The United States District Court for the Northern District of California ruled November 12, 2013, that a party seeking to obtain approval of a biosimilar could not avoid the process set forth in the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) by obtaining a declaratory judgment of patent invalidity before even submitting a biosimilars application. See Sandoz Inc. v. Amgen Inc., Civil No. 13-2894 MMC, _____ USLW _____ (N.D. Cal. 2013).

In that case, Sandoz sought a declaratory judgment that certain patents for Amgen’s ENBREL® (etanercept) product were invalid before it had filed a biosimilars application with FDA; it was, instead, in the process of conducting required clinical trials with the intent to file a biosimilar application under Section 351(k) of the Public Health Service Act.  Amgen moved to dismiss, alleging that a case or controversy did not exist, and secondly that the district court lacked authority to consider such a dispute until after Sandoz had filed an application with FDA for its biosimilar of ENBREL® and gone through the patent exchange process required by BPCIA.

While the district courts do have jurisdiction to entertain declaratory judgments, Judge Chesney ruled that that jurisdiction was limited with regard to patent disputes due to Section 351 of the Public Health Service Act (“PHSA”).  She stated:

“Specifically, with limited exceptions not applicable here, neither a reference product sponsor, such as Amgen, nor an applicant, such as Sandoz, may file a lawsuit unless and until they have engaged in a series of statutorily-mandated exchanges of information.  See 42 U.S.C. §§ 262(1)(2)-(6).

Here, Sandoz does not contend, and cannot contend, it has complied with its obligations under §§ 262(1)(2)-(6), because, as it concedes in its compliant and opposition, it has not, to date, filed an application with the FDA.  Rather, citing § 262(1)(8), Sandoz argues  § 262 “provides [declaratory judgment] actions can be filed  by either party upon the biosimilar manufacturer’s notice of commercial marketing, which Sandoz has given here.”

See  page 3.  Sandoz’s argument failed as the notice of commercial marketing could only be given after the biosimilar was licensed, and that even then, it would be required to go through the patent exchange process set forth in Section 351, before seeking declaratory relief.

In addition, she ruled that no case or controversy existed since Amgen had not threated to sue Sandoz.  And she ruled a mere allegation that it intended to file a biosimilars application did not create a case or controversy:

Finally, Sandoz’s allegation that it intends in the future to the file an application with the FDA is insufficient to create a case or controversy.  See Benitec Australia, Ltd. v. Nucleonics, Inc., 495 F.3d 1340, 1346 (Fed. Cir. 2007) (holding “fact that [declaratory judgment plaintiff] may file an [application for drug] in a few years does not provide the immediacy and reality required for a declaratory judgment”); Telectronics Pacing Systems, Inc. v. Ventritex, Inc., 982 F.2d 1520, 1527 (Fed. Cir. 1992) (affirming dismissal of declaratory judgment action brought by patentee where accused “device had only recently begun clinical trials, and was years away from potential FDA approval”).See page 4.

This case is significant since it is the first reported decision involving BPCIA, and because it holds that biosimilar applicants cannot avoid the patent exchange and other rules set forth in Section 351(1)(2)-(6), of the PHSA, 42 U.S.C §§ 262(b)(2)-(6), by filing a declaratory judgment action at an earlier time not allowed by BPCIA.

That exchange process requires “good faith negotiations” within specific timeframe regarding which patents will be subject of a preliminary injunction suit.  Thereafter, on mutually agreeable date, but not later than 5 days after biosimilars applicant provides the BLA holder with the number of preliminary injunction patents, there is to be a simultaneous exchange of:

• List of patents BLA holder believes should be subject of the preliminary injunction suit

• List of patents biosimilars applicant believes should be subject of preliminary injunction suit.

If there is agreement on patent list, the suit must be filed by BLA holder (holder of license for Reference Product or RP) not later than 30 days after such agreement.  If there is no agreement, the BLA holder must file the suit not later than 30 days after the patent lists are exchanged.  For new patents issued to RP after BLA holder provides to biosimilars applicant list of patents for which a preliminary injunction claim could reasonably be asserted, the BLA holder must supplement that list within 30 days of patent issuance.  Within 30 days of biosimilars applicant receiving such a supplement, the biosimilar applicant must provide response.  Once the preliminary injunction suit is filed, the biosimilars applicant must provide FDA with notice of copy of complaint within 30 days of being served, and FDA is required to publish inFederal Register notice of receipt of complaint.  The biosimilars applicant must provide notice to BLA holder no later than 180 days before date of first commercial marketing. After receipt of notice, the BLA holder can seek preliminary injunction from commercial marketing until there is a court decision on validity, enforceability and infringement of the patent(s) subject to the suit.

These procedures differ from those for generic drugs of small molecule drugs, but, as with those products, it is now clear the litigation on the validity of patents for the innovator product – be it an RLD for small molecule drugs or an RP for biologics –  can only occur until after the statutorily mandated process is followed.