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Hospira Seeks En Banc Review of the Federal Circuit’s “Safe Harbor” Ruling in Amgen v. Hospira

In December, in Amgen v. Hospira, 944 F.3d 1327 (Fed. Cir. 2019), a panel of the Federal Circuit issued the first decision applying the statutory Safe Harbor of 35 U.S.C. § 271(e)(1) to BPCIA patent litigation.  The Federal Circuit affirmed the jury’s finding that Hospira’s pre-approval manufacture of batches of its biosimilar was an act of infringement not protected by the Safe Harbor, even though data from those batches was used to support Hospira’s BLA.  Hospira has now petitioned for rehearing en banc, arguing that the court’s holding “calls into question the continuing viability of the Safe Harbor, particularly in the context of BPCIA litigation.” 

The Safe Harbor statute exempts otherwise infringing activity from infringement liability if the activity is “solely for uses reasonably related to the development and submission of information” to the government in connection with an application to market drugs or veterinary biologic products.  35 U.S.C. § 271(e)(1).  Congress enacted this exemption as part of the Hatch-Waxman Act to ensure that patent protection would not be extended de facto by the time it took for generic manufactures to develop a proposed generic drug.  See Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 670 (1990).  The Safe Harbor was enacted to allow a generics maker to start its development work before the patent expired.

In Amgen v. Hospira, Hospira’s infringing activity occurred years before it obtained approval of its proposed erythropoietin (EPO) biosimilar.  Amgen accused Hospira of infringing two expired manufacturing method patents based on the manufacture of 21 commercial-scale batches during the regulatory review period.  By the time of trial, Hospira’s product still had not been approved for commercial sale, and data from the batches had been submitted to the FDA in connection with Hospira’s BLA.  Hospira took the position that its manufacture of those batches was protected by the Safe Harbor because the batches were used to support its BLA (e.g., to provide stability data, or demonstrate biosimilarity).  Amgen argued, in contrast, that Hospira had manufactured the batches in order to stockpile product for a commercial launch, not to meet any FDA requirement, and that their manufacture therefore fell outside the Safe Harbor.

The jury largely agreed with Amgen, finding that fourteen of the twenty-one batches were not covered by the Safe Harbor but that seven were protected.  It awarded Amgen $70 million in damages for these batches.  On a motion for JMOL, the district court sustained the jury’s verdict, and on appeal, the Federal Circuit affirmed.  The panel, addressing the jury instruction on the Safe Harbor, agreed that it was correct to focus not on how Hospira ultimately used each batch (none were sold or put to commercial use in the U.S.), but on “whether each act of manufacture was for uses reasonably related to submitting information to the FDA.”  According to the panel, the Safe Harbor instruction then “struck the appropriate balance by telling the jury that Hospira’s additional underlying purposes do not matter as long as Hospira proved that the manufacture of any given batch of drug substance was reasonably related to developing information for FDA submission.”  The panel then found that the jury’s verdict was supported by substantial evidence because although data from Hospira’s batches was submitted to the FDA, there was evidence that this was not required.

In its en banc petition, Hospira argues that the panel erred by focusing on the reasons for which the product was manufactured, as opposed to the objective facts regarding how it was used.  Hospira contends that by upholding the jury’s verdict based on the evidence that the submission of data from the infringing batches wasn’t “required,” the panel’s decision would introduce uncertainty into the law and force biosimilar makers “to cut it too close lest it risk losing Safe Harbor.”  The panel’s holding, Hospira warns, will cause biosimilar applicants to err on the side of making fewer pre-approval batches and providing less information to the FDA.  This in turn, Hospira suggests, will “needlessly prolong[] the review process if FDA finds the initially submitted data to be insufficient.”  Hospira seeks much broader protection under the Safe Harbor, arguing that, given the limited guidance from FDA about what exactly is needed to obtain approval of a biosimilar, the Safe Harbor should be construed broadly to protect the manufacture of product that is used for an FDA submission.

Whether the full court takes this case or not, it is likely that the Safe Harbor will continue to be relevant in biologics litigation, given the prominence of manufacturing patents in the patent portfolios of biologics makers and the extensive manufacturing programs that are often required to obtain FDA approval of a biologic medicine. 

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