By Carl J. Minniti III (Rutgers-Camden Law Class of 2016) Biosimilar competition has finally arrived. But a pending Federal Circuit case has the potential to restrain this competition before it even starts.

A Quick Recap

 During the 1980’s, with the emergence of biotech firms such as Genentech, pharmaceutical innovation unleashed recombinant proteins, which are also called biologics. These new drugs were revolutionary. Their ability to target certain cancerous cells was an improvement over the use of indiscriminate chemotherapies. For example, Rituxan, one of the best-selling cancer fighting drugs of all time, has been called a “Smart Bomb” due to its ability to target certain Non-Hodgkin Lymphoma cells. Unlike small-molecule chemical compounds (i.e., aspirin), biologics are large, complex, and difficult to make. Development involves “growing” the protein in living cells, followed by purification. Unfortunately, this intricate process makes it impossible to make an exact copy of a biologic. Therefore, unlike small-molecule chemical compounds where generic replicates can be made, biologic copies aim to be as similar as possible; thus the name: biosimilars. Patents covering first-generation biologics are beginning to expire. With the Biologics Price Competition and Innovation Act of 2009 (BPCIA), Congress created an abbreviated pathway for biosimilar approval. Similar to the Hatch-Waxman Act, the goal was clear: promote innovation, while also creating a competitive environment to drive down cost.  

The First BPCIA Case: Sandoz v. Amgen

The first case to arise out of the BPCIA is a dispute between two pharmaceutical giants: Sandoz and Amgen. The case is one of pure statutory interpretation: Does the BPCIA statutorily bar a biosimilar maker from pursuing a declaratory judgment action prior to submitting an application? The events leading up to the Federal Circuit can be summarized as follows… Amgen makes Enbrel. The patents covering Enbrel expired in 2012 and 2014. With these dates in mind, Sandoz began developing an Enbrel-biosimilar with market entry timed to coincide with patent expiration. Sandoz has not yet submitted a biosimilar application. Recognizing that its foothold in the market will now be challenged, Amgen has acquired submarine patents alleged to cover the drug. These types of patents are a product of manipulative continuation practices by the applicant, and can result in patent issuance more than a decade after the filing date. A market competitor is not able to determine whether a submarine patent application is in the PTO’s pipeline. Submarine patents are meant to surprise an industry and preclude competition. If valid, Amgen’s submarine patents will protect Enbrel until almost 2030. As a result, Sandoz’s market entry and asset allocation have been thrown off. Having spent millions on production, Sandoz sought a declaration of its rights and filed suit for declaratory judgment of invalidity or noninfringement. In response, Amgen filed a motion to dismiss. In a short five-page opinion, the district court granted Amgen’s motion to dismiss. Now, the Federal Circuit is taking a look. In my article Sandoz v. Amgen: Why the Biologics Price Competition and Innovation Act of 2009 Allows Biosimilar Makers to Pursue Pre-Application Declaratory Judgment Actions and Will Enhance Competition, I urge the Federal Circuit to reverse the district court’s decision and find that the BPCIA does not prevent biosimilar makers from filing pre-application declaratory judgment (DJ) actions. Simply put, the relevant BPCIA provisions narrowly speak of “applicants.” And because Sandoz is not an applicant, its DJ suit should be allowed. I also argue that this outcome is desirable and that pre-application DJ actions are unlikely to be invidiously exploited. Ultimately, this is a case that will determine whether litigation strategies can promote competition, especially when submarine patents are in play. The ability for a biosimilar maker to resolve the validity of submarine patents, prior to submitting an application, will increase confidence in biosimilar investment. By simply paying careful attention to the text of the statute, the Federal Circuit can go a long way to sustain the incredibly important, nascent, yet fragile, market for biosimilars.