Sandoz is having a good year.  The company succeeded in having their NEUPOGEN^® (filgrastrim) biosimilar product, Zarxio™, approved by the FDA in March, a mere ten months after filing its biosimilar application last July.  The biosimilar applicant also avoided the disclosure provisions of the Biologics Price Competition and Innovation Act (BPCIA) (codified at (42 U.S.C § 262(l)(2)(A)), successfully arguing those provisions were optional before the District Court and the Federal Circuit.  And they were also fortunate that the Court did not maintain the injunction that prevented marketing Zarxio™ during the pendency of Amgen's appeals.

And now Sandoz has decided to begin to reap the benefits of those victories, bringing Zarxio™ to market in a September 4th announcement (two days after the injunction expired) (see the Sandoz press release).  According to several media reports, Zarxio™ will be priced at a 15% discount on Amgen's NEUPOGEN^® product, on the low end of estimates that the discount would range from 15-30% (but consistent with estimates, most famously by the Federal Trade Commission that price reductions would be much lower than small molecule generic drugs brought to market under the Hatch-Waxman Act).  NEUPOGEN^® is a $1.2-1.4 billion dollar per year product for Amgen, and it is unclear (in the short term) what the effect of Sandoz Zarxio™ marketing will be.  This is due at least in part to an anticipated lag in physician acceptance:  unlike conventional "generic," generally small molecule, drugs (which cause upwards of 90% reductions in drug prices from the innovator brand price very quickly after entering the marketplace), biosimilar drugs are both more complex than small molecule drugs and are administered by physicians (typically by injection) and thus continue to actively involve medical personnel during a course of treatment.  Consequently, physician acceptance of biosimilar drugs is much more of an issue than for generic drugs and thus market penetrance is expected to be delayed for 1-5 years, even by Sandoz.  These estimates are in line with industry expectations for biosimilar drugs in general; for example, Express Scripts has estimated that while U.S. healthcare costs may be reduced by about $250 million between 2015 and 2025, biosimilar sales worldwide will only increase from $1.3 billion to $35 billion by 2020, even taking into account the robust approval climate for biosimilar drugs on Europe (where the EMEA has approved 21 biosimilar drugs over the past 10 years; it should be noted that cost savings in Europe from biosimilars amount to about a 10% reduction).

Also significant is that Sandoz' approval is but the first of many NEUPOGEN^® biosimilar approvals waiting FDA action, and thus there is some pressure for Sandoz to gather its metaphorical biosimilar rosebuds now before facing additional biosimilar competition.  There is also the continuing litigation with Amgen (the decision subject to Federal Circuit review was on Amgen's motion for summary judgment; litigation on the merits is ongoing).  Amgen also has filed a petition for rehearing en banc that could reverse Sandoz' victories to date (or perhaps certiorari review by the Supreme Court, which ultimately could be more costly in view of the time to decision while Zarxio™ is on the market).  This situation is reminiscent of an "at-risk" launch in the ANDA context, and Sandoz' willingness to take this apparent risk suggests that it may not believe that Zarxio™ infringes the patent Amgen has asserted.  This illustrates the strategic disadvantage to the reference product sponsor that the courts' interpretation of the BPCIA has created, and provides another reason for Congress to clarify whether it meant what it said when it crafted the disclosure provisions to state that the biosimilar applicant "shall" make the disclosures Sandoz has thus far been able to avoid.

For additional information regarding this and other related topics, please see:

• "Federal Circuit Lifts Injunction Against Sandoz," September 2, 2015
• "'Don't Stop the Dance'[*] -- The Dissents-in-Part from Amgen v. Sandoz," July 23, 2015
• "Amgen v. Sandoz (Fed. Cir. 2015)," July 22, 2015
• "Federal Circuit Decides Amgen v. Sandoz (in an opinion that will make neither party happy)," July 21, 2015
• "Amgen v. Sandoz -- Federal Circuit Oral Argument," June 7, 2015
• "Amgen Wins Injunction against Neupogen® Biosimilar Pending Appeal," May 6, 2015
• "Amgen v. Sandoz Update -- Amgen's Continuing Efforts to Obtain Preliminary Injunction," April 28, 2015
• "Amgen v. Sandoz Update -- BIO Files an Amicus Brief at the Federal Circuit," April 21, 2015
• "Amgen Receives No Help from the FDA -- A Biosimilar Update," April 15, 2015
• "The Tyranny of the Judiciary," March 23, 2015
• "Gotta Dance? Apparently Not -- A Biosimilar Update," March 19, 2015
• "The First Biosimilar Application Has Been Approved -- But What About the Patent Issues?" March 12, 2015
• "FDA Approves Sandoz Filgrastim Biosimilar," March 8, 2015
• "'No Clinically Meaningful Differences': The First Accepted Biosimilar Application Has Been Recommend for FDA Approval," January 14, 2015
• "Sandoz Inc. v. Amgen Inc. (Fed. Cir. 2014)," December 9, 2014
• "Finally, A Biosimilar Application Has Been Accepted By The FDA," July 28, 2014