Amgen 2015 Annual Report Download - page 32

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In the United States, in 2010 the ACA authorized the FDA to approve biosimilars via a separate, abbreviated pathway. (See
Item 1. Business—Government Regulation—Regulation in the United States—Approval of Biosimilars.) The first biosimilar
entrant into the U.S. market, Zarxio™, a biosimilar version of NEUPOGEN® from Sandoz, was launched in the United States in
2015. In addition, a growing number of companies have announced that they are in varying stages of development of biosimilar
versions of existing biotechnology products, including biosimilars that would compete with our products. Some companies pursuing
development of biosimilars versions of our products may challenge our patents well in advance of the expiration of our material
patents. (See Our intellectual property positions may be challenged, invalidated or circumvented, or we may fail to prevail in
present and future intellectual property litigation.) For example, in June 2013, Sandoz filed suit against us, seeking a declaratory
judgment that the etanercept product it was developing as a biosimilar to ENBREL did not infringe certain of our patents, and that
those patents were also invalid and unenforceable. While that suit was dismissed for lack of subject matter jurisdiction as Sandoz
had not yet filed a marketing application with the FDA, Sandoz subsequently announced that its marketing application has now
been accepted for review by the FDA. (For information related to our other biosimilars patent litigation, see Part IV—Note 18,
Contingencies and commitments, to the Consolidated Financial Statements.) The U.S. pathway includes the option for biosimilar
products meeting certain criteria to be approved as interchangeable with their reference products. Some companies currently
developing biosimilars may seek to register their products as interchangeable biologics, which could make it easier for prescribers
or pharmacists to substitute those biosimilars for our products. In addition, critics of the 12-year exclusivity period in the biosimilar
pathway law will likely continue to seek to shorten the data exclusivity period and/or to encourage the FDA to interpret narrowly
the law’s provisions regarding which new products receive data exclusivity. While we are unable to predict the precise impact of
biosimilars on our products, we expect in the future to face greater competition in the United States as a result of biosimilars and
downward pressure on our product prices and sales. This additional competition could have a material adverse effect on our
business and results of operations.
Our current products and products in development cannot be sold without regulatory approval.
Our business is subject to extensive regulation by numerous state and federal governmental authorities in the United States,
including the FDA, and by foreign regulatory authorities, including the EMA. We are required in the United States and in foreign
countries to obtain approval from regulatory authorities before we can manufacture, market and sell our products. Once approved,
the FDA and other U.S. and foreign regulatory agencies have substantial authority to require additional testing and reporting,
perform inspections, change product labeling or mandate withdrawals of our products. Failure to comply with applicable regulatory
requirements may subject us to administrative and/or judicially imposed sanctions. The sanctions could include the FDA’s or
foreign regulatory authorities’ refusal to approve pending applications, delay in obtaining or withdrawals of approvals, delay or
suspension of clinical trials, warning letters, product recalls, product seizures, total or partial suspension of our operations,
injunctions, fines, civil penalties and/or criminal prosecutions.
Obtaining and maintaining regulatory approval has been, and will continue to be, increasingly difficult, time-consuming and
costly. Legislative bodies or regulatory agencies could enact new laws or regulations, change existing laws or regulations, or
change their interpretations of laws or regulations at any time, which could affect our ability to obtain or maintain approval of our
products or product candidates. The rate and degree of change in existing laws and regulations and regulatory expectations have
accelerated in established markets, and regulatory expectations continue to evolve in emerging markets. Failure to comply with
new laws, regulations or regulatory interpretations could result in significant monetary penalties as well as reputational and other
harms. We are unable to predict when and whether any further changes to laws or regulatory policies affecting our business could
occur, such as efforts to reform medical device regulation or the pedigree requirements for medical products or to implement new
requirements for combination products, and whether such changes could have a material adverse effect on our business and results
of operations.
Regulatory authorities may also question the sufficiency for approval of the endpoints we select for our clinical trials. A
number of our products and product candidates have been evaluated in clinical trials using surrogate endpoints that measure an
effect that is known to correlate with an ultimate clinical endpoint. For example, a therapeutic oncology product candidate may
be evaluated for its ability to extend the length of time during and after the treatment that a patient lives without the disease
worsening (progression-free survival, or PFS). Demonstrating that the product candidate produces a statistically significant
improvement in PFS does not necessarily mean that the product candidate will show a statistically significant improvement in
OS, the time that the patients remain alive. In the cardiovascular setting, a heart disease therapeutic candidate may be evaluated
for its ability to reduce LDL-C levels, as elevated LDL-C level has been a surrogate endpoint for cardiovascular events such as
death, heart attacks and stroke. The use of surrogate endpoints such as PFS and LDL-C reduction, in the absence of other measures
of clinical benefit, may not be sufficient for broad usage or approval even when such results are statistically significant. Regulatory
authorities could also add new requirements, such as the completion of enrollment in a confirmatory study or the completion of
an outcomes study or a meaningful portion of an outcomes study, as conditions for obtaining approval or obtaining an indication.
For example, our initial FDA application for Repatha® sought approval for a broader patient population based on data demonstrating
that Repatha® reduced LDL-C levels. However, the FDA ultimately approved Repatha® only for a subset of those patients, citing
among other things the absence of positive outcomes data showing that Repatha® prevents cardiovascular events. While our