Unsafe Harbor? Amgen v Hospira and the Application of the Safe Harbor in Biosimilar Development

Recently, in Amgen v Hospira (Case No 15-839, Docket Item 327 [D Del 2017]), the first biosimilar patent infringement case to reach a verdict, a Delaware federal jury awarded Amgen $70 million in damages against Hospira, the maker of a biosimilar version of Amgen’s recombinant erythropoietin product, Epogen (epoetin alfa). The verdict against Hospira—who had not even sold its product in the United States, but was preparing to do so upon the 2015 and 2016 expiration of Amgen’s patents—is the most recent test of the “safe harbor” provision of the Patent Act that protects uses related to FDA approval.

Hospira’s primary defense at trial was that its preparation of 21 batches of biosimilar epoetin alfa, between 2013 and 2015 fell within the “Safe Harbor” provision of the US Patent Act,¹ which immunizes acts “solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.” Hospira argued that it produced the batches to show biosimilarity and stability, and to validate its manufacturing process. Hospira witnesses also testified about numerous meetings with FDA to address the uncertain regulatory landscape for biosimilars.

The problem for Hospira is that it also labeled some of these batches as “commercial inventory.” At trial, Amgen’s evidence showed that the 21 batches had a commercial value in the hundreds of millions of dollars. With a verdict returned for Amgen, the jury apparently found that at least some of the epoetin alfa manufactured by Hospira was not solely made for FDA submission. Pending before the court is a motion for judgment as a matter of law to sweep away the verdict, in which Hospira contends that no reasonable jury could have found infringement based on the evidence presented at trial.

Regardless of whether Amgen or Hospira prevail at the district court, the next step is likely an appeal to the Court of Appeals for the Federal Circuit to decide whether the Safe Harbor exception applies. Congress enacted the Safe Harbor as part of the Hatch-Waxman amendment, in part, to allow generic drug manufacturers to develop and test products so that they could sell the cost-saving product as soon as the patents blocking market entry expire. The Supreme Court has previously held that the Safe Harbor broadly protects all uses of patented inventions that are reasonably related to development of information that may be submitted to the FDA.²

The question here is whether producing 21 batches is reasonable under the Safe Harbor. When it comes to stockpiling otherwise infringing product before patent expiry, the courts are decidedly undecided. On the one hand, more than 20 years ago, in Biogen, Inc v Schering AG, the court concluded that it maintained jurisdiction over the declaratory judgment action for invalidity where the putative infringer’s $24 million stockpile was not protected by the Safe Harbor.³ But just 2 years later, in Amgen v Hoechst Marion Roussel, the manufacture and testing of commercial batches was found to be protected activity because the batches were objectively likely to generate useful information, even if data from those batches was not provided to the FDA.⁴ On the other hand, the jury appears to have rejected that theory, instead implicitly finding that Hospira made its biosimilar epoetin alfa for commercial purposes with the potential of generating data for the FDA as a secondary benefit.

On appeal, Hospira is likely to have the better argument based on past decisions, such as the Supreme Court Merck decision, indicating that the Safe Harbor broadly protects preapproval activity. However, the analysis of whether the Safe Harbor applies is fact intensive. Thus, Amgen may have the advantage because of the fact-finding at the district court.

The Amgen decision should act as a warning to manufacturers intending to rely on the Safe Harbor. Because the Safe Harbor is an affirmative defense to patent infringement, a manufacturer that intends to rely on the Safe Harbor should keep careful records as to the purpose of batches. The manufacturer may also want to coordinate with legal counsel to ensure that its activity is reasonably related to obtaining data for the FDA and to consider alternative non-infringement arguments. Some planning and preparation may help to avoid an outcome like the $70 million judgment in Amgen.

References

1. US Patent Act, 35 USC §271(e)(1) (2011).

2. Merck KGaA v Integra LifeSciences, 545 US 193, 202 (2005).

3. Biogen, Inc v Schering AG, 954 F Supp 391, 397 (D Mass 1996).

4. Amgen, Inc v Hoechst Marion Roussel, Inc, 3 F Supp 2d 104, 108-10 (D Mass 1998).