by Dennis Crouch
Sandoz v. Amgen is one of the first decisions by the Federal Circuit relating to the biosimilars and the Biologics Price Competition and Innovation Act of 2009 (BPCIA) (codified principally at 42 U.S.C. § 262). By rejecting jurisdiction here, the court adds incremental value to biologic patents at the cost of some chilling of the development of follow-on biosimilars.
In this case, the Sandoz sued Amgen — asking the court for a declaratory judgment that two of Amgen’s patents covering its Enbrel formulation are invalid. Patent Nos. 8,063,182 and 8,163,522. The district court rejected the lawsuit altogether — finding no case-or-controversy sufficient to create jurisdiction. On appeal, the Federal Circuit has affirmed, although on narrower grounds than did the district court.
Unlike generic drugs, follow-on (“generic”) biologics will typically require additional research because biosimilars are typically – and as their name suggests – only similar to the original treatment product. This means that a follow-on company will likely make substantial research investments prior to seeking FDA approval.
The BPCIA creates a biosimilars scheme akin to what Hatch-Waxman does with generics. In particular – like Hatch-Waxman – BPCIA creates a paper-cause-of-action labeling the filing an FDA biosimilarity application as a form of patent infringement. The particulars of BPCIA is substantially different from Hatch-Waxman, but they run in parallel at least from a 30,000-foot framework.
Here, Sandoz is working on a biosimilar of Enbrel and Amgen has notified Sandoz that its proposed biosimilar would infringe the patent. In 2013 Sandoz took two simultaneous actions: (1) it began a major (and expensive) Phase III trial of its version of the treatment product and (2) it filed this declaratory judgment action — asking the federal court for a holding that the Amgen patents are both invalid and would not be infringed by Sandoz’ product. Although Sanoz has already invested in the research, an adverse decision in the DJ case could help the company avoid wasteful spending. Because pharmaceutical patent litigation takes years to complete, the early-stage lawsuit may well only be complete at around the product launch date. Importantly, however, courts often make early claim-construction decisions that could be helpful for Sandoz in developing a non-infringing alternative. Notably, Sandoz research is not alleged to be infringing since (1) it is being done abroad and (2) it likely qualifies for the research exception of 35 U.S.C. 271(e).
Rather than hearing the case, the district court dismissed based upon lack of jurisdiction. Applying two alternate theories, the district court held (1) that the controversy was not sufficiently immediate and real as required by Supreme Court doctrine on cases-and-controversies; and (2) that the BPCIA preempts declaratory judgment lawsuits prior to the DJ-plaintiff’s FDA biosimilar application filing.
The U.S. Constitution (as interpreted by the Supreme Court) requires an actual and immediate case-or-controversy between the parties. The approach is to ask “whether the facts alleged … show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007).
On appeal, the Federal Circuit affirmed – finding no immediate case or controversy between the parties. In addition to the fact that no infringement occurs until at least the FDA filing, the Federal Circuit found that the Sandoz ongoing research could still potentially result in a product that is clearly non-infringing. Importantly, because the court found no case-or-controversy under MedImmune, the Federal Circuit chose not to address the alternative judgment that BPCIA preempts the lawsuit.
Biopharmaceuticals are on the rise as an important and useful facet of medical technology. However the impact of BPCIA is still yet to be solidified.