SCOTUS says OK to give notice of commercial marketing before FDA license under Biologics Price Competition and Innovation Act

Sandoz Inc. v. Amgen Inc., (June 12, 2017) ( Thomas, J., delivered the opinion for a unanimous Court) (Breyer, J., filed a concurring opinion).

42 U.S.C. § 262(l) of the Biologics Price Competition and Innovation Act of 2009 (BPCIA) regulates “biosimilars,” biological products that are highly similar to FDA-approved biological products. Section 262(l) has two notification requirements that are important to this case. First, an applicant seeking approval of a biosimilar must submit its application materials and manufacturing information to the manufacturer (sponsor) of the corresponding biologic (reference product) within 20 days after the FDA notifies the applicant that its application is accepted for review. Second, the applicant must notify the manufacturer at least 180 days before it commercially markets the biosimilar after it receives approval from the FDA.

Because reference products are often covered by multiple patents, the BPCIA has specific provisions that enable the sponsor to bring an infringement action at two different stages of the review process. First, after the applicant has submitted its application and manufacturing information to the sponsor, the sponsor can evaluate the biosimilar for possible infringement and identify any patents that it believes might be infringed by the biosimilar that is the subject of the application. The parties may litigate infringement of the identified patents immediately or may choose to litigate after the FDA has licensed the biosimilar and the applicant has given the sponsor notice of its intent to begin commercial marketing.

In May 2014, Sandoz filed an application with the FDA seeking approval to market a filgrastim biosimilar under the brand name Zarxio, listing Neupogen (a filgrastim product marketed by Amgen) as the reference product. The FDA accepted Sandoz’s application for review on July 7, 2014. One day later, Sandoz notified Amgen that it had submitted an application and that it intended to market Zarxio immediately after receiving FDA approval. Sandoz notified Amgen that it did not intend to submit its application and manufacturing information and that Amgen could sue immediately for infringement of patents on methods of manufacturing and use of filgrastim. In October 2014, Amgen sued Sandoz for patent infringement and also asserted two claims under California’s unfair competition law. Amgen sought injunctions to force Sandoz to provide its application and manufacturing information and to provide notice of commercial marketing after, not before, the FDA licensed Zarxio under the BPCIA. Sandoz counterclaimed, arguing that the patent was invalid and not infringed and that it had not violated the BPCIA.

The district court granted partial judgment on the pleadings to Sandoz on the BPCIA claims and dismissed Amgen’s unfair competition claims. Amgen appealed to the Federal Circuit, which affirmed the dismissal of Amgen’s unfair competition claims and held that Sandoz did not violate the BPCIA by failing to disclose its application and manufacturing information. The Federal Circuit also held that an applicant might only provide effective notice of commercial marketing after—not before—the FDA has licensed the biosimilar. Sandoz petitioned the Supreme Court for certiorari.

The first question addressed by the Court was whether the requirement under § 262(l)(2)(A) that an applicant provides its application and manufacturing information to the manufacturer of the reference product is enforceable by an injunction under federal or state law. The Court agreed with the Federal Circuit that an injunction is not available under federal law to force an applicant to provide its application and manufacturing information to the sponsor but disagreed with the Federal Circuit’s reasoning. The Court remanded for the district court to determine whether an injunction is available under state law.

The Federal Circuit held that § 262(l)(9)(C) and § 271(e) provide the only remedies for a violation of § 262(l)(2)(A), and that neither provision authorizes a court to compel compliance with § 262(l)(2)(A). In reaching this conclusion, the Federal Circuit relied primarily on § 271(e)(4), which states that it provides “the only remedies which may be granted by a court for an act of [artificial] infringement.” The Court rejected this approach, finding that an applicant’s failure to disclose its application and manufacturing information is not an act of artificial infringement and thus is not remediable under § 271(e)(4). It is the submission of an application that constitutes an act of artificial infringement remediable under § 271(e)(4). Section § 262(l)(9)(C) does, however, authorize the sponsor—not the applicant—to bring an immediate declaratory judgment action for infringement if the applicant fails to turn over its application and manufacturing information. The Court noted that the remedy in § 262(l)(9)(C) is exclusive, meaning that an injunction is not available to enforce § 262(l)(2)(A) under federal law. The Court remanded to determine whether state law provides a remedy for an applicant’s failure to submit its application and manufacturing information.

The second question addressed by the Court was whether the applicant must provide notice after the FDA licenses its biosimilar, or if it may provide notice before the FDA licenses its biosimilar. The Court concluded that an applicant might, but does not have to, provide notice to the manufacturer of the biologic before obtaining a license from the FDA.

The statute at issue, § 262(l), states only that the applicant must give notice at least 180 “before the date of the first commercial marketing,” where commercial marketing must be “of the biological product licensed” by the FDA. Using statutory construction, the Court found that the biosimilar must be licensed on or before the date of the first commercial marketing. Therefore, the applicant may provide notice either before or after receiving FDA approval so long as it provides notice before the date of the first commercial marketing. The Court rejected the Federal Circuit’s interpretation, which would have required the applicant to provide notice after the FDA licensed the biosimilar and at least 180 days before the first commercial marketing. The Court noted that if Congress had intended the applicant to notify the sponsor of commercial marking twice, it would have said so expressly. Because Sandoz notified Amgen before licensure, and because the Federal Circuit erred in finding that notice may only be provided after licensure, the Court reversed the Federal Circuit’s judgment as to the notice provision of § 262(l).

Justice Breyer concurred with the Court’s decision, noting only that the FDA has implicit authority to interpret § 262 and, using this authority, could determine that a different interpretation “would better serve the statute’s objectives” and “depart from, or [] modify” the Court’s decision.

An applicant cannot be forced to provide its application and manufacturing information to the manufacturer of a biologic under federal law. Applicants can provide notice of commercial marketing either before or after receiving approval from the FDA.

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