US Supreme Court Strikes Down 180-Day Waiting Period

In a unanimous decision, the Supreme Court rejected Amgen’s oral arguments—a biosimilar manufacturer can meet the 180-day notification period requirement by notifying the originator’s manufacturer before receiving approval. In other words, biosimilar launches can occur immediately after approval by the Food and Drug Administration (FDA).

The 180-day notification period was seen as giving the originator a further 6 months of exclusivity, not allowing newly approved products to reach the market until after the period had expired. The argument by biosimilar manufacturers has been that notification of its intention to commercialize the drug can be given prior to approval (e.g., at the time the application is sent to the FDA), without any disadvantage in terms of an examination of whether patents had been infringed.

Sandoz v. Amgen involved Sandoz’s filgrastim biosimilar Zarxio®, which has since launched, but this decision, written by Justice Clarence Thomas, will clear one barrier out of the way to faster access to biosimilars.Image result for justice clarence thomas

The justices decided to punt on a ruling of whether the patent dance is necessary to the states, where unfair business conduct laws may take precedence. The patent dance involves a protocol where the biosimilar applicant must provide to the reference drug maker information on how it plans to manufacture the agent and its actual 351(k) application. The reference drug manufacturer can then evaluate which of its patents it believes will be infringed, and must respond (and counter) within a specific timetable. According to Justice Thomas’ opinion, “There is no dispute about how the federal scheme actually works, supreme-courtand thus nothing for us to decide as a matter of federal law. The mandatory or conditional nature of the [Biologics Price Competition and Innovation Act] requirements matters only for purposes of California’s unfair competition law, which penalizes ‘unlawful’ conduct. Whether Sandoz’s conduct was ‘unlawful’ under the unfair competition law is a state-law question, and the court below erred in attempting to answer that question by referring to the BPCIA alone.

“We decline to resolve this particular dispute definitively because it does not present a question of federal law. The BPCIA, standing alone, does not require a court to decide whether §262(l)(2)(A) is mandatory or conditional; the court need only determine whether the applicant supplied the sponsor with the information required under §262(l)(2)(A).”

Justice Stephen Breyer suggested, in a concurring opinion, that the FDA may play a greater role in deciding the outcome of the patent dance. He stated, “[If FDA], after greater experience administering this statute, determines that a different interpretation would better serve the statute’s objectives, it may well have authority to depart from, or to modify, today’s interpretation.”

No Clear Winner on Supreme Court’s Biosimilar Hearing Day

Despite the fact that the arguments at Wednesday’s Supreme Court wrestling match on the patent dance and 180-day notification issue went into overtime, there was no clear winner discernable in Amgen v. Sandoz.

Some observers believe that the Supreme Court justices were more comfortable with Amgen’s arguments, but the justices admitted that there was little clarity in trying to interpret the ambiguous language of the Biologics Price Competition and Innovation Act. Justice Stephen Breyer stated his unfamiliarity with the technical aspects of the field and expressed concern about ruling on these issues.

Indeed, it is possible that the Court will not issue any ruling, since the case specifically arose around Sandoz’s launch of Zarxio®. Sandoz waited out the 180-day notification period before launching the product, which could prompt the justices to decide that the question is moot, avoiding the larger question of whether it should be enforced for future biosimilar launches.

Judicial experts and industry watchers will be pouring over the comments and questions from the justices for some time, until a final ruling is released (thought to be in July).

In other news… US sales of Janssen’s Remicade® slipped 2.4% to $1.18 billion, in the first full quarter following the launch of its biosimilar competitor, Pfizer’s Inflectra®. This does not necessarily reflect lost marketshare but Janssen’s concessions in matching the price of Inflectra to retain its preferred positioning. With a new competitor looming later this year (Renflexis™), Remicade’s earnings slide is expected to accelerate.

Amgen’s Enbrel® is also facing a less-rosy future, as the product’s sales in the anti-TNF category has begun to slip, independent of any active biosimilar competition. However, competition in the rheumatoid arthritis and psoriasis categories from other products, especially interleukin inhibitors, has been stiff. First quarter 2017 sales of Enbrel in the US dropped 15% to $1.18 billion. Sandoz’s biosimilar etanercept, though approved by the FDA and beyond the 180-day notification period, has not yet launched due to patent litigation questions.

Frustration Mounts as Sandoz’s Etanercept Biosimilar Launch Delayed into 2018

Call it irritation, exasperation, or frustration, but biosimilar manufacturers and payers alike are feeling it, as the fight over drug patents has barred the way to approval for yet another biosimilar for a costly biologic.

In this case, Sandoz’s Erelzi™, which was approved by the Food and Drug Administration on August 30, 2016, has been caught in the patent litigation web. The originator drug, Amgen’s Enbrel® was first approved in 1998. Amgen asserts that its patent on the agent protects exclusivity until 2029, which would give Amgen 31 years of sole marketing rights. Despite the unlikely event that it can defend its patent for this extraordinary period, Sandoz has acknowledged that it will need to hold off launch of the biosimilar until at least 2018.

In a report from Reuters on January 25, Richard Francis, CEO of Sandoz, stated that the legal battle “won’t really reach a conclusion until 2018. That’s the frustration sometimes of the legal situation, but the way I look at that, we’re carving the landscape out as we go.”

Indeed, Sandoz has been at launch-delaythe forefront of legal battles, also fighting Amgen on the validity of the 180-day notification period, which is now being readied for US Supreme Court arguments in the Spring. The 180-day notification period for Erelzi was due to end in
late February 2017. After this time, Sandoz may still launch the product, at risk of financial penalties and loss of revenues, if the courts rule that Amgen’s remaining patent is valid.

However, the potential for savings on Enbrel, through biosimilar competition, continues to be a mirage for payers. The agent, which pulled in US revenues of $5 billion in 2015, has been the subject of numerous recent price increases. Health plans and insurers, while believing these costs untenable, may have little choice but to pay up or find ways to more aggressively restrict access.

Supreme Court May Hear Biosimilar 180-Day Notice Suit

How soon after approval by the Food and Drug Administration (FDA) can a biosimilar be sold on the market? For a conventional generic drug, that is pretty much completely up to the manufacturer. For a biosimilar maker, they have to sit and wait.

The US Supreme Court has asked the Obama Administration for its views on the contentious 180-day notice period, mandated by law, that biosimilar manufacturers must give to makers of innovator products, indicating their intention to go to market.

The Biologics Price Competition and Innovation Act (BPCIA), which authorized the biosimilar approval pathway, also set the timing of when a biosimilar can be launched. Specifically, BPCIA stated that a biosimilar manufacturer must give 180-day notice to the innovator’s manufacturer before the agent can be launched. The original notion was that this 6-month period would allow for the resolution of any patent dispute brought by the innovator drug maker. This seems unnecessary in reality, as patent disputes have been initiated and underway for many months/years before FDA approval is given. Instead, the 6-month notice period is undully delaying product launch (and depriving the government and the public of cost savings), according to Sandoz, which petitioned in February for the US Supreme Court to decide the matter.

In 2015, Sandoz contended that the law allowed it to give Amgen notice of its marketing plans for Zarxio® before FDA approval was granted. The federal appeals court did not agree, forcing Sandoz to wait essentially another 6 months before going to market.

According to industry observer Ed Silverman, this means 2 things: (1) that it is likelier that the Supreme Court will hear the case and (2) that the Obama Administration, which had lobbied for shorter exclusivity periods than was actually granted in BPCIA (7 yr vs. 12 yr), may have another chance to influence how quickly biosimilars are brought to the marketplace.

Sandoz argues that it should be allowed to provide this notice well before FDA approval, as patents are being disputed well before hand; Amgen counters that notice of intention to launch is moot without FDA approval. Of course, with an 8-member Supreme Court, a tie would allow the appeals court decision to stand.