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You Can Dance If You Want To: Sandoz v. Amgen

In borrowing a page from the '80s band "Men Without Hats," on June 12, 2017, the U.S. Supreme Court brought greater certainty for both biosimilar applicants and originator companies.  In Sandoz Inc. v. Amgen Inc., the Supreme Court ruled on two key issues relating to the “patent dance” under the Biologics Price Competition and Innovation Act (BPCIA). First, the Court held that where a biosimilar applicant declines to provide its application and manufacturing information, the patent owner’s exclusive remedy under federal law is to bring a declaratory judgment action for patent infringement. The Court left open for now whether a patent owner may have additional remedies under state law. Second, the Court held that a biosimilar applicant may provide its mandatory 180-day notice of commercial marketing at any time and need not wait until FDA has approved its application.

As Sandoz did in the present case, the decision means that a biosimilar applicant can elect not to provide the reference product sponsor with access to its application and manufacturing information. And, as a consequence, this also provides the option to not participate in the resulting exchange of patent information provided for under the BPCIA—commonly referred to as the “patent dance.” The sole remedy available to the reference product sponsor under federal law is to file a declaratory judgment action for patent infringement.

Whether future biosimilar applicants will elect to participate in the patent dance will likely depend on whether they see a strategic benefit to the early exchange of product and patent information in a given case. A recent report from The IMS Institute for Healthcare Informatics estimates the global pharmaceutical biologics market at over $200B, with biosimilars representing 2-4% of that market.[1] With the Supreme Court's ruling it is highly likely that biosimilar applicants will not provide highly confidential information to their closest competitors.

The most consequential aspect of today’s decision is the Court’s conclusion that a biosimilar applicant may give its 180-day notice of intent to commercially market before it receives FDA approval. This means that, absent a court injunction, a biosimilar applicant will be free to market its product immediately upon FDA approval so long as it provided its notice at least 180 days prior to FDA approval.

While the Court gave some clarity on the issues of effective notice of commercial marketing and participation with the patent dance, it is important to take note that lawmakers are currently undertaking efforts to overhaul the Affordable Care Act. The decision begs the question of whether lawmakers will attempt to amend portions of the BPCIA to override one or both of the Court’s holdings.


[1] https://www.imshealth.com

© 2017 Sterne Kessler

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About this Author

Paul Calvo, Intellectual Property Attorney, Sterne Kessler Law Firm
Ph.D. Director

Dr. Calvo, a director in the Biotechnology/Chemical Group, represents a diverse group of U.S. and international companies innovating in the biotechnology and pharmaceuticals industries.  He provides counsel with regard to global patent portfolio strategy, licensing, patent validity, infringement, and design around strategies.  Dr. Calvo is experienced in U.S. and international patent procurement and enforcement matters (particularly patent prosecution and oppositions), FDA/ANDA practice, technology transfer, invalidity, noninfringement, freedom-to-operate and patentability opinions, and...

202-772-8846
Timothy J. Shea, Jr., Ph.D., Biotech Patent Attorney, Sterne Kessler, Law firm
Director

Mr. Shea is a director in the Biotechnology/Chemical Group where he specializes in advising biotech and chemical companies and research institutions on complex legal issues relating to the protection, enforcement and transfer of their intellectual property.  He practices primarily in the fields of immunology, molecular biology, genomics, proteomics, medical diagnostics, biotherapeutics, and drug delivery.  He has extensive experience advising clients on the creation and management of strategic patent portfolios, freedom-to-operate and patentability issues, complex prosecution strategies, validity and infringement issues, and due diligence investigations in connection with acquisitions and investments. 

A significant portion of Mr. Shea's practice involves counseling emerging companies on strategies for creating, protecting and leveraging their IP assets to grow their businesses. He frequently advises clients on all aspects of technology transfer, including the drafting and negotiation of patent and technology license agreements, material transfer agreements, sponsored research agreements, confidentiality and nondisclosure agreements, joint developments agreements, etc.  Mr.  Shea is currently Vice-Chair of the Life Sciences Committee for Licensing Executives Society International, an international network of IP licensing professionals.

202-772-8679
Director

Mr. Ainsworth is a Director in the Litigation Group. His practice is focused on representing patent owners in enforcement proceedings and in representing pharmaceutical industry clients in patent litigation arising under the Hatch-Waxman Act. He has represented clients in patent cases in federal courts and before the United States International Trade Commission. He also served as counsel in numerous inter partes review proceedings on behalf of clients involved in parallel district court and USPTO proceedings. Among Mr. Ainsworth's clients include industry leaders in the...

202.772.8783