Amicus Curiae Brief — Teva Pharmaceuticals USA, Inc., Petitioner v. GlaxoSmithKline LLC, et al.
Supreme Court briefAug 12, 2022
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No. 22-37
In The
Supreme Court of the United States
TEVA PHARMACEUTICALS USA, INC.,
Petitioner,
v.
GLAXOSMITHKLINE LLC,
SMITHKLINE BEECHAM (CORK) LIMITED,
Respondents.
On Petition for a Writ of Certiorari to the United
States Court of Appeals for the Federal Circuit
BRIEF OF AMICUS CURIAE ALVOTECH IN
SUPPORT OF PETITIONER
Corinne S. Hockman
MCGUIREWOODS LLP
501 Fayetteville Street
Suite 500
Raleigh, NC 27601
(919) 755-6572
chockman@mcguirewoods.com
Jonathan Y. Ellis
Counsel of Record
MCGUIREWOODS LLP
888 16th Street N.W.
Suite 500
Washington, DC 20006
(202) 828-2887
jellis@mcguirewoods.com
i
QUESTION PRESENTED
If a generic drug’s FDA-approved label carves out
all of the language that the brand manufacturer has
identified as covering its patented uses, can the generic manufacturer be held liable on a theory that its
label still intentionally encourages infringement of
those carved-out uses?
ii
TABLE OF CONTENTS
QUESTION PRESENTED .......................................... i
TABLE OF AUTHORITIES ..................................... iii
INTEREST OF AMICUS CURIAE ............................ 1
INTRODUCTION AND SUMMARY OF
ARGUMENT ............................................................... 2
ARGUMENT ............................................................... 5
I.
Biosimilars Provide Vital Consumer
Benefits Comparable to Generic
Pharmaceuticals Under a Similar Legal
Framework. ...................................................... 6
A.
Biosimilars drive substantial
savings and health benefits by
competing with branded biologics. ....... 6
B.
Biosimilars are governed by a legal
regime comparable to, but with
notable distinctions from, the
Hatch-Waxman Act. .............................. 8
II.
The Federal Circuit’s Decision Poses a
Heightened Threat to Congress’s
Procompetitive Statutory Scheme for
Biosimilars. .................................................... 16
III.
Limiting Consumer Access to Biosimilars
Would Have Dire Consequences for Public
Health. ............................................................ 22
CONCLUSION ......................................................... 25
iii
TABLE OF AUTHORITIES
Cases
Amgen Inc. v. Hospira, Inc.,
944 F.3d 1327 (Fed. Cir. 2019) ............................ 24
Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S,
566 U.S. 399 (2012) .............................................. 20
Global-Tech Appliances, Inc. v. SEB S.A.,
563 U.S. 754 (2011) ........................................ 14, 15
Metro-Goldwyn-Mayer Studios Inc. v.
Grokster, Ltd.,
545 U.S. 913 (2005) .............................................. 15
Sandoz Inc. v. Amgen Inc.,
137 S. Ct. 1664 (2017) .................................. passim
Takeda Pharms. U.S.A., Inc. v. W.-Ward
Pharm. Corp.,
785 F.3d 625 (Fed. Cir. 2015) .............................. 15
Statutes
21 U.S.C. § 355(b)(1)(A)(viii) ..................................... 11
21 U.S.C. § 355(j)(2)................................................... 13
21 U.S.C. § 355(j)(5)................................................... 14
42 U.S.C. § 262(a)(2)(D) .............................................. 9
42 U.S.C. § 262(i) ......................................................... 9
42 U.S.C. § 262(k) .................................. 8, 9, 10, 12, 13
iv
42 U.S.C. § 262(l) ............................................. 8, 12, 13
42 U.S.C. § 271(e)(2)(C)(i) ......................................... 14
Regulations
21 C.F.R. § 201.100 ................................................ 9, 10
21 C.F.R. § 314.53(c) .................................................. 11
21 C.F.R. § 314.53(e) ................................................. 11
Other Authorities
155 Cong. Rec. S7335 (July 10, 2009) ......................... 8
Association for Accessible Medicines,
The U.S. Generic & Biosimilar Medicines Savings Report, October 2021,
https://bit.ly/3d1nkMY ................................... 4, 6, 7
Erwin Blackstone and P. Fuhr Joseph,
The Economics of Biosimilars,
6 AM. HEALTH DRUG BENEFITS 469 (2013) ............ 7
Cong. Research Serv., Biologics and Biosimilars:
Background and Key Issues (2019),
https://bit.ly/3dnMXrF ........................................... 6
Cong. Research Serv., Drug Pricing and
Pharmaceutical Patenting Practices (2020),
https://bit.ly/3Qsi1EY ........................................... 19
v
Evan Diamond et al., “Purple Book” Patent
Listing Under Biological Product Patent
Transparency Act,
J.D. SUPRA (Apr. 8, 2021),
https://bit.ly/3bIi0xX ............................................ 20
IQVIA Institute, Proportion of branded
versus generic prescription drug
spending in the United States from
2017 to 2021, STATISTA (Apr. 2022),
https://bit.ly/3P0JjRr .............................................. 2
IQVIA Institute, Total nominal spending
on medicines in the U.S. from 2002 to
2021, STATISTA (Apr. 2022),
https://bit.ly/3zAOCla............................................. 2
Kasey E. Koballa, The Biologics Price
Competition and Innovation Act: Is a
Generic Market for Biologics Attainable?,
9 Wm. & Mary Bus. L. Rev. 479 (2018) ................. 6
Sen. P. Leahy Ltr. to Hon. K. Vidal
(June 8, 2022), https://bit.ly/3JLripi.................... 19
Ian Lopez, Hikma Drug Label Win Still
Leaves Generics on Hook for Liability,
BLOOMBERG LAW (Jan. 12, 2022),
https://bit.ly/3Qk1dQF ......................................... 17
Andrew Mulcahy et al., Biosimilar Cost
Savings in the United States: Initial
Experience and Future Potential,
7(4) RAND HEALTH Q. 3 (2018) ............................. 18
vi
Remarks from FDA Commissioner Scott
Gottlieb, M.D., as prepared for delivery at
the Brookings Institution on the release of
FDA’s Biosimilars Action Plan (July 18,
2018), discussed in Failure to Launch: Patent Abuse Blocks Access to Biosimilars for
America’s Patients,
BIOSIMILARS COUNCIL (June 2019),
https://bit.ly/3SA6NA7 ......................................... 23
STAFF OF H. COMM. ON OVERSIGHT & REFORM,
117th Cong., Drug Pricing Investigation
(Maj. Staff Rep. Dec. 2021),
https://bit.ly/3Q7Yolx ......................................... 3, 7
STAFF OF H. COMM. ON OVERSIGHT & REFORM,
117th Cong., Drug Pricing Investigation
AbbVie—Humira and Imbruvica
(Staff Rep. May. 2021),
https://bit.ly/3C14mkf .......................................... 23
U.S. Food & Drug Admin., Center for Biologics
Evaluation & Research, Biosimilars and
Interchangeable Biosimilars: Licensure for
Fewer Than All Conditions of Use for Which
the Reference Product Has Been Licensed,
Draft Guidance (Feb. 2020),
https://bit.ly/3SFJa9n....................................... 9, 10
U.S. Food & Drug Admin., Center for Biologics
Evaluation & Research, Questions and
Answers on Biosimilar Development and
the BPCI Act, Guidance for Industry (Sept.
2021), https://bit.ly/3QySJou ............................... 10
vii
U.S. Food & Drug Admin., Implementation
of the Biologics Price Competition and
Innovation Act of 2009,
https://bit.ly/318DmZW .......................................... 8
U.S. Food & Drug Admin., Purple Book
Database of Licensed Biologic Products:
Frequently Asked Questions with Answers,
https://bit.ly/3p7zpTv ..................................... 12, 13
Dan Witters, Millions in U.S. Lost Someone
Who Couldn’t Afford Treatment,
GALLUP (Nov. 12, 2019),
https://bit.ly/3SAYtQn............................................ 2
1
INTEREST OF AMICUS CURIAE1
Alvotech USA Inc. and Alvotech hf. (collectively,
Alvotech) focus on developing and manufacturing
high-quality biosimilar medicines, i.e., biopharmaceutical medicines that have been shown to be “highly
similar” to, and have no clinically meaningful differences from, a reference biologic medicine. Alvotech
aims to improve access to biosimilars, believing that if
there is a proven biologic medicine, it should be accessible to all patients in need. Alvotech has made substantial investments developing unique cell lines,
unique manufacturing processes, and unique formulations as compared with reference biologic medications
with the goal of bringing affordable biosimilar treatments to patients in the U.S. and beyond.
Alvotech has a significant interest in the question
presented in Teva Pharmaceuticals USA, Inc.’s petition for a writ of certiorari. In the decision below, the
Federal Circuit upheld a massive jury verdict against
petitioner for inducing infringement of a patent covering a patented indication by marketing and selling a
generic drug approved only for unpatented indications.
By cobbling together disparate statements from the
generic label’s description of its unpatented indications and truthful statements from product materials
about the generic’s FDA approval, the court affirmed
1 Pursuant to Rule 37.6, amicus curiae affirms that no counsel for
a party authored this brief in whole or in part and that no person
other than amicus curiae or its counsel made a monetary contribution to its preparation or submission. Counsel of record for all
parties were timely notified pursuant to Rule 37.2(a) of amicus
curiae’s intent to file this brief, and all parties have provided
written consent to its filing.
2
a jury verdict equal to more than three times all of petitioner’s $74 million in sales of the generic for all uses
during the relevant period. As a result, the Federal
Circuit’s decision provides ammunition for brandname biologic companies to threaten and pursue similar litigation against biosimilar companies, impeding
and delaying the launch of new biosimilars and imposing unnecessary costs on consumers, the government,
and biosimilar companies.
INTRODUCTION AND
SUMMARY OF ARGUMENT
1. America is in the midst of a drug-pricing crisis.
A 2019 Gallup study found that more than 13% of
American adults (over 34 million people) know at least
one friend or family member who died in the past five
years because they could not afford medical treatment.
The same study found that 58 million Americans had
experienced “medication insecurity” (the inability to
pay for prescribed medication) at least once in the past
twelve months. See Dan Witters, Millions in U.S. Lost
Someone Who Couldn’t Afford Treatment, GALLUP
(Nov. 12, 2019), https://bit.ly/3SAYtQn. Nationwide
spending on medication has increased from $195 billion just 20 years ago to over $574 billion in 2021. See
IQVIA Institute, Total nominal spending on medicines
in the U.S. from 2002 to 2021, STATISTA (Apr. 2022),
https://bit.ly/3zAOCla.
Brand-name drugs are the primary driver of
these rising prices. See IQVIA Institute, Proportion of
branded versus generic prescription drug spending in
the United States from 2017 to 2021, STATISTA (Apr.
2022), https://bit.ly/3P0JjRr. According to the 2021
Congressional Committee on Oversight and Reform
3
Drug Pricing Investigation, in the five-year period
from 2016 and 2020, pharmaceutical companies raised
the price of branded prescription drugs by 36%—almost four times the rate of inflation during that period.
STAFF OF H. COMM. ON OVERSIGHT & REFORM, 117th
Cong., Drug Pricing Investigation at iii (Maj. Staff Rep.
Dec. 2021), https://bit.ly/3Q7Yolx (Drug Pricing Investigation Report). These price hikes correspond with a
dramatic increase in patenting activity and aggressive
use of the patent system by the pharmaceutical sector.
See id. at 79-80, 107.
The Federal Circuit’s decision in this case provides
branded companies a new opportunity to take advantage of the patent system to the detriment of the
nation’s healthcare system and the American people.
By upholding a massive infringement verdict based on
a cobbled together collection of disparate references in
a skinny label and truthful product materials, the decision below provides incentives for branded companies to use litigation and threats of litigation in an attempt to delay the launch of unpatented drugs with
unpatented indications that compete with the brand
product and provide important consumer benefits.
The decision below concerned the chemical pharmaceutical market. But the threat of such behavior from
branded companies will exist at least as much in the
biopharmaceutical market.
2. Indeed, the consequences of the decision are
likely only to be worse for biopharmaceuticals. Biopharmaceuticals—both brand-name biologics and biosimilars—are large-molecule pharmaceutical products “derived from natural, biological sources such
as animals or microorganisms.” Sandoz Inc. v. Amgen
Inc., 137 S. Ct. 1664, 1669 (2017). Brand-name biolo-
4
gics are among the most expensive medicines in the
United States—representing only two percent of all
prescriptions but more than half of all pharmaceutical
spending. Biosimilars are “generic” versions of biologics, governed by a legal framework similar to the Drug
Price Competition and Patent Term Restoration Act of
1984 (Hatch-Waxman Act), including a similar abbreviated approval process for new drugs that are highly
similar to an already-approved branded drug.
Because brand-name biologics are among the most
expensive and top-selling medicines in the United
States, lower-cost biosimilars are able to drive significant savings by entering the market and ending the
monopoly power of the branded product. By providing
lower-cost drugs and competition, biosimilars have
provided an estimated $12.6 billion in savings since
the first U.S. biosimilar was approved 10 years ago.
Association for Accessible Medicines, The U.S. Generic
& Biosimilar Medicines Savings Report, October 2021,
at 17, https://bit.ly/3d1nkMY (AAM Savings Report).
They have also been used in more than 121 million
days of patient therapy and have supported almost 10
million incremental days of therapy—care that many
patients would not have received without the availability of lower-cost biosimilars. Id.
Several differences between the markets for smallmolecule drugs and biologics and between their respective legal regimes are likely to amplify the harm
of the decision below for the biopharmaceuticals market. First, because the prices of biologics are several
times higher than those of traditional chemical drugs,
the threat of new litigation under the decision carries
with it an increased threat of lost-profit damages. Second, the Federal Circuit’s decision exacerbates the
5
harm from pre-existing patent strategies in biopharmaceuticals that tend to increase the number of patents covering a given biologic, which may now be asserted in new aggressive litigation by the biologic.
And third, because biologics are not required, in seeking FDA approval, to identify publicly the patents that
cover their on-label indications, biosimilars will likely
find it even more difficult than generics to craft their
labeling in a manner that might guard against the
threat of litigation created by the decision below.
The net result is likely to undermine the pro-competitive design of the BPCIA and lead to decreased
competition in the biopharmaceuticals market, increased prices of already prohibitively expensive pharmaceuticals, and, ultimately, reduced patient access
to life-saving medications—to the detriment of the
public health and welfare of the United States. The
Court’s intervention is warranted now.
ARGUMENT
If left intact, the Federal Circuit’s decision can only
worsen America’s drug-pricing crisis. The decision below provides branded drug companies unwarranted
new ammunition in their attempts to prevent or delay
the launch of unpatented drugs for unpatented on-label indications that would compete with their own
drugs. The ultimate victims of those efforts are the
consumers who would otherwise enjoy greater access
to life-saving and life-enhancing medicines at lower
cost. And the harmful effects of the decision are likely
only to be worse in the biopharmaceutical market, in
light of both natural and legal differences between
that market and the market for traditional, chemical
pharmaceuticals. Further review is warranted.
6
I.
Biosimilars Provide Vital Consumer Benefits Comparable to Generic Pharmaceuticals Under a Similar Legal Framework.
A.
Biosimilars drive substantial savings and health benefits by competing with branded biologics.
Biopharmaceuticals, commonly known as biologics,
are pharmaceutical products manufactured in living
organisms. See Kasey E. Koballa, The Biologics Price
Competition and Innovation Act: Is a Generic Market
for Biologics Attainable?, 9 Wm. & Mary Bus. L. Rev.
479, 482 (2018). Unlike small-molecule drugs made
through chemical, synthetic processes, biologics are
large-molecule drugs made through less predictable
manufacturing techniques in natural sources like
plants, animals, and microorganisms. See id. Like
their chemical counterparts, biologics offer important
treatments for chronic conditions, including cancers,
autoimmune diseases, and other serious health conditions. Examples of biologics and some of their approved indications include adalimumab (brand name
Humira®) for rheumatoid arthritis or plaque psoriasis,
trastuzumab (brand name Herceptin®) to treat earlystage HER2-positive breast cancer, and insulin
glargine (brand name Lantus®) for type 2 diabetes.
See Cong. Research Serv., Biologics and Biosimilars:
Background and Key Issues, 26 (2019), https://bit.ly/
3dnMXrF.
Brand-name biologics are among the most expensive medicines in the United States—representing
only two percent of all prescriptions but more than
half of all pharmaceutical spending. See AAM Savings
Report 19. And these costs have only risen in recent
7
years. The average cost of a biologic has been as much
as $45 per day, compared with $2 per day for other
pharmaceuticals, with biologics costing anywhere
from $10,000 to almost $250,000 annually per patient.
See Erwin Blackstone and P. Fuhr Joseph, The Economics of Biosimilars, 6 AM. HEALTH DRUG BENEFITS
469 (2013); Drug Pricing Investigation Report vi.
Biosimilars are the lower cost, “generic” versions of
costly brand-name biologics. Because brand-name biologics are among the most expensive and top-selling
medicines in the United States, lower-cost biosimilars
are able to drive significant savings by entering the
market and ending the monopoly power of the reference product. By providing lower-cost drugs and competition, biosimilars drove an estimated $7.9 billion in
savings to U.S. consumers in 2020 alone, and have
provided an estimated $12.6 billion in savings since
the first U.S. biosimilar was approved 10 years ago.
AAM Savings Report 17. And those savings are just
beginning: savings from biosimilars are projected to
reach $133 billion in the next 5 years. Id. at 12.
Beyond providing significant savings for patients
and payers, biosimilars also dramatically increase patient access to care. Since their introduction, biosimilars have been used in more than 121 million days of
patient therapy and have supported almost 10 million
incremental days of therapy—care that many patients
would not have received without the availability of
lower-cost biosimilars. AAM Savings Report 17.
8
B.
Biosimilars are governed by a legal
regime comparable to, but with notable distinctions from, the HatchWaxman Act.
Biosimilars are governed by a legal framework that,
in many respects, parallels the framework under the
Drug Price Competition and Patent Term Restoration
Act of 1984 (Hatch-Waxman Act) that governs chemical generics, and patent litigation under each regime
proceeds in a similar manner. But there are several
important and relevant differences.
1. In 2010, Congress passed and the President
signed the Biologics Price Competition and Innovation
Act (BPCIA) to accelerate access to affordable biopharmaceuticals. See generally 42 U.S.C. § 262(k)-(l);
Sandoz, 137 S. Ct. at 1669; see also 155 Cong. Rec.
S7335, S7336 (July 10, 2009) (Statement of Sen. Sherrod Brown) (“Health care reform must broaden access
to generic alternatives to biologics, the most expensive
kinds of prescription drugs.”). The BCPIA creates an
abbreviated pathway for FDA approval of biosimilar
products similar to the pathway that the Hatch-Waxman Act provides for generic chemical drugs, building
on FDA’s “longstanding policy of permitting appropriate reliance on what is already known about a drug,
thereby saving time and resources and avoiding unnecessary duplication of human or animal testing.”
U.S. Food & Drug Admin., Implementation of the Biologics Price Competition and Innovation Act of 2009,
https://bit.ly/318DmZW.
The BPCIA’s abbreviated biologics license application (aBLA) process parallels the Hatch-Waxman
Act’s abbreviated new drug application (ANDA)
process. Following an exclusivity period for any
9
approved biologic, a manufacturer of a new biopharmaceutical may gain FDA approval for the new drug
by demonstrating that it is biosimilar to the reference
biologic just as a generic manufacturer can gain FDA
approval for a new chemical pharmaceutical by
demonstrating that it is bioequivalent to an approved
reference chemical drug. See Sandoz, 137 S. Ct. at
1670; see also 42 U.S.C. § 262(k). To obtain such approval, a biosimilar company “must show that its product is ‘highly similar’ to the reference product and that
there are no ‘clinically meaningful differences’ between the two in terms of ‘safety, purity, and potency.’ ”
Sandoz, 137 S. Ct. at 1670 (quoting 42 U.S.C.
§§ 262(i)(2)(A), (B)).
As in the chemical pharmaceutical context, FDA
must approve biosimilar labeling. See 42 U.S.C.
§ 262(a)(2)(D); 21 C.F.R. § 201.100. “FDA regulations . . . require that prescription drug labeling [including biosimilar labeling] contain: ‘adequate information . . . including indications, effects, dosages,
routes, methods, and frequency and duration of administration and any relevant warnings, hazards, contraindications, side effects, and precautions, under
which practitioners licensed by law to administer the
drug can use the drug safely and for the purposes for
which it is intended.’ ” U.S. Food & Drug Admin., Center for Biologics Evaluation & Research, Biosimilars
and Interchangeable Biosimilars: Licensure for Fewer
Than All Conditions of Use for Which the Reference
Product Has Been Licensed, Draft Guidance at 6
(Feb. 2020), https://bit.ly/3SFJa9n (quoting 21 C.F.R.
§ 201.100(d)(1)) (2020 FDA Draft Carve-Out Guidance).
10
Moreover, as with generic chemical pharmaceuticals, biosimilars may only be licensed for conditions
that have been previously indicated for the reference
product. See 42 U.S.C. § 262(k)(2)(A)(i)(II); see also
2020 FDA Draft Carve-Out Guidance at 3. But as under Hatch-Waxman, an aBLA “applicant generally
may obtain licensure of a proposed biosimilar product
for fewer than all conditions of use for which the reference product is licensed.” U.S. Food & Drug Admin.,
Center for Biologics Evaluation & Research, Questions and Answers on Biosimilar Development and the
BPCI Act, Guidance for Industry at 7 (Sept. 2021),
https://bit.ly/3QySJou. The BPCIA thus similarly allows biosimilars to “carve out” indications from their
labels that are still subject to patent protection, leaving only one or more unpatented indications on the label. See 42 U.S.C. § 262(k)(2)(A)(i)(III).
FDA has advised biosimilar companies how to develop a draft label that carves out patented uses of a
biologic (i.e., a skinny label). Specifically, FDA advises
that “[t]he applicant should develop draft labeling for
the proposed biosimilar or proposed interchangeable
biosimilar that includes information from the reference product labeling that is relevant to the proposed
conditions of use for the proposed biosimilar or interchangeable, with appropriate modifications. In preparing such draft labeling, the applicant should carefully scrutinize the content of all sections of the labeling to ensure that relevant information is included,
based on the proposed conditions of use for the proposed biosimilar or interchangeable product. [Then,]
FDA will evaluate the labeling to determine whether
it complies with applicable requirements.” 2020 FDA
Draft Carve-Out Guidance at 5-6 (emphases added).
11
2. Despite these similarities, the two statutory
and regulatory schemes—and the procedures under
those schemes for coordinating the launch of new
drugs and any patent litigation—also diverge in important respects.
First, the Hatch-Waxman Act imposes public disclosure requirements on branded chemical pharmaceutical companies that the BPCIA does not impose on
branded biologic manufacturers.
As the petition explains, under Hatch-Waxman, a
branded pharmaceutical company seeking FDA approval must declare all patents (except manufacturing-process patents) that cover their branded drug and
its indications, along with a corresponding use
code. See Pet. 8 (citing 21 U.S.C. § 355(b)(1)(A)(viii);
21 C.F.R. § 314.53(c)(2)(ii)(P)(3)). The branded company must submit a declaration, under penalty of perjury, to FDA that identifies each method of use and
related patent claim covering its drug, as well as
shorter use codes to describe the claimed method,
see 21 C.F.R. § 314.53(c)(2), which FDA then makes
publicly available in the so-called “Orange Book.” 21
C.F.R. § 314.53(e). A generic manufacturer preparing
an ANDA can then rely on those listings to know
which patents the branded company believes claims
an approved indication. See Pet. 8.
The BPCIA does not enforce the same requirements on branded biologic manufacturers, and thus
biosimilars do not enjoy the same transparency in assembling an aBLA. In particular, under the BPCIA,
there is no provision mandating that a biologic manufacturer seeking FDA approval of a new biologic to
identify, or swear under the penalty of perjury as to,
the patents that the manufacturer considers as
12
protecting the biologic or its on-label indications. As a
result, biosimilar manufacturers largely rely on their
own searches to determine the existing patent landscape for a reference biologic before submitting an
aBLA and proposed label to FDA. In some instances,
the biosimilar manufacturer may rely on a biologic’s
previous assertions about the patents that the biologic
believes covers a different, previous biosimilar applicant for the same reference drug—which FDA publishes in what it calls the “Purple Book.” See 42 U.S.C.
§ 262(k)(9); U.S. Food & Drug Admin., Purple Book
Database of Licensed Biologic Products: Frequently
Asked Questions with Answers, https://bit.ly/3p7zpTv.
But even then, the listings are specific to the previous
applicant and may not cover aspects of the subsequent
biosimilar.
Second, the BPCIA provides an opportunity to engage in a prelitigation (and private) informationexchange between the biosimilar and the biologic
manufacturer colloquially referred to as the “patent
dance” intended to streamline or narrow the issues for
litigation and to facilitate a biosimilar manufacturer’s
decision whether to launch at-risk and any related patent litigation alongside that launch. See 42 U.S.C.
§ 262(l)(3)-(6), (9).
The patent dance kicks off when the biosimilar
company provides the reference biologic manufacturer
with a copy of the aBLA along with other information
describing the manufacturing process of the biosimilar
at issue. See 42 U.S.C. § 262(l)(2); see also Sandoz, 137
S. Ct. at 1670-71. “After the applicant makes the requisite disclosures, the parties [then] exchange information to identify relevant patents and to flesh out the
legal arguments that they might raise in future
13
litigation.” Sandoz, 137 S. Ct. at 1671; see 42 U.S.C.
§ 262(l)(3).2
The purpose of this exchange is to narrow the issues for future litigation, not to complicate them. As
this Court emphasized, “[t]he BPCIA sets forth a carefully calibrated scheme for preparing to adjudicate,
and then adjudicating, claims of infringement.”
Sandoz, 137 S. Ct. at 1670.
Third, the two statutes and corresponding regulations establish different regimes for any associated patent litigation.
As the petition describes, the Hatch-Waxman Act
requires that a generic manufacturer certify that it intends to follow one of three pathways to launch its
drug. See Pet. 5-7. The generic manufacturer is required to indicate in its ANDA whether it will (1) wait
to launch until all Orange-Book-listed patents covering the drug expire; (2) certify to FDA that the listed
patents held by the brand manufacturer are invalid or
will not be infringed by the generic launch; or
(3) where the drug molecule itself is off-patent, submit
a “section viii” statement that it will launch with a
skinny label that carves out any patented on-label indications. See 21 U.S.C. § 355(j)(2)(A)(vii)(I)-(IV),
(viii); see also Pet. 6-7. If the generic manufacturer
asserts patent invalidity or non-infringement, the
2 Since December 2020, the reference manufacturer must also
provide to FDA the same list of patents it might raise in future
litigation against the biosimilar, which FDA publishes in the
“Purple Book.” See 42 U.S.C. § 262(k)(9)(A)(iii); see also U.S. Food
& Drug Admin., Purple Book Database of Licensed Biologic Products: Frequently Asked Questions with Answers, https://bit.ly/
3p7zpTv.
14
Hatch-Waxman Act provides for an automatic 30month stay of the regulatory approval process, pending the outcome of litigation (assuming certain conditions are met). See 21 U.S.C. § 355(j)(5)(B)(iii); see also
Pet. 6.
By contrast, the BPCIA does not impose any automatic stay of the regulatory approval process for an atrisk launch. Pre-launch litigation can begin during
the application process, see 42 U.S.C. § 271(e)(2)(C)(i)
(making submission of an application for approval an
act of patent infringement), and at the conclusion of
any patent dance, the BPCIA “channels the parties”
into litigation. Sandoz, 137 S. Ct. at 1671; see id. at
1671-72. But FDA may approve the biosimilar while
the manufacturers continue to engage in negotiation
or litigation, and upon receiving approval, the biosimilar may then launch without regard to the status of
those negotiations or litigation.
3. Despite the distinctions between how small and
large molecules get into patent litigation, once there,
such disputes proceed in a similar manner, including
the standard of proof. To prove that a biosimilar manufacturer has induced infringement of a reference biologic manufacturer’s patent claim covering a method
of using that biologic, the biologic company must
demonstrate (1) direct infringement by another (i.e.,
that a doctor or patient directly infringed the method
of use) that was (2) knowingly aided and abetted by
affirmative steps taken by a biosimilar to encourage
direct infringement with (3) the affirmative intent
that the product be used to infringe. See Global-Tech
Appliances, Inc. v. SEB S.A., 563 U.S. 754, 760 (2011).
To establish liability for induced infringement under Section 271(b) of the Patent Act for a product with
15
both patented and unpatented uses, it has long been
understood that only “[e]vidence of active steps . . .
taken to encourage direct infringement, such as advertising an infringing use or instructing how to engage
in an infringing use, show an affirmative intent that
the product be used to infringe,” and that only “a showing that infringement was encouraged overcomes the
law’s reluctance to find liability when a defendant
merely sells a commercial product suitable for some
lawful use.” Metro-Goldwyn-Mayer Studios Inc. v.
Grokster, Ltd., 545 U.S. 913, 936 (2005) (internal quotations marks and citations omitted). Mere mention
or description of a potentially patented use is not sufficient; one must recommend, promote, or encourage a
patented use, or suggest that a patented use should be
performed. See Global-Tech Appliances, 563 U.S. at
760.
In the pharmaceutical context, the Federal Circuit
has thus made clear that, to induce infringement of a
drug with both patented and unpatented on-label indications, an allegedly infringing drug’s label must
“encourage, recommend, or promote infringement.”
Takeda Pharms. U.S.A., Inc. v. W.-Ward Pharm. Corp.,
785 F.3d 625, 631 (Fed. Cir. 2015). Particularly “in
the Hatch-Waxman context . . . designed to enable the
sale of drugs for non-patented uses,” the court determined that “vague label language cannot be combined
with speculation about how physicians may act to find
inducement.” Id. at 631-32.
Although the Federal Circuit panel did not purport
to change this well-settled law, the result of its decision threatens to undermine Congress’s carefully calibrated scheme to encourage competition among pharmaceuticals.
16
II.
The Federal Circuit’s Decision Poses a
Heightened Threat to Congress’s Procompetitive Statutory Scheme for Biosimilars.
The Federal Circuit’s decision provides branded
companies an unwarranted new tool in their efforts to
prevent or delay competition, whether generic or biosimilar. And the differences between the regimes governing biosimilars and generics may exacerbate the
harm with respect to access to biosimilars in a manner
that fundamentally disrupts the BPCIA’s statutory
design.
A. As the petition explains, the Federal Circuit’s
decision will likely be used by branded pharmaceutical
companies in an effort to blur the lines between infringing and non-infringing conduct and to dilute the
evidentiary showing of intent and affirmative encouragement required to impose liability for induced infringement in the context of pharmaceuticals.
In the decision below, the Federal Circuit upheld
an inducement verdict based on unconnected piecemeal statements in an FDA-approved label and a disparate collection of what would otherwise be non-infringing, truthful statements from various points in
time, across several documents, about unpatented
uses. See Pet. App. 15a-17a (relying on, e.g., the indication for an unpatented use, the dosage section, and
the clinical studies section of the FDA-approved label);
id. at 31a-32a (relying on product materials accurately
describing FDA’s anticipated and eventual approval).
And the result—a nearly $235 million jury verdict
more than three times all of petitioner’s sales for all
uses during the relevant period, see id. at 43a; id. at
17
123a n.3 (Prost, C.J., dissenting)—is too simply much
to expect brand manufacturers to ignore.
Although Alvotech takes the Federal Circuit at its
word that, even after the decision below, “generics
[can]not be held liable for merely marketing and selling under a ‘skinny’ label omitting all patented indications, or for merely noting (without mentioning any
patented uses) that FDA had rated a product as therapeutically equivalent to a brand-name drug,” Pet.
App. 11a, the petition rightly observes that if brand
manufacturers need “only to find claim elements ‘mentioned’ in portions of [a generic’s] label that speaks to
unpatented uses, [they] will regularly find something
in the skinny label that can serve as the basis for an
inducement complaint years (and hundreds of millions
of dollars) after generic launch.” Pet. 33.3
The threat of devastating liability if a jury gets it
wrong threatens to upset the careful balance that Congress struck in both the Hatch-Waxman Act and the
BPCIA to protect innovation while recognizing the
clear benefits of accelerating the introduction of competition to market. And the risk of such ruinous litigation will loom large in the decision about when and
whether to launch new biosimilars, just as it does generics. The consequence will be fewer generic and
3 Indeed, the decision will encourage branded manufacturers to,
as one FDA attorney recently put it, develop strategies for “structur[ing] their own labeling so that they have a ‘better chance of
success in future skinny label cases,’ ” such as by “seed[ing] potentially problematic language” in parts of their label with the
intention that, when copied to a generic’s label, it will create
grounds for future inducement liability. Ian Lopez, Hikma Drug
Label Win Still Leaves Generics on Hook for Liability, BLOOMBERG LAW (Jan. 12, 2022), https://bit.ly/3Qk1dQF.
18
biosimilar launches, less competition, and fewer consumer health benefits.
B. Because biosimilars are governed by a similar
legal regime, the Federal Circuit’s decision is at least
as problematic for biosimilars as chemical generics.
Indeed, several differences between the markets for
chemical drugs and biopharmaceuticals and between
the BPCIA and Hatch-Waxman regimes could amplify
and compound the harm of the decision below.
First, because of the relative differences in market
size between small-molecule drugs and large-molecule
drugs, the Federal Circuit’s decision is likely to have a
disparate impact on biosimilars as compared with
small-molecule drugs. As discussed in Section I.A, supra, the average price of biologics is several times that
of their small-molecule counterparts. See Andrew
Mulcahy et al., Biosimilar Cost Savings in the United
States: Initial Experience and Future Potential, 7(4)
RAND HEALTH Q. 3 (2018). The potential jury verdicts,
including lost profits or treble damages, that could result from an at-risk biosimilar launch are therefore
significantly greater for biosimilar companies than
their generic drug counterparts. See Pet. App. 42a45a (affirming an award of lost profits for the branded
company). And thus the incentives to avoid such liability by avoiding such an at-risk launch may be all
the greater until a court has rejected a lawsuit like
this one, providing the biosimilar greater certainty
that courts will find its label “skinny enough.”
Second, the Federal Circuit’s decision is likely to
exacerbate harm caused by certain other patent practices that are particularly prevalent among biopharmaceuticals. The federal government has already
identified “patent thickets” as an impediment to
19
competition, particularly in the biologic space. See
generally Cong. Research Serv., Drug Pricing and
Pharmaceutical Patenting Practices 16, 24 (2020),
https://bit.ly/3Qsi1EY (Patenting Practices); see also
Sen. P. Leahy Ltr. to Hon. K. Vidal (June 8, 2022),
https://bit.ly/3JLripi (explaining that branded companies attempt to threaten competitors with larger patent portfolios by filing numerous, overlapping patents that relate to or cover the same invention). This
problem only stands to be exacerbated by the Federal
Circuit’s decision, which encourages brand companies
to expand the patent thickets with multiple methodof-use patents claiming off-label uses in the hopes that
they can find some language in the labeling to justify
an inducement claim.
The threat of costly patent litigation in which tens
of patents, hundreds of patent claims, and millions
upon millions in damages may be brandished against
biosimilar manufacturers—i.e., ruinous litigation—is
already enough to postpone otherwise apt competition
from entering the market or coercing them to settle.
See Patenting Practices 26-27 (noting that Johnson &
Johnson has over 100 patents covering its autoimmune disorder drug Remicade® and Biogen/Genentech filed 204 patent applications to protect cancer
treatment Rituxin®). The problem will only be made
worse if branded companies are permitted to rely on
the decision below to establish inducement of their
ever-expanding thicket of off-label, method-of-use patents.
Third, the different disclosure requirements for
branded manufacturers under the BPCIA is likely to
increase the harm to biosimilar companies from the
decision below. As noted, unlike the Hatch-Waxman
20
Act, neither the BPCIA nor biopharmaceutical regulations require branded biologic companies seeking FDA
approval to list the non-process patents that cover a
branded drug and its indications for use in a public
database like the Orange Book. Thus, while generic
chemical drug companies “can rely on what brands say
their patents cover” when they draft their carveout labels, Pet. App. 52a (citing Caraco Pharm. Labs., Ltd.
v. Novo Nordisk A/S, 566 U.S. 399, 407 (2012)), biosimilar companies do not necessarily enjoy the same
privilege.
The different disclosure regime may carry both
practical and legal consequences. As a practical matter, it deprives biosimilar manufacturers of the advance notice provided by the Orange Book of the
brand’s view of the relevant patents that could be asserted even against a skinny label—making it only
more difficult to craft one adequate to avoid litigation.
It is not until the patent dance, after the biosimilar’s
aBLA application has been accepted by FDA, that the
biosimilar company is provided with a list of patents
that the branded biologic alleges is infringed by the
biosimilar’s proposed labeling. And while some second
or subsequent biosimilar applicants may be able to
rely in part on listings in the Purple Book (if the previous applicant engaged in the patent dance), those
listings are specific to the previous biosimilar applicant’s label, and so may not directly apply. See Evan
Diamond et al., “Purple Book” Patent Listing Under
Biological Product Patent Transparency Act, J.D.
SUPRA (Apr. 8, 2021), https://bit.ly/3bIi0xX.
In addition to those practical difficulties, the lack
of an advance declaration by the brand, under penalty
of perjury, further complicates the possibility that
21
equitable estoppel could mitigate the effects the Federal Circuit’s decision for biosimilars. Biosimilars
would not have the same basis for appealing to the discretionary equitable-estoppel doctrine that some
members of the Federal Circuit suggested might serve
as an answer to the problems caused by the Federal
Circuit’s decision. See Pet. App. 190a-93a (Moore, C.J.,
concurring) (suggesting that equitable estoppel might
mitigate the harm of the decision for generic chemical
drug manufacturers); see also Pet. 36-37.
C. The potential harm from the decision on the biopharmaceutical market is even more problematic
when one considers how it disrupts the design innovations of the BPCIA (1) to streamline litigation using a
patent dance, and (2) to permit more at-risk launches
than the Hatch-Waxman Act allows.
First, the BPCIA’s patent dance is a departure
from Hatch-Waxman certification procedures designed to streamline patent litigation concerning a
new biosimilar. The biosimilar manufacturer privately shares information with the branded manufacturer, enabling the parties to negotiate or focus any
litigation concerning the launch. The decision below,
however, threatens to disrupt that streamlined process by encouraging brand companies to use the patent dance to list numerous off-label, method-of-use
patents, arguing there is enough from the label to assert in litigation. Instead of serving as a tool to
streamline litigation, the patent dance could become
simply another means to complicate it and create uncertainty for the biosimilar manufacturer.
Second, the BPCIA departed from Hatch-Waxman
to more often permit at-risk launches of biosimilars.
As discussed above, unlike the Hatch-Waxman Act,
22
the BPCIA never imposes an automatic stay of the approval process for an at-risk launch, encouraging biosimilars to launch more quickly even while litigation
is ongoing (subject only to the possibility of an injunction). See p. 14, supra. By substantially increasing
the potential cost of an at-risk launch, however, the
Federal Circuit’s decision threatens to negate Congress’s decision—by effectively imposing the same
barrier to an accelerated launch through increased litigation risk.
III.
Limiting Consumer Access to Biosimilars
Would Have Dire Consequences for Public
Health.
If left undisturbed, the Federal Circuit’s decision
threatens to have adverse impacts on the public health
and welfare of the United States through decreased
competition, increased prices of already-expensive
pharmaceuticals, and, ultimately, reduced patient access to life-saving medications.
First, the decision may lead to decreased competition not only in the chemical pharmaceutical market
but also in the biologic space. At a minimum, expanded threatened or actual litigation may have a
chilling effect in the number of biosimilars that decide
to come to market only after a district court has rejected the biologic’s claims of induced infringement
based on a lawful skinny label. And that chilling effect
may be compounded by a reference biologic company’s
efforts to expand patent thickets around their branded
products with off-label, method-of-treatment patents
that they hope to convince a court or jury that words
somewhere in the biosimilar’s labeling infringe.
23
Second, the lower court’s opinion may also lead to
higher biopharmaceutical product prices overall, both
on the branded side and biosimilar side. In the absence of robust competition, biologics companies can
be expected to continue to inflate the prices of their
drugs, costing patients and the federal government
billions of dollars, and contributing to the drug-pricing
crisis. See STAFF OF H. COMM. ON OVERSIGHT &
REFORM, 117th Cong., Drug Pricing Investigation
AbbVie—Humira and Imbruvica at i (Staff Rep. May.
2021), https://bit.ly/3C14mkf (describing AbbVie’s
“uninhibited price increases” for its biologics, including a 470% increase for Humira since its 2003 launch).
One former FDA Commission estimated that delays in
biosimilar entry to market caused by anticompetitive
strategies like patent abuse already cost Americans
more than $4.5 billion in 2017 alone. See Remarks
from FDA Commissioner Scott Gottlieb, M.D., as prepared for delivery at the Brookings Institution on the
release of FDA’s Biosimilars Action Plan (July 18,
2018), discussed in Failure to Launch: Patent Abuse
Blocks Access to Biosimilars for America’s Patients,
BIOSIMILARS COUNCIL 6 (June 2019), https://bit.ly/
3SA6NA7.
Moreover, if biosimilar companies are threatened
with ruinous litigation, it would be infeasible not to
incorporate such litigation costs into the price of biosimilars. In this case, the Federal Circuit affirmed a
verdict of nearly $235 million dollars against petitioner for induced infringement of respondents’
method-of-use patent. Pet. App. 43a-45a. As noted,
petitioner made only $74.5 million in all of its sales of
the generic during the period-in-question. See Pet. 12.
Thus, “it was ultimately more costly for [petitioner] to
sell an unpatented drug for unpatented uses than it
24
would have been to stay out of the market altogether.”
Pet. App. 145a-46a (Prost, C.J., dissenting). The economics are not any better in the biosimilar markets;
in fact, they are far worse. As discussed, large molecule biopharmaceuticals can be up to twenty times the
price of small molecule drugs; thus, lost-profit damages can be significantly higher. These potentially
debilitating verdicts could deter biosimilars from
launching at risk. See, e.g., Amgen Inc. v. Hospira, Inc.,
944 F.3d 1327, 1340-41 (Fed. Cir. 2019) (affirming a
$70 million infringement verdict based on pre-launch
batches not subject to a safe harbor).
Finally, both depressed competition and increased
drug prices will ultimately lead to reduced patient access to necessary medications. Without the ability for
biosimilars to predictably determine what to include
in their carveout labels to avoid threatened or actual
induced infringement litigation and to accurately
judge the risk of an at-risk launch, the drug-pricing
crisis America faces is poised to worsen. For many
Americans who cannot afford these increases, more
and more will lose the ability to afford the medications
and care they need. The U.S. healthcare system and
the American people cannot afford that outcome.
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CONCLUSION
For the foregoing reasons, the petition for a writ of
certiorari should be granted.
Respectfully submitted,
Jonathan Y. Ellis
Counsel of Record
MCGUIREWOODS LLP
888 16th Street N.W.
Suite 500
Washington, DC 20006
(202) 828-2887
jellis@mcguirewoods.com
Corinne S. Hockman
MCGUIREWOODS LLP
501 Fayetteville Street
Suite 500
Raleigh, NC 27601
(919) 755-6572
chockman@mcguirewoods.com
AUGUST 12, 2022
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.