All’s Quiet on the Eastern Front on the Eve of Oral Argument in Dispute Over BPCIA Provisions

June 3, 2015

By Kurt R. Karst –      

Here we are . . . on the eve of Oral Argument before the U.S. Court of Appeals for the Federal Circuit in a dispute over the applicability and correct interpretation of various provisions of the the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  The dispute comes in the context of Sandoz Inc.’s (“Sandoz’s”) ZARXIO (filgrastim-sndz), a biosimilar version of Amgen Inc.’s (“Amgen’s”) NEUPOGEN (filgrastim) (BLA 103353) that FDA licensed on March 6, 2015 (BLA 125553).  Things have been pretty quiet now for a couple of weeks.  Perhaps folks are lacing up their shoes and doing some stretching before the Big Dance.  Regardless, anticipation is quietly growing; and no matter what dance style you prefer – the Amgen Waltz, or the Sandoz Shuffle – you’ll be waiting with bated breath for the Federal Circuit’s ruling.  Of course, no matter how the Federal Circuit rules, it’s highly unlikely to be the end of the party.  The dispute will almost certainly end up on the steps of the U.S. Supreme Court.  But that Court may not take up an appeal, leaving the Federal Circuit’s ruling intact.  Thus, June 3, 2015 will mark an important milestone in the young life of the BPCIA. 

We won’t repeat all of the details of the case here, as we’ve posted on the case several times before (here, here, here, and here).  But briefly, the case is before the Federal Circuit after Amgen appealed a March 19, 2015 decision from the U.S. District Court for the Northern District of California holding that, among other things, the BPCIA’s reticulated information exchange and patent resolution procedures are not mandatory for Section 351(k) biosimilar applicants, and that the plain language of the BPCIA allows for the statutory 180-day notice of commercial marketing to come well before the licensure of a Section 351(k) application.

In early May 2015, the Federal Circuit may have tipped its hand on the the merits of the case when the Court issued an Order granting Amgen’s Emergency Motion for an Injunction Pending Appeal.  That Order threw a wrench in Sandoz’s planned launch of ZARXIO.  The Federal Circuit also directed Amgen and Sandoz to respond concerning what amount of a bond, if any, should be posted for each day that the injunction is in place.  Sandoz promptly filed its Response, saying that a “substantial bond should be required to ensure that Sandoz can be fully compensated if it later is determined that the injunction was improvidently granted.”  How much is “substantial”?  About $180 million!  According to Sandoz:

[T]he Court should require Amgen to post a bond in a total amount that represents $460,000 per day multiplied by the maximum number of days this Court anticipates the injunction may be in place.  Although Sandoz hopes a decision will issue quickly, it respectfully requests a bond amount calculated from May 11, 2015, until one year from the date of oral argument (June 3, 2016) to ensure that it is adequately protected.  Such a bond would total $179.4 million.  In addition, for whatever time period the Court uses to calculate the lump sum total of the bond, Sandoz requests that the Court also order that Amgen augment the bond amount by $3.22 million per week (7 times $460,000) thereafter, if the injunction remains in place beyond what the Court anticipates.

Amgen doesn’t agree.  In Amgen’s Response, the company says that Sandoz’s number is “inflated” and that Sandoz “wildly overstates” the bond needed to protect the company from the effects of a later-vacated injunction.  Among other things, Amgen says that 390 days (i.e., from and including Monday, May 11, 2015, to and including Friday, June 3, 2016) is far too long a period.  “In recent cases with expedited briefing, as is the case here,” notes Amgen, “the Court’s average time from oral argument to an opinion on the merits was 58 days and the median time was 61 days.   Thus, the Court should not order a bond based on a 390-day calculation.” 

So how much of a bond would Amgen propose?  Preferably, nothing.  According to Amgen:

Given that ZARXIO® is a new product, that the injunction is expected to be short, and that Amgen has sufficient resources to pay any damages award, the Court could fairly conclude that no bond is needed.  If the Court is inclined to order Amgen to post a bond, however, Amgen submits the bond should reflect the revenue Sandoz forecasts that it would have received during the injunction period.

Amgen's proposed bond amount is redacted from the company's brief.  The Federal Circuit has thus far remaind mum on the bond issue. 

Moving up the Eastern Seaboard, to the U.S. District Court for the District of Massachusetts, there’s the ongoing case over Celltrion, Inc.’s (“Celltrion’s”) and Hospira, Inc.’s (“Hospira’s”) biosimilar version of Janssen Biotech, Inc.’s (“Janssen’s”) REMICADE (infliximab).  As we previously reported, that case raises some of the same issues currently before the Federal Circuit in the Sandoz-Amgen dispute.  That court docket hasn’t seen a lot of action as of late, except for a May 20, 2015 Memorandum of Law from Janssen (and New York University) in further support of their Motion for Partial Summary Judgment and a Preliminary and Permanent Injunction (and in opposition to Celltrion’s/Hospira’s Cross-motion for Partial Summary Judgment).  In that brief, Janssen argues that the statutory notice of commercial marketing from Celltrion is ineffective because it occurred before any biosimilar licensure, and that Janssen is entitled to a permanent injunction requiring Celltrion/Hospira to comply with the BPCIA’s 180-day notice requirement.