Supreme Court Ruling Leaves BPCIA Intact

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A technicality—inability to demonstrate harm—frustrated plaintiffs whose case threatened to sink not just the Affordable Care Act but also the Biosimilars Price Competition and Innovation Act (BPCIA), the pathway for biosimilars approvals.

The regulatory pathway for biosimilar approvals was saved from deletion today when the Supreme Court ruled that plaintiffs had no standing to challenge the constitutionality of the Affordable Care Act (ACA), which embodies the Biologics Price Competition and Innovation Act (BPCIA; Title VII) that allows the licensure of biologic products as biosimilars.

The decision (7-2) by the nation’s highest court was not unexpected, although without the certainty of a ruling the biosimilars pathway was never fully in the clear.

“Biosimilar applications and approvals are continuing to increase as companies and FDA are becoming more familiar with the pathway, and it would have been unfortunate had the biosimilar approval process become a collateral casualty of a constitutional challenge,” said Kevin Nelson, a partner in the intellectual property practice at Schiff Hardin.

The ruling also was applauded by the Biosimilars Forum, an association of biosimilar developers. “Upholding this law means that millions of patients will continue to have access to biosimilars—lower-cost options for life-saving brand name biologic therapies both now and in the future,” the group said in a statement.

Plaintiffs had challenged the constitutionality of the individual mandate portion of the ACA, which requires that participants either obtain health insurance or pay a penalty. Plaintiffs contended that although Congress reduced the penalty to zero dollars, the mandate effectively undermined the constitutionality of the entire ACA. A lower court ruled the mandate was unconstitutional but left it to the Supreme Court to decide whether other provisions of the ACA, including the BPCIA, also should be struck down or were “severable,” meaning they could be preserved.

The plaintiffs were found to have “no standing” in the case, meaning they could not demonstrate that the individual mandate had caused them harm.

By rejecting the case as lacking standing, the court sidestepped the need to evaluate the issue of severability, noted Ha Kung Wong, an intellectual property attorney with Venable. "This makes it more difficult to bring further constitutional challenges to the ACA in the courts. What this shows us, since this is the third time the Supreme Court has found a way to uphold the ACA, is that this is not an issue that they believe should be addressed in the courts, but, rather, in legislation.

"The ACA isn't perfect," Wong said, "but this holding perhaps allows us all to refocus on finding ways to improve the ACA to better provide necessary health coverage for Americans."

Legal experts argued prior to the Supreme Court ruling that the intent of Congress in creating the BPCIA was not that it should hinge on the survivability of components of the ACA. Instead, they argued, the BPCIA was created specifically to ensure that lower-cost competitive alternative biologics should be available to the American public to protect their access to vital, affordable medicines.

To date there have been 29 biosimilar approvals in the United States and 21 of those products have reached the market. Biosimilars, a distant cousin to generic medicines, although much more complex and made from living organisms as opposed to static chemical compounds, are certified as being as safe and efficacious as the originator biologics they reference.

Critics contend that BPCIA upgrades or other fixes are needed to make it easier for biosimilars to reach the marketplace. Heavy litigation, lengthy periods of originator product exclusivity, and lack of clarity on which patents apply to originator biologics are some of the burdens that biosimilar developers must face.

With the debate over the ACA settled for now, “Congress should go forward with improving the biosimilar pathway to increase confidence and uptake in biosimilars and to provide incentives for companies in seeking to manufacture lower-cost biosimilar products,” Nelson said.

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