Makin’ It: How Does the Safe Harbor Apply to Biosimilar Manufacturing?

March 18, 2020By Sara W. Koblitz

With the growth of biosimilar applications, courts have been faced with a litany of questions arising from the interplay between reference product intellectual property and the biosimilar application process.  Though the BPCIA was designed to “learn” from FDA’s experience with the Hatch-Waxman Act, the procedural differences in the patent dance raise novel questions (for example, questions about whether the patent dance is mandatory and proper notice timing made it all the way to the Supreme Court).   The Federal Circuit, back in December, addressed another one of these questions arising from a significant difference between the Hatch-Waxman Act and the BPCIA: the role of process (or manufacturing) patents.

The patent safe harbor under 35 U.S.C. § 271(e), as we have discussed here and here, exempts drug development and approval from patent infringement provisions, and courts have interpreted the safe harbor to apply to broadly to FDA-regulated and approved products, including biologics.  Generally, the safe harbor protects the use of a patented technology for all development activities “reasonably related” to FDA approval.  Indeed, as long as there is a reasonable basis to believe that patented technology may be used for a non-routine FDA submission, the use is not an act of infringement.  Courts continue to grapple with the application of the safe harbor to different types of FDA submissions as the regulatory process has become more complex—and largely have continued to expand its scope.

However, now that biosimilars and the biosimilar patent dance are a thing, the courts have to assess the scope of the safe harbor with respect to types of patents.  This wasn’t an issue in the past because FDA regulations preclude the listing of process patents in the Orange Book, which means that process patents are not included in the Hatch-Waxman patent dance.  Indeed, the Federal Circuit has even held that, for purposes of patent infringement, the act of submitting an ANDA is only an artificial act of infringement with respect to a drug substance or drug product patent—thereby omitting process patents from the infringement calculus until the product has been placed into interstate commerce (obviating the need for the application of the safe harbor to process patents).  See Glaxo Inc. v. Novopharm Ltd.110 F.3d 1562 (Fed. Cir. 1997).  But in the biosimilars context, where the manufacturing process may be integral to the safety, potency, and purity of the biological product, and is therefore critical to the product itself, process patents are included in the patent dance, raising questions of how the safe harbor actually works when the act of manufacturing itself is an act of infringement.

In December, the Federal Circuit was asked to opine on jury instructions with respect to the application of the safe harbor to process patents in patent litigation relating to Hospira’s biosimilar application referencing Amgen’s erythropoietin.  While no one argued that the safe harbor does not apply to process patents (likely because the safe harbor statute expressly applies to “the use” of a patented invention for FDA approval purposes) , the jury found that only 7 of Hospira’s 21 batches of drug substance were covered by the safe harbor; the other 14 therefore infringed on Amgen’s process patents.

Hospira argued that “no reasonable jury could have found that some, but not all, of Hospira’s drug substance batches were protected by the Safe Harbor defense.”  Instead, Hospira argued, the instructions to the jury with respect to the application of the safe harbor to process patents were flawed.  The instructions, in relevant part, stated:

You must evaluate each of the accused activities separately to determine whether the Safe Harbor applies.  If you find that an accused activity was reasonably related to the development and submission of information to the FDA for the purpose of obtaining FDA approval, then Hospira has proved its Safe Harbor defense as to that activity. If Hospira has proved that the manufacture of a particular batch was reasonably related to developing and submitting information to the FDA in order to obtain FDA approval, Hospira’s additional underlying purposes for the manufacture and use of that batch do not remove that batch from the Safe Harbor defense.

Hospira argued that this instruction focused on the intent of manufacturing batches rather than whether each batch was used for purposes reasonably related to Hospira’s submission.  Amgen, unsurprisingly, argued that the jury instruction clearly applies only to the use of the batches.

The Federal Circuit sided with Amgen.  The Court explained that because the patented inventions are “Amgen’s claimed methods of manufacture,” “[t]he relevant inquiry, therefore is not how Hospira used each batch it manufactured, but whether each act of manufacture was for uses reasonably related to submitting information to the FDA.”  In other words, the jury appropriately focused on the “why” of each use of the manufacturing process.  Regardless, the Court continued, “the instructions struck the appropriate balance by telling the jury that Hospira’s additional underlying purposes do not matter as long as Hospira proved that the manufacture of any given batch of drug substance was reasonably related to developing information for FDA submission.”  Because substantial evidence supports the jury’s findings that the 14 batches—which were admittedly made for commercial inventory but supposedly used for biosimilarity testing, revisions to release specifications, stability testing, and continued process verification—were not manufactured solely for uses reasonably related to the development and submission of information to FDA, as they were also used for routine submissions and therefore not protected by the safe harbor, the Court found the jury’s findings reasonable.

Hospira filed a Petition for Rehearing En Banc in January, arguing the Federal Circuit misapplied the safe harbor with respect to biosimilar process patents.  Instead of the underlying purpose for the use of the manufacturing process, Hospira contends that the jury must look at the ultimate use of the product manufactured through the potentially infringing process.   Looking at the broader application of the safe harbor, Hospira argues the Federal Circuit’s ruling “calls into question the continuing viability of the Safe Harbor” because “[i]f an act of manufacture infringes regardless of how the product batches produced by the patented method are used, then the statutory protection for ‘making’ a drug is rendered illusory for a large subset of the patents available to be asserted under the BPCIA.”  Therefore, the Court’s ruling that “subsequent uses that are objectively related to obtaining FDA approval cannot bring the making of the [erythropoietin] within the Safe Harbor if the manufacture itself was not ‘required,’ at the time of manufacture, for seeking FDA approval” must be erroneous.

According to Hospira, because it ultimately used all of the batches to generate data for its aBLA, its infringement of Amgen’s process patents is protected under the safe harbor regardless of its intent when manufacturing those 14 batches.  This is particularly true, Hospira argues, because of the nascent nature of the aBLA process.  Because, at the time of submission, FDA had only “issued limited draft guidance for the requirements for approval of [an aBLA],” Hospira did not know exactly what testing and how many batches would be necessary for approval.  Therefore, Hospira manufactured batches to preclude “giving the FDA less information than it deserves and/or needlessly prolonging the review process if FDA finds the initially submitted data to be insufficient.”

Amgen responded in late February, urging the Court to deny the Petition for Rehearing.  Amgen focuses on the wording of the jury instruction rather than the overarching policy debate, arguing that the jury instruction was consistent with the statute, as well as existing safe harbor case law.  Further, Amgen emphasizes that the testing performed on the batches was required only because the batches were made for commercial inventory.  The jury properly found, based on substantial evidence, that the tests performed were “routine testing” not subject to the safe harbor.  Indeed, Amgen explains, that “rather than use ‘how’ or ‘why,’” the panel correctly applied the language used in the statute: “whether each act of manufacture was for uses reasonably related to submitting information to the FDA.”

Ultimately, there is an underlying question of fact here—whether the Hospira actually used those batches for routine submissions or approval submissions—which may lead the Federal Circuit to reject the Petition for Rehearing En Banc.  While that would certainly be a bad outcome for Hospira—and arguably for any aBLA-filers mired in regulatory uncertainty— such an outcome may preclude clarity on the why vs. how issue.  But even if that happens, this is unlikely to be the last we hear from the Federal Circuit on the scope of the safe harbor as it applies to process patents.  As the biosimilar patent dance process unfolds, we expect that process patents will play a larger role, culminating in even more questions for the courts.