The Biologics Price Competition and Innovation Act (BPCIA) created an abbreviated approval pathway for companies wishing to market biological products. In short, such companies may base their filing with the FDA on a previously-approved biological product. For approval under the abbreviated pathway, the biological product must be shown to be “biosimilar” to a previously-approved “reference product.” 

The BPCIA also provides a framework for the biosimilar applicant and the reference product sponsor to address any patent infringement concerns raised by the biosimilar applicant’s marketing of the biosimilar (

). This framework provides the biosimilar applicant substantial control over when any patent infringement litigation will be filed. A review of a few examples of patent infringement complaints reveals different approaches taken by biosimilar applicants and shows how biosimilar applicants’ decisions on how closely to follow the BPCIA pathway may affect the timing of the ensuing patent litigation.

The BPCIA framework for addressing patent infringement concerns has often been called the “patent dance.” In this dance, the biosimilar applicant takes the lead and ultimately dictates the scope of a first patent litigation. But, in the end, all hell can break loose, as often happens in modern-day dancing, and the reference product sponsor can bring a second patent litigation with no further dancing under the BPCIA framework.

If the dance framework is followed to completion, a first patent litigation can be expected about 245 days after the FDA accepts the biosimilar applicant’s application for review. In one such case, 

 the first patent litigation was filed 201 days after FDA acceptance. This case is a textbook example of how the dance framework timing can work. The BPCIA requires that the biosimilar applicant notify the reference product sponsor within 20 days of the FDA accepting the biosimilar application [42 USC § 262(l)(2)]. In 

, this date was apparently August 15, 2019.

The 20-day notification triggers an obligation for the reference product sponsor to provide the biosimilar applicant with a list of patents that could be asserted against the applicant. That list must be provided within 60 days of receipt of the 20-day notification [42 USC § 262(l)(3)(A)]. In 

, the reference product sponsor provided this list on October 14, 2019.

In response, within 60 days of receipt of the list, the biosimilar applicant provides its own list of potential patents for resolution and its defenses to the patents identified on the reference product sponsor’s list [42 USC § 262(l)(3)(B)]. In 

, the biosimilar applicant, Hospira, could have waited until December 13, 2019, to provide its response, but did so on October 30, 2019—17 days after the patent listing—43 days sooner than necessary.

A further response by the reference product sponsor is required, again within 60 days. In this response, the reference product sponsor must set out its infringement analysis for those patents identified by the biosimilar applicant in its defense response [42 USC § 262(l)(3)(C)]. In 

, the reference product sponsor, Amgen, took almost the full 60 days permitted and provided its response on December 27, 2019.

The BPCIA framework then allots 15 days for the parties to negotiate which patents on the respective lists will be part of the first patent infringement litigation [42 USC. § 262(l)(4)]. In 

, the parties completed their negotiation by January 13, 2020, and agreed that a single patent would be asserted in the first litigation. One would expect that Amgen identified in its patent list a whole host of other patents that could be asserted against Hospira, and that could have been part of the first litigation if the parties had agreed to include them in the first litigation. But, as noted, the parties agreed that the first litigation would include only 1 of the patents identified on the parties’ patent lists.

The BPCIA provides for an additional step if no agreement has been reached [42 USC § 262(l)(4)], but that was not necessary in 

. Finally, the reference product sponsor, in order to preserve its right to damages other than a reasonable royalty [35 USC § 271(e)(6)(b)], may promptly (within 30 days) file a patent infringement civil action asserting the agreed patents [42 USC § 262(l)(6)].

, it appears that the FDA accepted Hospira’s biosimilar application on about July 26, 2019. Amgen sued on February 11, 2020. Assuming the July 26 date is accurate, the dance in 

Of course, the above BPCIA framework is not the end for Amgen and Hospira in that matter. As noted, the parties agreed to litigate only a single patent in the first litigation. But, there may be others—perhaps many—that Amgen may have available to assert in the second litigation. The second litigation triggers under 42 USC § 262(l)(8). Hospira must provide notice to Amgen of commercial marketing not later than 180 days before marketing [42 USC § 262(l)(8)(A)].

After that notice, Amgen may sue Hospira for patent infringement for all other patents that appeared on lists provided under 42 USC § 262(l)(3)(A) and (B). That’s where all hell can break loose, and, if those lists are extensive, the parties could be in litigation for quite some time on the previously-omitted patents. Because those patents available for the second litigation were already vetted by the parties in their exchanges under the BPCIA framework, no further information is required before the second litigation. Hospira’s biosimilar application was approved by the FDA on June 10, 2020. We can expect some action in this second phase of litigation in the near future.

A completely different approach was taken by 2 other biosimilar applicants. In 

, the biosimilar applicant, Sandoz, chose to provide only the notice under 42 USC § 262(l)(3)(A). Sandoz engaged in no further dancing. In 

, the biosimilar applicant, Samsung Bioepis, skipped the dancing entirely. The reference product sponsor, Immunex, learned of the Samsung Bioepis biosimilar application only after the FDA published its approval of the Samsung Bioepis biosimilar.

, it appears that the FDA accepted Sandoz’ biosimilar application on July 7, 2014. Sandoz notified Amgen of that acceptance on July 25, 2014. Prior to that notification on July 8, 2014, Sandoz had advised Amgen that Sandoz expected FDA approval of its biosimilar in early 2015 and provided notice of commercial marketing pursuant to 42 USC § 262(l)(8). Subsequent correspondence from Sandoz to Amgen included offers to provide certain information about the biosimilar, but those offers were withdrawn. 

Sandoz also repeatedly reminded Amgen that “Amgen is entitled to start a declaratory judgment action.” The result of Sandoz’ actions under the BPCIA was that Sandoz lost control of the timing for when a lawsuit could be filed by Amgen and lost its right to file a suit for declaratory judgment [42 USC § 262(l)(9)]. The practical result was that Amgen tired of Sandoz’ shenanigans and filed its suit for patent infringement on October 24, 2014—about 110 days after the FDA accepted Sandoz’ application. No doubt Amgen was motivated to file the lawsuit before Sandoz’ commercialization, but Amgen could have waited until any later time to file the lawsuit.

, the reference product sponsor first learned of the biosimilar applicant’s (Samsung Bioepis) application on April 25, 2019 when the FDA published its approval of the biosimilar. Immunex sued Samsung Bioepis on April 30, 2019, alleging that Samsung Bioepis “failed to provide to Immunex any of the information specified by 42 USC § 262(l)(2).” From a review of other cases, it appears that in 2019 the FDA approved a biosimilar application about 320 days after the date of acceptance. Assuming a similar time frame for the Samsung Bioepis application, it may be that Samsung Bioepis’ approach resulted in litigation in about 320 days. As in 

, here the biosimilar developer lost the ability to file a civil action for a declaratory judgement as a result of its failure to follow the BPCIA framework.

The above examples provide some insight into how the biosimilar applicant’s decisions on whether to follow the BPCIA framework may affect the timing of the ensuing patent litigation. Although adhering to the BPCIA framework provides some clarity to the process, for example, an early identification of the patents at the reference product sponsor’s disposal to assert, other consideration may counsel using only part of the BPCIA framework or none at all. Also, given that patents identified in the parties’ 42 USC § 262(l)(3)(A) and (B) lists are now identified in the Purple Book, subsequent biosimilar applicants can use that additional information in preparing their strategies for how to proceed under the BPCIA.

The opinions expressed here are the present opinions of the author and may not reflect the opinions of McAndrews, Held & Malloy, its clients, or any individual attorney or employee. This is for general information purposes and is not intended to be, and should not be taken as, legal advice.

The Biologics Price Competition and Innovation Act (BPCIA) provides a stepwise approach for fact-finding prior to patent litigation, but companies may choose their own path, case examples show.  

The Inner Workings of the BPCIA Patent Dance

Alejandro Menchaca is a shareholder at McAndrews, Held and Malloy, a full-service intellectual property law firm. He is also a long-standing adjunct professor in the area of intellectual property law at University of Illinois Chicago School of Law. He can be reached at 

Alejandro Menchaca, JD

Few manufacturers like to have their product referred to as a commodity. It sounds 

”. It conjures images of grain, coal, iron, and pork bellies. More positively, it may also be “

Let’s look at some economic definitions—with some levity but serious nonetheless. Citing several sources, 

 defines a commodity as “an economic good…that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them.” It is associated with “smaller profit margins”. The “importance of factors (such as brand name)” is diminished—except for price.

 that from its taste “it is not possible to tell who produced it, a Russian serf, a French peasant, or an English capitalist”. No doubt, there was some truth about that in the mid 19th century and may be applicable, in concept, to today. However, it has long been known that Marx was quite off with his ideas. In fact, apparently he also 

 that a commodity “appears at first sight an extremely obvious, trivial thing”; which is indeed correct, only that he qualified this by stating that a commodity is a “very strange thing, abounding in metaphysical subtleties and theological niceties”.

 of a commodity? Full or substantial fungibility—the economic term for interchangeability. Its instances are equivalent (or nearly so). Who produced the commodity is of no regard and, in time, neither is brand name. Price is the major driver, and profit margins are smaller. Implied in all this is the importance of volume and the intensity of competition.

Manufacturers of biosimilar and originator products may disagree. But can we ignore the fact that pegfilgrastim is a commodity, and so is trastuzumab? We can go down the entire 

 of biosimilars and come to the same conclusion.

, we’ll realize that there is little if any innovation in biosimilars (not that we expected innovation). All products are 

 to the reference product. With some latitude in reasoning, all biosimilars can be presumed to be equivalent to all other biosimilars referencing the same product. The set of a reference product and all its “similar biosimilars” make up the commodity class (yes, the reference product is now a commodity as well).

Not convinced? Ten adalimumab biosimilars have been approved in Europe and it’s possible that the 

 may come onto the US market next year—all from different manufacturers; all judged to be equivalent to reference; all interchangeable, in principle. In the United States, all with the same non-proprietary name and a 4-letter suffix. All with brand names to remember, but more likely to be forgotten. All aiming for sufficient market share and volume to recoup investments and provide shareholder value. And a couple years from now, all with similar (eroding) 

However, as commodities, biosimilars come with factors that make them a unique class of “high-tech” commodities.

First, a biosimilar is a treatment, not just a technical product. Its market is not a mass market, but a (highly) specialized niche that is constrained in size by epidemiology. It requires a highly educated “user” to make the purchase decision (physician-prescriber) and, in a shared decision-making, an informed willing “user” to consent to its use (patient).

Another unique factor: how it is paid for. A biosimilar is a high-priced and relatively low-volume commodity that few users pay for directly—certainly not the prescribing physician, nor the clinician administering it, and, except for co-pays and deductibles, the patient receiving it. It is not a regular purchase where product and money are moved across the counter. It is a transaction where the typical prescriber does not know the exact (negotiated) price; where the mere cost would run shivers down the patient’s spine; and even the actual financial burdens may be beyond a patient’s means.

This brings us to the last unique factor: constrained access. Using a biosimilar is a purchase where a third party decides access to the commodity (albeit under a pseudo contract with provider and patient). This third party— the payer—holds the ultimate decision by “authorizing” or “denying” the purchase.

The strange thing is that this third party gets most of its revenue from the people it is intended to serve. One way or another, patients pay into the payer system through taxes, fees, employee contributions, and, yes, employer contributions. In a way, the latter are employee contributions in disguise as the employees “produce” what their employer sells and therefore can make the employer contributions.

Is This Biosimilar Commodity Market Sustainable?

A quick back-of-the envelope calculation using data from the National Cancer Institute and the CDC shows that of the 

 estimated cases of cancer in 2020 in the United States, about 

 may have been treated with chemotherapy, of which an estimated 

 may have required (febrile) neutropenia prophylaxis. Of these 153,516 patients an estimated 80% will have been prophylacted with pegfilgrastim for at least 1 cycle, but probably several more.

For the sake of discussion, let’s assume generously an average of 2 cycles, or (rounded) 307,000 administrations. With 4 pegfilgrastim biosimilars on the market (another 2 have been approved) in addition to the reference, and (rather unrealistically) assuming equal market share, we are talking on average about 61,000 administrations per product per year (going down to an average 44,000 administrations after the 2 approved biosimilars enter the market). The product with the lowest 

 product Neulasta (6 mg) at $1477, with all but 1 biosimilar hovering right above this level. Do the math!

And if you’re still not convinced that each biosimilars-plus-reference set is a commodity market (several products, market share competition, downward pricing pressure, smaller margins, fading brand name recognition, etc) 

 that just four years ago, before any biosimilar pegfilgrastim had entered the market, the CMS reimbursement limit for Neulasta (reference pegfilgrastim) was about $4,500.

Does it Pay to Be a Biologics Commodity Player?

Probably, but manufacturers may need to play it differently.

Before elaborating my answer, let me start with an observation. For those of you who follow the consumer, generics, and biosimilars markets, you may have noticed the recent trend to spin-off consumer products, generics, and/or biosimilars. To just mention a few, 

 spun off its consumer goods, including its acquisitions from Pfizer and Novartis, into a newly-listed company; and 

 is in the process of doing something similar.

 intends to divest itself from Sandoz, its generics and biosimilars division. Pfizer merged its generics but not its biosimilars business with Mylan to form Viatris, which in turn entered into an agreement with Biocon (an Indian company) to acquire Viatris’ biosimilar assets. My speculation is that Big Pharma may be doing this to focus on the high-value and high-margin business of developing and marketing new drugs. The benefit to shareholders should be evident: profit margins are less likely to be diluted by lower-margin, cheaper products.

There may have been the (in hindsight, unrealistic) expectation that biosimilars would be a lucrative business with solid margins—better than generics but not as good as branded drugs. That may prove not to be the case for some biosimilars in the United States, as I argued in 

Let me leave you with some food for thought for next month’s column. What are the current major markets for biosimilars? What is their size? What are the population dynamics, from growth to demographics to epidemiology? What access to care do patients have, what are the barriers, and where are the pivot points? Realistically, how many product sets of biosimilars-plus-reference can be accommodated? Does the biosimilar industry need to think about alternate models of production, distribution, pricing, etc? Where are the unmet medical needs? How can these be met in a way that is fair and equitable to patients, payers, and manufacturers.

I am a strong proponent of biosimilars. That does not mean I am against innovation—on the contrary. There would be no biosimilars without the innovators. I have worked on several of these innovators. I am working now on innovators that someday may have biosimilar analogs. I am of the generation that has had the joy of seeing treatments emerge (and some fail) for diseases that over 40 years ago had the poorest of poor prognoses—but are now treatable.

Innovation in therapeutics (that is, the originator products) is about moving the boundaries of hope. Biosimilars are a channel for spreading more hope to more patients.

Ivo Abraham is Chief Scientist of Matrix45 and Professor of Pharmacy, Medicine, and Clinical Translational Sciences at the R. Ken Coit College of Pharmacy at the University of Arizona, where he is associated with the Center for Health Outcomes and PharmacoEconomic Research. He has worked in biologicals since the late 1990s and in biosimilars since their introduction in the European marketplace—collaborating closely with Karen MacDonald (also his wife) on large international and national observational studies. On both the private and academic sides, their group published the first economic evaluations of biosimilars, a line of studies that continues to date and have been instrumental in the breakthrough and market adoption of biosimilars in Europe and the United States. More recently, Matrix45 has ventured into biosimilars in emerging markets, including low- and middle-income countries. Ivo Abraham may be reached at 

Statement of Disclosures of Relevance to this Monthly Column

Matrix45, LLC and predecessor companies in which Ivo Abraham and Karen MacDonald hold or have held equity, have been contracted for research, analytics, dissemination, and consulting services by Janssen/Johnson & Johnson, Amgen, Novartis, and Roche on the originator side and by Sandoz/Novartis, Coherus Biosciences, Mylan/Viatris/Biocon, Hospira/Pfizer, and Teva on the biosimilars side; with past and current conversations with Merck KGaA, Therapeutic Proteins International, Celltrion, Apobiologix, Apogenix, Fresenius Kabi, and Spectrum. By company policy, associates of Matrix45 cannot hold equity in sponsor organizations, nor provide services or receive compensation independently from sponsor organizations. Matrix45 provides its services on a non-exclusivity basis.

All contributions to this column are prepared independently and without funding from sponsors.

When more may yield less: price erosion of biosimilars following US market entry. (September 2022).

https://www.centerforbiosimilars.com/view/dr-ivo-abraham-column-when-more-may-yield-less-price-erosion-of-biosimilars-following-us-market-entry

It’s what we do with the savings: economics and equity. (August 2022) 

https://www.centerforbiosimilars.com/view/dr-ivo-abraham-column-it-s-what-we-do-with-the-savings-economics-and-equity

Good bait and fair switch: biosimilar interchangeability, substitution, and choice. (July 2022) 

https://www.centerforbiosimilars.com/view/contributor-good-bait-and-fair-switch-biosimilar-interchangeability-substitution-and-choice

To try or not to try, that’s not the question: phase 3 trials of biosimilars and beyond. (June 2022) 

https://www.centerforbiosimilars.com/view/contributor-to-try-or-not-to-try-that-s-not-the-question-phase-3-trials-of-biosimilars-and-beyond

The enemy of your enemy should be your friend: why biosimilar companies should collaborate. (May 2022) 

https://www.centerforbiosimilars.com/view/contributor-the-enemy-of-your-enemy-should-be-your-friend-why-biosimilars-companies-should-collaborate

Ivo Abraham, PhD, chief scientist of Matrix45 and a professor at the University of Arizona, explores whether biosimilars should be considered a commodity and if the commodification of medications is sustainable as the market continues to expand.

Authors