On March 19, 2015, Judge Seeborg of the Northern District of California1 handed a significant victory to Sandoz's efforts to bring the first biosimilar product to market by denying Amgen's partial judgment on the pleadings and preliminary injunction2 to block the sale of Zarxio, a biosimilar to Amgen's blockbuster drug, Neupogen. Judge Seeborg dismissed Amgen's California Unfair Competition Law (UCL) and conversion allegations with prejudice, and found no likelihood of success on the merits or irreparable harm to support its preliminary injunction motion. The court's decision interprets provisions of the Biologics Price Competition and Innovation Act (BPCIA), which govern procedures for biosimilar drug developers seeking to take advantage of expedited regulatory approval from the U.S. Food & Drug Administration (FDA).
At issue before the district court was whether Sandoz's decision to bypass the information-sharing and notice provision violated the BPCIA. Pointing to language in the BPCIA that biosimilar makers "shall" provide the "information required," Amgen maintained that Sandoz did not comply with the BPCIA by: 1) failing to provide a complete copy of its biosimilar application, including proprietary information regarding the manufacturing of Zarxio; 2) failing to participate in the infringement and patent information exchange provided for under the BPCIA; and 3) failing to provide to Amgen notice of at least 180 days prior to the commercial marketing of its drug.
While conceding that "such phrasing lends support to Amgen's reading" that such disclosures may be mandatory under the BPCIA, Judge Seeborg noted that the complex provisions of the BPCIA instead suggested that Congress created a carrot-and-stick approach that encouraged disclosure while allowing for a reference product sponsor to immediately bring suit should the applicant fail to comply with the disclosure procedures.3 Parsing through the BPCIA's language, Judge Seeborg concluded that sharing information as part of the BPCIA's patent information exchange procedures could reduce related patent litigation by giving biosimilar applicants the opportunity to preview which patents would be subject to a litigation and to resolve disputes outside of court proceedings, but is "required" only "where the parties elect to take advantage of their benefits."4 Should a biosimilar applicant fail to follow through with the procedures, the judge noted that the BPCIA allows for "the reference product sponsor to commence patent litigation immediately."5 The court further observed that "Congress took the additional step in the BPCIA to amend 35 U.S.C. § 271(e) to add that an applicant's failure to disclose information . . . is immediately actionable, making it clear that such a dispute is ripe for adjudication."6 Judge Seeborg thus found it "evident that Congress intended merely to encourage use of the statute's dispute resolution process in favor of litigation," with the BPCIA "contain[ing] no stick to force compliance in all instances."7
Concluding that the BPCIA gives biosimilar applicants the option to enter the "patent dance" or not, the court noted Sandoz's particular situation made choosing the BPCIA information-sharing provision time-consuming, and an immediate patent infringement lawsuit preferable:
"Sandoz therefore traded in the chance to narrow the scope of potential litigation with Amgen [through the BPCIA's information sharing provisions] in exchange for the expediency of an immediate lawsuit. The BPCIA's plain language and overall statutory scheme support a reading that renders this decision entirely permissible."8
The court similarly dismissed Amgen's contention that the BPCIA required biosimilar makers to provide notice to reference product sponsor rivals 180 days "before the date of the first commercial marketing of the biological product licensed under [the BPCIA]."9 Siding with Sandoz, the judge found Amgen's reading of the relevant BPCIA provisions to be nonsensical given that "FDA approval must precede market entry."10 Judge Seeborg thus concluded that ultimately Congress would not have given reference product sponsors another 180 days of exclusivity–on top of an existing 12 years—without being clear: "Had Congress intended to make the exclusivity period 12.5 years, it could not have chosen a more convoluted method of doing so."11
While the court's findings will certainly be appealed, the practical effects of this ruling warrant an analysis of the pros and cons of whether a biosimilar applicant should avail itself of the BPCIA's notice and information provisions during drug development, or whether a more expedient route would be the invitation of an immediate patent infringement suit. More importantly however, the opinion signals to reference product sponsors that efforts to delay biosimilar market entry through the complex BPCIA provisions may not be available.
1 Amgen Inc. v. Sandoz Inc. 14-cv-04741-RS (N.D. Cal. March 19, 2015).
