August 8, 2018

Competitor Influence on the Conduct of the Patent Dance and Litigation

By Elisabeth A. Koral, Principal

Changes in the competitive landscape of the biologics market can occur in a variety of ways.  For example, competitor settlements can be reached and/or a competitor can be granted interchangeability status.  The bottom line is that more competitors can make a biologics market less attractive to new entrants.  Competitor dynamics also influence whether a biosimilar manufacturer decides to engage in the patent dance or launch at risk.

As more litigation arises under the BPCIA, settlement agreements have inevitably followed.  In 2017 and 2018, for example, three competitors in the Humira biosimilar market — Amgen, Samsung Bioepis, and Mylan — reached settlement with AbbVie. In this article, we discuss litigation considerations for a biosimilar manufacturer when a competitor settlement has been reached.

Consider a hypothetical where a biosimilar competitor has reached a settlement agreement with the reference product owner for U.S. market entry as of November 1, 2022.  A biosimilar manufacturer wishing to enter the U.S. market may alter its approach to potential biosimilar litigation based on whether the biosimilar manufacturer wants to enter the U.S. market either:

  1. Before November 1, 2022; or
  2. By at least 2022.

Under scenario (1), since November 1, 2022 is less than 5 years away, a faster approach may be to pursue the (9)(C) path instead of engaging in the patent dance. The biosimilar manufacturer could provide the reference product owner with a notice of commercial marketing and launch at risk. However, given the reference product owner’s previous settlement, it is likely that more pressure, for example, a stronger non-infringement position, would have to be applied to the reference product owner to force a settlement for market entry before November 1, 2022.  In addition, it should be assumed that the biosimilar competitor’s settlement has a most-favored nations clause that means the reference product owner cannot grant anyone market entry that is earlier than the biosimilar competitor.

Therefore, prior to launching at risk, an analysis of the strength of the biosimilar manufacturer’s non-infringement positions and invalidity defenses most likely for all of the reference product owner’s identified patents (e.g., patents identified during litigation with the biosimilar competitor) is necessary.  IPRs also could be pursued depending on the analysis of the reference product owner’s patents and the number of possible patents.  If there is a large number of possible patents, though, IPRs may be cost-prohibitive compared to litigation because each challenged patent requires a separate, and substantial ($30,000+) filing fee just to submit the IPR petition.

Under scenario (2), the biosimilar manufacturer may proceed with the more predictable and straightforward patent dance with the goal of reaching a settlement for market entry by at least 2022.