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A New Patent Dance: The
Biologics Price Competition
and Innovation ActJ. Eric Thies
David M. Conca
Jeffrey A. Wolfson
Jeffrey L. Kopacz
Michael K. Kirschner
2
J. Eric Thies
Assistant Counsel, Intellectual
Property Group at Merck
• Rahway, NJ
Chair, IPO Pharmaceutical
Issues Committee
3
David M. Conca
Partner, Litigation Department
at Paul, Hastings, Janofsky &
Walker, LLP
• New York, NY
Chair of IPO Pharmaceutical
Issues Subcommittee on
Healthcare Legislation
Moderator
4
Jeffrey A. Wolfson
Partner at Haynes and Boone,
LLP
• Washington, DC
Vice-Chair of IPO
Pharmaceutical Issues
Subcommittee on Healthcare
Legislation
Panelist
7
Presentation Outline
Part 1: Overview of New Legislation
Part 2: Hypothetical Patent Information
Exchange
Part 3: Resulting Litigation
Part 4: FDA Regulatory Implementation
8
Part 1: Overview
Title: Biologics Price Competition and Innovation Act of 2009
• Effective date: March 23, 2010
Amends Section 351 of the Public Health Service Act to provide for abbreviated pathway for biosimilars based on regulatory data previously submitted for reference product
42 U.S.C. 262 (2010)
9
Part 1: Overview
Data exclusivity for reference products,
including pediatric exclusivity extension
Regulatory pathway for biosimilars,
including interchangeability incentives
New patent litigation procedures with
obligations on each side to disclose
information
10
Part 1: Overview
A follow on biologic can still be approved under 21 U.S.C. 355(b)(2) (505(b)(2)) if:
• The follow on biologic is in the same product class as the original biologic
• The original biologic was approved under section 505(b)(1) Not later than March 23, 2010
• The follow on biologic application is submitted before March 23, 2020
42 U.S.C. 262 Note: PL 111-148 7002(e)(1)-(e)(2)
11
Part 1: Overview (cont.)
Exception: a follow on biologic application may not be submitted under 21 U.S.C. 355 if:
• Another biologic is approved under 42 U.S.C. 262 that could be a reference product for the follow on biologic application if submitted under that section
42 U.S.C. 262 Note: PL 111-148 7002(e)(4)
12
Part 1: Overview (cont.)
Phase Out: an approved application
for a biologic under 21 U.S.C. 355
will be deemed a license for the
biologic under 42 U.S.C. 262 on
March 23, 2020
42 U.S.C. 262; PL 111-148 7002(e)(4)
13
Deemed a
“License…under such section 351”
An approved application under Section 505 (21 U.S.C. 355) “shall be deemed to be a license for the biological product under such section 351” on March 23, 2020.
Exclusivity under 351 is for “12 years after the date on which the reference product was first licensed under subsection (a)”
PL 111-148 7002(e)(4); 42 U.S.C. 262(k)(7)(A)
14
Part 2: Hypothetical Exchange
Reference product sponsor Real Pharmaceutical
Sciences, Inc. (RPS) files a biologics license application
(BLA) under 351 for its drug Humorex, a biologic used to
treat ipthealgia, a disease that produces uncontrollable,
deadly laughter. RPS has obtained patents on the drug
and processes of making it. RPS receives FDA approval
for Humorex.
15
Part 2: What does that get RPS?
Humorex is then entitled to 12 years of regulatory exclusivity
Biosimilar applications cannot be filed less than 4 years after the date Humorex is approved
42 U.S.C. 262(k)(7)(A)-(B), (m)(3)-(4)
Discussion: What does regulatory exclusivity really mean? Compare Hatch-Waxman? Four year date?
RPS appro
val
4 years
12 years
Data E
xclusiv
ity E
xpires
No Bio
simila
rs
16
Part 2: Pediatric Exclusivity?
Pediatric exclusivity nets reference
product sponsor an extra 6 months of
regulatory exclusivity:
• Initial follow on biosimilar applications and
their approval delayed 6 months, but
• Only if appropriate pediatric studies done and
submitted and accepted under 505A at least 9
months before expiration of relevant period
42 U.S.C. 262(k)(7)(A)-(B), (m)(3)-(4)
17
Result of Pediatric Exclusivity
4 years
12 years
6 months6 months
Discussion: File for pediatrics late to extend twelve year term late rather than early?
18
Part 2: RPS can’t get data exclusivity on…
A supplement to the original Humorex BLA; or
A subsequent application (by RPS or a related entity) for• Change (not structural) resulting in new indication,
route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength; or
• Structural modification that does not result in change in safety, purity, or potency
42 U.S.C. 262(k)(7)(C)
Discussion: Compare prior data necessary to get NCE. Is there guidance on threshold data required to show safety, purity, potency?
19
Part 2: Four Years Into Data Exclusivity
4 years after Humorex’s approval, Biosimilar Aspirations,
Ltd. (BA) files with the FDA an application for Funni, a
biosimilar that claims Humorex as the reference biologic.
BA also is called the subsection (k) applicant or sub(k)
applicant.
RPS appro
val
4 years
12 years
Data E
xclusiv
ity E
xpires
BA can a
pply
20
Part 2: FDA Guidance for BA
FDA may issue guidance for approval of biosimilars, but it doesn’t have to do so
Guidance documents may state that FDA will notcurrently license a biosimilar for a certain product or class because science and experience currently does not allow it.
But issuance or non-issuance of guidance shall not preclude FDA from reviewing or acting on an application• FDA can later reverse or modify its position
42 U.S.C. 262(k)(8)
Discussion: How/whether FDA guidance will affect follow-on biologic development.
21
Part 2: FDA Guidance for BA
Product Class-Specific Guidance
• If issued, it must include criteria to determine
both “highly similar” and “interchangeable”
• Public comment period
42 U.S.C. 262(k)(8)(D)
Discussion: How/whether class-specific guidance will affect follow-on biologic development.
22
Part 2: What does BA have to show?
For the FDA to approve Funni, BA has to prove that it is• Biosimilar
• “Optionally”, BA can try to show that it is interchangeable
Also, BA must show that the facility where Funni is manufactured, processed, packed, or held meets standards to ensure safety, purity, and potency
42 U.S.C. 262(k)(2)(A)(i), (k)(2)(B)
Discussion: Investing/developing manufacturing facilities very early in biosimilar product’s life cycle
23
Part 2: What is biosimilarity?
1. Highly similar to reference product
notwithstanding minor differences in
clinically inactive components; and
2. No clinically meaningful differences with
regard to safety, purity, and potency
42 U.S.C. 262(i)(2) (as amended)
Discussion: What showing will BA have to make for “highly similar”?”
24
Part 2: Biosimilarity Studies
I. Biosimilarity must be shown by: a) Analytical studies demonstrating that Funni is highly similar
to Humorex notwithstanding minor differences in clinically active components;
b) Animal studies (including assessment of toxicity);
c) Clinical studies that demonstrate safety, purity, and potency in one or more conditions of use for which Humorex is licensed and intended to be used and for which licensure is sought
But FDA can waive one or more biosimilarity studies
42 U.S.C. 262(k)(2)(A)(i)(I)-(II), (k)(2)(A)(ii)
Discussion: What will FDA waive? Compare to Hatch-Waxman (bioequivalence studies) and European biosimilar pathway.
25
Part 2: What Else is Required for BA
Licensure?
II. Demonstration of the same mechanism or mechanisms of action, to the extent mechanisms of action are known to RPS
III. Used for the same indications
IV. Same route of administration, dosage form, and dosage strength as reference product; and
V. Manufactured under FDA standards
Discussion: Doctrine of Equivalents?
26
Part 2: Interchangeability
BA must demonstrate that Funni is biosimilar to Humorex and
• Expected to produce the same clinical results; and
• If administered more than once to an individual, the risk of altering or switching is not greater than risk of using the reference product without alteration or switch
42 U.S.C. 262(k)(4)
Discussion: Clinical studies necessary for switching? What are the risks?
27
Part 2: Interchangeability
A determination of “interchangeability”
would mean that Funni could be
substituted for Humorex without the
intervention of the health care provider
that prescribed Humorex
42 U.S.C. 262(i)(3) (as amended)
Discussion: How will this affect TE codes? What will be the market impact of biosimilar vs. interchangeable designation?
28
Part 2: Incentives to Prove
Interchangeability, but…
If FDA determines that Funni is interchangeable with Humorex, BA gets data exclusivity against any other potential interchangeable biologics
To the earlier of:• 1 year after first commercial marketing of first interchangeable
product;
• 18 months after a final court decision on all patents in suit in an action under this section against the first approved interchangeable product, or dismissal of an action under this section against first interchangeable product;
42 U.S.C. 262(k)(6)
Discussion: BA only gets exclusivity as against other interchangeables.
29
Part 2: Incentives to Prove
Interchangeability, but…
• 42 months after approval of first interchangeable product if applicant has been sued under this section and litigation is still ongoing within the 42 month period; or
• 18 months after approval of first interchangeable product if applicant has not been sued under this section
42 U.S.C. 262(k)(6)
Discussion: Impact on settling these cases?
30
Part 2: What else is in BA’s application?
Publicly-available information regarding the previous determination that reference product Humorex is safe, pure, and potent
BA may include any other information to support the application, including publicly-available information about Humorex or another biological product
However, BA’s Funni application will not be evaluated for biosimilarity against more than one reference product
42 USC 262(k)(2)(iii); (k)(5)
Discussion: What would you include if you were BA?
31
Part 2: After BA sends its application to FDA
Once BA sends its biosimilar application to FDA with Humorex as its reference product, the FDA will notify it that the application was accepted for review. BA then has an obligation to notify RPS.
42 USC 262(l)(2)
32
Part 2: What Obligations Does BA have to
RPS?
Within 20 days after notification by the FDA, BA must provide RPS’s counsel (under confidentiality provisions)• A copy of its application for Funni
• Information about its manufacturing process
BA may also provide: • Any other information RPS requests and BA thinks
appropriate to provide
42 USC 262(l)(2)
Discussion: What would appropriate information be? Should BA include such information?
33
Part 2: Confidentiality Provisions for the
Exchange of Information
BA does not need to negotiate a protective order because confidentiality provisions are in the statute
BA may not deny access to its biosimilar application (and other information exchanged between BA and RPS) to:• RPS Outside counsel: one or more attorneys (if they do not
engage “formally or informally” in “relevant or related” patent prosecution)
• RPS In-house counsel: one attorney with the same patent prosecution bar
42 U.S.C. 262(l)(1)(A)-(B)
Discussion: Will parties need to negotiate the meaning of “relevant” patent prosecution for inside counsel?
34
Part 2: Confidentiality Provisions
(cont.)
BA may also not deny access to:• A representative of a patent owner, where patent is
exclusively licensed to RPS and right to sue has been retained, so long as owner agrees to be bound by the confidentiality provisions
No disclosure to any other person without BA’s consent• But cannot be “unreasonably” withheld
RPS and BA can negotiate a different protective order
42 U.S.C. 262(l)(1)(A)-(C)
Discussion: Who else? Experts? Internal RPS employees?
35
Part 2: Exchange of Patent Information and
Lists (The Dance)
First Step: BA Provides Application to RPS
Then during this exchange, RPS and BA each identify
patents they think are relevant.BA provides
application
to RPS
Day
1
RPS
provides
patent list
Day
61
BA
responds
with
reasoning
Day
121
Patent List
Negotiation
?
RPS
responds
with
reasoning
Day
181
36
Part 2: Second Step
RPS Provides Its List to BA
Within 60 days of receipt of information
from BA, RPS must provide:
• List of all patents for which RPS believes a
claim of patent infringement could reasonably
be asserted
• Which of those patents it is prepared to
license to BA42 U.S.C. 262(l)(3)(A)
Discussion: pre-suit investigations?
37
Part 2: Second Step
RPS’s Initial List to BA
RPS: Humorex is covered by 6 patents which we believe will be infringed by Funni: • ’001
• ’002
• ’003
• ’004
• ’005
• ’006
We are willing to license the ’005 patent.
Discussion: With short deadlines, what should BA do to prepare for this exchange?
38
Part 2: Third Step
BA Responds to RPS’s Initial List
BA must respond within 60 days:• Factual and legal basis for belief each patent is
invalid, unenforceable, or will not be infringed; or
• Will not begin commercial marketing until patent expires; and
• Response to each patent RPS will license What does the response need to be?
• BA can include its own list of patents on which it believes a claim of infringement could reasonably be asserted
42 U.S.C. 262(l)(3)(B)
Discussion: What if there are several patents? What about 20?
39
Part 2: Third Step
BA’s Response to RPS’s Initial List
We will not infringe ’001. The ’002, ’003,
’004 and ’006 are invalid or unenforceable.
We do not need to license ’005 because
we also think it is invalid or unenforceable.
These patents are not infringed, invalid,
and/or unenforceable because…
Note that BA must provide a response to
an offer to license42 U.S.C. 262 (3)(B)(iii)
40
Part 2: Fourth Step
RPS Responds to BA
RPS must respond within 60 days
• Detailed statement describing factual and
legal basis for belief that the patent will be
infringed
• Response to statement concerning validity
and enforceability
42 U.S.C. 262(l)(3)(C)
Discussion: Response to validity and enforceability.
41
Part 2: Fourth Step
RPS’s Response to BA
You will infringe patents ’001-’006. They
are all valid and enforceable for the
following reasons…
RPS must provide its reasons for
infringement, validity, and enforceability,
showing its position to BA
42
Part 2: Fifth Step
Patent List Negotiations
RPS and BA must engage in good faith
negotiations regarding which patents will be
subject of the immediate infringement action
42 U.S.C. 262(l)(4)(A)
Discussion: When should those negotiations begin? What do BA and RPS need to do to show good faith?
43
Part 2: Sixth Step
Final Patent Lists
What if RPS and BA fail to reach agreement on
which patents to litigate within 15 days?
• They must then exchange final patent lists that will
determine which patents will be litigated immediately42 U.S.C. 262(l)(4)(B)
44
Part 2: Sixth Step
Final Patent Lists
BA notifies RPS of the number of patents that
should be the subject of the infringement action
Within 5 days parties simultaneously exchange
lists of patents that should be the subject of the
infringement action
RPS cannot list more patents than the number
proposed by BA (except if BA does not list any
patent, then RPS can list one)
42 U.S.C. 262(l)(5)
45
Part 2: What Will RPS and BA Do in This
Exchange?
BA: “We believe that 3 patents should be
the subject of immediate litigation.”
RPS: “We choose patents ’002, ’003, and
’004.”
BA: “We choose ’002, ’003, and ’006.”
They still haven’t come to agreement
Discussion: Strategies for dealing with this?
46
Part 3: Litigation
If the parties agree on a list • RPS must commence action with respect to each patent on the list
within 30 days of the agreement
If the parties do not agree on a list• RPS must commence action with respect to each patent on either list
within 30 days of the exchange of the lists of patents during negotiations
42 U.S.C. 262(l)(6)
47
Part 3: RPS Must Sue on Four Patents
Because RPS and BA didn’t agree, RPS must
commence litigation on patents ’002, ’003, ’004
and ’006 within 30 days of the exchange of final
patent lists
BA must notify FDA of the litigation
If RPS and BA had agreed, only 3 patents would
be litigated immediately
Discussion: Is it more advantageous to agree or disagree? Is it okay to preview lists to ensure agreement/disagreement?
48
Part 3: Bringing an Action for Infringement:
Limitations
Bringing action after the 30 days has expired or bringing action then dismissing it without prejudice • Sole remedy in any subsequent infringement action of
that patent will be reasonable royalty
Failure to disclose relevant patent• Action for patent infringement under “this section” can
never be brought
No provision prohibiting settlement35 U.S.C. 271(e)(6)
Discussion: Does “this section” mean 271(e) or 271?
49
Part 3: Notice of Commercial Marketing and
Preliminary Injunction
Notice of intent to market
• BA must provide at least 180 days notice of intention
to market, regardless of existence of patents
Preliminary injunction
• RPS can seek a preliminary injunction after receiving
BA’s notice
To prevent marketing until court decides infringement,
validity, and enforceability42 U.S.C. 262(l)(8)
Discussion: Will there be substantial PI practice?
50
Part 3: Preliminary Injunction
(Cont.)
Eligible patents
• Patents in the original list of either of the parties, or in a newly issued patents list, but that are not included in the final lists (after negotiations)
Parties must reasonably cooperate to expedite further discovery as needed for preliminary injunction
42 U.S.C. 262(l)(8)
51
Part 4: FDA Implementation
FDA is given substantial discretion under the statute
Unclear how FDA will implement the statute
If FDA issues guidance on a case-by-case basis, an approval pathway will be difficult to predict for other biosimilar applicants
Unclear what studies FDA will require, which could affect decisions by biosimilar applicants of which products to develop
Discussion: What do you guys think?
52
Part 4: Recent FDA Actions
The agency is in the early stages of deciding on an approval pathway
A working group comprised of officials from CDER, CBER, and the Office of the Chief Counsel has been established by FDA to implement the statute
Leah Christi has been tapped as the Office of New Drugs’ Associate Director of Biosimilars
What else?
Washington Drug Letter, Vol. 42 No. 25, “Biosimilar Developers Told to Wait as FDA Crafts Regulatory Guidance,” June 21, 2010; “The Pink Sheet” Daily, “FDA Creates Biosimilars Overseer in Drug Office; Internal Panel to Advice Application Reviewers,” May 20, 2010.