Ted Mathias focuses on trying patent cases. In the last 2 years, he tried 2 cases to judgment and served as lead counsel in a case involving 33 patents that settled favorably on the eve of trial. Mathias has litigated patent cases and handled successful appeals to the Federal Circuit in the areas of medical devices, pharmaceuticals, mechanical devices, e-commerce and software.

Ted Mathias, JD

For years, biosimilar developers have lamented the lack of patent transparency around reference biologics. The Purple Book Continuity Act (PBCA), enacted in December 2020 

, directs FDA for the first time to publicly list certain patent information in the “Purple Book,” a database of approved biological products.

The PBCA is a welcome first step, but many in the biosimilar industry argue that Congress needs to do more to illuminate the patent landscapes for approved biologic products. Disclosure of reference product patents comes too late and is too incomplete to meaningfully guide business decisions. Developers of follow-on biologics need greater disclosure in order to make well-informed decisions about which products to pursue, with the ultimate goal of encouraging more development and earlier entry of follow-on biologics.

Rather than encouraging companies to move quickly to develop follow-on products, the [Purple Book Continuity act] only helps those developers who wait for others to forge ahead without the benefit of patent transparency.

Pharmaceutical companies seeking to develop small molecule generic drugs have long looked to a different database maintained by the FDA, the “Orange Book,” for patent information. Here, sponsors of small molecule drugs are required by the Hatch-Waxman Act to list patents they own or license that cover those drugs. Generic developers can thus rely on the Orange Book to provide the universe of patents that an originator might assert during prelaunch litigation and thereby gauge their litigation exposure in considering whether to pursue a generic pharmaceutical. This increased certainty allows generic manufacturers to proactively prepare for litigation, thereby increasing their chances of a clear path to launch.

Until the PBCA’s enactment, follow-on biologic developers had no such clarity and had to rely on their own due diligence in assessing which patents they might face in litigation. The FDA’s Purple Book listed approved biologics but provided no patent information. The PBCA now provides at least 

 degree of patent disclosure. Under the new law, a reference product sponsor (RPS) must provide the FDA with a list of the patents and associated expiration dates that it discloses under 42 USC § 262(l)(3)(A) and 262(l)(7) as part of the patent dance, a series of disclosures required under the Biologics Price Competition and Innovation Act (BPCIA).

Although some patent transparency is better than none, many biosimilar companies argue that the PBCA nevertheless falls short in several important respects. First, the PBCA does little for companies seeking to expedite development of follow-on biologics. The RPS must only provide information on its patents to the FDA for listing in the Purple Book after it engages in the patent dance with a follow-on developer. Therefore, rather than encouraging companies to move quickly to develop follow-on products, the PBCA only helps those developers who wait for others to forge ahead without the benefit of patent transparency. Contrast this with the Orange Book, which delivers the patent information to all developers, including first-movers who push to get their products to market faster.

Second, the patent disclosures that an RPS makes pursuant to the patent dance might not include, as the Orange Book does, all of the patents owned or licensed by the RPS that cover its product. Instead, the Purple Book will only list patents that the RPS alleges covers a specific follow-on product. It is entirely possible that the RPS might have a different set of patents that it would assert against another follow-on product. But under the PBCA, that different set of patents would not be listed in the Purple Book, until and unless they are included in another (l)(3)(A) list against a different follow-on developer.

This concern is not merely theoretical. A survey of previous BPCIA litigation shows that RPSs can and do assert different patents against different defendants. For example, the RPS of trastuzumab, Genentech, brought suit against 4 different follow-on developers. Against both 

, Genentech disclosed the same 40 patents. When 

 filed, Genentech disclosed 37. And when Genentech brought suit against 

, it disclosed 21 patents. Some of the patents asserted against Amgen and Samsung Bioepis were neither disclosed nor asserted in the Celltrion and Pfizer cases. Thus, which patents get listed in the Purple Book may depend upon which developers file an abbreviated biologics license application (aBLA). 

It is true that these patents—and those to be listed in the Purple Book going forward—can be found by leafing through public court dockets. But asserted patents routinely make up only a subset of the entire portfolio. 

Extensive patent portfolios—sometimes called “patent thickets”—compound this problem. With larger patent portfolios, it is more likely that the RPS will have patents that have not been asserted or disclosed in previous suits. It will thus take more aBLA filings, resulting in more (l)(3)(A) lists, to expose the full extent of larger thickets.

On top of this, more patents qualify for prelaunch litigation under the BPCIA, where RPSs can assert patents covering manufacturing processes. Because manufacturing patents can be asserted prelaunch under the BPCIA but not under Hatch-Waxman, the Purple Book should have comparatively greater patent disclosure requirements than the Orange Book.

Proactive disclosure of manufacturing patents would also give follow-on developers the opportunity to design around patents during the early phases of product development. For example, 

Humira is the subject of some 154 patents and Rituxan is covered by at least 80

The large number of patents that tend to cover biologics (relative to small molecule drugs) weighs in favor of more transparency. Yet, even with the passage of the PBCA, the Purple Book will provide less patent information than the Orange Book. And while follow-on developers can depend upon earlier waves of litigation to identify some portion of an RPS’s patent portfolio, a great deal of diligence is often required to identify the universe of relevant patents with reasonable certainty.

The PBCA has also been criticized because, even after an RPS engages with the first follow-on developer to begin the patent dance for a given biologic, that engagement might not yield a patent listing in the Purple Book under the PBCA. The parties could reach a settlement before the RPS provides its Section 262(l)(3)(A) patent list. Or, the FDA may decline to request retroactive disclosure of patents from previous biosimilar litigations.

It is true that these patents—and those to be listed in the Purple Book going forward—can be found by leafing through public court dockets. But asserted patents routinely make up only a subset of the entire portfolio. Whether it be in the Purple Book or in a court filing, those disclosures are insufficient to bring meaningful transparency to follow-on developers.

In any event, the PBCA means that some patents will soon be coming to the Purple Book. Although the FDA is not required to make patent data available in the Purple Book until June, the obligation to communicate lists under Sections 262(l)(3)(A) and (l)(7) to the FDA is already in effect. Thus, the patent disclosures from biosimilars litigation initiated in 2021 may be among the first posted to the Purple Book.

 on November 19, 2020, that the FDA had accepted its application for a biosimilar of Humira. And on April 27, 2021, AbbVie, the RPS, 

. Although Alvotech agreed to only 4 patents for prelaunch litigation, AbbVie disclosed 62 patents which it could potentially assert in the Section (l)(3)(A) list. As of December 27, 2020, the PBCA requires that the RPS communicate any list under Sections 262(l)(3)(A) or (l)(7) to the FDA within 30 days of sending it to the aBLA applicant. Presumably these 62 patents will be provided to FDA for inclusion in the Purple Book.

The PBCA will bring some nominal level of transparency and notice for follow-on developers. But many in the biosimilar industry argue that it falls far short of what is needed. The PBCA provides no patent disclosure to the first filer of an aBLA, which must rely on its own diligence to identify patents that may be asserted. Nor does the PBCA require RPSs to proactively identify patents which cover a given biologic, as they must do for small molecule drugs in the Orange Book.

It may be true that numerous manufacturing patents might apply to a given product or its biosimilar depending upon the methods of manufacture. But the same cannot be said of patents which cover the active substance or those which cover a method of use. If proactive disclosure of such patents were compulsory, the Purple Book would begin to provide a level of transparency and utility on par with the Orange Book.

Nevertheless, there is reason for hope for the biosimilar industry: Congress has indicated a willingness to revisit which patents are listed in the Purple Book. The PBCA requires that, in 3 years’ time, the FDA take public comments on the type of patent information that should be included in the Purple Book. The FDA will then report this information to Congress along with its own recommendations.

If and when Congress revisits the issue, it might impose proactive patent disclosure requirements that would facilitate informed decision-making by follow-on developers and thus stimulate the development of more biosimilars for the US market.

Articles

Intellectual property attorneys from Axinn discuss the limitations of the Purple Book patent disclosure requirements and the burden these impose on biosimilar developers.

Opinion: Purple Book Patent Listings Are Only a First Step

Developments specific to biosimilars—a new regulatory framework for insulins, incremental market gains, and “patent dance” clarifications—were overshadowed this year by an existential threat to the law governing biosimilar approvals.

The most significant question facing biosimilar developers this year is whether the Biologics Price Competition and Innovation Act (BPCIA), which provides regulatory approval pathways for biosimilars in the United States, will survive 2021. The BPCIA—Title VII of the Affordable Care Act (ACA)—is caught in the legal crossfire surrounding the latest constitutional challenge to the ACA.

Although the BPCIA has bipartisan support, the ACA’s individual mandate requiring all individuals to maintain health coverage or pay a penalty has been the subject of numerous court challenges. The Supreme Court previously upheld the mandate’s constitutionality (by a 5-4 margin) as a valid exercise of Congress’ taxing power. After Congress reduced the penalty to $0 for failure to comply with the individual mandate, various states contended that the ACA is unconstitutional because the individual mandate does not generate any revenue and thus can no longer be classified as a tax.

 On March 3, 2020, the Supreme Court granted certiorari to decide this question and whether the individual mandate is severable from the remainder of the ACA, which would allow the remainder of the ACA to remain in place even if the individual mandate is found unconstitutional. The latter question is particularly important to biosimilar developers because the district court that originally decided the case concluded that the individual mandate is inseverable from the rest of the ACA. If the Supreme Court affirms this decision, the BPCIA would fall with the rest of the ACA.

Although the Supreme Court has yet to decide the constitutionality challenge at issue in 

, biosimilar developers have reasons to be optimistic. At the November 10, 2020, oral argument, the justices seemed reluctant to strike down the ACA in its entirety even if the individual mandate is unconstitutional. They described Congress’ decision to reduce the penalty to $0 but not repeal the law as “compelling evidence” that Congress wanted to preserve other provisions of the ACA, such as the protections for individuals with preexisting conditions. Chief Justice Roberts and Justice Kavanaugh also appeared skeptical of the argument that the ACA’s legislative findings section constituted an inseverability clause. The tenor of the oral argument suggests that the entire ACA will not be held unconstitutional even if the individual mandate is struck down, although it’s always dangerous to make predictions based on the oral arguments. A decision is expected in 2021.

A Changed Regulatory Scheme for Generic Insulin

On March 23, 2020, over 90 biological products previously governed by the Hatch-Waxman Act, including insulin and human growth hormone, became subject to the BPCIA. The regulatory shift presents follow-on insulin developers with new challenges and new opportunities.

Despite high consumer demand, few insulin developers working under the old scheme sought approval using the Hatch-Waxman Act’s abbreviated pathways. As a result, only 3 companies supply insulin in the United States, and insulin prices have continued to increase annually by more than 10%.

With the change to the BPCIA, insulin developers can now choose between 2 abbreviated pathways for approval: biosimilarity and interchangeability. To date, the FDA has not licensed any follow-on biologics as interchangeables. But insulin is a well-documented and structurally uncomplicated protein, and follow-on developers could find the FDA more receptive to approving insulins as interchangeables.

The shift to the BPCIA also provides a different playing field for patent issues. There will be less clarity as to which patents cover the biologic reference product. Unlike the requirement to list patents in the 

 for small molecule products, biologic originators are not required to identify patents that might be asserted in the 

 provided by the FDA. Therefore, developers will need to undertake more thorough searching to identify patents that could cover their follow-on biosimilar insulin products. On the plus side, follow-on developers will have more control over patent litigation. They can decide whether to initiate the patent dance—the BPCIA-prescribed information exchanges that may lead to patent litigation—or forego that process and let the originator decide the timing and scope of litigation.

The BPCIA offers other advantages to insulin developers that may allow earlier product launches. Most importantly, the BPCIA (unlike Hatch-Waxman) does not require follow-on developers to wait 30 months after being sued before launching their products. In addition, although reference biologics are typically entitled to 12 years of exclusivity, the FDA has stated that insulin products that were approved prior to March 23, 2020, are not entitled to either the 12 years of exclusivity under the BPCIA or the remainder of any exclusivity they may have had under the Hatch-Waxman Act.

 These benefits, combined with the more flexible patent litigation procedures, allow follow-on developers to right-size the scope of litigation in view of their launch plans.

Biosimilars made incremental market gains in 2020. Although the number of regulatory approvals was lower than in prior years, previously-approved biosimilars made significant market advances. These gains may signal that American doctors and patients are overcoming their initial resistance to biosimilars.

On the regulatory side, only 2 new biosimilars were approved by the FDA in 2020, a significant decrease from the record of 10 approvals made in 2019.

 Despite the drop-off in approvals, the FDA’s pipeline of biosimilars in development continues to grow. An average of 83 biosimilar projects were enrolled in the FDA’s biosimilar biological product development program during the first 9 months of 2020, compared with the average of 77 projects in 2019.

Commercially, 6 new biosimilars launched in 2020, matching 2019’s record, and doubling those from 2018.

 Eighteen biosimilars are now available in the United States (vs 29 approvals).

Biosimilar market shares continue to lag behind generic pharmaceuticals, but there was progress in 2020. In oncology therapeutics, bevacizumab and trastuzumab biosimilars accounted for at least 40% of their respective markets by volume.

 Sandoz’s Zarxio, the first biosimilar approved by FDA, marked its fifth anniversary of regulatory approval by overtaking the reference product in market share.

 These market successes will help improve consumer awareness of biosimilars as safe and effective treatments.

Notwithstanding court shutdowns due to the COVID-19 pandemic, BPCIA cases were actively litigated this year.

, addressed 2 issues related to BPCIA patent dance procedure. Reference product sponsor Genentech alleged that Amgen’s Avastin biosimilar infringed 26 Genentech patents. Genentech sought to dismiss Amgen’s counterclaims and affirmative defenses based on alleged deficiencies in Amgen’s patent dance disclosures under the BPCIA. First, Genentech argued that Amgen was barred from asserting counterclaims for declaratory relief under the BPCIA because it did not provide sufficient manufacturing information during the patent dance. Judge Connolly from the District of Delaware rejected this argument, holding that Amgen was not barred because, unlike a complaint, “the filing of counterclaims does not constitute ‘bringing an action’” under the BPCIA.

Genentech also argued that Amgen was barred from raising invalidity arguments that were not included in its “section 3B” contentions during the patent dance. Relying on the Supreme Court’s 

 decision, Judge Connolly also rejected this argument.

Three new BPCIA cases also were filed in 2020. Amgen brought 2 cases against Hospira asserting patents covering Amgen’s neutropenia treatments, Neulasta and Neupogen. The third case, 

, also involved Avastin. These cases are worth watching in 2021 because they raise a variety of issues, including infringement under the doctrine of equivalents and the level of detail required in patent dance disclosures.

Looking Ahead to 2021: Legislation and One Last Guidance From FDA

Congress is considering several bills aimed at jump-starting conversion to follow-on biologics. For example, the Increasing Access to Biosimilars Act of 2020 was introduced in the House of Representatives and Senate as HR 6179 and S 4134, respectively, to reduce the cost of biologics for senior citizens by providing an additional payment to eligible providers who furnish or dispense biosimilars to Medicare beneficiaries.

Other legislation from 2019 to 2020 aimed at limiting the number of patents that can be asserted in BPCIA litigation and providing biosimilar applicants an 

–type database of patents stalled in Congress. With the promise of new filings in 2021 and the concomitant litigation, the issue of which patents and how many can be asserted during the patent dance may take center stage once again.

Finally, the FDA published draft guidance in November 2020 addressing 3 issues concerning biosimilarity and interchangeability:

Applicants seeking an interchangeable-only review must make that request in the application’s cover letter;

A reference product sponsor seeking licensure of its approved biologic as a biosimilar to or interchangeable with another reference product must submit an abbreviated biologics application (aBLA) under the BPCIA for approval, although the applicant may support biosimilarity or interchangeability using data from the BLA application;

Labeling for interchangeables should (1) indicate that the product is interchangeable with the reference product, and (2) include relevant data and information from the reference product labeling but not a description of or data from clinical studies conducted to support interchangeability.

Comments on this draft guidance must be submitted to the FDA by January 19, 2021.

Despite the ongoing pandemic, the biosimilars pathways provided for in the BPCIA continued to evolve in 2020 through regulatory developments and judicial decisions. The pending litigations and proposed legislation create the potential for 2021 to be an equally—if not more—active year for the biosimilars industry.

1. Mathias T, Ropka S, Clegg R. What ACA’s uncertain future means for biologics patents. 

. February 27, 2020, 2:14 PM. https://www.law360.com/articles/1247932

2. Mathias T, Ropka S, Clegg R. Old drug, new tricks? How the BPCIA could increase generic competition for insulins. 

. June 23, 2020. https://www.biosimilardevelopment.com/doc/old-drug-new-tricks-how-the-bpcia-could-increase-generic-competition-for-insulins-0001

3. FDA. Statement from FDA Commissioner Scott Gottlieb, M.D. on new actions advancing the agency’s biosimilars policy framework. December 11, 2018. Silver Spring, MD: Office of Media Affairs, FDA. https://www.fda.gov/news-events/press-announcements/statement-fda-commissioner-scott-gottlieb-md-new-actions-advancing-agencys-biosimilars-policy

4. FDA. Interpretation of the “Deemed to be a License” provision of the Biologics Price Competition and Innovation Act of 2009: guidance for industry. Silver Spring, MD: Center for Drug Evaluation and Research, Center for Biologics Evaluation and Research, FDA; December 2018: 8-10. https://www.fda.gov/media/119590/download

5. FDA. Biosimilar product information. https://www.fda.gov/drugs/biosimilars/biosimilar-product-information. Accessed December 23, 20202. 

6. Amgen. 2020 biosimilar trends report. Thousand Oaks, CA: Amgen Biosimilars; September 2020: 9. https://www.amgenbiosimilars.com/-/media/Themes/Amgen/amgenbiosimilars-com/Amgenbiosimilars-com/pdf/USA-CBU-80723-2020-Amgen-Biosimilar-Trends-Report.pdf

7. FDA.FDA-Track: Center for Drug Evaluation & Research - pre-approval safety review – biosimilars dashboard. Silver Spring, MD; Center for Drug Evaluation and Research, FDA; September 30, 2020. https://www.fda.gov/about-fda/fda-track-agency-wide-program-performance/fda-track-center-drug-evaluation-research-pre-approval-safety-review-biosimilars-dashboard

. Civ. No 17-1407, 2020 WL 636439, at *4 (D Del February 11, 2020).

Intellectual property law attorneys from Axinn discuss regulatory and legal events in 2020 that will affect biosimilar markets in 2021.

Ted Mathias, JD

Opinion: Purple Book Patent Listings Are Only a First Step

Opinion: The Legal and Regulatory Year in Review