U.S. Supreme Court agrees to hear dispute over biologic drug sales

NEW YORK (Reuters) - The U.S. Supreme Court on Friday agreed to hear a dispute over whether companies that make copycat versions of biologic drugs must wait six months after winning federal approval to begin selling them.

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The justices will take up an appeal by Novartis AG of a 2015 federal appeals court decision that prevented the Swiss pharmaceutical company from selling its biosimilar version of California-based Amgen Inc’s $1-billion-a-year Neupogen until six months after the Food and Drug Administration approved it. The case could determine how quickly patients have access to biosimilar medicines at potentially cheaper prices.

Unlike traditional drugs, biologic drugs cannot be copied exactly to make generic versions. A 2010 federal law allows companies to seek approval to sell near-copies called biosimilars.

Biologic drugs are complex chemicals made inside living cells. Insurers expect biosimilars, like generics, to be cheaper than original brands.

Novartis unit Sandoz in September 2015 began selling Zarxio, the first biosimilar to win regulatory approval in the United States. Neupogen and Zarxio boost white blood cell counts in cancer patients to help fight infections.

Zarxio, which costs 15 percent less than Neupogen at list prices, has since exceeded $100 million in sales, according to Novartis.

The dispute arose when Amgen sued Sandoz in 2014 in San Francisco federal court alleging patent infringement and violations of the law governing biosimilars. The companies disagreed on how to apply the law’s requirement that a biosimilar drug maker give the brand-name manufacturer 180 days notice before launching its copycat version.

In July 2015, the U.S. Court of Appeals for the Federal Circuit in Washington ruled that the 180-day notice must be given after FDA approval.

Novartis last February appealed that decision to the Supreme Court, saying the Federal Circuit’s ruling improperly gave the brand-name manufacturer an extra six months of exclusivity on top of the 12 years already provided for under the law, driving up healthcare costs.

“If not reversed, (it) will delay access by patients to all biosimilars for six months longer than Congress intended,” Novartis said in its petition asking the Supreme Court to take up the case.

In opposing Novartis’ appeal, Amgen told the Supreme Court that the statute was meant to foster innovation and clearly states that the 180-day period cannot begin until the biosimilar is approved.

The Supreme Court in December declined to hear a similar case involving Canadian generic drug maker Apotex Inc and Amgen.

The justices on Friday also agreed to resolve Amgen’s appeal in the same case over whether biosimilar makers must give brand-name manufacturers a copy of their application to make a copycat drug after it is submitted to the FDA.

The case is Sandoz v. Amgen in the Supreme Court of the United States, 15-1039 and Amgen v. Sandoz, 15-1195.

Reporting by Andrew Chung; Editing by Will Dunham