Top Actions to Consider in Light of the Biosimilar Act

March 1, 2013

Janice A. Vatland PhD

(as published in Westlaw Journal Pharmaceutical)


There is great interest in increasing access to lower cost biological therapeutics for the treatment of human diseases. The Biologics Price Competition and Innovation Act of 2010 ("Biosimilar Act") was enacted to create a pathway to obtain Food and Drug Administration (FDA) approval of biosimilar or “follow-on” versions of biological products based upon lesser showings of safety and efficacy. A major goal of this legislation is to achieve cost savings much like what has been realized with the approval of traditional generics under the Drug Price Competition and Patent Term Restoration Act, better known as the Hatch-Waxman Act.

Unfortunately, the methodology used for approving generic versions of traditional pharmaceuticals cannot be simply adopted and extended to cover versions of biological therapeutics. Traditional pharmaceuticals are generally small molecules produced by chemical reactions which can generally be manufactured to be the same as—and therapeutically interchangeable with—their pioneer counterparts. Not so with biological products, which are complex molecules where even minor molecular or manufacturing differences can result in significant changes. With current technology, it is highly unlikely for follow-on versions of biological products to be identical—and thus “generic”—in the traditional sense.

It is currently in the hands of the FDA to determine just how to implement the Biosimilar Act and devise a system for approving follow-on versions of these complex molecules. Earlier this year, the FDA took a significant step to begin to define how the assessment of biosimilarity will be undertaken with the introduction of three guidance documents, described more fully below. The first document addresses safety considerations in demonstrating biosimilarity, the second addresses quality considerations in demonstrating biosimiliarity, and the third provides questions and answers about the implementation of the Biosimilar Act. The guidance documents provide a first glimpse at what the FDA’s approach will be but do so in a very general, non-specific way.

Even with this guidance, it remains unclear what the FDA will consider a biosimilar, much less the path to approval. Nevertheless, with what is known about the Biosimilar Act, and the information in the three guidance documents, there are some actions pioneer or reference product manufacturers and biosimilar manufacturers can now take to prepare for approvals under this new pathway.

The Biosimilar Act

Like the Hatch-Waxman Act for generic small molecule drugs, the Biosimilar Act: (1) establishes standards for application and approval; (2) provides a term of data exclusivity; and (3) establishes a scheme for handling patent disputes. The similarities, however, end there.

Standards for Application and Approval

Under the Hatch-Waxman Act, a generic must show that it is a bioequivalent, and clinical studies are normally not required. Under the Biosimilar Act, however, a biosimilar applicant must demonstrate that its biologic: (1) exhibits biosimilarity with the pioneer or reference product; (2) is indicated for the same previously approved condition(s); (3) works in the same way to treat the condition(s) (to the extent the mechanism of action is known); and (4) has the same strength, dosage form, and route of administration.

As mentioned above, due to the complex nature of biological products, a follow-on version is expected to be similar, rather than identical, to the reference product. The Biosimilar Act provides that biosimilarity be demonstrated based on data that show the biosimilar is "highly similar to the reference product notwithstanding minor differences in clinically inactive components." It must also be shown that there are no "clinically meaningful differences" between the biosimilar and reference product in terms of "safety, purity, and potency of the product." Such showings must be based on data from analytical studies, animal testing, and one or more clinical studies, although the FDA has the discretion to decide an element is unnecessary.

Although the FDA’s guidance did not address a methodology for doing so, an applicant may go further and establish that its biosimilar is also interchangeable with the reference product. To show interchangeability, the biosimilar applicant must demonstrate the biosimilar is expected to yield the same clinical result and a patient could switch or even alternate between the biosimilar and reference product without extra risk. A biosimilar that is also deemed to be interchangeable is most analogous to a traditional generic. Such a biosimilar may be substituted for the reference product without the intervention of a prescribing physician, and the first such biosimilar will be afforded a period of market exclusivity where the FDA may not approve another interchangeable biosimilar.


Under the Hatch-Waxman Act, five years of data exclusivity are afforded for active ingredients not in any previously approved drug. On the other hand, a biosimilar application cannot be made effective until 12 years after the date on which the reference product was first licensed (an application cannot even be submitted until four years after the approval of the reference product.) Six-month exclusivity extensions are available in certain circumstances, similar to what is provided under the Hatch-Waxman Act.

However, unlike the Hatch-Waxman Act, where new indications for an existing drug may receive an additional three years of data exclusivity, the Biosimilar Act does not allow for additional periods of data exclusivity unless the change to a reference product is a structural modification resulting in a change in safety, purity or potency. In other words, additional periods of data exclusivity for changes to the reference product that result in a new indication, new route of administration, new dosing schedule, new dosing form, new strength, etc. will generally not be granted.

Patent Disputes

Rather than having something akin to the Orange Book under the Hatch-Waxman Act, the Biosimilar Act establishes a method for managing patent infringement actions through completely new disclosure requirements for both reference product and biosimilar manufacturers. Under this system, the burden is on the parties to negotiate the list of patents that should be involved in the dispute. This list can potentially include all patents where a claim of patent infringement could be reasonably asserted. This is different from the listing of patents in the Orange Book, which is limited to patents covering the active ingredient, formulation, and method of use.

The requirements imposed by this system are time-sensitive and demanding:

  • The biosimilar applicant must provide a copy of the application to the reference product sponsor within 20 days of being notified that its application has been accepted by the FDA.
  • Within 60 days of receiving a copy of the application, the reference product sponsor must provide the biosimilar applicant with a list of patents it believes “could reasonably be asserted” with respect to the reference product. These patents include those owned by or exclusively licensed to the reference product sponsor. The list must identify which patents the reference product sponsor would be prepared to license to the biosimilar applicant (which may spur settlements rather than further litigation.) The reference product sponsor has 30 days to amend this list after the issuance, or exclusive licensing, of a new patent it believes is infringed by the biosimilar applicant.
  • Within 60 days of receiving the list of patents, the biosimilar applicant must provide the reference product sponsor with a detailed statement describing its opinion that any patent listed is invalid, unenforceable, or will not be infringed by the commercial marketing of the biosimilar, or a statement that it does not intend to begin commercial marketing of the biosimilar before the expiration of the listed patent(s).
  • Within 60 days of receiving the biosimilar applicant’s detailed statement, the reference product sponsor must provide the biosimilar applicant with a detailed statement describing its opinion that its patent(s) will be infringed by the biosimilar, as well as a response concerning the validity and enforceability of its patent(s).
  • The biosimilar applicant and reference product sponsor must then “engage in good faith negotiations” as to which of the patents should be the subject of patent infringement claims. If the parties do not reach agreement, they must proceed by an alternative procedure that includes the exchange of lists of patents to be included in the litigation.
  • Within 30 days, the reference product sponsor shall bring suit. If the reference product sponsor prevails in this action before approval of the biosimilar due to the exclusivity period, the court must enter a permanent injunction prohibiting further infringement.

It is important to note that no stay is afforded upon filing suit, whereas a 30-month stay is provided under the Hatch-Waxman Act. To stop a biosimilar product from going to market, an injunction from a court is needed. Significantly, a biosimilar applicant must notify the reference product sponsor 180 days before the first commercial marketing of the biosimilar. The reference product sponsor may then seek a preliminary injunction.

It is also important to note that failure to bring an infringement action within the 30-day requirement (or bringing an infringement action that was dismissed without prejudice or was not prosecuted to judgment in good faith) will result in the available remedy being limited to a reasonable royalty. Failure by the reference product sponsor to timely include a relevant patent in the exchanged list will preclude the reference product sponsor from later bringing an infringement action against the biosimilar applicant with respect to that undisclosed patent under the new dispute procedure. It is, however, an open question as to whether or not an action could be filed under the traditional routes of a patent infringement suit.

Recent FDA Guidance

As indicated above, in February, the FDA issued three guidance documents to provide some insight into the scientific and quality considerations for demonstrating biosimilarity. These documents provide a very general framework for what may be shown by a biosimilar applicant and considered by the FDA. The guidance is neither exhaustive nor product-specific, but it does provide a first look at how the FDA will begin to approach the assessment of biosimilarity.

From the guidance documents, it is clear that the FDA believes that proteins can differ in at least three ways: primary amino acid sequence, modification to amino acids (e.g., sugar moieties,) and higher order structure (e.g., protein-folding.) To demonstrate biosimilarity, the FDA intends to consider the totality of the evidence on a product-specific basis. It will also generally expect a biosimilar applicant to characterize the structure and function of its proposed biosimilar and the reference product with state-of-the-art technology (even though the FDA acknowledges that current analytical methodology may not be able to detect all relevant structural and functional differences between two proteins.)

Animal studies may also be required, and the scope and magnitude of further studies, such as clinical studies, will depend on the extent of residual uncertainty. The FDA intends to assess results from prior studies to provide support for a selective and targeted approach to further studies. Thus, the FDA recommends a stepwise approach using structural analyses, functional assays, animal data, and clinical studies in the development of biosimilar products. In order to facilitate and advance such an approach, the FDA is encouraging biosimilar applicants to set up meetings with the FDA to share information, assess milestones and get input throughout the process.

What Steps Can be Taken Now?

Perform an Intellectual Property Strategy Review

Under the Biosimilar Act, there is a certain amount of protection afforded through data exclusivity for a reference product. However, due to the complexity of biological molecules, it is feasible that a biosimilar may be similar enough to qualify as a biosimilar under the Biosimilar Act but not similar enough to be covered by a patent claim. In addition, the protection afforded through the exclusivity provision will not apply to competitor products not deemed to be biosimilars, and additional periods of exclusivity will not apply to changes to a reference product that are not structural modifications resulting in a change in safety, purity or potency.

As a result, reference product manufacturers should not rely solely on the period of exclusivity for protection; rather, they should consider obtaining valid claims that afford broad patent protection of their biologics. To do so, the reference product manufacturers may protect not only the biologic itself but also, if possible, the target molecule(s) of the biologic, methods of use, etc. Additionally, these manufacturers should contemplate how their biologics could be modified, improved or designed-around and consider obtaining patent protection for those modifications or improvements.

Reference product manufacturers should also consider how best to protect their methods of manufacture. For biological products generally, the method of manufacture may affect the structure and function of a biological product in a significant way. Additionally, under the new dispute system, methods of manufacture may be included in the patent dispute process. Thus, methods of manufacture may take on an increased importance and should be protected (although with current case law surrounding the safe harbor provision their importance may be significantly reduced.) Whether or not such protection should be via patent or trade secret protection, however, will depend on a variety of factors, including the impact of the method of manufacture on the structure and function of the biologic, whether or not other processes can produce a biosimilar product, the ability to determine or reverse-engineer the method of manufacture, etc. Patents provide protection during the term of the patent, while a trade secret may provide protection indefinitely.

Biosimilar manufacturers should be aware of the intellectual property that may be involved in protecting the reference product and consider how such protection may be avoided. Biosimilar manufacturers may also want to consider different formulations, delivery devices, etc., which the FDA has indicated may be acceptable and which may not be protected by any intellectual property. Further, biosimilar manufacturers should seek valid patent protection for their own biosimilars and modifications or improvements. Patent protection may be available for biosimilar products even when a period of exclusivity under the Biosimilar Act is not.

Prepare for a Patent Dispute

The patent dispute provisions of the Biosimilar Act establish demanding and time-sensitive disclosure requirements for both the reference product sponsor and biosimilar applicant. Given the detail required and the complexity of the issues, both parties should conduct the necessary investigations and analyses well before a biosimilar application is filed. Some steps that may be taken include: identifying all relevant patents, patent owners, and licenses and developing detailed infringement, validity, and enforceability positions. Failing to be prepared in advance will likely result in a rush to prepare the required statements, risking a potentially determinative mistake.

The strategy for undertaking the process, including the timing for filing a biosimilar application as well as the number of patents to involve in the process, should also be carefully contemplated in advance. Other avenues for litigation and challenging patents, such as patent challenges within the United States Patent and Trademark Office, should also be considered.

In all, it will be important for reference product and biosimilar manufacturers to fully understand their patent portfolios as well as those of their competitors and to think strategically about positions to take in a variety of venues. Sophisticated legal counseling, active portfolio diligence, and time-sensitivity will be necessary to be adequately prepared for patent disputes in light of the Biosimilar Act.

Work with the FDA

Based on the FDA’s guidance documents, it is apparent the FDA will proceed cautiously with approval under this new pathway. The FDA intends to assess the totality of the evidence in a stepwise manner for each product until it gains experience in approving biosimilars. Therefore, any biosimilar applicants or reference product sponsors wishing to influence what biosimilar applicants should be required to demonstrate should be sure to engage with the FDA. Once a biosimilar application has been filed, the biosimilar applicant should plan to set up meetings throughout the process to help understand and guide what studies will be required.


The Biosimilar Act is in the early stages of implementation with the goal of increasing access to biological therapeutics at lower cost while preserving safety and efficacy. The FDA has recently provided a very general framework for approaching the determination of biosimilarity through three guidance documents.

It is still unclear what types of products will meet the biosimilarity standard, or how such biosimilarity will be shown. However, with the guidance provided, along with the legislation, there are some preparations that can be undertaken immediately to plan for this new approval pathway. These preparations include reviewing intellectual property strategies, preparing patent dispute positions, and engaging with the FDA.