Supreme Court Issues First Interpretation of the BPCIA
The Supreme Court yesterday issued its first opinion interpreting the Biologics Price Competition and Innovation Act (“the BPCIA”), the statute which created a pathway for the approval of abbreviated applications to market biological products. The Court’s unanimous opinion contained two holdings. First, the Court determined that an injunction under federal law is not available to enforce the requirement set forth in 42 U.S.C. § 262(l)(2)(A) that a biosimilar applicant provide a reference product sponsor with a copy of its biosimilar application and manufacturing information. Second, the Court determined that a biosimilar applicant need not wait until its product is licensed by FDA to provide the reference product sponsor with notice of commercial marketing under 42 U.S.C. § 262(l)(8)(A).
On July 7, 2014, FDA notified Sandoz Inc. (“Sandoz”) that Sandoz’s biosimilar application referencing Neupogen® (filgrastim)—a blockbuster biologic marketed by Amgen Inc. (“Amgen”)—had been accepted for review. On July 8, 2014, Sandoz notified Amgen that its biosimilar application had been accepted for review and that it intended to market its biosimilar product immediately upon FDA approval. Sandoz did not provide Amgen with a copy of its biosimilar application and manufacturing information on July 8, 2014, and it later represented to Amgen that it did not intend to provide the same to Amgen.
In October 2014, Amgen sued Sandoz for patent infringement. Amgen also asserted two claims under California’s unfair competition law. Amgen sought an injunction to require Sandoz to provide it with a copy of Sandoz’s biosimilar application and manufacturing information as stated in 42 U.S.C. § 262(l)(2).1 Amgen also sought an injunction to require Sandoz to provide notice of commercial marketing only after Sandoz’s product became licensed by FDA.2 Sandoz counterclaimed for declaratory judgments that the asserted patents were invalid and not infringed and that it had not violated the provisions of the BPCIA.
The United States District Court for the Northern District of California granted partial judgment on the pleadings to Sandoz on its BPCIA-related counterclaims and dismissed Amgen’s state law claims with prejudice. Amgen Inc. v. Sandoz Inc., No. 14-cv-04741, 2015 U.S. Dist. LEXIS 34537, at *33–35 (N.D. Cal. Mar. 19, 2015). A divided United States Court of Appeals for the Federal Circuit affirmed in part, vacated in part, and remanded. Amgen Inc. v. Sandoz Inc., 794 F.3d 1347, 1351 (Fed. Cir. 2015). The Federal Circuit: (1) affirmed the district court’s dismissal of Amgen’s state law claims; (2) affirmed the district court’s determination that a biosimilar applicant does not have to comply with the disclosure requirement of 42 U.S.C. § 262(l)(2)(A); and (3) reversed the district court’s conclusion that notice of commercial marketing may be given prior to licensure of a biosimilar product. Id. at 1354–61.
The Supreme Court vacated in part and reversed in part the judgment of the Federal Circuit. Sandoz Inc. v. Amgen Inc., Nos. 15-1039, 15-1195, slip op. at 18 (U.S. June 12, 2017) (“Slip Op.”). The cases were remanded to determine whether California law would treat noncompliance with the BPCIA as “unlawful.” Id.
On the first issue, the Supreme Court held that federal law does not provide an injunction to enforce the BPCIA’s requirement for the biosimilar applicant to provide the reference product sponsor with its application and manufacturing information. Here, the Court generally agreed with the Federal Circuit, “though for slightly different reasons.” Slip Op. at 10. The Supreme Court explained that the submission of a biosimilar application is an artificial act of infringement under 35 U.S.C. § 271(e)(2)(C), and the only remedies available for such infringement are provided at 35 U.S.C. § 271(e)(4). Id. at 12. A biosimilar applicant’s failure to provide the disclosure under 42 U.S.C. §262(l)(2)(A) is not an act of infringement, and 35 U.S.C. § 271(e)(4) does not provide a remedy for that failure. Id. Rather, 42 U.S.C. § 262(l)(9)(C) provides the remedy for a biosimilar applicant’s failure to disclose its application and manufacturing information to the sponsor—that is, the ability of the reference product sponsor alone to immediately bring an action on any patent that claims the biological product or its use. Id. And the declaratory judgment remedy provided in 42 U.S.C. § 262(l)(9)(C) “excludes all other factual remedies, including injunctive relief.” Id. The Supreme Court concluded that “[t]he presence of [42 U.S.C.] § 262(l)(9)(C), coupled with the absence of any other textually specified remedies, indicates that Congress did not intend [reference product] sponsors to have access to injunctive relief, at least as a matter of federal law, to enforce the disclosure requirement.” Id. at 13.
The Court also explained that statutory context confirmed its interpretation. Slip Op. at 13. The BPCIA provides for injunctive relief where there is a violation or threatened violation of the rules governing the confidentiality of information disclosed under 42 U.S.C. § 262(l). Id. (citing 42 U.S.C. § 262(l)(1)(H)). Thus, in the Court’s view, Congress acted intentionally when it provided an injunctive remedy for breach of confidentiality requirements but did not provide the same for a breach of the disclosure requirement of 42 U.S.C. § 262(l)(2)(A). Id.
On the second issue, the Supreme Court concluded that a biosimilar applicant may provide notice of commercial marketing either before or after receiving FDA approval based on the plain language of the statute. Slip Op. at 15–16. 42 U.S.C. § 262(l)(8)(A) states that 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).” The Court reasoned that the phrase “of the biological product licensed under subsection (k)” modifies “commercial marketing” and not “notice.” Id. at 16. The Court explained that the use of the word “licensed” in the statute “reflects that fact that, on the date of first commercial marketing,’ the product must be ‘licensed.’” Id.
The Court also explained that statutory context confirmed its interpretation. Slip Op. at 16. 42 U.S.C. § 262(l)(8)(A) contains only one timing requirement, i.e., the biosimilar applicant must provide notice at least 180 days prior to marketing its biosimilar. Id. This stands in contrast to 42 U.S.C. § 262(l)(8)(B), which imposes two timings requirements: “After receiving 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.” Id. Thus, the court reasoned, “‘[h]ad Congress intended to’ impose two timing requirements in § 262(l)(8)(A), ‘it presumably would have done so expressly as it did in the immediately following’ subparagraph.” Id. (quoting Russello v. United States, 464 U.S. 16, 23 (1983)).
Justice Breyer joined the Court’s opinion, but he wrote separately to note the fact that the FDA “may well have authority to depart from, or to modify, [the Court’s] interpretation” if it “determines that a different interpretation would better serve the statute’s objectives.” Slip Op. at 1 (Breyer, J., concurring).