By Rao Vepachedu, JD, PhD, LLM(1)


An innovator biologic drug maker files a biologics license application (BLA) with the FDA for the grant of a license for commercial marketing of the novel biologic drug. For the first time, now ObamaCare allows a generic company to sell a biosimilar drug (generic version of the biologic drug).


In general, an innovator biologic drug maker files a biologics license application (BLA) with the Food and Drug Administration (FDA) under 42 U.S.C. § 262(a) for the grant of a license for commercial marketing of the novel biologic drug by providing clinical data to demonstrate the safety and efficacy of its product(2). This process is similar to the FDA approval process for a New Drug Application (NDA) for a license to commercialize the traditional novel chemical entity (NCE) drugs(3), under the Federal Food, Drug and Cosmetic Act and Section 21 of the Code Of Federal Regulations (CFR)(4).

Hatch-Waxman Act

Prior to 1984, entry of generic drugs was difficult due to regulations imposed upon drug approvals due to the Thalidomide scare(5) in the late 1950s and early 1960s leading to the 1962 amendments to the Federal Food, Drug, and Cosmetic Act (FDCA), requiring all new drugs to be proven safe and effective prior to approval by the FDA. In 1978 President Carter recommended patent term restoration for pharmaceuticals and any other products that required regulatory review, to compensate for the time lost to the review, by extending a patent’s term(6). The U.S. Court of Appeals for the Federal Circuit’s 1984 decision in Roche Products v. Bolar Pharmaceutical(7) became a catalyst in brew that was brewing between two competing policy interests—inducing pioneering development of pharmaceutical formulations and methods and facilitating efficient transition to a market with cheap generic copies of those pioneering inventions(8). Therefore, in 1984 the Drug Price Competition and Patent Term Restoration Act of 1984 (aka Hatch-Waxman Act)(9) was passed into law, providing for restoration of a maximum of 5 years of the patent term lost to federal regulatory review(10) and a litigious path to generic drugs(11). However, Hatch-Waxman Act did not cover biologic drugs.

Obama Care and Biosimilars

For the first time in the U.S., the Patient Protection and Affordable Care Act (Obama Care), which includes the Biologics Price Control and Innovation Act (BPCIA), provides a pathway for FDA approval of generic versions, called “biosimilar” drugs, of biologic drugs, to balance innovation and price competition (12).

The BPCIA contains a pathway for regulatory approval of follow-on biological products that are “highly similar” to a previously approved product (reference product), a patent dance of complicated litigation provisions that prescribe guidance for choosing patents for litigation between the reference product sponsor (RPS) and the biosimilar applicant (BA) during the time prior to FDA approval. An RPS receives up to twelve years of exclusivity against follow-on products, regardless of patent protection. The BPCIA has certain similarities in its goals and procedures to the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act) (13), which encouraged generic drug producers forcing litigation upon the innovator drug manufacturers(14).

Under that process, codified at 42 U.S.C. § 262(l), the biosimilar applicant grants the RPS confidential access to it’s a BLA and the manufacturing information regarding the biosimilar product no later than 20 days after the FDA accepts its application for review(15). The parties then exchange lists of patents for which they asserted by the RPS, as well as their respective positions on infringement, validity, and enforceability of those patents. Following that exchange, which could take up to six months, the parties negotiate to formulate a list of patents that would be the subject of an immediate infringement action. The RPS then sues the biosimilar applicant within 30 days. That information exchange and negotiation thus contemplates an immediate infringement action brought by the RPS based only on listed patents.

Amgen vs. Sandoz

In Amgen Inc. et al. vs. Sandoz Inc., the United States Court of Appeals for the Federal Circuit (CAFC) attempted to unravel the riddle, solve the mystery, and comprehend the enigma – the BPCIA – which it referred to as “mystery inside an enigma”(16).

Amgen has been marketing filgrastim under the brand name Neupogen® (Neupogen) since 1991 and Neupogen’s possible 12-year exclusivity period under BPCIA has already expired (in 2003). Sandoz filed a biosimilar application for filgrastim, in May 2014. On July 7, 2014, Sandoz received notification from the FDA that it had accepted Sandoz’s application for review. On July 8, 2014, Sandoz notified Amgen that it had filed a biosimilar application referencing Neupogen and that it intended to launch its biosimilar product immediately upon FDA approval. On March 6, 2015, the FDA approved Sandoz’s aBLA for all approved uses of Amgen’s Neupogen.

One issue was that Sandoz decided not to comply with the first provision of the BPCIA, which states that the biosimilar applicant shall provide to the RPS a copy of its application and also manufacturing information. Sandoz contended that Congress did not intend to make these disclosures mandatory, because the Act also provided remedies for RPSs faced with nondisclosure from the biosimilar applicant. The district court sided with Sandoz in its interpretation of the BPCIA, that the Act does not force the biosimilar applicant to make these disclosures. The Federal Circuit affirmed this construction of these provisions, because mandating compliance with paragraph (l)(2)(A) in all circumstances would render paragraph (l)(9)(C) and 35 U.S.C. § 271(e)(2)(C)(ii) superfluous, and statutes are to be interpreted if possible to avoid rendering any provision superfluous. It is a cardinal principle of statutory construction that a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant (17).

Another issue was the provision of the BPCIA indicating that the biosimilar applicant provide 180 day notice to the RPS that it intended to enter the marketplace, but Sandoz provided this notice prior to obtaining FDA approval. The Sandoz biosimilar to be marketed under the brand name Zarxio® obtained FDA approval on March 5, 2015. Under paragraph (l)(8)(A), a subsection (k) applicant may only give effective notice of commercial marketing after the FDA has licensed its product. The CAFC opined that Congress intended the notice to follow licensure, at which time the product, its therapeutic uses, and its manufacturing processes are fixed. Requiring that a product be licensed before notice of commercial marketing ensures the existence of a fully crystallized controversy regarding the need for injunctive relief. It provides a defined statutory window during which the court and the parties can fairly assess the parties’ rights prior to the launch of the biosimilar product. Sandoz’s notice in July 2014, the day after the FDA accepted its application for review, was premature and ineffective. And therefore, concluded that, under paragraph (l)(8)(A), a subsection (k) applicant may only give effective notice of commercial marketing after the FDA has licensed its product, and no later than 180 days before commercial marketing of the licensed product, Sandoz may not market Zarxio before 180 days from March 6, 2015, i.e., September 2, 2015.

Finally, Amgen has no exclusive right to possession of its approved license on Neupogen to sustain its claim of conversion under California law, because the possible exclusivity under BPCIA expired in 2003, before the law was enacted.


References and Notes:

(1)     Dr. Rao Vepachedu is a Managing Director at Cardinal Risk Management and registered patent attorney with extensive experience in the management of intellectual property and extensive experience in research and teaching. He currently works for Cardinal Intellectual Property (CIP), Cardinal Risk Management (CRM), and Cardinal Law Group (CLG). In addition, he is the president of Vepachedu Educational Foundation Inc. (www.vepachedu.org), a 501(c) (3) educational foundation. For more information visit: www.linkedin.com/in/vepachedu; http://www.avvo.com/attorneys/60201-il-sreenivasarao-vepachedu-764535.html, and http://www.crm-ip.com/vepachedu.html. Contact: svepachedu@yahoo.com or rao.vepachedu@cardinal-ip.com.

(2) Title 21 – Food and Drugs; Subchapter F – BIOLOGICS (Parts 600 – 680); available at: http://www.gpo.gov/fdsys/pkg/CFR-2003-title21-vol7/pdf/CFR-2003-title21-vol7-chapI-subchapF.pdf

(3) New Drug Application (NDA), available at: http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/NewDrugApplicationNDA/

(4) The Code of Federal Regulations (CFR) is the codification of the general and permanent rules published in the Federal Register by the departments and agencies of the Federal Government. It is divided into 50 titles that represent broad areas subject to Federal regulation. The 50 subject matter titles contain one or more individual volumes, which are updated once each calendar year, on a staggered basis.

Title 21 – Food and Drugs, available at: http://www.gpo.gov/fdsys/pkg/CFR-2003-title21-vol1/content-detail.html

Federal Food, Drug, and Cosmetic Act (FD&C Act), available at: http://www.fda.gov/RegulatoryInformation/Legislation/FederalFoodDrugandCosmeticActFDCAct/default.htm

Investigational New Drug (IND) Application, available at: http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/InvestigationalNewDrugINDApplication/default.htm

(5) During 1950s, it became painfully clear that that the use of Thalidomide, a sedative frequently prescribed to pregnant women experiencing morning sickness, caused birth defects. In Germany 1957, Chemie Grünenthal marketed Thalidomide, a calming medicine by the name of Contergan. In Sweden Contergan was sold as Neurosedyn under licence by Astra. It was sold from until December 1961. During early 1960s, about 12.000 children in 48 countries were born with injuries caused by Thalidomide. The medicine was banned temporarily from 1962 to 1985. Today, there are 104 people living in Sweden, with injuries caused by Thalidomide. Available at: http://thalidomide.org/web/facts/#sthash.qGx51rCR.dpuf.

Currently, FDA approved thalidomide is used along with dexamethasone to treat multiple myeloma in people who have been recently found to have this disease. It is also used alone or with other medications to treat and prevent skin symptoms of erythema nodosum leprosum (ENL; episodes of skin sores, fever, and nerve damage that occur in people with Hansen’s disease [leprosy]). Thalidomide is in a class of medications called immunomodulatory agents. It treats multiple myeloma by strengthening the immune system to fight cancer cells. It treats ENL by blocking the action of certain natural substances that cause swelling. Even a single dose of thalidomide taken during pregnancy by either male or female can cause severe birth defects (physical problems present in the baby at birth) or death of the unborn baby. Thalidomide is present in seminal fluid containing sperm that is released into vagina through the penis during mating, even if the male had a vasectomy (surgery prevents only sperm from leaving body, but does not prevent the remaining seminal fluid, which is 99% of the ejaculate). Available at: http://www.nlm.nih.gov/medlineplus/druginfo/meds/a699032.html

Normal human semen or seminal fluid has a volume of about 3 ml of which around 65-70% is a viscous fructose-rich fluid, about 25-30% is white color secretion from the prostate glands containing enzymes, oils, fats etc., and about 20 million sperms or about 1-2.5% of the ejaculate. Available at: http://www.vepachedu.org/manasanskriti/Seminal.pdf

(6) Mossinghoff, Overview of the Hatch-Waxman Act and Its Impact on the Drug Development Process, 54(2) FOOD & DRUG L.J. 187-94 (1999), pg 187.

(7) The Hatch-Waxman Act overturned the US Federal Circuit’s ruling in Roche Products v Bolar Pharmaceutical (733 F2d 858, Federal Circuit, 1984) against generic drug manufacturer Bolar for using Roche’s patented active pharmaceutical ingredient to make generic versions of its drug to conduct clinical trials to prove biosimilarity with the branded drug, which were essential to secure regulatory approval from the FDA. The exemption enabling generic manufacturers to experiment with patented drugs and produce them in limited quantities for research became known as the Bolar exemption, wherein the use of patented drug or method for the purpose of submissions required by a federal agency such as FDA is not an infringing activity. Available at: http://law.justia.com/cases/federal/district-courts/FSupp/572/255/2310125/

8) Novo Nordisk A/S, et al. v. Caraco Pharm. Labs., Ltd., 601 F.3d 1359, 1360 (Fed. Cir. 2010) (citing Andrx Pharm., Inc. v. Biovail Corp., 276 F.3d 1368, 1371 (Fed. Cir. 2002)), rev’d on other grounds, 2012 U.S. LEXIS 3106 (U.S. Apr. 17, 2012).

(9) On September 24, 1984, President Reagan signed the Drug Price Competition and Patent Term Restoration Act (Public Law 98-417) into law. This Act has been described as the one of the most important pieces of legislation affecting the drug industry. Available at: http://corporate.findlaw.com/intellectual-property/drug-price-competition-and-patent-term-restoration-act.html

(10) The US Congress sought to restore to our [US] domestic drug companies some of the incentive for innovation which has weakened as Federal pre-market approval requirements have become more expensive and time consuming. That incentive will produce both the investment and the commitment to research and development that will again place the United States in unquestioned leadership in the field. And it will generate an increase in the number of important new drugs, among the most vital causes for this century’s dramatic increase in the length and quality of life. Available at:



(11) Implementation of the Biologics Price Competition and Innovation Act of 2009: The Patient Protection and Affordable Care Act (PPAC Act), signed into law by President Obama on March 23, 2010, amends the Public Health Service Act (PHS Act) to create an abbreviated approval pathway for biological products that are demonstrated to be “highly similar” (biosimilar) to or “interchangeable” with an FDA-approved biological product. These new statutory provisions also may be referred to as the Biologics Price Competition and Innovation Act of 2009 (BPCI Act). Available at: http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/ucm215089.htm

(12) The Hatch-Waxman Act requires that a branded manufacturer identify the numbers and expiration dates of the patents which claim the drug(s) and methods covered by its New Drug Application (NDA). 21 U.S.C. 355 (b)(1)(G).

ANDA Litigation: Strategies and Tactics for Pharmaceutical Patent Litigators, ISBN: 978-1-61438-478-6, 978-1-61438-479-3, 1- 840 (2012), available at: http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=215132

(13) Pub. L. No. 98-417, 98 Stat. 1585 (1984).

(14) The incentive for a manufacturer of a brand-name prescription drug to undertake measures that attempt to prolong the period of marketing exclusivity for a brand-name drug is very strong. The period of the market exclusivity is a very important, because it requires on average 15 years and a 1 billion dollars investment in bringing a noel drug through the stringent FDA process. Once several generic manufacturers enter the market, competition generally drives prices down close to marginal cost. In cases where the drug confers substantial clinical benefits and where patients and providers have few therapeutic alternatives, the loss of profits for the innovator may run into billions of dollars and layoffs. Litigation is one tactic that innovators have no choice but to use because a filing of ANDA amounts to infringement of live patents that support the novel drug, triggering a 30-month delay in the entry of the generic. Another method is to gain an extra six months of protection on a drug by conducting clinical studies in children to determine the best doses for young people. A third option was to settle with a potential generic competitor not to produce the cheaper version of the drug, in a suit arising from patent litigation, which involves “pay-for-delay” arrangements in which a brand-name manufacturer agrees to pay a would-be generic competitor to hold its product off the market for a certain period of time.

Morton et al., “Markets for Pharmaceutical Products,” Handbook of Health Economics, Vol. 2, Elsevier, 2012, chapter 12, pp. 763-823 at p. 795.

(15) 42 U.S.C. § 262, available at: http://www.gpo.gov/fdsys/granule/USCODE-2010-title42/USCODE-2010-title42-chap6A-subchapII-partF-subpart1-sec262/content-detail.html,

https://www.law.cornell.edu/uscode/text/42/262 or


(16) “A riddle wrapped in a mystery inside an enigma,” Winston Churchill in The Russian Enigma, a BBC radio broadcast (Oct. 1, 1939), available at http://www.churchill-society-london.org.uk/RusnEnig.html


(17) TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001)

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