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Biosimilars, the BPCIA, and Amgen v. Sandoz: The Federal Circuit’s First Attempt To Make Sense of “A Riddle Wrapped in a Mystery Inside an Enigma”

On July 21, 2015, the Federal Circuit issued a key decision regarding the meaning of various provisions of the Biologics Price Competition and Innovation Act (BPCIA). See Amgen Inc. v. Sandoz Inc., Fed. Cir. Case No. 2015-1499. A divided panel of the Court decided two issues on appeal, giving the nod to Sandoz on the first issue and to Amgen on the second. As previously reported in a June 4 post on our Global IP Matters blog, the appeal had been fast-tracked because of the potentially imminent marketing of Sandoz’s Zarxio (filgrastim-sndz), which is a biosimilar version of Amgen’s Neupogen® (filgrastim). Perhaps for similar reasons, the Court issued its 46-page opinion very quickly – less than two months after the parties’ oral argument was held on June 3, 2015.

The Issues

The Federal Circuit’s decision focused on two issues, both of which had been decided largely in Sandoz’s favor during the district court proceedings:

  1. Whether the BPCIA’s patent exchange provisions – specifically, 42 U.S.C. § 262(l)(2)-(6) – are mandatory (Amgen’s view) or optional (Sandoz’s view), and what the consequences of non-compliance or “opting out” of these exchange provisions should be; and
  2. Whether the 180-day pre-launch notice required under 42 U.S.C. § 262(l)(8) may be given immediately upon FDA’s acceptance of the biosimilar application (Sandoz’s view) or only upon FDA’s approval of the biosimilar product for licensure (Amgen’s view).

The Court’s Decision

The Court was split 2-1 on both issues, with a different two-judge majority agreeing on each issue. On the first issue, Judges Lourie and Chen sided with Sandoz, affirmed the district court, and held as follows:

[E]ven though under paragraph (l)(2)(A), when read in isolation, a subsection (k) applicant would be required to disclose its aBLA and the manufacturing information to the RPS by the statutory deadline, we ultimately conclude that when a subsection (k) applicant fails the disclosure requirement, 42 U.S.C. § 262(l)(9)(C) and 35 U.S.C. § 271(e) expressly provide the only remedies as those being based on a claim of patent infringement. Because Sandoz took a path expressly contemplated by the BPCIA, it did not violate the BPCIA by not disclosing its aBLA and the manufacturing information by the statutory deadline.

Maj. Op. at 15 (emphasis added). Critical to the majority’s reasoning was the presence of an express remedy within the BPCIA itself, a remedy that the majority believed was designed to address precisely the path that Sandoz had chosen. Judge Newman dissented from this portion of the opinion, arguing that the BPCIA’s disclosure requirements under (l)(2)(A) are mandatory, and that “[t]hese deliberate violations of the requirements of the BPCIA forfeit Sandoz’ access to the benefits of the BPCIA.” Newman Op. at 2; see also id. at 8 (“Subsection (k) and subsection (l) are components of an integrated framework; to enjoy the benefits of subsection (k), the biosimilar applicant is obligated to comply with subsection (l).”).

On the second issue, Judges Lourie and Newman sided with Amgen, reversed the district court, and held as follows:

We … conclude that, under paragraph (l)(8)(A), a subsection (k) applicant may only give effective notice of commercial marketing after the FDA has licensed its product. The district court thus erred in holding that a notice of commercial marketing under paragraph (l)(8)(A) may effectively be given before the biological product is licensed….

Maj. Op. at 18 (emphasis added). Judges Lourie and Newman based their decision on the rationale that “[r]equiring that a product be licensed before notice of commercial marketing ensures the existence of a fully crystallized controversy regarding the need for injunctive relief,” and that the 180-day post-licensure period therefore “provide[s] a defined statutory window during which the court and the parties can fairly assess the parties’ rights prior to the launch of the biosimilar product.” Id. at 17. Judges Lourie and Newman also made clear that the (l)(8)(A) notice requirements are mandatory where, as here, a biosimilar applicant “completely fails to provide its aBLA and the required manufacturing information to the RPS by the statutory deadline.” Id. at 21.

The majority conceded that, at least in this case, its ruling would effectively provide Amgen with an additional 180 days of market exclusivity for Neupogen. Id. at 18. But the majority argued that this would not necessarily be the case for other reference biologic drugs where the 12-year exclusivity period had not already expired. Id. (“A statute must be interpreted as it is enacted, not especially in light of particular, untypical facts of a given case.”). Judge Chen dissented vigorously, arguing that the majority decision results in an “extra-statutory windfall” for Amgen and other reference product sponsors under the BPCIA. Chen Op. at 2. Judge Chen also disagreed that the (l)(8)(A) notice requirements are always mandatory. If a party does not engage in the (l)(2) exchange procedures, Judge Chen reasoned, then (l)(8) “lacks meaning” and “does not apply” (in the same way that (l)(3)-(l)(7) also would not apply). Id. at 6, 10.

What Does the Court’s Decision Mean for the Parties?

The practical effects of the Federal Circuit’s decision are as follows:

  1. Sandoz may not market its biosimilar filgrastim product until September 2, 2015, which is 180 days from March 6, 2015, the date that Sandoz received FDA licensure/approval for Zarxio. Maj. Op. at 21. Consistent with this finding, the Federal Circuit also extended its injunction pending appeal to September 2, 2015. Id. at 25.
  2. Amgen’s state law claims for unfair competition and conversion are dismissed, some on substantive grounds (because Sandoz did not violate the BPCIA with respect to certain of Amgen’s claims) and some on mootness grounds (because the 180-day extension through September 2, 2015 provides all the relief Amgen could otherwise obtain on its other claims). Maj. Op. at 22-23.
  3. The case is remanded to the district court for consideration of Amgen’s infringement claims and Sandoz’s counterclaims regarding U.S. Patent No. 6,162,427 (covering a method of using filgrastim), as well as “any other patents properly brought into the district court action.” Maj. Op. at 25. If Amgen wishes to prevent Sandoz from marketing Zarxio after September 2, 2015, it will likely have to obtain an injunction from the district court based on the ‘427 or other patents (all of which will need to take place in a very short time frame).

What Does the Court’s Decision Mean for the BPCIA?

The Federal Circuit’s decision in Amgen v. Sandoz is far from the end of the story for the BPCIA. First, there are several important issues — such as that of “preemption” under the BPCIA, or interpretation of other aspects of the Act’s patent exchange and dispute resolution provisions — that were not squarely raised by this appeal, and thus were not addressed by the court. See, e.g., Maj. Op. at 21 n.5 (declining to address the preemption issue). Second, given the panel split on both key issues, the case is ripe for en banc rehearing by the full Federal Circuit and potentially for certiorari to the U.S. Supreme Court. Third, without expressly asking Congress to rewrite the BPCIA, the Court did not hesitate to express its frustration with the statute’s text. On this point the entire panel of judges even appeared to be in agreement. As Judge Chen wrote, “[t]o fulfill our judicial obligation to say what the law is, we must choose from a series of imperfect choices.” Chen Op. at 11 (internal quotations omitted). And as Judges Lourie and Chen wrote in the opening of the Court’s opinion:

Winston Churchill once described Russia as “a riddle wrapped in a mystery inside an enigma.” Winston Churchill, The Russian Enigma (BBC radio broadcast Oct. 1, 1939), available at That is this statute. In these opinions, we do our best to unravel the riddle, solve the mystery, and comprehend the enigma.

Maj. Op. at 3 n.1.

In other words, and as is usually the case with biosimilars and the BPCIA, stay tuned …

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Thomas H. Wintner is an intellectual property and commercial litigator at Mintz. Tom handles cases in trial and appellate courts, counseling clients in life sciences, health care, education, real estate, and other sectors. He has extensive experience with patent litigation and other IP matters.