Sandoz Inc. and Morrison & Foerster scored a big win for biosimilar producers Monday when the U.S. Supreme Court finally explained what Congress was thinking when it passed the insanely complicated Biosimilar Price Competition and Innovation Act.
Drugmakers who introduce a “highly similar” version of an existing biological drug won on two grounds. They don’t have to wait to get FDA approval before serving the BPCIA’s required 180-day notice on the branded drugmaker. And they can opt out of the BPCIA’s “patent dance” – a complex exchange of disclosures about the biosimilar product and the branded drug patents – without risking a federal injunction.
Justice Clarence Thomas’ unanimous opinion said the brand’s only recourse is a declaratory judgment action for patent infringement, or possibly a suit for injunctive relief under state law.
Here are three quick takeaways from the ruling.
1) This is an across-the-board win for biosimilar producers. The state law issue is a red herring.
From reading Thomas’ opinion one might infer the state claims – in Amgen’s case brought under California’s unfair competition law – could have some potential bite. A look back at the argument indicates this was simply a loose procedural end the justices couldn’t tie up. New Justice Neil Gorsuch said the BPCIA might pre-empt California law, but Sandoz didn’t make that argument “in any way, shape or form.”
“I think there are strong arguments that this would be pre-empted,” Assistant Solicitor General Anthony Yang responded. The BPCIA is “a highly detailed scheme” and enforcing it state-by-state “might wreak some havoc.”
“Exactly,” Gorsuch replied. “I agree with you.”
Chief Justice John Roberts also described the BPCIA as “a very reticulated statute” that appears to implicate “pretty well-established pre-emption laws.”
So when Thomas instructed the Federal Circuit in Monday’s opinion to consider Amgen’s state law claims and whether they’re pre-empted by the BPCIA, he added a wink. “The court is also of course free to address the preemption question first by assuming that a remedy under state law exists,” he wrote.
2) The Federal Circuit cannot catch a break at the Supreme Court.
It’s been a tough term for the Federal Circuit. Decisions on patent design damages, laches, and patent exhaustion have been shredded.
In Sandoz, the high court rejected the Federal Circuit on the 180-day period and the mootness of the state law claims, but it did agree that a federal injunction is not available to force a biosimilar applicant into the patent dance.
Alas, even that one harmonious holding was for “slightly different reasons than those provided by the court below,” Thomas wrote. The “flaw in the Federal Circuit’s reasoning” was its finding that opting out of the patent dance is an artificial act of infringement. Even Amgen conceded some of the point, Thomas wrote. If the Supreme Court next declares that Simon Tam has no constitutional right to call his rock band The Slants, then we’ll know the high court is just messing with CAFC.
3) Justice Breyer, please introduce yourself to Neil Gorsuch.
Breyer issued a one-paragraph opinion agreeing with the majority but added Congress “implicitly delegated” to the FDA the interpretation of the BPCIA. With experience the agency “may well have authority to depart from, or to modify, today’s interpretation,” Breyer wrote.
This is a remarkable pipe dream given the well-known hostility Breyer’s newest colleague has expressed toward administrative tribunals and the concept of Chevron deference. As if to put a point on it, the justices on Monday granted cert in a case that proposes to declare the Patent Trial and Appeal Board’s role in resolving validity disputes unconstitutional. If Breyer should outlive Gorsuch, then yes, perhaps, the court will then defer to the FDA’s interpretation of the biologics law. Not likely before.