Abbott Petitions FDA on Biosimilars; Argues Fifth Amendment Takings Clause
Posted: 17 May 2012 09:30 PM PDT
By Michelle L. Butler –
Abbott Laboratories (“Abbott”) recently submitted a citizen petition to FDA regarding biosimilars under the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”). Specifically, the citizen petition requests that FDA not accept for filing, file, approve, or discuss with any company any application or any investigational new drug application (“IND”) for any biosimilar that cites as its reference product any product for which the biologics license application (“BLA”) was submitted to FDA prior to the date on which the BPCIA was enacted. The citizen petition focuses on Abbott’s approved BLA for Humira® (adalimumab), but it requests the same treatment for all BLAs submitted to FDA prior to the March 23, 2010 enactment date of the BPCIA as part of the Affordable Care Act.
The grounds for the citizen petition are that approving a biosimilar that relies on a reference product approved under a BLA pursuant to section 351(a) of the Public Health Service Act (“PHS Act”) would constitute a taking under the Fifth Amendment to the U.S. Constitution that requires just compensation. The citizen petition argues that the Constitutional issue raised is timely and urgent given the fact FDA has already received numerous requests for pre-IND meetings for proposed biosimilar products. Petition at 7.
Abbott’s argument in the citizen petition is as follows:
The information contained in a BLA is trade secret information under both federal and state law.
Abbott has invested significant resources in developing Humira and obtaining approval of the Humira BLA and has taken care to protect the trade secret information contained in the Humira BLA.
Until the passage of the BPCIA, the PHS Act and FDA’s implementing regulations, as well as repeated statements by FDA and FDA’s practice, made it clear that information contained in a BLA could not be used for the benefit of competitors and that FDA lacked authority to approve a follow-on product that relied on an approved BLA.
Given the considerable investment Abbott made in its BLA and the statutory scheme as implemented by FDA, Abbott has a reasonable, investment-backed expectation that its trade secret information would be protected.
By its nature, the abbreviated pathway for approval of a biosimilar would use the trade secret information contained in a BLA. This is the case despite FDA’s statements in the 505(b)(2) context that it relies on the “findings” of safety and effectiveness and does not directly use the trade secret information.
Use of the information in the Humira BLA to approve a biosimilar would upset Abbott’s reasonable, investment-backed expectation and therefore effect a taking.
A taking without just compensation violates the Fifth Amendment.
FDA should not interpret the statute in a way that would result in the imposition of large liabilities on the United States and should therefore apply the BPCIA prospectively only.
The citizen petition discusses in some detail the jurisprudence under the takings clause of the Fifth Amendment, describing Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984), as holding that “when 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.” Petition at 11 (quoting Monsanto, 467 U.S. at 1011). The citizen petition further states that “[t]he principles set out in Monsanto establish that FDA would take property, and the government would be required to pay just compensation, were FDA to use trade secrets, submitted in a reference product BLA before the BPCIA’s enactment, in the course of evaluating and approving a biosimilar application.” Petition at 12. In order to avoid the Constitutional issue, FDA should grant the relief requested by Abbott and not accept for filing, file, approve, discuss, or otherwise take any action with regard to any IND or BLA for a product for which the reference product BLA was submitted prior to March 23, 2010.
One thing the citizen petition does not address is whether the statutory scheme provided in the BPCIA, including 12-year exclusivity for reference products, provides the requisite just compensation to keep the bargain from running afoul of the takings clause. Interestingly, the citizen petition incorporates arguments raised by Constitutional law scholar Richard A. Epstein in a paper published last year. Abbott supported Mr. Epstein's research on the project.<<<
For Epstein paper, see:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1927940
From the FDA law blog