Amgen on Remand: BPCIA Preempts State Unfair Competition and Conversion Law

by Dennis Crouch

Amgen v. Sandoz (Fed. Cir. 2017) [AmgenSandoz Fed Cir Decision Dec 2017]

The BPCIA (Biologics Price Competition and Innovation Act of 2009) is designed to promote innovation in biologic drug treatments while also facilitating a strong follow-on biosimilar (generic) market.  At a very high level, BPCIA runs parallel to the provisions of the Hatch-Waxman innovator-generic rules, but the details are quite different and substantially more complicated.

In its first foray into the BPCIA law, the Supreme Court dove into the details, holding that:

  • Providing Information and Data: Although the BPCIA statute indicates that the biosimilar applicant “shall provide” certain information and data to the innovator company (the reference product sponsor or RPS), the Supreme Court held that no injunction should issue to enforce that requirement. 42 U.S.C. § 262(l)(2)(A)
  • Notice of Marketing: The BPCIA requires 180 days of notice to the RPS prior to biosimilar product marketing.  The Supreme Court held that notice can be given prior to FDA approval — this eliminates what the patentee hoped would be an automatic six-month delay after FDA approval of a biosimilar.

On remand, the Supreme Court directed the Federal Circuit to determine whether the failure to provide the information and data [under § 262(l)(2)(A)] is a violation of California law of unfair competition and conversion.

In its decision here, the Federal Circuit holds that the BPCIA preempts any state laws that would create liability for failure to comply with the requirement for providing information and data.

Federal preemption is initially based upon the Supremacy Clause of the U.S. constitution — federal law “shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. The U.S. Supreme Court has developed several strands of preemption doctrine – here the court focused on implicit field preemption .

Under field preemption, “state law is pre-empted where it regulates conduct in a field that Congress intended the Federal Government to occupy exclusively.” Quoting English v. Gen. Elec. Co., 496 U.S. 72 (1990). We may infer such a congressional intent from a “scheme of federal regulation . . . so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,” or where an Act of Congress “touch[es] a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.” Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). “Where Congress occupies an entire field . . . even complementary state regulation is impermissible.” Arizona v. United States, 567 U.S. 387, 401 (2012).

Implicit preemption is less likely in traditional state law areas (creating a presumption against preemption), and more likely in areas where states have not traditionally regulated.

The basic framing issue for the court is whether the state law should be seen as regulating unfair competition (a traditional state law area) or instead regulating biologic competition (a previously unoccupied field) and patents (a traditional federal area).  Here, the court focused on the latter two.

As an initial matter, no presumption against preemption applies in this case because biosimilar patent litigation is hardly ‘a field which the States have traditionally occupied. Indeed, patents are inherently federal in character. (internal quotations and citations removed).

Here, the complexity of the BPCIA lent itself toward preemption –  as a “carefully crafted and detailed enforcement scheme” it is “reasonable” to infer “that Congress left no room for the States to supplement it.”

In addition, the court found some amount of direct conflict with Federal Law under the theory of “conflict in technique” since the various tort regimes of the 50 states could radically shift the incentives and actions of the biologic dance participants.

Thus, the Federal Circuit here affirmed the district court’s dismissal of Amgen’s state law claims as “preempted on both field and conflict grounds.”

 

28 thoughts on “Amgen on Remand: BPCIA Preempts State Unfair Competition and Conversion Law

  1. The biosimilars act and biosimilars/interchangables litigation is just an academic hobby for me, but this feels like the most reasonable outcome. It’s striking that it is taking so long, and there is so much expensive litigation around, developing standardized practices around biosimilar market entry.
    link to digitalcommons.wcl.american.edu

    In disputes between a brand and a biosimilar, there are already lengthy delays for data and market exclusivity built into the statute. The Supreme Court not allowing an extra six months on the back end seems reasonable.

    FDA preemption is a pretty widespread doctrine—it’s one of those areas that’s largely devoted to Federal control for health and safety reasons, among others—and it makes sense here to prevent all sorts of shenanigans. Not allowing injunctions against the biosimilar company trying to develop a competing product is another balanced outcome. The BPCIA is already skewed toward the brand applicant in ways that have raised questions as to whether it will be used for its intended purpose—that is, as a compromise to allow a pathway for generic versions of complex biologics. There are enough natural delays in that process to make it unlikely that multiple biosimilar companies will be able to even create products, much less apply through the pathway. Further penalizing those trying to use the pathways (as opposed to just seeking ways around them with biobetters, IPRs, or what have you) doesn’t seem consonant with the Congressional goals of the BPCIA.

    But this is all armchair policy for me. I will say, it’s fascinating to watch as a (current) outsider!

  2. link to digbysblog.blogspot.com

    In his first 10 months in office, [Mango G@rbagefire] has told 103 separate untruths, many of them repeatedly. Obama told 18 over his entire eight-year tenure. That’s an average of about two a year for Obama and about 124 a year for [the G@rbagefire].

    Nobody could have predicted that a p@ th0 l0gical l i a r would … continue to l i e in the White House.

    And yet many patent attorneys gleefully voted for him. Most of them hang out over at Big Jeans place, lapping up Big Jeans spittle and complaining about how they aren’t being respected. Very serious people! Totally not a pack of wealthy entitled self-absorbed w @nkers who can never be satisfied and would gladly throw anybody and everybody else under the bus if it meant that they’d get a few more pennies in their bank accounts.

    Human s c u m.

    1. Why the F is this type of repeat posting tolerated?

      How many times does Malcolm need to be expunged?

      And what is his 0bsess10n with Quinn all about?

      1. “Why the F is this type of repeat posting tolerated?”

        It would probably be raycyst to squelch MM’s glorious culture, a “Culture of Critique” as it has been called.

        “How many times does Malcolm need to be expunged?”

        Are you espousing a need for a “The Final Solution” to the MM “problem”? Careful, because that would be raycyst.

        “And what is his 0bsess10n with Quinn all about?”

        He doesn’t care about Quinn in particular so much as he cares about whitey.

        1. He doesn’t care about Quinn in particular so much as he cares about whitey.

          That’s NOT the message, given how much he references someone that does not blog or comment here.

          Sure, Malcolm has his “whitey” ISMs – but that is not the only thing WAY askew with Malcolm’s rants.

        2. to squelch MM’s glorious culture

          That “culture” has zero to so with patents, patent law, or ANY such notion of “America’s leading patent law source“.

          I have provided SEVERAL mechanisms of NOT squelching ANY such “free speech” and yet providing a comment section that is actually – you know – consistent with dialogues on PATENT LAW.

          Further, as my comment indicates, Malcolm’s rants OF THIS NATURE have been repeatedly purged already. Some on this very thread!

          ALL that my comment here indicates is that Malcolm simply refuses to take a hint with his rants. Rants that have NO relation whatsoever to the purpose of this blog and thus are nothing but a blight here in this context.

          I really don’t care if rants all the live long day long – somewhere else where such ranting would be appropriate. But here it is not. Here – on this very thread – he has already been expunged.

          1. “That “culture” has zero to so with patents, patent law, or ANY such notion of “America’s leading patent law source“.”

            Sure it does, MM’s sub-culture critiques everything about the white host culture in whatever country they’re in (and does similar in many non-white host cultures). Including patents, including everything about the gubmit, including oppressions by patents, or whatever means, and including oppressions by everything about the gubmit as a whole. Which they see as all be a “white supremacist” system of gubmit (nevermind the fact that they grow rich in it, also nevermind the fact that they wouldn’t live anywhere but there). Patents, as all property rights/grants are a branch of the gubmit as you know. To stop them from critiquing is to oppress their glorious culture and to be raycyst.

            Don’t you feel culturally enriched by MM’s critiques? Surely you must, to do otherwise would after all be raycyst, and xylophonbic etc. Be progressive anon, help him tear down the “white cis hetero christian patriarchial scum’s system”! Stop thinking of only yourself, or decorum or whatever, fight the scum (yourself)!

            “Further, as my comment indicates, Malcolm’s rants OF THIS NATURE have been repeatedly purged already. Some on this very thread!”

            Yeah but that’s raycyst, and MM knows it, so he persists, valiantly fighting for “good”. You know, to really “stick it to the man”.

            “Here – on this very thread – he has already been expunged”

            Yeah but that’s raycyst bruh. He must be allowed to fight the white oppressors, and he must persist in the face of such oppressions should they take place.

            Also, people of other than a white ethnicity are never a problem and nothing they ever do is a problem, simply by virtue of their ethnicity. Remember that, big get. Get your thinking right.

            “That’s NOT the message, given how much he references someone that does not blog or comment here.”

            Um bruh, that’s been “the message” of MM’s since before Trump was even the republican nominee. And in fact, it near certainly was the underlying motivation for MM’s message going back decades.

            “Sure, Malcolm has his “whitey” ISMs – but that is not the only thing WAY askew with Malcolm’s rants.”

            Yes, but that’s what drives all of them, going back 10, 11 years. That’s why he blogs so much, yes, for free. A very particular form of mind control. Consider yourself culturally enriched.

    2. I’m surprised you’d associate with such scum MM.

  3. Hm, I find this opinion rather unconvincing. If I were Amgen, I would start writing my cert. petition to take this one back up to the SCotUS.

    1) [Discussion of field preemption at slip op. pg. 19] [N]o presumption against preemption applies in this case because biosimilar patent litigation is hardly a field which the States have traditionally occupied… (internal quotations omitted). This slices the bologne rather thin (to borrow Justice Kagan’s inimitable turn-of-phrase). Sandoz is not applying for the right to litigate a patent. They are applying for the right to market a drug. In other words, the field is not “biosimilar patent litigation,” but rather “regulation of pharmaceuticals.” This is, indeed, a field historically located squarely inside the police powers of the States. In other words, right from the word “go,” the CAFC has started its field preemption analysis from the wrong starting point, and everything else that follows just runs down the wrong path from there.

    2) [Discussion of conflict preemption at slip op. pg. 22] [S]tate law claims “clash” with the BPCIA, and the differences in remedies between the federal scheme and state law claims support concluding that those claims are preempted… Amgen seeks through state law to impose penalties on Sandoz unavailable under the BPCIA for failure to comply with § 262(l)(2)(A)’s disclo-sure requirements. So what? The touchstone of conflict preemption is that a party cannot simultaneously comply with both state and federal law. The fact that one can be enjoined to disclose one’s biosimilar application under state law but not under federal is not a conflict. It is not as if federal law positively prohibits disclosure of the biosimilar act. Indeed, federal law encourages (but does not strictly require) disclosure, so there is no set of mutually incompatible requirements being laid on the regulated parties here. There is not even a frustration of the intended working of the federal regulatory scheme.

    The CAFC said that: (1) there is no express preemption; but (2) there is field preemption; and (3) conflict preemption. Given that their reasoning in favor of finding both (2) and (3) is so weak, this decision should not be allowed to stand.

    1. “They are applying for the right to market a drug. In other words, the field is not “biosimilar patent litigation,” but rather “regulation of pharmaceuticals.” This is, indeed, a field historically located squarely inside the police powers of the States.”

      Not in the real world — this is a field historically exclusively regulated by the Federal Food and Drug Administration. I defy you to identify any State regulation of the drug approval process or information disclosures required by the drug approval process.

      1. Historically is the key word here. Prior to the 1906 Pure Food & Drug Act, all drug regulation was done at the state level.

        Just because the FDA is the biggest game in town now does not alter how one should approach the historical analysis for field preemption.

        1. The FDA is the only game in town. That’s the point of the preemption analysis. You get that, right?

          1. I feel like we are talking past each other here.

            Yes, the FDA dominates the field now. I cannot agree that it is the “only” game in town (trying working in a pharmacy some time and you will discover just how many state laws there are still on the books concerning the sale of drugs), but it is surely the 800 lb gorilla in the room.

            In other words, maybe there is a good field preemption argument to be made here, but the CAFC did not make it.

            One is supposed to be very wary of finding field preemption in a field historically belonging to the States, and much less reluctant to find field preemption in a field that belongs by allocation of enumerated powers to the feds in the first instance.

            The CAFC employed the analysis befitting a matter of original federal jurisdiction when dealing with an issue historically accorded to the states. That is a category error in analysis. Maybe the CAFC reached the right conclusion anyway, but if so it was totally by accident, because they did not use the correct analysis.

            1. In other words, maybe there is a good field preemption argument to be made here, but the CAFC did not make it.

              Seems okay to me. This is a Federal statute regulating both patent enforcement and drugs that are patented. Drugs are regulated by the FDA. Patents are indisputably Federal in character. Why would we let States muck up this system with a bunch of disparate rules that interfere with the operation of the statute? Pre-emption seems at least reasonable in this context.

              Prior to the 1906 Pure Food & Drug Act, all drug regulation was done at the state level.

              LOL. That was over a century ago. And “drug regulation” was a joke. Hence the FDA.

              Maybe the CAFC reached the right conclusion anyway, but if so it was totally by accident, because they did not use the correct analysis.

              The “analysis” is a balancing of various policy considerations. The policy considerations were addressed. Not an “accident”.

            2. “. I cannot agree that it is the “only” game in town (trying working in a pharmacy some time and you will discover just how many state laws there are still on the books concerning the sale of drugs)…”

              “Sale of drugs” is an overgeneralization of the activity.

              I defy you to identify any State regulation of the drug approval process or information disclosures required by the drug approval process.

              The States do not regulate that. Full stop.

              Maybe the CAFC reached the right conclusion anyway, but if so it was totally by accident, because they did not use the correct analysis.

              No; they used the correct analysis, but you’ve proceeded to misrepresent the law, ignore entire prongs of precedent because you find them inconvenient, and implicitly argue that pre-market approval — which no serious person can argue has been regulated by the states since the FDCA — can be a State function since the States are permitted to regulate drug distribution.

              Regardless of your background in biologics, you evidently have no idea how the drug regulatory system works. And you’re putting that on full display here.

    2. “The touchstone of conflict preemption is that a party cannot simultaneously comply with both state and federal law.”

      Or… a state law is in conflict with a federal law because it interferes with the objectives of the federal law or is an obstacle to the accomplishment of the federal purpose.

      You’ve ignored that prong as well as the opinion’s express reference to it:

      Contrary to Amgen’s
      assertions, its state law claims “clash” with the BPCIA,
      and the differences in remedies between the federal
      scheme and state law claims support concluding that
      those claims are preempted. As the Supreme Court has
      recognized, a “[c]onflict in technique can be fully as disruptive
      to the system Congress erected as conflict in overt
      policy.” Amalgamated Ass’n, 403 U.S. at 287.

      1. I may have failed to quote that portion explicitly, but I did not ignore it. As I noted, the federal law encourages disclosure of the biosimilar application, so it can hardly count as a frustration of the federal law’s purpose if the state law obliges that disclosure.

        1. You’ve ignored it.

          “We must assume that Congress
          acted intentionally when it did not provide an injunctive
          remedy for breach of § 262(l)(2)(A)’s disclosure requirements.
          See Sandoz, 137 S. Ct. at 1675. Where, as here,
          “Congress made a deliberate choice not to impose” certain
          penalties for noncompliance with federal law, state laws
          imposing those penalties “would interfere with the careful
          balance struck by Congress.” Arizona, 567 U.S. at 405–
          06.”

          1. Once again, I disagree that I “ignored” the CAFC’s reasoning. I simply do not agree with the CAFC’s reasoning.

            The CAFC’s argument here is too cute by half. If I can reach a conclusion of “conflict preemption” every time a state creates a remedy that the federal law does not create by invoking the logically vacuous category of “delicate balance,” then effectively all state laws must fail unless they simply restate the federal law verbatim. That is not what “conflict preemption” means because (in a dual sovereignty federal system like ours) that cannot be what “conflict preemption” means.

            1. If I can reach a conclusion of “conflict preemption” every time a state creates a remedy that the federal law does not create by invoking the logically vacuous category of “delicate balance,”

              If.

            2. ” I simply do not agree with the CAFC’s reasoning.”

              Well that changes everything. You obviously win the internet.

    3. Greg, I thought the point about the patent dance being affected differently depending on variations of State laws to be persuasive.

  4. I just went to the CAFC website, and I do not see any decisions reported for today. ¿How did you get a copy of this opinion already? ¿Are you some sort of super-PHOSITA, imputed with knowledge of written but not yet announced court decisions?

    1. You’re not on the Super Secret List, Greg. I did talk with Soros about this and let’s just say there’s an issue with some of your 101 comments. It’s likely you’ll be nominated for a re-evaluation in the first or second quarter of 2018 so don’t fret too much.

      1. I knew MM was in with soros. This whole time NWPA thought it was “hur dur Google” lol. Nah bruh, soros is MM’s homie.

        lol

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