Biotech Values

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On the "patent dance" between NVS and AMGN

Biosimilar makers flout forced patent negotiations in US

Nature Medicine : 3/9/2015

http://www.nature.com/nm/journal/v21/n2/full/nm0215­100.html

By Cassandra Willyard

The first generic versions of complex drugs known as biologics are likely to gain approval in the US this year under a new, abbreviated approval pathway. But before these drugs reach the market, the companies developing these generic versions, called biosimilars, will have to settle patent disputes with the makers of brand-name biologics. The process for resolving these disputes, however, is rife with ambiguities that the courts have yet to interpret—and some lawyers assert that this could dissuade companies from producing biosimilars in the US.

Just last month, an advisory committee to the US Food and Drug Administration (FDA) recommended approval of the first biosimilar application submitted to the agency. Sandoz, the generics division of Swiss drug giant Novartis, is seeking approval for a biosimilar version of Neupogen (filgrastim), a medicine produced by the California-based biotech Amgen that helps cancer patients produce more white blood cells.

The FDA is likely to decide whether to approve the drug before summer. But even as the agency reviews the application, Amgen and Sandoz are in a legal battle over the patents pertaining to Neupogen. The drug's key patents expired in 2013, but Amgen wants assurance that Sandoz's copycat version doesn't infringe on any of its remaining patents, such as one that covers the co-administration of Neupogen and a chemotherapy drug to boost the mobilization of stem cells from bone marrow, which expires 12 December 2016. So in October 2014, Amgen filed a lawsuit against Sandoz. “This lawsuit is necessary because Defendants refuse to follow the rules,” states the complaint.

The rules in question can be found in the Biosimilars Price Competition and Innovation Act (BPCIA). The law, part of the 2010 US Patient Protection and Affordable Care Act, lays out an expedited approval pathway for biosimilars. It also includes a procedure for resolving patent disputes that contains so many carefully timed and choreographed steps it has become known as the 'patent dance.”

Under the patent dance, the applicant has 20 days from when it files its application with the FDA to hand over that same document to the company that originally developed the drug so that the latter can ensure that the generic version does not infringe on any active patents. According to Amgen's complaint, Sandoz has refused to do that. And Amgen alleges that because it doesn't have access to Sandoz's application, the company can't determine whether Sandoz is infringing on any of the patents in its extensive portfolio. Sandoz claims it offered Amgen access to its application under certain conditions, and that Amgen refused. Sandoz also argues that the BPCIA does not compel biosimilar applicants to provide their applications to the companies that make the drugs they plan to mimic.

Ditching the dance
Sandoz isn't the only biosimlar manufacturer looking to avoid the patent dance. Other companies are trying to circumvent it as well. This type of bickering is probably not what the architects of the BPCIA envisioned when they drafted the legislation. The patent dance is supposed to help resolve disputes by forcing the parties to share information and hash out their differences, says Wendy Choi, a patent attorney at Ballard Spahr LLP in Atlanta. It's intended to work like this: once the original developer of the biologic reviews the biosimilar manufacturer's FDA application, the company has 60 days to compile a list of all the active patents it believes could be infringed on by the applicant. The two parties then embark on an exchange of patent lists and explanations of infringement and validity, all according to a set schedule. The goal of this back and forth is for the two parties to reach an agreement over which patents will be the subject of the first round of patent infringement litigation.

“The fights are going to be over patents where the biosimilar says, 'I don't think I actually practice this patent. Under your interpretation I infringed it, but I don't really think I do what you're claiming,'” says Hans Sauer, deputy general counsel for intellectual property at the Biotechnology Industry Organization (BIO), a trade association representing biotechnology companies. Whether or not one company has infringed on another's patent is rarely straightforward. “A patent is a very long and complex document,” says Erika Lietzan, a law professor at the University of Missouri School of Law in Columbia. “For infringement, you have to interpret every single term in the claims and then you have to determine whether the biosimilar is doing that exact thing.” The dispute might come down to a slight difference in pH.

Daniel Scolnick, a patent attorney with Pepper Hamilton LLP in Berwyn, Pennsylvania, sees what those who drafted the act were trying to accomplish. “They're trying to get the parties to come to an agreement, to narrow the issues,” he says. “I think they tried to make it simpler.” But at this point, he adds, “no one really understands how it's going to work.” And, so far, Sandoz and other biosimilar manufacturers haven't seemed willing to participate in the BPCIA's patent dispute resolution process.

Terry Mahn, a patent attorney at Fish & Richardson in Washington, DC, isn't surprised to see biosimilar makers trying to sidestep the patent dance. “They don't want to have to disclose their application and the information on their manufacturing process,” he says. “You're giving the enemy all the secrets to your business.”

Some aspects of this forced negotiation might also be unappealing to developers of brand-name biologics. For example, if the two parties can't agree on which patents are involved, the biosimilar maker can limit the number of patents contested in the first round of litigation to as few as one. “I think both sides are reluctant participants in this dance,” says Kenneth Zwicker, an expert in patent-infringement litigation at the Boston law firm Lathrop & Gage.

Advance move
Sandoz's alleged refusal to hand over its filgrastim application isn't the company's first attempt to bypass the patent dance. In 2013 the company filed a lawsuit against Amgen and Hoffman-LaRoche over another drug, a generic version of Amgen's Enbrel (etanercept). Although Sandoz hadn't yet filed an application with the FDA and was still testing its version of etanercept in a phase 3 trial, the company asked the California Northern District Court to issue a declaratory judgment that its biosimilar will not infringe on two of Amgen's patents, and that those patents were invalid and unenforceable, in part, because they had been issued more than a decade and a half after they were first filed.

In November 2013, the judge dismissed the case as premature as Sandoz had not yet engaged in the BPCIA's patent information exchange process. The decision also stated that Amgen's patents posed no immediate threat because Sandoz had not yet filed an application with the FDA. Sandoz appealed the decision, but on 5 December 2014, a Federal Circuit court upheld the ruling. Notably, however, the federal judge declined to rule on whether biosimilar manufacturers must participate in the patent dance before heading to court. The decision “is unfortunate in a way,” Choi says, “because all the parties involved want clarity.”

At least three similar complaints have been filed by drug companies hoping to challenge the patents that cover Remicade (infliximab), Janssen's blockbuster anti-inflammatory medicine. In March 2014, South Korean biosimilar maker Celltrion, which has developed its own version of infliximab, launched two separate lawsuits, one against Janssen over three Remicade patents it believes to be invalid, and another against Kennedy Trust for Rheumatology Research, which granted Janssen a license for patents covering the co-administration of Remicade with another arthritis drug. And in August 2014, the Illinois-based pharmaceutical and medical device company Hospira, which has an agreement with Celltrion to co-market their Remicade copycat, filed a lawsuit against Janssen over some of the same patents. Celltrion eventually dropped the case against Janssen, and the other two cases were dismissed by the district court in December 2014. “Celltrion's attempts to skirt the BPCIA's dispute resolution mechanisms while reaping the benefits of its approval process is improper,” the court noted. However, none of these cases have reached federal court.

Amgen is hoping that its suit against Sandoz will conclusively settle the issue. On 6 January, the day before Sandoz received the green light from the FDA's advisory committee, Amgen filed a motion urging the court to rule that Sandoz's failure to provide its biosimilar application to Amgen violates the BPCIA and constitutes unfair business practices under California law. But a decision in this case could easily be a year to 18 months away, Scolnick says. “It will probably take a significant amount of time to figure the scope of the law and how it will be applied.”

What all this uncertainty means for biosimilar development in the US is not yet clear. Choi, who often lectures in Asia, says that many biosimilar companies there are interested in bringing their drugs to the the US, but they're deterred by the BPCIA's patent dance. “If they were thinking about sticking their toe in the water, this made them back up and say, 'Ok, we're going to wait a little bit,'” she says. However, if the courts rule that biosimilar companies can avoid the patent dance and instead resolve patent disputes through some simpler process, “that could have the effect of enticing others to develop more biosimilars,” says Kurt Karst, an attorney at Hyman, Phelps & McNamara in Washington, DC.

But Lietzan isn't convinced the patent dance or the uncertainties surrounding its enforcement are acting as a deterrent. “There is a lot of money at stake,” she says. Decision Resources Group, a healthcare analytics firm, estimates that by 2022 the US biosimilars market will reach $11 billion. “The notion that anybody is holding back on getting an approvable product to the FDA simply because they're concerned that these court cases are going to come out in favor of having to do the patent dance is ludicrous,” Lietzan adds.

For companies willing to take the plunge, Zwicker worries that the patent dance could drive up the cost of biosimilars. “You're generating a lot of legal work, by both the parties, including the biosimilar,” he says. “And they're going to have to recoup those expenses.”