FDA Licenses First HUMIRA Biosimilar; Denies AbbVie Petition on Fifth Amendment Takings

September 26, 2016

By Kurt R. Karst –       

Last Friday, FDA announced that the Agency licensed the fourth biosimilar biological product under the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”): Amgen, Inc.’s (“Amgen’s”) AMJEVITA (adalimumab-atto) (BLA 761024), a biosimilar version of AbbVie Inc.’s (“AbbVie’s”) (BLA 125057) blockbuster product HUMIRA (adalimumab). The licensure follows PHS Act Section 351(k) licensures for ERELZI (etanercept-szzs) (BLA 761042; licensed on August 30, 2016), INFLECTRA (infliximab-dyyb) (BLA 125544; licensed on April 5, 2016), and ZARXIO (filgrastim-sndz) (BLA 125553; licensed on March 6, 2015).  Amgen and AbbVie are still embroiled in patent infringement litigation under the BPCIA’s so-called “patent dance” procedures (which our friends over at the Big Molecule Watch Blog have been closely following), so it’s not entirely clear when AMJEVITA will be commercially available.  But another litigation front may now open that holds the potential to delay AMJEVITA, and possibly wipe away the biosimilar licensure.

At the same time FDA licensed AMJEVITA, the Agency formally denied a Citizen Petition (FDA-2012-P-0317) AbbVie (formerly Abbott Laboratories) submitted to the Agency in April 2012.  As we previously reported,  AbbVie’s petition requests that FDA not accept for filing, file, approve, or discuss with any company any application or any IND for any biosimilar that cites as its reference product any product for which the BLA was submitted to FDA prior to the March 23, 2010 date of enactment of the BPCIA.  Although the petition focuses on HUMIRA, it requests the same treatment for all BLAs submitted to FDA prior to March 23, 2010.  According to Abbvie, licensing a biosimilar that relies on a reference product licensed under a BLA pursuant to section PHS Act § 351(a) would constitute a taking under the Fifth Amendment to the U.S. Constitution that requires just compensation.  After all, didn’t those reference product sponsors reasonably expect, on the basis of applicable law and FDA statements in the pre-BPCIA era, that the trade secrets and confidential commercial information contained in their BLAs would not be used to benefit a competitor through the licensure of another company’s biosimilar application?

Given all of the FDA activity over the past few years around biosimilar versions of pre-BPCIA reference products, FDA had effectively denied AbbVie’s petition; but a formal FDA response remained pending. FDA’s 22-page petition denial addresses in detail each of the arguments raised by AbbVie.  According to FDA, AbbVie lacks a protected property interest in information available to the public.  “The Fifth Amendment does not protect information that Abbott describes as trade secrets but that was available for public disclosure under FDA’s information disclosure regulations after the Agency approved the Humira BLA in 2002,” writes FDA.  “Such publicly available information cannot satisfy the second element under the [Uniform Trade Secrets Act (‘UTSA’)] definition of a trade secret, i.e., that the information ‘is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.’”

And even assuming that a property interest could be identified, FDA concludes that AbbVie fails to identify a use of the company’s information by FDA that would give rise to a taking:

We note that Abbott does not base its takings argument upon any direct use by FDA of any particular trade secret in Abbott’s BLA or approval of a biosimilar application. Specifically, Abbott has not identified any particular trade secret that has been “used” but instead argues that all ofthe trade secrets in the reference product’s BLA are used when a biosimilar is approved. . . .

FDA disagrees with Abbott’s contention that the Agency’s reliance on FDA’s prior finding that the reference product is safe, pure, and potent constitutes a “use” of Abbott’s information that could give rise to a taking. Abbott has no protected property interest in FDA’s finding regarding the safety, purity, and potency of the reference product.  The BPCI Act requires biosimilar applications to include “publicly-available information regarding [FDA’s] previous determination that the reference product is safe, pure, and potent.”  There is no property interest, including any interest that Abbott could assert, in publicly available information about FDA’s prior determination regarding the reference product.  Where there is no property interest, there cannot be a taking. [(Emphasis in original)]

Going one step further, FDA says that “even if Abbott were to identify both (1) property that is eligible for Fifth Amendment protection and (2) a use of that property by FDA when FDA approved a biosimilar product,” the three factors laid out by the U.S. Supreme Court in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978) (here), “demonstrate that FDA’s approval of a biosimilar product that references a BLA approved before the enactment of the BPCI Act does not give rise to a regulatory taking.” Those three Penn Central factors – and the first of which the Supreme Court held to be decisive in rejecting an alleged taking of a trade secret – are: (1) “the extent to which the regulation has interfered with distinct investment-backed expectations,” (2) “the economic impact of the regulation on Abbott,” and (3) “the character of the governmental action.”

As to the first Penn Central factor, FDA says that Abbvie failed to establish that when the company submitted its BLA to FDA in 2002 for HUMIRA that the company had a reasonable investment-backed expectation “that the trade secrets in that application would not be used by [FDA] in any manner to support approval of another company’s product or disclosed to other applicants to guide their research efforts.”  Abbvie’s 2012 petition discussed in some detail the jurisprudence under the takings clause of the Fifth Amendment, describing Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) (here), 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). 

FDA addresses AbbVie’s arguments head-on:

  • First, Monsanto holds that statutory silence cannot support a reasonable investment-backed expectation, so the absence of statutory language expressly authorizing a proposed biosimilar product to reference a previously licensed BLA at the time the Abbott BLA was submitted does not provide the foundation for the expectation that Abbott claims. . . .
  • Second, FDA’s disclosure regulation, promulgated in 1974, could not support a reasonable investment-backed expectation because that regulation is silent with respect to any use of data by FDA and makes the analytical, preclinical, and clinical data in a BLA available for public disclosure upon the approval of the BLA. . . .
  • Third, Abbott claims that it relied upon statements by FDA officials that the Agency lacked authority to approve a biosimilar product prior to the enactment of the BPCI Act. None of those statements, however, suggests that FDA never would have such authority. Nor does Abbott cite any legal support for the claim that such Agency statements amount to “an explicit governmental guarantee [that] formed the basis of a reasonable investment-backed expectation.” 

Will AbbVie take FDA to the mat and challenge in court the Agency’s petition denial and AMJEVITA licensure? We’re waiting on the edge of our seats to find out.