Sandoz Inc. v. Amgen Inc.
137 S. Ct. 1664 (2017)
Authored by Kendyl Green
Statement of Facts: In May 2014, Sandoz, Inc. (“Sandoz”) filed an application with the Food and Drug Administration (“FDA”) seeking approval to market a filgrastim biosimilar product under the name Zarxio, referencing Amgen Inc.’s (“Amgen”) Neupogen. Filgrastim is a biologic used to stimulate the production of white blood cells. On July 7, 2014, the FDA notified Sandoz that it had accepted the company’s application for review. The next day, Sandoz gave notice to Amgen that it had submitted an application to the FDA and that it intended to market Zarxio immediately upon receiving the FDA’s approval. Sandoz did not provide the requisite application and manufacturing information pursuant to § 262(l)(2)(A) and told Amgen that it could sue for infringement under § 262(l)(9)(C).
Consequently, Amgen sued Sandoz for patent infringement in October of 2014. Amgen also brought two claims under California’s unfair competition law which prohibits “any unlawful . . . business act or practice.” Cal. Bus. & Prof. Code Ann. §17200 (West 2008). A business act or practice is unlawful if it violates a rule in a state or federal statute. Referencing state law, Amgen first accused Sandoz of engaging in unlawful conduct when it did not provide the application and manufacturing information pursuant to § 262(l)(2)(A). Second, Amgen claimed Sandoz provided notice of commercial marketing under § 262(l)(8)(A) before the FDA had licensed its biosimilar. Amgen sought an injunction to enforce disclosure of the application and manufacturing information as well as disclosure of commercial marketing after the FDA licensed its biosimilar. Sandoz counterclaimed and sought declaratory judgment, asserting that the patent was invalid and, therefore, not infringed and that Sandoz had not violated the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).
While this case was pending at the United States District Court for the Northern District of California, the FDA licensed Zarxio and Amgen was given another notice of commercial marketing. The district court granted partial judgment to Sandoz on its BPCIA counterclaims and dismissed Amgen’s unfair competition claims with prejudice. Consequently, Amgen appealed to the Federal Circuit. The Federal Circuit granted an injunction pending appeal against marketing Zarxio. Furthermore, the court affirmed the district court’s ruling to dismiss the state-law claim based on the alleged violation of § 262(l)(2)(A) because Sandoz did not violate the BPCIA for failing to disclose the application or manufacturing information. Additionally, the Federal Circuit found that the remedies stated in the BPCIA were the exclusive remedies for an applicant’s failure to comply with § 262(l)(2)(A). The court further noted that the applicant may provide notice of commercial marketing only after the licensure of the biosimilar. Consequently, it extended the injunction to bar Sandoz from marketing Zarxio until 180 days after the second notice was given.
Procedural History: The district court granted partial judgment to Sandoz on its BPCIA counterclaims and dismissed the unfair competition claims with prejudice. Amgen appealed to the Federal Circuit, which granted an injunction pending appeal against the commercial marketing of Zarxio. Subsequently, the Federal Circuit affirmed in part, vacated in part, and remanded the cases. The Federal Circuit affirmed the district court’s dismissal of Amgen’s state-law claim of Sandoz’s violation of § 262(l)(2)(A). The court found that Sandoz did not violate the BPCIA by failing to disclose its application and manufacturing information and that the BPCIA remedies are the exclusive remedies if an applicant fails to comply with § 262(l)(2)(A). The Federal Circuit also held that an applicant may provide effective notice of commercial marketing only after the FDA has licensed the biosimilar. It extended its injunction to 180 days after the date Sandoz provided its second notice. The Supreme Court of the United States granted certiorari.
Questions Presented: First, whether a court may enforce by injunction, under state or federal law, § 262(l)(2)(A)’s requirement that an applicant provide the sponsor with its application and manufacturing information. Second, whether an applicant may provide effective notice before FDA licensure of the biosimilar.
Holding: First, the Court vacated the issue of whether a court may enforce a violation of § 262(l)(2)(A) by an injunction under federal law. The Supreme Court remanded the issue of whether an injunction may be applied under state law, since this is a state court question. Second, the Court found that an applicant may provide notice either before or after FDA licensure. The Court found that Sandoz did not violate § 262(l)(8)(A) when it gave notice to Amgen before the filgratsm biosimilar product was licensed. Therefore, the Federal Circuit erred in issuing a federal injunction that prohibited Sandoz from marketing Zarxio until 180 days after licensure. Lastly, the Court remanded the case to the Federal Circuit to determine whether Sandoz’s failure to disclose its application and manufacturing information was “unlawful” under California unfair competition law. The Court vacated in part, reversed in part, and remanded the cases to the Federal Circuit.
Reasoning: Writing for the majority, Justice Thomas held that, in making the determination to issue an injunction, a court may not impose an injunction under federal law if an applicant fails to provide the sponsor with an application and manufacturing information. Unlike the Federal Circuit, which found that failing to disclose this information qualified as artificial infringement, the Supreme Court determined that Sandoz’s failure to disclose its application was not an act of artificial infringement and thus not remedial under § 271(e)(4). Rather, the Court cited § 262 (l)(9)C), which provides a remedy for an applicant’s failure to turn over its application and manufacturing information by authorizing the sponsor to bring a declaratory-judgment action for artificial infringement. According to the statutory context, because there was already an express remedy in the BPCIA, federal law may not enforce the disclosure requirement through another form of remedy like an injunction. The Supreme Court declined to resolve the issue of whether failure to disclose the information was “unlawful” under California unfair competition law because it is a question of state law.
In determining the second issue, the Supreme Court explained § 262(l)(8)(A) describes that an applicant “shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).” Since the segment “of the biological product licensed under subsection (k)” refers only to “commercial marketing” and not to “notice,” a biosimilar must be “licensed” only before “commercial marketing.” 137 S. Ct. at 1668. Therefore, it does not matter whether an applicant provides notice before or after receiving approval from the FDA because the statutory provision only contains the explicit timing requirement of having a license 180 days before marketing.
Concurring Opinion: Justice Breyer joined the opinion of the Court in his concurrence. He stated that the Court reasonably interpreted the statutory terms. Nevertheless, in his view, Congress implicitly delegated authority to the FDA to interpret the terms according to its experience in administering the statute. If the FDA later determines that a different interpretation would better serve the statute’s objectives, it may modify or veer from the Court’s interpretation.