[author: Donald Zuhn]
In a Citizen Petition filed with the U.S. Food and Drug Administration on April 2, Abbott Laboratories requested that the FDA refrain from accepting biosimilar applications under the Biologics Price Competition and Innovation Act (BPCIA) that cite reference products (biologics) for which a biologics license application (BLA) was submitted to the FDA prior to March 23, 2010. The BPCIA, which provides an approval pathway for biosimilar biological products and constitutes a portion of the Patient Protection and Affordable Care Act that was signed into law on March 23, 2010, allows the FDA to accept biosimilar applications four years after a reference product has been licensed and to approve such applications twelve years after the reference product has been licensed.
In its Petition, Abbott specifically asks the FDA to:
[C]onfirm that it will not accept for filing, file, approve, or discuss with any company, or otherwise take any action indicating that the agency will consider, any application or any investigational new drug application (IND) for a biosimilar that cites, as its reference product, BLA 125057 for Humira® (adalimumab) or any other product for which the biologics license application (BLA) was submitted to FDA prior to March 23, 2010, the date on which the BPCIA was signed into law.
Abbott explains that the FDA should refuse biosimilar applications for all pre-enactment reference products, including its own biologic Humira®, because to approve such applications would constitute a taking under the Fifth Amendment of the U.S. Constitution, which requires just compensation.
Noting that "the reference product sponsor has invested massive amounts of capital . . . and has taken great risk to develop, test, and seek a license to market the reference product," Abbott argues that "[a]n innovator's resulting license application typically reflects more than a decade of research and contains analytical, preclinical, and clinical data, as well as detailed manufacturing information, most of which qualifies as trade secrets," and contends that "[t]hese trade secrets are the private property of the reference product sponsor and are therefore protected by the Fifth Amendment to the U.S. Constitution." According to Abbott's Petition, "[w]hen FDA approves a biosimilar biological product on the grounds that the reference product has been shown safe, pure, and potent, it uses these trade secrets."
Abbott also notes that when it submitted its BLA for Humira® in 2002, the company "had no notice, or reasonable expectation, that the agency would use its trade secrets to approve another company's product," and in fact, had "developed and submitted those trade secrets in reasonable reliance on FDA's lack of legal authority to approve biosimilars, confirmed by years of agency statements that it lacked such authority." The Petition suggests that other innovators who submitted pre-enactment BLAs also "reasonably expected -- on the basis of applicable law and agency statements -- that the trade secrets contained in their applications would not be used to benefit a competitor." Abbott argues that "[u]nder well-established Supreme Court jurisprudence, FDA's use of the trade secrets in pre-enactment sponsors' BLAs to support approval of competitor products would frustrate these sponsors' investment-backed expectation regarding their property and would constitute a taking under the Fifth Amendment to the U.S. Constitution that requires just compensation."
With regard to whether the information in a BLA constitutes a trade secret, the Petition explains that the Uniform Trade Secrets Act (UTSA), which has been adopted (with minor variations) in 45 states and the District of Columbia, defines a trade secret as constituting information that (a) derives independent economic value from not being generally known to, or readily ascertainable using proper means by, other persons who can obtain economic value from its disclosure or use, and (b) is the subject of reasonable efforts to maintain its secrecy. With respect to the first prong, Abbott states that "maintaining the secrecy of the data and information in a license application gives the submitter an economic advantage, because the license holder's competitors cannot obtain approval of a competing similar product without undertaking an investment of similar magnitude or compensating the innovator for a right to reference that information and data." As to the second prong, Abbott notes that "biologics innovators go to great lengths to ensure that the data and other information submitted in their applications are not publicly released, whether inadvertently or purposefully, or otherwise accessible to potential competitors." Abbott, therefore, contends that the information submitted to FDA -- including analytical, preclinical, and clinical data to support a marketing application -- constitute trade secrets.
According to the Petition, as of February 2012, the FDA had received 35 requests for pre-IND meetings for proposed biosimilar products for eleven different reference products, had held 21 pre-IND sponsor meetings, and had received nine INDs. Indicating that it "believe[s] that some (if not all) proposed biosimilar product applications that have been or will be the subject of such meetings will reference innovator biologic products that were approved via BLAs submitted prior to March 23, 2010," Abbott argues that the constitutional issue raised in its petition is "both timely and urgent." Abbott also expresses a belief "that at least three companies have begun preclinical and/or clinical testing of biosimilar adalimumab," but notes that it "does not know whether FDA is advising any companies about the contents of a biosimilar application citing approval of Humira[®]."
Abbott asserts that even if the biosimilar applicant receives no information from the FDA regarding the contents of an innovator's BLA, the approval of a biosimilar application based on the approved biologic results in a taking. In particular, Abbott contends that:
Any FDA approval of a biosimilar application necessarily uses the trade secrets that were submitted in support of the BLA that the biosimilar is referencing. Such a use occurs even though the BPCIA directs FDA to base approval of the biosimilar product only on information in the biosimilar application and directs the biosimilar applicant to include in its application only publicly available information regarding FDA's prior finding of safety, purity, and potency for the reference product. The approval of a biosimilar necessarily relies on and uses the trade secrets that the innovator sponsor submitted in support of the BLA. Were it not for those trade secrets -- generated at great effort and expense by the sponsor -- there would be no pioneer biologic for the biosimilar sponsor to reference.
The Petition further argues that:
FDA's reliance on its earlier finding that the reference product is safe, pure, and potent -- to grant another company a license to market a competing biosimilar product -- diminishes the economic value of the reference product sponsor's trade secrets that made the finding possible. The trade secrets generated at great risk and expense by the first entrant lose value and provide a diminished competitive advantage if the government can simply proceed with approving competitor products on the basis of subsequent applications that omit trade secrets comparable to those required of the reference product sponsor.
Abbott notes that "[w]ithout the [innovator] company's efforts to create the trade secrets in the BLA, the license 'simply would not exist,'" and "FDA's reliance on the finding accompanying the license is therefore reliance on the underlying trade secrets." Abbott argues that "FDA may not, in other words, separate the 'public finding' [of a biologic's approval] from the underlying data."
Citing Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) -- which involved Monsanto's submission of trade secret data to the EPA in support of its application to register a pesticide -- Abbott argues that:
[W]hen an applicant submits trade secret data as part of a license application, at a time when the government has provided assurances through law, regulation, and/or agency guidance that the data will not be used by the agency to benefit a competitor of that applicant, later "consider[ation of] those data [by the agency] in evaluating the application of a subsequent applicant" would frustrate the applicant's "reasonable investment-backed expectation" that the data would, instead, remain inviolate.
Abbott notes that in Monsanto, the Supreme Court "first acknowledged that trade secrets are property protected by the Fifth Amendment's prohibition on taking private property for public use without just compensation," and determined that Monsanto had a reasonable, investment-backed expectation that the EPA would not use data submitted to it between 1972 and 1978 (when the statutory scheme prohibited the EPA from publicly disclosing an applicant's trade secret data) for the benefit of a competitor.
Abbott contends that "approving biosimilars of pre-enactment reference products would take the trade secret property of an identifiable class (i.e., pre-enactment reference product sponsors) and impose a very large financial liability on the United States," adding that "retrospective application of the BPCIA would call the statute's constitutionality into question." Abbott suggests that the FDA should therefore "apply the BPCIA prospectively only." The Petition concludes by requesting that the FDA "interpret the BPCIA as applying only to post-enactment reference products, thereby avoiding both significant constitutional questions and significant governmental liability."