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Supreme Court Interprets BPCIA Disclosure and Notice Provisions

June 13, 2017

On June 12, 2017, in a unanimous decision, the Supreme Court of the United States decided Sandoz Inc. v. Amgen Inc., which concerned certain disclosure and notice requirements imposed by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), 42 U.S.C. § 262(l), on applicants seeking FDA approval for biosimilars of biologic drug products. The BPCIA is a “complex statutory scheme” that “establishes processes both for obtaining FDA approval of biosimilars and for resolving patent disputes between manufacturers of licensed biologics and manufacturers of biosimilars.” In particular, the Court resolved two issues concerning the BPCIA, holding that (i) an injunction is not an available remedy under federal law to force a biosimilar applicant to provide a copy of its FDA application and information about how the biosimilar is manufactured to the manufacturer of a licensed biologic product prior to the start of a patent infringement case; and (ii) an applicant may give the biologic manufacturer notice of “commercial marketing” of its biosimilar either before or after receiving FDA approval, i.e., licensure, for its product.

Some background may be helpful to understand these issues. In contrast to “traditional” drugs that are chemically synthesized, biologics are drug products derived from natural, biological sources such as animals or microorganisms. Under the BPCIA, manufacturers of biologics may seek FDA marketing approval using two different pathways. One pathway is that the FDA may “license” a new biologic drug if a manufacturer demonstrates, among other things, that the biologic is “safe, pure, and potent.” Alternately, the BPCIA provides an abbreviated approval pathway for licensure of a biosimilar by “piggyback[ing] on the showing made by the manufacturer (sponsor) of a previously licensed biologic (reference product).” Under this abbreviated route, an applicant must demonstrate that its proposed biosimilar product is “highly similar” to the reference product and that no “clinically meaningful differences” exist between the products in terms of “safety, purity, and potency.” The submission of a biosimilar application to the FDA constitutes an “artificial” act of infringement that can allow a patent infringement lawsuit to be brought before the biosimilar receives FDA approval or the commencement of commercial marketing.

In this case, Amgen markets a biologic called Neupogen® (filgrastism), which is used to stimulate the production of white blood cells. Amgen has marketed Neupogen since 1991, and has patents on methods of using and manufacturing filgrastism. In May 2014, Sandoz filed an application with the FDA seeking approval to market a filgrastism biosimilar to be named Zarxio®. Sandoz’s biosimilar application cited Neupogen as the reference product. In July 2014, following the FDA’s acceptance of the biosimilar application for review, Sandoz notified Amgen that it had submitted the application and intended to commercially market Zarxio upon receiving FDA approval. Amgen sued Sandoz for patent infringement in October 2014, and also alleged violations of California’s unfair competition law. While the case was pending, the FDA licensed Zarxio.

The issues in the Supreme Court’s opinion concern the requirements and timing for certain disclosures that a biosimilar applicant makes to the biologic manufacturer. The first question the Court addressed is whether injunctive relief is available to enforce a BPCIA requirement that the biosimilar applicant “shall provide” a copy of its biosimilar application and manufacturing information to the biologic manufacturer. In addition to seeking this injunction under federal law via the BPCIA, Amgen also sought an injunction under California’s unfair competition law. The second question addressed by the Court is whether a biosimilar applicant’s notice of commercial marketing is effective if it is provided prior to the FDA’s decision to license the biosimilar. The BPCIA requires notice to be provided “not later than 180 days before the date of the first commercial marketing” of the biosimilar. Thus, this issue is important because if notice may be provided 180 days or more before FDA approval, commercial marketing may begin immediately after licensure; otherwise, a biosimilar applicant would not be able to market its product until 180 days after approval.

With regard to the first question, the Court considered whether § 262(l)(2)(A)’s requirement that an applicant “shall provide” the sponsor with its biosimilar application and information about how the biosimilar is manufactured “within 20 days” after being informed that the FDA accepted the application for review is enforceable by an injunction under either federal or state law. The Court held that under federal law an injunction is not available to enforce this requirement. The Court reasoned that the BPCIA includes a provision that provides a remedy for when an applicant fails to turn over its application and manufacturing information. This provision, found in § 262(l)(9)(C), allows a sponsor “to bring an immediate declaratory-judgment action for artificial infringement.” The Court decided that the existence of this remedy in the BPCIA acts to exclude all other federal remedies, including injunctive relief. In support of this, the Court noted that Congress expressly provided injunctive relief for breaching confidentiality provisions under the BPCIA; thus, if it had intended to do so, Congress could have done the same for the breach of the disclosure requirement. But since Congress did not do so, the Court found that Congress did not intend for sponsors to have access to injunctive relief to enforce the disclosure requirement. Consequently, injunctive relief is not available under federal law to enforce the BPCIA’s disclosure requirement.

As to whether injunctive relief may be available under California’s unfair competition law, instead of deciding the issue, the Court remanded it to the Federal Circuit with instructions about how to proceed. Previously, the Federal Circuit had concluded that no injunctive relief was available under California’s unfair competition law, but the Court found that this conclusion was based on an improper application of the BPCIA’s requirements to this question of state law. Thus, on remand, the Court instructed the Federal Circuit to consider “whether California law would treat noncompliance with § 262(l)(2)(A) as ‘unlawful.’”

Regarding the second question, the Court considered whether the BPCIA’s requirement that an applicant “shall provide notice to the reference product sponsor not later than 180 days before the date of first commercial marketing of the [biosimilar] product licensed under [the BPCIA]” could be satisfied by providing notice prior to the FDA licensing the biosimilar product, or whether such notice is effective only after the biosimilar is licensed. See § 262(l)(8)(A). While the Federal Circuit had determined that an applicant’s biosimilar must be “licensed” at the time applicant gives notice, the Supreme Court disagreed. The Court found that the use of the word “licensed” in the statute “merely reflect[ed] the fact that, on the ‘date of the first commercial marketing,’ the product must be ‘licensed.’” Thus, the Court held that notice can be provided before or after the FDA licenses the biosimilar. The Court found that this was supported by the statutory context of § 262(l)(8)(A), because the provision contained a single timing requirement and if Congress intended to have more than one timing requirement it would have done so, as it did in the following subparagraph of this section. Thus, the Court’s decision allows a biosimilar applicant to provide notice of commercial marketing to run out the 180 day clock before actually receiving FDA approval to commercially market the biosimilar.

The decisions here are unlikely to be the Supreme Court’s last decisions concerning the BPCIA’s “complex statutory scheme.” The Court is plainly wrestling with the statute, as well as the policy considerations implicated by the statute. When addressing the notice of commercial marketing timing issue, the Court mentioned that there were numerous policy arguments put forth by Amgen, Sandoz, and the Government as Amicus Curiae. Rather than addressing the merits of the policy arguments, however, the Court stated that “[t]he plausibility of the contentions on both sides illustrates why such disputes are appropriately addressed by Congress, not the courts.” Furthermore, Justice Breyer wrote a concurring opinion stating that “Congress implicitly delegated to the [FDA] authority to interpret [the] same [statutory] terms. That being so, 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.” Thus, it may be some time before interpretations of the BPCIA become settled law.