Could FDA Enforce the “Requirement” to Provide the Biosimilar Marketing Application ?

I am writing again about the Supreme Court’s June 12 ruling that Amgen was not entitled to a federal injunction ordering Sandoz to share its biosimilar marketing application and manufacturing information.  The Court’s opinion refers ten times to providing those materials as “required” or a “requirement” (Slip Op. at 2, 4, 7, 9, 10, 13, 13, 14, 15, and 15).  What does this mean, as a practical matter?


As a reminder, the Public Health Service Act (PHSA) contains provisions that make it possible for patent litigation between an innovator (here, Amgen) and a biosimilar company (here, Sandoz) to start before the market launch of products (Sandoz’s biosimilar biologic) that might infringe the innovator’s patents.  At a high level, the two companies exchange information and generate a master list of relevant patents, following which they identify a subset for immediate litigation. There is a separate opportunity for litigation on the rest of the patents in the final 180 days before the biosimilar company launches its product.  For more details, see my earlier blog post discussing the scheme.  The entire process is kicked off when the biosimilar company provides the innovator with a copy of its application and information about its manufacturing process.  This is “required” (the Court’s wording) by section 351(l)(2)(A) of the PHSA. I’ll refer to this as the (2)(A) requirement.

The dispute

As noted last week, shortly after enactment the question was raised whether a biosimilar company could simply opt out of the premarket information exchange process.  The PHSA says that the company “shall provide” its application.  But it also says that if the biosimilar company fails to provide its application, then the innovator can bring a declaratory judgment action, but the biosimilar company cannot.  And the Patent Act makes it an artificial act of infringement to submit the application with the goal of marketing before expiry of a patent claiming the innovative product or a method of using the product.

In brief the argument was that the scheme really wasn’t creating a mandate, it was creating a choice.  If the biosimilar company wanted the benefits of the premarket patent litigation process (like control over the scope of the first wave of litigation and the ability to file a declaratory judgment action 180 days before market launch), it could provide its application.  If the biosimilar company wanted to avoid disclosing the trade secrets in its application, it could forfeit the right to file a declaratory judgment and open itself up to a declaratory judgment action at the innovator’s discretion.

Taking it to FDA

FDA opened a docket in 2010 to collect views on implementation of the BPCIA.  Although it asked no questions about the patent litigation provisions, both the innovative industry and the biosimilar industry addressed those provisions.  One biosimilar company, Momenta, wrote that Congress had intended to “decouple the FDA from the patent clearance process” and that the statute “clearly contemplates that one can seek a 351(k) approval at risk, and without patent clearance.”  PhRMA wrote that it was “aware that some have argued the premarket litigation scheme, or at least the triggering step of application disclosure, is somehow optional.”  It added, “[t]here can be no question, however, that biosimilar applicants must by law provide their applications and manufacturing information to reference product sponsors.”  The “provision requiring this — section 351(l)(2) — is unambiguously mandatory.”

FDA punts

In October 2014, Amgen filed a petition with the agency asking it to require biosimilar applicants to certify that they will comply with the (2)(A) requirement.  This petition roughly coincided with Amgen’s suit against Sandoz.  FDA opened a docket for the petition, and Momenta commented, arguing that Congress intended to allow applicants to choose whether to engage in the information exchange process.

In March 2015, FDA denied the petition, largely because of the pending litigation.  First, it wrote, the statute does not require FDA to impose a certification obligation.  Indeed, it added, the statute generally does not describe any FDA involvement in monitoring or enforcing the information exchange.  Amgen had conceded that it was asking for a discretionary action.  Second, the lack of an explicit certification requirement in the PHSA contrasts with provisions of the FDCA that do require applicants under that statute to certify to one thing or another.  For instance, the FDCA requires generic drug applicants to file patent certifications in their abbreviated new drug applications.  Third, the dispute in question — whether the information exchange provisions are “mandatory” or “optional” — was the subject of ongoing litigation (the Sandoz v. Amgen case) which “may clarify how section 351(l) should be interpreted.”

The Supreme Court rewrites the question presented

After the court of appeals ruled against Amgen on this issue, here’s what Amgen wrote in its question presented:

Is an Applicant required by 42 U.S.C. § 262(l)(2)(A) to provide the Sponsor with a copy of its biologics license application and related manufacturing information, which the statute says the Applicant “shall provide,” and, where an Applicant fails to provide that required information, is the Sponsor’s sole recourse to commence a declaratory-judgment action under 42 U.S.C. § 262(l)(9)(C) and/or a patent-infringement action under 35 U.S.C. § 271(e)(2)(C)(ii)?

And here is how the Court recast the question:

The first question presented by these cases is whether the requirement that an applicant provide its application and manufacturing information to the manufacturer of the biologic is enforceable by injunction.

The Court’s version is plainer and more succinct, and of course an injunction was precisely what Amgen sought. But the Court’s choice of words is curious; it seems to assume an answer to the first part of Amgen’s question.

The Court rules

Although it repeatedly referred to section (2)(A) as imposing a “requirement,” the Court concluded that Amgen was not entitled to a federal injunction enforcing the provision. This sounds a little bit like saying there is no private right of action.  And that would not come as a surprise to people who focus on FDA law.  The Federal Food, Drug, and Cosmetic Act (FDCA) imposes many requirements on industry, and it has been clear for decades that there is no explicit or implicit private right of action under the FDCA.  If one private party is aggrieved by another’s non-compliance with the statute, the federal courts will not entertain a private suit to enforce compliance.

Under this reading of the Supreme Court’s opinion, the statute is FDA’s to enforce.  And this would be consistent with the fact that 351(f) of the PHSA makes the violation of any provision of section 351 — which presumably includes section 351(l)(2)(A) — a misdemeanor.

But didn’t the Court expressly decline to say whether providing an application is “mandatory” or a “condition-precedent”?

Yes.  See Slip Op. at 14-15. This was because the dispute about whether providing the application is “mandatory” or “optional” (a “condition precedent” to enjoying certain benefits of premarket patent litigation) was not relevant to Amgen’s request for an injunction under federal law.  It remains relevant to another ground for relief cited by Amgen – unfair competition under California law.

Unfair competition under California law involves acting unlawfully by violating another law.  This may be why the Court recast the question presented, repeatedly characterized section (2)(A) as imposing a requirement, and referred (in footnote) to a “violation” of the requirement in question.  Although the court of appeals may still conclude that California would not treat noncompliance as unlawful, the significance of these word choices will require some reflection.

If California law does authorize a private remedy, the next question will be whether the PHSA preempts that remedy.  There is, of course, no express preemption.  The question will be one of implied preemption and, presumably, obstacle preemption – whether the state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.

What would FDA do, if the request to require certifications were renewed? 

Justice Breyer’s concurrence suggests that he, for one, thinks Congress at least implicitly delegated to FDA the authority to interpret the provisions in question.  And an interpretation from FDA might assist with the obstacle preemption inquiry.

In the end, if FDA agreed that it could enforce section (2)(A), it might consider a refuse-to-file (RTF) policy.  Essentially, it would refuse to file a biosimilar application unless the applicant certified that it would comply with subsection (2)(A), i.e., that it would provide a copy of its application to the innovator within 20 days of FDA’s acceptance of the application.  (For an example of a non-statutory certification-type requirement tied to acceptance of a marketing application, consider the drug regulation indicating that FDA may refuse to file an NDA that lacks a “statement” that each non-clinical laboratory study was conducted in compliance with the agency’s good laboratory practice requirements.)

All of this said, FDA’s reasoning in its response to the Amgen petition suggests it is unlikely to do anything at this stage while the matter remains in the courts.

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