A trio of recent court decisions have brought (mostly) good news for companies hoping to bring biosimilar drugs to market. Two of those cases from the Federal Circuit Court of Appeals, which hears all appeals of patent cases from around the country, deal with the “safe harbor” exception to patent infringement where such infringement occurs during the course of experimentation used for regulatory approval contained in the Hatch-Waxman Act. The third case, decided by the United States Supreme Court, relates to when certain biotechnology inventions can be protected by patents at all, under the so-called “laws of nature” doctrine. A complex web of legislation, however, continues to slow the introduction of biosimilar drugs to the market.
The good news for biosimilars is that in the Supreme Court’s decision in Mayo Collaborative Services v. Prometheus Laboratories, the Court invalidated claims of two patents that Prometheus asserted against Mayo, holding that the claimed methods cover natural laws of nature and fail the patent-eligibility requirements. The patents at issue covered the steps of “administering” a drug to a subject suffering from a disease and “determining” whether metabolites of that drug appeared in the subject’s blood. If the metabolites are at a specified level, according to the patents, it “indicates a need” to increase or decrease the amount of the drug administered the next time.
The Court concluded that “Prometheus’ patents set forth laws of nature” relating to correlations between doses and metabolite levels as indicators of toxicity, and were thus not eligible for patent protection because the steps in the claim were not “sufficient to transform” the natural principles. Without such a strict transformation requirement, patent law would “inhibit further discovery by improperly tying up the future use of laws of nature.” While it remains to be seen how this decision will be implemented by the lower courts, companies hoping to bring biosimilar drugs to market can find positive news in this decision.
In the two Federal Circuit decisions, there was more of a mixed result. In the first decision, GlaxoSmithKline v. Classen Immunotherapies, the appellate court stated that under current law there is not a “safe harbor” from infringement suits where the study performed is for the purpose of providing information to the FDA for “routine reporting” required “long after marketing approval has been obtained.” However, the same court, just weeks later, seemed to backtrack from that broad statement. In Momenta v. Amphastar, the court ruled that the Hatch-Waxman “safe harbor” protects “post-approval studies that are reasonably related to the development and submission of information under Federal law,” where that information is required to be submitted in order to maintain FDA approval. It contrasted the factual situation to that in the Classen case by explaining that in Classen, the experiments that did not meet the “safe harbor” exception were generated voluntarily by the manufacturer and were thus not “required” for FDA submission: “unlike in Classen where the patented studies performed were not mandated by the FDA, the information here is not generated voluntarily by the manufacturer but is generated by FDA requirements the manufacturer is obligated under penalty of law to follow.” Again, this is good news for biosimilar companies that perform experiments designed to obtain regulatory approval.
The Classen decision has been appealed to the Supreme Court, and the Momenta case is likely to shortly follow it there. The Supreme Court has asked the Solicitor General’s office for its view as to whether the high court should take up these issues.
Finally, despite the relatively good news coming from the courts, the legislative and regulatory thicket continues to be more complex than necessary or hoped for by the industry. Provisions in the Patient Protection and Affordable Care Act, enacted in 2010 and held constitutional this June by the Supreme Court, created a biosimilars-patent pathway at the FDA similar to Hatch-Waxman. While the merits of the compromises at play in that legislation is a subject for a longer discussion, when the current scheme was passed it was with the idea of speeding up the approval of biosimilars and getting them on the market. But as of now, more two years into the new regime, not a single company has chosen that passageway for regulatory approval. Instead, biosimilars have been going a more traditional, but longer route to approval. There are some legislative proposals floating around that would try to reinvigorate the speedy process originally envisioned. Watch this space for news to come as those proposals develop.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer