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June 14, 2017

In unanimous ruling, SCOTUS opens quicker path to market for biosimilar drugs

Daily Briefing

The Supreme Court on Monday issued a unanimous 9-0 ruling that affects biologic drug patents and allows generic versions of the biologic drugs to reach the market sooner.

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Biologic drugs are developed from living cells, which makes the treatments costly to develop and makes it impossible for generic drugmakers to manufacture exact replicas. However, generic drugmakers can develop comparable, and often less-costly, versions of the drugs, called biosimilars, which are close enough to biologics to function in the same manner.

FDA in 2015 approved Zarxio, a drug developed by Novartis' Sandoz, as the first biosimilar medication for sale in the United States. The drug was approved for the same uses as Amgen's Neupogen.

Case details

In the case, Amgen argued that Sandoz had violated the Biologics Price Competition and Innovation Act (BPCIA) by beginning to sell Zarxio within six months after receiving FDA approval for the biosimilar.

Amgen claimed that the law, which was established under the Affordable Care Act (ACA), required biosimilar drugmakers to inform biologic drugmakers of their intent to begin selling a biosimilar drug six months before they do so, and that, under the law, biosimilar drugmakers could not provide their notifications of intent until they received FDA approval to sell their drugs.

Further, Amgen claimed that BPCIA required both biologic and biosimilar drugmakers to exchange proprietary information about their drugs. Amgen said the information sharing is necessary to allow biologic drugmakers to determine whether they should file lawsuits regarding potential patent infringements before the biosimilars are sold. Relatedly, Amgen argued that the six month-notification period is necessary to allow biologic drugmakers time to review potential patent infringements before biosimilars enter the market.

The case was complicated by the fact that both companies had asked the Supreme Court to overturn earlier rulings that they considered unfavorable. The U.S. Court of Appeals for the Federal Circuit in 2015 had ruled that biosimilar drugmakers must receive FDA approval before they can send notice to biologic drugmakers that they intend to begin selling a biosimilar drug. Sandoz disagreed with that ruling and appealed it to the Supreme Court. The U.S. government also disagreed with that ruling, and argued in support of Sandoz before the high court.

FDA OKs first generic biosimilar

The U.S. Court of Appeals for the Federal Circuit in 2015 also had ruled that the proprietary information-sharing process included in BPCIA is voluntary, meaning biosimilar drugmakers are not legally obligated to share proprietary information for their biosimilar with makers of the drugs' corresponding biologics. Amgen disagreed with that ruling and appealed it to the Supreme Court. The U.S. government, however, agreed with the lower court's ruling on proprietary information-sharing, and argued against Amgen before the high court.

Ruling details

The Supreme Court reversed the lower court's ruling that biosimilar drugmakers must first receive FDA approval before they can send notice to biologic drugmakers that they intend to begin selling a biosimilar drug.

In addition, the high court ruled that federal law does not require biosimilar drugmakers to provide proprietary information on their products to brand-name drugmakers. However, the Supreme Court ordered the lower federal circuit court to determine whether state law requires such information-sharing. Justice Clarence Thomas in the ruling wrote that the Court based its decision on BPCIA's "plain language," and not on arguments regarding how the law should be interpreted. Thomas wrote that Amgen's arguments were both "unpersuasive" and unable to overcome the law's clear meaning.


The ruling has major implications for the drug industry and consumers because it means biosimilars, which typically cost less than their biologic counterparts, could reach the market sooner, Reuters reports.

Stakeholders expressed mixed reaction to the ruling.

Novartis in a statement applauded the Court's decision, saying the ruling "will help expedite patient access to life-enhancing treatments."

The Pharmaceutical Care Management Association in a statement said, "The Supreme Court's ruling on biosimilars will help create more competition among costly biologic medications, which is the key to reducing overall prescription drug costs for consumers, employers, government programs, and others."

Payers in the health care system, such as pharmaceutical benefit managers and insurers, also welcomed the ruling, saying the decision could allow biosimilars to be introduced in the market faster and ultimately result in savings.

But Amgen spokesperson Kelley Davenport in a statement said the company was disappointment with the decision and "will continue to seek to enforce [its] intellectual property against those parties that infringe upon [its] rights."

Courtenay Brinckerhoff, a partner at Foley & Lardner, said allowing lower courts to determine whether state laws require biosimilar drugmakers to share their proprietary information could hurt brand-name drugmakers. "It could be that no matter what the state law says, the federal law is so comprehensive that it precludes any additional state law remedies," she said (Chung, Reuters, 6/12; Siddons, CQ News, 6/12 [subscription required]; Weixel, The Hill, 6/12; AP/Modern Healthcare, 6/12).

Get your pharmacy organization in tune

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