FDA

Could Proposed Bills to Lower Pharmaceutical Drug Pricing Influence Trade Secrecy over Patent Intellectual Property Protection?

By Renee Sanchez

At the beginning of 2023, Americans saw price hikes from big pharmaceutical companies (collective known as “big pharma”), around the same time new legislation was also proposed in the Senate seeking to lower pharmaceutical drug prices by targeting anticompetitive patent strategies and antitrust abuses.[1] Two out of five of these bills could possibly influence big pharma patent strategy. First, S.79, the Interagency Patent Coordination and Improvement Act of 2023, which aims at improving communication and coordination between the U.S. Patent and Trademark Office (USPTO) and the U.S. Food and Drug Administration (FDA). Second, S.150, The Affordable Prescriptions for Patients Actwhich aims at restricting anticompetitive “product hopping.”[2]

Basics of “Product Hopping”

“Product hopping” is when a company makes minimal changes to their product without any substantial benefits compared the original. They may take the original product of the market completely, known as “hard switches,” or make a “soft switch,” keeping the drug on the market until a generic is released and physicians and patients can decide whether or not the benefits of the new formulation is significant enough to switch prescriptions.[3] Often, companies will make a hard switch just as their patent is about to expire preventing others from creating generics or biosimilar products.[4]

Courts have historically enforced some cases of hard switches but have failed to recognize antitrust or anticompetitive behaviors in soft switches.[5] It has been suggested that the best way to address product hopping is through legislation – S.150 proposes how to identify and address both hard switches and soft switches nearly identical to legislation was also proposed in 2021, S.1435, Affordable Prescriptions for Patients Act of 2021.[6]

Patents Traditionally Used for Pharmaceuticals

Patents are traditionally used in the biomedical industry to encourage innovation and disclosure. Pharmaceuticals are commonly protected best by patents due to the possibility of reverse engineering pharmaceutical compounds.[7] Additionally, the disclosures required throughout the commercialization process often reveal protected information.[8] Trade secrets can, however, be used safely for other information such as ‘know-how’ and manufacturing information not revealed in the patent.[9]

Patents offer a sort of “quid pro quo” where the company specifies and discloses their technology and if all requirements of a patent are met, they are awarded a monopoly on that patent for about 20 years.[10] After that point in time, the patent is dedicated to the public and can be used by anyone.[11] To get around the loss of monopoly over a company’s pharmaceutical invention, they may perform anticompetitive behavior such as “product hopping.”

Consequences of Using Trade Secret Strategy

A company seeking to abuse antitrust laws and ‘product hop’ may also find other ways to monopolize their inventions, such as through trade secrecy. Although trade secrecy has an appropriate place to benefit the biomedical industry, critics suggest that their use can limit access to quality and affordable medications.[12] Conversely, maintaining trade secrets has allowed scientists from research universities and industry corporations to collaborate.[13]

Although there may be some benefits to using trade secrecy for a pharmaceutical compound, the risks may far outweigh those benefits. The following are a few examples weighing these benefits and risks:

  • If an original medication or ‘reference product’ is protected by a trade secret rather than a patent, a company developing a generic may be able to reverse engineer the product and provide a less expensive medication to the public. On the other hand, this puts original company’s trade secret at risk of independent invention.
  • If the pharmaceutical product is difficult to reverse engineer, the original pharmaceutical company may be able to maintain their trade secret for an indeterminate amount of time, thus stifling innovation and monopolizing the market for that drug.
  • However, the original inventor could license the chemical formula protected by trade secret to a company manufacturing a generic, earning royalties or some other type of financial compensation, while providing the market with a low-cost alternative. This option would promote competition meanwhile earning the original inventor or manufacturer additional financial incentives and protecting their trade secret from misappropriation.

There is a fine balance that pharmaceutical companies as well as legislators need to consider between the bottom-line financial benefits, reducing monopolies, benefiting the public, and protecting intellectual property. It is likely, that despite the implications on patents that the current proposed legislation may entail, pharmaceutical companies will likely continue to utilize patents over trade secrets to protect their pharmaceutical compounds.

[1] Id.; S. 79, 118th Cong. (2023); S. 150, 118th Cong. (2023); S. 113, 118th Cong. (2023); S. 142 118th Cong. (2023); S. 148, 118th Cong. (2023); Jeff Overley, HHS Memos, 5 Senate Bills Target Drug Prices And Tactics, Law360 (Feb. 9, 2023, 10:53 PM EST), https://www.law360.com/articles/1573737.

[2] Overley, supra note 2.

[3] Michael A. Carrier, A Simple Solution to the Problem of “Product Hopping,” Harv. Health Pol’y Rev. (Dec. 23, 2021) https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4000867.

[4] Id.

[5] Id. at 1-2.

[6] Id.; S. 150, 118th Cong. (2023).

[7] William Dean, Can you keep a trade secret? Understanding pharmaceutical IP, Barker Brettell Intellectual Property (May 19, 2022). Powder River Basin Res. Council v. Wyo. Oil & Gas Conservation Comm’n, 320 P.3d 222, 227 (Wyo. 2014) (referring to deformulation of chemical compounds).

[8] Dean, supra note 8.

[9] Id.

[10] Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F3d 1336, 1345 (Fed. Cir. 2010).

[11] Choosing Between Trade Secret and Patent Protection: A Primer for Businesses, Law.com (May 12, 2022) https://plus.lexis.com/api/permalink/78c7f494-3b24-43d0-acba-1dc59d4a6592/?context=1530671.

[12] Allison Durkin, et al., Addressing the Risks That Trade Secret Protections Post for Health and Rights, Health Hum. Rts. (Jun. 2021), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8233014/ .

[13] Mark F. Schultz, Trade Secrecy and COVID-19, Geneva Network (October 5, 2022), https://geneva-network.com/research/trade-secrecy-and-covid-19/.

Artificial Intelligence in the Biological System: Is Invasive Medical Intervention Modern Evolution?

By Anna Elizabeth Melo

With every medical technological innovation there is the anticipation of life changing opportunities and societal advancement as well as the fear of unintended risks and consequences. These considerations are ever-present with the concept of implanting a brain-computer interface directly on the cortex of the human brain, with potential uses that span far beyond medical necessity. This device is what Neuralink set out to create in 2016.[1]

The company, headed by Elon Musk, proposed that its product would eventually restore vision (including congenital blindness), would enable individuals with spinal cord injuries or motor issues to regain mobility and speech, and would reduce or even halt the progression of Alzheimer’s disease and dementia.[2] The procedure itself entails a neurosurgical placement of a device mimicking the capabilities of the axon and dendrite in a neuron (transmitting and processing neural signals).[3] Micron-scale threads replete with electrodes attach to the device, permeate the brain, and connect the device with the targeted region of the brain for ascertaining neuronal communications.[4]A robotic surgical placement device has been specially designed for placement of these threads and possesses the ability to detect target regions of the brain while avoiding placement in surface vasculature.[5]The device requires a charger that is capable of wirelessly charging the battery from outside of the body.[6]

While there have been experiments done by the company on animal subjects, including highly publicized demonstrations of a macaque capable of playing digitized Pong with its brain alone, the Federal Drug Administration (FDA) has not yet cleared the technology for human trials.[7]Musk has stated that he is confident that the first Neuralink implant will be placed into a human brain within the next six months, where the results of its efficacy on various conditions may be seen in 2023.[8]

While the idea of implanting a communicative brain-computer interface appears futuristic, it is already being done. A competitor to Neuralink, Synchron, was able to secure FDA approval for human trials first in this area in the United States in July of 2021.[9]While there are restorative brain function promises of both Synchron and Neuralink’s technology, the controversy surrounding Neuralink surpasses these possibilities in the areas of neuroscience and neurosurgery. This is the result of Musk’s proposal to eventually implant brain chips in individuals without any medical need resulting in a transhumanistic symbiosis between man and machine.[10]

Beyond the medical and scientific concerns for the longevity of this technology upon implantation, the possibility of removal post- neurosurgical placement and its adaptability to brain plasticity, there are numerous legal and ethical concerns in adopting Neuralink for elective use.  Human autonomy is at the forefront of this disquietude. Personhood emanates from complex cognitive function in the prefrontal cortex in consideration of somatosensory and visual inputs. When a private, for-profit company is capable of remotely controlling regions of the brain that regulate thought, vision, movement and emotion, there arises a question of who possesses agency over the individual. Arguably, if the individual is unable to remove the device, modify its settings, or override the machine, artificial intelligence precedes its human host.

Notwithstanding the numerous constitutional implications that may be invoked as a result of this technology, defenses to criminal liability for a person with a brain chip should also be assessed. If someone were charged with a crime that required a particular mental state, could incapacity, such as brain chip override or malfunction, resulting from this procedure negate an intentional or even negligent action? In the civil context, could a contract be rescinded due to coercion, undue influence, or incapacity as a result of this device? Could injured plaintiffs or vicariously liable parties on behalf of a defendant’s actions seek indemnification on the part of Neuralink? What about a wrongful death lawsuit against Neuralink if a party committed suicide after implantation?

These probing inquiries are just the beginning of the legal, regulatory, constitutional, psychological, and moral questions that will be raised in the coming months and years. It is doubtful that current legal, medical, and technological infrastructure will be able to address these issues at this time. We are left with the question: is this the next step in human evolution and the key to unlocking dormant regions of brain, or the emergence of mind control from private companies? Only time will tell.

[1] Approach, NEURALINK (2022), https://neuralink.com/approach/.

[2] Id.

[3] Id.

[4] Id.

[5] Elon Musk & Neuralink, An Integrated Brain-Machine Platform with Thousands of Channels, PubMed Central (Oct. 31, 2019), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6914248/.

[6] Supra note 1.

[7] Darrell Etherington, Watch a monkey equipped with Elon Musk’s Neuralink device play Pong with its brain, techcrunch (Apr. 8, 2021, 9:31 PM), https://techcrunch.com/2021/04/08/watch-a-monkey-equipped-with-elon-musks-neuralink-device-play-pong-with-its-brain/.

[8] Rebecca Falconer, Elon Musk highlights monkey “telepathic typing” at Neuralink event, axios (Dec. 1, 2022), https://www.axios.com/2022/12/01/elon-musk-neuralink-brain-chip-event.

[9] Jon Fingas, Synchron says it’s the first to implant a human brain-computer interface in the US, endgadget (July 19, 2022), https://www.engadget.com/first-brain-computer-interface-implant-in-us-163756888.html.

[10] Kenny L., What is Neuralink: A Look At What It Is, What it Wants to Be, and What it Could Become, medium (July 18, 2019), https://towardsdatascience.com/what-is-neuralink-a-look-at-what-it-is-what-it-wants-to-be-and-what-it-could-become-2acf32b51dc5.

December FDA Update – Jardiance May Reduce Risk of Cardiovascular Death

William Salage

The U.S. Food and Drug Administration [FDA] today approved a new indication for Jardiance (empagliflozin) to reduce the risk of cardiovascular death in adult patients with type 2 diabetes mellitus and cardiovascular disease. Jardiance is marketed by Boehringer Ingelheim and Eli Lilly and Company. Risk of cardiovascular death is 70 percent higher in adults with diabetes compared to those without, per the Centers for Disease Control and Prevention. It is also the leading cause of death among adults with type 2 diabetes.

Jardiance had already been approved in 2014 for lowering blood sugar in adults with type 2 diabetes, but the FDA said that the drug was also “shown to reduce the risk of cardiovascular death.” Therefore, Jardiance was immediately put into a new clinical trial to prove its effectiveness for cardiovascular disease.

The approval is based on breakthrough evidence from the landmark EMPA-REG OUTCOME trial, which investigated the effects of Jardiance compared with placebo when added to standard of care type 2 diabetes and cardiovascular medicines in adults with type 2 diabetes and established cardiovascular disease. In the trial, Jardiance significantly reduced the risk of the combined primary endpoint of cardiovascular death, non-fatal heart attack or non-fatal stroke by 14 percent versus placebo; absolute risk reduction was 1.6 percent for Jardiance versus placebo. This primary finding was driven by a significant 38 percent reduction in the risk of cardiovascular death; absolute risk reduction was 2.2 percent for patients taking Jardiance versus placebo. There was no change in the risk of non-fatal heart attack or non-fatal stroke. The cardiovascular benefits of Jardiance were consistent among patient subgroups.

November FDA Update – Development of Zika Virus Pathology Model

William Salage

Scientists at FDA have developed a neonatal mouse model that provides a platform for potentially improving studies to understand the pathology of the Zika virus. The model was published in PLoS Pathogens, is the description of a neonatal mouse model that provides a platform for potentially improving and expediting studies to understand the causes and effects (pathology) of the Zika virus.

This medical advancement is sorely needed in the fight against Zika. The recent spread of the Zika virus and its association with increased rates of neurological disorders and complex congenital syndromes, such as microcephaly in babies and Guillain-Barré Syndrome in adults, has created an urgent need for animal models to examine the virus’ pathology. Better understanding the impact and long-term effects of the Zika virus infection in mice may be useful in efforts to find ways to combat it in a human population. While past research indicated that only mice with compromised immune systems are susceptible to Zika virus infection, this study shows that neonatal mice with otherwise healthy immune systems are also susceptible.

The new model, described in PLoS Pathogens, uses the C57BL/6 mouse strain. Neonatal mice of this strain are susceptible to the Zika virus, per FDA researchers, and the mice develop neurological symptoms 12 days after infection.

Most encouraging however, the FDA agency is also working on ways to respond to the Zika virus outbreak including protecting the US supply of blood, human cells, tissues, and tissue-based products. FDA is accomplishing this goal by incenting and prioritizing the “development of diagnostic tests to help clinicians detect and diagnose Zika virus infection, and evaluating the safety and efficacy of any investigational vaccines and therapeutics that are currently in various stages of early development.”

November FDA Update – Approval of St. Jude’s Amplatzer PFO Occuder Device

William Salage

On October 28, 2016, the Food and Drug Administration approved St. Jude Medical Inc.’s Amplatzer PFO Occluder device. The PFO Occluder is a tool designed for patients who have previously experienced a stroke because of a blood clot passing through a small hole in the heart called the patent foramen ovale, or PFO. The device provides a non-surgical method for doctors to close a PFO. PFOs are found in approximately 25 to 30 percent of Americans, and normally do not cause any health problems. However, for stroke patients, PFOs present a problem. For some stroke patients, the PFO can become a pathway for a blood clot to travel to the brain and block a blood vessel, causing another stroke.

The Amplatzer PFO Occluder is inserted through a catheter that is placed in a leg vein and advanced to the heart where it is then implanted close to the hole in the heart between the top right chamber (right atrium) and the top left chamber (left atrium).

The device had been on the market more than a decade ago under a humanitarian device exemption (HDE). The HDE is a device that is intended to benefit patients by treating or diagnosing a disease or condition that affects or is manifested in fewer than 4,000 individuals in the United States per year. A device manufacturer`s research and development costs could exceed its market returns for diseases or conditions affecting small patient populations. The HUD provision of the regulation provides an incentive for the development of devices for use in the treatment or diagnosis of diseases affecting these populations. However, the HDE designation for the Amplatzer PFO Occluder device was voluntarily withdrawn by the manufacturer in 2006 because the target population for the device was greater than 4,000 patients.

By approving the Amplatzer PFO Occluder device, the FDA concluded that the device demonstrated a reasonable assurance of safety and effectiveness through randomized clinical studies. However, adverse effects associated with the device or the implantation procedure include injury to the heart, irregular and/or rapid heart rate (atrial fibrillation), blood clots in the heart, leg or lung, bleeding and stroke.

October FDA Update – Approval of Cancer Drug, Lartruvo

William Salage

On October 19, 2016, the US Food and Drug Administration (FDA) approved a new drug, Lartruvo (olaratumab), to treat adults with certain soft tissue sarcomas (STS). Specifically, cancers that develop in muscles, fat, tendons or other soft tissues. Lartruvo is approved alongside the already approved drug doxorubicin for the treatment of patients with STS who cannot be cured with radiation or surgery and who have a type of STS for which an anthracycline (chemotherapy) is an appropriate treatment.

Lartruvo’s approval marks the first time the FDA has approved an initial treatment of STS in over 40 years. The National Cancer Institute estimates that 12,310 new cases of STS and nearly 5,000 deaths are likely to occur from the disease in 2016. The most common treatment for STS that cannot be removed by surgery is treatment with doxorubicin alone or with other drugs. STS includes a wide variety of tumors arising in the muscle, fat, blood vessels, nerves, tendons or the lining of the joints.

The FDA is approving Lartruvo under the agency’s accelerated approval program, which allows approval of a drug to treat a serious or life-threatening disease or condition based on clinical data showing the drug influences a surrogate endpoint that is reasonably likely to predict clinical benefit. Lartruvo also received orphan drug designation, which provides incentives such as tax credits, user fee waivers and eligibility for exclusivity to assist and encourage the development of drugs intended to treat rare diseases

FDA Finds Consumer Antiseptic Products are Not Generally Recognized as Safe and Effective

William Salage

On September 2, 2016 the U.S. Food and Drug Administration (FDA) issued a final ruling that 19 ingredients (most importantly triclosan and triclocarban)  in over-the-counter (OTC) consumer antiseptic wash products are not Generally Recognized as Safe and Effective (GRAS/GRAE). This final rule follows the FDA’s commitment to review all OTC products marketed in the U.S. on or before May 1972.

The ruling comes after a proposed rule in 2013 requiring the manufactures of these products to demonstrate both their long term daily use safety and more effective than generic soap through clinical studies pursuant to their review of their GRAS/GRAE status. The manufacturers either failed to clinically demonstrate the safety and effectiveness of their products or did not submit any data at all. The manufacturers now have one year to remove their products containing the newly banned ingredients.

However, the FDA did defer rulemaking on three other ingredients: benzalkonium chloride, benzethonium chloride, and chloroxylenol. Accordingly, this final rulemaking does not apply to these three products. The FDA made this decision in order to allow manufacturers additional time to conduct clinical trials and submit proper data.

October FDA Update – Approval of Medtronic’s New Insulin Delivery System

William Salage

On September 28, 2016 the U.S. Food and Drug Administration (FDA) approved Medtronic’s new insulin delivery system for people with Type 1 diabetes, the MiniMed 670G hybrid closed looped system (MiniMed 670G). The MiniMed 670G consists of two major parts: (1) an insulin pump, and (2) a continuous glucose monitor. These two components were already approved by the FDA separately and are already on the market. The MiniMed 670G however combines these two components together with a new part, a program which communicates between the two devices. The MiniMed 670G is therefore the first device to automatically monitor glucose (sugar) and provide appropriate basal insulin doses in people 14 years of age and older with type 1 diabetes. Specifically, the MiniMed 670G predicts when a person’s blood sugar is dropping and prevents the low in the first place, and also corrects high blood sugars. However, users still need to manually request insulin doses to counter carbohydrate (meal) consumption

The implication of Medtronic’s new system is enormous for those with Type 1 diabetes. The new capabilities mean they can both sleep through the night without worrying about their blood sugars dropping too low and can go through their day without having to think about their diabetes all the time, according to Aaron Kowalski, chief mission officer for the JDRF, the organization that funds much of the “artificial pancreas” research.

September FDA Update – Action Following New Regulations on Tobacco Products

William Salage

On September 15, 2016 the U.S. Food and Drug Administration [FDA] issued its first warning letter to a group of businesses and vendors for selling newly regulated tobacco products. The products specifically include e-cigarettes, e-liquids and cigars, being sold to minors.

This action comes following the FDA’s final rulemaking in May 2016 which extended its authority to all tobacco products including e-cigarettes, cigars, hookah tobacco and pipe tobacco, among others. Before finalizing the May 2016 rule, there was no federal law prohibiting retailers from selling e-cigarettes, hookah tobacco or cigars to people under age 18. Specifically, the new regulations restrict the sale of tobacco products by: (1) not allowing products to be sold, both in person or online, to persons under the age of 18; (2) requiring age verification by photo ID for all customers under age 27; (3) prohibiting the sale of covered tobacco in vending machines; and (4) prohibiting the distribution of free samples.

Data from the FDA and the Centers for Disease Control and Prevention show current e-cigarette use among high school students increased by more than 900 percent between 2011 and 2015, and hookah use also increased significantly during this time. Additionally, data show high school boys smoked cigars at about the same rate as cigarettes. The FDA’s first warning letter to businesses represents the agency’s first step in cracking down on tobacco sales to minors.