On September 16, 2021, eleven congressional leaders (“the Signors”) sent a letter to Andrew Hirshfeld, the acting director of the United States Patent and Trademark Office (“USPTO”), requesting the USPTO to reevaluate the Patent Trial and Appeal Board’s (“PTAB”) view on discretionary denials of petitions for inter partes review (“IPR”).  The Office uses discretionary denials to deny institution of challenges to patents when an upcoming trial in district court would address the patent’s validity on the premise that parallel review would be an inefficient use of the PTAB’s resources. The first signature of the letter is none other than Senator Patrick Leahy (D-VT), one of the two lead sponsors of the America Invents Act. The congressional letter garnered bi-partisan support, with other signors including Senator Elizabeth Warren (D-MA), Congressman Darrell Issa (R-CA), and Senator Richard Blumenthal (D-CT). However, Thom Tillis (R-NC), who has signed previous letters to the USPTO and is an active member of the Senate Judiciary IP Subcommittee, is noticeably absent from the letter.

The Signors emphasized that discretionary denials are contributing to the high price of drugs. As described in the letter, some pharmaceutical companies engage in anti-competitive patent practices that artificially extend the manufacturer’s monopoly on a drug, prevent competitors from entering the market, and drive up the cost of drugs. The letters cites as an example that pharmaceutical companies create “patent thickets” comprising “dozens of questionable, back-to-back patents,” or engage in “product hopping” by transitioning from one branded drug to another very similar drug with a longer patent life.

As noted by the Signors, the IPR process was designed by Congress to provide “a lower-cost and faster alternative to litigation” to allow competitors to challenge weak patents and bring generic or biosimilar products to market sooner. The Signors explained that the IPR system is “one of the few tools available” to serve as a “check against questionable patents” and “help address the root cause of high prescription drug prices.” By denying IPR petitions for “reasons not based on merit” but based on administrative factors “not grounded in statute,” the Signors argued that discretionary denials of IPR petitions have weakened the IPR process.

Particularly, the Signors point to Apple, Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020, designated as precedential May 5, 2020), which set forth the factors governing the PTAB’s discretion to deny institution of an inter partes review (“IPR”). Since Fintiv, the number of IPR petitions denied for reasons not based on the merit have risen dramatically – from 5% in 2016 to an estimated 19% in 2020.

Currently before the Supreme Court are two petitions for writ of certiorari related to Fintiv as further discussed here. Additionally, various members across the patent community have also weighed in on the Fintiv factors in response to the USPTO’s request for comments on discretionary institutions in 2020 as further discussed in our earlier post found here.

With the additional pressure on the USPTO from Congress, we may see changes to discretionary denials and to Fintiv in the future.

On August 3, 2021, the China National Intellectual Property Administration (CNIPA) released the Draft Revised Patent Examination Guidelines (“Draft Guidelines”) for comments.  The revisions in the Draft Guidelines reflect the recently amended Chinese Patent Law that came into effect on June 1, 2021, and the Draft Revised Implementing Regulations (“Draft Regulations”) of the Chinese Patent Law.  This article summarizes selected provisions in the Draft Guidelines that are relevant to pharmaceutical products.

Patent Linkage System

In an earlier post, we discussed the patent linkage system implemented in the 4th  amendment to the Chinese Patent Law.  On July 4, 2021, the National Medical Products Administration (NMPA) of China and CNIPA jointly issued Measures for the Implementation of Early Resolution Mechanisms for Drug Patent Disputes (Interim) (“Measures”), which became effective on the same day.  The Measures provide details on how the Chinese patent linkage system will work.

According to the Measures, when a generic applicant submits its application for marketing authorization in China, it must make one of the four declarations below based on relevant patent information of the corresponding brand drug listed on the registration platform for drugs marketed in China.

  • Type 1: There is no relevant patent on the platform.
  • Type 2: There is a relevant patent on the platform. However, the relevant patent has expired or has been declared invalid, or the generic applicant has a license from the patentee.
  • Type 3: There is a relevant patent on the platform but the generic/biosimilar applicant will not sell its product before expiration of the patent.
  • Type 4: There is a relevant patent on the platform, but the patent should be declared invalid, or the generic product does not fall into the scope of the patent.

If the patentee or interested party has objections to the Type 4 declaration of a generic applicant, they may, within 45 days from the publication date of the generic application, file a lawsuit in a court or request the CNIPA to make an administrative ruling as to whether the generic product’s technical specifications fall into the scope of a relevant patent.

The first generic applicant who has (1) successfully challenged a brand drug’s patent and (2) is first approved to enter the market in China, can enjoy a 12-month market exclusivity period.  During this period, NMPA may still review but will not approve other generic drug applications (except for co-challengers).

The Draft Guidelines provide that a generic applicant should make the Type 4 declaration before they submit their petition to invalidate the relevant patent before the CNIPA.  If the CNIPA receives multiple petitions for invalidating the same patent, the petitions will be processed by the order of the petition dates.

Patent Term Adjustment (PTA)

In accordance with the amended Chinese Patent Law, the Draft Guidelines provide that PTA may be available for a patent granted over four years from its filing date and three years after the date of request for examination.  The PTA must be requested by the applicant within three months from the issue date with the payment of a fee.

The Draft Guidelines further clarify that, for a Chinese national stage application from a PCT application, the filing date of the national stage application is used for PTA calculation.  Also, for a divisional application, PTA is calculated based on the filing date of the divisional application rather than the parent application.  The Draft Guidelines also state that the date of requesting for examination is the mailing date of the notice of entering examination.

The PTA is calculated as the unreasonable delays by the CNIPA subtracted by applicant delays.  The Draft Guideline give some examples of applicant delays, including:

  • Failure to respond to a CNIPA communication within the specified time period;
  • For applications entering the Chinese national stage before the 30-month date, failure to expressly request examination to start prior to the 30-month date;
  • Filing a requesting for deferred examination
  • Adding inadvertently omitted elements disclosed in priority application in a PCT stage by incorporation by reference of the priority application.

Of notes, according to a publication released by CNIPA on May 27, 2021, PTA is only available for invention patents issued on or after June 1, 2021, and any request for PTA will only be processed after the Regulations are finalized.

Patent Term Extension (PTE)

We have discussed PTE in an earlier post.  The Draft Guidelines provide further clarifications on PTE regulations.

Regarding the type of drugs whose patents are eligible for PTE, the Draft Guidelines provide that PTE is available for patents of “innovative new drugs” and some “improved new drugs,” as defined in the Drug Registration Regulations and related guidelines issued by the National Medical Products Administration (NMPA) of China.  According to the Draft Guidelines, for “improved new drugs” (i.e., class 2 drugs, which are improved drugs having not been marketed in or outside China), only some kinds of drugs in this category are eligible for PTE.  Such class 2 drugs include “class 2.4 drugs” (drugs that contain known active ingredients but are used for a new indication), “class 2.2 prophylactic biologics” (improved vaccines), and “class 2.2 therapeutic biologics” (biologics that contain known active ingredients but are used for a new indication).  Thus, according to the Draft Guidelines, patents related to drugs that have already been marketed outside China are not eligible for PTE.

According to the Draft Regulations, PTE is only available for patents directed to active ingredients, manufacturing methods, and medical uses.  The Draft Guidelines specify that PTE only applies to the claim scope correlating to the NMPA-approved active ingredients, manufacturing methods, and medical uses.

The Draft Guidelines also set forth some limitations on the request for PTE (some have been included in the draft Regulations):

  • PTE must be requested by the patentee within three months from the drug’s approval date. If the patentee is different from the drug marketing authorization holder, the patentee must have the permission from the holder to request the PTE.
  • The patent must be granted prior to the drug’s approval date.
  • The patent must be alive when PTE is requested.
  • There must not be previous PTE granted to the patent.
  • When there are multiple patents related to a drug, PTE can only be requested for one patent.
  • When a patent covers multiple drugs, the term of the patent can only be extended under PTE for one drug.

Also, the Draft Guidelines provide that if the patentee has requested both PTA and PTE for a patent, the CNIPA should determine on the PTE request after the PTA is determined.  If the patentee has not requested PTA but the 3-month time limit for requesting PTA has not expired, the CNIPA should wait until the expiration of the three month limit to determine the PTE (unless patentee expressly waives the request for PTA).  Thus, these provisions in the Draft Guidelines suggest that a patent can receive both PTA and PTE.

According to the publication released by CNIPA on May 27, 2021, PTE is only available for patents related to drugs approved on and after June 1, 2021.  Also, Similar to PTA, any request for PTE will only be processed after the finalized Regulations take effect.

15-Day Mail Delay Grace Period

Another update in the Draft Guidelines relevant to U.S. applicants is that electronically filed applications will no longer be entitled to the 15-day mail delay grace period when calculating deadlines to respond to CNIPA communications.

Conclusion

Since the amended Patent Law came into effect, only the Measures related to the patent linkage system have been finalized so far.  The impacts of the amended Patent Law on other aspects of the Chinese patent system will depend on the finalized Regulations and Guidelines, which have not been promulgated yet.  We will provide further updates when the finalized versions of the Regulations and Guidelines are available.

The recently enacted “Purple Book Continuity Act of 2019” went into effect as of June 25, 2021.  The FDA must proactively update the Purple Book information every 30 days with an alphabetical list of licensed biologics, including the date of marketing application approval and the marketing/licensure status.  Additionally, there is now a potentially higher price for reference product sponsors for biologic drugs to enter the patent dance under the BPCIA and assert their patents against potential competitor biosimilar manufactures.

Prior to enactment of  H.R. 1520, the “Purple Book Continuity Act of 2019,” the FDA published the “Purple Book” reference guide for biologic drugs under section 351(a) or 351(k) of the Public Health Service Act (PHS) with information on whether biologic drug products have been determined by the FDA to be biosimilar to (or interchangeable with) the reference biological product and the date a biological product was licensed for marketing under section 351(a) or 351(k) of the PHS.  The Purple Book also indicated the date of expiration of applicable exclusivity if the FDA evaluated the biological product for reference product exclusivity under section 351(k)(7).  The Purple Book was only updated periodically by the FDA.

The recent enactment now adds a new layer of complexity for parties strategizing how to enter the patent dance under the BPCIA.  The reference product sponsor must provide the FDA with the expiration dates of all patents listed in the patent list sent to the subsection (k) applicant pursuant to 42 U.S.C. § 262(l)(3) and any supplemental lists pursuant to 42 U.S.C. § 262(l)(7) within 30 days of providing the subsection (k) applicant with such lists.  The FDA will then publish the patent expiration dates on the searchable Purple Book database in its recurring monthly updates.

The new regulation will likely ensure that the Purple Book listing will be closely watched by parties looking to develop their own biosimilar versions of licensed biologics.  As a result, a reference product sponsor may choose to forgo asserting some or all of their patents in order to avoid publication of expiration dates in what would amount to an easily accessibly compilation of the relevant patent estate.  This prospect could change the calculus for reference product sponsors in terms of the number and type of patents that they assert.  For example, a reference product sponsor may want to limit the number of patents asserted against a party in order to avoid revealing their hand to follow on competitors that may implement a design around strategy.  It remains to be seen whether the new regulation will have an impact on the desire to wield the better part of expansive portfolios against competitors, for example AbbVie’s recent challenge to Alvotech reported here.

As of the date of this post, the Purple Book lists patents and expiration dates in connection with AbbVie’s Humira® product and Genentech’s Avastin® and Lucentis® products.  Notably, most of the listed patents relate to methods of manufacturing rather than formulations, treatment methods, and other aspects relevant to biosimilar manufacturers.

Despite progress, there is still room to improve on the new regulations from the viewpoint of public transparency.  For instance the Purple Book counterpart for small molecule drugs, “The Orange Book”, requires NDA applicants and holders to provide the patent number and expiration date of any patent which claims the drug or method of using such drug and which a claim of patent infringement could reasonably be asserted (21 U.S. Code § 355(b)).  Recent changes to the Orange book came through the Orange Book Transparency Act of 2020.  NDA holders are now required to notify the FDA of invalidation of a patent within 14 days so the Orange Book listing can be amended as necessary.

The trend for both the Purple Book and Orange Book is moving towards increased public transparency.  The major impetus for the new regulations is to increase the number of lower cost drug options on the market, for example by shedding more light on the patent mine field that awaits some would-be competitors trying to enter the market.  However, it may take several years to see any impact, if at all, on the number of generic drugs and biosimilars entering the market.

On June 21, 2021, the Federal Circuit denied Amgen’s petition for en banc review of the court’s February 2021 decision in Amgen Inc. et al. v. Sanofi, Aventisub LLC, et al., 987 F.3d 1080 (Fed. Cir. 2021), which found that Amgen’s two patents covering the cholesterol-lowering antibody drug Repatha® are invalid for lack of enablement.  For more details on the February 2021 decision, please see our previous post here.

The court did not provide detailed comments in its order.  However, Judge Lourie, joined by Judges Prost and Hughes, wrote a separate opinion on the denial of Amgen’s petition.

Amgen had argued that the court’s February 2021 decision announced a new test for the enablement requirement, under which “enablement is evaluated by the ‘time and effort’ required ‘to reach the full scope of claimed embodiments,’” rather than focusing on “whether it would require undue experimentation.”  The Amici supporting Amgen’s petition also argued that the court had “adopted a ‘numbers-based standard’ to evaluate enablement asking not whether experimentation is undue but how long it would take to make and screen every species.”  In denying the petition, the Federal Circuit stated the argument “mischaracterizes our law.”  The court argued that “[w]hat is new today is not the law, but generic claims to biological materials that are not fully enabled.”  The court further reasoned that “[t]he problem was not simply that the claimed genus was numerous—it was that it was so broad, extending far beyond the examples and guidance provided.  Likewise, it was not that it would take a long time to collect the full set of each and every embodiment—it was that the narrow and limited guidance in the specification made far corners of the claimed landscape that were particularly inaccessible or uncertain to make unenabled.”

Amgen further argued that the court should overrule case law that holds enablement is a question of law.  Although acknowledging that one can reasonably ask why enablement is a question of law while written description is not, the court argued that they are bound by their longtime precedent and Amgen’s arguments “provide no compelling reason to introduce such a seismic shift.”

The court also rejected Amgen’s argument that the February 2021 decision will “threaten innovation” and “devastate the incentives to invest in drug discovery.”  The court argued that “if one considers that one has invented a group of compositions defined by a genus but does not know enough to fully enable that genus, one would suppress innovation if one were able to claim such a broad genus, not enhance it.”  Invoking a consolation prize to urge that the sky is not falling, the court noted that Amgen has a patent protecting Repatha®, which is U.S. Patent No. 8,030,457 claiming CDRs in the anti-PCSK9 antibody.  Thus, taking a post hoc view, the court cited Amgen’s good fortune in later obtaining a narrower patent on its antibody as a reason why Amgen should not complain about having its earlier, broader patent invalidated.

Amgen has not yet indicated whether it will take further actions, such as filing a petition for a writ of certiorari to the Supreme Court.  We will keep monitoring this case and report on future developments.

In the most recent of a series of litigations by AbbVie against manufacturers seeking to market biosimilar versions of Humira®, the world’s most profitable drug, AbbVie initiated an action against Alvotech in the district court for the Northern District of Illinois on April 27, 2021, after Alvotech requested approval of its biosimilar, AVT02, a biosimilar to the high-concentration 100 mg/ml formulation of adalimumab (Humira®). Alvotech stated that it believes AVT02 will be the first biosimilar to the citrate-free, 100 mg/ml formulation of Humira® approved in the United States. AbbVie initially stated in its “3C” statement (under 42 U.S.C. § 262(l)(3)(c)) that it reasonably believed that Alvotech would infringe 63 patents out of purportedly more than 100 total patents covering Humira®, although it subsequently removed one from that list. The 62 patents allegedly infringed by Alvotech are listed in the table below.

Alvotech responded that only four of the 62 patents should be the subject of the action pursuant to 42 U.S.C. § 262(l)(6), specifically U.S. Patent Nos. 8,420,081; 8,926,975; 8,961,973; and 9,085,619. The ’081 and ’619 patents are directed to self-buffering formulations, for example, for the 100 mg/ml formulation of Humira®.  The ’975 and ’973 patents are directed to methods of treating ankylosing spondylitis and Crohn’s disease using adalimumab, respectively. Although AbbVie asserted that litigating only the four patents selected by Alvotech would not resolve all of the infringement issues, Alvotech disagreed, stating that “invalidation of these four patents should pave the way for market entry of AVT02.” Consequently, on April 27, 2021, AbbVie asserted the four patents selected by Alvotech (NDIL-1-21-cv-02258). Alvotech has moved to dismiss that action for failure to join a necessary party (Alvotech USA) for which venue is improper in Illinois.

On May 11, 2021, Alvotech filed a Declaratory Judgment Action in the Eastern District of Virginia (EDVA-1-21-cv-00589; EDVA-2-21-cv-00265) asserting non-infringement, invalidity, and unenforceability due to inequitable conduct and unclean hands.  Notably, Alvotech asserted that AbbVie sought to “systematically and artificially inflate the size of the Humira® portfolio,” including patenting purported inventions that AbbVie does not use for Humira®, by seeking multiple patents on the same invention without informing the USPTO of pending applications in other patent families, seeking patents for prior art Humira®, by obtaining patents through inequitable conduct, and seeking patents on inventions that AbbVie did not invent. Alvotech alleged that the foregoing actions were taken to create what Alvotech described as a “minefield of IP,” which AbbVie’s CEO stated in a 2013 earnings call would be the very obstacle that would face biosimilar manufacturers.  Alvotech asserted that as a result of these activities, AbbVie has been able to garner $10 billion to $20 billion in revenue per year despite the fact that patents covering the Humira® product expired in 2016.

Subsequently on May 28, 2021, AbbVie filed a second complaint in the Northern District of Illinois (NDIL-1-21-cv-02899) asserting the other 58 patents that AbbVie alleged to be infringed by Alvotech. Alvotech has noted in its declaratory judgment action that there has never been a case in U.S. history where 60 or more patents were litigated to final judgement. Yet, AbbVie contends that all 62 must be litigated to resolve the dispute.

In the most recent example of aggressive patent litigation tactics, AbbVie continues to bury its competition in infringement claims while continuing to enjoy monopoly profits on the world’s most lucrative drug for nearly two decades.

We previously reported on AbbVie’s patent portfolio around Humira® (here). AbbVie is not the first and only company to create what has been termed a “patent thicket” around its products. For example, Amgen/Immunex’s Enbrel® (etanercept) and Roche’s Rituxan ® (rituximab) are also protected by large portfolios. However, the expansiveness of AbbVie’s Humira® portfolio, and AbbVie’s apparent willingness to wield their IP against would-be competitors, has heightened the focus on AbbVie’s practices as reported here. As discussed in our earlier post, this prompted an unprecedented antitrust suit against AbbVie in which the district court judge ultimately sided with AbbVie, but which is currently on appeal in the 7th Circuit.

As noted in the table below, challenges to AbbVie’s patents have not garnered much success to-date. As a result, the sheer size and scope of the portfolio continues to present a daunting barrier to market entry for biosimilars to AbbVie’s Humira®. As discussed here, while biosimilar versions of Humira® have launched in numerous countries around the world, AbbVie® continues to thwart biosimilar competition in the United States, where it secured over $16 billion of Humira® sales revenues in 2020.

We will continue to monitor the progress of the battles between AbbVie and Alvotech, as well as new challenges to the patents AbbVie asserted against Alvotech.

Previously challenged patents are noted as follows:

* Pending; ¥ Settled/voluntarily dismissed; # Institution denied

In an earlier post, we discussed the patent linkage system implemented in the Fourth Amendment to the Chinese Patent Law, which will come into effect on June 1, 2021.  Another important change in the amendment is the introduction of Patent Term Extension (PTE) for pharmaceutical patents.

The new PTE provision is in the 3rd paragraph of Article 42 in the amended Chinese Patent Law, which reads and is translated as follows: “In order to compensate for the time taken for regulatory review and approval of a new drug in China, the Patent Administration Department of the State Council, at the request of a patentee, may extend the term of an invention patent related to the new drug that has received regulatory approval for marketing in China.  The patent term extension should not exceed five years, and the total remaining term of the patent after the regulatory approval should not exceed fourteen years.”

Specific rules for implementing PTE will be provided in the amended Implementing Regulations of the Chinese Patent Law (“Regulations”).  Draft amendments to the Regulations (“draft Regulations”) were released on November 17, 2020.  A final version of the amended Regulations has not been promulgated.

Below is a summary of the PTE rules according to the amended Chinese Patent Law and the draft Regulations.

Eligibility

The amended Chinese Patent Law provides that PTE may be available for an invention patent related to a new drug.  Under Section 85-4 of the draft Regulations, a new drug can be a new chemical drug, biologic drug, or traditional Chinese medicine, and PTE is only available for patents covering the drug, methods of manufacturing of the drug, and medical use of the drug.  Thus, medical device and equipment patents are not eligible for PTE.

The draft Regulations also specify that the patent related to the new drug refers to a patent related to the drug’s active ingredient that receives regulatory approval for the first time in China.  However, it is not clear whether the active ingredient only includes the active moiety or also includes the salts, ester, or crystal forms of the active moiety.

Timing

The draft Regulations provide limitations on the timing of filing a request for PTE.  Under Section 85-7 of the draft Regulations, a request for PTE must be filed within three months from the date when a new drug receives regulatory approval.  The request should be filed with the Patent Administration Department of the State Council (i.e., China National Intellectual Property Administration (CNIPA)).

Thus, under the current version of the draft Regulations, drugs approved prior to March 1, 2021, will not be eligible for PTE.  Some pharmaceutical companies have submitted their concerns on this requirement to the CNIPA.  In particular, they asked for a “transition period” to include some drugs approved before March 1, 2021.  They argued that drugs approved since April 2018 should be eligible for PTE consideration since the Chinese State Council executive meeting decided in April 2018 to provide up to 5 years’ term extension for patents related to drugs for which regulatory approval was simultaneously applied in China and abroad.

Another limitation on the timing is that a PTE request must be filed at least six months prior to the patent’s expiration date (without PTE).  Since the amended patent law will come into force on June 1, 2021, it appears that patents expiring before December 1, 2021, will not be eligible for PTE considerations.  No retrospective remedy is provided in the current version of the draft Regulations.

Calculation

The calculation of PTE under the amended Chinese Patent Law is different from PTE calculation in the U.S. and is more similar to that of the supplementary protection certificate (SPC) in the European Union.  Section 85-5 of the draft Regulations provides that the extended term under PTE is the time period between a patent’s filing date and the date when the drug receives regulatory approval, reduced by five years.  The total time period of PTE is also subject to limits under Article 42 of the amended patent law as discussed above.

Limitations

Section 85-7 of the draft Regulations further provides the following requirements and limitations on the request for PTE:

  • when there are multiple patents related to a new drug, PTE may only be requested for one of the patents;
  • when a patent covers multiple drugs, the term of the patent may only be extended under PTE for one drug;
  • the patent has never received a PTE; and
  • the remaining term of the patent (without PTE) is no less than six months (discussed above).

Also, under Section 85-6 of the draft Regulations, during a patent’s extended term under PTE, the scope of the patent is limited to the new drug and the approved indication(s) of the drug.

Conclusion

Along with other amendments, the introduction of PTE will strengthen IP protection for pharmaceutical patents in China.  The real impact of the amendments will depend on the finalized Regulations, CNIPA’s examination guidelines, and future judicial interpretations.  We will provide more updates on any further clarifications and amendments.

On May 6, 2021, the Brazilian Supreme Court determined that the minimum ten-year patent term set forth in Article 40 of the Brazilian Intellectual Property Statute (Law No. 9,279) was unconstitutional (ADI 5529), and, on May 12, 2021, retroactively reduced the terms of granted pharmaceutical and medical device patents that are valid only due to the ten-year patent term provision to 20 years from the filing date.  The terms of granted patents in fields other than pharmaceuticals and medical devices did not have their terms retroactively reduced, i.e., they maintain their ten-years from grant date terms.

Historically, patent applicants before the Brazilian Patent and Trademark Office (BRPTO) experienced some of the longest pendency times in the world. In 2015, the average pendency of a patent application was eleven years with some applications taking more than twenty years to grant as a patent. This meant that some Brazilian patents were granted only after their 20-years from filing date term had already expired.  Due to the extremely long pendency periods, the Brazilian legislature enacted the minimum ten-year patent term.

In the Brazilian Supreme Court’s May 6 decision, nine of the eleven Justices issued opinions stating that the ten-year patent term, even in view of a backlog of patent applications, violated the Brazilian Constitution.  The reasoning underlying the decision included the fact that the extension was automatic, could be subject to gamesmanship by the applicant, and was not sufficiently limited to prevent evergreening.

The Justices decided that the general provision of twenty years from the date of filing provided a sufficient term of protection for patent owners, and the minimum term constituted a “term extension” that undermined the temporary nature of a patent as provided by the Brazilian Constitution. The Justices highlighted that the term extension finds no parallel in any other country’s patent framework and automatically extends the patent’s life without considering the applicant’s responsibility for contributing to the delay. Furthermore, the Justices emphasized that the minimum term increased pharmaceutical prices in the Brazilian market by creating monopolies and impacted the country’s access to pharmaceuticals.

After the May 6, 2021 decision, several generic companies in Brazil filed lawsuits targeting patents held by pharmaceutical companies.  Specifically, 46 identical lawsuits were filed against 79 patents, including patents directed to Repatha® (evolocumab), Nucala® (mepolizumab), Entyvio® (vedolizumab), Xvega® (denosumab), Brilinta® (ticagrelor), Xarelto® (rivaroxaban), Vyvanse® (lisdexamfetamine), Xalkori® (crizotinib), Latuda® (lurasidone), Ibrance® (palbociclib).

The Brazilian Supreme Court estimated that 11% of patents granted with the extended term are in the pharmaceutical field. With approximately 36,000 total patents granted with the benefit of the patent term extension, the retroactive application of the Brazilian Supreme Court’s May 6, 2021 decision appears to shorten the patent term of approximately 4,000 granted pharmaceutical patents, likely including the 79 patents directed to the major pharmaceutical products noted above.

This decision will have an unprecedented impact on pharmaceuticals in Brazil because many generic and biosimilar manufacturers will be able to launch years before previously anticipated.  It will be interesting to observe the ripple effects of this decision on drug pricing and availability, public health, and patent examination resources and procedures in Brazil in coming years.  Given the Supreme Court’s scrutiny of the limitless and automatic aspects of the provision, it is possible that the Brazilian legislature will consider enacting an alternative framework akin to the patent term extension or supplementary protection certificate regimes employed by the United States and European Union, respectively.

During the first quarter of 2021, multiple companies launched adalimumab biosimilars as a growing number of biosimilar players marketed their versions of the world’s most profitable drug, Humira®, which had sales of about $20 billion in 2020.  While none have launched thus far, at least eight adalimumab biosimilars are due to launch by the end of 2023 in the United States, where Abbvie secured over $16 billion of its Humira® sales revenues in 2020.

On February 11, 2021, the European Commission (EC) granted marketing authorization for Celltrion’s YuflymaTM for use in treating thirteen chronic inflammatory diseases.  This authorization is valid in all EU Member States and the European Economic Area countries Iceland, Liechtenstein, and Norway.  According to Celltrion, YuflymaTM is the first adalimumab biosimilar with a high concentration, low-volume, and citrate-free formulation.

On February 16, 2021, Sandoz Canada launched its adalimumab biosimilar, Hyrimoz®, in Canada.  Hyrimoz® was authorized for sale in Canada by Health Canada on November 4, 2020.  This biosimilar is approved for nine indications, including rheumatoid arthritis, polyarticular juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, adult Crohn’s disease, ulcerative colitis, hidradenitis suppurativa, psoriasis, and adult uveitis.  According to Sandoz Canada, the company has completed the pan-Canadian Pharmaceutical Alliance (pCPA) negotiations for Hyrimoz®, which is the first step in securing public reimbursement.

On February 18, 2021, Fresenius Kabi Canada announced the launch of IDACIO® in Canada.  IDACIO® received marketing authorization from Health Canada on October 30, 2020.   IDACIO® is approved for treating all indications of the reference drug Humira® in the areas of rheumatology, gastroenterology, and dermatology.  IDACIO® is the first biosimilar product introduced into North America by Fresenius Kabi.

On March, 23, 2021, LG Chem announced in a public filing that it obtained approval from Japan’s Health Ministry for its adalimumab biosimilar called Adalimumab BS MA.  LG Chem is partnering with Mochida, which obtained exclusive sales and marketing rights over the biosimilar in Japan.  Adalimumab BS MA is approved for nine indications, including rheumatoid arthritis, psoriasis vulgaris, psoriatic arthritis, pustular psoriasis, ankylosing spondylitis, polyarticular juvenile idiopathic arthritis, intestinal Behcet’s disease, Crohn’s Disease, and ulcerative colitis.

In addition, Samsung Bioepis recently launched its adalimumab biosimilar in multiple markets.  On February 18, 2021, it launched the adalimumab biosimilar HadlimaTM in Canada, in partnership with Merck Canada.  In Canada, HadlimaTM is approved for the treatment of rheumatoid arthritis, polyarticular juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, adult Crohn’s Disease, ulcerative colitis, hidradenitis suppurativa, plaque psoriasis, and adult and pediatric uveitis.  On March 29, 2021, the company launched HadlimaTM in Australia in partnership with MSD Australia (Merck).  In Australia, HadlimaTM is approved for treating rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, adult and pediatric Crohn’s disease, ulcerative colitis, hidradenitis suppurativa, and plaque psoriasis.  On March, 15, 2021, Samsung Bioepis agreed with Yuhan Corp. to sell its adalimumab biosimilar under the name AdalloceTM in Korea.  Samsung Bioepis obtained the local license for AdalloceTM in 2017 and plans to launch the product in the first half of 2021.

AbbVie has been using various life cycle extension strategies to maintain as much market share as possible.   In addition to a “patent thicket,” which is the subject of a pending lawsuit, AbbVie has pushed for a shift to a new formulation that causes less pain, offered a wide range of doses for different types of patients, and obtained approval of new indications.  However, in October 2018, with the launch of adalimumab biosimilar products in Europe, the sales of Humira® dropped by 30 percent in the following year.  Thus, evidence from Europe suggests that biosimilar companies are likely to take a significant portion of Humira®’s market share with aggressive discounting.

Two bills were signed into law on April 23, 2021, with the aim of increasing access to and education regarding generic and biosimilar medicines.

The Ensuring Innovation Act was passed with the aim to “lower the price patients pay for their prescriptions,” according to Senator Bill Cassidy, one of the co-sponsors for the bill.  The bill also “ensures affordable life-saving medicine while preserving innovation for cutting-edge medicine,” per comments by Senator Roger Marshall, another of the bill’s co-sponsors. Representative Kurt Schrader, a co-sponsor of the House companion bill, stated that the bill would close “another loophole to prevent drug companies from gaming the system and holding back competition in the marketplace.”

For all these ambitious goals, the bill makes relatively narrow changes to the Federal Food, Drug and Cosmetic Act (the “FD&C Act”). Specifically, the bulk of the changes in the bill replace the term “active ingredient” with the term “active moiety” in certain portions of the FD&C Act, as well as inserting similar terms relating to biologics.  The majority of these changes deal with New Chemical Entity exclusivity and Orphan Drug exclusivity. These exclusivities allow for a period where the first company to meet the requirements for exclusivity may market the medicine without generic competition, regardless of any related patent coverage.

This change to “active moiety” is intended to restrict these exclusivity periods to the FDA’s narrower definition of “the molecule or ion… responsible for the physiological or pharmacological action of the drug substance,” which explicitly excludes changes such as salts, complexes or chelates. This addresses a perceived issue where a company currently selling a drug protected by some form of exclusivity could attempt to receive a new exclusivity period by introducing a product with a new active ingredient but the same active moiety.

Whether these changes will achieve the goals described by the bill’s sponsors remains to be seen. The FDA has, for well over 20 years, interpreted the statute with the “active ingredient” language to require a new “active moiety” to receive exclusivity. 21 C.F.R. § 314.108 (1994).  That said, drug companies have found at least some success in convincing courts that this interpretation was impermissible, see Amarin Pharms. Ireland Ltd. v. Food & Drug Admin., 106 F. Supp. 3d 196, 208–09 (D.D.C. 2015), so the Act cannot be said to have no effect.

The Advancing Education on Biosimilars Act of 2021 was similarly intended to “help lower the cost of health care” by providing education to health care providers and patients about biosimilars, according to Senator Maggie Hassan, one of the bill’s co-sponsors. This effort to educate the public about biologics and biosimilars traces back to at least 2019, when similar bills were introduced by Sen. Hassan and others. Now-retired Senator Mike Enzi, a co-sponsor of the 2019 version of the bill, stated the intention was to “drive down drug costs by increasing confidence in cheaper prescription drug alternatives like biosimilars.”

The Act authorizes the Secretary of Health and Human Services to operate a website providing educational materials regarding biologics and biosimilars, including definitions and the review and approval processes for those products. Should this and other efforts increase the adoption of biosimilars, reports have indicated reductions in health care costs of up to $7 billion annually could be achieved by an increased share of the market going to biosimilars.

On February 25, 2021, the U.S. Court of Appeals for the Seventh Circuit heard oral arguments in UFCW Local 1500 Welfare Fund v. AbbVie Inc. (Case No. 20-2402), a case appealed from the U.S. District Court for the Northern District of Illinois by a group of Humira buyers (including consumer groups, drug wholesalers, and unions) accusing AbbVie of using “patent thicket” around Humira® to block biosimilars from entering the market, in violation of antitrust laws.

The alleged Humira “patent thicket” includes over 130 patents (resulting from about 250 patent applications) covering the adalimumab molecule and other aspects of the technology such as formulations and manufacturing methods. According to the suit, AbbVie also entered into agreements with several biosimilar makers (including Amgen, Samsung Boepsis, and Sandoz) under which the biosimilar makers received access to the European market in October 2018 but will stay out of the U.S. market until 2023. In this case, the Humira buyers are attempting to get a judgement that would allow biosimilars to enter the U.S. market earlier than the date set forth in the agreement.

Humira (adalimumab) is one of world’s most valuable biologic drugs and was approved for treatment of a variety of autoimmune disorders including rheumatoid arthritis, Crohn’s disease, and plaque psoriasis. In 2019, Humira’s sales were $14.9 billion (increased from $13.7 billion in 2018) in the U.S. where no biosimilar was on the market, while sales were $4.3 billion (decreased from $6.3 billion in 2018) in Europe where biosimilars had launched.

In 2019, the group of Humira buyers filed a complaint in the district court alleging, inter alia, that AbbVie “applied for, obtained, and asserted patents to gain the power it needed to elbow its competitors” out of the U.S. market, and “created a thicket of intellectual property protection so dense that it prevented would-be challengers from entering the market with cheaper biosimilar alternatives” in violation of the Sherman Act.

In June 2020, the district court dismissed the complaint without prejudice.  The court evaluated whether AbbVie’s alleged conduct is protected by the Noerr–Pennington doctrine, under which a party’s application for patents before the USPTO is protected against antitrust liability unless the application is “objectively baseless,” i.e., there is no reasonable expectation of success on the merits. The court found that “AbbVie’s rate of success with its patent applications—more than half (53.4%)” supported that AbbVie’s patent applications were not objectively baseless, and thus there was no violation of antitrust law under the Noerr–Pennington doctrine. The court also found that the Humira buyers did not “plausibly allege the existence of an agreement that restrained competition.”

In July 2020, the Humira buyers appealed the decision to the 7th Circuit.  During the oral argument in February 2021 before a panel consisting of Circuit Judges Frank H. Easterbrook, Diane P. Wood, and Thomas L. Kirsch II, the Appellants argued that there was “widespread, objective baselessness in the patent minefield erected by AbbVie.”

Judge Easterbrook asked the Appellants whether they were prepared to prove that each of the patents in the alleged thicket is invalid. The Appellants contended that, instead of showing that all the patents are invalid, they only needed to show that at least one biosimilar maker would have prevailed in a challenge to Humira’s exclusivity if not for the patent thicket. The Appellants further stated that AbbVie only asserted about 60 to 80 patents against would-be biosimilar makers and thus, they only needed to focus on those asserted patents. Judge Easterbrook also questioned the Appellants’ assertions that there was no presumption of the patents’ validity, and noted that the likelihood of proving that all the patents in the entire thicket are invalid is “astoundingly small.”

Judge Wood appeared to agree with the Appellants that it would not matter whether the patents not asserted by AbbVie are invalid. She asked AbbVie why they would agree to the biosimilars’ entry in 2023, years before their patents’ expiration in the 2030s, and whether this agreement is “a signal of tremendous weakness” of the patents.  AbbVie responded that the later-expiring patents in the alleged thicket are generally narrower than earlier-expiring ones, and thus the date set forth in the agreement is a “perfectly appropriate compromise” between AbbVie and the biosimilar makers.

Concerning the consequences of the case’s outcome, Judge Kirsch asked the Appellants how a brand company could enter a global agreement with biosimilar makers without subjecting itself to antitrust lawsuits in the U.S. The Appellants responded that if a company decides to combine settlements in different markets, they need to make sure that they are settling, not trading off one market against another. The Appellants contended that AbbVie’s agreement with the biosimilar makers is a “sweetheart deal in Europe” but “terrible deal” in the U.S.

Overall, the oral arguments provide insights into the court’s views on the antitrust implications of creating a “patent thicket” around a drug, and on global settlement agreements involving entry into different markets.  We will provide additional updates as the case proceeds.