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Disclosure Requirements Under the BPCIA

The Biologics Price Competition and Innovation Act (BPCIA) provides for a series of disclosures between a biosimilar applicant and the innovator company, commonly referred to as the “patent dance.”  42 U.S.C. §262(l). While the Federal Circuit is about to address whether the disclosure requirements of the BPCIA are mandatory (after one district court found them optional), a question for parties engaging in the patent dance is how much detail is contemplated by the BPCIA disclosure requirements.  Specifically, the BPCIA provides that, no later than 60 days after the innovator company identifies the list of patents that may be asserted against the biosimilar applicant, the biosimilar applicant shall provide to the innovator company, with respect to each patent listed, “a detailed statement that describes, on a claim by claim basis, the factual and legal basis of the opinion of the [biosimilar] applicant that such patent is invalid, unenforceable, or will not be infringed by the commercial marketing of the biological product that is the subject of the…application.” 42 USC § 262(l)(3)(B)(ii)(I).

In determining the standard and appropriate level of detail required by the disclosures pursuant to the patent dance, looking to analogous disclosure requirements in the Hatch-Waxman context provides helpful guidance. The Hatch Waxman Act sets forth a mechanism for a generic drug company to file an abbreviated new drug application ("ANDA"), which allows the generic company to piggyback off the research and development work and regulatory submissions of the innovator company for a small-molecule drug.  In doing so, a generic drug maker that seeks to obtain regulatory approval prior to the expiration of applicable patents must certify pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV) ("Paragraph IV") that the patents covering the innovator company’s approved drug (or use thereof) – published in the FDA’s “Orange Book” – are either invalid, not infringed, or unenforceable.  Using language similar to the BPCIA, the Hatch Waxman Act requires that the generic drug maker provide the innovator company with a Paragraph IV notification letter that includes “a detailed statement of the factual and legal basis of the opinion of the applicant that the patent is invalid or will not be infringed.”  21 USC § 355(j)(2)(B)(iv)(II).

Gleaning from the Hatch-Waxman context, “detailed statement” disclosures under the BPCIA should have a reasonable basis and establish a prima facie case of invalidity or non-infringement.  Notable cases such as Takeda Chem. Indus. v. Mylan Labs., Inc., 459 F. Supp. 2d 227 (S.D.N.Y. 2006) make such standards clear in the Hatch-Waxman context.  In Takeda, generic drug companies made Paragraph IV certifications but changed their invalidity arguments at trial from those in their certification letters.  The district court found that the Paragraph IV certification letter was “so devoid of merit and so completely fail[ed] to establish a prima facie case of invalidity that it must be described as ‘baseless.’  When viewed in the context of the totality of this litigation, the filing strongly supports an award of attorneys' fees.”  Id. at 235.  In affirming the decision and fees awarded to patentee by the district court, the Federal Circuit emphasized the “constantly shifting set of arguments” put forth by the generic drug companies and reasoned, “it seems reasonable to expect assertions of invalidity based on prior art to remain relatively consistent as the prior art should be known when the certification of invalidity is made.”  Takeda Chem. Indus. v. Mylan Labs., 549 F.3d 1381, 1387 (Fed. Cir. 2008).  See also Yamanouchi Pharm. Co. v. Danbury Pharmacal, Inc., 231 F.3d 1339, 1347 (Fed. Cir. 2000) (holding that the Hatch-Waxman Act imposes a duty of care on an ANDA filer and affirming the district court’s decision to award attorney fees because the generic drug company’s Paragraph IV certification was “baseless” and failed to establish a prima facie case of invalidity.).

Exercising care and good faith in drafting the disclosures pursuant to the patent dance will likely be critical under the BPCIA.  Moreover, as in the Hatch-Waxman context, filing “baseless” non-infringement or invalidity positions risks sanctions as an “exceptional case” that may warrant attorney fees under 35 U.S.C. § 285.

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