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Patent Litigation Under a Future Biosimilars Act

By Aaron Barkoff

    Biopharmaceuticals, such as Epogen® (epoetin) and Erbitux® (cetuximab), are becoming increasingly important for the treatment of disease.  U.S. sales of such drugs were about $40 billion in 2006 and are expected to rise to over $90 billion in 2009.  Accordingly, political pressure is building to allow the sale of ?biosimilar? drugs.  Inspired by the success of the Hatch-Waxman Act, which has led to the wide use of generic ?small molecule? drugs, four different biosimilars bills have been introduced in Congress in the past fifteen months.  Three of the proposed bills would establish a complex scheme for patent litigation between brand-name and generic biopharmaceutical companies, especially as compared to the Hatch-Waxman Act.
    The Hatch-Waxman Act, passed by Congress in 1984, amended the Food, Drugs and Cosmetic Act to establish an abbreviated pathway for FDA approval of small molecule drugs.  Under the Act, a company seeking to market a generic small molecule drug must demonstrate only that the generic is ?bioequivalent? to the corresponding brand-name drug; it need not conduct large scale clinical trials demonstrating safety and efficacy.  The Hatch-Waxman Act, however, did not amend the Public Health Service Act, under which biopharmaceuticals are approved, and therefore it did not create an abbreviated pathway for the approval of biopharmaceuticals.
    The Hatch-Waxman Act established a relatively straightforward scheme for patent litigation.  In a New Drug Application, a brand-name drug company is required to inform the FDA of any patents claiming the drug or methods of using the drug ?with respect to which a claim of patent infringement could reasonably be asserted.?  The patent information is listed in the FDA?s ?Orange Book,? which the FDA updates regularly and publishes on the Internet.  When a generic drug company submits an Abbreviated New Drug Application (?ANDA?), it is required to file one of four different patent certifications with respect to any patents listed in the Orange Book for the brand-name drug.  Upon filing a Paragraph IV certification (indicating that a listed patent is invalid, unenforceable, or not infringed), the generic drug company is required to provide notice to the patent owner.  If the patent owner brings suit within 45 days of receiving notice, then the FDA may not grant final approval of the ANDA for 30 months.  This last feature ? the automatic 30-month stay ? is conspicuously absent from all of the proposed biosimilars bills.

    Rep. Henry Waxman introduced the first of the four biosimilars bills, the Access to Life-Saving Medicine Act (H.R. 1038), on February 14, 2007.  The Waxman bill is regarded as the one most favorable to the generic drug industry.  It establishes a complicated system for the private exchange of patent information between brand-name and generic biopharmaceutical companies, and contains unusual provisions regarding patent litigation.
    The Waxman bill states that a biosimilar applicant or prospective applicant may, at any time, send a written request for patent information to the holder of the approved application for the brand-name biopharmaceutical, who then must respond within 60 days by providing a list of all those patents it believes ?in good faith relate to the reference product.?  Moreover, the brand company must, for the following two years, update its response by identifying all relevant patents issued or licensed after the initial response.  A biosimilar applicant may make additional requests for patent information at any time.
    Unlike the Hatch-Waxman Act, the Waxman bill does not require (or even allow) biosimilar applicants to file any kind of patent certification with the FDA.  Instead, the bill states that a biosimilar applicant may send notice of its application to the holder of the application for the approved biopharmaceutical, including a detailed statement of the factual and legal basis for its belief that one or more of the patents is invalid, unenforceable, or not infringed.  That company may then bring an action for infringement, but only based on a patent in the notice, and only in a judicial district identified by the biosimilar applicant as one in which it consents to being sued.  The bill also states that the recipient of the notice may not, prior to the commercial marketing of the biosimilar drug product, bring a declaratory judgment action for infringement, validity, or enforceability of any patent that was not identified in the notice.
    The Waxman bill also would add a new 35 U.S.C. § 271(e)(6) to the patent statute, stating that in certain cases, the sole and exclusive remedy that may be granted by a court, upon a finding of infringement, shall be a reasonable royalty.  In other words, neither any other measure of damages nor an injunction could be awarded.  This new paragraph would apply to actions where:  (1) the patent-in-suit was identified in response to a request for patent information by a biosimilar applicant; (2) notice of filing of a biosimilar application was provided; and (3) the action was brought either after the expiration of the 45-day period following the notice of filing or before expiration of the 45-day period but where the action was dismissed without prejudice or was not prosecuted to judgment in good faith.

    The Patient Protection and Innovative Biologic Medicines Act of 2007 (H.R. 1956), introduced by Rep. Jay Inslee on April 19, 2007, does not contain any provisions for exchanging patent information or conducting litigation between brand-name and generic biopharmaceutical companies.  Accordingly, patent litigation would proceed under an existing provision ? for example, 35 U.S.C. § 271(a), (b) or (c).  In most cases, such actions would not be filed until after the generic company begins marketing its biosimilar drug product, though in certain cases the brand company might have sufficient warning to file a declaratory judgment complaint.  The Inslee bill is generally regarded as the one most favorable to the brand-name drug industry.

    The Biologics Price Competition and Innovation Act of 2007 (S. 1695), introduced by Sen. Edward Kennedy on June 26, 2007, contains the most complex provisions for exchanging patent information and conducting patent litigation of any of the four biosimilars bills.  It includes many of the features of the Waxman bill, and many additional provisions as well.
    Like the Waxman bill, the Kennedy bill would establish a system for the exchange of patent information between brand-name and generic biopharmaceutical companies.  Unlike the Waxman bill, however, the Kennedy bill mandates participation in the exchange.  The Kennedy bill states that a generic biopharmaceutical company shall, within 20 days of being notified by the FDA that the FDA has accepted its biosimilar application, provide a copy of its application to the holder of the approved application for the brand-name biopharmaceutical.  Within 60 days of receiving the biosimilar application, the brand company shall provide a list of patents covering the biopharmaceutical.  In turn, the generic company shall provide, with respect to each listed patent:  (1) a detailed statement describing the factual and legal basis of its opinion that such patent is invalid, unenforceable, or would not be infringed by the commercial marketing of its biosimilar drug product; or (2) a statement that the generic company does not intend to begin commercial marketing of its product before the patent expires.  Then, the brand company is to provide a detailed statement describing the factual and legal basis of its opinion that each patent in the first category would be infringed by such marketing.
    The Kennedy bill contains detailed provisions for ?patent resolution negotiations? and patent litigation between brand-name and generic companies.  After exchanging the information described above, the companies ?shall engage in good faith negotiations to agree on which, if any patents listed? shall be the subject of a patent infringement action.  If the companies agree, then the brand company is to file suit on the patents within 30 days.  If they do not agree, then provisions to minimize the number of patents-in-suit must be followed, after which litigation may be initiated.  In addition, a biosimilar applicant must provide notice to the brand company at least 180 days before commercial marketing of the biosimilar drug product, after which the brand company may seek a preliminary injunction.  Moreover, like the Waxman bill, the Kennedy bill includes provisions relating to newly issued or licensed patents and limitations on declaratory judgment actions.

    Recently, on March 13, 2008, Rep. Anna Eshoo introduced the Pathway for Biosimilars Act (H.R. 5629).  Compared to the Waxman and Kennedy bills, the Eshoo bill would establish a relatively simple scheme for exchanging patent information and conducting patent litigation.
    Like the Kennedy bill, the Eshoo bill states that a biosimilar applicant shall provide the brand-name company with a copy of its application after the FDA has accepted the application for review.  Within 60 days of receiving the application, the brand company shall provide the generic company with a list of patents covering the biopharmaceutical, explaining why it believes each patent would be infringed if the biosimilar application were approved.  Within 45 days of receiving the list, the generic company shall, with respect to each patent, either (1) state that it will not commence marketing of the biosimilar drug before the expiration of the patent; or (2) provide a detailed written explanation of the reasons why it believes the manufacture, use, or sale of the biosimilar drug would not infringe the patent.  The brand company then has 60 days within which to bring an action for infringement of any patent on the list.  Finally, the bill states that a biosimilar applicant may not bring an action for declaratory judgment of invalidity, unenforceability, or noninfringement of any patent on the list until at least 120 days after the applicant provides its detailed written explanation.

    It appears unlikely that any biosimilars bill will be enacted before the new Administration takes office next year.  However, with healthcare costs steadily rising, Congress is expected to begin working again in earnest to pass biosimilars legislation shortly thereafter.  Any new biosimilars law will probably incorporate some of the elements described above, meaning there will likely be a dramatically different patent litigation scheme for biosimilars than there currently is for small molecule drugs under the Hatch-Waxman Act.

Note:  This article originally appeared in Snippets, the firm newsletter of McDonnell Boehnen Hulbert & Berghoff LLP.

Full post as published by Orange Book Blog: At the Intersection of Patent Law and FDA Law on May 21, 2008 (boomark / email).