The U.S. Court of Appeals for the Seventh Circuit agreed with a district court earlier this week that neither a settlement agreement between AbbVie and a number of generic biologics companies, nor the 132 patents owned by Abbvie covering its blockbuster drug, Humira, violate the Sherman Antitrust Act. This holding, which is significant in its own right, also has broader implications for patent-antitrust analysis.
The U.S. Patent and Trademark Office (USPTO) yesterday announced in a joint blog post with the Food and Drug Administration (FDA) that the Office plans to execute a number of initiatives aimed at lowering drug prices, as directed in July 2021 by President Joe Biden’s “Executive Order on Promoting Competition in the American Economy.” The announcement came via a blog post jointly authored by USPTO Director Kathi Vidal and Food and Drug Administration (FDA) Commissioner Robert M. Califf. Biden’s Executive Order in part encouraged curbing some pharmaceutical companies’ practices, such as so-called pay-for-delay settlement agreements between brand pharmaceutical companies and generics manufacturers. The Order called for the USPTO and the FDA “to leverage [their] collective expertise in promoting innovation, competition, and the approval and regulation of safe and effective drugs to help provide relief to American families at the pharmacy.”
The U.S. House of Representatives yesterday approved two bills meant to lower prescription drug prices and sent them on to President Joe Biden for approval. The Advancing Education on Biosimilars Act and the Ensuring Innovation Act were introduced by U.S. Senator Bill Cassidy, M.D. (R-LA) and broadly aim to improve the current market for cheaper generic drugs.
As we turn the page to 2021, we expect at least two major cases to be resolved that could have long-lasting effects on where and how Hatch-Waxman and Biologics Price Competition and Innovation Act (BPCIA) cases are litigated. Specifically, the future of skinny labels is in doubt, and available venues for Plaintiffs could be significantly narrowed. The number of new drugs eligible for generic competition will also rebound in 2021, but only time will tell if the global pandemic affects the overall number of generic filings. While there are many more Hatch-Waxman and BPCIA developments to watch this year, these are a few that we will be following closely.
On July 1, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed a holding of the U.S. District Court for the District of New Jersey in Immunex Corporation, Amgen Manufacturing, Limited, Hoffman-La Roche Inc. v. Sandoz, Inc., Sandoz International GMBH, Sandoz GMBH, holding that Sandoz failed to prove that the asserted claims were invalid for obviousness-type double patenting (ODP), failure to meet the written description requirement, and obviousness for lack of motivation to combine the prior art references. The ruling for now blocks Sandoz from marketing its biosimilar version (Erelzi) of the popular rheumatoid arthritis drug, Enbrel. Judge Reyna dissented, arguing that certain clauses of the licensing agreement were illusory, thereby rendering the agreement an effective assignment for purposes of ODP.
Yesterday, in an opinion authored by Judge Moore, the Court of Appeals for the Federal Circuit (CAFC) affirmed the District of Delaware’s decision that: 1) U.S. Patent No. 5,856,298 (the ‘298 patent) belonging to Amgen was infringed by Hospira and not invalid; 2) 14 batches of drug substance for Hospira’s erythropoietin biosimilar drug product were not covered by the Safe Harbor provision of 35 USC § 271(e)(1); and 3) Amgen had proven that it was entitled to a jury verdict of $70 million in damages. Additionally, the CAFC affirmed the jury’s verdict of noninfringement of U.S. Patent No. 5,756,349 (the ‘349 patent).
In the face of pressure to pull provisions in the United States-Mexico-Canada Agreement (USMCA) that would grant 10 years of regulatory data protection (RDP) for biologics inventions, a recent report claims that the requirement would not result in higher drug prices for U.S. patients. The USMCA is currently being negotiated, but the chances of a vote this summer are quickly dwindling. In addition to other objections, many Democrats have opposed granting 10 years of RDP—an increase from 8 years in Canada and from 0 in Mexico (the U.S. period of exclusivity is longer, at 12)—arguing it would result in higher drug prices and delayed entry for biosimilars. Patrick Kilbride, Vice President of International Intellectual Property for the Global Intellectual Property Center (GIPC) at the U.S. Chamber of Commerce, has argued here before that the data does not support those claims.
High prescription drug prices and their impact on costs borne by the government in Medicaid, Medicare Part D and other federal programs, is a front burner topic in Washington. The President has committed to reducing the price of prescription drugs, and pressured drug companies to hold the line. The Department of Health and Human Services (HHS) has proposed two regulatory initiatives—price disclosure in drug advertising and foreclosing rebates from manufacturers to pharmacy benefits managers (PBMs)—aimed at pushing prices down. Some Democrats have urged more sweeping actions, such as having the government negotiate Medicare drug pricing as a single buyer or regulating drug prices by reference to an international index based on government-negotiated drug prices abroad. These proposals cannot solve the drug pricing problem. The Administration’s proposals merely tweak the status quo and put no effective restraint on new drug prices. Jawboning by the Executive has had a minimal impact. Disclosure of manufacturers’ list prices, unless accompanied by numerous and inherently confusing caveats highlighting the difference between those prices and the co-pay an insured consumer must bear at retail, is potentially misleading and, in any event, has no direct impact on prices. Eliminating rebates, as HHS’s rulemaking acknowledged, will inevitably raise health insurance costs now partly paid for by rebates while manufacturers’ pricing power remains unabated. The Democrats’ call for government power buying or price regulation would impact drug prices but also require politically sensitive government determinations about the “worth” of prescription drugs to patients—a significant step on the road to government-allocated health care.
While part one of this two-part series on intellectual property (IP) due diligence focused on a life science company’s own IP portfolio, part two will address a company’s understanding of how it fits into the market by considering its freedom to operate, as well as its competitors’, and the interplay of patent and regulatory exclusivity as it relates to the company’s product. Patent and regulatory exclusivity—two areas that can provide the most value and protection to a life science product—are very interrelated. Simply identifying when a key patent naturally expires is not sufficient, because regulatory exclusivity could possibly extend the company’s ability to keep competitors off the market or allow competitors to speed up entry in certain situations.
Critics of drug patents often claim that when initial drug patents expire, drug companies stuff their patent portfolios with “trivial” patents that unjustifiably extend their patent monopoly to keep the prices up. This argument perpetuates common myths and misunderstandings that fail on several levels… In the last decade, large molecule biological drugs have come to the fore. They provide dramatic new treatments for some conditions but can be very expensive. It is difficult to develop inexpensive generic-type versions for biological drugs.
Originally filed in October 2014, the long-running and high-stakes battle between two powerhouse companies, Amgen and Sandoz, continues to lay out the ground rules for a growing biosimilar industry. State law claims are preempted by the BPCIA on both field and conflict grounds, which means only remedy available against biosimilar applicants refusing to engage in the patent dance is filing for a declaration of infringement, validity, or enforceability of a patent that claims the biological product or its use. Notably, this must be done before receiving manufacturing information from the biosimilar company. Patent lawsuits are notoriously costly so, in the short term, the decision will have the greatest impact on innovator start-ups with limited financial resources. In the long term, relying on costly litigations to keep biosimilar drugs off the market will likely increase the consumer price for any biologic drug.
In the case, Amgen v. Sanofi, the Court vacated an injunction Amgen obtained against a competing drug to its new PCSK9-inhibitor. The Court’s decision turned on a finding that the jury was improperly instructed on the criteria for invalidating a patent directed to an antibody for lack of written description. Thus, will the precedent recently established in Amgen’s PCSK9 case doom the validity of its patents covering Enbrel®? There are likely two ways that the decision in Amgen v. Sanofi made a validity challenge to Enbrel®’s patents easier.
The 20 years of protection afforded by a patent is intended to promote innovation by allowing inventors a chance to recoup development costs and derive a profit from their efforts. However, in the pharmaceutical industry, the practical duration of protection is often substantially shorter since obtaining a patent is just one piece—albeit a critical one–of bringing a drug to market.
In a patent infringement case governed by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), the Federal Circuit found that it lacked jurisdiction to compel discovery in the district court. The Court also found that Amgen failed to meet the requirements for mandamus relief. Amgen Inc. v. Hospira, Inc., (Fed. Cir. Aug. 10, 2017) (Before Dyk, Bryson, and Chen, J.) (Opinion for the court, Dyk, J.)… When filing a BPCIA paragraph (l)(3) list of patents that could potentially be infringed by a biosimilar, all patents that could reasonably be infringed, based on available knowledge without discovery, should be included on that list. In an interlocutory appeal, the Federal Circuit lacks “collateral order” jurisdiction to compel a district court to order discovery concerning non-listed patents, nor is mandamus warranted, because relief is available on appeal from a final judgment.
42 U.S.C. § 262(l) of the Biologics Price Competition and Innovation Act of 2009 (BPCIA) regulates “biosimilars,” biological products that are highly similar to FDA-approved biological products. Section 262(l) has two notification requirements that are important to this case… The second question addressed by the Court was whether the applicant must provide notice after the FDA licenses its biosimilar, or if it may provide notice before the FDA licenses its biosimilar. The Court concluded that an applicant might, but does not have to, provide notice to the manufacturer of the biologic before obtaining a license from the FDA.