In this video interview, Sean Tu, PhD, JD, a professor of law at West Virginia University in Morgantown, discusses his recent paper in JAMA outlining the intersection of trade secret law and patent law for biologics. Tu explains how pharmaceutical companies are using both methods to keep biosimilars off the market.
The following is a transcript of his remarks:
First of all, let me tell you what’s at stake. Biologics are a huge portion of our drug spend — $260 billion in 2021. They represent less than 5% of drug prescriptions, but they cost 46% of the drug spend. So, a huge amount of what we’re spending is on these biologics.
The strategy that I’m talking about with ancillary product patents is really life-cycle management. This is called “evergreening.” So what is evergreening? It’s a way that you can use the patent system to delay or deter biosimilar market entry.
The way you do that is you file patent one, which has a 20-year expiration date, and then 5 years later, you file another patent and get another 20 years, and that extends it by 5 years, right? And then 5 years later, you file another one, and then you get 5 more years, and you do this again and again and again.
I can’t get a generic or biosimilar onto the market because before I can get a biosimilar on the market, I need to make sure that I don’t infringe on any patent that the brand manufacturer has. So, evergreening is the strategy by which you kind of — it’s called evergreening because you breathe new life into the patents that you had before, and they never expire.
So let me explain the framework a little bit of FDA approval and market exclusivity. Biologics are given 12 years of market exclusivity. That is, the FDA says, “Hey, we understand that it takes a long time and a lot of money to create these new biologics that have really lifesaving or life-altering effects on patients who are affected by these diseases. We’re going to give you 12 years where no one else is going to get approved. But in return for that, when a biosimilar comes onto market, they can use your clinical trials to show that their biosimilar is similar enough in potency and purity to rely on these clinical trials to show that it works, it’s safe, and it’s effective.”
What are these ancillary features? Ancillary features are post-translational modifications of these biologic products. Things like cosylation, where I have an antibody, and then because these things are made in living organisms, things are added on like fatty acids or lysines.
What’s interesting is, I have to have a similar pattern of these post-translational modifications or else I can’t get approval for my [biosimilar] drug, right? It’s called a “window” that I have to meet.
For example, Humira [adalimumab] has a certain acidity profile, and if I’m going to make a biosimilar, I have to be within that window. What’s interesting is that the window is not disclosed. Why? Because the brand company keeps it secret. So what’s really kind of silly is the biosimilar has to make its product and then hand it to the FDA and the FDA looks at the disclosure from the brand firm and says, “Is it close enough? Is it within this window?” If it is, you’re good to go. You can make your biosimilar. If it’s not, you have to go back to the drawing board and make another biosimilar that’s in this window.
But I just told you that you get 12 years of market exclusivity to rely on clinical data, but I can’t rely on your clinical data if my product is not similar enough. So all of that clinical data that I’m giving you 12 years of market exclusivity for is worthless, because my product is not the same.
So, I don’t think that these things should be protected by trade secret. Why? Because I’ve already given you 12 years of exclusivity so that other companies can rely on your data to make a product that’s similar enough.
To add insult to injury, what are these guys doing? They’re patenting these ancillary features more than 15 to 18 years later. I told you about the evergreening strategy. The median time is an extra 10.4 years of exclusivity that I’m adding. How are they doing that? They say, “Hey, this is all trade secret. It was never disclosed. I’m getting a patent now and adding 10 years of life onto this patent.”
And these are really powerful patents. Why? They’re not secondary patents. They’re not follow-on technology. It’s not a new method of treatment. It’s not changing from a capsule to a tablet. It’s the actual product. These are primary patents, which means that if I’m trying to make a product, I have to have the same glycosylation pattern or [be] within a window. If you have the product with the window covered [by patent], I can’t make that product.
That is what we’re really showing here, that this is a kind of a new thing that people are doing. First, holding this as trade secret. How do I know that? I tried to FOIA [Freedom of Information Act] this information from the FDA, and they were unwilling to give the information because they said it was trade secret. I said, “Who says it’s trade secret?” And they said, “The brand firm is holding this as trade secret.”
I feel for the FDA, because they do get sued by the brand manufacturers for releasing trade secrets. So I think Congress needs to step in here and say, “Hey, if you’re in this regulated industry and we’re giving you guys 12 years of market exclusivity, you can’t protect this via trade secret. That’s part of the deal when we give you the 12 years of market protection, you can’t use trade secrets.” You can’t have your cake and eat it too, right?
The whole idea behind these two very different IP structures — patents on one end, which has a disclosure function. I give you 20 years of exclusivity on your patent, you give me the ability to make and use your product. Trade secret is, you keep it secret, nobody else can use it as long as you keep it secret. But you have to choose.
You can’t go trade secret and then see your competitor saying that they’re going to reverse engineer your trade secret, so you better go patent it. You can’t do that. There are patent doctrines that stop you from doing that.
What are some solutions? If the PTO [U.S. Patent and Trademark Office] and FDA talk to each other, [FDA] would have to disclose this information to the PTO. The PTO is very public about what they find, because all of that is a public discourse. You wouldn’t be able to get a patent later on if, as part of the disclosure, you have to disclose all of the ancillary features that come with this patent.