Takeaway: Biosimilar drug producers no longer have to get FDA approval of their generic drugs before giving notice of commercial marketing to competitors, which may mean more choices and cheaper drug prices.
On June 12, the Supreme Court handed down a much-anticipated opinion that is a big win for companies working on biosimilar drugs. Justice Clarence Thomas authored the unanimous opinion, holding that biosimilar companies will be able to launch their generic products as soon as the data exclusivity on the original product lapses. Amgen Inc. v. Sandoz Inc. (2017). There is no longer a requirement for companies who are making biosimilars to wait an extra six months after getting approval from the Food and Drug Administration (FDA) to sell the product. The dispute was between Sandoz, a unit of Swiss drug giant Novartis, and the American multinational biopharmaceutical company Amgen over Amgen’s cancer drug Neupogen.
Neupogen is a biologic, which is a drug that is not made from chemicals, but from living cells. The drugs have helped make major advances in treating diseases, but are extremely costly to produce. Designed to prevent infections in chemotherapy patients, Sandoz created their version of the drug (called Zarxio) to compete with Neupogen. Zarxio is a generic that costs approximately 15% less than Amgen’s product and helps boost red blood cells in cancer patients.
Amgen originally filed a patent infringement suit against Sandoz claiming they violated the 2010 Biologics Price Competition and Innovation Act (BPCIA). The 2010 law gives the original product a 12-year period of exclusivity before allowing cheaper, generic versions to be introduced into the market. The original drug manufacturers (here Amgen) can gain billions of dollars in sales with this market lead-time. The law also requires the manufacturers of biosimilars to give a six-month notice of sales to rivals before engaging in any commercial marketing. Amgen claimed that Sandoz did not disclose details of its application and gave improper notice before commercial marketing. When Sandoz gave notice of commercial marketing, Zarxio had not yet received FDA approval.
In March 2015, Zarxio was the first biosimilar to be approved by the FDA under the BPCIA. Zarxio was approved as a biosimilar, meaning that the drug is not interchangeable and the healthcare provider who prescribed the original drug must approve the product substitute before it can be used. The FDA’s approval of Zarxio was based on a number of factors that showed the drug’s biosimilarity to Neupogen.
In 2015, a federal appeals court found in favor of Amgen, holding that the six-month notice cannot occur until the biosimilar drug gets approval from federal regulators. Sandoz countered this, arguing that this allowed an additional six months of unfair exclusive sales to the original drug maker.
There were two issues before the Supreme Court: (1) if there is a possibility of granting an injunction under Federal Law for alleged violations of the BPCIA and (2) if the applicant’s notice must occur not only six months before commercial marketing, but also after obtaining a license from the FDA.
Sandoz won on both arguments. On the first prong, the Court held that the BPCIA is not enforceable by an injunction granted under Federal Law, but remanded to the Federal Circuit to determine if there is a state-law injunction possibility. On the second prong, the Court held that the generic drug maker is not required to, but may give the six-month notice before obtaining an FDA license.