The patent venue statue, 28 U.S.C. § 1400(b), states that “[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides or where the defendant has committed acts of infringement and has a regular and established place of business.” See 28 U.S.C. § 1400(b).  Recently, in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, the United States Supreme Court held, in a unanimous 8-0 decision, that the broad definition of corporate “residence” in the general venue statute 28 U.S.C. 1391(c) does not apply in patent infringement cases involving domestic corporations.

For the last twenty-seven years, since the Federal Circuit’s ruling in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F. 2d 1574 (1990), patent infringement litigation has functioned under the premise that the “residence” provisions of §1391(c) apply to §1400(b), and thus, venue was proper for a defendant domestic corporation wherever it was subject to personal jurisdiction at the time of the action.

The Supreme Court’s recent ruling affirmatively rejected such a flexible approach to the patent venue statute. The Supreme Court emphasized that its prior decision in Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222, 226, 77 S. Ct. 787, 1 L. Ed. 2d 786 (1957), which held that the word “resides” in §1400(b) as applied to domestic corporations refers only to the entity’s state of incorporation, still applies.  In TC Heartland, the Court reasoned that Congress’ 2011 amendments to § 1391 show no indication of an intent to disturb its previous holding or alter the meaning of § 1400(b). As such, the Supreme Court again rejected the notion that §1391(c) defines residence for the purposes of §1400(b). The patent venue statute thus provides that a domestic corporation only “resides” in its state of incorporation.

After TC Heartland, in a patent infringement case where the defendant is a domestic corporation, a defendant may be sued only: (1) in its state of incorporation (where it “resides”); or (2) where the defendant “has performed acts of infringement and has a regular and established place of business.”  See 28 U.S.C. § 1400(b).  A variety of questions remain as to the potential impact this decision will have on pharmaceutical litigation for small molecules arising under Hatch-Waxman, and for litigation for large molecules arising under the BPCIA, because of the unique venue issues present in these types of cases.

Prior to the Supreme Court’s recent decision, patentees in pharmaceutical cases had a great amount of flexibility when it came to choice of venue. Indeed, patent owners essentially had free reign to file a lawsuit in any state where an ANDA or BLA applicant ultimately intended to market its final product.  For example, in Acorda Therapeutics Inc. v. Mylan Pharms. Inc., 817 F.3d 755 (Fed. Cir. 2016), the Federal Circuit recently affirmed that Mylan was subject to specific personal jurisdiction in Delaware because it had registered to do business in the state, authorized an agent to accept service of process in the state, and had filed an ANDA seeking approval to direct sales of the product across the United States, including Delaware.  The TC Heartland decision, however, separated the idea of residency in the venue statute from personal jurisdiction, and it remains uncertain how the facts impacting the Federal Circuit’s decision in Acorda will be interpreted and applied to the “regular and established place of business” prong of the venue statute after TC Heartland.

The Supreme Court’s decision seemingly narrows a patentee’s choice of forums in Hatch-Waxman and BPCIA cases.  After TC Heartland, defendants can clearly still be sued in their state of incorporation.  However, it remains to be seen where else patentees will be permitted to bring suit in these cases.  The answer to this question will depend on how the courts interpret the phrase “where the defendant has performed acts of infringement and has a regular and established place of business” in 35 U.S.C. 1400(b).

The act of infringement in both Hatch-Waxman litigation and litigation arising under the BPCIA is not based on actual sales of the final product.  Rather, in both types of cases, the Patent Act allows the filing of an infringement suit before any actual sales have occurred based on a statutorily created “artificial” act of infringement.  In these types of cases, a claim for infringement is permitted based solely on the submission of an abbreviated new drug application containing a paragraph IV certification to the FDA, or the filing of an abbreviated biologics license application with the FDA under the 351(k) pathway.  See 35 U.S.C. § 271 (e)(2).  Thus, courts are now faced with the issue of deciding where an artificial act of infringement occurs for purposes of these cases – in other words, does the act of infringement occur where the application is prepared, only where the application is filed, or is it deemed to occur anywhere the application seeks approval to market the final product?

Delaware and New Jersey have traditionally been the most popular venues selected by patent owners for Hatch-Waxman litigation.  Although the sample size for cases arising under the BPCIA is much smaller, BCPIA cases have been filed in those courts as well.  In fact, the Generic Pharmaceutical Association filed an amicus brief in support of the Petitioner in TC Heartland, arguing that the concentration of so many patent cases in these two districts, followed by appeal to a single appeals court, causes delay due to overcrowded dockets and further “deprives patent law of the diversity of approaches needed to advance the law.”  See Brief Amicus Curiae of Generic Pharmaceutical Association in Support of Petitioner in TC Heartland LLC v. Kraft Foods Grp. Brands LLC.

Because many pharmaceutical companies are incorporated in or have established headquarters in New Jersey or Delaware, those locations will likely remain popular venue choices.  However, until the ambiguity over where the defendant has performed the “artificial” act of infringement is resolved, and the questions of what is required to show a “regular and established place of business” is further clarified, it is possible that patent owners will resume the practice of filing duplicate suits in multiple jurisdictions to “protect” their rights under Hatch-Waxman and the BPCIA.

TC Heartland may also impact the ability of multiple generic companies sued on the same product to engage in joint defense groups if all defendants are not properly sued in the same venue.  Generally, if a patentee sues several generic companies in a single court, the cases are consolidated and the parties can achieve efficiencies and decrease costs (compared to multiple individual litigations) by cooperating as a joint defense group.  In the aftermath of the Supreme Court’s ruling, a patentee may be unable (or unwilling) to sue all generic defendants in a single venue, thereby potentially increasing costs for both sides.  Having concurrent litigations involving the same product against multiple generic companies in more than one court would also increase the possibility of inconsistent decisions on issues such as claim construction, infringement, and validity.  Separate litigation against multiple generics in different venues could also have a significant impact on the timing of approvals if cases operate on different schedules or proceed at different paces.

The potential for inconsistent decisions and the impact on timing could be eliminated if cases filed against multiple generic defendants or multiple biosimilar applicants in different location are consolidated for pre-trial proceedings through the use of multi-district litigation (“MDL”).  Cases that involve “one or more common questions of fact” can be consolidated by a panel for MDL pursuant to 28 U.S.C. § 1407. Interestingly, when Congress enacted the America Invents Act, it expressly restricted joinder rules such that defendants may only be joined in one action if “(1) any right to relief is asserted against the parties jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process; and (2)  questions of fact common to all defendants or counterclaim defendants will arise in the action.” See 35 U.S.C. § 299.  However, Congress expressly created an exception for ANDA and BPCIA litigation, and the statute does not apply to acts of infringement based on the filing of an ANDA or BLA under § 271(e)(2).  As such, Congress has already shown a willingness to treat these cases differently, and section 299 would not prohibit the use of MDL in litigation under Hatch-Waxman or the BPCIA.

Finally, as stated above, TC Heartland applies to domestic corporations and the decision did not address venue as it applies to foreign entities or LLCs.  Indeed, in a footnote, the Supreme Court expressly declined to address the implications of the petitioner’s arguments on foreign corporations.  According to 1391(c), “a defendant not resident in the United States may be sued in any judicial district, and the joinder of such a defendant shall be disregarded in determining where the action may be brought with respect to other defendants.” For now, the general venue statute will continue to be the rule for foreign defendants, allowing them to be sued in any judicial district.  See 28 U.S.C. § 1391(c).

The limited scope of the decision may create a “loophole” for choice of venue in patent cases generally (i.e., not limited to cases arising under Hatch-Waxman or the BPCIA) if the defendant is a foreign corporation with a U.S. subsidiary.  In the past, when potential defendants included both a foreign parent corporation and U.S. subsidiary, plaintiffs would generally bring a lawsuit against both entities. However, as a way to alleviate the venue restrictions of TC Heartland and engage in more favorable foreign shopping, plaintiffs may now elect to only file a lawsuit against the foreign parent corporation in order to have the ability to sue in any judicial district.

We will continue to keep you informed as these issues continue to develop.

Celltrion announced last week that its Biologics License Application (“BLA”) for CT-P10, a biosimilar to Biogen and Genentech’s Rituxan® (rituximab), has been accepted for review by the Food and Drug Administration (“FDA”).  The FDA is expected to act on the application in the first quarter of 2018.

Rituximab is an anti-CD20 monoclonal antibody approved for the treatment of non-Hodgkin’s lymphoma, chronic lyphocytic leukemia, rheumatoid arthritis, granulomatosis with polyangitis, and microscopic polyangitis.  Celltrion’s rituximab biosimilar was approved in Europe earlier this year and in South Korea in November 2016, as we previously reported here.

Celltrion has entered into an agreement with Teva regarding rituximab.  According to the press release, Celltrion is responsible for clinical development and regulatory activities, and Teva is responsible for all commercial activities in the U.S. and Canada.

Celltrion has filed several IPR petitions with the Patent Trial and Appeal Board (“PTAB”) seeking review of patents related to rituximab as we reported here, here, here, and here.  Pfizer also has several IPR petitions pending related to rituximab.  A complete list of IPRs related to rituximab and other proposed biosimilars can be found in RFEM’s IPR Dashboard.

On June 19, 2017, the European Commission (EC) approved Sandoz’s Rixathon® (rituximab), a biosimilar to Roche/Genentech’s Rituxan®/Mabthera®.  The approval follows the positive recommendation by the Committee for Medicinal Products for Human Use (“CHMP”) issued two months ago.

Rituximab is an anti-CD20 monoclonal antibody approved for the treatment of non-Hodgkin’s lymphoma (follicular lymphoma and diffuse large B-cell lymphoma) and chronic lymphocytic leukemia, as well as immunological diseases such as rheumatoid arthritis, granulomatosis with polyangiitis, and microscopic polyangiitis. Rixathon® was approved for all indications of the reference product in Europe.  According to Sandoz’s announcement, the approval of Rixathon® was based on a comprehensive development program, including analytical, preclinical, and clinical data, demonstrating biosimilarity of Rixathon® to the reference medicine, MabThera®.  Sandoz also received approval in the EU for Riximyo®, the company’s other rituximab biosimilar, through a duplicate marketing authorization. Sandoz currently has an application pending for rituximab in Japan, and the company has publicly stated that it expects to submit an application for rituximab to the FDA in 2017.

Rixathon will be Sandoz’s fourth biosimilar with full approval in the EU.  Sandoz also received marketing authorization for its biosimilar products related to epoetin alfa, somatropin, and filgrastim in Europe.  In addition, Sandoz’s Erelzi®, a proposed biosimilar to Amgen’s Enbrel® (etanercept), recently received a positive recommendation by the CHMP.

Rixathon®/Riximyo® will join Celltrion’s rituximab biosimilar Truxima®, which was approved in the EU in February 2017 as we reported here.  Celltrion also received positive recommendations from the CHMP for additional rituximab biosimilars, including Blitzima, Ritemvia, and Tuxella on May 18, 2017.  As a result, the EU may soon have a substantial number of rituximab biosimilar drug options.

In stark contrast, the U.S. FDA has not yet approved any rituximab biosimilar products for the U.S. markets.  We previously reported on the status of biosimilar authorizations in the U.S. compared to Europe.  This recent announcement for Sandoz’s rituximab biosimilar products, which may be followed by a group of rituximab biosimilar products by Celltrion, continues the trend, but hopefully not for long.

We previously reported that after a public meeting held on May 25, 2017, the FDA’s Oncologic Drug Advisory Committee (ODAC) recommended Pfizer’s proposed biosimilar to Amgen’s Epogen®/Procrit® for approval across all indications.  The ODAC committee voted 14-1 in favor of approval of Pfizer’s application.

Surprisingly, however, the FDA did not approve the application as expected.  Rather, Pfizer announced last week that it had received a second complete response letter (“CRL”) from the FDA for its proposed epoetin alfa biosimilar.

As discussed in our prior post, this application has an unusual history.  Hospira submitted the aBLA in December 2014 before it was acquired by Pfizer in 2015.  The application was initially rejected by the FDA in October 2015, and afterwards very little was known about the status of the application until the ODAC committee meeting was announced earlier this year.

According to Pfizer’s press release, the most recent rejection “relates to matters noted in a Waring Letter issued on February 14, 2017 following a routine [FDA] inspection of the company’s facility in McPherson Kansas in 2016.”  Importantly, Pfizer also stated that “the issues noted in the warning letter do not relate specifically to the manufacture of epoetin alfa.” Additionally, no further clinical data was requested by FDA in the CRL.  Pfizer has not provided information regarding the timeframe for its response to FDA.

Amgen and Pfizer/Hospira are currently engaged in litigation over infringement of two patents related to this product.  The litigation, which also alleges claims related to the disclosure requirements of the BPCIA, was filed in September 2015.  A detailed summary of the litigation is available here as part of RFEM’s Litigation Spotlight series.

The Biosimilar User Fee Act (“BsUFA”) was originally enacted in 2012, and the current legislative authority is set to expire at the end of September 2017.  Under BsUFA, the U.S. Food and Drug Administration (“FDA”) is authorized to collect fees directly from biosimilar drug product applicants, and the fees are dedicated to expediting the approval of biosimilar applications.  As part of the authorization process, the FDA also agreed to certain “performance goals” and procedures, including timelines for acting on original applications, resubmissions, and supplements.  A complete list of the performance goal and procedures for each year from 2013 to 2017 can be found here.

A reauthorization of the BsUFA agreement (“BsUFA II”) has been negotiated with input from government, industry, and interested members of the public. The FDA held two public meetings regarding reauthorization, one in December 2015, and a second on October 20, 2016. Materials from each of those meetings are available from the FDA’s website here.

A bill reauthorizing all of the FDA user fee programs, including the Prescription Drug User Fee Amendments (“PDUFA VI”), the Medical Device User Fee Amendments (“MDUFA IV”), the Generic Drug User Fee Amendments (“GDUFA II”), and the Biosimilar User Fee Amendments (“BsUFA II”), S.934 – FDA Reauthorization Act of 2017,  was introduced in the Senate and passed by the Committee on Health, Education, Labor & Pensions (“HELP Committee”) on May 11, 2017.  The House version, H.R.2430 – FDA Reauthorization Act of 2017, was unanimously (54-0) passed on June 8, 2017, by the House Energy and Commerce Committee.  Each version will need to move to the House and Senate floors where further changes may be made.  Differences between the House and Senate versions must also be resolved before the bill is sent to the President for signature.  In total, the bill would add about $400 million in new user fees for the first year, which pales in comparison with the $1 billion in increased fees requested in President Trump’s budget blueprint.

This article highlights the important changes and takeaways from the current version of the BsUFA II portion of the bill.  The changes in BsUFA II are important for biosimilar applicants because changes have been made to user fees and application timelines.  The latest proposals allow the FDA to adjust the user fees from $45 million to up to $54 million in fiscal year 2018.  Another modification that will occur within the next few years is the removal of the supplemental fee and establishment of fees for sponsors and independent users, although not at more than a 25% increase.  The application review timeline has been extended by two months, which should reduce need for review date extensions.  It is expected that biosimilar regulation should receive more funding for providing education and guidance to the prescribing community, patient community, and other stakeholders.

History Leading up to Recent Congressional Votes

Over the last 15 months, the HELP Committee had 15 bipartisan briefings, some of which were with the Energy and Commerce Committee as well, to hear from FDA and industry about the reauthorization.  FDA posted meeting minutes after every negotiation, and held public meetings before discussions began to hear feedback on the draft recommendations last fall.  This committee held two bipartisan hearings earlier this year on the FDA medical device and drug user fees, and released a discussion draft on April 14, 2017, that provided two weeks for public comment.

During an October 20, 2016, public meeting to discuss BsUFA II, proposed changes to the fee structures included:

  • Enhanced predictability of BsUFA funding (cannot increase by more than 25% fee amount until 2021);
  • Establish independent user fee structure;
  • Improve FDA’s ability to manage program resources and engage in long term planning;
  • Simplify administration of program;
  • Remove supplemental and establishment fees; and
  • Retain initial, annual and reactivation biosimilar biological product development (BDP) fees

On May 11, 2017, the HELP Committee voted 21-2 for the user fee reauthorization bill before it was advanced to the full Senate.  Relatively few amendments and provisions were made to the bill prior to this vote in an attempt to ease approval.  Policy amendments made by the HELP committee included:

  • A requirement for FDA to develop bioequivalence guidance specific to complex generic drugs;
  • Policies providing risk based inspections of medical device facilities, changes to the regulation of contrast agents for use with imaging systems and OTC sales of certain hearing aids to consumers;
  • A bill to promote early planning of pediatric studies; and
  • Changes to the Orphan Drug Act.

Two important provisions made by voice during the May 11 vote included requiring the FDA to “hold public meetings and develop guidance with the goal of increasing patient access to experimental drugs” and “expedite review of certain generic drug applications.”  Senator Bernie Sanders (I-VT) proposed an amendment involving importation of drugs from Canada that was rejected to avoid complicating the bill’s passage.

Senator Lamar Alexander (R-TN), Chairman of the HELP Committee, has warned that if the user fee agreements are not reauthorized by “late July, the FDA will be forced to begin sending layoff notices to more than 5,000 employees to notify them that they may lose their job in 60 days.”

Extension of Target Action Date by 60 Days to Allow for Additional Communications

BsUFA II is aimed at expediting biosimilar development by allowing for additional communications between FDA review teams and biosimilar applicants.  BsUFA II encourages communication during pre-submission meetings, mid-cycle communications, and late-cycle meetings.  Also, when manufacturing facilities must be inspected late in the review process, this can adversely impact FDA’s ability to complete application review within the performance goal timeframes. One major change implemented by BsUFA II to allow time for additional communications and inspection of manufacturing facilities is an extension of the application review timeframe.

Under BsUFA, by 2017, the FDA’s goal was to review and act on 90% of original biosimilar biologic applications within 10 months of receipt.  Under BsUFA II, the FDA’s performance goal for acting on a new biosimilar application has been modified to require review and action on 90% of applications within 10 months of the 60-day filing date (the date when an applicant is notified if the application has been accepted by FDA for review). This change will extend the first action dates by 60 days for all applications submitted on or after October 1, 2017, making the earliest possible approval date for such applications approximately one year after submission.

New Model For Application Review

The New Review Model, also known as “the Program,” applies to New Molecular Entity, New Drug Applications and original Biologics License Applications.  It is intended to promote the efficiency and effectiveness of the first cycle review process and minimize the number of review cycles necessary for approval.

In an October 20, 2016, presentation, Leah Christl, Associate Director for FDA Therapeutic Biologics, explained that the new user fee program planned to allow for additional communication between FDA review teams and biosimilar applicants, while also adding 60 days to the review timeframe to accommodate for additional interactions.  Also, Christl explained that the new user fee program was intended to enhance staff capacity, develop new guidance and regulations to clarify scientific criteria for biosimilar developers, deliver more timely information to the public to improve the overall understanding of biosimilarity and interchangeability, and deliver more information concerning the date of first licensure and each reference product’s exclusivity expiration date.

According to Janet Woodcock’s testimony to the Committee on Energy and Commerce on March 2, 2017, the BsUFA II commitment letter establishes an application review model similar to “the Program” initiated for new drugs under the Prescription Drug User Fee Act that intended to promote the efficiency and effectiveness of the first cycle review process and minimize the number of review cycles necessary for approval.

The parameters of the Program will include the following:

  1. re-submission meeting;
  2. original application submission;
  3. Day 74 Letter;
  4. review performance goals (10 month user fee clock starts at 60-day filing date);
  5. mid-cycle communication;
  6. late-cycle and advisory committee meetings;
  7. inspections; and
  8. assessment of the Program.

The additional two-month review clock time (10 month plus 60 days, as noted above) is intended to provide FDA more time to complete additional late cycle activities added as part of the new review model (e.g., late-cycle meeting), and to address other late cycle review work, such as application deficiencies, Advisory Committee advice, and inspection issues to improve the efficiency of the first review cycle.  The new program also allows for inspections of facilities late in the application process, which often impacted FDA’s timeline under BsUFA.

Changes to Initial Advisory Committee Meeting and BPD Type 2 Meeting Date Schedule

In fiscal year 2015, BsUFA only met for 50% of the Initial Advisory meetings within the 90 day goal, 67% of the Type 1 meetings within the 30 day goal, 49% of the Type 2 meetings within the 75 day goal, and 0% of the Type 4 meetings within the 60 day goal.

Under the BsUFA II commitment letter, Biosimilar Initial Advisory meetings will occur within 75 calendar days, instead of 90 days as agreed to in BsUFA, from receipt of the meeting request and meeting package. This type of meeting will be limited to a general discussion on whether a proposed product could be developed as a biosimilar, and will provide high-level overarching advice on the expected content of the development program.

To provide necessary time for FDA discussions and developing comprehensive responses, BPD Type 2 Meetings will occur within 90 calendar days, instead of 75 days as in BsUFA, from receipt of the meeting request and meeting package. There will be phased-in performance goals for meeting these deadlines of 80% in fiscal years 2018 and 2019, and 90% in fiscal years 2020 through 2022. In addition, the Agency will send preliminary responses to the sponsor’s questions contained in the background package no later than five calendar days before the face-to-face, videoconference, or teleconference meeting date for BPD Type 2 and Type 3 meetings.

The FDA hopes that changing their schedule and charging additional fees (discussed below in the “Fee Increases” section) will allow their staff time and resources to clarify scientific criteria for biosimilar developers by strengthening their guidance and regulations.  Changing the timeline for meetings could also improve quality of information about product licensing and expiration date.  Allowing more time for applications would also give the public a better understanding of the biosimilar.

Publication of Guidance Document

In the BsUFA II commitment letter issued on September 16, 2016, FDA committed to publishing a revised draft guidance on Formal Meetings Between the FDA and Biosimilar Biological Product Sponsors or Applicants no later than September 30, 2018, and to updating the draft guidance on Best Practices for Communication Between IND Sponsors and FDA During Drug Development by December 31, 2018.  Additionally, the FDA’s commitment letter on BsUFA II indicated that FDA would publish draft or final guidance documents addressing the following topics:

  • Considerations in Demonstrating Interchangeability with a Reference Product, as we discussed in this prior article;
  • Clinical Pharmacology Data to Support a Demonstration of Biosimilarity to a Reference Product;
  • Nonproprietary Naming of Biological Products;
  • Statistical Approaches to Evaluate Analytical Similarity;
  • Processes and Further Considerations Related to Post-Approval Manufacturing Changes for Biosimilar Biological Products; and
  • Labeling for Biosimilar Biological Products.

Although the proposed dates for publication have not yet occurred, the first three guidance documents listed above were published by FDA ahead of schedule.  In December 2016, FDA published its final guidance on Clinical Pharmacology Data to Support a Demonstration of Biosimilarity to a Reference Product.  Then, on January 12, 2017, FDA published its final guidance on Nonproprietary Naming of Biological Products, as discussed here.  Finally, on January 17, 2017, FDA published draft Considerations in Demonstrating Interchangeability with a Reference Product, as we discussed in this prior article. The comment period for this draft guidance was extended by FDA and closed on May 19, 2017.

Fee Increases

The BsUFA II user fee revenue amounts and fee amounts have been adjusted significantly from those of BsUFA .  At the time BsUFA  was enacted, the biosimilar program was in its infancy and there was little data available on which to base the fees.  With BsUFA II, the agency and the industry have the benefit of several years of real-world experience.

The fees collected under BsUFA II remain dedicated to “expediting the process for the review of biosimilar biological product application.”  BsUFA II requires fees be set to generate a total of $45 million in user fee revenue for FY 2018, which is a 125% increase from the $20 million base user fee revenue for FY 2017. The FDA can adjust this amount when setting the user fee amounts to reflect an updated assessment of the BsUFA workload, but the adjustment cannot increase user fee revenue by more than $9 million.

The bill newly establishes an independent fee structure for biosimilars based on the following types of fees:

  • “Application Fee” for new biosimilar applications;
  • “Initial Biosimilar Development Fee,” for the first year once a sponsor begins clinical trials;
  • “Annual Biosimilar Development Fee,” for subsequent years a sponsor is developing a new biosimilar; and
  • “Biosimilar Program Fee,” for sponsors of approved biosimilars.

The Trump Administration’s budget proposes an 18% ($15.1 billion) cut to the U.S. Department of Health and Human Services.  To compensate, the budget proposes to increase user fees from $508 million to $1.3 billion in 2018.  Biosimilar fees would increase from $22 million in 2017 to $87 million in 2018 (+$65 million); medical device fees would increase from $126 million in 2017 to $439 million in 2018 (+$313 million); and generic drug fees would increase from $323 million in 2017 to $616 million in 2018 (+$293 million).

Under BsUFA, biosimilar application fees requiring clinical data decreased from $2,374,200 in 2016 to $2,038,100 in 2017; both initial biosimilar development fees and annual biosimilar development fees decreased from $237,420 in 2016 to $203,810 in 2017; and biosimilar product fees decreased from $114,450 in 2016 to $97,750 in 2017.

BsUFA II removes the supplemental fee and establishment fee for sponsors, establishes an independent user fee structure, and modifies the product fee with a new provision that sponsors shall not be assessed more than five BsUFA program fees for a fiscal year per application.

___

*Lela Jackson also contributed to this post.

On June 22, 2017, the Committee for Medicinal Products for Human Use (“CHMP”) of the European Medicine’s Agency (“EMA”) recommended Samsung Bioepis’ Imraldi® (SB-5, adalimumab), a biosimilar to AbbVie’s Humira®, for approval.  The CHMP’s recommendation will be referred to the European Commission for final marketing authorization.

Adalimumab is a TNF (tumor necrosis factor) inhibitor that binds to TNF-alpha (TNF-α), preventing it from activating TNF receptors. Samsung Bioepis is seeking approval of Imraldi® for the treatment of rheumatoid arthritis, juvenile idiopathic arthritis, axial spondyloarthritis, psoriatic arthritis, psoriasis, pediatric plaque psoriasis, hidradenitis suppurativa, Crohn’s disease, paediatric Crohn’s disease, ulcerative colitis, and uveitis.

Samsung Bioepis is a joint venture between Samsung BioLogics and Biogen.  The company announced that its application for adalimumab was accepted by the EMA in July 2016, and it also has an application pending for adalimumab in Korea.  The company prevailed in patent litigation in the UK involving two patents related to adalimumab earlier this year, as we previously reported here.  According to Biogen, “global sales estimates for Humira® stand at $16 billion in 2017, making it the number-one prescribed biologic therapy in the world.”

This article provides an update on our prior analysis of the infliximab litigation involving Janssen Biotech, Inc. (“Janssen”), Celltrion Healthcare Co. and Celltrion, Inc. (“Celltrion”), and Hospira Inc. (“Hospira”).

Briefly, when we last addressed this case, the litigation had already been narrowed to one patent, U.S. Patent No. 7,598,083 (“the ’083 patent”).  Further, there were two important developments with respect to the ’083 patent.  First, Celltrion alleged that Janssen did not have standing to bring suit on that patent because Janssen had failed to join all of the co-owners of the ’083 patent to the action.  Second, and relatedly, the Court provided “guidance” indicating that because the parties had never completed the ‘patent dance,’ 35 U.S.C § 271(e)(6) would not limit Janssen’s damages to a reasonable royalty in the event a future lawsuit was filed.

The parties proceeded to brief the questions of standing, with the Defendants filing a motion to compel evidence allegedly relevant to that question.  The case took a twist on May 31, 2017 (Dkt. 562), when Janssen informed the Court that it had filed a new lawsuit against Defendants, once again alleging infringement of the ’083 patent.  This was something that the Court had previously suggested.  Janssen contended that it was forced to file this lawsuit to preserve its rights because Celltrion had attempted to invoke the ‘patent dance’ with respect to the ’083 patent, triggering the deadline for filing a suit and preserving remedies under Section 271(e)(6).  Needless to say, Janssen contended that Defendants’ position was meritless, but stated it filed the lawsuit to eliminate any issue concerning its potential rights to future damages.  Moreover, Janssen explained that it executed a further assignment of the patent, mooting any standing issues.  Finally, Janssen stated that in light of these developments, it intended to dismiss the existing claims without prejudice to litigate the new lawsuit.

The following day, June 1, 2017, the Court held a telephone conference.  The docket indicates that the parties are to update the Court by June 16 in advance of a June 21, 2017 hearing.

Janssen’s new lawsuit is limited solely to the ’083 patent, with claims for infringement under Sections 271(a) and (b), as well as a claim for artificial infringement under 271(e)(2)(C).

Finally, the venue of the new lawsuit presents another potential quagmire, as Hospira is a Delaware corporation with a principal place of business in Illinois.  As such, in view of TC Heartland, Hospira may be able to argue that venue is improper in the new lawsuit.  Indeed, the new complaint goes out of its way to state that the defendants “did not contest venue in the 2015 action and the 2016 action,” perhaps setting up an argument that any such arguments are now waived.  Ultimately, this lawsuit will surely continue, regardless of any unique procedural developments.

We will continue to keep you apprised of further updates.

Fujifilm Kyowa Kirin Biologics announced that its Medical Marketing Application (“MMA”) for FKB327, a biosimilar to AbbVie’s Humira® (adalimumab), has been accepted for review by the European Medicines Agency (“EMA”).  Adalimumab is a TNF (tumor necrosis factor) inhibitor that binds to TNF-alpha (TNF-α), preventing it from activating TNF receptors, which cause the inflammatory reactions associated with autoimmune diseases. Humira® is indicated for the treatment of rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn’s disease, psoriasis, and ulcerative colitis.

Fujifilm Kiowa Kirin, Samsung Bioepis, and Biogen prevailed in patent litigation involving two patents related to adalimumab in the UK earlier this year, as we reported here. Fujifilm Kiowa Kirin is also developing FKB238, a bevacizumab biosimilar, jointly with AstraZeneca.  Bevacizumab is an anti-vascular endothelia growth factor A (Anti-VEGF) specific monoclonal antibody that inhibits formation of new blood vessels and is used to slow the growth of tumors related to several types of cancer.  Genentech’s Avastin® (bevacizumab) is indicated for the treatment of conditions related to metastatic colon cancer, lung cancer, glioblastoma, ovarian cancer, and cervical cancer.

The FDA announced yesterday that the Oncologic Drug Advisory Committee (“ODAC”) has scheduled a public meeting to review ABP 215, Amgen’s proposed biosimilar to Genentech’s Avastin (bevacizumab), on July 13, 2017.  According to the announcement, the proposed indications and uses for ABP 215 include:

  1. first- or second-line treatment of patients with metastatic carcinoma of the colon or rectum in combination with intravenous 5-fluorouracil-based chemotherapy;
  2. use in combination with fluoropyrimidine-irinotecan- or fluoropyrimidine-oxaliplatin-based chemotherapy for the second-line treatment of patients with metastatic colorectal cancer who have progressed on a first-line ABP 215-containing regimen;
  3. the first-line treatment of unresectable, locally advanced, recurrent, or metastatic non-squamous, non-small cell lung cancer in combination with carboplatin and paclitaxel;
  4. the treatment of glioblastoma with progressive disease in adult patients following prior therapy as a single agent;
  5. the treatment of metastatic renal cell carcinoma in combination with interferon alfa; and
  6. use in combination with paclitaxel and cisplatin or paclitaxel and topotecan for the treatment of persistent, recurrent, or metastatic carcinoma of the cervix.

The FDA has established a public docket for comment on this meeting.  The docket number is FDA 2017-N-2732, and the comment period closes on July 10, 2017.

Amgen and Allergan announced that they submitted an application for ABP 215 to the FDA in November 2016, and according to Amgen, the BSUFA date (FDA’s target goal) for action on the application is September 14, 2017.  Amgen and Allergan also have an application for ABP 215 pending in Europe that was submitted in December 2016.

Introduction

The Amgen, Inc. and Amgen Manufacturing, Limited (“Amgen”) litigation against Hospira, Inc. (“Hospira”), filed in September 2015, was one of the earliest cases filed under the Biologics Price Competition and Innovation Act (“BPCIA”).  The case involves Hospira’s proposed biosimilar to Amgen’s Epogen®/Procrit® (epoetin alfa).  The procedural posture is somewhat complicated, as there are district court proceedings and an interlocutory appeal to the Federal Circuit underway simultaneously.  Furthermore, several issues raised in the dispute will be directly affected by the outcome of the decision in the consolidated Sandoz v. Amgen and Amgen v. Sandoz cases that are currently under consideration by the Supreme Court.

Epoetin alfa is a human erythropoietin that stimulates the production of red blood cells (erythropoiesis).  Epoetin alfa is produced in cell cultures using recombinant DNA technology.  The product is manufactured by Amgen and sold in the United States by Amgen as Epogen® and by Janssen, a subsidiary of Johnson & Johnson, as Procrit®.  Epoetin alfa is approved in the United States for treating anemia due to chronic kidney disease, anemia due to the use of zidovudine in HIV-infected patients, and the effects of concomitant myelosuppressive chemotherapy treatment. Epoetin alfa is also indicated to reduce the need for blood transfusions in certain patients undergoing certain types of elective surgery.

Epogen® first received FDA approval in 1989. Amgen prevailed in legal battles in the early 1990’s regarding patent ownership, and epoetin alfa has gone on to become a  blockbuster biologic, with yearly revenues consistently reaching over $1 billion annually since the mid-1990s, peaking at $2.6 billion in 2004, with around $1.3 billion in 2016.

Hospira, Inc. (“Hospira”) submitted an abbreviated biologics license application (“BLA”) seeking to market a proposed biosimilar (referred to by FDA as “Epoetin Hospira”) to Amgen’s Epogen® (epoetin alfa) in December 2014. Hospira publicly announced the submission of the application (BLA 125545) in January 2015, and the application was acquired by Pfizer when it purchased Hospira in 2015.  The original BSUFA date (target goal for FDA action) on the application was November 2015, but the FDA initially rejected the application.  Pfizer and Hospira resubmitted the application in December 2016. As we previously reported here, the FDA’s Oncologic Drugs Advisory Committee (ODAC) reviewed the application at a public meeting on May 25, 2017, and recommended approval across all indications.  Pfizer has publicly stated that, once approved, the product will be commercialized pursuant to an agreement between Pfizer and Vifor Pharma, Inc.

Hospira’s Retacrit® was approved in the EU in 2007, and according to Pfizer, its product is the first biosimilar erythropoiesis-stimulating agent (“ESA”) recommended for approval by an FDA Advisory Committee.  The FDA will take the ODAC’s recommendation into consideration before taking final action on the application, and although a specific date has not been announced, based on the date of the ODAC recommendation, a final decision on “Epoetin Hospira” could come as early as this summer.

The “Patent Dance” Between the Parties

In the Complaint, Amgen noted that this case was one of the first BPCIA infringement cases generally, and that it was also one of the first actions seeking to specifically enforce the application disclosure provision of section (l)(2)(A) and commercial notice provision of section (8)(A) of the BPCIA.  While this is a substantive patent infringement case, the disclosure and notice provisions of the BPCIA have taken center stage in the litigation thus far.  As previously discussed here, here, and here, at the time of this writing, the Supreme Court is considering the issues of: (1) whether a biosimilar applicant is required to provide the reference product sponsor with a copy of its biologics license application and related manufacturing information or whether the “patent dance” is optional; and (2) whether a biosimilar product must be “licensed” (meaning FDA-approved) before a biosimilar applicant can provide an effective 180-day  notice of commercial marketing (“NCM”) to the reference product sponsor (“RPS”), or whether such notice can be provided any time after the FDA has accepted the application for review.  The outcome of the Supreme Court’s decision will impact the issues surrounding these same questions in the Amgen v. Hospira litigation.

Hospira filed its application in December 2014, and the application was accepted for review by FDA in February 2015. This acceptance kicked off the complex series of deadlines for the exchange of information related to patent infringement, validity, and enforceability, affectionately known as the “patent dance.” One of Congress’s stated goals of the BPCIA’s “patent dance” is to potentially streamline and narrow patent litigation for biosimilar products.  According to the Compliant, Hospira notified Amgen when the FDA had accepted its BLA.  Although Hospira provided a copy of its BLA to Amgen on February 23, 2015, Amgen alleges that Hospira did not satisfy the disclosure requirements of section (l)(2)(A) of the BPCIA because Hospira did not provide any manufacturing information in addition to its BLA.

Following receipt of Hospira’s BLA, Amgen provided Hospira with a 3A list of patents which it believes could be asserted against Hospira. According to the pleadings submitted to the Court, Hospira’s 3A list identified only two patents.  The parties exchanged detailed statements, but Amgen has alleged that Hospira’s statement was deficient.  In the next step of the information exchange, section 4(a) of the BPCIA says that the RPS and the applicant “shall engage in good faith negotiations to agree on which, if any, patents” identified on their respective 3A and 3B lists “shall be the subject of an action for patent infringement.” According to Hospira’s Answer filed in the litigation, “Hospira advised Amgen that it accepted the patents” identified on Amgen’s 3A list and that litigation could proceed without further negotiations. Amgen’s Complaint, however, accuses Hospira of violating section (l)(4) of the BPCIA and contends that such acceptance did not amount to good-faith negotiations.

Hospira provided a notice of commercial marketing to Amgen on April 8, 2014.  Amgen objected to the notice as ineffective because it was provided before Hospira received approval (“licensure”) of its proposed product from the FDA.  The pleadings indicate that Hospira responded that it would rely on the April 8, 2015 notice and would not provide any further notice because in its view, further notice is not required.

The Litigation Begins

The Disclosure of Manufacturing Information Under (l)(2)(A)

On September 18, 2015, Amgen filed a Complaint against Hospira alleging infringement of U.S. Patent No. 5,856,298 (“the ’298 patent”), which Amgen identified in its initial list during the Patent Dance, and U.S. Patent No. 5,756,349 (“the ’349 patent”). In addition to counts based on infringement of these patents, Amgen’s complaint also included counts asserting that Hospira had violated the BPCIA by: 1) not providing manufacturing information along with its BLA in its initial notice to Amgen (Section (l)(2)); and 2) refusing to give NCM following the application’s approval.

In October 2015, Hospira moved to dismiss the count charging a violation of section (l)(2) regarding the disclosure requirements of the BPCIA, arguing that there is no private right of action for the enforcement of provisions of the BPCIA. Instead, Hospira argued that when an applicant elects not to disclose its application and manufacturing information pursuant to section (l)(2)(A) of the BPCIA, a reference product sponsor has a statutory remedy in the form of an immediately available declaratory judgment action, as expressly provided in section 9 of the BPCIA.

Following the Federal Circuit’s denial of a request for en banc review of the split majority panel’s decision in Amgen v. Sandoz which held that the BPCIA did not grant the right to compel compliance with the disclosure requirement of section (2)(A) and that the statute provided the only remedy in the form of a declaratory judgment action pursuant to section 9, Amgen filed an Amended Complaint dropping the section (2)(A) disclosure issue as a separate count. However, as the litigation progressed, Amgen has maintained its position that it requires manufacturing information, particularly to determine whether it may reasonably assert method patents directed to the cell culture in which Hospira’s product would be manufactured. In April 2015, the Court entered a scheduling order and the case was set for trial beginning in September 2017.

During discovery, Amgen sought manufacturing information and FDA correspondence from Hospira.  Hospira objected and sought to limit discovery to issues related to the two patents identified and asserted by Amgen.  In April 2015, the parties submitted letter briefings to the court, and Amgen sought to compel the production of manufacturing information and FDA correspondence.  The district court (Judge Andrews) denied the motion to compel, finding that the information sought was not relevant to the two patents which were asserted in the litigation.

Amgen appealed the decision to the Federal Circuit, and Hospira filed a motion to dismiss Amgen’s appeal for lack of jurisdiction, arguing that the Court’s ruling on the discovery dispute is not a final appealable order subject to the Appeals Court’s jurisdiction.  Hospira further argued that the order does not fall within the scope of the collateral order doctrine.  The Court requested briefing on the issue of jurisdiction as well as the denial of the motion to compel.  Briefing in the appeal was completed in November 2016, and the Federal Circuit heard oral argument on April 3, 2017. In that argument, the panel noted that the Sandoz opinion was still binding on the panel pending Supreme Court review.  The Court asked counsel for both sides what was stopping Amgen from filing new infringement suits on its cell culture patents. Amgen’s position is that it does not have enough information to reasonably file suits under the standards of Rule 11.

Notice of Commercial Marketing

Amgen’s complaint contained a count for declaratory judgment that Hospira’s refusal to provide a post-approval NCM violated the BPCIA, and Amgen sought an injunction prohibiting Hospira from marketing the product until 180 days after a post-approval NCM was provided to Amgen.

In October 2015, Hospira moved to dismiss the count regarding the NCM. Hospira argued that under its reading of the BPCIA, the 180-day NCM is only necessary for applicants who were not participating in the patent dance, and that Hospira had participated by providing its BLA to Amgen following its acceptance for review by the FDA.

In August 2016, the district court denied Hospira’s motion to dismiss the count regarding the NCM.  The Court recognized that the Federal Circuit’s Sandoz v. Amgen decision held that NCM is only effective after the FDA has “licensed” (approved) a product, and that the Federal Circuit’s Apotex v. Amgen case also concluded that the 180-day delay between NCM and entering the market was a mandatory requirement enforceable by injunction. As such, the district court held that it was presented with the same question that had been answered by the Federal Circuit, and under current law, Hospira’s motion should be denied.

Under current Federal Circuit precedent, a notice of commercial marketing is a “stand alone” requirement, meaning that it must be provided regardless of whether the parties complete the patent dance, and such notice can only be provided once the biosimilar has been approved by the FDA.  See Amgen, Inc. v. Sandoz, Inc., 794 F.3d 1347 (Fed. Cir. 2015). However, as discussed above, that specific issue is currently under review by the Supreme Court.  The Supreme Court heard oral arguments on April 26, 2017, and a decision is expected in late June.

The Status of the Substantive Patent Infringement Case

The ’298 patent, entitled “Erythropoietin Isoforms,” issued on January 5, 1999, from an application filed on November 3, 1994, and claims priority through a series of applications to October 13, 1989. The ’298 patent is assigned on its face to Amgen Inc. The ’349 patent, entitled “Production of Erythropoietin,” issued on May 26, 1998, from an application filed on June 6, 1995, and claims priority through a series of applications to December 13, 1983. The ’349 patent is assigned on its face to Amgen Inc.

Both of these patents are currently expired. As such, even if Amgen were to prevail on its claims of infringement, the two patents in suit would not prevent Hospira from launching its product upon approval (and effective NCM), but could subject Hospira to potential damages.  Amgen has taken the position that if additional patents are identified based on discovery, or if new patents issue that might be infringed, claims based on those patents could be asserted, which could prevent Hospira from entering the market.  On the other hand, Hospira has taken the position that Amgen is precluded by the BPCIA from asserting any existing patents that were not identified on Amgen’s original 3A patent list.

Infringement and invalidity contentions regarding the two patents were exchanged in April and May 2016. A Markman hearing was held in September 2016, and the district court issued an opinion construing the disputed claim terms and of the ’298 patent in November 2016.  In August 2016, Amgen filed a sealed motion for leave to file an amended complaint adding three additional defendants. As discussed in an October 2016 order granting the motion in part, the court noted that adding defendants so close to trial (scheduled for September 2017) would be prejudicial to the defendant and denied the motion as to that point.  However, the court noted that the proposed amended complaint also added two new theories of infringement based largely on the existing facts of the case, and the court allowed these theories to be added with respect to Hospira. One of these two new theories appears to be that Hospira directed and controlled an unidentified Hospira agent to infringe the patent. An additional count of infringement of the ’349 patent under 35 U.S.C. § 271(b) was added as well. This count alleged induced infringement as a result of Hospira directing two (redacted) companies to infringe claims of the ’349 patent.

Expert discovery closed on May 5, 2017, and dispositive motions were due by May 12, 2017.  Amgen did not file any dispositive motions. Hospira filed a motion for summary judgment that:

  1. all of Hospira’s accused erythropoietin drug substance batches are protected by the safe harbor provisions of 35 U.S.C. § 271(e)(1) and thus do not infringe U.S. Patent Nos. 5,756,349 and 5,856,298; and
  2. that Hospira does not infringe the asserted claims of U.S. Patent No. 5,856,298 either literally or under the doctrine of equivalents.

Briefing on Hospira’s summary judgment motion should be completed in early June, along with any briefing on Daubert motions. On May 26, 2017, Amgen filed a motion for a preliminary injunction seeking “to enjoin [Hospira] from launching a biosimilar version of Amgen’s EPOGEN® (epoetin alfa) product until Hospira has complied with the [notice of commercial marketing] requirement of 42 U.S.C. § 262(l)(8)(A).” Hospira has not yet responded to the motion for preliminary injunction.

A pretrial conference is currently scheduled for September 8, 2017, and a five-day jury trial will begin on September 18, 2017.  As noted above, a final decision on FDA approval of “Epoetin Hospira” could come as early as this summer.  We will continue to keep you apprised of further developments.