Nelson Quoted on the Effect of Unexpected Biosimilar Launches on Drug Licensing Agreements

Partner Kevin Nelson was quoted on how a drug company’s biosimilar launch can affect licensing agreements between other competitors. Amgen recently announced it is launching two biosimilars that could conflict with previous licensing agreements between the brand drug company Genentech and other competitors to launch their own biosimilars at an agreed-upon time.

“Typically, settlement agreements in the pharma space include what are called acceleration clauses,” he said. “Such clauses will allow an agreed-upon launch date to be accelerated to an earlier date in the event the patent or patents are invalidated or found not infringed in another litigation, or if a competing product or authorized competing product comes on the market before that agreed-upon date.”

He added that these acceleration provisions “can come in a variety of flavors from a change in royalty rate or structure, a requirement to leave the market if the ‘unauthorized entrant’ leaves the market, or perhaps agreed damages.”

However, Kevin said that Amgen’s announcement of its immediate launched may have caused logistical issues for the manufacturers who had licensing agreements with Genentech. Even if the agreements allowed for immediate launches of the other biosimilars if or when another competitor entered the market, Kevin said it may not be feasible for those companies to immediately launch their own products.

“The biosimilar companies cannot just fire up the machines and have product ready tomorrow,” he said. “Manufacturing, packaging, sales, and distribution all take time. And you don’t want inventory to go bad — especially not this type as it is expensive.”

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