No pharmaceutical drug is entitled to 30 years of unfettered marketing exclusivity. Let’s be straight about that up front. Regardless of results of the patent settlements or the results of inter partes review, this is just common sense for a market-based economy.
Ask anyone in the pharma industry, in the payer sector, or on the health systems side of the fence. I doubt that Amgen executives, the beneficiary of the US District Court’s ruling, believe that a drug launched in 1998 should be shielded from competition until 2029. After all, Amgen is also the company that just launched two cancer biosimilars, challenging Roche’s intention to protect Herceptin and Avastin’s exclusivities as long as it possibly can.
The ruling by the US District Court of New Jersey on August 8th, that Amgen’s patents on etanercept are valid, puts Sandoz into quite a quandary. It challenges a key provision of the Biologic Price Competition and Innovation Act (BPCIA) as well. This decision will likely cost Sandoz somewhere between $5 billion and $10 billion in lost US biosimilar etanercept sales over the next 10 years. Sandoz may have some business alternatives; its legal alternatives already being exercised: it has sought and will receive an expedited appeal through the US Court of Appeals.
Interestingly, Roche (which seems to be a party to so much action on the biosimilar front these days) was the first to file applications for these specific patents on etanercept. Immunex had obtained the rights to the patents, and it was subsequently purchased by Amgen.
Sandoz did not contest that it would infringe upon the patents, but the US District Court judge also found that Sandoz failed to prove that the patents should be considered invalid. The judge’s decision means that Sandoz’s work in developing Erelzi® for the US market may be for naught. For most of the past 3 years, Sandoz had the only approved etanercept biosimilar. Until very recently, when Samsung Bioepis obtained FDA approval for Eticovo®, the window of opportunity was all Sandoz’s.
Also, until very recently, it seemed that the Federal Trade Commission was going to serve as the competitive backstop for patent issues such as these. A reasonable person might expect the FTC to eventually set aside these patents, and open the market to biosimilar competition, simply on the basis that they are attempts to maintain market exclusivity well beyond the 12-year period provided by the BPCIA.
However, the Trump administration has backed away from that potential remedy. The District Court is not charged with ruling whether Amgen’s patents are anticompetitive, only whether it considers the patents to be valid. That being the case, arguing the Court’s decision here (based on whether the patents are obvious) is not a fruitful exercise.
This case, however, can serve as a renewal for the call to action by the FTC. One business remedy may be a settlement between Amgen and Sandoz, which allows the latter to market an authorized biosimilar, in exchange for a share of the profits. This does not affect Samsung Bioepis, which is fighting its own patent battle with Amgen over this reference product. The FTC has criticized “pay-for-delay” deals in general, and even if this was signed and implemented by January 1, 2020, the authorized biosimilar would almost certainly carry a higher WAC cost than a two-biosimilar launch scenario.
As a result, we are still awaiting some common sense here. The 12 years of exclusivity is written into the BPCIA statute. AbbVie’s Humira® will also have benefited from 20+ years of exclusivity when the first biosimilar is launched in 2023. Thirty years is a wholly unnecessary insult to the BPCIA and to the health system.
Tens of billions in projected health system savings from use of biosimilars is eroding heavily each year common sense is set aside. If I were a prospective biosimilar manufacturer, I would be seriously reconsidering the marketplace opportunities and where to spend my resources.
The FTC should intervene and use some common sense guard rails in this unique balance of intellectual property and competition.