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« Biotech/Pharma Docket | Main | The Milwaukee Journal Sentinel Gets It Right about Patents »

August 19, 2009


Perhaps Obama's comment was referring to small molecule generics, particularly the FTC report and testimony on "pay for delay" settlements.

On FOBs, I find it interesting that the industry warns Congress of the necessity of a long DE period, but calms Wall Street and VC firms with the EU experience of reduced market penetration by FOBs. These two lines of thought should be integrated and we should see a model of the true implications to BIO cash flow from FOB legislation.


I agree. It's possible (and perhaps more likely) that the President was speaking about "pay for delay" agreements (or reverse payments) between small molecule innovators and generics. Particularly since the Obama Administration (via the DOJ) recently expressed agreement with the FTC on that issue as well.

Thanks for the comment.


I'm not sure what arguments BIO et al. have left to support 12 years of data exclusivity. It seems, at this point, that the proponents of 12 years keep falling back on Prof. Grabowski's paper and the patent circumvention argument recited by Mr. Johnson.

In my understanding the 12 or so years that Prof. Grabowski has calculated it would take a biologic portfolio to break even is properly interpreted as a maximum, rather than an optimum, period of market protection. Any profits accrued after this point are in excess of what is required to stimulate investment in the portfolio and represent a windfall to the investors at the expense of patients who take the biologics. There is mounting evidence, from the FTC, the European experience, and Amgen's CEO as stated above, that biologics will continue to maintain a large portion of market share, and continue to draw significant profits, after the entry of biosimilars. Therefore, Prof. Grabowski's study would seem to indicate that 12 years of exclusivity is excessive.

As for the patent circumvention argument, it seems clear that the allowance of similarity, rather than equivalence, is a concession to the impossibility of manufacturing a biologic that has molecule-by-molecule identity to another rather than an attempt to give flexibility to generic manufacturers. I will be surprised, for example, if the FDA approves biosimilars that do not share amino acid sequence identity to their predecessors. I think it is very likely that a patent that covers a biologic will have sufficient scope to cover any biosimilars that might be approved by the FDA. I haven't ever seen any real evidence that this fear of widespread patent circumvention is a legitimate possibility. If it exists I would love to see it.

In any case, thanks for covering this topic in such depth on your blog. I've loved reading it.

Dear Jeff:

A clarification or two. The Grabowski data show a range of 13.2-16.9 years necessary to "break even" on a biologic drug, so the 12-year exclusivity number is actually lower than what Professor Grabowski reports as necessary.

Also, Dr. Gregory Glover gave a talk at BIO 2009 documenting the differences between patent and regulatory protection under a biosimilars scheme (at http://www.patentdocs.org/2009/05/docs-at-bio-patent-reform-super-session.html). While it may be possible that the FDA requires amino acid sequence identity, the statute doesn't mandate that outcome, and a clever biogeneric could make the argument that a valine-to-leucine change is a difference of one methylene group (-CH2-) in a molecule comprising 6,000 atoms or so. Since it is unlikely (but not impossible) that this will cause a difference in bioactivity, you have the potential for copying without infringement that many in the biotechnology community fear.

The biggest risk in the biosimilars issue is that small differences in how the drugs are made will have unintended consequences - a completely unknowable outcome. This shouldn't prevent Congress from outlining a biosimilars approval pathway, but it is a topic that goes undiscussed in the hoopla over data exclusivity. Even small molecule generics can have unintended effects on some patients (Wellbutrin XL being one example).

The FTC, the EU and CEO Sherer may be right, and if they are Congress can always reduce the data exclusivity term if it turns out to be too long. It will be much more difficult to put the genie back in the bottle if it turns out that 12 years is too short a time and has the feared negative effects on biopharma investment. And 12 years of data exclusivity is a lot shorter than it is today (substantially unlimited).

We are gratified that you enjoy the blog. We have fun doing it. Thanks for the comment.

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