industry for high prices, it is foolhardy not to recognize these and other factors in producing the current price situation.

The context of the comments in the FDA's BAP also comprises statements by Commissioner Gottleib regarding the possibility of changing U.S. drug importation regulations (but with disclaimers regarding exclusivities and prompted by "supply chain disruptions" to soften the political effects of implied threat) to permit "temporarily" importation of drugs from foreign sources.  The FDA has also created a task force to address drug shortages, either due to supply chain difficulties or source monopolization of unpatented drugs without remaining regulatory exclusivity due to sole sourcing.

But there is another aspect that is typically overlooked.  For many biologic drugs, the diseases they address are ones that a generation ago resulted in significant morbidity and mortality; indeed, some diseases were invariably fatal (many cancers, HIV) or severely debilitating (kidney disease, hepatitis).  Some of these were diseases of the elderly, and the wisdom of expending vast sums to extend few lives for short times is a topic for another day.  But for the overwhelming number of cases where individuals in the prime of life are cured or their diseases managed, these drugs provide significant advantages, both for the afflicted individuals and society as a whole.  In the most hard-hearted, dollars-and-cents analysis, what pundits who bemoan high drug costs appear to forget is that these individuals are returned to the workforce as productive participants, who hold down jobs and pay taxes and participate in the U.S. consumer economy.  Society, whether in the form of local or nationwide businesses or federal, state, and local tax collectors, reaps the benefit of those who have returned to the workforce due to the effects of biologic drugs that did not exist twenty, ten, five, or even one year ago.

And that doesn't take into account the human benefits, which now routinely permit individuals (and their spouses, sons, daughters and grandchildren) to enjoy the benefits of longer life and participation in weddings, births, and other lifetime milestones.  Undue focus on the goal -- obtaining biologic drugs at reduced prices -- raises a risk of not having these drugs, or their benefits, because private investment is frustrated and the government is a generally a poor source of innovation.  It would be well for policymakers, particularly at FDA, to keep such considerations in mind to temper their fiscal zeal.

Senators Ask FTC to Investigate Biosimilar Litigation Settlement Agreement

By Kevin E. Noonan --

The high cost of biologic drugs was one of the (if not the) most compelling motivations for Congress to adopt a biosimilar pathway as part of the Affordable Care Act in 2010 (aka "Obamacare").  Passage of the Biologic Price Control and Innovation Act (BPCIA, codified at 42 U.S.C. § 262(k)) created for the first time a pathway for FDA approval of biosimilar drugs in the U.S.  But from the beginning there have been grumblings, particularly regarding the term of the data exclusivity period (see "Congress Jumps on Bandwagon to Reduce Biologic Drug Exclusivity Term"; "President's Latest Budget Proposal Seeks Decrease of Data Exclusivity Period and Elimination of Pay-for-Delay Agreements"; "Senators Send Letter on Biosimilars to FDA"; "Senators Back 12-Year Data Exclusivity Period for Biosimilars and President Obama (Once Again) Does Not"; and "President's Latest Budget Proposal Seeks Decrease of Data Exclusivity Period and Elimination of Pay-for-Delay Agreements").  As biosimilar applicants have utilized the FDA's implementation of the abbreviated biologics license application (aBLA) pathway, and parties and the courts have begun to work out the litigation provisions of the Act (42 U.S.C. § 262(l)), the question of settlement of such litigation has arisen.  As mentioned in a recent roundup of the biosimilar landscape (see "Status of U.S. Biosimilar Approvals and Pending Applications"), there have been several biosimilar patent litigations that have settled or been avoided by licenses between branded biologic drug makers (termed "reference product sponsors" under the law) and biosimilars applicants.  For example, Genentech entered a global licensing agreement on March 31, 2017 with Mylan/Biocon over their Herceptin® biosimilar, Ogivri (trastuzumab-dkst) (although this biosimilar is not yet on the market), and Amgen/Samsung-Bioepsis's Amjetiva® (adalimumab-atto) is scheduled to enter the market in competition with AbbVie's Humira® in January 2023 as the result of a settlement agreement between the parties (see "HUMIRA® Biosimilar Update -- Settlement in AbbVie v. Amgen Case Announced and AbbVie v. Boehringer Ingelheim Litigation Begins").

Settlement agreements between conventional branded and generic drug makers were the source of a long dispute between pharmaceutical companies and the Federal Trade Commission, culminating in the Supreme Court's decision in FTC v. Actavis in 2013.  Before that decision, Congress implemented a protocol requiring any such "reverse payment" settlement agreements (called "pay-for-delay" by the FTC and those opposed to the practice) to be vetted by the Commission, wherein ones deserving of suspicion as being anticompetitive would come to the FTC's attention (and presumably corrective action).

No such regime has been put in place for biosimilar drugs, and two Senators, Charles Grassley (R-IA) and Claire Klobucher (D-MN), think the FTC should commence review of the Humira® settlement.  Part of their angst on the issue is a disparity of biosimilar entry dates between the U.S. (2023) and Europe (October 2018).  Part is their innate inclinations:  Senators Grassley and Klobucher have carried the branded company abuse torch for a while (see "The CREATES Act of 2016: Senate Listens to Generics Industry").  And of course perhaps the biggest factor is the high cost of Humira®, which is and has been the top-selling biologic drug for several years, and the price of which cannot but help to be reduced when biosimilar competitors enter the marketplace.  It must be noted in passing, however, that the size of such a reduction is unlikely to be as great as has been the case for conventional generic small molecule drugs.  In a fashion predicted by an FTC White Paper prepared before enactment of the BPCIA (see "No One Seems Happy with Follow-on Biologics According to the FTC"), the few biosimilar providers on the market have priced their drugs at only 15% less than the reference product sponsor (Sandoz's Zarxio® (filgrastim-sndz) (in competition with Amgen's Neupogen®); Pfizer's Inflectra® (infliximab-dyyb) (in competition with J&J/Janssen's Remicade®), although Merck-Samsung-Bioepsis's Renflexis® (infliximab-abda) (another Remicade® competitor) launched at risk (i.e., while patent litigation was on-going) at a 35% discount).  While this is a significant savings in aggregate (say, for example, insurers and the Federal government), it is not the windfall for consumers that some (including perhaps these Senators) seem to think it will be.

Nevertheless, these Senators have sent their letter to FTC Chairman Joseph Simons, reproduced below:

Dear Chairman Simons:

We write to urge the Federal Trade Commission (FTC) to look into whether strategies to hinder or delay generics from entering the market – such as anticompetitive "pay for delay" settlement agreements that have plagued generic pharmaceutical markets for years – may be being utilized for settlements regarding biologic medicines.

As you are aware, the FTC estimates that these pay for delay settlements can cost consumers and taxpayers $3.5 billion in higher drug costs every year.  Since 2001, the FTC has filed a number of lawsuits to stop these deals, and has worked with Congress on legislation to end pay for delay settlements.  We would like to continue those efforts to combat these agreements and explore their impact on the biologic market.

Biologics play an important role in treating many serious illnesses and are among the fastest growing classes of therapeutic products.  As they are more expensive than simple molecule pharmaceuticals, biologics constitute a substantial and increasing proportion of our nation's healthcare costs.  Without biosimilar competition, U.S. patients and payers will likely see additional price increases on biologics in the years to come.

For example, AbbVie Inc.'s (AbbVie) Humira is a biologic medicine that treats multiple inflammatory diseases and is the world's top-selling prescription drug with annual sales of $16 billion, including more than $10 billion in the United States alone.

Over the past year, AbbVie entered into global settlement agreements of all intellectual property litigation with both Amgen Inc. (Amgen) and Samsung Bioepsis (Samsung) over their biosimilars of Humira.  Under the agreements, Amgen and Samsung will not launch their products in the United States until 2023, but both companies will be able to launch their biosimilars into the European market in October 2018.  This means that while European patients will benefit from biosimilar competition later this year, Americans may be without access to Humira biosimilars for almost five more years.  While such terms in patent settlement agreements may not always be inappropriate, the incentives for parties to delay biosimilar entry are present, and biologic markets could be susceptible to patent settlement abuse.

In light of the importance of biosimilar competition to drive down prices and improve the quality of life for American patients, we urge the FTC to examine global patent settlements relating to biosimilars to ensure they are not in violation of antitrust laws.

Thank you for your prompt attention to this important matter.  We appreciate the FTC's efforts to ensure that potentially anticompetitive practices do not impede competition in the pharmaceutical market.

As yet the Commission has not responded publicly.

Status of U.S. Biosimilar Approvals and Pending Applications*

By Kevin E. Noonan --

The Biologics Price Competition and Innovation Act (BPCIA) was enacted as part of the Affordable Care Act (colloquially called "Obamacare," Public Law 111-148) (see "House Passes Health Care Reform Bill -- Biosimilar Regulatory Pathway Makes Cut, Pay-for-Delay Ban Does Not").  It gave the U.S. for the first time a pathway for FDA approval of alternatives to biologic drugs (termed "biosimilars" because the complexity of these molecules precludes the atom-for-atom identity of small molecule generic drugs), codified at 42 U.S.C. § 262(k), as well as provisions for resolving patent disputes between innovator biologic drug companies (termed "reference product sponsors" in the Act) and biosimilar applicants (codified at 42 U.S.C. § 262(l)).

Nine years later, after promulgation of several Guidances by the FDA regarding how it will (and has) implemented the biosimilar pathway, it is reasonable to review what the BPCIA hath wrought.  While the litigation provisions have been the source of some controversy (and arguably have played out in ways not envisioned when the Act was passed), the biosimilar pathway has been somewhat successful in bringing a first generation of biosimilar drugs to market.  For example, as of December 2017 there were 59 biosimilar products enrolled in the FDA's Biosimilar Development Program:

And as of June 2018, 24 biosimilar applications have been filed and eleven biosimilar drugs have received FDA approval.

FDA approval of these drugs has been relatively rapid, typically taking 10-20 months from FDA acceptance to approval.  There have been some outliers; Pfizer/Hospira's Retacrit^® (a biosimilar of Epogen^®/Procrit^®) was under FDA review for 42 months.  Most (but not all) of these FDA-approved biosimilars have also been approved in Europe (some quite a while ago, paradoxically including Retacrit^® which was approved in Europe in 2007).  The FDA decided early in its implementation process that it would accept clinical and other comparative data previously submitted to European regulators, supplemented by so-called "bridging studies," in the FDA approval process. Such studies were submitted for Sandoz's Zarxio^® (filgrastim-sndz) and Erelzi^® (etanercept-szzs) biosimilars, for example.  Several products (Amgen's Amjetiva^® (adalimumab-atto), Pfizer/Celltrion's Inflectra^® (infliximab-dyyb), and Merck/Samsung Bioepsis's Renflexis^® (infliximab-abda)) were supported by double-blind clinical studies comparing the biosimilar to EU-licensed and RPS-sourced biologic drugs.

The prolonged regulatory saga for Retacrit^® illustrates the extent to which the FDA can require a biosimilar applicant to satisfy its purity, safety, and efficacy standards for a biosimilar product:

Mere approval is not sufficient, of course; many but not all of these drugs are on the market in competition with the reference biologic drug.  These include Zarxio^® (filgrastim-sndz) (in competition with Amgen's Neupogen^®), which launched in September 2015, and Inflectra^® (infliximab-dyyb) (in competition with J&J/Janssen's Remicade^®), which launched in November 2016; each of these biosimilars are sold at a 15% discount from the reference biologic drug price.  Renflexis^® (infliximab-abda) (another Remicade^® competitor) launched at risk (i.e., while patent litigation was on-going) at a 35% discount, and Amjetiva^® (adalimumab-atto) is scheduled to enter the market in competition with AbbVie's Humira^® in January 2023 as the result of a settlement agreement between the parties.  Several other approved biosimilars are not yet on the market, however; these include Boehringer Ingelheim's Humira^® biosimilar, Cyltezo^® (adalimumab-abdm); Amgen/Allergan's Avastin^® biosimilar, Mvasi (bevacizumab-awwb) (Amgen/Allergan); and Mylan/Biocon's Herceptin^® biosimilar, Ogivri (trastuzumab-dkst), despite a global licensing agreement with Genentech entered into on March 31, 2017; and Hospira's Epogen^® biosimilar, Retacrit^® (epoetin alfa-epbx).  In addition, Pfixer has decided not to enter the marketplace with its Remicade^® biosimilar, Ixifi, which would also compete with Pfizer's other Remicade^® biosimilar, Inflectra^®.

Fourteen biosimilar (§ 262(k)) applications are currently pending:

These applications have encountered more challenges on their approval pathways; several of them have received Complete Response Letters from the FDA (indicating that the agency will not approve the application under 21 C.F.R. §§ 314.125 or 314.127), and many have been pending longer than the 10-20 month average experienced by the already-approved biosimilars.

Biosimilar litigation is also proceeding and provides a reason that some of the approved biosimilars are not yet on the market (including Erelzi^®, Cyltezo^®, Mvasi, and Mylan/Biocon's Neulasta^® biosimilar, Fulphila™).  Consistent with expectations during passage of the BPCIA, there is also active litigation involving reference product sponsors and biosimilar applicants:

So far, approved biosimilars and pending biosimilar applications have been concentrated amongst the top U.S. biologic drugs, but there are several such drugs that are among these top drugs and have no prospective biosimilar competitors:

Finally, it must be recognized that other considerations can and have arisen, particularly antitrust concerns.  Pfizer filed suit against Johnson & Johnson and Janssen Biotech for antitrust violations related to alleged anticompetitive activities surrounding competition between Remicade^® and Inflectra^®.  Pfizer alleged that the defendants engaged in "improper exclusionary tactics," including exclusionary contracts, coercive rebate policies with insurers, hospitals, clinics ("fail first" restrictions), exclusionary rebates, bundling, and coverage restrictions.  This advertisement hasn't helped:

Pfizer's four-count complaint alleged Sherman Act Section 2 violations for monopolization and attempted monopolization; Clayton Act violations for entering into exclusive contracts; and Sherman Act Section 1 violations for entering into agreements in restraint of trade.  Pfizer has asked the court for $150 million in damages, attorneys' fees, costs, and an injunction.  J&J/Janssen has responded with a motion to dismiss under Fed. R. Civ. Pro. 12(b)(6) based in pleadings deficiencies under Ashcroft v. Iqbal and Bell Atlantic Corp. v. Twombly.  Substantively, defendants allege that Pfizer did not show antitrust injury or anticompetitive behavior, and that their actions were just robust capitalist competition.  The motion has been pending since November 2017, and the court has stayed discovery while considering the motion.

Within the last year, the number of approved biosimilars in the U.S. has more than doubled, and with the number of pending biosimilar applications it is likely that this trend will continue.  One aspect of the BPCIA has not yet come to pass, a designation of any biosimilar as being interchangeable.  The FDA released draft Guidance directed to the standards it is considering for awarding an interchangeability designation in January 2017 (see Considerations in Demonstrating Interchangeability with a Reference Product); a Final Guidance is expected in 2019.

*Adapted from a talk given at the American Conference Institute's 9th Annual Conference on Biosimilars, held in New York, New York on June 25-27, 2018.

Celltrion, Inc. v. Genentech, Inc. (N.D. Cal. 2018)

By Donald Zuhn --

Last month, in Celltrion, Inc. v. Genentech, Inc., District Judge Jeffrey S. White of the U.S. District Court for the Northern District of California granted two motions to dismiss filed by Defendants Genentech, Inc.; Hoffman La-Roche, Inc.; and City of Hope ("Genentech"), which sought to dismiss the first amended complaint filed by Plaintiffs Celltrion, Inc.; Celltrion Healthcare, Co. Ltd.; Teva Pharmaceuticals International GMGH; and Teva Pharmaceuticals USA, Inc. ("Celltrion").  Celltrion had initiated the dispute between the parties by filing complaints for declaratory judgment with respect to patents related to Genentech's Herceptin and Rituxan biologic drugs.

Both of the cases involve the Biologics Price Competition and Innovation Act of 2009 ("BPCIA"), which provides a regulatory approval pathway for biosimilar drugs.  Under the BPCIA, a biologic licensed by the U.S. Food and Drug Administration is known as a reference product, and the entity that manufactures the reference product is known as the reference product sponsor ("RPS").  An entity that wishes to manufacture a biosimilar drug -- the biosimilar applicant (BA) -- may apply to the FDA for approval, and upon a showing that there are no "clinically meaningful differences" between the biosimilar drug and the biologic drug, can procure FDA approval for the biosimilar drug.

42 U.S.C. § 262(l) of the BPCIA prescribes a detailed mechanism for resolving infringement claims arising between the reference party sponsor and the biosimilar applicant, which is colloquially referred to as the "patent dance."  A timeline showing a number of steps in that patent dance is depicted below:

The two cases between Celltrion and Genentech relating to Herceptin and Rituxan involved §§ 262(l)(5)(A) and 262(l)(5)(B)(i), which specify the steps in the patent dance that take place after the biosimilar applicant and reference product sponsor engage in "good faith negotiations" to reach an agreement identifying the patents that will be the subject of patent infringement litigation (pursuant to § 262(l)(4)(A)).  If the biosimilar applicant and reference product sponsor cannot agree on a list of patents to be litigated, the parties must simultaneously exchange lists of patents that each believes should be immediately litigated ("5(B) Lists"), and before that exchange takes place, the biosimilar applicant must identify the number of patents that it will identify on its own 5(B) List ("5(A) Number").  Pursuant to § 262(l)(9)(B), if a biosimilar applicant fails to serve its 5(A) Number or 5(B) List (or comply with several other steps), the applicant may not bring an action for declaratory judgment.

With respect to Herceptin, Celltrion had applied for FDA approval to market a biosimilar of that biologic drug called "Herzuma," and received notice that its application had been accepted by the FDA for review.  When it came time for the parties to conduct good faith negotiations, Genentech proposed that the parties agree to litigate a discrete number (fewer than all) of the patents under discussion, and Celltrion responded by indicating that it wished to litigate a larger number of patents than Genentech's opening offer.  Without providing its 5(A) Number or 5(B) List, Celltrion served a notice of commercial marketing on Genentech and then filed a declaratory judgment action against Genentech regarding the Herceptin patents it wished to litigate.

With respect to Rituxan, Celltrion had applied for FDA approval to market a biosimilar of that biologic drug called "Truxima," and received notice that its application had been accepted by the FDA for review.  During good faith negotiations, Celltrion indicated that it wished to litigate all forty of the patents Genentech had placed on its § 262(l)(3)(A) List.  As with Herceptin, Celltrion served a notice of commercial marketing on Genentech without providing its 5(A) Number or 5(B) List, and then filed a declaratory judgment action against Genentech regarding the Rituxan patents Celltrion wished to litigate.

Genentech responded to the declaratory judgment actions by filing motions to dismiss both suits for lack of subject matter jurisdiction, or alternatively, failure to state a claim.  With respect to subject matter jurisdiction, the District Court noted that "Genentech has cited no 'clear statement' by Congress suggesting that Congress intended the BPCIA's requirements to be jurisdictional prerequisites," and therefore treated Genentech's motions as seeking dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).

In arguing against those motions, Celltrion contended that it may streamline its obligations under the BPCIA and satisfy several steps of the patent dance at once.  In particular, Celltrion argued that it was absolved of the responsibility to comply with § 262(l)(5) because it told Genentech it "wished" to litigate all of the patents on Genentech's § 262(l)(3)(A) Disclosure, and that this statement both fulfilled its obligations to engage in "good faith negotiations" under § 262(l)(4) and made the exchange of the 5(A) Number and 5(B) Lists "redundant."  The District Court, however, countered that "[t]his argument . . . improperly conflates Sections (l)(4) and (l)(5)," pointing out that "[t]he parties' obligations under Section (l)(5) only arise if the parties are unable to agree, after fifteen days of good faith negotiations, on a final and complete list of patents to litigate in Phase I."  The Court concluded that "[g]iven the plain language of this provision, and the relationship between Sections (l)(4) and (l)(5) more generally[,] . . . no single statement or gesture can satisfy the requirements of both sections simultaneously."

With respect to the Rituxan complaint, Celltrion argued that that it was not obligated to offer its 5(A) Number or exchange 5(B) Lists because it filed its lawsuit nine days before the expiration of the fifteen-day period provided under § 262(l)(4) for good faith negotiation.  The Court found this argument to be unpersuasive, noting that "[b]y this argument, Celltrion suggests that the filing of this declaratory judgment action was permissible because it skipped required statutory steps, where the non-occurrence of those statutory steps explicitly bars Celltrion from filing this action—an unpersuasive legal Catch-22."  The Court stated that "Celltrion was obligated to complete all required procedures before filing this lawsuit, and it did not."

Celltrion's final argument was that the notices of commercial marketing it served for Herzuma and Truxima enabled it to file the declaratory judgment actions regardless of its compliance with other portions of the BPCIA.  In particular, Celltrion contended that because a notice of commercial marketing lifts the ban on declaratory judgment actions described in § 262(l)(9)(A), a notice of commercial marketing should also lift §§ 262(l)(9)(B) and (C)'s prohibitions.  The District Court, however, pointed out that the Central District of California had recently considered and rejected a similar argument in Amgen v. Genentech, Inc., 17-cv-7349-GHW, 2018 WL 910198 (C.D. Cal. Jan. 11, 2018).  The Court reiterated that "a notice of commercial marketing only opens the door for an applicant to file a declaratory judgment action if the applicant complies with the rest of the statute."

"Because Celltrion did not complete its obligations under Section (l)(5)," the District Court determined that "Celltrion may not file actions for declaratory judgment with respect to the patents at issue," and therefore granted both of Genentech's motions to dismiss, while affording Celltrion leave to amend its complaints.

Celltrion, Inc. v. Genentech, Inc. (N.D. Cal. 2018)
Order Granting Defendants' Motions to Dimiss by District Judge White

Top Stories of 2017: #5 to #9

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 11th annual list of top patent stories.  For 2017, we identified nineteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  In two prior posts, we counted down stories #19 to #15 and stories #14 to #10, and today we count down stories #9 to #5 as we work our way towards the top four stories of 2017.  As with our other lists (2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2017" on January 17, 2018 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

9.  Federal Circuit Affirms Inequitable Conduct Determination in Regeneron Pharmaceuticals v. Merus

In July, a divided panel of the Federal Circuit affirmed a District Court decision finding Regeneron's U.S. Patent No. 8,502,018, which is directed to transgenic mice expressing human variable domain immunoglobulin (Ig) genes, unenforceable due to inequitable conduct.  It was undisputed that during prosecution of the '018 patent, four references were known to Regeneron and its counsel that were not cited to the U.S. Patent and Trademark Office -- these references were cited by a third party during prosecution of a related application after Regeneron received a Notice of Allowance for the '018 patent.  While Regeneron did not submit these references to the Office during prosecution of the application that issued as the '018 patent, Regeneron did cite these references in all other pending related applications.  The District Court, applying the rubrics of the Federal Circuit's decision in Therasense, Inc. v. Becton, Dickinson and Co., found the '018 patent unenforceable due to inequitable conduct.  In particular, the District Court determined that the uncited references were "but-for" material (i.e., the patent would not have granted but for the non-disclosure because the undisclosed references rendered the granted claims unpatentable), not cumulative to references considered by the Examiner, and there was an intent to deceive the Examiner by not disclosing the uncited references.  With respect to the second prong of the Therasense test -- intent to deceive -- the District Court had cataloged instances of litigation misconduct in drawing an adverse inference that there was an intent to deceive.  The District Court findings included improperly withholding and citing on privilege logs documents clearly not privileged (such as experimental data), withholding as privileged information where the privilege had been waived, and withholding evidence of patent prosecution counsels' reasoning and state of mind relevant to whether counsel had an intent to deceive.  In affirming the District Court's decision, the panel majority reviewed the litigation misconduct described by the District Court and found that the District Court's decision to draw an adverse inference that there was an intent to deceive was not an abuse of discretion.  Judge Newman penned a strong dissent, based on her conviction that "my colleagues apply incorrect law and add confusion to precedent," writing that "[t]he panel majority thus convicts Regeneron, its counsel, and its scientists, with no trial, no evidence, and no opportunity to respond in their defense."

For information regarding this and other related topics, please see:

• "Regeneron Pharmaceuticals, Inc. v. Merus N.V. (Fed. Cir. 2017)," July 28, 2017

8.  Supreme Court Interprets "Substantial Portion" in § 271(f)(1)

In February, in Life Technologies Corp. v. Promega Corp., the Supreme Court reversed a determination by the Federal Circuit that there could be circumstances in which a party may be liable under § 271(f)(1) for supplying or causing to be supplied a single component for combination outside the United States, holding instead "that a single component does not constitute a substantial portion of the components that can give rise to liability under §271(f)(1)."  Promega had sued Life Technologies for infringement of several of its patents, alleging that Life Technologies sold genetic testing kits that were not covered by the license agreement between the parties.  In reversing the Federal Circuit, the Supreme Court pointed out that Life Technologies manufactured all but one component of its kits in the United Kingdom -- manufacturing Taq polymerase in the United States and then shipping the Taq polymerase to its United Kingdom facility to be combined with the other four components of the kit.  Turning to the question of whether, as a matter of law, a single component could ever constitute a "substantial portion" so as to trigger liability under § 271(f)(1), the Court answered that question in the negative, holding that "one component does not constitute 'all or a substantial portion' of a multicomponent invention under §271(f)(1)," and adding that to resolve the question presented in the instant case, the Court did not need to define how close to "all" of the components "a substantial portion" must be.  The Supreme Court therefore reversed the judgment of the Federal Circuit and remanded the case since only a single component of the patented invention at issue was supplied from the United States.

For information regarding this and other related topics, please see:

• "Life Technologies Corp. v. Promega Corp. (2017)," February 22, 2017

7.  Supreme Court Interprets BPCIA in Amgen v. Sandoz

The Supreme Court handed down its opinion in Sandoz Inc. v. Amgen Inc. in June, marking the first time the Court has interpreted the Biologics Price Competition and Innovation Act (BPCIA) for the approval of biosimilar drugs.  The Court described the BPCIA as "a carefully calibrated scheme for preparing to adjudicate, and then adjudicating, claims of infringement" related to biosimilar applications.  This process begins with the disclosure by a biosimilar applicant of an abbreviated Biologics License Application (aBLA) and related information in order to "enable the sponsor to evaluate the biosimilar for possible infringement of patents it holds on the reference product."  Nevertheless, the Court held that the reference product sponsor (RPS) cannot seek enforcement of the disclosure provision in 42 U.S.C. § 262(l)(2)(A) by injunction under federal law.  This was essentially the result reached by Federal Circuit.  However, the Supreme Court reversed and remanded the question whether the disclosure provision was enforceable under state law, or whether the BPCIA pre-empted any state law claim.  With regard to the 180-day notice-of-commercial-marketing provision of the statute, the Court reversed the Federal Circuit and held that the notice may be provided "either before or after receiving FDA approval."

For information regarding this and other related topics, please see:

• "Amgen Inc. v. Sandoz Inc. (Fed. Cir. 2017) -- One Last Dance . . . ," December 14, 2017
• "HUMIRA® Biosimilar Update -- Settlement in AbbVie v. Amgen Case Announced and AbbVie v. Boehringer Ingelheim Litigation Begins," September 28, 2017
• "Amgen Inc. v. Hospira, Inc. (Fed. Cir. 2017)," August 10, 2017
• "Sandoz Inc. v. Amgen Inc. (2017)," June 12, 2017
• "Sandoz, Amgen, and the Federal Government at the Supreme Court -- Timing of BPCIA 180-Day Notice of Commercial Marketing Provisions," April 27, 2017
• "Supreme Court Hears Oral Argument in Sandoz v. Amgen -- Patent Dancing and Missing Puzzle Pieces," April 26, 2017
• "Supreme Court Preview -- Sandoz Inc. v. Amgen Inc. -- 180 Day Notice of Commercial Marketing Provisions of BPCIA," April 25, 2017
• "Supreme Court Preview -- Sandoz Inc. v. Amgen Inc.," April 24, 2017
• "Supreme Court to Review BPCIA -- Amgen v. Sandoz Petitions for Writs of Certiorari Granted," January 15, 2017

6.  New Administration Withdraws U.S. from TPP Agreement

Only days after being sworn into office, President Trump made good on one of his signature campaign promises and notified the other twelve countries that were considering ratifying the Trans-Pacific Partnership (TPP) Agreement (i.e., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) that the United States was withdrawing from the treaty and that he would not ask Congress to ratify it.  The President's stated reasons for doing so, reiterated many times during his campaign, were that the treaty was bad for American workers and part of a pattern of trade agreements that had taken jobs from U.S. workers and encouraged businesses to offshore capital and production capacity in favor of countries where labor was cheaper than in the U.S.  Some in the patent community thought the President was wrong to withdraw from the TPP, believing that the agreement was generally favorable to American interests and would have had no effect on the U.S. job market, in part because the provisions of the treaty favored American innovators, specifically biotechnology and pharmaceutical companies, but all creative industries (including film, recording artists, and writers, among others) whose efforts are not offshored.  In July, the United States Trade Representative released the summary of its objectives for NAFTA renegotiation, including its objectives for the intellectual property and competition provisions of the agreement.  However, the provisions that the USTR indicated it would be seeking -- which appear to be intended to create a template for future bilateral or multilateral agreements -- reestablish the basic framework initially negotiated by the Obama Administration as part of the TTP, which President Trump had rejected as a "continuing rape of our country."  The Trump Administration's decision to pursue many of the same intellectual property protection objectives in renegotiating NAFTA as had been negotiated as part of TPP was all the more remarkable in light of the decision by the other TPP member states (also in July) to continue to seek a broader free trade market with the same sort of intellectual property requirements.

For information regarding this and other related topics, please see:

• "The Trump Administration's Intellectual Property and Competition Objectives for NAFTA Renegotiation: What Was Wrong with the TPP?" July 20, 2017
• "Why President Trump Is Wrong about Trans-Pacific Partnership Agreement," January 26, 2017

5.  Supreme Court Expands Exhaustion Doctrine in Impression Products v. Lexmark

In May, the Supreme Court unsurprisingly reversed the Federal Circuit regarding the metes and bounds of the patent exhaustion doctrine.  The Court ruled in Impression Products, Inc. v. Lexmark International, Inc. that the doctrine precludes a patentee from using the patent laws to enforce any agreement that restricts a purchaser's post-sale ownership rights in a patented article, and that the doctrine extends to patented products sold abroad.  The decision reversed Federal Circuit precedent that permitted patentees to limit the scope of rights transferred to purchasers upon sale of a patented article, provided that such restrictions were "clearly worded" (Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992)) and further expanded the scope of exhaustion to include sales made outside the U.S., which the Federal Circuit had held were outside the reach of exhausting U.S. patent rights (Jazz Photo Corp. v. International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001)).  The decision represents a culmination of the Court's delineation of the expansive scope of exhaustion regarding intellectual property rights that can be found in Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008), and (in the copyright context) Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013).

For information regarding this and other related topics, please see:

• "Patent Exhaustion and Pharmaceuticals, October 10, 2017
• "Impression Products, Inc. v. Lexmark International, Inc. (2017)," May 30, 2017