By John Richards

The recent health care reform legislation in the United States has taken steps to fill what some have seen as an anomaly the inter play between drug regulation and the patent law in that certain provisions that relate to small molecule drugs do not apply to biological drugs (essentially, those made in living cells rather than by chemical synthesis). The recent health care reform legislation addresses this.

The Food Drug and Cosmetic Act makes it unlawful to deliver any new drug into interstate commerce unless it has been approved by the Food and Drug Administration as being safe and effective. In 1983, the Supreme Court held that such provisions could apply to generic versions of new drugs as well. Hence, generic drug manufacturer were faced with the possibility of having to repeat the testing that had been carried out by the originator of the drug before they could obtain marketing approval.

In 1984, the Hatch-Waxman Act restructured the law relating to the introduction of generic drugs into the market place by amending the Food, Drug and Cometic Act to make it easier for generic versions of a drug that had been approved previously to obtain marketing approval from the FDA As a corollary, the Patent Act was also amended to provide that testing for the purposes of meeting FDA requirements was not a patent infringement, but that filing an application for approval to market a generic version of an approved drug under the provisions of the Food, Drug and Cosmetic Act would expose the applicant to a suit for patent infringement if the intention was to market the generic version before any relevant patent expired. Additionally, the Hatch-Waxman Act extended the term of patent protection for innovator drugs to compensate for the delay in marketing them as a result of the need to obtain FDA approval and also provided for a period of marketing exclusivity for the original drug independent of patent protection. Since the passage of that Act, applications for permission to market generic versions of drugs under the Food Drug and Cosmetic Act, filed as Abbreviated New Drug Applications (ANDA), must include a certification as to one of the following: (I) that no patent information was filed by the original innovator of the drug; (II) that the patent has expired; (III) the date on which the patent expires; or (IV) that the patent is invalid or will not be infringed. Applicants for an ANDA must up-date their certifications if additional relevant patents are added to the Orange Book, unless the patentee delays more than thirty days after the issue of the patent to enter it in the Orange Book. If the certification is of type (IV), the ANDA applicant must give the patentee notice and advise the patentee why it believes the patent is invalid, unenforceable or not infringed. If within 45 days of giving this notice, the patentee institutes a suit for patent infringement, the FDA must delay grant of marketing approval until a court holds that there is no infringement or 30 months have elapsed, whichever is the sooner.

Any marketing of biological products, however, requires a bologics license issued under the Public Health Service Act. The different requirements stem from the differences between the chemistry of small molecules and biological materials and the relative difficulty in accurately reproducing small molecule drugs that are normally made by chemical synthesis and biological products typically produced in cells and so subject to greater variability. Applications for marketing authorization for biological materials are therefore typically handled under the Public Health Service Act rather than the Food Drug and Cosmetic Act. The Hatch-Waxman Act made no amendments to the Public Health Service Act and so as a practical matter there has not hitherto been any “simplified” way in which to obtain approval for marketing of alternatives to the original version of a biological product.

The Public Health Services Act has now been amended by part of the 2010 health care reform legislation (the Biologics Price Competition and Innovation Act) to provide for provisions analogous to but different from those provided for small molecules under the Hatch Waxman Act.

Under these provisions, it is made easier for the manufacturer of a biological product that is a “Biosimilar” of a reference biological product (i.e. one that has already been approved) while at the same time providing a means for suing someone seeking such approval for patent infringement prior to actual marketing of the biosimlar if the approval is requested to commence before the relevant patents expire.

To qualify for these provisions, a biosimilar must be shown to be “highly similar” to the reference product, use the same mechanism of action as the reference product for the relevant conditions, the use “prescribed, recomended or suggested” in the labeling of the biosimilar is the same as those approved for the reference product, the route and administration dosage form and strength are the same as for the reference product and the facilities in which the biosimilar is manufactured, procesed packed or stored meet the necessary standards.

Similar to the Hatch-Waxman provisions, the first person to market a biological product is given a period of marketing exclusivity. Applications for marketing approval of biosimilars can not take effect until twelve years from the date of first authorization of the reference product, thereby in effect giving that product a twelve year exclusivity period independent of any patent protection.

Additionally, the applicant for approval of a biosimilar will be required to disclose information about the application to the sponsor of the reference product on a strictly confidential basis and the statute provides for the grant of immediate injunctive relief should the sponsor of the reference product misuse the information given to it.

Once the sponsor of the reference product has received such information about the application for approval of a biosimilar, it has sixty days within which to provide the applicant for the biosimilar with a list of patents which the sponsor of the reference product believes could reasonably be asserted to be infringed by the making, using, selling, offering to sell or importing the biosimilar in question. Within sixty days of receipt of this list, the applicant for approval of the biosimilar may provide its own list of patents that it believes might be infringed and “shall” provide the sponsor of the reference product with a detailed statement on a claim by claim basis of the reasons why each claim is invalid, unenforceable or not infringed or a statement that it does not intend to begin commercial marketing until the patent expires.

The sponsor of the reference product has sixty days within which to respond to the allegations made by the applicant for marketing approval of the biosimilar. The protagonists are then required to engage in good faith negotiations to agree which if any patents may be infringed by the biosimilar. If there is a failure to agree, each side will supply a list of patents, which, unless the applicant lists no patents, shall not exceed the number of patents listed by the biosimilar applicant.

Within thirty days of the agreement as to relevant patents or the exchange of patent lists, the sponsor of the reference product must institute a patent infringement action. Failure to bring such an action within thirty days will result in the remedy for any subsequently filed infringement action being limited to the payment of a reasonable royalty. Failure of the owner of a patent that should have been included in a patent list to include it in such a list will result in the patent owner being unable to bring an action for infringement under this provision.

If the biosimilar applicant determines to commence commercial marketing of a product it shall provide the product of the reference product with 180 days advance notice and the sponsor of the reference product shall be entitled to seek a preliminary injunction enjoining such marketing for any patent which the reference product sponsor included in its patent list but which was not included in the biosimilar applicant’s lists. Furthermore, neither side is permitted to seek a declaratory judgment as to infringement, validity or enforceability before the biosimlar applicant gives notice of its intent to commence commercial marketing. Failures by the biosimilar applicant to comply with the provisions noted above open the door to the possibility of declaratory judgment actions by the sponsor of the reference product.

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