Biosimilar developers should weigh a host of factors in deciding whether to follow the Biologics Price Competition and Innovation Act's patent information and exchange procedures now that the US Supreme Court has ruled the federal law does not require 351(k) applicants to engage in the "patent dance."
Factors for consideration include the amount of marketing exclusivity remaining on a reference product, the strength of the patents at issue, and the risk that a refence product sponsor will seek a preliminary injunction to block a biosimilar's launch, according to Chad Landmon, a partner at Axinn, Veltrop and Harkrider.
Whether to participate in the patent dance is "an interesting question with no straight answer," Landmon said during a Food and Drug Law Institute webinar Aug. 9. "It's definitely going to be different … depending on who the companies are and the products."
Whether to participate in the patent dance is "an interesting question with no straight answer." – Axinn, Veltrop's Landmon
"I don’t know that it’s a decision that when people saw the act being drafted [expected] it was something that companies would have to think about, but it's a fascinating decision both from a patent side and a regulatory side and even a broader business damages [and] marketing side," Landmon said.
That biosimilar product developers even have a decision to make on whether to engage with a reference product manufacturer in the patent dance was cemented by the US Supreme Court's June 12 ruling in a dispute between Sandoz Inc., which developed the biosimilar Zarxio (filgrastim-sndz), and Amgen Inc., which markets the reference product Neupogen (filgrastim).
The high court ruled that a reference product sponsor cannot seek an injunction under federal law to require a biosimilar applicant to participate in the patent dance. However, the justices left the door open to the possibility that an innovator could obtain an injunction against a biosimilar sponsor under state law for not providing their application and manufacturing process information. (Also see "US Supreme Court Permits Earlier Biosimilar Launches; Penalty For Declining Patent Dance Uncertain" - Pink Sheet, 12 Jun, 2017.)
The potential availability of a state law cause of action is likely to complicate a biosimilar sponsor's decision-making on whether to go through the patent dance with a reference product sponsor pending further legal clarity, Landmon said, adding that almost every state has unfair competition laws. "They're all slightly different, but it's something to consider whether you're deciding whether to engage in the patent dance at all."
Marketing Exclusivity And Patent Strength
How much marketing exclusivity remains for the reference product is a key factor that should be weighed by biosimilar sponsors, Landmon said.
"A lot of the products that we're seeing right now being litigated right away there is no market exclusivity left," Landmon said. In those instances, "there's probably less incentive for the biosimilar applicant to engage in the patent dance, given that they do have an opportunity to get on the market relatively quickly."
However, if there is a lot of time left on the exclusivity, such as three or more years, it could be beneficial for a biosimilar sponsor to enter the patent dance to secure some patent certainty before having to decide whether to launch, he said.
"If you do launch, there can be significant patent damages that can include treble damages at times depending on the circumstances," Landmon said. "These are very large products and the damages in some of these cases are going to be significant, so I think looking at the amount of time that's left in the exclusivity is a big issue."
There is a cost to engaging in the patent dance because a biosimilar applicant might have to litigate patents earlier, he said. "There could be, though, a cost benefit in terms of being able to negotiate some sort of small reduced list and litigate a subset of the patents, which can lead to a settlement on all the patents later on down the road, so there could be some benefit to that," Landmon said.
Biosimilar applicants must consider the strength of the innovator's patents and their own need for patent certainty. "If the patents are stronger, I think as a biosimilar applicant that may lead to you wanting to engage in the dance because you want to get that patent certainty, " he said.
A company's tolerance for risk also will factor into the decision-making, Landmon said. "How risk-averse is the company or how risk-taking is the company? And that's obviously something that's different for every company."
Preliminary Injunction Threat
The threat of a preliminary injunction could persuade some biosimilar applicants to conduct the information exchange with the reference product sponsor, Landmon suggested.
In a footnote in their decision in the Zarxio case, the Supreme Court justices said they "express no view" on whether a federal district court may consider a biosimilar applicant's failure to engage in the patent dance in deciding whether to grant a preliminary injunction motion.
The Supreme Court suggested a trial court may consider whether the biosimilar applicant participated in the patent dance in deciding whether to grant a preliminary injunction blocking a biosimilar's launch.
"Essentially this can come up if a biosimilar applicant is close to or has received its license and is about to go to market," Landmon said. "The reference product sponsor can bring a preliminary injunction action … to keep that applicant off the market for a certain period of time, and the Supreme Court said that the district court can consider whether the biosimilar applicant participated in the patent dance."
"Again, this is one of those things that biosimilar applicants need to consider," Landmon said. "Do they engage in the patent dance because they're not required to, at least under federal law? They may want to because they might want to avoid a preliminary injunction."
Don't Look For Tentative Approvals Anytime Soon …
Landmon said he believes the Supreme Court decision has relieved FDA of having to decide, at least for now, whether it can grant tentative approvals for biosimilars.
In the Zarxio decision, the high court ruled that 351(k) applicants can provide 180-day notice of commercial marketing prior to FDA licensure. Landmon had previously predicted that if the Supreme Court ruled that advance notice of commercialization could only be provided after licensure, FDA might decide to start issuing tentative approvals to get around the 180-day delay. (Also see "Biosimilar Tentative Approvals Could Flow From US Supreme Court Case" - Pink Sheet, 12 May, 2017.)
The idea of issuing tentative approvals had been suggested by a federal appeals court in a dispute between Amgen and Apotex Inc. over the latter's proposed biosimilar to Neulasta (pegfilgrastim).
"Given that the Supreme Court has come down very firmly saying you can give that 180-day notice before licensure … I don't think there's any urgency at FDA to address this issue," Landmon said. "I think it's something that's still out there again that we might see FDA address in the future, but I'm sure not anytime soon."
… Because FDA Has Enough On Its Biosimilars Plate
It seems unlikely FDA will be looking to make new policy on biosimilars if it does not have to, given the amount of work already on its plate.
During the FDLI webinar, Joe Franklin, associate director for policy with the Center for Drug Evaluation and Research's therapeutic biologics and biosimilars staff, noted that 69 products were enrolled in the agency's biosimilar development program as of July 31. (See box)
This is more than twice the number of products enrolled at the close of fiscal year 2013, which was the first year under the Biosimilar User Fee Act (BsUFA). (See graphic)
"The important thing we are struggling with and constantly challenges us at FDA is that because we are implementing a new regulatory pathway … it's just a fact at this point that development programs for products and applications that are submitted to FDA generally raise unique scientific and regulatory issues, and a major part of our work is to design an efficient process for evaluating those questions and making sure that stakeholders are apprised of FDA's policymaking in this area," Franklin said.
Source: FDA slide for Aug. 9 Food and Drug Law Institute webinar, "Key Regulatory Issues In Biosimilars"
Like other human drug and device user fee programs, the current iteration of BsUFA expires on Sept. 30. The FDA Reauthorization Act (FDARA) would renew BsUFA for another five years and provide the agency with a massive funding boost for its biosimilar-related activities. (Also see "Biosimilar User Fee Agreement Offers FDA Funding Boost, Fee Structure Overhaul" - Pink Sheet, 16 Sep, 2016.)
FDARA has passed both the House and Senate and is awaiting President Trump's signature. (Also see "Implementing User Fees Should Be Lighter Lift For FDA This Time Around; Bill Heads To White House" - Pink Sheet, 3 Aug, 2017.)