Supreme Court Issues Important Decision in the Biopharma Sector Favoring Earlier Entrance of Cost-Saving Biosimilars into the US Market

In a closely watched case in the biopharma space (Sandoz Inc. v. Amgen, Inc., No. 15–1039, June 12, 2017), the Supreme Court issued its first ever decision on how to interpret the biosimilar patent dispute provisions of the Biologics Price Competition and Innovation Act (BPCIA).  Most importantly, the Court ruled that biosimilar applicants do not have to wait until FDA approval to give brand companies the “180-day premarketing notice”.  Since this statutory premarketing notice serves as a trigger for patent infringement litigation under the BPCIA statute, Amgen, the maker of the brand-name biologic product in this case (Neupogen®), argued that biosimilar applicants such as Sandoz should be prohibited from giving their notice prior to actual FDA approval because, prior to final FDA approval, the exact features of the biosimilar product are not crystalized.  Amgen’s concern in this regard is that premature notice deprives patent holders of a fixed target upon which to base their patent infringement pleadings.  Orderly proceedings would be disrupted and chaos would result, according to Amgen.  In response, Sandoz argued that if biosimilar applicants have to wait for final FDA approval prior to giving their notice, then cost-saving biosimilar products would end up being delayed by an additional six months (on top of statutory exclusivity provisions already afforded to brand-name makers of biologics).  The Supreme Court decided the matter by focusing on the BPCIA’s “carefully crafted and detailed enforcement scheme” and agreed with Sandoz, thus reversing the Federal Circuit on this issue. The Court pointed out that “[e]ven if we were persuaded that Amgen had the better of the policy arguments, those arguments could not overcome the statute’s plain language.”

On a separate but related issue, the Supreme Court held that federal injunctions are not available for brand companies to force biosimilar applicants to comply with the BPCIA’s provisions regarding the back-and-forth exchange of patent and product information often referred to as the “biosimilar patent dance”.  Basically, the Court reasoned that since the BPCIA already specified certain consequences in the event a biosimilar applicant opts out of the patent dance, all other federal remedies, including injunctive relief, are excluded.  Citing previous precedent, the Court held that “[w]here, as here, ‘a statute expressly provides a remedy, courts must be especially reluctant to provide additional remedies.’ Karahalios v. Federal Employees, 489 U. S. 527, 533 (1989)”.  However, the Supreme Court’s pronouncements in this regard did not fully resolve the issue of whether biosimilar applicants can be forced to participate in the patent dance.  This is because the Court remanded the following questions to the Federal Circuit:  (1) whether state law (California law in this case) would treat noncompliance with the patent dance provisions as “unlawful”; and if so, then (2) whether the BPCIA pre-empts any additional remedy available under state law for an applicant’s failure to comply (and whether Sandoz has forfeited any pre-emption defense).

Another interesting aspect of this case involves the potential future role of the FDA.  Specifically, in a concurring opinion, Justice Breyer pointed out that “Congress implicitly delegated to the [FDA] authority to interpret” the relevant statutory provisions, and thus, “if that agency, after greater experience administering this statute, determines that a different interpretation would better serve the statute’s objectives, it may well have authority to depart from, or to modify, today’s interpretation, . . . though we need not now decide any such matter.”