Patent Challenges
The intensity of the debate around the exclusivity provisions was matched only by the equally intense support among most stakeholders
for a patent-challenge process tied to the FDA's regulatory review process. A general consensus emerged among most stakeholders
that early patent challenges should be encouraged, but there was no comparable emphasis on adopting a mechanism for concluding
litigation. The result was a proverbial patent thicket—ironically, one that presents unique challenges for biotech patent
holders and biosimilar sponsors alike.
For a biosimilar sponsor, the law imposes an unprecedented mandate to turn over its complete BLA and its entire manufacturing
process to its direct competitor within 20 days of filing of the application by the FDA. This disclosure occurs some six-to-nine
months before patent litigation is initiated in Federal court with attendant judicial oversight of the process.
For biotech patent holders, the law effectively compels patentees to put their entire patent estate at risk prematurely—when
a biosimilar application is filed and potentially long before it enters the market—and imposes unprecedented limitations on
enforcement of their rights for any patent not put at risk. These results flow from just a few of the many intricate aspects
of the new law's patent-challenge process. First, there is a mandate that the reference BLA holder "shall" provide the biosimilar
sponsor—within 60 days of receiving its application and manufacturing process—a list of all patents under which the BLA holder
believes a patent-infringement claim reasonably could be asserted against a party making, using, offering to sell, selling,
or importing into the US the biosimilar product. Second, to encourage full disclosure of a comprehensive patent list, the
new law provides that the owner of any patent not disclosed on a timely basis, i.e., on the initial list or a supplemental
list provided within 30 days of a later-acquired patent being issued or in-licensed, is statutorily precluded from enforcing
that patent-infringement litigation against the biosimilar applicant. Finally, even for timely disclosed patents, if the statutory
timelines are not followed (with litigation initiated before expiry of the relevant 30-day statutory window) or if timely
litigation is dismissed without prejudice, the sole and exclusive remedy for infringement is a reasonable royalty. Consequently,
biotech patentees confront a real Hobson's choice—either list and risk all patents or "hold back" one or more patent(s) having
substantially diminished value. Like so much else in the law's intricate patent provisions, these unparalleled curbs on patent
rights create an unlevel playing field for biotech-patent enforcement and are likely to trigger any number of legal and constitutional
challenges that will divert resources to a potential plethora of lawsuits spawned by this convoluted new patent-challenge
process. None of these outcomes is good for any segment of the biopharmaceutical industry, and all of them represent unsound
IP public policy.
The fundamental flaw in the BPCIA's patent-challenge provisions and the one repeatedly underscored both by the Federal Trade
Commission in recommending against their adoption and by the one stakeholder that consistently opposed their enactment is
that for the first time in the history of the biotechnology industry, biotech patent challenges are tied directly to the initiation
of the regulatory review and approval process.4 This ill-considered approach, however, applies only to biosimilar applications; it does not apply to traditional BLAs. In
addition to codifying an overarching disparity across patent-enforcement regimes in the biotechnology industry, the approach
creates perverse incentives. Sponsors that otherwise might submit biosimilar applications may undertake the additional regulatory
burden of submitting a traditional BLA to avoid the unprecedented requirements and inherent complexities of the biosimilar
patent-challenge provisions. Like any other traditional BLA applicant, such a sponsor then would have much greater control
over its own destiny in terms of any patent disputes. It could take steps to defer litigation until the postapproval phase,
or it could potentially initiate an action during the preapproval phase.
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