Supreme Court Permits Biosimilar Drugs to Be Marketed Sooner

By Jacob C. Jones and David G. Barker

On June 12, 2017, in Sandoz Inc. v. Amgen Inc., the United States Supreme Court unanimously held that a drug manufacturer may give a required 180-day notice of its intent to market a biosimilar drug before receiving FDA approval. This means that, in some circumstances, manufacturers can begin marketing biosimilars immediately after FDA approval.

The Biologics Price Competition and Innovation Act of 2009 (BPCIA) required Sandoz to give Amgen notice 180 days before selling its biologic Zarxio, an FDA approved biosimilar drug that relied on the prior approval of Amgen’s Neupogen.  Sandoz notified Amgen before it received FDA approval.  The Court rejected Amgen’s argument that the 180-day notice period must begin after approval, which would have effectively extended Neupogen’s exclusivity by six months.

Biosimilars are biologics, a kind of drug regulated by the FDA and specifically addressed by the BPCIA.  Biologics are manufactured in specially-engineered biological systems, such as bacteria or yeast.  They can be marketed in the United States only if approved by the FDA, either as a “new biologic” that is proven to be “safe, pure, and potent,” or as a “biosimilar” proven to be “highly similar” to a previously-approved biologic, among other requirements.  The approval process for new biologics is much more expensive, but new biologics enjoy a 12-year period free of competition from biosimilars, even without any patent protection.

Nevertheless, patent disputes abound under the BPCIA scheme that authorizes the less-expensive biosimilar practice of piggybacking on a new biologic developed by a competitor.  The BPCIA requires notice and information-exchange designed to accelerate patent infringement and validity determinations in order to remove the cloud of potential litigation before a company like Sandoz markets its biosimilar.

In this case, Sandoz notified Amgen of its intent to market Zarxio, but Sandoz did not provide Amgen with additional application and manufacturing information for Zarxio, as required by the BPCIA. The Court held that federal law provides no further remedy for Sandoz’s failure to disclose the additional information, but the district court will determine, on remand, whether there is a state-law remedy that is not preempted by the BPCIA.

In a concurring opinion, Justice Breyer suggested that the FDA may have authority to reach a different interpretation of the BPCIA’s notice requirements.  Thus, it is conceivable that the FDA may one day adopt Amgen’s version of the notice requirement—no notice until FDA approval—extending a biologic’s monopoly by another six months.

But for now, biosimilar manufacturers may consider giving notice, as Sandoz did, before FDA approval, such as when the FDA accepts a biosimilar application for review.  By the time the application is approved, the 180-day notice period will likely have been satisfied and—barring any patent litigation and assuming the 12-year exclusivity period has expired—the biosimilar manufacturer can proceed directly to market.

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