Held June 22–23, 2021, the American Conference Institute’s 12th annual Biosimilars and Innovator Biologics conference focused on the legal and patent issues affecting the biosimilar industry. In this article, we note some of the takeaways of the presentations.
The Year in Review panel focused on recently enacted and proposed legislation. Hans Sauer, Deputy General Counsel and Vice President of Intellectual Property, BIO, noted the Purple Book Continuity Act, which was promulgated in December 2020. The Purple Book will, for the first time, include patent information. The new listings will specify the patent list submitted by the reference manufacturer once the patent dance begins. Mr. Sauer explained that “This will lead to earlier identification of patents than what would have been the case otherwise. The first biosimilar manufacturer will not have a benefit, but the second or third biosimilar manufacturer will have that information in hand” when readying their product for commercialization.
It should be noted that to this point, the Purple Book has been a reference of only limited use. Information about the patents a reference manufacturer is most interested in defending is a welcome addition. Yet, the patent dance is optional; if the first biosimilar manufacturer decides not to participate, those patents are not listed.
The Record on PTAB Decisions
Mr. Sauer added, “When we look at patents being challenged versus those litigated later in court, they often go after [in the PTAB route] composition of matter rather than manufacturing patents. It will be interesting to see if the advance listing of these patents changes those dynamics over the next year or two.”
In a related session, John Josef Molenda, Partner, Co-Chair, Healthcare & Life Sciences Practice, Steptoe & Johnson LLP, described the growing experience with the interpartes review (IPR) process to date. The number of IPR filings peaked at 90 in 2017 but averaged 25 filings per year more recently. “Not all of these were related to biosimilars,” cautioned Mr. Molenda. “All involved biologic products, but some were filed by the manufacturers of innovator products.”
Forty-five percent of the IPR patent challenges related to methods of treatment, 19% to method of manufacture, 25% involved composition of matter, and 11% involved varying formulations. Mr. Molenda said, “In 75% of the cases, at least one claim was found to be unpatentable. Two percent found that no claims were unpatentable.” Importantly, in cases involving composition of matter patents, IPR found that 90% were unpatentable. Seventy-three percent of the IPR decisions were affirmed in Appellate Court; 12% of these decisions were dismissed and 15% of the IPR decisions were vacated or remanded.
Two pieces of proposed legislation attempt to address “product hopping,” or the attempts of an innovator company to create follow-on products and switch patients to those new agents to avoid loss of revenue from older agents at the end of their patent life. Consider the example of AbbVie’s introduction of Skyrizi® and moves to gain new starts or convert patients from Humira®.
David Korn, VP, IP & Law, PhRMA, pointed to the companion Senate and House bills S. 1435 and H.R. 2873 (Affordable Prescriptions for Patients Act of 2021 and Affordable Prescriptions for Patients Through Promoting Competition Act of 2021, respectively). Both bills would affect “hard switches” and “soft switches.” The first one introduces a new product and excludes coverage of the older product. The second one only disadvantages the older product.
Antitrust Implications for Patent Settlements
Is this an antitrust issue? “I’m not sure why the Federal Trade Commission (FTC) wouldn’t have authority to act in these cases [without these bills],” he said. Mr. Sauer clarified that the courts have ruled in past that if consumer choice is removed, a ruling of antitrust is more likely. If the consumer has a choice, however, the courts view this as normal competition.
Putting this into context, if the FTC has the authority to address antitrust issues involving reference biologics, it has been extremely reluctant to use it. Members of the House of Representatives wrote to the FTC in May 2021, citing AbbVie’s own internal review that it was expecting biosimilar competition in 2017. The agreements it signed with biosimilar manufacturers delayed market entry of these competitors until 2023, allowing AbbVie greater than $75 billion in US sales of Humira. Of course, no one twisted the arms of the biosimilar makers to sign the agreements (well, to be fair, maybe their lawyers did).
Both S. 1435 and H.R. 2884 (Affordable Prescriptions for Patients Through Improvements to Patent Litigation Act) have another notable provision to address the infamous patent thicket problem. Both proposals would impose a cap on patent assertions at 20 (only 10 of which may be newer ones).