Amicus Curiae Brief — Sandoz Inc. v. Amgen, Inc., 136 S. Ct. 2501 (2016) (No. 15-1039)
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FEB 17 20i7
Nos. 15-1039 & 15-1195 | SUfiGhs" us Chere
ee _____________—_________
IN THE
Supreme Court of the Anited States
SANDOZ INC.,
Petitioner,
Vv.
AMGEN INC. AND AMGEN MANUFACTURING LIMITED,
Respondents.
AMGEN INC, AND AMGEN MANUFACTURING LIMITED,
Cross-Petitioners,
Vv.
SANDOZ INC.,
Cross-Respondent.
On Writ of Certiorari
to the United States Court of Appeals
for the Federal Circuit
BRIEF OF APOTEX INC. AND APOTEX CORP.
AS AMICI CURIAE SUPPORTING SANDOZ INC.
KERRY B. MCTIGUE DAVID C. FREDERICK
W. BLAKE COBLENTZ Counsel of Record
BARRY P. GOLOB MILES J. SWEET
AARON 8, LUKAS AMELIA I.P. FRENKEL
STEPHEN A. MILLER KELLOGG, HUBER, HANSEN,
COZEN O’CONNOR TODD, EVANS & FIGEL,
1200 19th Street, N.W. P.L.L.C.
Washington, D.C. 20036 1615 M Street, N.W.
(202) 912-4800 Suite 400
Washington, D.C. 20036
(202) 326-7900
February 17, 2017 (dfrederick@khhte.com)
a
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ..................ccccesccsccscesceeees ill
INTEREST OF AMICI CURTAE.,...........60.ccccccccceeeeees l
EEE Re RCS 3
A. Statutory Background .........................:, fe EAE 3
Stage |: Information Exchange and
AEE Is OIC AA LD 5
Stage 2: Enforcement and Dispute
BEC EE EESESEEE n =Oe NILE Sa a 6
B. Procedural Background .................ccccccceeeeeeeees 7
SUMMARY OF ARGUMENT. ...................cccccceeeeeeees 11
I nhc ik ral iainntin ds Aicminnidinenniatabaanbiukiobedaces 14
I THE FEDERAL CIRCUIT MISREAD
isa ncscistihisredndnbtinds as ctuGoichiabubeicy nines. 15
A. The BPCIA Allows Biosimilar Appli-
cants To Give Notice Of Commercial
Marketing Before FDA Approval............ 15
1. The BPCIA’s Plain Text Neither
Requires a Waiting Period Nor
Provides an Injunctive Remedy
for Lack of Notice ..............c.0.ssccsesssess 15
2. Imposing a Waiting Period Is at
Odds with the Purpose of the
BPCIA Patent Dispute Resolu-
ESET EAE LOG 18
B. The Federal Circuit’s Ruling Is
Inconsistent With Other BPCIA
EI 2 io Ee Sets Shes ER 20
i
fl. THE FEDERAL CIRCUIT'S DECI-
SION CANNOT BE RECONCILED
WITH THE BPCIA’S LEGISLATIVE
HISTORY AND PURPOSES. ..................60664 24
A. The BPCIA Is Designed To Increase
Price Competition From Biosimilar
TITRE EVE Re ere eve er 24
B. Congress Determined That A 12-Year
Exclusivity Period Struck The Right
Balance Between The Competing
I i iccintia tna hihleujidindnttietiap abit naiepinbibiaicaatn 27
C. Notice Of Commercial Marketing Is
Not Necessary In All Cases.................... 31
NR eiintinnidincccenisusdecntesesstsunsasceiectsatbeovenien .. 32
TABLE OF AUTHORITIES
Page
CASES
Amgen Inc. v. Apotex Inc.:
Final Judgment, No. 15-61631-CIV-COHN/
SELTZER (S8.D. Fla. Sept. 6, 2016).........00000000.... 20
Findings of Fact and Conclusions of Law,
No. 15-61631-CIV-COHN/SELTZER (S.D.
I a sauisnadadeus 19
827 F.3d 1052 (Fed. Cir.), cert. denied, 137
ii i IE CITI dclininisc i sessinemademncbeiidndtmasiedceiinesuantia 2, 8, 9,
10, 20, 23
Caraco Pharm. Labs., Lid. v. Novo Nordisk
A/S, 132 S. Ct. 1670 (2012) ............ccccccccccsccccseees 25
kli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661
ha EET Re eas OO LenS Pt SO 25
FTC v. Actavis, Inc., 133 S. Ct. 2223 (2013)............ 25
STATUTES AND RULES
Biologics Price Competition and Innovation
Act of 2009, Pub. L. No. 111-148, tit. VII,
subtit. A, 124 Stat. 119, 804 (2010)............. passim
Drug Price Competition and Patent Term
Restoration Act of 1984, Pub. L. No. 98-417,
98 Stat. 1585 (Hatch-Waxman Act)......... 13, 25, 26
Federal Food, Drug, and Cosmetic Act,
Se I ME EMI ccs ants tagcadehiermmeabadeannede 26
Patent Act (35 U.S.C.):
ae ee Oe ee ID ce sevnsiossdcvensidicceacoccseves 17
iV
Patient Protection and Affordable Care Act,
Pub. L. No. 111-148, 124 Stat. 119 (2010)............3
Public Health Service Act, 42 U.S.C. § 201
SEE, seccticchentrssincancccesepeundsesicustsenuteopsusnsasocuseqesenste 26
Pg EERE er nee Mirae BOE 16
ee es Se otis cccccicenscndsaccdnsscndsennncsncnereast 4
Se A i ctinircbnconssacinsorepswievene 4, 16, 19, 20
Be in ccessciconesinsiedacriabretcnmiqecatiies 4
Es ID 0d < candi inclinusigddubenaebiannvedds squndindebed 5
ee i ics ciicncewunnesatenenenceianiiaih 4
gk Foe |}, ee 5, 7, 17, 21, 23
42 U.S.C. § 262(2)(2)(A) ..........cccccrserreeees 5, 6, 7, 8, 9,
10, 12, 13, 23, 32
42 U.S.C. § 262(1)(3) ......... 5, 7, 8, 13, 18, 19, 21, 23
42 U.S.C. § 262(1)(4)...............5, 7, 8, 13, 19, 21, 23
42 U.S.C. § 262(1)(5)............... 5, 7, 8, 13, 19, 21, 23
ee I ins sihisiviigiiccenenddeessiionenuetn 5, 7, 23
Oe ls Be IU pincts nai escnacecsenssissacsonnnesecenes 5, 21
Oe ee ie cas tccncnnecsscicccunstseccassosatinntpionts 15
42 U.S.C. § 262(1)(8)(A) ............ eee 6, 7, 8, 11, 12,
13, 15, 16, 18, 22
SD as Oe ED dar ssasccsoccascevcasonerionsi 6, 18, 19
re IE sinsncesscsvassecanacnsersagovensennics 19
42 U.S.C. § 262(7)(9)(B) .............0044 7, 12, 13, 16, 17
Oe te Oe IEE vccisncccecssescesevsesscs 6, 7, 12, 17
RN Sts Oils HET hirsetshishnidacdnbcarecesptuiscninssinecaniovousnnisennbayis I
Vv
LEGISLATIVE MATERIALS
Assessing the Impact of a Safe and Equitable
Biosimilar Policy in the United States:
Hearing Before the Subcomm. on Health of
the H. Comm. on Energy and Commerce,
110th Cong. (2007), available at https://
archive.org/details/gov.gpo.fdsys.CHRG-
BING cous csancopicnnshecitennannnes 21, 28, 29, 30, 31
Biologics and Biosimilars: Balancing Incentives
for Innovation: Hearing Before the Sub-
comm. on Courts and Competition Policy of
the H. Comm. on Judiciary, 111th Cong.
(2009), available at https://judiciary.house.
gov/_files/hearings/printers/111th/111-73_
IIE cane keiticctniienacebiodiminintedeugsiesel 21, 30, 31
Follow-On Biologics: Hearing Before the S.
Comm. on Health, Education, Labor, and
Pensions, 110th Cong. (2007), available at
https://www.gpo.gov/fdsys/pkg/CHRG-
110shrg34053/pdf/CHRG-110shrg34053.pdf....28, 29
H.R. 1548, 111th Cong. (2009) .....cccccccscseeeeeceeees 21, 31
Safe and Affordable Biotech Drugs: The Need
for a Generic Pathway: Hearing Before the
H. Comm. on Oversight and Gov't Reform,
110th Cong. (2007), available at https://
www.gpo.gov/fdsys/pkg/CHRG-110hhrg
40874/pdf/CHRG-110hhrg40874. pdf .................. 29
Senate Comm. on Health, Education, Labor &
Pensions, Press Release, Lawmakers Praise
Committee Passage of Biologics Legislation
(June 27, 2007), available at http://www.
help.senate.gov/ranking/newsroom/press/
lawmakers-praise-committee-passage-of-
I inno ssvcsanssnianbiesebuediceeuntseidesteteans 28
vi
ADMINISTRATIVE MATERIALS
Comment of the Staff of the Federal Trade
Comm'n to FDA (Oct. 27, 2015), available at
https://www.ftc.gov/system/files/documents/
advocacy_documents/ftc-staff-comment-
submitted-food-drug-administration-response-
fdas-request-comments-its-guidance/
151028fdabiosimilar.pdf........................0008 3, 24, 25
Food & Drug Admin., Memorandum re: Exclu-
sivity Expiry for Neupogen (filgrastim) BLA
103353 (June 26, 2014), available at http://
www.accessdata.fda.gov/drugsatfda_docs/
nda/2015/125553O0rig1s000AdminCorres.
IDGET scaczeecsvecoescceee scdegeeonswennseodubeeeeiianeennannannaanannaia 24
Letter from John E. Dicken, Health Care Dir.,
Gov't Accountability Office, to Hon. Orrin
G. Hatch, Ranking Member, Senate Comm.
on Finance (Jan. 31, 2012), available at
http://www.gao.gov/assets/590/588064.pdf......... 25
Office of Mgmt. & Budget, Exec. Office of
President, Fiscal Year 2014; Budget of the
U.S. Government (Apr. 2013), available at
http://www.whitehouse.gov/sites/default/
files/omb/budget/fy20 1 4/assets/budget.pdf......... 14
OTHER MATERIALS
Krwin A. Blackstone & Joseph P. Fuhr, Jr.,
The Economics of Biosimilars, 6 Am. Health
& Drug Benefits 469 (Sept/Oct. 2013),
available at http://www.ncbi.nlm.nih.gov/pme/
articles/PMC4081732/pdf/ahdb-06-469.pdf........ 27
vil
Krista H. Carver et al., An Unofficial Legisla-
tive History of the Biologics Price Competi-
tion and Innovation Act of 2009, 65 Food &
Drug L.J. 671 (2010), available at https://www.
cov.com/-/media/files/corporate/publications/
2010/01/an-unofficial-legislative-history-of-
the-biologics-price-competition-and-
innovation-act-of-2009. pdf...................00008- 21, 27, 31
Steve Miller, Express Scripts, Presentation
at FTC Biosimilars Workshop: Customer
Perspective on Biosimilars (Feb. 4, 2014),
available at https://www.ftc.gov/system/
files/documents/public_events/Follow-On%20
Biologics%20Workshop%3A%20I mpact% 20
of%20Recent%20Legislative%20and%20
Regulatory%20Naming%20Proposals%20
on%20Competition/miller.pdf ....................0000. 4, 25
Joanna M. Shepherd, Biologic Drugs, Bio-
similars, and Barriers to Entry, 25 Health
Matrix 139 (2015), available at http://
scholarlycommons.law.case.edu/cgi/view
INTEREST OF AMICI CURIAE'
Amici Apotex Inc. and Apotex Corp. are subsidiar-
ies of the global pharmaceutical company collectively
known as Apotex,? which is one of the world’s fore-
most generic drug and specialty pharmaceutical
research and technology leaders.
Apotex is actively working to develop and manufac-
ture a broad portfolio of biologic drug products.
Apotex belicves that the benefits of biosimilars will
be significant for patients, payors, and providers,
and it is dedicated to increasing public availability
of more affordable versions of these life-saving
therapies and to generating substantial savings for
the American health care system.
Apotex agrees with Sandoz Inc. (“Sandoz”) that
reversal of the Federal Circuit is necessary to correct
the interpretation of the Biologics Price Competition
and Innovation Act of 2009 (“BPCIA”). This decision,
by a divided panel, has the effect of extending the
monopolies for biologic products beyond the period
specified by Congress, thereby delaying competition
and consumer access to less-expensive medicines.
In recent years, Apotex has filed with the Food and
Drug Administration (“FDA”) applications under the
BPCIA for pegfilgrastim and filgrastim, which are
' Pursuant to Rule 37.6, counsel for amici certify that no
counsel for a party authored this brief in whole or in part and
that no person other than amici and their counsel made a mon-
etary contribution intended to fund the preparation or submis-
sion of this brief. Counsel further certify that all parties have
consented to the filing of this brief, and those written consents
are being submitted contemporaneously with this brief.
2 Apotex Inc. is an Ontario corporation and Apotex Corp. is
a Delaware corporation. Both are wholly owned by Apotex
Holdings, Inc.
2
biosimilar versions of the products Neulasta® and
Neupogen®, respectively, marketed by Amgen Inc.
and Amgen Manufacturing Ltd. (collectively,
“Amgen”). Amgen subsequently sued Apotex in the
United States District Court for the Southern Dis-
trict of Florida for patent infringement by Apotex’s
proposed pegfilgrastim biosimilar product.
In that case, the district court granted a prelimi-
nary injunction prohibiting Apotex from commer-
cially marketing its biosimilar product until 180 days
after first receiving its FDA license and then provid-
ing a notice of commercial marketing under the
BPCIA.
Upon review of Amgen’s case against Apotex, the
Federal Circuit applied the construction of the
BPCIA’s notice of commercial marketing that is now
before the Court, and affirmed the district court's
grant of a preliminary injunction. Amgen Inc. v.
Apotex Inc., 827 F.3d 1052, 1060-61 (Fed. Cir.), cert.
denied, 137 S. Ct. 591 (2016). Apotex thus has a
significant interest in the proper interpretation and
application of the BPCIA.
3
INTRODUCTION
A. Statutory Background
This case arises from the F ederal Circuit's errone-
ous construction and misapplication of the BPCIA, a
part of the Patient Protection and Affordable Care
Act of 2010. This comprehensive legislation was
‘intended to strike a balance between encouraging
competition among an important and rapidly grow-
ing category of costly specialty pharmaceuticals and
incentivizing the development of new drugs.
The decision below amounts to a thumb on the
scale for biologic manufacturers. The anticompeti-
tive effects of prolonging the collection of monopoly
rents by those manufacturers and bolstering already-
troublesome barriers to entry for biosimilars, which
are an important new class of medical products, will
cost consumers and taxpayers hundreds of billions of
dollars.
Prices for “biologics” — 1.é., large-molecule drugs
that are produced in living organisms — are on
average 22 times higher than prices for traditional
chemical or small-molecule medications; biologics can
cost more than $200,000 per year. See Comment of
the Staff of the Federal Trade Comm’n to FDA at 3
(Oct. 27, 2015) (hereinafter “FTC Comment”).*
Moreover, prices are increasing by approximately
10-15% each year, with the average price of biologics
having doubled from 2006 to 2012. See id. None-
theless, in 2010, four of the 10 top-selling branded
drugs worldwide were biologics, and industry experts
3 Available at https://www.ftc.gov/system/files/documents/
advocacy_documents/ftc-staff-comment-submitted-food-drug-
administration-response-fdas-request-comments-its-guidance/
151028fdabiosimilar.pdf.
q
estimated biologics would rise to seven of the top 10
in 2016. See Steve Miller, Express Scripts, Presen-
tation at FTC Biosimilars Workshop: Customer
Perspective on Biosimilars 3 (Feb. 4, 2014) (“Miller,
Customer Perspective on Biosimilars”).4
As part of an effort to promote competition and
restrain these spiraling drug costs, Congress in the
BPCIA established an abbreviated pathway for regu-
latory approval of follow-on biologics that are “highly
similar” to the branded drug, which is referred to
as the “reference product.” 42 U.S.C. § 262(i)(2). The
BPCIA recognizes the importance of encouraging
innovation through a period of market exclusivity for
the reference product. To that end, the FDA cannot
finally approve an abbreviated Biologics License
Application (“aBLA”) for a biosimilar product until 12
years after the date on which the reference product
was licensed, thus ensuring that the branded drug
company, in this context referred to as the “reference
product sponsor,” enjoys 12 years of market exclu-
sivity (and monopoly profits), regardless of whether
it has any patent protection for its product. See
id. §§ 262(k)(7)(A), 262(/)(1)(A). At the same time,
however, the BPCIA encourages price competition
once the sponsor’s monopoly protection ends. The
BPCIA therefore allows a biosimilar applicant to
submit an aBLA and rely in part on the sponsor’s
FDA-approved license of a reference product. See id.
§ 262(k).
The BPCIA also established a detailed, carefully
calibrated framework for the efficient resolution of
4 Available at https://www.ftc.gov/system/files/documents/
public_events/Follow-On%20Biologics%20Workshop%3A%20
Impact%200f%20Recent%20L egislative%20and%20Regulatory™%
20Naming%20Proposals%200n%20Competition/miller.pdf.
5
patent disputes between the reference product
sponsor and the biosimilar applicant. See id. § 262(/).
Congress designed a series of choices in two stages,
through which the biosimilar applicant may elect to
share critical information with the reference product
sponsor in an effort to streamline patent disputes.
And at each such opportunity, the statute also offers
the reference product sponsor recourse in the event
the biosimilar applicant chooses not to share such
information.
Stage 1: Information Exchange and Initial
Litigation
In the first stage, under paragraphs (/)(2)-(/)(7) of
the BPCIA,® the parties may exchange information
concerning the aBLA, a list of patents for which a
claim of patent infringement may be asserted against
the biosimilar applicant, and statements concerning
the patent(s), followed by negotiation to decide which
patents should be the subject of an immediate
patent-infringement action. Specifically, paragraph
(1)(2)(A) provides that the biosimilar applicant “shall
provide to the reference product sponsor a copy of
the application submitted ... under subsection (k),
and such information that describes the process or
processes used to manufacture the biological product
that is the subject of such application,” not later than
20 days after the FDA accepts the application for
review. When the biosimilar applicant provides
those paragraph (/)(2)(A) disclosures, its action initi-
ates a series of exchanges under paragraphs (/)(3)-
(1)(7), with each successive exchange reliant on the
performance of one of more preceding exchanges.
5 The various provisions of 42 U.S.C. § 262(/) that are the
subject of this brief may be referred to as “paragraph (/)__”
throughout.
6
The result of this first-stage activity is a patent-
infringement lawsuit and an updated list of poten-
tially relevant patents that have not been included in
the lawsuit.
But if the biosimilar applicant elects not to share
its application and manufacturing information with
the reference product sponsor under paragraph
(1)(2)(A), then paragraph (1)(9)(C) provides the refer-
ence product sponsor with a remedy: “If a subsection
(k) applicant fails to provide the application and
information required under paragraph (2)(A), the
reference product sponsor, but not the subsection (k)
applicant, may bring an action under section 2201 of
title 28 for a declaration of infringement, validity, or
enforceability of any patent that claims the biological
product or use of the biological product.”
Stage 2: Enforcement and Dispute Resolution
In the second stage for resolving patent disputes,
under paragraph (/)(8)(A), the biosimilar applicant
“shall provide notice to the reference product sponsor
not later than 180 days before the date of the
first commercial marketing of the biological product
licensed under subsection (k).”. When the applicant
gives notice, the sponsor may seek an injunction
under paragraph (/)(8)(B): “After receiving the notice
under subparagraph (A) and before such date of
the first commercial marketing of such biological
product, the reference product sponsor may seek a
preliminary injunction prohibiting the subsection (k)
applicant from engaging in the commercial manufac-
ture or sale of such biological product until the court
decides the issue of patent validity, enforcement,
and infringement with respect to any patent” that
was described as relevant during the information
7
exchange outlined in paragraph (/)(3) and that is not
already the subject of litigation.
If the biosimilar applicant elects not to give notice
of commercial marketing under paragraph (/)(8)(A),
then paragraph (/)(9)(B) also provides the reference
product sponsor with a remedy: “If a subsection (k)
applicant fails to complete an action required of the
. applicant under ... paragraph (8)(A), the refer-
ence product sponsor, but not the subsection (k)
applicant, may bring an action under section 2201 of
title 28, for a declaration of infringement, validity, or
enforceability of any patent” submitted to be relevant
during the information exchange described in para-
graphs (/)(2)-(/)(5), including any newly issued patent
deemed relevant.
B. Procedural Background
The decision under review became the Federal
Circuit's first case interpreting the BPCIA. In this
case, Sandoz elected not to provide the information
specified in paragraph (/)(2)(A). And the Federal
Circuit held that Sandoz was not required to do so,
confirming that the information exchange described
in paragraphs (/)(2)-(/)(5) is optional and that para-
graph (/)(9)(C) provides an appropriate remedy to the
reference product sponsor in the event that a biosimi-
lar applicant elects not to engage in the information
exchange. Pet. App. 18a. The Federal Circuit also
held that a biosimilar applicant such as Sandoz that
chooses not to engage in the information exchange
described in paragraph (/)(2)(A) must provide to the
reference product sponsor the notice of commercial
marketing described in paragraph (/1)(8)(A). See id.
6 References to “Pet. App. __a” are to the appendix to the
certiorari petition filed in No, 15-1039.
8
at 26a (“We therefore conclude that, where, as here,
a subsection (k) applicant completely fails to provide
its aBLA and the required manufacturing information
to the [reference product sponsor] by the statutory
deadline, the requirement of paragraph (/)(8)(A) is
mandatory.”). The court further held that such an
applicant could provide that notice of commercial
marketing only after the issuance of the FDA license
for its biosimilar product. /d. at 2la-22a.
But the Federal Circuit left unanswered how its
limited rulings regarding the paragraph (/)(8)(A)
notice of commercial marketing should be applied to
scenarios in which a biosimilar applicant did chose
to participate in the paragraph (/)(2)(4) information
exchange. The court of appeals answered that criti-
cal question in a companion case, Amgen Inc. v.
Apotex Inc., 827 F.3d 1052 (Fed. Cir.), cert. denied,
137 S. Ct. 591 (2016).
A brief summary of the facts of the Apotex case
follows. In 2002, Amgen received a license for a
brand-name biologic with the active ingredient peg-
filgrastim. Jd. at 1055. In 2014, Apotex applied for
an FDA license to market a biosimilar pegfilgrastim
product in accordance with the BPCIA. /d. After the
FDA accepted Apotex’s application for review, Apotex
timely provided Amgen with a copy of that applica-
tion and the other information specified in paragraph
(1)(2)(A). Id. at 1059. Thereafter, Apotex and Amgen
engaged in the exchange of patent information
contemplated by paragraphs (/)(3)-(/)(5). Apotex also
attempted to provide Amgen with the notice of com-
mercial marketing described in paragraph (/)(8)(A).
Id. The parties ultimately agreed to litigate all
unexpired patents, of which there is currently only
one remaining. Id.
9
Amgen subsequently filed its complaint in the
United States District Court for the Southern
District of Florida. The district court granted a pre-
liminary injunction prohibiting Apotex from commer-
cially marketing its biosimilar product until waiting
180 days after first receiving its FDA license and
then providing a new notice of commercial market-
ing. /d. at 1060.
On appeal, the Federal Circuit discounted the
significant factual distinctions between the Apotex
case and Sandoz —- namely, that Apotex faithfully
engaged in the information exchange precipitated by
the paragraph (/)(2)(A) disclosures and that all rele-
vant patents had thereby already become the subject
of litigation. Relying on the Sandoz decision now
under review, the Federal Circuit decreed, first,
that applicants are required to provide a notice of
commercial marketing “whether or not a (2)(A) notice
was given” and, second, that “[t]he (8)(A) require-
ment of 180 days’ post-licensure notice ... [is]
enforceable by injunction.” Jd. at 1060-61.
Regarding the former holding, the Federal Circuit
reasoned that “[t]he language of (8)(A) is categorical”
because “liJt contains no words that make the
applicability of its notice rule turn on whether the
applicant took the earlier step of giving the (2)(A)
notice that begins the § 262(/) information-exchange
process” and because “[t]here ... is no other statu-
tory language that effectively compels a treatment of
(8)(A) as non-mandatory.” Jd. at 1061. The court of
appeals also rejected the argument “that paragraph
(9) of § 262(1) makes a declaratory-judgment action,
discussed in (9)(B), the exclusive remedy for viola-
tions of (8)(A).” Jd. at 1063.
10
Regarding the timing of the notice of commercial
marketing and the injunctive relief granted to
Amgen, the Federal Circuit reasoned that the BPCIA
“establishes the 12-year date only as an earliest date,
not a latest date, on which a biosimilar license can
take effect” and that, in any case, “any ... delay
beyond 12 years should occur less and less as
time goes by” because, “as time passes, more and
more of the reference products will be newer, and
a biosimilar-product applicant, entitled to file an
application a mere four years after licensure of the
reference product, ... can seek approval long before
the 12-year exclusivity period is up.” Jd. at 1061-62
(citing Pet. App. 22a).
Taken together, the Federal Circuit’s decisions in
Sandoz and Apotex rob biosimilar applicants such as
Apotex and Sandoz of a central tenet of the BPCIA’s
design, viz., control over the scope of the first-stage
patent litigation by the applicant under paragraph
(1)(2)(A). The court of appeals’ holdings award refer-
ence product sponsors such as Amgen a new, extra-
statutory remedy: an injunction against commercial
marketing of an FDA-approved biosimilar product
until 180 days after post-approval notice is given.
This exclusivity windfall exceeds the 12-year exclu-
sivity period granted by Congress.
11
SUMMARY OF ARGUMENT
Congress struck a careful balance in the BPCIA
between, on the one hand, encouraging competition
to lower the soaring prices for biologic medications
and, on the other hand, maintaining incentives for
the development of new drugs. It did so by coupling
an abbreviated pathway to expedite the market
availability of biosimilar products with a 12-year
period of exclusivity for branded reference products.
I. The Federal Circuit erroneously held that 42
U.S.C. § 262(1)(8)(A) requires that a biosimilar apphi-
cant wait until after it receives FDA approval before
providing effective notice of commercial marketing to
the reference product sponsor. The court also erred
in creating an extra-statutory injunctive remedy for
reference product sponsors in the event biosimilar
applicants choose not to provide such notice. Those
decisions have the effect of extending the 12-year
exclusivity period and delaying the onset of price-
lowering competition from biosimilar products. The
Federal Circuit’s erroneous interpretation of this
important new framework is contrary to the statute’s
plain text and purpose.
Paragraph (/)(8)(A) provides that a “subsection (k)
applicant shall provide notice to the reference
product sponsor not later than 180 days before the
date of the first commercial marketing of the biologi-
cal product licensed under subsection (k).” Although
the use of the word “shall” in isolation implies a
mandatory obligation, the text of the statute as a
whole indicates that is the case only for those bio-
similar applicants that wish to avail themselves of
the enumerated expedited procedures.
The Federal Circuit recognized as much, holding
that, although the BPCIA repeatedly directs that a
12
biosimilar applicant “shall” take certain actions, it is
not always the case that they “must” do so. Pet. App.
l4a-l5a. The Federal Circuit explained that “‘shall’
in paragraph (/)(2)(A) does not mean ‘must’” because,
among other provisions, paragraph (/)(9)(C) “explicit-
ly contemplates that a subsection (k) applicant might
fail to disclose the required information by the statu-
tory deadline” and provides a consequence for the
applicant’s failure to do so. Id. at 15a-16a.
That same logic applies with full force to the
BPCIA’s notice of commercial marketing provision.
Paragraph (/)(9)(B) provides the exclusive remedy to
reference product sponsors in the event that an
applicant elects not to provide the notice of commer-
cial marketing described in paragraph (/)(8)(A): “Jf a
subsection (k) applicant fails to complete an action
required of the subsection (k) applicant under ...
paragraph (8)(A), the reference product sponsor, but
not the subsection (k) applicant, may bring an action
under section 2201 of title 28, for a declaration of
infringement, validity, or enforceability” of those
patents raised during the earlier information exchange
between the parties. The Federal] Circuit’s imposi-
tion of an injunction to enforce its flawed interpre-
tation of paragraph (/)(8)(A) as mandatory thus
renders the paragraph (/)(9)(B) penalty provision
superfluous.
Moreover, the court’s ruling produces consequences
that contravene the legislative intent of the BPCIA
to facilitate the early resolution of patent disputes
between the parties. For example, the BPCIA does
not require a biosimilar applicant to give notice of
commercial marketing if it made the disclosures set
forth in paragraph (/)(2)(A) and fully engaged in the
subsequent patent resolution framework. Under such
13
circumstances, a notice of commercial marketing
serves no purpose. If paragraph (/)(8)(A) were man-
datory for applicants who complied with paragraph
(1)(2)(A) and engaged in the information exchange
described in paragraphs (/)(8)-(/)(5), then reference
product sponsors would have no need of the remedy
specified in paragraph (/)(9)(B). Thus, with no fur-
ther patent rights remaining for the reference prod-
uct sponsor to assert, an approved biosimilar product
is needlessly kept off the market for an additional
180 days.
Il. The Federal Circuit’s erroneous decision is in-
consistent with Congress’s purpose in decreasing the
total health care costs of the United States govern-
ment and the American people. If upheld, the Fed-
eral Circuit’s statutory interpretation will delay
patient access to more affordable biosimilar medicines.
New competition between branded reference
products and biosimilars can help ameliorate rising
health care costs and is expected to translate into
major savings for consumers, including public-sector
health plans and the federal government. Lower
prices also mean better consumer access.
The Federal Circuit’s decision will delay Ameri-
cans’ realization of those economic and medical bene-
fits — thwarting Congress’s years-long effort to close
the biologics loophole in the Hatch-Waxman Act.
The BPCIA completed a project three decades in the
making: balancing cost competition and innovation
for all types of pharmaceuticals. And its framework
for the abbreviated approval of biosimilars is argua-
bly even more essential to health care today than
when the Hatch-Waxman Act was enacted in 1984.
To ensure that Americans are able to realize the
benefits of biosimilars and of continued brand-name
14
biologic innovation, Congress specifically prescribed
a 12-year period of exclusivity for brand-name refer-
ence products.’ By extending that exclusivity period
in all cases, the Federal Circuit’s decision impedes
Americans’ access to life-saving biosimilar drugs
and could add billions of dollars to household and
government health care costs.
ARGUMENT
The Federal] Circuit’s decision misreads_ the
BPCIA’s text and upsets Congress’s careful balance
between cost-saving competition and life-saving
innovation. Congress sought to promote the former
through the creation of an abbreviated pathway for
the approval of biosimilar products and the latter by
preserving a 12-year exclusivity period for brand-
name reference product sponsors. The Federal Cir-
cuit threw up a roadblock in the abbreviated path-
way by mandating that biosimilars provide a notice
of commercial marketing even when doing so cannot
advance the orderly resolution of patent disputes.
And, adding insult to injury, the court’s rulings
functionally extended the 12-year exclusivity period
by an extra six months, diverting hundreds of
billions of dollars from taxpayers and health care
consumers to biologic manufacturers. Together, those
errors impermissibly favor reference product sponsors.
If not corrected, they will substantially increase
‘In fact, the Obama Administration’s Office of Management
and Budget (“OMB”) proposed reducing the market exclusivity
period afforded to reference product sponsors from 12 years to 7
years in order to achieve $3 billion in savings over 10 years to
federal health programs including Medicare and Medicaid.
See OMB, Exec. Office of President, Fiscal Year 2014: Budget of
the U.S. Government 40 (Apr. 2013), available at http://www.
whitehouse.gov/sites/default/files/omb/budget/fy201 4/assets/
budget. pdf.
15
Americans’ health care costs and needlessly delay
access to life-saving biosimilar medications.
I. THE FEDERAL CIRCUIT MISREAD THE
BPCIA
A. The BPCIA Allows Biosimilar Applicants
To Give Notice Of Commercial Marketing
Before FDA Approval
The Federal Circuit is incorrect that biosimilar
applicants must wait to give effective notice of
commercial marketing under 42 U.S.C. § 262(/)(8)
only after the FDA has approved a biosimilar appli-
cation substantially for the reasons that Judge Chen
gave in his cogent dissent. The court also erred in
creating an injunctive remedy in the event a bio-
similar applicant chooses not to give notice of
commercial marketing. The Federal Circuit’s ruling is
inconsistent with the statute’s text and the purpose
of the notice provision. And the ruling has the perni-
cious and costly effect of automatically granting the
reference product sponsor a 180-day windfall of extra
monopoly profits after FDA approval of a biosimilar
application, all to the detriment of patients who need
and deserve more affordable biosimilar options. If
Congress had wanted to impose a 12-and-a-half-year
waiting period before biosimilar products could be
brought to market, it could have done so. Instead,
Congress enacted a 12-year waiting period. ‘The
Federal Circuit should have respected that carefully
considered legislative choice.
1. The BPCIA’s Plain Text Neither Requires a
Waiting Period Nor Provides an Injunctive
Remedy for Lack of Notice
Paragraph (/)(8)(A) calls on a biosimilar applicant
to “provide notice to the reference product sponsor
16
not later than 180 days before the date of the first
commercial marketing of the biological product
licensed under subsection (k).” 42 U.S.C. § 262(1)(8)(A).
The product to be marketed commercially will, of
course, need to be licensed before it can be marketed,
and the passage makes clear that notice is required
for biosimilar applicants seeking approval under
subsection (k) (as contrasted with the traditional
pathway for biologics approval under subsection (a)).
On its face, however, this provision says nothing
about FDA approval being required before notice is
given. The notice requirement is imposed on the
“subsection (k) applicant,” a choice of words that
strongly suggests that notice can be given before the
application has been approved. If Congress had
thought otherwise, :t would have imposed the require-
ment on the “subsection (k) licensee,” Or otherwise
have denoted the completion of the application
process. The Federal Cirewmt nevertheless ruled that
the phrase “licensed under subsection (k)” carried
with it the requirement that the product be licensed
not only before commercial marketing but also before
effective notice of commercial marketing can be
given. This reading places more interpretive weight
on the word “licensed” than it can reasonably bear
when the phrase is considered in the context of the
statute as a whole.
Furthermore, the Federal Circuit’s ruling that
commercial marketing could be enjoined in this case
until 180 days after FDA approval is in tension with
paragraph (1)(9)(B) of the statute. That provision
prescribes the remedy in the event that the bio-
similar applicant elects not to provide notice of
commercial marketing:
17
If a subsection (k) applicant fails to complete an
action required of the subsection (k) applicant
under... paragraph (8)(A), the reference product
sponsor, but not the subsection (k) applicant,
may bring an action under section 2201 of title
28, for a declaration of infringement, validity,
or enforceability of any patent included in the
list described in paragraph (3)(A), including as
provided under paragraph (7).
42 U.S.C. § 262(1)(9)(B). The court correctly recog-
nized that “paragraph (/)(9)(B) specifies the conse-
quence for a subsequent failure to comply with
paragraph (/)(8)(A) after the applicant has complied
with [the information-exchange provisions of] para-
graph (/)(2)(A).” Pet. App. 25a. The court concluded,
however, that the provision “does not apply in this
case, where Sandoz did not comply with paragraph
(1)(2)(A) to begin with.” Jd. The Federal Circuit then
crafted its own extra-statutory remedy — an injunc-
tion preventing commercial marketing until 180 days
after notice has been given — to fill in what it regarded
as a gap in the statute.
There is no gap to fill, however. As Judge Chen
explained in his dissent, “the absence of such a
remedial provision in (/)(9)(B) confirms that Congress
deemed any additional remedy to be unnecessary.”
Id. at 51a (Chen, J., dissenting-in-part). A reference
product sponsor does not need the remedy in
paragraph (/)(9)(B) if the biosimilar applicant does
not comply with paragraph (/)(2) because, if that
happens, other provisions of the law — 42 U.S.C.
§ 262(1)(9)(C) and 35 U.S.C. § 271(e)(2)(C)Gi), to be
precise — “already grant the right to file, immediately,
an unrestricted patent infringement action.” Pet.
App. 51a (Chen, J., dissenting-in-part). The Federal
18
Circuit thus distorted the remedial scheme created
by Congress to fill an imagined gap in the scheme
that does not exist.
2. Imposing a Waiting Period Is at Odds with
the Purpose of the BPCIA Patent Dispute
Resolution Provisions
The purpose of the paragraph (/)(8)(A) notice is to
allow the reference product sponsor to seek relief
under paragraph (/)(8)(B), which provides:
After receiving the notice under subparagraph
(A) and before such date of the first commercial
marketing of such biological product, the refer-
ence product sponsor may seek a preliminary
injunction prohibiting the subsection (k) applicant
from engaging in the commercial manufacture or
sale of such biological product until the court
decides the issue of patent validity, enforcement,
and infringement with respect to any patent that
is—
(i) included in the list provided by the refer-
ence product sponsor under paragraph (3)(A) or
in the list provided by the subsection (k) appli-
cant under paragraph (3)(B); and
(ii) not included, as applicable, on—
(I) the list of patents described in para-
graph (4); or
(II) the lists of patents described in para-
graph (5)(B).
42 U.S.C. § 262(/)(8)(B). That is, the reference
product sponsor may seek to prevent the biosimilar
applicant from launching its biosimilar product until
the court decides the issue of patent validity, enforce-
ment, and infringement with respect to any patent
that was listed as relevant under paragraph (l)(3)
19
but not included in the lists of patents for early
litigation that were agreed upon under paragraph
(1)(4) or selected for litigation by the procedure of
paragraph (/)(5). Paragraph (/)(8)(B) thus addresses
patents that are not already the subject of a lawsuit
between the parties. The provision is necessary
because without it paragraph (/)(9)(A) would prevent
the reference product sponsor from asserting the
patents on the paragraph (/)(3) list that were not
already in litigation.
Very often, there will be no such patents. For
example, in Amgen’s own subsequent litigation with
Apotex concerning a biosimilar version of pegfil-
grastim, all of the patents identified as relevant
under paragraph (/)(3) were already part of the law-
suit. Amgen had no additional patents to add to the
case after receiving notice of commercial marketing.
Under those circumstances, if notice of commercial
marketing is required at all, then requiring Apotex
to wait to give notice of commercial marketing until
after the FDA has approved its biosimilar application
under subsection (k) serves no purpose; the delay in
giving notice extends by 180 days the period of time
in which patients and insurers must pay monopoly
prices to the seller of the branded reference product
even though the seller cannot use that time to resolve
additional patent disputes.
Indeed, Amgen tried and lost its patent case
against Apotex. The district court concluded that
Apotex’s manufacturing process did not infringe
Amgen’s patent. See Findings of Fact and Conclu-
sions of Law at 19-26, Amgen Inc. v. Apotex Inc.,
No. 15-61631-CIV-COHN/SELTZER (S.D. Fla. Sept.
6, 2016) (reproduced in the appendix to Apotex’s
certiorari petition filed in No. 16-332 at 59a-67a);
20
Final Judgment at 1, Amgen Inc. v. Apotex Inc.,
No. 15-61631-CIV-COHN/SELTZER (S.D. Fla. Sept.
6, 2016) (reproduced in the appendix to Apotex’s
certiorari petition filed in No. 16-332 at 71a). Thus,
Amgen exhausted its patent rights, and the “cate-
gorical” 180-day injunction imposed by the Federal
Circuit in Amgen’s case against Apotex will operate
only to keep a non-infringing, cost-saving, FDA-
approved biosimilar product out of the hands of con-
sumers for six months longer than Congress intended.
See Amgen Inc. v. Apotex Inc., 827 F.3d 1052, 1062
(Fed. Cir.), cert. denied, 137 S. Ct. 591 (2016).
Even when there are additional relevant patents to
assert, moreover, the purpose of the notice provision
is more logically fulfilled before the FDA approval of
the subsection (k) application than afterward. The
BPCIA created an artificial act of infringement based
on the filing of the application under subsection (k),
which allows the reference product sponsor to assert
its patents against the biosimilar applicant before
the application has been approved. If, however,
notice of commercial marketing could be given only
after FDA approval, then there would be no need
for the artificial act of infringement that the BPCIA
creates. Instead, the patent owner could bring a
conventional declaratory judgment suit and seek a
preliminary injunction without the need for the early
patent dispute resolution procedures that the BPCIA
makes available.
B. The Federal Circuit’s Ruling Is Incon-
sistent With Other BPCIA Provisions
Congress plainly expected that biosimilar appli-
cants and reference product sponsors would engage
in the information exchange and patent negotiations
21
described in paragraphs (/)(2)-(1)(5) and (/)(7).8 The
Court should therefore evaluate the meaning of the
8 See Biologics and Biosimilars: Balancing Incentives for
Innovation: Hearing Before the Subcomm. on Courts and Com-
petition Policy of the H. Comm. on Judiciary, 111th Cong. 9
(2009) (hereinafter “Biologics and Biosimilars”) (statement of
Rep. Eshoo) (“H.R. 1548 also establishes a simple, streamlined
patent resolution process. This process would take place within
a short window of time, roughly 6 to 8 months after the biosimi-
lar application has been filed with the FDA. It will help ensure
that litigation surrounding relevant patents will be resolved
expeditiously and prior to the launch of the biosimilar product,
providing certainty to the applicant, the reference product
manufacturer, and the public at large.... Once a biosimilar
application is accepted by the FDA, the agency will publish a
notice identifying the reference product and a designated agent
for the biosimilar applicant. After an exchange of information
to identify the relevant patents at issue, the applicant can
decide to challenge any patents’ validity or applicability.”),
available at https://judiciary.house.gov/_files/hearings/printers/
111th/111-73_51014.PDF; id. at 197 (statement of Teresa S.
Rea, President, American Intellectual Property Law Associa-
tion) (“[H.R. 1548] addresses the need for an exchange of infor-
mation concerning the follow-on product to allow a preliminary
infringement analysis. The notice and certification provisions
in H.R. 1548 would limit the patents that may be challenged
to those which the patent holder believes are infringed by the
follow-on product.”); see also Krista H. Carver et al., An Unoffi-
cial Legislative History of the Biologics Price Competition and
Innovation Act of 2009, 65 Food & Drug L.J. 671, 802-06 (2010)
(describing how the patent provisions of H.R. 1548 were in-
corporated into the final legislation), available at https://www.
cov.com/-/media/files/corporate/publications/2010/01/an-unofficial-
legislative-history-of-the-biologics-price-competition-and-innovation-
act-of-2009.pdf; Assessing the Impact of a Safe and Equitable
Biosimilar Policy in the United States: Hearing Before the Sub-
comm. on Health of the H. Comm. on Energy and Commerce,
110th Cong. 116 (2007) (hereinafter “Assessing the Impact”)
(statement of Bruce Downey, Chairman of the Board, Generic
Pharmaceutical Association) (“I think we need to have a provi-
sion that would permit resolution of intellectual property disputes
22
paragraph (/)(8)(A) notice provision against the other
BPCIA provisions that inform Congress’s intent.
The Federal Circuit's ruling that effective notice
of commercial marketing can be given only after
FDA approval of the biosimilar product means that,
whenever notice is required before commercial mar-
keting can begin, the 12-year statutory exclusivity
period will be extended by 180 days. The court
appears not to have fully appreciated this consequence
of its decision. The court stated that “requiring FDA
licensure before notice of commercial marketing
does not necessarily conflict with the twelve-year
exclusivity period of § 262(k)(7)(A).” Pet. App. 22a.
In support of this conclusion, the court reasoned
that, although the rule resulted in an extra 180
days of exclusivity in the present case (in which the
biosimilar application had been filed only after the
expiration of the 12-year exclusivity period), “[t]hat
extra 180 days will not likely be the usual case,
as aBLAs will often be filed during the 12-year exclu-
sivity period for other products.” Jd. This statement
is a non sequitur. It makes no difference whether
the application is filed within the 12-year exclusivity
period or afterwards. If the FDA cannot approve a
biosimilar application before the expiration of the
12-year exclusivity period, and if effective notice of
commercial marketing cannot be given before FDA
in advance of launching the product. ... Many of these products
do not have one or two patents, but 30, 40 patents and there are
disagreements about whether we infringe or if they are valid,
and there needs to be a mechanism that allows those issues to
be decided before there is a launch of the product that allows
both innovator and generic companies to manage the risks that
they confront ... .”), available at https://archive.org/details/gov.
gpo.fdsys. CHRG-110hhrg40500.
23
approval of the biosimilar application, then, in any
case in which notice is required, the applicant will
need to wait an extra 180 days after the 12-year
exclusivity period has expired before commercial
marketing can begin. The court thus erred in creat-
ing this “extra-statutory exclusivity windfali.” Id. at
44a (Chen, J., dissenting-in-part).
Moreover, the BPCIA does not require a biosimilar
applicant to give notice of commercial marketing if it
made the disclosures set forth in paragraph (/)(2)(A)
and fully engaged in the subsequent first-stage patent
resolution framework. Under such circumstances, a
notice of commercial marketing serves no purpose.
Amgen’s case against Apotex illustrates the severe
consequences of the Federal Circuit’s erroneous
interpretation. Unlike Sandoz here, biosimilar
applicant Apotex in that case chose to comply with
the information exchange provisions of paragraphs
(1)(2)-(1)(5). Thus, Apotex provided reference product
sponsor Amgen with all of the information needed to
litigate the relevant patents, which concluded with
a judgment of non-infringement. See supra pp. 8-9,
19-20. Thus, in that case, Amgen has no more patent
rights to assert when the FDA grants authorization
for Apotex to commence commercial marketing its bio-
similar product, but the bar imposed by the Federal
Circuit means the American people will nevertheless
have to wait an additional 180-days after FDA
approval for Apotex’s pegfilgrastim product to enter
the market.”
% The Federal Circuit has suggested that “the FDA may ...
issue a license before the 11.5-year mark and deem the license
to take effect on the 12-year date.” Apotex, 827 F.3d at 1062.
But such speculation finds no basis in fact: there is currently no
FDA policy for licensing applications prior to the expiration of
24
if. THE FEDERAL CIRCUIT'S DECISION CAN-
NOT BE RECONCILED WITH THE BPCIA’S
LEGISLATIVE HISTORY AND PURPOSES
The Federal Circuit read the BPCIA as having the
purpose of preserving the market share of reference
product sponsors. In fact, the statute was intended
to increase the availability of biosimilar products by
balancing the interests of reference product sponsors
and biosimilar applicants and, more broadly, to balance
the national interests in innovation and cost compe-
tition. Requiring a notice of commercial marketing
in all cases and extending the 12-year exclusivity
window upends Congress’s intended balance.
A. The BPCIA Is Designed To Increase Price
Competition From Biosimilar Market Entry
In a recent submission to the FDA, the FTC recog-
nized that “[bjiosimilar competition is important
because biologics are among the most promising
medicines for the treatment of a variety of medical
conditions for which patients have no other alterna-
tive.” FTC Comment at 2-3. The FTC further noted
that “the relatively high prices of biologics, combined
with patient cost-sharing requirements, can limit
patient access to biologics. Price competition from
biosimilars would likely lead to reduced prices for,
and thus greater patient access to, biologics and
biosimilars.” J/d. at 3 (footnote omitted).
The FTC has predicted that, with expected dis-
counts of up to 30% of the brand biologic product
the exclusivity period. See FDA, Memorandum re: Exclusivity
Expiry for Neupogen (filgrastim) BLA 103353 (June 26, 2014),
available at http://www.accessdata.fda.gov/drugsatfda_docs/
nda/2015/1255530rig 1s000AdminCorres.pdf.
25
price, consumers stand to benefit significantly from
the new market competition between lower-cost but
similarly effective biosimilars. Jd. at 5. Industry
estimates suggest this competition could save con-
sumers, including the federal government, as much
as $250 billion by 2024. See Miller, Customer
Perspective on Biosimilars at 7.
Congress recognized the benefits of cheaper, more
widely available generic drugs in the markets for
traditional small-molecule chemical medicines three
decades ago. With the Drug Price Competition and
Patent Term Restoration Act of 1984, Pub. L. No.
98-417, 98 Stat. 1585, known more commonly as the
Hatch-Waxman Act, Congress crafted a framework
with what this Court has called a “procompetitive
thrust” designed both to preserve incentives for brand-
named innovation and to speed the introduction of
low-cost generic drugs to market. FTC v. Actavis,
Inc., 133 S. Ct. 2223, 2234 (2013); see Caraco Pharm.
Labs., Ltd. v. Novo Nordisk A/S, 132 8S. Ct. 1670,
1676 (2012); Hli Lilly & Co. v. Medtronic, Inc., 496
U.S. 661, 676 (1990). The resulting surge of cheaper
generic products produced significant savings for
consumers. According to the Government Account-
ability Office (“GAO”), the total savings that accrued
to the U.S. health care system from substituting
small-molecule generic chemical drugs for their brand-
name counterparts from 1999 to 2010 amounted
to more than $1 trillion. See Letter from John E.
Dicken, Health Care Dir., GAO, to Hon. Orrin G.
Hatch, Ranking Member, Senate Comm. on Finance,
at 4, 10 (Jan. 31, 2012).!°
10 Available at http://www.gao.gov/asscts/590/588064. pdf.
26
But the abbreviated approval pathway under the
Hatch-Waxman Act applied only to biovequivalent
drugs (i.e., chemical, small-molecule drugs) regulated
under the Federal Food, Drug, and Cosmetic Act.
In contrast, biosimilar drugs (i.e., biologic, large-
molecule drugs) regulated under the Public Health
Service Act still required full, individual FDA testing
and approval. That asymmetry rendered biologics
broadly immune to the downward pricing pressures
that affected traditional drugs. See Joanna M. Shep-
herd, Biologic Drugs, Biosimilars, and Barriers to
Entry, 25 Health Matrix 139, 144-46 (2015).'! Thus,
the BPCIA was intended to update the American
drug-approval system in keeping with global trends
toward increased use of biosimilars.
Although the BPCIA is distinct from the Hatch-
Waxman Act and there are significant differences
between the two statutes, both share the same basic
theoretical framework and use similar procedures to
attain similar goals. Notably, both statutes aim to
improve access to high-cost medications for popula-
tions in need while preserving the incentives to
innovate new treatments and facilitating the timely
identification and resolution of patent disputes. But
the Federal Circuit’s decision, which essentially
affords reference product sponsors an automatic
180-day injunction barring sales of biosimilar drugs
whenever notice of commercial marketing is required,
frustrates the purpose of the statute and endangers
the calculated tradeoff between price-lowering com-
petition and incentive for innovation. Biosimilars
already face significant barriers to market entry that
are much more difficult to overcome than those
"l Available at http://scholarlycommons.law.case.edu/cgi/view
content.cgi?article=1021&context=healthmatrix.
27
typically confronting small-molecule generic chemical!
drugs. These barriers include difficulties associated
with manufacturing, marketing, storage, distribution,
delivery devices, immunogenicity (i.e., adverse reac-
tions in a patient due to live organisms), and special
requirements for pharmacovigilance (i.e., post-sale
monitoring). See Erwin A. Blackstone & Joseph P.
Fuhr, Jr., The Economics of Biosimilars, 6 Am.
Health & Drug Benefits 469, 471 (Sept./Oct. 2013). !?
An unnecessarily lengthy, unintended, and unwar-
ranted extension of the exclusivity period will impede
access to biosimilars and add hundreds of billions of
dollars in costs to consumers, employers, and publicly
funded programs like Medicare and Medicaid.
B. Congress Determined That A 12-Year Exclu-
sivity Period Struck The Right Balance
Between The Competing Interests
The 12-year window was a carefully negotiated
compromise — a “middle ground between innovator
and generic interests.” Carver, An Unofficial Legis-
lative History, 65 Food & Drug L.J. at 817. Defining
an exclusivity period that would best promote both
innovation and cost-saving generic competition was
a key sticking point across years of legislative nego-
tiations. See id. at 724-25 (noting that exclusivity
proved early on to be a “troublesome” point of dis-
agreement). In fact, even during final negotiations
over the bill, proposals under consideration included
exclusivity periods as long as 14 years and as short
as five to seven. See id. An unnecessarily lengthy,
unintended, and unwarranted extension of the exclu-
sivity period will impede access to biosimilars and add
12 Available at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC
4031732/pdf/ahdb-06-469. pdf.
28
hundreds of billions of dollars in costs to consumers,
employers, and publicly funded programs like Medi-
care and Medicaid.
Members of Congress weighed the competing inter-
ests of sponsors and applicants and of innovation and
cost competition. They emphasized the need to strike
a “balance” that would “allow generic companies to
do what they do best — bring low-cost versions to
the market.” Senate Comm. on Health, Education,
Labor & Pensions, Press Release, Lawmakers Praise
Committee Passage of Biologics Legislation (June 27,
2007) (statement of Sen. Hatch).'* Their aim was
“to lower prices and extend the availability of ...
treatments to more who need them.” Jd. (statement
of Sen. Clinton). The congressional record is full of
testimony from lawmakers of both parties and from
others who repeatedly emphasized the importance of
achieving cost savings to improve patient access.
For example, in a hearing before a Subcommittee
of the House Committee on Energy and Commerce,
Rep. Frank Pallone, Jr. called on Congress to
“produce measurable savings.” Assessing the Impact
at 2. Representative Nathan Deal concurred, offer-
ing that Congress had before it “an opportunity to
provide patients access to a lower cost alternative for
their needed medications.” Jd. at 5. Likewise, the
Vice President of Human Services at Caterpillar,
Inc., tolu the Senate Committee on Health, Education,
Labor, and Pensions that biologic drugs accounted for
an outsized and increasingly unaffordable slice of the
company’s health care expenses, describing the rising
costs as “simply not sustainable.” Follow-On Biologics:
13 Available at http://www.help.senate.gov/ranking/newsroom/
press/lawmakers-praise-committee-passage-of-biologics-legislation.
29
Hearing Before the S. Comm. on Health, Education,
Labor, and Pensions, 110th Cong. 11 (2007).'4 In the
same hearing, Sen. Charles Schumer acknowledged
the national scope of the problem and put the poten-
tial for cost savings in perspective: “Treating [a]
patient with a biologic drug can cust $100,000 a year,
total cost to the nation, $32 billion. If introducing
competition in this market lowers the price of bio-
logics even by only 10 to 25 percent, the savings are
astronomical.” Jd. at 6.'°
14 Available at https://www.gpo.gov/fdsys/pkg/CHRG-110shrg
34053/pdf/CHRG- 110shrg34053. pdf.
15 See also Safe and Affordable Biotech Drugs: The Need for
a Generic Pathway: Hearing Before the H. Comm. on Oversight
and Gov't Reform, 110th Cong. 2-3 (2007) (statement of Rep.
Waxman) (“A new path for FDA to approve generic biologicals
will save patients billions in the future and will improve access
to treatments and cures .... For the sake of patients, their
families, public and private health insurance, and taxpayers, we
must find a way to introduce competition to this market. When
a patent expires, we owe it to consumers to find a way through
competition to lower prices and still deliver a safe and effective
product.”), available at https://www.gpo.gov/fdsys/pkg/CHRG-
1 10hhrg40874/pdf/CHRG- 1 10hhrg40874.pdf; Assessing the Impact
at 7 (statement of Rep. Ferguson) (noting importance of both
patient safety and cost savings and, in particular, pointing to
expectation that “follow-on biologics will save about $3.6 billion
over 10 years”); id. at 9 (statement of Rep. Blackburn) (“[w]hen
the healthcare costs are skyrocketing, and we hear this every
time we come in for a committee hearing, we know that people
are looking for new options for lowering drug costs”); id. at 10
(statement of Rep. Capps) (“Quite frankly, with no competition
on the markets, biologics remain out of economic reach for
most of the people who need them. [ hope to hear today from
witnesses on how we can balance innovation with patients’
needs for cheaper, more accessible drugs.”); id. at 11 (statement
of Rep. Solis) (“The manufacture of biologic medicines has the
potential to save millions of lives, and biologics account for
approximately $30 billion in sales. However, the cost of devel-
30
Ultimately, Congress provided for a 12-year exclu-
sivity period that was intended to be commensurate
in duration and scope to the patent protection typi-
cally afforded to innovative drugs.!® And, like patent
protections, the 12-year exclusivity period is not
open-ended. Indeed, the congressional sponsor of key
patent resolution provisions underscored the point:
“In order to protect the rights of all parties and
ensure that all patent disputes involving a biosimilar
are resolved before, and I emphasif[ze] the word
before, the expiration of the data-exclusivity period,
H.R. 1548 also establishes a simple, streamlined
patent resolution process.” Biologics and Biosimilars
oping and manufacturing these biologics are extremely high;
and the average cost of a 1-day supply of biologic medicines is
$45. As a result, the cost for patients, insurers, private compa-
nies, and Government payers are quickly growing. And I am
very concerned about the high cost of these medicines, especially
the cost of those treatments for many who lack healthcare
insurance or who are underinsured.”); id. at 12 (statement of
Rep. Wilson) (“I commend the chairman and members of his
committee for their determination to tackle this issue to see
whether there is something we can do so that we create a
pathway for generics that might be at less cost for a new class
and a new kind of therapy in the area of medicine.”).
16 See Biologics and Biosimilars at 8 (statement of Rep.
Eshoo) (“[T]o preserve the existing incentives for investment
and innovation, the Pathway for Biosimilars Act provides a
data-exclusivity period equivalent to patent protections for
small molecules. The Congressional Budget Office has deter-
mined that 11.5 years is the average length of time that drugs
are marketed under patent. In other words, innovative drugs
and biologics typically stay on the market for about 12 years
before facing competition. My legislation maintains this level of
protection for biologics.”).
31
at 9 (statement of Rep. Eshoo) (emphasis added);!’
seealso Assessing the Impact at 116 (statement
of Bruce Downey, Chairman of the Board, Generic
Pharmaceutical Association) (“[T]here needs to be a
mechanism that allows [patent] issues to be decided
before there is a launch of the product that allows
both innovator and generic companies to manage the
risks that they confront and ... also allows for the
earliest lawful entry of the product and doesn’t allow
the litigation post-exclusivity period, post-patent to
delay the launch of a product.”) (emphasis added).
Any assertion to the contrary undermines Congress’s
explicit effort to make cost-saving biosimilars avail-
able at the earliest possible date consistent with
continuing innovation.
C. Notice Of Commercial Marketing Is Not
Necessary In All Cases
Requiring a notice of commercial marketing in all
cases cannot be justified by reference to Congress’s
intent to promote the introduction of biosimilar
products, including by facilitating the resolution of
patent disputes arising between sponsors and bio-
similar appiicants.
The Federal Circuit’s decision erroneously requires
all biosimilar applicants to wait an additional 180
days before undertaking to commercially market
an aBLA product, notwithstanding their voluntary
participation in the statutory information exchange
and patent negotiation procedures. But where, as
in Apotex’s case, an applicant has made available to
17 The patent resolution provisions of H.R. 1548, 111th Cong.
(2009), were substantially incorporated into the BPCIA’s final
text. See Carver, An Unofficial Legislative History, 65 Food &
Drug L.J. at 802-06 (describing how the patent provisions of
H.R. 1548 were incorporated into the final legislation).
32
the sponsor the information outlined in paragraph
(1)(2)(A), the reference product sponsor has all the
information needed to enforce its intellectual property
rights, including “a copy of the application” and
“such other information that describes the process or
processes used to manufacture the biological product
that is the subject of such application.” As such,
mandating the notice of commercial marketing will
in most, if not all, cases in which an applicant has
provided the paragraph (/)(2)(A) disclosures, convey
a windfall upon sponsors without providing any
countervailing public benefit. In Amgen’s case
against Apotex, for example, not only did Apotex
already provide Amgen with all the information
Amgen needed to determine whether to litigate its
intellectual property rights, but Amgen in fact already
had undertaken to litigate all relevant patents,
which Apotex’s product was found not to infringe.
The 180-day injunction therefore serves no purpose
other than to preserve Amgen’s exclusive market for
an additional six months.
CONCLUSION
The judgment of the court of appeals should be
reversed with respect to the questions presented in
the petition by Sandoz and affirmed with respect to
the question presented in the cross-petition by
Amgen.
KERRY B. MCTIGUE
W. BLAKE COBLENTZ
BARRY P. GOLOB
AARON S. LUKAS
STEPHEN A. MILLER
COZEN O’CONNOR
1200 19th Street, N.W.
Washington, D.C. 20036
(202) 912-4800
February 17, 2017
33
Respectfully submitted,
DAVID C. FREDERICK
Counsel of Record
MILES J. SWEET
AMELIA I.P. FRENKEL
KELLOGG, HUBER, HANSEN,
TODD, EVANS & FIGEL,
P.L.L.C.
1615 M Street, N.W.
Suite 400
Washington, D.C. 20036
(202) 326-7900
(dfrederick@khhte.com)
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.