By Michael J. Weil (Lowis & Gellen) and Steven L. Baron (Mandell Menkes)
Sandoz v. Amgen Inc. is a momentous decision for the Supreme Court, marking the first time that the court has heard a case regarding biosimilars and the Biologics Price Competition and Innovation Act (BPCIA). Consequently, the decision may have far reaching implications for drug makers and patent practitioners.
Biosimilars are the generic version of a class of drug called biologics. Biologics are made from organic material—living cells. These cells are typically an engineered bacterium or yeast; because each biologic is created from a unique cell there is no way to guarantee that each dose will be identical. Moreover, the fact that biologics are living makes them extremely dynamic. Biologics have been used in treating conditions from arthritis to cancer. Given their effectiveness, biologics are also immensely profitable and popular–by 2014 six of the ten best-selling medicines globally were biologics, with about $49 billion in combined sales.
Consequently, drug makers readily seize on the chance to create their own version of wildly successful biologics like Rituxan® (used to treat cancer and arthritis) and Humira® (used to treat arthritis and skin disorders). After the BPCIA-mandated exclusivity period on a biologic expires, manufacturers are allowed to market their own “generic” versions of biologics—called biosimilars.
The BPCIA contains the laws which govern biosimilars. The main thrust of the BPCIA permits drug manufacturers to produce biosimilars that are “highly similar to a reference product in their active ingredients”. The reference product refers to the biologic being copied, and the company that makes the brand name biologic is known as a “reference sponsor.” The BPCIA also refers to an “applicant”; the applicant is the company that applies to manufacture the biosimilar.
Furthermore, under the BPCIA, the FDA must deem each biosimilar safe for use, pure and sufficiently potent. Finally, a biosimilar must use the same mechanism for action and route of administration as its reference product.
In this case, Sandoz is the applicant (seeking to make the biosimilar) and Amgen is the sponsor (attempting to extend its exclusive rights to its biologic).
Biosimilars raise a host of complex issues; however there are three main issues that the Supreme Court addressed in Sandoz v. Amgen. First, the court ruled on the BPCIA requirement that an applicant provide the sponsor with its application and manufacturing information. Second, the court ruled on whether applicant’s failure to provide the information was a question of state or federal law. Third, the court ruled on whether an applicant is required to provide notice of commercial marketing to the sponsor until after the FDA licenses its biosimilar.
Acknowledging the complexity of pharmaceutical patent litigation, the Supreme Court made a relatively unusual announcement during oral arguments. Before arguments began on this case of first impression, Chief Justice John Roberts instructed the representing attorneys: “the court has decided to give each of you five extra minutes” of argument time. Critics have noted that the extra time signals to the lawyers, and to the larger biomedical community…that the court understands this litigation to be far more complex than most others and that the justices are willing to put in extra effort to try to resolve the relevant issues in a conscientious manner.
After an intensely scrutinized process which began in 2014, the Supreme Court issued its judgment, a unanimous opinion, on July 14th 2017.
Court’s Ruling: As mentioned above, the Court’s opinion held three prongs.
First, the court held that under federal law the BPCIA’s provision requiring applicant (Sandoz) to provide sponsor (Amgen) with its application and manufacturing information could not be enforced by injunction. In particular, the Court disagreed with the Federal Circuit’s ruling that failure to disclose the required information is an act of artificial infringement under §271(e)(4). Instead, the Court held that a sponsor is entitled to bring a declaratory judgment action for artificial infringement under §271(e)(2)(C)(ii), depriving the applicant of the opportunity to bring a declaratory judgment action prior to marketing.
Second, the court held that the legality of an applicant’s failure to provide sponsor with its application and manufacturing information, fell under California’s unfair competition law; hence, the court deemed it a question of state law and remanded the issue back to California.
Finally, the court held that an applicant (Sandoz) is not required to wait until the FDA licenses its biosimilar to provide notice of commercial marketing to the sponsor (Amgen).
The Supreme Court’s ruling overturned the Federal Circuit’s initial ruling in favor of Amgen. The Federal Circuit ruled that an applicant had to have its drug approved by the FDA, before giving its marketing notice to the sponsor. Marketing notice in this case means that the biosimilars manufacturer alerts the biologic maker (the reference sponsor), that it will be marketing its generic version in short order. The BPCIA requires this notice in order to warn the biologic maker that its reign of exclusivity will end soon. Additionally, after FDA approval, and giving marketing notice, the applicant subsequently had to wait 180 days before it was able to market its biosimilar.
The Supreme Court held that only one wait time was necessary under the plain language of the BPCIA: “the applicant may provide notice either before or after receiving FDA approval.” The justices ruled that the BPCIA imposes only a “single timing requirement” (180 days before commercial marketing of the biosimilar) not “two timing requirements” (after FDA licensure and 180 days before commercial marketing).
Practically speaking, after the Supreme Court’s decision, companies may now be able to market biosimilars immediately after FDA licensing, provided that three stipulations are satisfied. First, the biosimilars company has to give notice at the beginning of the FDA process; second, the FDA process takes more than 180 days; and third, the biosimilar does not infringe any valid patent rights. All three elements are fulfilled in this case.
After the Supreme Court issued its opinion, producers of brand name biologics have lamented that the ruling takes away at least another 180 days of exclusivity, and billions of dollars in additional revenue. Conversely, biosimilars manufacturers and patients needing less-costly drugs are rejoicing at the potential for reduced wait times. Overall, the Supreme Court’s decision represents a landmark victory for Sandoz and other biosimilars manufactures. However, the opinion looks to be the first ruling in a potentially robust new frontier for the Supreme Court.
Copyright © Mandell Menkes LLC & Lowis & Gellen LLP 2017.
Originally posted at:
Lowis & Gellen’s Christopher Cahill recently moderated “Alpha, Beta & Stock Picking,” a Financial Poise webinar in its Investor Fundamentals 2.0 series of webinars. See https://www.financialpoise.com/financialpoisewebinars/ for more details.
Lowis & Gellen LLP is proud to announce its recent success in securing a dismissal of an ADA lawsuit filed by Theresa Brooke.
Theresa Brooke and her counsel, Peter Strojnik, have filed hundreds of ADA lawsuits against hotels located throughout the western United States. Theresa Brooke’s lawsuits range from “pool lift” lawsuits, to physical barrier lawsuits, to website room reservation accessibility lawsuits. Theresa Brooke’s lawsuits typically ask the court to enforce an injunction against the hotel (requiring the hotel to fix the alleged deficiency) and also award her attorney’s fees. Many hotels appear to quickly settle these lawsuits. Quick settlement, however, can be potentially problematic for entities that operate multiple hotels and may encourage additional lawsuits.
If you are a hotel operator and you have received an ADA lawsuit, you should contact an experienced ADA defense attorney. Lowis & Gellen’s Arizona based lawyers are available to assist and defend ADA lawsuits.
Chris Cahill presented “Maximize Value in Your Customer’s Bankruptcy” and on “Keep What You’ve Earned From the Claws of the Bankruptcy Trustee” on September 13, 2017 at the 2017 Credit Professionals’ Conference & Expo in Milwaukee. This informative and enjoyable conference was produced by the Wisconsin Credit Association.
L&G’s Chris Cahill presented “Maximize Value in Your Customer’s Bankruptcy” and on “Keep What You’ve Earned From the Claws of the Bankruptcy Trustee” this week at the 2017 Credit Professionals’ Conference & Expo in Milwaukee. The informative and enjoyable conference was produced by the Wisconsin Credit Association. Chris appreciated the opportunity to meet everyone and looks forward to presenting again!
The Carolyn & Byron Youth Project, NFP, founded by Lowis & Gellen paralegal Laresha Bowles and her husband Famiku Bowles, is dedicated to assisting, serving and uplifting the people who live in some of our city’s most impoverished neighborhoods.
On August 27, the organization held its “Saved By The Bell” Back to School Block Party & School Supply Giveaway for the youth in one Garfield Park community. From the Carolyn & Byron Youth Project:
“Thanks to our very generous donor, Lowis & Gellen, LLP, our kids had their fill of yummy hot dogs; hamburgers; chips; juice & candy. They were also treated to face painting; enjoyed sack races; jump rope; basketball games and picture drawing contests for prizes! We were very pleased to have some of the adults on the block come out, get involved and interact with the kids in an orchestrated flag football game! Last but not least, the children were gifted with beautiful book bags and plenty of supplies to fill them as they begin the new school year! We thank all of our donors but a special thank you to Lowis & Gellen, LLP for making this happens for these very deserving little people!“
We thank Laresha and Famiku for their great work in serving the community!
On July 28, 2017, the Illinois Appellate Court (First District) affirmed the judgment of Judge Kathy Flanagan requiring a defendant hospital to produce documents related to its self-insured trust for in camera inspection.
In Brown v. Advocate Health and Hospitals Corp., 2017 IL App (1st) 161918-U, the plaintiff issued discovery requests seeking copies of the defendant hospital’s insurance policies. The hospital disclosed $12.5 million in coverage for the plaintiff’s claim, and stated that there was no policy because it was a self-insured entity. Ruling on plaintiff’s motion to compel, the circuit court ordered the hospital to tender its unredacted trust documents for in camera inspection. The hospital refused to tender the documents and asked to be held in “friendly contempt.” Judge Flanagan entered an order to that effect.
On appeal, the hospital argued the insurance documents were confidential financial documents that were irrelevant to the plaintiff’s claims. In a divided decision, the Appellate Court majority relied on the 1957 Illinois Supreme Court decision Terry v. Fisher, 12 Ill. 2d 231. In Fisher (a case that arose from a motor vehicle accident), the Supreme Court reasoned that liability insurance existed, in part, for the benefit of the persons injured by the negligence of the insured. The majority in Brown held the same was true of the hospital’s self-insured trust, “even if it is not a standard insurance policy per se.” The majority further reasoned that review of the documents could lead to admissible evidence regarding substantive issues, such as whether an agency relationship existed between certain defendants.
In his dissent, Justice Gordon noted there were “obvious reasons” for a hospital to protect these types of documents from disclosure, such as its interest in keeping financial formulas establishing what triggers excess coverage confidential. Justice Gordon distinguished Fisher and reasoned that unlike motor vehicle insurance, the hospital’s self-insured trust did not exist for the benefit of injured parties. He further disagreed the documents could lead to admissible evidence regarding whether an agency relationship existed, noting that nothing in the record even indicated that agency was at issue in the case.
This opinion was filed under Supreme Court Rule 23 and therefore cannot be cited as precedent at this time. However, a petition to publish is pending. Although the holding is limited to the propriety of an in camera review of documents related to self-insured trusts, it is likely to embolden plaintiffs to pursue the production of insurance-related documents. Further, the Court emphasized that a protective order strictly limited “the use or dissemination of any produced insurance documents,” perhaps suggesting that such an order would be seen as sufficient to protect the hospital’s interest in the event that it was ordered to produce the documents following in camera inspection. In the event the opinion is published, self-insured defendants will have a more difficult time objecting to the production of documents outlining the existence and extent of self-insured trusts from which settlements or judgments could be paid. Those defendants should still request an in camera inspection of all such documents and should argue any relevant objections via a privilege log when those documents are submitted for inspection.
The Illinois General Assembly recently sought to expand personal sick leave benefits provided by all Illinois employers, and on January 13, 2017, Governor Bruce Rauner signed a new amendment to the Illinois Employee Sick Leave Act. The new amendment makes room for a “kin care” allowance where employees are able to use personal sick leave benefits to care for not just themselves, but certain family members in addition. The amendment went into effect immediately. Below are major changes to the Act and answers to common questions that apply to the amendment.
What family members are covered under the new Illinois Employee Sick Leave Act?
Family members under the Act are the covered employee’s child, spouse, sibling, parent, mother in law, father in law, grandchild, grandparents, step parent, and newly added stepchildren and domestic partners.
What other key changes allowed under the amendment?
The new amended Act also now specifically states that employers may request written verification of the employee’s absence from a health care professional if such verification is required under the employer’s paid time off policy.
Who is covered for benefits under the Act?
All Illinois employers who provide personal sick leave benefits to their employees are covered by the Act.
If a company does not already provide personal sick leave benefits to employees, is it now required to do so?
No. The Act does not require employers to adopt sick leave policies if they do not already have them in place.
Do sick leave benefits include disability under the Act?
No, an employment benefit plan or paid time off policy does not include long term disability, short term disability, an insurance policy, or other comparable benefit plan or policy.
How does the amendment change bargaining agreements?
It does not. The new amendment adds a provision stating that the law does not interfere with collective bargaining agreements or a party’s power to collectively bargain such an agreement.
What ifan employer retaliates because of the Act?
Under the Act, an employer shall not deny an employee the right to use personal sick leave benefits in accordance with the Act or discharge, threaten to discharge, demote, suspend, or in any manner discriminate against an employee for using personal sick leave benefits.
An employee exercises rights under the Act by attempting to use personal sick leave benefits, filing a complaint with the Illinois Department of Labor (“IDOL”), alleging a violation of the Act, cooperating in an investigation or prosecution of an alleged violation of the Act, or opposing any policy or practice that is prohibited by the Act.
Please feel free to contact our employment team at Lowis and Gellen LLP with any questions about the Act or other workplace requirements.
Lowis & Gellen’s Andrea H. Kott, Kevin J. Clancy and Joseph E. Comer won a recent victory in the Appellate Court of Illinois with broad implications and protections for expert witnesses in litigation. Sandler v. Sweet, et al., 2017 IL App (1st) 163313.
The plaintiff in this case was also a plaintiff in a prior lawsuit alleging medical malpractice against a hospital. In the prior case, the plaintiff alleged he suffered a brain injury after a suicide attempt while receiving inpatient psychiatric treatment. The hospital denied any brain injury occurred. In defending that litigation, the hospital retained Dr. Sweet as an expert witness. Dr. Sweet conducted a neuropsychological evaluation of the plaintiff and prepared two written reports of his findings, opining the plaintiff did not suffer a brain injury while at the hospital.
When that case was over, the plaintiff filed this subsequent lawsuit, naming Dr. Sweet and the hospital where he practices as defendants. Plaintiff raised claims for medical negligence, common law fraud, and breach of fiduciary duty. Plaintiff’s theory of the case was that Dr. Sweet failed to correctly diagnose his brain injury, which caused the plaintiff harm because he delayed in seeking treatment in reliance on the findings in Dr. Sweet’s reports. The Circuit Court dismissed the case and the Appellate Court affirmed.
In its opinion, the First District held the plaintiff could not state a claim for medical negligence or breach of fiduciary duty because he had no physician patient relationship with Dr. Sweet, a retained expert for the hospital, plaintiff’s adversary in the underlying litigation. The Appellate Court further held Dr. Sweet was entitled to absolute immunity from any suit based upon statements made in his reports, pursuant to the privilege for statements made in “judicial proceedings.”
Even though Dr. Sweet prepared his reports before any actual in court testimony, and before he was even listed on a disclosure of expert witnesses, the Court held they were still privileged because they were an integral part of the process leading up to the testimony. The “privilege of an expert witness extends not only to his or her testimony, but also to acts and communications which occur in connection with the preparation of that testimony.” Id. In addition, the Court held expert witnesses are entitled to absolute immunity regardless of whether they are retained by a party or appointed by the court. “The basic policy of ensuring frank and objective testimony should prevail regardless of how the witness comes to court.” Id.
This decision helps ensure that experts and other witnesses are free to participate openly in litigation without the threat of facing a future lawsuit based upon their opinions or testimony.
The Appellate Court’s opinion may be found at: