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Senate Committee: 12 years of data exclusivity is cool
August 2009
by Stephen Albainy-Jenei  |  Email the author
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"To amend the public health service act to establish a pathway for the licensure of biosimilar biologic products, to promote innovation in the life sciences." Amendment No. 297.

The U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee voted last month in favor of a proposal by Sens. Kay Hagan (D-N.C.), Michael Enzi (R-WY) and Orrin Hatch (R-UT) to create a follow-on biologics (FOB) pathway that provides 12 years of data exclusivity for brand-name biologic drugs.

In looking for a way to create an abbreviated pathway for the Food and Drug Administration (FDA) to approve generic biologic therapies (aka biogenerics or follow-on biologics), there are lots of questions about how to achieve the proper balance between innovation and competition. The sticking point (in general) has been that the brand name drugmakers and generics can't agree on how long a biotech drug should be on the market before a generic drugmaker can market a generic.

Under the proposed law, if FDA approves a biological product on the grounds that it is interchangeable to a reference product, the Department of Health and Human Services (HHS) is prohibited from making a determination that a second or subsequent biological product is interchangeable to that same reference product until one year after the first commercial marketing of the first interchangeable product.

The act also authorizes HHS to issue guidance with respect to the licensure of biological products under this new pathway, and it includes provisions governing patent infringement concerns such as the exchange of information, good faith negotiations and initiation infringement actions.

The Biotech Industry Organization (BIO) has called for 14 years of market exclusivity, while generic makers want the period limited to no more than five years of protection. Not to be confused with patents, data exclusivity is the period after the FDA approves a product during which an imitator can't rely on the innovator's clinical data for safety and effectiveness. It can run during and longer than the period of patent protection.

The current measure for 12 years passed 16 to 7, despite an earlier decree by the Obama administration that a seven-year exclusivity limit sounded good. The Obama administration had sent out an earlier warning shot that it considered seven years enough time to protect brand-name biotechnology medicines from generic competitors. In a letter to Rep. Henry Waxman (D-CA), the White House said seven years "strikes the appropriate balance between innovation and competition by providing for seven years of exclusivity."

The posturing by the current administration is not a surprise given that the U.S. government is the largest consumer of medical care via Medicare and Medicaid and the fact that sales of biotech drugs were $40.3 billion last year. With creating a governmental health care system at the top of its priority list, ways to cut costs are critical to any reform.

After considering at least four proposals all titled the "Biologics Price Competition and Innovation Act of 2009," the HELP committee declined several other proposals including voting down one by Sen. Sherrod Brown (D-OH), which would have provided only seven years of exclusivity for brand name biologics.

Sen. Barbara Mikulski's (D-MD) proposed a 10-year exclusivity period, which could be extendable by one year if a supplemental application was approved for one or more new therapeutic indications. Sen. John McCain's (R-AZ) proposal would have provided a 10-year period of exclusivity that could be extended by two years "if there has been significant therapeutic advancements with respect to the reference product."

The vote was at least a small victory for major biotech drugmakers, which have been lobbying for a period of 12 to 14 years before generic equivalents could be approved. Biotech companies have been pushing for a longer period of data exclusivity, saying that it can take 15 years and a $1 billion to develop and market a biotech drug, so they need the longer period to make back their investment. Generic drugmakers, not surprising, would like the exclusivity period to be as little as possible.

This is just as small step, since the Senate plan could change when the healthcare bill goes to the floor for a vote. It also must be approved by the House.

So, what will the final number be for exclusivity? We'll have to wait to see.

Stephen Albainy-Jenei is a patent attorney at Frost Brown Todd LLC, serving up chat at PatentBaristas.com. Write him with comments or questions at Stephen@patentbaristas.com. Albainy-Jenei doesn't own shares of companies mentioned in this article.


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