Industry Voices: Biosimilars and trade secrets


By D'vorah Graeser, Graeser Associates International (GAI)

Trade secrets are an important form of intellectual property, although they are very different from other types of intellectual property. Trade secrets are commercially valuable information that a company protects through secrecy. The classic example is the Coca-Cola formulation. Unlike patents and trademarks (other forms of intellectual property), trade secrets are not a registerable right, meaning that there is no "trade secret application" at a government office. Instead, trade secrets are protected through an internal process by a company that keeps them secret. However, trade secrets can be very important for giving a company a commercial "edge"--for example through a proprietary manufacturing process.

Trade secrets may potentially be used to protect manufacturing processes for biological drugs--yet there is concern that the new law on biosimilars, the BPCIA (Biologics Price Competition and Innovation Act of 2009), and the accompanying FDA regulations, may expose trade secrets of both originators and biosimilar applicants. Manufacturing processes for biologics include many aspects that could be kept as trade secrets, including precise cell growth conditions, analytical processes, purification process and even characteristics of the cells that produce the drug. Clearly, details of these processes are highly important commercial information that gives the company that owns them a clear advantage.

The FDA is literally stuck between a rock and a hard place regarding trade secrets and biosimilars. On the one hand, the BPCIA requires the FDA to review biosimilar applications for production of these highly complex biological drugs, but on the other hand, the FDA would appear to be enjoined from using the originator's trade secrets in doing so (actually, as described later on in this section, there are court decisions that would apparently support the ability of the FDA to use such trade secrets when evaluating biosimilar applications). The process by which the FDA characterizes a biological drug is also problematic with regard to the trade secrets of the originator, since the FDA at least partially determines these characteristics according to the process used by the manufacturer. Indeed, even apparently minor changes in the manufacturing process must be cleared by the FDA before that new process can be used to produce a biological drug for sale and administration to a patient.

This problem is actually quite extraordinary, as no other product is regulated so extensively according to the process used to manufacture it, nor is any other product so strongly tied to its specific manufacturing process. Unfortunately, this problem is at the heart of the trade secret dispute between the originator manufacturers and the FDA, and is likely to feature in many court cases.

How could such trade secrets be divulged through the biosimilar application process? There are a number of potential routes. First, the BLA action package (containing key documents from approval of the originator drug) is public--but the FDA intimated that other information about the originator drug could also be made public. The FDA has stated that additional details of the originator's application (potentially including the manufacturing process) could be released under a FOIA (Freedom of Information Act) request. The FDA provided no specific details of what could be released under such a request, or under what circumstances it could be released.

Second, there is concern about inadvertent disclosure by FDA reviewers during the review process to a biosimilar applicant. Indeed, at least the use of trade secrets relating to the originator biological drug would appear to be necessary for the biosimilar application to be adequately reviewed (for more information, see our detailed report on trade secrets and biosimilars ( Third, biosimilar applicants must give a copy of their biosimilar application to the originator within 20 days of notification of acceptance by the FDA--again, potentially revealing trade secrets of the biosimilar applicant.

Fourth, biosimilar applicants are required to explain either why they do not infringe patents of the originator or alternatively why the patents are invalid; in order to explain non-infringement of manufacturing process patents, biosimilar applicants might need to reveal their own trade secrets.

Clearly the FDA biosimilar application and review process is very new and is developing rapidly. Only time will tell as to whether this process ultimately protects--or exposes--the trade secrets of the commercial participants in this process, the originators and the biosimilar manufacturers.

D'vorah Graeser is the founder and CEO of Graeser Associates International (GAI), an international health care intellectual property firm. Graeser has been a U.S. patent agent for more than 15 years and has extensive experience in the biomedical field. Follow Graeser on Twitter: @DGraeser. Follow Graeser's biosimilar communications on Twitter: @biosimilarsGAI. Email Graeser at