There has been a lot of curiosity within the biologics industry regarding how the “patent dance” procedures of the Biologics Price Competition and Innovation Act (“BPCIA”) would operate.[1] This interest was piqued in July 2014 when Sandoz Inc.’s (“Sandoz”) biosimilar application for a biosimilar of Amgen Inc.’s (“Amgen”) Neupogen® was the first accepted by FDA under section 351(k) of the Public Health Service Act (“PHSA”). Apparently, Sandoz has refused to engage in the “patent dance” in accordance with the BPCIA, leaving Amgen without a dance partner. Amgen did not take kindly to being stranded on the dance floor and has opted to sue Sandoz for its allegedly unlawful refusal to follow the BPCIA’s patent resolution procedures.
The BPCIA was enacted in 2010 as part of the Patient Protection and Affordable Care Act and amended the PHSA to establish an expedited pathway for FDA approval of biosimilars under section 351(k). The BPCIA sets forth a detailed procedure commonly referred to as the “patent dance” in section 351(l) under which a holder of a branded biologic, such as Amgen, and a biosimilar applicant, such as Sandoz, are to engage in a series of timed exchanges of information with the goal of determining which, if any, of the brand holder’s patents will be litigated by the parties. As part of this process, the biosimilar applicant must provide the brand holder a copy of its section 351(k) application no later than twenty days after FDA has accepted the application, along with other information that describes the process or processes used to manufacture the biosimilar that is the subject of the 351(k) application. The biosimilar applicant may also provide the brand holder with additional information that the brand holder requests. After the biosimilar applicant provides the brand holder with a copy of its application, a series of timed exchanges is supposed to occur to resolve certain patent issues prior to filing a patent infringement action. While reference in the statute is made to the ability of the parties to negotiate separately from the “patent dance,” no provisions are made for the present situation: where an alternative framework was proposed but the parties were unable to reach an agreement.
Additionally, the BPCIA requires a biosimilar applicant to provide notice to the branded biologic holder not later than 180 days before the date of the first commercial marketing of the biosimilar licensed under section 351(k). This gives the brand holder the opportunity to seek a preliminary injunction preventing the biosimilar applicant from selling its product until a court resolves any issues of validity, infringement and enforcement of the patents at issue.
According to Amgen’s complaint, Sandoz allegedly refused to provide Amgen with a copy of its biosimilar application within 20 days of receiving notice from FDA of acceptance of its application. Instead, Sandoz proposed an alternative procedure that did not follow the BPCIA’s “patent dance” procedures, which Amgen rejected. Further, Sandoz asserted that its proposal of an alternative procedure also contained its 180–day notice of commercial marketing.
On October 24, 2014, Amgen filed suit in the U.S. District Court for the Northern District of California. Amgen alleges that Sandoz’s refusal to “dance” pursuant to the BPCIA constitutes unlawful acts in violation of 42 U.S.C. Sections 262(1)(2)(A) and 262(l)(8)(A) that deprive Amgen of the benefits afforded under the statute provided by Congress for brand holders, including the ability to seek a preliminary injunction against Sandoz and court intervention to prevent Amgen from suffering irreparable harm. In its complaint, Amgen asserts the following claims: 1) unfair competition under Cal. Bus. & Prof. Code section 17200 et seq., 2) conversion, and 3) infringement of U.S. Patent No. 6,162,427 that covers a method of using Neupogen® to treat a disease requiring peripheral stem cell transplantation.
Amgen’s conversion claim is particularly interesting, since it is not a commonly seen cause of action in this context. Conversion is an intentional tort in which one converts another’s property to his or her own use, usually by treating another’s goods as one’s own, holding onto such property that accidentally comes into the convertor’s hands, or purposely giving the impression that the convertor owns the property. The owner of the property has the right to sue for his or her own property or the value of the property due to the loss of its use. Amgen is alleging that Sandoz’s use of a license for Neupogen® to obtain FDA approval for its own benefit and profit is an act of conversion. In particular, Amgen asserts that Sandoz’s biosimilar application uses Amgen’s prior demonstration of the safety, purity, and potency of Neupogen® without Amgen’s permission and without satisfying the BPCIA procedures. Sandoz seeks to obtain a value benefit from the license for Neupogen® under section 351(k), but would not be able to do so without Amgen’s prior efforts to obtain approval of Neupogen®. Thus, under Amgen’s theory, Sandoz has converted Amgen’s property.
Amgen is also seeking declaratory and injunctive relief. Amgen wants Sandoz to be enjoined from marketing its biosimilar product until (1) Amgen is restored to the position it would have been absent Sandoz’s refusal to follow the framework in the BPCIA, and (2) Amgen receives notice of Sandoz’s commercial marketing after FDA licenses Sandoz’s biosimilar product. Further, Amgen is seeking to enjoin Sandoz from continuing with FDA review of its biosimilar application until it decides to comply with the BPCIA’s framework, as opposed to its proposed alternative. Finally, Amgen seeks a judgment that Sandoz has infringed Amgen’s asserted patent by submitting its biosimilar application without providing the application and manufacturing information to Amgen.
K&L Gates will be closely monitoring this litigation to see what, if any, insight is gained into the BPCIA “patent dance” requirements.
Notes:
[1] For additional information on the BPCIA, please see the following article: FDA Accepts First Biosimilar Application Filed under Section 351(k) of the Public Health Service Act, K&L Gates Legal Insight, July 28, 2014, available at http://www.klgates.com/fda-accepts-first-biosimilar-application-filed-under-section-351k-of-the-public-health-services-act-07-28-2014/.
