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.”