On April 26, 2017, the Supreme Court heard oral arguments in Amgen v. Sandoz, where the parties have asked the Court to interpret two of the biosimilar patent dance provisions of the Biologics Price Competition and Innovation Act (BPCIA). While it is never wise to predict how the Justices will rule based on the questions and comments at oral hearing, I would not be surprised if they uphold the Federal Circuit’s interpretation of this complicated statute. 

The Questions Presented

As summarized in this article, there are two issues of statutory construction before the Court:

1. Can the notice of commercial marketing required by 42 U.S.C. § 262(l)(8)(A) be given before the FDA has approved the biosimilar product? (The Federal Circuit said no; Sandoz urges yes)

2. Do biosimilar applicants have to share their biosimilar application and other information in accordance with 42 U.S.C. § 262(l)(2)(A)? (The Federal Circuit said no; Amgen urges yes)

Although the Solicitor General of the United States filed an amicus brief that sided with Sandoz on both issues, the Justices seemed inclined to affirm the Federal Circuit on both issues.

What Would You “Notice” Prior To Approval?

The Justices who commented on this issue seemed to agree with the Federal Circuit that the notice of commercial marketing required by 42 U.S.C. § 262(l)(8)(A) cannot be given until the FDA has approved the biosimilar product—otherwise what would you be giving notice of?

Justice Breyer: What does this notice say? And what it says is that you have to provide … notice of … first commercial marketing of the biological product licensed. …. Now, how could you do that if you don’t know what the product licensed is?

Once this notice has been given, the Reference Product Sponsor has an opportunity to assert any remaining patents. Thus, the Justices asked how the Reference Product Sponsor would know which patents could be asserted if the biosimilar product had not yet been approved. Sandoz’s attorney argued that the very nature of a biosimilar product would provide such information:

Ms. Maynard:  By definition, a biosimilar is highly similar to the reference-product sponsor’s product. So a reference-product sponsor would have good-faith basis in that case to bring suit on any patent that covers its own product, or any patent that covers a use of its own product.

Chief Justice Roberts wasn’t entirely convinced:

CHIEF JUSTICE ROBERTS: But it doesn’t know the specifics of the biosimilar. I mean, by definition, the biosimilar is similar; it’s not identical. And whether or not it infringes might have something to do with the ways in which it is different.

On the other hand, Justice Kagan pointed out that the “patent dance” litigation is based on the biosimilar application, and so would suffer from the same uncertainty vis-a-vis any changes embodied in the approved product:

JUSTICE KAGAN: But isn’t that true of a lot of what this Act contemplates? I mean, all the round 1 litigation can occur before the approval is given.

Should Reference Product Sponsors Have 12.5 Years Exclusivity?

None of the Justices seemed comfortable with the consequence of requiring approval prior to notice, i.e., effectively providing the original biologic product with an additional 180 days of market exclusivity. There was some discussion of whether the FDA might be able to approve or signal approval of a biosimilar product before the 12 year period had run (but only make the approval effective at 12 years), but as I wrote in this article it is not clear that the FDA would or could do so.

What About The Biosimilar Patent Dance?

Although Amgen had framed the “patent dance” issue as whether “shall” means “shall,” the Justices focused on the statutory consequences for violating the “shall” requirement. On this issue, they seemed to agree that the only remedy available to a Reference Product Sponsor if the biosimilar application does not provide the information required by § 262(l)(2)(A) is to bring a declaratory judgment action under  § 262(l)(9)(C):

GORSUCH: Mr. Waxman, let’s say -let’s say I spot you that, okay, that (2)(A) “shall” means shall. …. And how can we possibly decide what (2)(A) means without taking a peek at (9)(C) as to what remedies are permitted? …. You can’t –it’s hard to divorce a right from its remedy, isn’t it, and to understand the contours of the right. And if (2)(A) gives you a certain right to information, we usually understand the right in the context of the remedy provided. …. And here the remedy is (9)(C).

Justice Sotomayor read the statutory scheme differently, as presenting two options for resolving patent disputes:

JUSTICE SOTOMAYOR: “Shall” is if you want to invoke this Federal process [the patent dance], this is what you have to do. …. So if you don’t invoke the Federal process, what remains? That’s not a remedy. That’s a different Federal process, the declaratory-judgment process. That’s what (C) says.

Were Amgen’s State Law Claims Preempted?

Although neither party had briefed the issue, the Justices asked both parties about preemption of the state law claims that Amgen had asserted against Sandoz. Arguing for the United States, the Assistant to the Solicitor General came the closest to taking a position on this issue:

MR. YANG: I think there are strong arguments that this would be preempted. This is a highly detailed scheme. And if States were to start to interject different means of enforcing it on a State-by-State basis, that might wreak some havoc, but we’ve not taken a position on that.

Why Hasn’t An Agency Interpreted These Provisions

One interesting theme in the Justices’ questions was their wondering why an agency (the FDA or PTO) had not weighed in on these issues in the first instance.

JUSTICE BREYER: Now, we are being asked to interpret very technical provisions that I find somewhat ambiguous and am operating in a field I know nothing about. But it’s going to have huge implications for the future. So why isn’t the way to go about this case to ask the agency to issue some regulations? Then when we see their interpretation, you all will be able to argue that their interpretation exceeds the statutory delegation. And by doing that, we would have a better picture.

However, since neither the FDA nor the USPTO oversee the patent dance, it will be up to the Court to interpret these biosimilar patent dance provisions.