You Win Some, You Lose Some: Federal Circuit Denies En Banc Review in BPCIA Dispute & Otsuka Files Suit Over 3-Year Exclusivity

October 19, 2015

By Kurt R. Karst

Predicting the future is a tricky business.  Predictions don’t often pan out, even when most or all of the indicators prognosticators use say something will (or will not) happen.  We have a pretty decent track record of guessing how a case might come out or whether FDA will be challenged over a particular decision.  Last week we batted .500 on two previous predictions.

In July, after the U.S. Court of Appeals for the Federal Circuit issued a severely fractured panel opinion in Amgen v. Sandoz concerning various statutory issues under the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), we thought the likelihood that the Federal Circuit would grant petitions for rehearing and/or petitions for rehearing en banc (from both Amgen and Sandoz) was pretty high.  After all, we had to chart out the differing Circuit Judge opinions on a couple of the issues at bar (see our previous post here).  Moreover, the implications of the Court’s decision, if not altered, are manifold and may very well set the stage for implementation of the BPCIA’s so-called “patent dance” procedures for quite some time.  Last Friday, however, the Federal Circuit surprised us when the Court issued an Order denying the Amgen and Sandoz petitions for rehearing and rehearing en banc. 

We doubt the Federal Circuit’s Order will be the last word in the case.  So, we’re going to double down now and predict that the U.S. Supreme Court will be asked by Amgen and/or Sandoz to take up an appeal of the Federal Circuit’s decision.  There’s simply too much at stake here for the budding biosimilar industry (and for the future of the BPCIA)  for a party not to take this dispute to the next level.  We’ll know in the coming months if our prediction is correct.  Of course, if neither Sandoz nor Amgen go further (or the issues are otherwise deemed moot in the case), both of the primary issues in the case – whether or not the “patent dance” is mandatory, and when a biosimilar applicant can provide notice of commercial marketing – may still reach the U.S. Supreme Court though a future dispute (perhaps here or here).

We hit the nail on the head with our second prediction when Otsuka Pharmaceutical Development & Commercialization, Inc. and Otsuka Pharmaceuticals Co., Ltd. (collectively “Otsuka”) filed a Complaint in the U.S. District Court for the District of Columbia last week challenging FDA’s October 5, 2015 denial of a Citizen Petition (Docket No. FDA-2015-P-2482) and approval of Alkermes plc’s (“Alkermes”) 505(b)(2) NDA 207533 for ARISTADA (aripiprazole lauroxil) Extended-elease Injectable Suspension in light of unexpired 3-year new clinical investigation applicable to Otsuka’s ABILIFY MAINTENA (aripiprazole) for Extended-release Injectable Suspension, for Intramuscular Injection 300 mg/vial and 400 mg/vial, approved under NDA 202971.  ARISTADA is a prodrug of N-hydroxymethyl aripiprazole (and which N-hydroxymethyl aripiprazole is a prodrug of aripiprazole) that FDA approved for the treatment of schizophrenia (the same use for which ABILIFY is approved).

You can refer back to our previous post for the details on FDA’s (rather lengthy and complex) decision that Otsuka is challenging.  In the end, the dispute concerns the scope of 3-year exclusivity.  Otsuka alleges in its Complaint that FDA violated the FDC Act’s 3-year exclusivity provisions (FDC Act § 505(c)(3)E)(iii) and (iv)), the Agency’s regulation governing 3-year exclusivity (21 C.F.R. § 314.108), and the Administrative Procedure Act (“APA”) in approving ARISTADA.  According to Otsuka:

The FDA decisions challenged in this case undermine a fundamental aspect of the [FDCA]. . . .  Here, FDA disregarded the text and purpose of the exclusivity provisions and, in their place, created a wholly unauthorized new scheme to deny Otsuka exclusivity rights it earned and to approve a so-called new drug that undeniably is not a medical advance; provides no new or additional therapeutic benefit; and, as its own manufacturer has boasted repeatedly, operates in the body exactly as does Otsuka’s drug.  Rather than incentivize innovation and new drug development to benefit public health, FDA’s action punishes the innovator and unlawfully rewards a follow-on copycat company that proposes to bring to market a drug that provides no new or additional public health benefit.  FDA’s decision inverts the intent of the FDCA by denying Otsuka the protection to which it is legally entitled and rewarding what is, at best, an imitative competitor’s facially clever, but substantively meaningless, chemical trick.  Neither law nor sound policy supports this outcome.  FDA’s decision should not stand.

Otsuka asks the D.C. District Court to declare, after expedited proceedings (in a Motion to Expedite), that FDA’s denial of Otsuka’s exclusivity rights and ARISTADA approval violated the APA insofar as such alleged violations are arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law.  Otsuka also asks the court to vacate FDA’s ARISTADA approval and “any FDA decisions or actions underlying or supporting or predicated upon that approval,” and that the court declare that Otsuka’s 3-year exclusivity precludes the Agency from granting approval of the ARISTADA NDA until such exclusivity expires in 2017.  As one would expect, Alkermes promptly filed a Motion to Intervene in the case.