December 8, 2014

BPCIA

BPCIA = Biologics Price Competition & Innovation Act Before Plaintiffs Can Invoke (jurisdiction they must file an) Application

No standing for declaratory judgment before biosimilar application

With the FDA’s recent acceptance of its first biosimilar application, pharmaceutical industry experts are on tenterhooks waiting to see how this new business space will develop. The Federal Circuit brought some clarity (although not as much as some might have wished) with its 5 December 2014 decision in Sandoz Inc. v. Amgen Inc.

Sandoz plans to market a biosimilar version of entanercept (Amgen’s Enbrel®). Sandoz is expanding its European production facility where the biosimilar entanercept will be manufactured, and is currently conducting trials (outside the U.S.) to generate the data necessary to support its biosimilar application. Sandoz has not, however, filed an actual application for this particular biosimilar. Nevertheless, Sandoz filed suit in the Northern District of California seeking a declaratory judgment of non-infringement and invalidity/unenforceability of US 8,063,182 and 8,163,522—both of which are asserted to cover Enbrel®.

Amgen defended against the suit on two grounds: (1) because no biosimilar application has yet been filed, Sandoz’s alleged worry of an infringement suit is too speculative at this point to provide the court with subject-matter jurisdiction; and (2) Sandoz is improperly attempting to avoid the orderly procedures and mechanisms for exchange of information between a patent owner and a biosimilar applicant set forth in the Biologics Price Competition & Innovation Act (BPCIA, 42 U.S.C. §262(l)). The district court held for Amgen on both grounds. Sandoz Inc. v. Amgen Inc., No. C-13-2904 MMC, 2013 U.S. Dist. LEXIS 161233 (N.D. Cal. Nov. 12, 2013).

The Federal Circuit agreed with the district court that Sandoz’s declaratory judgment suit will not be ripe for adjudication until Sandoz files its biosimilar application. Sandoz’s current experiments cannot support jurisdiction because all parties agree that these experiments are not infringement under 35 U.S.C. §271(e)(1), which provides “safe harbor” for activities undertaken to “develop[] information for submission under any federal law regulating the manufacture, use, or distribution of drugs.” Merck KGaA v. Integra Lifesciences, 545 U.S. 193, 206 (2005). Meanwhile, Sandoz’s capital investments in production facilities outside the U.S. are also too distantly removed from any actual infringement of U.S. patents to provide subject-matter jurisdiction.

Because this would have been a case of first impression on 42 U.S.C. §262(l), many observers were hoping for some guidance from the Federal Circuit about how these procedures will work in practice. Such observers will have to keep waiting. The Federal Circuit declined to reach the §262(l) issues because there is no subject-matter jurisdiction to support the case in the first place. It remains for another day to observe the workings of §262(l) in action.