Patent Docs: Follow-on Biologics

Follow-on Biologics

March 22, 2010

House Passes Health Care Reform Bill -- Biosimilar Regulatory Pathway Makes Cut, Pay-for-Delay Ban Does Not

On Sunday night, the House of Representatives voted by a narrow 219-212 margin to agree to the version of the Patient Protection and Affordable Care Act (H.R. 3590) that the Senate passed on December 24, 2009 (see "Follow-on Biologics News Briefs - No. 11"). Less than an hour later, the House added 135 pages of amendments to the Senate bill by a 220-211 vote. Those amendments will now go to the Senate for approval.

As we reported in December, the Senate bill contains a section providing for an approval pathway for biosimilar biological products. This portion of the bill would preclude a biosimilar application from being approved "until the date that is 12 years after the date on which the reference product was first licensed," as well as offer an additional 6 months of exclusivity for the use of reference products "in the pediatric population." We also noted in January that an effort by Sen. Herb Kohl (D-WI) to add a pay-for-delay provision to the Senate health care bill had failed (see "Consumer Groups Ask Congress to Add Pay-for-Delay Provision to Health Care Bill"). The provision, which was based on a bill (S. 369) Sen. Kohl introduced in February 2009, would have prohibited payments from brand name to generic drug manufacturers with the purpose to prevent or delay the entry of competition from generic drugs.

The additional House amendments that were passed yesterday leave the biosimilars portion of the Senate bill untouched, but do not add the pay-for-delay ban that President Obama was seeking as recently as last month. The President had included a ban of pay-for-delay settlements among 34 key improvements in his health care proposal released prior to the Bipartisan Meeting on Health Reform (see "President's Health Care Plan Includes Pay-for-Delay Ban and Biosimilar Regulatory Pathway").

Posted at 10:50 PM in Follow-on Biologics, Food and Drug Administration | Permalink | Comments (0) | TrackBack (0)

March 08, 2010

New York Times Provides Soapbox for Data Exclusivity Critics

By Kevin E. Noonan --

Policy arguments based solely on outcome rather than process are rarely effective when put into practice. This is because the desired benefits of the outcome blind the policymaker to the question of whether the desired outcome can be achieved without considering the effects (intended or otherwise) by the process. This effect can be seen, for example, in the Federal Trade Commission's crusade to ban "reverse payment"-containing settlements of ANDA litigation. The desired outcome is cheaper drug prices as soon as possible. However, against the "per se" illegal stance of the FTC, several regional Courts of Appeal, as well as the Federal Circuit, have assessed the reasonableness of such settlements and found instances where such agreements are, and are not, anticompetitive -- something an outright ban cannot accommodate. Indeed, according to some of these analyses, generic drug entry would be delayed, and unnecessary drug costs incurred, by the ban advocated by the FTC.

The same type of goal-oriented thinking is evidenced in an Op-Ed piece (where else?) in The New York Times ("Biologics Boondoggle"). (The Times has previously voiced its objections to the length of the data exclusivity period; see "Follow-on Biologics News Briefs - No. 11"). Today's piece was written by Anthony D. So, director of the Program on Global Health and Technology Access at Duke University, and Samuel L. Katz, a professor and chairman emeritus of Duke's Pediatrics department. Their goal, like the FTC's, is to hasten the availability of generic drugs, in their case biologic drugs, to increase patient access and reduce costs. And, like the FTC, they have a "simple" solution -- limit the data exclusivity period of biologic drugs to 5 years, the same period "enjoyed" by conventional, small molecule drugs. But this position ignores most of the evidence that this is not a sufficient period to maintain innovation in biologic drug development, and reduces to greed (never expressly stated) the motivations of the biotechnology industry in advocating for the 12-year period contained in both the House and Senate versions of the healthcare reform bill.

The position also ignores the evidence, ironically in a peer-reviewed scientific paper (not an op-ed piece) by their colleague, Professor Henry Grabowski, that the "proper" data exclusivity term is between 14 and 17 years (see "Professor Grabowski's Economic Analysis of data Exclusivity for Follow-on Biologic Drugs"), and that the 12-year period is a compromise from the term that the data indicates is necessary. It also ignores the current situation, where the data exclusivity period is unlimited since there are no follow-on biologic provisions under current U.S. law. Also ignored is the reality that the data exclusivity period is one of the few provisions of the two versions of the healthcare bill that are in agreement (a fault shared with President Obama; see "Snatching Defeat from the Jaws of Victory?"), or that the term could be easily reduced if it turns out to be longer than necessary.

Further, unlike other entrants in this debate (even the FTC), the article contains no compelling economic arguments. Besides bemoaning the high costs of biologic drugs, the only mention in the piece about the economics of biologic drugs, generic or otherwise, is the assertion that biologic drugs cost about the same to bring to market as conventional drugs (without any citation to the basis for this statement other than "according to studies cited by the pharmaceutical industry's own trade association"). There is also reference to the high prices of these drugs, such as Herceptin® for breast cancer, Humira® for Crohn's disease, and Cerezyme® for Gaucher's disease. The prices are high, but these drugs are used to treat life-threatening illnesses (in the Gaucher's disease example, a lethal childhood disease); while there may be a debate to be had on whether our society can afford to treat these diseases (or ethically afford not to), their cost is not the best way to frame the debate (and, according to the FTC's report, the savings achieved by follow-on biologic drugs won't be that significant anyway, reducing the costs by no more than 30%, in contrast to the 80-90% reductions seen with conventional drugs; see "No One Seems Happy with Follow-on Biologics According to the FTC").

Also not ignored are allegations about excessive "monopoly protection" (using a buzzword that always signals an intent to inflame rather than illuminate), or that biologic drug makers can extend their "monopoly" by making minor changes in the drugs (which would not preclude the generic biologic drug maker from using the innovator's data to obtain approval for the original version of the drug), or that the 12-year data exclusivity period for biologics will be used to bootstrap a longer data exclusivity period for conventional drugs (again, with no attribution except a statement that "GlaxoSmithKline has already called for 14 years of exclusivity for conventional drugs"; regardless of anything GSK might wish, changing the data exclusivity period for conventional drugs is not part of any follow-on biologics legislation introduced either as stand-alone legislation (H.R. 1427 or 1548 or S. 726 ) or as part of the healthcare bill (H.R. 3590)). As such, the suggestion is an irrelevancy, except to once again increase the sense of "urgency" the writers seem to want to engender to provoke the public to adopt their position.

That position is clearly expressed in the last paragraph of their piece:

Congress should allow biologics no more than five years of protection. That would provide drug makers plenty of incentive for innovation, and still protect consumers from the high prices that extended monopolies allow. Striking the right balance will ensure that Americans can afford the most effective medicines available.

Providing cheaper drugs is an admirable goal, for many reasons -- improved access to these drugs, sound economics, or just plain thrift. But cheaper drugs come with a price in the real world, and part of that price is to make drug development less attractive for investment and investors. That may sound cold-blooded, but anyone who has a 401k account wants her investments to be profitable, so the public should understand the need for some assurance of a return on investment. The current economic downturn cannot blind us to the folly of killing the golden goose of biologic drug development, and nothing will cook that goose more quickly and more certainly than creating a climate inimical to investment in these drugs. That isn't a goal anyone wants.

Posted at 11:55 PM in Follow-on Biologics, Media Commentary | Permalink | Comments (6) | TrackBack (0)

February 24, 2010

President's Health Care Plan Includes Pay-for-Delay Ban and Biosimilar Regulatory Pathway

By Donald Zuhn --

President Obama's new proposal for health care reform was unveiled on the White House website earlier this week. According to the White House, the President's plan "builds off of the legislation that passed the Senate and improves on it by bridging key differences between the House and the Senate as well as by incorporating Republican provisions that strengthen the proposal." The President's new proposal is being offered in anticipation of Thursday's "open, bipartisan" meeting to discuss ideas for reforming and improving the U.S. health care system.

Among 34 "key improvements" in the President's plan is a proposal to prevent delays in the public's access to generic drugs by banning pay-for-delay settlements, wherein a brand-name pharmaceutical company can delay generic competition through an agreement to pay a generic company to keep its drug off the market for a period of time. According to the President, support for a pay-for-delay ban comes from a Federal Trade Commission (FTC) report that estimates that such agreements could cost consumers $35 billion over the next 10 years. The President's plan adopts a provision from current health care reform legislation wherein "any agreement in which a generic drug manufacturer receives anything of value from a brand-name drug manufacturer that contains a provision in which the generic drug manufacturer agrees to limit or forego research, development, marketing, manufacturing or sales of the generic drug" would be presumed to be "anti-competitive and unlawful." This presumption could "be overcome if the parties to such an agreement demonstrate by clear and convincing evidence that the pro-competitive benefits of the agreement outweigh the anti-competitive effects of the agreement." The President's proposal would also give the FTC enforcement authority to address pay-for-delay agreements.

According to the President's proposal, the plan also "promotes innovation [and] creates a pathway for the creation of generic versions of biological drugs so that doctors and patients have access to effective and lower cost alternatives." However, as presently described, the plan provides no further details regarding how it would promote innovation and lacks specifics regarding the follow-on biologics (or biosimilar) regulatory pathway it would establish. Earlier this year, the President created some controversy when he informed Congressional Democratic leaders, including Rep. Anna Eshoo (D-CA), of his continued opposition to a 12-year data exclusivity period in a meeting at the White House (see "Snatching Defeat from the Jaws of Victory?"). The President's position was not too surprising, given the Administration's assertion in a letter to House Energy and Commerce Chairman Henry Waxman (D-CA) last June that a 7-year data exclusivity period would "strike[] the appropriate balance between innovation and competition" (see "White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics").

The President's Bipartisan Meeting on Health Reform will take place on Thursday, February 25, beginning at 10:00 am (EST). The meeting, which will be held in the Blair House, will be open to the public and made available online at www.whitehouse.gov/live. The meeting webpage on the White House website includes links to health care ideas being currently presented by Senate Democrats, Senate Republicans, House Democrats, and House Republicans.

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February 18, 2010

PhRMA Representative Questions Follow-on Biologics Paper

By Donald Zuhn --

In a letter to the editor published in this week's edition of The New England Journal of Medicine, Dr. David Wheadon, Senior Vice President of the Pharmaceutical Research and Manufacturers of America (PhRMA) Scientific & Regulatory Affairs team, attempts to set the record straight regarding a follow-on biologics (FOB) paper published in that medical journal last fall. The focus of Dr. Wheadon's criticism is a NEJM paper written by a New York patent attorney (Alfred Engelberg) and two Harvard professors (Dr. Aaron Kesselheim and Dr. Jerry Avorn), in which the three authors contend that the FOB legislation being proposed in the House and Senate -- which would provide 12 years of data exclusivity -- would "upset[] the delicate balance between the interests of consumers and those of innovators" (see "NEJM Authors Say Five Years of Data Exclusivity Would Be Sufficient"). Citing the Federal Trade Commission (FTC) report on FOBs that was released last June (see "No One Seems Happy with Follow-on Biologics According to the FTC"), the three authors suggest that the FOB legislation currently pending in the House and Senate (and which was proposed at the time the paper was originally published) be amended to "give the FDA the mandate to evaluate and approve biosimilar drugs in a reasonable period, starting, as with small-molecule products, 5 years after the approval of the original drug," and conclude that "[s]uch a compromise would best balance the need for financial incentives with the need for competition, promoting access and motivating important subsequent innovation."

Stating that "the record should be set straight," Dr. Wheadon offers five counterarguments to the Engelberg et al. paper. First, he contends that once an FOB regulatory pathway has been established, FOB manufacturers will have "strong incentives to enter the market" -- namely, substantially reduced developmental costs (Dr. Wheadon suggests that FOB manufacturers will be looking at costs of between $10 million and $40 million, as compared to $1.2 billion for innovators) resulting from the FOB manufacturer's ability to use an innovator's data to support its application for FDA approval. Next, Dr. Wheadon contends that protection of this data, via an appropriate data exclusivity period, will be critical given the less certain patent protection for biologic drugs (which he says is a result of the requirement that an FOB need only be similar, and not identical, to the corresponding biologic drug). Third, Dr. Wheadon points out that data protection will not eliminate competition because biologics will still have to compete with other drugs. In particular, Dr. Wheadon notes that an FOB manufacturer can bypass an innovator's data protection by generating its own data to provide support for FDA approval. Fourth, in response to some of the criticism regarding evergreening loopholes in the current legislation, Dr. Wheadon observes that "changes to an innovator biologic that do not affect the product's safety, purity, or potency would not qualify for a new data-protection period." Last, Dr. Wheadon asserts that recent (but as yet unpublished) data indicates that "developers of less than one third of biologics had recouped their research and development costs from 2003 through 2008," and therefore "focusing on revenues associated with a select few biologics is misleading."

Also commenting about the Engelberg et al. paper in a letter to the editor are Dr. Allan Pollock and Dr. Martin Zagari of Amgen. Briefly, the Amgen researchers seek to correct an error in the paper regarding the annualized cost of epoetin alfa therapy for anemia of chronic renal disease. Whereas the Engelberg et al. paper suggests that the cost of this therapy is $84,467 per patient, Dr. Pollock and Dr. Zagari state the actual cost is $8,767 per patient. The Amgen researchers also note that the Centers for Medicare and Medicaid Services (CMS) pays for 80% of this cost.

Two of the authors of the original NEJM paper, Alfred Engelberg, a New York patent attorney who represented the Generic Pharmaceutical Industry Association and played a role in the passage of the Hatch-Waxman Act in 1984, and Dr. Aaron Kesselheim, a patent attorney and Instructor in Medicine at the Harvard Medical School, are given the last word. In response to Dr. Pollock's and Dr. Zagari's letter, Mr. Engelberg and Dr. Kesselheim explain that the $84,467 figure was the result of an arithmetic error in transcription, and that the figure should have been $8,447 (somewhat lower than the number suggested by Dr. Pollock and Dr. Zagari).

As for Dr. Wheadon's letter, Mr. Engelberg and Dr. Kesselheim begin by noting that Dr. Wheadon "does not challenge our central contention that the pending biosimilar legislation will produce less competition and perpetuate higher prices for biologic drugs," but "[r]ather, he attempts to justify that outcome with a number of common arguments." First, the two authors suggest that Dr. Wheadon's $1.2 billion developmental cost estimate "has been widely disputed, and the amount may be lower for biologics." They note that for the drug alglucerase (Ceredase), the innovator reported spending less than $58 million for development. The authors also dispute Dr. Wheadon's FOB manufacturer cost estimate of $10 million to $40 million, stating that "according to the FDA, clinical-trial requirements for biosimilars may not be substantially different from those for new products."

As for the currently pending FOB legislation, Mr. Engelberg and Dr. Kesselheim argue that it "will grant a 12-year monopoly without any innovation requirement and offers additional 12-year periods of exclusivity for minimal changes to the original product." The two authors conclude their letter by contending that if currently pending FOB legislation is passed by Congress, "U.S. patients and insurers will continue to pay unnecessarily high prices for [biologics] for decades to come."

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January 31, 2010

Follow-on Biologics News Briefs - No. 12

By Donald Zuhn --

BIO CEO Asks President to Focus on Unresolved Issues in Health Care Debate

Writing for True/Slant earlier this month, Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood provided his organization's take on recent efforts by President Obama to re-write the biosimilars provisions of the House and Senate health care bills ("Health Care Reform Negotiations: Focus on Unresolved Issues"). A little more than two weeks ago, President Obama informed Congressional Democratic leaders, including Rep. Anna Eshoo (D-CA), of his continued opposition to a 12-year data exclusivity period in a meeting at the White House. Noting that the "clock was ticking away" on health care reform, Mr. Greenwood (at right) wondered why the President and some members of Congress, like Rep. Henry Waxman (D-CA), would focus on the long resolved data exclusivity provisions of the House and Senate bills rather than "on some of the 20+ areas where the House and Senate bills don't line up -- employer mandates, a public option, taxes, to name a few."

Contending that biosimilars provisions represent a "legislative solution . . . that would encourage life-saving biomedical research while expanding access to powerful biologics," Mr. Greenwood also asserted that the proposed legislation would "preserve[] existing U.S. jobs and maintain[] the biotechnology sector's ability to create high-wage, high-value jobs." Despite the fact that the biosimilars provision "happens to be one of the few provisions that is almost identical in both the House and Senate versions of the health care reform bill," and that the provision received bipartisan support in both the Senate Health, Education, Labor and Pensions (HELP) Committee (by a 16-7 vote) and House Energy and Commerce Committee (by a 47-11 vote), the President has pressed for a shorter data exclusivity period.

In his brief article, Mr. Greenwood notes that "[t]he biosimilars provision is the result of a careful compromise overwhelmingly approved months ago in each Chamber," and that "[i]n addition to receiving support in both Chambers and by both parties, the biosimilars provision is supported by universities, patient groups, venture capitalists and economic development groups." The BIO CEO concludes by stating that "[i]t's time for Rep. Waxman and the White House to take on the tough issues that are weighing down the health care reform debate -- not reopen one of the few issues that has long been resolved."

38 Patients Groups and Research Universities Back 12-Year Data Exclusivity Period

Earlier this month, the Gazette.Net reported that despite the election of Republican Scott Brown to the Massachusetts Senate seat once occupied by Ted Kennedy, a number of legislators have been pushing for the passage of the proposed biosimilars regulatory pathway that was approved in both the Senate and House health care reform bills ("BioWatch: Federal biosimilar regulation gathers support"). In two separate letters, one to Senate Majority Leader Harry Reid (D-NV) from eight Senate Democrats and another to House Speaker Nancy Pelosi (D-CA) and Majority Leader Steny Hoyer (D-MD) from 45 members of the House, legislators continue to support a biosimilars regulatory pathway providing a 12-year data exclusivity period.

In addition to the letters above, and a letter from six Governors also supporting the 12-year period (see "Governors Write President in Support of 12-Year Data Exclusivity Period"), Sen. Reid and Speaker Pelosi also recently received a similar letter from 38 organizations, including groups representing surgeons plus advocacy groups such as Easter Seals, the Parkinson's Disease Foundation and the Muscular Dystrophy Association. (Patent Docs has not had an opportunity to review the above letter, but would gladly post a copy if any of our readers can provide one.)

NATF Says Patient Safety Should Be Top Priority When Crafting Biosimilar Regulatory Pathway

In an advertisement appearing in the Eastern edition of The Wall Street Journal on January 27, the North American Thrombosis Forum (NATF) states that "patient safety must be the top priority and must be ensured prior to making [biosimilar] drugs available to the U.S. public." The ad notes that both the House and Senate health care bills would provide for the creation of a biosimilars regulatory pathway in the U.S., and contends that "[t]he potential of [biologic medicines] to reduce costs is why we believe follow-on biologics are a critical component for meaningful heathcare reform." While acknowledging that "healthcare reform legislation is a massive undertaking with many competing interests," the ad warns that "when compared to a fight over billions of dollars, threats to patient safety from follow-on biologics may be easily overlooked."

The ad proposes several changes to the biosimilars provisions of the House and Senate health care bills in order to better address patient safety. First, the ad contends that "it is critical that this piece of healthcare reform requires well-designed and properly conducted clinical trials demonstrating safety and efficacy of biosimilars." The ad also contends that the "potency and biological effects of the biosimilar and approved product must be equivalent," and therefore, the FDA must "set out clear criteria to demonstrate whether biosimilars can be substituted for approved products (interchangeability), and biosimialrs themselves must be excluded as reference products." Finally, the ad states that "long-term safety must be established and rigorously monitored in patients treated with biosimilars."

According to the ad, the NATF is a nonprofit advocacy group of scientists, clinicians, and patients focusing on the unmet needs and issues related to thrombosis and cardiovascular diseases. Representing NATF on the ad are Dr. Craig Kessler, Professor of Medicine and Pathology at the Georgetown University Medical Center, and Dr. Craig Jackson, Associate Professor of Internal Medicine and the Washington University School of Medicine.

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January 25, 2010

Law Professors Contend that Data Exclusivity Is Secondary Issue in Follow-on Biologics Debate

By Donald Zuhn --

In a paper published earlier this month, David Adelman and Christopher Holman assert that in the debate on follow-on biologics legislation, "the controversy over regulatory 'data exclusivity' is a sideshow." The authors argue that policymakers should instead "focus on mitigating the systemic barriers to entry that pose much greater and longer-term obstacles to lower-cost biotech drugs." Dr. Adelman (at right) the Harry Reasoner Regents Chair in Law at the University of Texas School of Law, and Dr. Holman (below left), Associate Professor of Law at the University of Missouri-Kansas City School of Law (and author of Holman's Biotech IP blog), discuss these assertions in a paper entitled "Misplaced Fears in the Legislative Battle Over Affordable Biotech Drugs."

The authors begin with several observations regarding data exclusivity. First, they note that "data exclusivity would neither create restrictions on the use of the [biologic] itself, nor would it preclude FOB makers from conducting their own studies to obtain FDA approval." Next, the authors note that the inclusion of a twelve-year data exclusivity period in both the House and Senate health care bills was "driven by concerns that patent protection is less effective for biotech drugs than it is for conventional drugs." While acknowledging that "[p]revailing uncertainties provide grounds for and against Congress legislating a twelve-year term of data exclusivity for biotech drugs," the two professors contend that:

What is unequivocal, though, is that the effects either way on health care expenditures would be modest. According to a 2007 estimate by the Congressional Budget Office, establishing an abbreviated FDA approval process for FOBs would reduce national spending on prescription drugs by just 0.5 percent over the first ten years of the program. The impact of a shortened data exclusivity period would be a fraction of this estimate, since competitive market entry by FOBs would still face [] barriers to market entry . . . . Overall the health care savings would be nominal, as drugs account for only about ten percent of total health care expenditures in the United States.

As a result, the authors conclude that "on balance, the potential benefit to patients that might result from a shortened period of data exclusivity for innovators is outweighed by the financial risks to the biotech industry, and particularly the negative impacts on investments in research and development."

Regarding the limitations of the patent system for biologics, the paper points to the complexity of biologics as creating two mutually reinforcing problems for innovators. First, "[t]he size and complexity of biotech drugs affords competitors many molecular degrees of freedom, which opens [u]p many opportunities to design around an original innovator's patents." Second, "the scientific uncertainties surrounding the relationship between changes in structure and protein function bounds the original inventors' capacity to draft and support broad patent claims." The paper next focuses on the limited success innovators have had in enforcing biologic patents, particularly composition-of-matter patents. The authors note, interestingly, that:

The history of cases involving enforcement of composition-of-matter patents on biotech drugs paints a decidedly negative picture. There does not appear to be a single appellate-level decision in which a patent on the active ingredient of a biotech drug has been found valid and infringed.

According to the authors, the problems associated with securing broad biologic patent protection and then enforcing such patents means that "[a]n abbreviated FDA approval process could permit FOB producers to have their cake and eat it." In other words, generic manufacturers "could benefit not only from the research conducted by the original innovator but also from its clinical data to gain rapid, low-cost FDA approval -- and all while circumventing the patent on the active ingredient."

For the authors, the real obstacle to low-cost follow-on biologics is not a twelve-year data exclusivity period, but rather barriers to entry that would prevent follow-on biologics from reaching the market even after patent and data exclusivity protection expires. For example, the paper notes that:

Recent studies have developed models to estimate the number of FOB producers and price reductions of biologics once FOB entry occurs. Using conservative R&D costs assumptions for drugs with mid-level markets (i.e., ~$500 million annually), one study estimated that the average number of FOB entrants would be just two, as opposed to nine for traditional drugs, and that on average FOB prices would remain at eighty-two percent of the brand price.

The authors argue that if such numbers turn out to be accurate, "this translates into a negligible impact on total health care costs, as biotech drugs generate about fourteen percent of the total revenues for pharmaceuticals, which in turn account for only about ten percent of total health care costs." More importantly, the authors argue that "[t]he low sensitivity of aggregate health care expenditures to the presence or absence of a data exclusivity term contrasts the heavy reliance of biotech drug makers on profits from successful drugs." The paper also contends that:

Limiting the term of data exclusivity could also be counterproductive for everyone. Although counterintuitive, safeguarding high short-term profits through a twelve-year data exclusivity term stands to mitigate the difficulties of balancing innovation and patient access. Owing to the huge upfront costs of drug development, the optimal temporal profile of drug prices arguably favors high initial prices followed by a dramatic drop after patent protection (or data exclusivity) ends.

The authors conclude the paper by stating that:

[W]e find reasonable grounds for a twelve-year term of data exclusivity for biotech drugs, but this issue is ultimately secondary. The most important problem to address is the multiple barriers to entry of FOB manufacturers. Designing effective policies to overcome them warrants much greater attention and careful economic analysis, as reducing barriers to entry holds out the promise of dramatically lowering prices of biotech drugs over the long run.

Additional information regarding Dr. Adelman's and Dr. Holman's article can be found on Holman's Biotech IP blog.

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January 20, 2010

Governors Write President in Support of 12-Year Data Exclusivity Period

By Donald Zuhn --

On Saturday, reports began to circulate regarding President Obama's recent interest in "renegotiating" the data exclusivity provisions of the health care bills that were passed in the House and Senate late last year (see "Snatching Defeat from the Jaws of Victory?"). In a discussion at the White House, the President informed Rep. Anna Eshoo (D-CA) that he did not support the 12-year period in both bills and would prefer that the bills specify a shorter period instead.

The President's position was not too surprising, given the Administration's assertion in a letter to House Energy and Commerce Chairman Henry Waxman (D-CA) last June that a 7-year data exclusivity period would "strike[] the appropriate balance between innovation and competition" (see "White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics"). However, the President's last-minute efforts to convince the House and Senate to change their bills startled many in the biotech/pharma industry. Writing in the congressional daily The Hill, Jeffrey Young opined that by "jettisoning" the 12-year data exclusivity period in the bills, President Obama would be "ignoring one of the few substantive bipartisan amendments approved during committee consideration of healthcare reform" ("Obama at odds with some Dems on key provision in healthcare"). In mid-July, the Senate Health, Education, Labor and Pensions (HELP) Committee rejected an amendment for a 5-year data exclusivity term, and instead voted 16-7 in favor of an amendment providing a 12-year term (see "Senators Champion 12-Year Data Exclusivity in Senate"). At the end of July, the House Committee on Energy and Commerce approved an amendment to its health care bill that would provide a 12-year data exclusivity period (see "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period"). While the House health care bill itself was passed out of Committee by a narrow 31-28 margin, the biosimilar licensure pathway amendment, including its 12-year data exclusivity provision, sailed through the Committee in a 47-11 vote.

On Tuesday, in response to the President's comments last week, six Governors sent a letter to the President, "to express [their] concern about recent proposals that have been made to provisions that relate to biosimilars in the health reform bill." In the letter, which was sent by Gov. Martin O'Malley (D) of Maryland, Gov. Bill Ritter (D) of Colorado, Gov. Jack Markell (D) of Delaware, Gov. Deval Patrick (D) of Massachusetts, Gov. Beverly Perdue (D) of North Carolina, and Gov. Donald Carcieri (R) of Rhode Island, the signatories told the President that:

We oppose limiting the period of data exclusivity for developers of biosimilar products as well as any revision to the "evergreening" language contained in both House and Senate passed bills. The balance struck by Congress -- both through the Senate Health, Education, Labor and Pensions Comminee and House Energy and Commerce Comminee -- on 12 years of data exclusivity for biologics and reasonable "evergreening" language represents a critical element needed to ensure appropriate incentives for continued biomedical innovation. We urge you to continue working with the congressional leaders to carefully evaluate the product of the extensive work that they have already done on this matter and retain the provisions that were passed in both chambers of Congress.

The Governors reminded the President about the economic impact of the bioscience industry, noting that "[t]he biopharmaceutical and life sciences workforce in this country is nearly 700,000 strong and supports more than 3.2 million total jobs in associated sectors," and that "employment in the biopharmaceutical sector grew more than twice as fast as all other sectors combined between 1996 and 2006." The Governors also argue that:

The high risk and uncertain nature of biologics R&D, combined with the economic downturn, underscores the sector's vulnerabilities. Thus this critically important issue has a direct economic impact on our states, our nation 's public health, our economic success, and our global leadership in innovation in biomedical research.

In support of the data exclusivity period in the House and Senate bills, the letter notes that:

With biotechnology products in particular, data exclusivity provides a critical incentive for innovation, as patent protections may be limited by the highly complex nature of these products, which are produced from living cells. Economic modeling has shown that a provision of at least 12 years of non-patent data exclusivity allows innovator companies to recover their original investment in the marketed therapy. Equally important, however, revenues from successful marketed therapies offset the hundreds of millions of dollars spent on drug discovery R&D on candidates that do not make it to market. Thus, these revenues support pipeline drug candidate development and investments in costly and complex manufacturing facilities for FDA approved therapies. In order to assure these companies continue to make investments in medical innovation and take the risks necessary to bring these important products to patients, innovators should be provided with appropriate incentives, including data exclusivity and protections for their patents.

The Governors conclude the letter by asking the Administration to "work closely with Members of Congress to gain a better understanding of the complexity of this issue before making a decision that could hinder scientific innovation and jeopardize our nation's role as a leader in the development and delivery of lifesaving therapeutics."

Tuesday's letter marks the second time these Governors have addressed the issue of data exclusivity. In a letter sent to Congressional leaders in September, Governors O'Malley, Ritter, Markell, Patrick, Perdue, and Carcieri were joined by Gov. M. Jodi Rell (R) of Connecticut, Gov. Theodore Kulongoski (D) of Oregon, Gov. Luis Fortuño (R) of Puerto Rico, and Gov. Christine Gregoire (D) of Washington in asserting that "the balance struck in the Senate Health, Education, Labor and Pensions Committee on 12 years of data exclusivity for biologics represents a critical element needed to ensure appropriate incentives for continued biomedical innovation" (see "Governors Send Letter to Congressional Leaders in Support of 12-Year Data Exclusivity Period").

For information regarding this and other related topics, please see:
• "Data Exclusivity Follow-up: More of the Same," January 18, 2010
• "Snatching Defeat from the Jaws of Victory?" January 17, 2010
• "Follow-on Biologics News Briefs - No. 11," December 30, 2009
• "Follow-on Biologics News Briefs - No. 10," November 30, 2009
• "House Health Care Bill Includes Biosimilar Licensure Pathway," November 3, 2009
• "12 Senators Write in Support of 12-Year Data Exclusivity Period," November 3, 2009
• "Four Senators Write in Support of 12-Year Data Exclusivity Period," October 19, 2009
• "Governors Send Letter to Congressional Leaders in Support of 12-Year Data Exclusivity Period," October 2, 2009
• "Follow-on Biologics News Briefs - No. 8," August 19, 2009
• "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period," July 31, 2009
• "Follow-on Biologics News Briefs - No. 5," July 19, 2009
• "House Subcommittee Holds Hearing on Follow-on Biologics," July 14, 2009
• "Senators Champion 12-Year Data Exclusivity in Senate," July 14, 2009
• "Senator Kennedy Weighs in on Biosimilar Data Exclusivity Period," July 9, 2009
• "White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics," June 26, 2009
• "No One Seems Happy with Follow-on Biologics According to the FTC," June 14, 2009
• "Third Follow-on Biologics Bill Introduced in 111th Congress," April 1, 2009
• "Second Follow-on Biologics Bill Is Introduced in House," March 18, 2009
• "Waxman Introduces Follow-on Biologics Bill," March 11, 2009
• "Congressman Waxman Tells GPhA Meeting that Hatch-Waxman Model Will Work for Follow-on Biologics," February 25, 2009

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January 18, 2010

Data Exclusivity Follow-up: More of the Same

By Kevin E. Noonan --

The efforts of the Obama Administration and Congressman Henry Waxman to reduce the term of the data exclusivity period contained in the House and Senate versions of the health care reform bill (12 years) has been noticed by others. The basic story is the same, but each new report adds some additional information.

Last Thursday, Alan Fram wrote an article for The Washington Post regarding the meeting between Congresswoman Anna Eshoo (D-CA) and the President as reported in BioCentury last Saturday (see "Snatching Defeat from the Jaws of Victory?"). The story was reported with substantial identity in BioCentury and the Post, but the Post added that the day after the reported set-to between the President and the Congresswoman, a letter was sent to Speaker Pelosi and Majority Leader Reid by "39 patient groups and research universities . . . backing the 12-year period." These groups recognized that "12 years of protection would balance patients' access to the drugs with incentives for companies to develop more of them."

John Carrol, in a FierceBiotech article, reported on the story last Friday. The report contained no new information, but did provide this political analysis:

It's hard to see, though, how Obama and Waxman could cobble together enough support from members of their own party to make a switch at this point. Waxman was handed what amounted to a public rebuke by Democrats on his own committee when they voiced their support of 12 years of data protection. With all the other compromises built into the reform bill to garner a solid majority of lawmakers, where are the votes in Congress to buck the outspoken backers of a bill cherished by biotech?

Finally, TIME Magazine, in a story last Friday by Karen Tumulty, reported on a possible basis for the President's position on data exclusivity: a 2008 report by Robert Shapiro, a former Clinton administration official, on the effects of generic competition in the biologics area (Dr. Shapiro's report was discussed on Patent Docs in February 2008; see "Dr. Robert Shapiro Discusses Follow-on Biologics Report"). The report appears to be completely results-oriented, to the effect that "generic versions of the top 12 categories of biologics whose patents have expired or will expire soon could save Americans up to $108 billion in the first 10 years and as much as $378 billion over two decades." Unfortunately, the story as originally reported erroneously stated that the 12-year data exclusivity period would run after patent protection had expired (i.e., consecutively). Ms. Tumulty even emphasized this error in an on-line comment. In response, Congresswoman Eshoo, through a spokesperson, attempted to correct the record, stating (accurately): "The patent and data exclusivity run concurrently." Ms. Tumulty further "clarified" the record as follows:

A more precise way to describe this is a period of "data exclusivity" (that is, use of the data used to develop the drug) guaranteed separate and apart from the patent. The amount of time we are talking about differs from drug to drug, because of the varying amounts of time that it can take to test a drug and win regulatory approval. For instance: If a drug comes to market with, say, five years left on its patent, this bill would give it an additional seven years.

Congresswoman Eshoo's spokesman made the point more clearly:

To further clarify, just like chemical drugs, biologics have a 20-year patent protection from the date the patent is filed. Data exclusivity begins the date the FDA approves a drug or biologic, running concurrently with whatever patent protection may be left at that time (generally this is about 12 years, according to the CBO).

The tumult over the data exclusivity period in biologics is put in context by a report by Ben Hallman in The Am Law Litigation Daily on a study from Adam Greene of RBS Capital Markets. The report involves statistics from ANDA litigation, arguably the most significant legal legacy of Congressman Waxman's seminal generic drug legislation for small molecule drugs. Mr. Greene looked at 370 ANDA litigations over the past 10 years and reported on outcomes. (Patent Docs will provide a more detailed analysis of the report in a later post.) Of the 370 lawsuits, 54% (200) either were dropped by the generic company or settled (presumably some of which involved "pay-for-delay" arrangements opposed by, inter alia, the Federal Trade Commission). Of the remainder, the results were about even: 82 cases were won by the generic drugmaker and 89 by the branded drugmaker. The report states that the motivation for ANDA litigation is the 180-day exclusivity period that rewards the first ANDA filer, stating:

[I]t's easy to see why generic firms focus on first-to-file opportunities. Settlements provide clarity for the company and shareholders, and we see them as a win-win for the generic and brand company.

These results are consistent with those reported by Matthew J. Higgins and Stuart J.H. Graham in Science last year ("Balancing Innovation and Access: Patent Challenges Tip the Scales"; see "Maybe Hatch-Waxman Data Exclusivity Isn't So Good for Traditional Drugs After All").

For information regarding this and other related topics, please see:
• "Snatching Defeat from the Jaws of Victory?" January 17, 2010
• "Follow-on Biologics News Briefs - No. 11," December 30, 2009
• "Follow-on Biologics News Briefs - No. 10," November 30, 2009
• "House Health Care Bill Includes Biosimilar Licensure Pathway," November 3, 2009
• "12 Senators Write in Support of 12-Year Data Exclusivity Period," November 3, 2009
• "Four Senators Write in Support of 12-Year Data Exclusivity Period," October 19, 2009
• "Governors Send Letter to Congressional Leaders in Support of 12-Year Data Exclusivity Period," October 2, 2009
• "Follow-on Biologics News Briefs - No. 8," August 19, 2009
• "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period," July 31, 2009
• "Follow-on Biologics News Briefs - No. 5," July 19, 2009
• "House Subcommittee Holds Hearing on Follow-on Biologics," July 14, 2009
• "Senators Champion 12-Year Data Exclusivity in Senate," July 14, 2009
• "Senator Kennedy Weighs in on Biosimilar Data Exclusivity Period," July 9, 2009
• "White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics," June 26, 2009
• "No One Seems Happy with Follow-on Biologics According to the FTC," June 14, 2009
• "Third Follow-on Biologics Bill Introduced in 111th Congress," April 1, 2009
• "Second Follow-on Biologics Bill Is Introduced in House," March 18, 2009
• "Waxman Introduces Follow-on Biologics Bill," March 11, 2009
• "Congressman Waxman Tells GPhA Meeting that Hatch-Waxman Model Will Work for Follow-on Biologics," February 25, 2009

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January 17, 2010

Snatching Defeat from the Jaws of Victory?

Obama Administration Pushes for Lower Data Exclusivity Period

By Kevin E. Noonan --

The Obama administration is reported to be pushing for a lower data exclusivity period than the 12-year period contained in both the House and Senate versions of the health care reform bill. This latest twist was reported by Steve Usdin in BioCentury on Saturday. According to the report, the President informed Congressional Democratic leaders of his opposition in a meeting at the White House last week. Specifically, on Wednesday, Congresswoman Anna Eshoo (D-CA) asked the President whether he supported the 12-year data exclusivity period in the bill. Characteristically forthright, the President is reported to have replied: "As a matter of fact, I don't." The Congresswoman, who succeeded in having the 12-year period added to the final bill over the objections of the Chairman of the House committee, fellow Californian Henry Waxman, is reported to have sharply responded to the news. She particularly objected to having the "deal" brokered between the Obama Administration and the pharmaceutical industry (wherein the "contribution" of the industry to healthcare reform is capped at $80 billion) be "sacrosanct" while the administration objected to one of the few aspects of the reform measure where there is agreement between the House and Senate versions. The President's answer was not specific, alluding to "good policy."

The report contains speculation that Congressman Waxman (at left) is trying to get a victory on this issue at the 11th hour (having failed miserably during debate on the bill). Other speculation includes that this is an issue where the President could assuage some of the criticism from the left that he had conceded too much to the pharmaceutical industry. Or perhaps the President's stance comes from his inner policy wonk.

Regardless of motivation, the stance has raised a firestorm. Billy Tauzin (at right), president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA) was motivated to threaten to withdraw "months of unstinting support" for the healthcare reform bill should the President prevail on Speaker Pelosi and Majority Leader Reid to reduce the data exclusivity term. Mr. Tauzin also was reported to have notified PhRMA's board members that the group "could not support the bill [if the data exclusivity term was reduced]" (emphasis in original). Congressman Waxman responded with characteristic combativeness, saying that "[t]he brand name drug companies are threatening to block health care reform for millions of Americans unless they receive virtually permanent immunity from generic competition." Besides being deficient in mathematics ("12 years" can be the same as "permanent" only on Capitol Hill or to a politician trapped in 2-year re-election cycles), Congressman Waxman fails to consider that permanent immunity from generic competition is the status quo. If he cares as much as he professes, he might consider that getting this health care bill passed should take priority; changes in data exclusivity term, if warranted, can wait for another day. Congressman Waxman's position was echoed by Teva Pharmaceuticals (or, more precisely, by their lobbyists, Cuneo Gilbert & LaDuca), saying that "[a]ccess to affordable health care must not be held hostage by the pharmaceutical industry in this way."

Perhaps the President should consider the likely, and threatened, consequences of his position. For example, the Massachusetts Biotechnology Council (MassBio) is threatening to "attempt to derail Democrat Martha Coakley's bid to replace Edward Kennedy in the U.S. Senate" unless the Administration provided reassurances that the final version of the bill contains the 12-year data exclusivity period. The article in BioCentury puts the number of biotech industry workers in Massachusetts at about 45,000, certainly enough to influence the election. This position would be a reversal; recently, BIO President and CEO, Jim Greenwood, attended a fundraising dinner for Ms. Coakley, and Robert Coughlin, MassBio's president and CEO, was reported to have warned both Speaker Pelosi and Majority Leader Reid that MassBio would actively oppose Ms. Coakley's election if the data exclusivity term was lowered from the present 12 years. Failing to hold the Massachusetts Senate seat for the Democrats would wreck havoc on the legislative calculations for getting a health care bill passed.

The report notes that a compromise is possible, specifically a term of 10 years. Earlier in the process, investors in the biotechnology sector and biotech company executives are said to have privately conceded that a 10-year term would be acceptable, similar to the term in Europe. However, that was then, and it is possible (if not likely) that expectations have been raised sufficiently for a 10-year term to no longer be possible.

The report notes, ironically, that there are other provisions in the bill, such as ones involving how the Food and Drug Administration will review applications for biosimilar drugs (for example, involving formal rulemaking) that would delay institution of a biosimilar approval pathway for "a minimum of two to three years" after the legislation is enacted (if ever).

While this may simply be a case of "politics as usual," it seems to be as inept as it is unnecessary. After all the time and effort (as well as political capital) this administration and Congress have expended in trying to pass health care reform, it would be worse than a shame if the petty politics of political preference and prerogative were to prevent its passage.

For information regarding this and other related topics, please see:
• "Follow-on Biologics News Briefs - No. 11," December 30, 2009
• "Follow-on Biologics News Briefs - No. 10," November 30, 2009
• "House Health Care Bill Includes Biosimilar Licensure Pathway," November 3, 2009
• "12 Senators Write in Support of 12-Year Data Exclusivity Period," November 3, 2009
• "Four Senators Write in Support of 12-Year Data Exclusivity Period," October 19, 2009
• "Governors Send Letter to Congressional Leaders in Support of 12-Year Data Exclusivity Period," October 2, 2009
• "Follow-on Biologics News Briefs - No. 8," August 19, 2009
• "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period," July 31, 2009
• "Follow-on Biologics News Briefs - No. 5," July 19, 2009
• "House Subcommittee Holds Hearing on Follow-on Biologics," July 14, 2009
• "Senators Champion 12-Year Data Exclusivity in Senate," July 14, 2009
• "Senator Kennedy Weighs in on Biosimilar Data Exclusivity Period," July 9, 2009
• "White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics," June 26, 2009
• "No One Seems Happy with Follow-on Biologics According to the FTC," June 14, 2009
• "Third Follow-on Biologics Bill Introduced in 111th Congress," April 1, 2009
• "Second Follow-on Biologics Bill Is Introduced in House," March 18, 2009
• "Waxman Introduces Follow-on Biologics Bill," March 11, 2009
• "Congressman Waxman Tells GPhA Meeting that Hatch-Waxman Model Will Work for Follow-on Biologics," February 25, 2009

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January 03, 2010

December 30, 2009

Follow-on Biologics News Briefs - No. 11

By Donald Zuhn --

Senate Passes Patient Protection and Affordable Care Act

On Christmas Eve, the Senate passed the Patient Protection and Affordable Care Act (H.R. 3590) by a 60-39 vote. Independent Senators Joe Lieberman (I-CT) and Bernard Sanders (I-VT) joined all 58 Democratic Senators in voting for the bill. All of the Republican members of the Senate -- with the exception of Senator Jim Bunning (R-KY), who did not vote -- voted against the bill. The Senate bill, which was officially renamed The Patient Protection and Affordable Care Act, expanded from 2,074 pages as introduced last month to 2,407 pages. One thing that did not change in the bill, however, was the section (§ 7002) providing for an approval pathway for biosimilar biological products. As reported on Patent Docs last month (see "Follow-on Biologics News Briefs - No. 10"), this provision would preclude a biosimilar application from being approved "until the date that is 12 years after the date on which the reference product was first licensed." In addition, the Senate bill would offer an additional 6 months of exclusivity for the use of reference products "in the pediatric population." On Tuesday, a message regarding the Senate's passage of the bill was sent to the House of Representatives.

Reaction to Senate Health Care Bill

In a statement released on Christmas, Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood declared that the Patient Protection and Affordable Care Act passed by the Senate "includes many provisions which serve as early Christmas presents for patients living with debilitating diseases such as cancer, Multiple Sclerosis, HIV/AIDS and a host of rare diseases." Referring to the biosimilar provision of the bill, Mr. Greenwood noted that the legislation "establishes, for the first time ever, a pathway to allow for U.S. Food and Drug Administration approval of biosimilars, sometimes inaccurately referred to as 'biogenerics.'" He added that as a result of this provision, "patients with devastating diseases will have increased access to safe and effective life-saving advanced therapies and can take comfort in the knowledge that this bill will accelerate the biotechnology sector's drive toward discovering new treatments, therapies and cures for diseases that have plagued us for years." Mr. Greenwood also pledged the industry group's cooperation in working with the Senate to ensure that "the House provisions pertaining to patent resolution are included in the final bill."

One day earlier, Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson issued a statement applauding the Senate "for taking an important and historic step toward expanding high-quality, affordable health care coverage and services to tens of millions of Americans, many of whom are struggling today financially." While noting that "considerable work remains to be done in reconciling differences between the Senate and House bills," Mr. Johnson stated that the PhRMA was "convinced that comprehensive health care reform, if done in a smart way, will benefit patients, our economy and the future of our nation."

In a statement released on Christmas Eve, Generic Pharmaceutical Association (GPhA) President and CEO Kathleen Jaeger contended "[t]he bill passed by the Senate, unfortunately, amounts to a treasure trove to brand drug companies who stand to make enormous profits from health care reform -- putting brand drug profits over patients." Perhaps anticipating BIO's reaction to the bill's passage, Ms. Jaeger stated that bill was "no holiday present to American consumers." She also stated that "[r]eal reform should bend the pharmaceutical cost curve in the right direction," adding that "as it stands, brand drug companies are poised to receive gold nuggets in their stockings, whereas consumers are about to get a handful of coal."

In response to the Senate's passage of H.R. 3590, the Coalition for a Competitive Pharmaceutical Market (CCPM) -- which has 33 participating members including Apotex, Hospira, Momenta Pharmaceuticals, Mylan Labs, Ranbaxy Pharmaceuticals, Teva Pharmaceuticals USA, Watson Pharmaceuticals, and the Generic Pharmaceutical Association (GPhA) -- has begun a campaign on its website to "[s]how Congress that the gift to brand drug companies isn't all it's wrapped up to be." As part of that campaign, the CCPM is asking visitors to its site to call or write the White House to "[a]sk the President to tell Congress to fix health care reform legislation by putting patients over profits."

Washington Times Op-Ed Says Savings Claims Are Inflated

In an op-ed article appearing in The Washington Times less than a week before the Senate passed the Patient Protection and Affordable Care Act, Roland King, who served as the chief actuary for the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services) for 16 years, notes that "[a] minority of legislators claim that changing [follow-on biologics] legislation to allow biosimilar manufacturers to copy another product as early as 7 years will result in an enormous additional savings to the government" ("Inflated savings claims: Not a prescription for a sound policy"). Mr. King, however, disputes this claim, asserting that "the facts simply do not bear this out." Noting that "[a] substantial majority of biologic drugs currently on the market are already at or near the end of the proposed 12-year protection period," Mr. King concludes that "lowering the data protection period would result in minimal additional savings." In addition, he contends that "the 12-year protection period is necessary so the legislation does not irreparably harm the uniquely American biotechnology industry and the future cures it will produce." Mr. King also believes that the bipartisan support the 12-year period received over the summer in the House Committee on Energy and Commerce (see "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period") and the Senate Health, Education, Labor and Pensions (HELP) Committee (see "Senators Champion 12-Year Data Exclusivity in Senate") another reason for retaining the 12-year data exclusivity period.

Pointing to his "almost 40 years of experience preparing cost estimates for federal health care programs," Mr. King states that "it's a great deal easier to project savings than to actually realize them." He contends that "the difficulty of the manufacture of biosimilar drugs, the number of likely biosimilar entrants in the market, the number of biologic products near the end of their patent life over the next decade, and the FDA review process that would be required to ensure the safety and effectiveness of biosimilar drugs, all lead to the conclusion that any savings from reducing the years of data protection would be insignificant." Admonishing opponents of the 12-year period who use cost savings to support their position, Mr. King asserts that this argument is "misleading [and] counter to the public's interest in having biotech companies retain sufficient incentives to continue investing billions of dollars in the research and development of vital new medicines." Instead, Mr. King concludes that "[m]oving from 12 years of data protection to seven years would not materially impact the savings, but would materially impact the incentives for innovator biotechnology companies to discover the next generation of treatments for such serious diseases as cancer and Parkinson's."

New York Times Reports on Lobbying Efforts Related to Biosimilar Provision of Health Care Legislation

In a report in last month's New York Times, the paper notes that statements by more than a dozen lawmakers added to the official record of the House debate on health care reform "were ghostwritten, in whole or in part, by Washington lobbyists working for Genentech" ("In House, Many Spoke With One Voice: Lobbyists'"). The report also notes that "lobbyists drafted one statement for Democrats and another for Republicans," and that these statements were picked up (at least in part) by 22 Republicans and 20 Democrats. According to the Times, e-mail messages that the paper obtained showed that the statements were based on information supplied by Genentech employees to lobbyist Matthew Berzok, a lawyer at Ryan, MacKinnon, Vasapoli & Berzok, who authored the statements, which were then distributed by lobbyists at another law firm (Sonnenschein Nath & Rosenthal). The Times report notes that the Democratic statement "emphasized the bill's potential to create jobs in health care, health information technology and clinical research on new drugs," and that the Republican statement "opposed the bill, but praised a provision that would give the Food and Drug Administration the authority to approve generic versions of expensive biotechnology drugs, along the lines favored by brand-name companies like Genentech."

In an editorial appearing in the Times two days later, the paper opines that "[i]t is disturbing that the [biotech] industry was able to so easily shape the official record to its liking" ("Puppets in Congress"). While acknowledging that "[t]he comforting news is that none of the ghostwritten material sought to change the contents of the bill, which was not open to much revision during the debate," the Times argues that it is "disturbing that so many members of Congress were willing to parrot the industry talking points." The paper also characterizes the House bill's 12-year data exclusivity provision as "a generous period by anyone's standards." (Our earlier series regarding the many papers, letters, and statements outlining positions taken by various players in the follow-on biologics data exclusivity debate contradicts the Times' characterization; see "Follow-on Biologics Data Exclusivity Debate Scorecard - Part III".)

Wall Street Journal Op-Ed Warns That Europe May Take Biologic Lead

In an op-ed appearing in The Wall Street Journal last month, a former member of the European Parliament argues that "European researchers are on the cusp of overtaking their American counterparts in biotechnology innovation, especially when it comes to the development of cutting-edge medicines known as 'biologics'" ("Washington's Gift to European Biotech"). According to the author, Della Vedova, a member of the Italian Chamber of Deputies, the European biotech industry has closed the gap in private financing and number of dedicated biotechnology firms over the past five years. Mr. Vedova notes that "just as the European biotech industry's substantial investments in research and development -- about a third of revenues in recent years -- is beginning to pay off, U.S. policy makers are considering legislation that would hamstring biotech research in their own country." In particular, Mr. Vedova refers to "[a] bill currently before the U.S. Congress [that] would allow drug companies to make knock-off versions of biologics much sooner than in Europe."

While Mr. Vedova is mistaken as to the actions of Congress since July -- House and Senate committees each passed 12-year data exclusivity provisions that are longer than Europe's 10-year period, and both the House and Senate have now passed health care bills providing for 12 years of exclusivity -- his point regarding the importance of longer exclusivity periods is well taken. For example, Mr. Vedova contends that "[w]ithout a significant exclusivity period, . . . biotech companies won't have enough time to recoup the huge sums they have invested." With regard to Europe's 10-year period, Mr. Vedova notes that "[t]he EU adopted this standard in 2003 to increase the competitiveness of the continent's pharmaceutical and biotech firms," adding that "it has paid off, as the recent success of European firms illustrates." Mr. Vedova concludes that a shorter exclusivity period in the U.S. "would mean more investment dollars, more jobs, and more research facilities on this side of the Atlantic," and would constitute "a historic shift" for U.S. biotech researchers, who have "[f]or much of the past few decades . . . left the Europeans in the dust."

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December 03, 2009

Two Physicians Want Congress to Close "Evergreening" Loophole in FOB Legislation

By Donald Zuhn --

In an Op-Ed appearing in Tuesday's San Jose Mercury News, two physicians have asked Rep. Anna Eshoo (D-CA) to close what they believe is a loophole in follow-on biologics (FOB) legislation currently before Congress ("Eshoo needs to close loophole in biologics legislation"). The authors of the piece, psychiatrist Dr. Alexander Tsai of the Langley Porter Psychiatric Institute at the University of California, and Dr. Nicholas Rosenlicht, a clinical professor of psychiatry at UCSF who is in private practice in Berkeley, CA, directed their request to Rep. Eshoo because of her successful efforts to secure passage of FOB legislation in the House.

Last spring, Rep. Eshoo (at left) introduced an FOB bill (H.R. 1548) in the House that would establish a pathway for the licensure of biosimilar biological products (otherwise known as follow-on biologics or biogenerics) and provide up to 14.5 years of data exclusivity for biologic innovators (see "Second Follow-on Biologics Bill Is Introduced in House"). The bill was introduced one week after House Energy and Commerce Committee Chairman Rep. Henry Waxman (D-CA) introduced his own bill (H.R. 1427), which would establish a regulatory pathway for the licensing of biosimilar or biogeneric biological products and provide up to 5.5 years of exclusivity (see "Waxman Introduces Follow-on Biologics Bill"). Currently, H.R. 1548 enjoys the support of 150 members of the House while H.R. 1427 has the backing of only 17 members.

While the relative support of the two bills served as something of an indicator of where the House stood on the issue of data exclusivity, over the summer, the debate over FOB legislation merged with the heath care debate. In late July, the House Committee on Energy and Commerce approved a health care bill (H.R. 3200) containing FOB provisions that are similar to the follow-on biologics legislation introduced by Rep. Eshoo back in March (see "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period"). And in November, the House passed a separate health care bill (H.R. 3962) that would provide for the establishment of a licensure pathway for biosimilar biological products, and which would preclude a biosimilar application from being approved "until the date that is 12 years after the date on which the reference product was first licensed" (see "Follow-on Biologics News Briefs - No. 10").

While the FOB debate over the past few years has been heavily focused on the length of an appropriate exclusivity period (see "Follow-on Biologics Data Exclusivity Debate Scorecard - Part III"), some opponents of current FOB legislation contend that another issue, known as evergreening, has been overlooked. As the Mercury News article suggests, current FOB legislation would "reward[] branded biologic drug manufacturers with additional years of exclusivity if they make slight changes to their existing drugs, a strategy known as 'evergreening.'" The authors note that "[a]ccording to the FTC, [Rep. Eshoo's] bill would stifle innovation by encouraging manufacturers to focus their research efforts on making minor modifications to existing drugs rather than on developing 'new inventions to address unmet medical needs,'" and add that "[a]s psychiatrists, we are very familiar with how evergreening has adversely affected our patients." Drs. Tsai and Rosenlicht find fault with Rep. Eshoo's contention that her bill would not permit evergreening, countering that the legislation "actually contains a glaring loophole whereby simple, inexpensive modifications to drug structure could trigger additional years of exclusivity." The authors conclude by asking Rep. Eshoo to "reconcile her priorities with those of the marginalized and excluded -- and close her evergreening loophole" as negotiations on the health care bill progress.

Drs. Tsai and Rosenlicht are not the first to call attention to an alleged evergreening loophole in current FOB legislation. In early November, Jane Hamsher, writing for The Huffington Post, disagreed with Rep. Eshoo's interpretation of her bill, saying that "a number of experts including Ethan Guillen, Executive Director of Universities Allied for Essential Medicines (UAEM), Chris Manz, UAEM student at Duke University, and Sarah Rimmington, Attorney at Essential Action, Access to Medicines Project, . . . all concur that Rep. Eshoo's bill doesn't say what she believes it does" ("Anna Eshoo's PhRMA Boondoggle: The Devil Is In Her Details"). In the health care bill recently passed by the House (H.R. 3962), the portion of the legislation that has been drawing criticism is contained within the following section (which also includes a provision providing for a 12-year data exclusivity period):

(7) EXCLUSIVITY FOR REFERENCE PRODUCT.—
(A) EFFECTIVE DATE OF BIOSIMILAR APPLICATION APPROVAL.—Approval of an application under this subsection may not be made effective by the Secretary until the date that is 12 years after the date on which the reference product was first licensed under subsection (a).
(B) FILING PERIOD.—An application under this subsection may not be submitted to the Secretary until the date that is 4 years after the date on which the reference product was first licensed under subsection (a).
(C) FIRST LICENSURE.—Subparagraphs (A) and (B) shall not apply to a license for or approval of—
(i) a supplement for the biological product that is the reference product; or
(ii) a subsequent application filed by the same sponsor or manufacturer of the biological product that is the reference product (or a licensor, predecessor in interest, or other related entity) for—
(I) a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength; or
(II) a modification to the structure of the biological product that does not result in a change in safety, purity, or potency.

Rep. Eshoo's interpretation of the passage above appeared in an article she wrote for The Hill's Congress Blog ("Setting the record straight on our health care legislation"), where she said that she was "quite frankly outraged by the falsehoods and misrepresentations" made by Ms. Hamsher in one of her earlier articles. As for the accusation that her legislation contained an evergreening loophole, Rep. Eshoo explained that:

There is no 'evergreening' clause in my legislation. There is in fact an 'anti-evergreening' clause which explicitly provides no new exclusivity period would be granted for "a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength." My amendment prohibits by its plain language exactly what Ms. Hamsher alleges it would encourage.

Ms. Hamsher's experts, however, countered with their own post ("UAEM and AMSA Respond to Rep. Eshoo -- Point by Point"), arguing that:

The clause Representative Eshoo refers to does appear on its face to exclude changes that result in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength from being eligible for a new 12-year exclusivity period. Unfortunately, her understanding of how the language operates is incorrect. The existence of the language in the bracket "(not including a modification to the structure of the biological product)" -- actually does create a huge evergreening loophole. If you look closely at the tricky language of the sentence you will see that changes to biologics that result in new indications, routes, dosing schedules, delivery systems, strengths, etc., are ineligible for another 12- year exclusivity period under the Eshoo approach only if they come about without a modification to the structure of the product.
In other words, if a company makes a modification to the structure of the already approved biologic that results in a new indication or any of the other items listed, they will be eligible for a brand new 12-year exclusivity period. Unfortunately, because the term "structural modifications" is not defined, interpretation is open to a very wide range of possible changes that will qualify for a brand new 12-year monopoly, many of which are relatively simple and inexpensive to do, and which do not change a drug in any material way.

As the health care debate moves to the Senate -- and the FOB debate moves along with it -- the Senate's response to the evergreening loophole argument merits watching.

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November 30, 2009

Follow-on Biologics News Briefs - No. 10

By Donald Zuhn --

Affordable Health Care for America Act Placed on Senate Legislative Calendar

The Affordable Health Care for America Act (H.R. 3962), which was passed by the House of Representatives on November 7th by a narrow five-vote margin (220-215), has now been placed on the Senate Legislative Calendar. The 1,990-page bill includes a section (§ 2575) providing for the establishment of a licensure pathway for biosimilar biological products, which precludes a biosimilar application from being approved "until the date that is 12 years after the date on which the reference product was first licensed," and offers an additional 6 months of exclusivity for the use of reference products "in the pediatric population" (see "House Health Care Bill Includes Biosimilar Licensure Pathway").

Health Care Bill Introduced in the Senate

On November 18th, two days after H.R. 3962 was placed on the Senate Legislative Calendar, Senate Majority Leader Harry Reid (D-NV) unveiled the Senate's own health care bill, the Patient Protection and Affordable Care Act (H.R. 3590). At first glance, the bill appears to be unrelated to health care, stating instead that it "amend[s] the Internal Revenue Code of 1986 to modify the first-time homebuyers credit in the case of members of the Armed Forces and certain other Federal employees, and for other purposes." However, a check of THOMAS indicates that the H.R. 3590 "is the vehicle for the version of health care reform that will be debated in the Senate." Like H.R. 3962, the 2,074-page Senate bill contains a section (§ 7002) providing for an approval pathway for biosimilar biological products. Also like H.R. 3962, the Senate bill precludes a biosimilar application from being approved "until the date that is 12 years after the date on which the reference product was first licensed." In addition, the Senate bill, like H.R. 3962, offers an additional 6 months of exclusivity for the use of reference products "in the pediatric population."

AP Reports on Senate Health Care Bill

An Associated Press report ("Reid health bill helps chiropractors, drugmakers") regarding the Senate bill states that it "extends the protection some brand-name manufacturers would get from generic competitors," as "Reid's bill would add another six months of protection for drugmakers who also test those products for use by children." Because the bill passed in the House contains an the same pediatric exclusivity provision, it is perhaps unfair to suggest that the pediatric exclusivity provision of Senator Reid's bill has somehow extended innovator exclusivity even further.

CCPM Comments on Senate Health Care Bill

The Coalition for a Competitive Pharmaceutical Market (CCPM), which recently released a statement "appealing to Congress to fix the excessive 12-year market exclusivity and ever-greening provisions for biologics or drop it altogether" (see "Follow-on Biologics News Briefs - No. 9"), released a short statement after Senator Reid unveiled H.R. 3590, in which the CCPM "voic[ed] serious concern in response to the extension of biologics exclusivity included in The Patient Protection and Affordable Care Act (H.R.3590)." In particular, the group states that "[d]espite numerous economic studies, widespread media attention, patient outcry, and the support of the Administration for a more balanced approach, the Senate Health Care Reform bill went in the opposite direction by adding additional exclusivity to the already unacceptable 12 years of market exclusivity for brand products." The CCPM statement does not specify exactly how the Senate bill goes "in the opposite direction by adding additional exclusivity."

According to the CCPM website, the group has 33 participating members, which include Apotex, Hospira, Momenta Pharmaceuticals, Mylan Labs, Ranbaxy Pharmaceuticals, Teva Pharmaceuticals USA, Watson Pharmaceuticals, and the Generic Pharmaceutical Association (GPhA).

GPhA Says Senate Bill "Gratuitously Extends Biologic Monopolies"

In a statement released by the Generic Pharmaceutical Association (GPhA) on November 19th, GPhA President and CEO Kathleen Jaeger writes that "[j]ust when you think the pro-BIO and PhRMA provisions in health care reform couldn't get any more favorable for them, the Senate health care reform bill has further disappointed consumers by adding additional monopoly protection to expensive biologic medicines," adding that "[r]egardless of the motivation, the biologic provision in this bill takes the already egregious and unwarranted 12 years of exclusivity and extends it." With regard to how the bill extends the 12-year exclusivity period, Ms. Jaeger alludes to the Senate's failure "to close down a major loophole known as 'evergreening.'" She also states that "[i]n the name of true health care reform, it is incumbent upon Congress to strip the anti-consumer biologic provision out of health care reform." The GPhA represents manufacturers and distributors of finished generic pharmaceuticals and bulk active pharmaceutical chemicals.

Boston Globe Criticizes 12-Year Exclusivity Period; Prompts Response

An Op-Ed article in last week's Boston Globe commends Congress for trying "to open the door for approval of generic versions of drugs known as biologics," but concludes that "after intensive lobbying by the biotech industry, the measures that are emerging from Congress grant too many years of exclusivity to the original makers" ("Biotech bills give drugmakers too many years of exclusivity"). The Globe argues that the 12-year exclusivity period in current House and Senate bills is "too long, more than double the five years of protection from competition guaranteed for conventional drugs."

The Globe Op-Ed, however, appears to disregard the differences in developmental costs and time between small molecule therapeutics and biologics (see "Amgen VP Makes Case for Longer Exclusivity Period in Follow-on Biologics Legislation"). Instead, the article contends that "competition from generics is not likely to erode the ability of the original biotech manufacturers to continue reaping profits," because "[t]here are onerous technical barriers to making so-called biogenerics, unlike generic versions of conventional medications, so companies that invent original drugs are likely to retain market share despite the new competition."

In support of this argument, the Globe points to an article published in the New England Journal of Medicine last month, which contends that a 5-year exclusivity period would be sufficient because follow-on biologics have led to biologic price reductions of between 25-30% (as compared with innovator small molecule price reductions of up to 80%) in Europe (see "NEJM Authors Say Five Years of Data Exclusivity Would Be Sufficient"). The Globe parts ways with the NEJM article on an appropriate exclusivity period, stating that "[i]n clearing the path for generic alternatives to expensive biologics, Congress should enact a shorter window of market exclusivity than 12 years, but more than the five years afforded to simpler, conventional drugs," and adding that "[a] protection period that falls directly in between these extremes would strike a balance between encouraging companies to make biologic drugs and making them affordable."

In response to the Op-Ed article, Massachusetts Biotechnology Council (MassBio) President Robert Coughlin argued that the Globe's "editorial misleadingly compared the 12 years of data exclusivity in the biosimilars legislation with the five-year provision for traditional pharmaceuticals," contending that "[t]his apples-to-oranges comparison overlooks the fact that biologics cannot achieve the same kind of patent protection as pharmaceuticals." Mr. Coughlin also noted that:

Data exclusivity does not prevent competition. Companies can bring competitive products to market during the exclusivity period, provided they conduct their own safety and efficacy research. They cannot piggyback on an innovator’s proprietary data to obtain FDA approval until the exclusivity period ends. That’s simply fair.

According to the MassBio website, the group represents more than 600 biotechnology companies, universities, academic institutions and others dedicated to advancing cutting edge research.

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November 05, 2009

Follow-on Biologics News Briefs - No. 9

By Donald Zuhn --

Patient Groups Back Senate and House Committee FOB Legislation

In September, twenty-seven patients' groups sent a letter to Sen. Harry Reid (D-NV), Sen. Mitch McConnell (R-KY), Speaker of the House Nancy Pelosi (D-CA), and Rep. John Boehner (R-OH), expressing their "strong support for the inclusion of a regulatory pathway for biosimilars in the America's Affordable Health Choices Act of 2009." The groups urged Congress "to identify the appropriate balance between access, patient safety, and the need for continued innovation," and noted that they "were heartened to see complementary amendments passed by both Committees of jurisdiction in the Senate and House with strong bi-partisan support" (see "Senators Champion 12-Year Data Exclusivity in Senate" and "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period"). In particular, the groups expressed support for "the important, compromise Hagan/Enzi/Hatch and Eshoo/Inslee/Barton amendments which establish a regulatory pathway for biosimilars."

The signatories to the letter include: AA CSA Foundation, Alliance for Aging Research, American Association of Orthopaedic Surgeons, American Autoimmune Related Diseases Association, American Institute for Medical and Biological Engineering, Californians for Cures, CANN - Community Access National Network, Celiac Disease Center at Columbia University, Children's Tumor Foundation, Colon Cancer Alliance, Community Health Charities, Dystonia Medical, Research Foundation, Easter Seals, Hereditary Disease Foundation, Immune Deficiency Foundation, In Need Of Diagnosis, Inc., International Cancer Advocacy Network, Lung Cancer, Circle of Hope, Men's Health Network, MLD Foundation, National Alliance on Mental Illness, Parkinson's Action Network, Research for Cure, RetireSafe, The AIDS Institute, Vietnam Veterans of America, and Vital Options International.

DelawareBio and BIO Seek Support of Delaware Delegation

On Monday, Bob Dayton, the President of the Delaware BioScience Association, and Jim Greenwood, the President and CEO of the Biotechnology Industry Organization (BIO), co-authored a letter on delawareonline, encouraging Delaware Sen. Thomas Carper (D), Sen. Edward Kaufman (D), and Rep. Mike Castle (R) to join them "in supporting a biosimilars pathway that protects patient safety and encourages continued innovation." Noting that Senate and House committees had passed health care reform amendments that would establish a follow-on biologic regulatory pathway -- as well as provide a 12-year data exclusivity period for biologic drug makers (see "Senators Champion 12-Year Data Exclusivity in Senate" and "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period"), Mr. Dayton and Mr. Greenwood contend that "[t]he pathway to regulatory approval of biosimilars included in the House and Senate health care reform bills will ensure that these medicines are tested for safety while expanding access, lowering costs through expanded competition and providing incentives for biotech companies to continue innovating." The biotech industry leaders also noted that "[p]atient advocates, doctors, labor unions, universities and governors, including Gov. Jack Markell, agree that the provisions must be included in the final health care bill" (see "Governors Send Letter to Congressional Leaders in Support of 12-Year Data Exclusivity Period").

Coalition for a Competitive Pharmaceutical Market Asks Congress to Fix FOB Provisions of Health Care Reform Legislation

Last week, the Coalition for a Competitive Pharmaceutical Market (CCPM) released a statement "appealing to Congress to fix the excessive 12-year market exclusivity and ever-greening provisions for biologics or drop it altogether." CCPM Chair Annette Guarisco stated that coalition members "would rather have the status quo than legislation that guarantees profits for a few at the expenses of the American public." In its release, the CCPM noted that a letter had been sent to Sen. Harry Reid (D-NV) and Speaker of the House Nancy Pelosi (D-CA), "urg[ing] lawmakers to resolve the current provision that will create an ineffective pathway to bringing biogenerics or biosimilars to patients and consumers," and "implor[ing] Congress not to overlook the immediate opportunity to bend the long-term cost curve of health care through a workable pathway for biogenerics."

The CCPM pointed to a recent Time magazine article (see "Time Magazine on Data Exclusivity Debate") as evidence of the "skepticism among the American public, pharmaceutical researchers, medical students, and industry economic experts about the results of BIO and PhRMA's influence on the health care reform deal." The group also pointed to a paper in the New England Journal of Medicine (see "NEJM Authors Say Five Years of Data Exclusivity Would Be Sufficient"), which the CCPM contends "highlights the shortcomings of biologics provisions [in current health care reform legislation]." In particular, the group says the article indicates that biosimilar legislation "would have no value because it would create a pathway that would scarcely be used," and further, "would allow for 'ever-greening,' or for manufacturers to obtain an additional 12-year exclusivity period by making minor changes to the structure of an approved product." The group concludes that "[f]inding the right balance between incentives for innovation and timely access to care means that Congress needs to fix or drop the current biogenerics provision [in health care reform legislation]."

TJU Dean Asks Congress to Focus on Patient Safety

In a letter to the congressional daily The Hill, Dr. David Nash (at right), Dean of the Jefferson School of Population Health at Thomas Jefferson University in Philadelphia, PA, urges Congress not to ignore "the broader need of ensuring patient safety" when crafting a follow-on biologics (FOB) regulatory pathway in current health care reform legislation. Dr. Nash, who last spring moderated a policy forum entitled: "Regulation of Follow-on Biologics: Ensuring Quality and Patient Safety" at the National Press Club in Washington, DC (see "Follow-on Biologics News Briefs - No. 3"), noted that much of the FOB discussion has focused on the issue of data exclusivity. He contends that "[t]his focus is extremely shortsighted, and ignores the broader need of ensuring patient safety for both current and future drugs." Stating that "it is not possible to create an identical biologic copy of the original drug because of the living proteins and carbohydrates used to make them," Dr. Nash warns that "the complexity of the genetic engineering demanded for producing [follow-on biologics] creates serious safety concerns." As a result, "[q]uestions of patient safety that hinge on the interchangeability and immunogenicity of FOBs can be answered only through rigorous and comprehensive human testing." Dr. Nash also contends that FOBs should be subject to post-marketing study and surveillance. He concludes that "[o]nly these actions can ensure that we're placing a higher premium on patient safety than other considerations."

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November 03, 2009

House Health Care Bill Includes Biosimilar Licensure Pathway

By Donald Zuhn --

Last Thursday, Rep. John Dingell (D-MI) introduced the Affordable Health Care for America Act (H.R. 3962) in the House of Representatives. The 1,990-page bill, which was co-sponsored by Rep. Robert Andrews (D-NJ), George Miller (D-CA), Frank Pallone, Jr. (D-NJ), Charles Rangel (D-NY), Pete Stark (D-CA), and Henry Waxman (D-CA), includes a section (§ 2575) providing for the establishment of a licensure pathway for biosimilar biological products.

With regard to the issue of interchangeability, the bill states that a biological product (i.e., follow-on biologic or biosimilar) shall be determined to be interchangeable with a reference product (i.e., innovator biologic) if information is provided showing that "the biological product . . . is biosimilar to the reference product" and "can be expected to produce the same clinical result as the reference product in any given patient." Biosimilarity is defined as meaning "that the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components," and that "there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product." For biological products that are administered to an individual more than once, information must also be provided showing that "the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch."

With regard to the issue of data exclusivity, the bill states that a biosimilar application cannot be approved "until the date that is 12 years after the date on which the reference product was first licensed," and further, that a biosimilar application may not be submitted "until the date that is 4 years after the date on which the reference product was first licensed." The bill also provides an additional 6 months of exclusivity for the use of reference products "in the pediatric population."

Following introduction, H.R. 3962 was referred to the Committees on Energy and Commerce, Education and Labor, Ways and Means, Oversight and Government Reform, Budget, Rules, Natural Resources, and Judiciary, for consideration of the provisions of the bill falling within the jurisdiction of each of the Committees.

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12 Senators Write in Support of 12-Year Data Exclusivity Period

By Donald Zuhn --

On October 23, twelve Senators sent a letter to Sen. Harry Reid (D-NV), asking the Senate majority leader to "support the establishment of a responsible pathway for the approval of follow-on biologic treatments, or 'biosimilars,' that ensures patient safety and includes 12 years of data exclusivity." The letter, which was signed by Mark Udall (D-CO), Christopher Bond (R-MO), Ben Nelson (D-NE), Kay Bailey Hutchinson (R-TX), John Kerry (D-MA), Robert Bennett (R-UT), Thomas Carper (D-DE), Thad Cochran (R-MS), Barbara Boxer (D-CA), Dianne Feinstein (D-CA), Paul Kirk, Jr. (D-MA), and Mary Landrieu (D-LA), states that "[t]he bipartisan vote this past summer by the Health, Education, Labor, and Pension (HELP) Committee to provide 12 years of data exclusivity for innovator biotechnology companies will help ensure the twin goals of making life-changing and life-saving biologic treatments more accessible and affordable, while continuing to foster the ongoing search for new cures and treatments."

The Senators contend that "lengthy and costly research and development must be coupled with an adequate period of data exclusivity for the innovator to ensure the future of new life-saving biotech discoveries." Nothing that "more than 150 patient organizations, research universities, venture capital groups, and innovators have stated strongly that 12 years of data exclusivity is crucial for ensuring continued growth and discovery in the biotech industry," the Senators "urge [the majority leader], this year, to support the enactment of 12 years of data exclusivity for innovator biotechnology companies."

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November 01, 2009

Follow-on Biologics Data Exclusivity Debate Scorecard - Part III

By Donald Zuhn --

Over the past twelve months, Patent Docs has reported on a number of papers, letters, and statements that outline positions taken by various players in the follow-on biologics (FOB) data exclusivity debate. In view of the recent Time magazine article "How Drug-Industry Lobbyists Got Their Way on Health Care," which mentions that Duke University Prof. Henry Grabowski's oft-cited data exclusivity study was funded by the Pharmaceutical Research and Manufacturers of America (PhRMA) and two partisan patient groups (see "Time Magazine on Data Exclusivity Debate"), a review of these players and their positions on the issue seems appropriate. Last week, we summarized the positions of seventeen individuals or groups that have participated in the debate (see "Follow-on Biologics Data Exclusivity Debate Scorecard" - Part I and Part II). Today, we examine the positions of another eleven participants in the debate. Among those who have advocated for shorter data exclusivity periods (i.e., less than 8 years) are:

• Alfred Engelberg, a New York patent attorney who represented the Generic Pharmaceutical Industry Association and played a role in the passage of the Hatch-Waxman Act in 1984; Dr. Aaron Kesselheim, a patent attorney and Instructor in Medicine at the Harvard Medical School; and Dr. Jerry Avorn, a Professor of Medicine at the Harvard Medical School, who published an article in the New England Journal of Medicine contending that FOB legislation being proposed in the House and Senate, which provides 12 years of data exclusivity, would "upset[] the delicate balance between the interests of consumers and those of innovators" (see "NEJM Authors Say Five Years of Data Exclusivity Would Be Sufficient"). The authors also argue that "[e]ven if the new legislation is adopted, manufacturers of potential follow-on products would probably prefer to ignore the new pathway and opt to file a standard BLA, which would not be subject to the 12-year delay," and therefore contend that "as currently fashioned, the biosimilar legislation would have no value, because it would create a pathway that would scarcely be used." The authors therefore suggest that the legislation currently being proposed in the House and Senate be amended to "give the FDA the mandate to evaluate and approve biosimilar drugs in a reasonable period, starting, as with small-molecule products, 5 years after the approval of the original drug."

• James Love, the director of the public interest advocacy group Knowledge Ecology International; and James Glassman, the former under secretary of State for public diplomacy and public affairs in the George W. Bush administration, who authored an article in the Congressional newspaper Roll Call expressing "alarm" regarding Congressional action to establish a follow-in biologics (FOB) regulatory pathway, and contending that passage of FOB provisions by the House Energy and Commerce and Senate HELP Committees would "make it difficult, if not impossible, for generic drugs to compete with biologics, even after patents have expired" (see "Roll Call Authors Unite against Current Follow Biologics Legislation"). The authors state that "[t]he original proposal for biogenerics would have retained most of the features of the 1984 Hatch-Waxman Act, including the five-year exclusion [i.e., exclusivity period]," and assert that "after an intense lobbying campaign by the manufacturers of biologics, new amendments to the Senate and House versions of the bill made it much more difficult for makers of generics to enter the market."

• Momenta Pharmaceuticals Inc., which issued a statement supporting a shorter data exclusivity period (see "Follow-on Biologics News Briefs - No. 6"). The Cambridge-based company, which is developing a technology platform that provides a series of analytic tools to help determine and reproduce exactly how a biologic drug was made, did not specify the particular data exclusivity period that it was seeking.

Among those who have advocated for longer data exclusivity periods (i.e., 10 or more years) are:

• The AIDS Institute, Community Access National Network, CAEAR Foundation, and National Minority AIDS Council, which sent a letter to Sen. Ted Kennedy in July noting that approximately 32 HIV/AIDS drugs had been developed since 1987, and opining that "[a]ll of these life-saving drugs were developed with private investment [that] was only possible because pharmaceutical and biotechnology companies were able to recoup their investment in the extensive clinical research and clinical trials required to make these drugs available to the people that need them" (see "Follow-on Biologics News Briefs - No. 6"). The signatories to this letter therefore "strongly urge [Congress] to include a period of data exclusivity relative to biologics of 12 years."

• The Alliance for Aging Research, which sent a letter to Rep. Anna Eshoo (D-CA) announcing its support for Rep. Eshoo's FOB bill -- which would have provided up to 14.5 years of data exclusivity (see "Follow-on Biologics News Briefs - No. 6").

• The ALS Association, which also sent a letter to Rep. Eshoo arguing that "any biosimilars legislation . . . must foster innovation," and therefore supporting a regulatory pathway providing a 12 year period of data exclusivity (see "Follow-on Biologics News Briefs - No. 6").

• The California Healthcare Institute (CHI), an independent organization comprising more than 250 biomedical companies and academic and research institutions involved in researching and advocating policy to forward the interests of California's biomedical community, which issued a statement "support[ing] the development of a science-based biosimilars approval pathway that employs the best science to make sure that products are safe for patients, that encourages price competition among manufacturers, and provides ample incentives to encourage continued private-sector investment in the next generation of breakthroughs," and stating that it was "pleased" that Congressional legislation would "provide[] for 12 years of data exclusivity" (see "Follow-on Biologics News Briefs - No. 7").

• Governors Deval Patrick of Massachusetts, M. Jodi Rell of Connecticut, Bill Ritter, Jr. of Colorado, John Markell of Delaware, Martin O'Malley of Maryland, Beverly Perdue of North Carolina, Theodore Kulongoski of Oregon, Donald Carcieri of Rhode Island, Luis Fortuño of Puerto Rico, and Christine Gregoire of Washington, who sent a letter to Speaker of the House Nancy Pelosi (D-CA), House minority leader John Boehner (R-OH), Senate majority leader Harry Reid (D-NV), and Senate minority leader Mitch McConnell (R-KY) stating that "the balance struck in the Senate Health, Education, Labor and Pensions Committee on 12 years of data exclusivity for biologics represents a critical element needed to ensure appropriate incentives for continued biomedical innovation" (see "Governors Send Letter to Congressional Leaders in Support of 12-Year Data Exclusivity Period"). In their letter, the Governors assert that "[i]nnovator companies must be provided with at least 12 years of non-patent data exclusivity to allow for recovery of their original investment and to ensure licensing payments to our research institutions." Governors Patrick, Ritter, Markell, O'Malley, Perdue, Kulongoski, and Gregoire are Democrats, and Governors Rell, Carcieri, and Fortuño are Republicans -- Gov. Fortuño is also a member of the New Progressive Party of Puerto Rico.

• Dr. Henry Grabowski (at right), a Professor of Economics at The Fuqua School of Business at Duke University, who published a paper in Nature Reviews Drug Discovery, in which he determined that the "break even" point for biologic drugs requires a data exclusivity period from between 12.9 and 16.2 years (see "Professor Grabowski's Economic Analysis of Data Exclusivity for Follow-on Biologic Drugs"). In his paper, Dr. Grabowski cautions that the discount rates used to calculate the break even periods are conservative and that "smaller publicly listed biotechnology companies and non-listed private biotechnology firms would generally have a much higher cost of capital," suggesting that the actual "break even" point may require even longer data exclusivity periods. As noted above, Dr. Grabowski's study was funded in part by the Pharmaceutical Research and Manufacturers of America (PhRMA).

• The Rhode Island BioGroup and the New England Biotech Association, which ran radio spots and full-page newspaper ads supporting an FOB regulatory pathway providing 12 years of data exclusivity (see "Follow-on Biologics News Briefs - No. 6").

In addition to the above advocates, at least one other group has addressed the data exclusivity issue without taking a position on an appropriate exclusivity period:

• Deloitte Consulting LLP, which published a paper assessing the differences between the small molecule pharma industry, which was a stable and mature in 1984 when Hatch-Waxman was implemented, and the biotech industry, which is nascent and complex (both scientifically and financially), and concluding that "[i]n establishing a path to market for follow-on biologics, Congress may need to employ a different set of levers to achieve the same results" (see "Deloitte White Paper Addresses Unintended Consequences of Follow-on Biologic Regulatory Pathway"). The Deloitte paper, which was authored by Jim Hollingshead and Rob Jacoby, suggests that an FOB regulatory pathway patterned too closely on the Hatch-Waxman regime would likely have unintended, and potentially adverse, consequences for the biotech industry.

In summary, the following advocates support "shorter" data exclusivity periods:

• Federal Trade Commission -- 0 years
• Alfred Engelberg, Dr. Aaron Kesselheim, and Dr. Jerry Avorn (NEJM authors) -- 5 years
• Dr. Laurence J. Kotlikoff -- 5 years
• James Love and James Glassman (Roll Call authors) -- 5 years
• National Coalition on Health Care -- 5 years
• AARP -- 5.5 years
• Alex Brill -- 7 years
• Office of Management and Budget -- 7 years
• Momenta Pharmaceuticals Inc. -- undefined

And the following advocates support "longer" data exclusivity periods:

• AIDS Institute, Community Access National Network, CAEAR Foundation, and National Minority AIDS Council -- 12 years
• ALS Association -- 12 years
• California Healthcare Institute -- 12 years
• Governors Deval Patrick, M. Jodi Rell, Bill Ritter, Jr., John Markell, Martin O'Malley, Beverly Perdue, Theodore Kulongoski, Donald Carcieri, Luis Fortuño, and Christine Gregoire -- 12 years
• National Venture Capital Association -- 12 years
• Pharmaceutical Research and Manufacturers of America -- 12 years
• Rhode Island BioGroup and New England Biotech Association -- 12 years
• Senators Orrin Hatch (R-UT), Barbara Mikulski (D-MD), Michael Enzi (R-WY), and Kay Hagan (D-NC) -- 12 years
• Stuart Watt (Amgen Inc.) -- 12 years
• Dr. John Calfee (American Enterprise Institute) -- 12 to 14 years (period mentioned but not specifically endorsed)
• Dr. Henry Grabowski -- 12.9 and 16.2 years
• Biotechnology Industry Organization -- 14 years
• Andrew Grossman (Heritage Foundation) -- 14 years (period mentioned but not specifically endorsed)
• Intellectual Property Owners Association -- 14 years
• Audrey Philips (Johnson & Johnson) -- 14 years
• Alliance for Aging Research -- 14.5 years
• Dr. Howard Dean (Democratic National Committee) -- 14.5 years
• Robert Armitage (Eli Lilly) - 15-20 years

Readers are encouraged to review our prior coverage of the papers and letters described in this series. Patent Docs will continue to update the list of data exclusivity debate participants -- on both sides of the issue -- as additional players make their positions known.

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October 29, 2009

Follow-on Biologics Data Exclusivity Debate Scorecard - Part II

By Donald Zuhn --

Over the past twelve months, Patent Docs has reported on a number of papers, letters, and statements that outline positions taken by various players in the follow-on biologics data exclusivity debate. In view of last week's Time magazine article "How Drug-Industry Lobbyists Got Their Way on Health Care," which mentions that Duke University Prof. Henry Grabowski's oft-cited data exclusivity study was funded by the Pharmaceutical Research and Manufacturers of America (PhRMA) and two partisan patient groups (see "Time Magazine on Data Exclusivity Debate"), a review of these players and their positions on the issue seems appropriate. Yesterday, we summarized the positions of ten individuals or groups that have participated in the debate (see "Follow-on Biologics Data Exclusivity Debate Scorecard - Part I"). Today, we examine the positions of another seven participants in the debate. Among those who have advocated for shorter data exclusivity periods (i.e., less than 8 years) are:

• The AARP, which sent a letter to members of Congress stating that "there is little to support" the argument that legislation providing up to 5.5 years of data exclusivity "would undermine [the biotech/pharma industry's] ability to recoup the costs of drug development" (see "BIO CEO Provides Update on Follow-on Biologics Legislation"). In addition, the organization's letter asserted that "based on U.S. drug sales alone, many top selling biologics have recouped their manufacturer’s initial investment several times over in the last six years -- often within a single year."

• The Federal Trade Commission (FTC), which issued a report on follow-on biologics stating that a 12-14 year data exclusivity period was not necessary to promote innovation by pioneer biologics companies (see "No One Seems Happy with Follow-on Biologics According to the FTC"). The FTC report opines that data exclusivity would be in addition to the incentives provided by patent protection and market-based pricing, and thus data exclusivity would provide no additional incentives to developing biologics drugs.

• The Office of Management and Budget (OMB), which sent a letter to Rep. Henry Waxman (D-CA), the Chairman of the House Energy and Commerce Committee, stating that a follow-on biologics regulatory pathway providing a 7-year data exclusivity period would "strike[] the appropriate balance between innovation and competition" (see "White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics"). The OMB letter was was signed by Peter Orszag, Director of the OMB, and Nancy-Ann DeParle, director of the Office of Health Reform.

Among those who have advocated for longer data exclusivity periods (i.e., 10 or more years) are:

• Dr. John Calfee (at right) of the American Enterprise Institute for Public Policy Research (AEI), who wrote a white paper indicating that longer data exclusivity periods would provide the more prudent approach to the regulation of follow-on biologics (see "AEI Believes Advantages of Longer Data Exclusivity Period Outweigh Disadvantages"). In his paper, Mr. Calfee stated that "[g]iven the stakes -- a substantial amount of future R&D hangs in the balance -- Congress should exercise an abundance of caution in designing follow-on biologic legislation so as not to endanger valuable future research," and concluded that "the social losses from providing for fairly long exclusivity periods (twelve to fourteen years) would be small compared to what are likely to be substantial social gains from exclusivity."

• Democratic National Committee chairman Dr. Howard Dean (at right), who wrote an Op-Ed piece in The Hill backing legislation that would provide up to 14.5 years of data exclusivity (see "BIO CEO Provides Update on Follow-on Biologics Legislation"). Dr. Dean argued that:

A commonsense and fair approach, similar to the process and timeline currently in place for generic versions of chemical-based medicines, would allow the original developer of the biologic to protect the proprietary data used to develop the medicine for at least 12 years. A shorter exclusivity period would prematurely rob biotech innovators of their intellectual property and destroy incentives to develop new cures. Most firms would be unable to recoup their investments in new medicines, which ordinarily top $1 billion and involve 15 years of research and development. If we discourage investment, we jeopardize the development of the next generation of breakthrough medicines and cures.

• The Pharmaceutical Research and Manufacturers of America (PhRMA), which issued a statement warning that "[g]iving short shrift to incentives for innovation would grind to a halt uniquely American innovation, moving critically important R&D -- and tens of thousands of U.S jobs – overseas," and stating that "[e]conomists and the venture capitalists whose private investments shore up this vital, yet vulnerable sector agree: 12 years of data protection, at a bare minimum, are needed to help recoup the significant development costs for biologic innovators" (see "PhRMA Supports Follow-on Biologics Regulatory Pathway Providing 12-Years of Data Exclusivity"). The advocacy group representing pharmaceutical and biotechnology research companies noted that "[c]ompanies could still seek approval of competing biologics using their own data, but for those 12 years no biosimilar competitor could rely on innovators’ hard–earned data, collected during development that may span a decade, or more, to seek approval."

• Senators Orrin Hatch (R-UT), Barbara Mikulski (D-MD), Michael Enzi (R-WY), and Kay Hagan (D-NC), who wrote a letter to Senate majority leader Harry Reid (D-NV) noting that "[m]ore than 150 patient groups, research universities, local chambers of commerce, venture capital groups, and innovators have expressed strongly that a base 12 years of data exclusivity is crucial to ensure continued growth in the biotechnology industry and future discoveries that will make a difference in the lives of millions of patients," and urging the majority leader "to support the enactment of a pathway for the approval of biosimilars with a base 12·year period of data exclusivity for innovator biotechnology companies" (see "Four Senators Write in Support of 12-Year Data Exclusivity Period").

Readers are encouraged to review our prior coverage of the papers and letters described above.

Posted at 11:59 PM in Follow-on Biologics | Permalink | Comments (0) | TrackBack (0)

October 28, 2009

Follow-on Biologics Data Exclusivity Debate Scorecard - Part I

By Donald Zuhn --

Over the past twelve months, Patent Docs has reported on a number of papers, letters, and statements that outline positions taken by various players in the follow-on biologics data exclusivity debate. In view of last week's Time magazine article "How Drug-Industry Lobbyists Got Their Way on Health Care," which mentions that Duke University Prof. Henry Grabowski's oft-cited data exclusivity study was funded by the Pharmaceutical Research and Manufacturers of America (PhRMA) and two partisan patient groups (see "Time Magazine on Data Exclusivity Debate"), a review of these players and their positions on the issue seems timely. Today, we summarize the positions of ten individuals or groups that have participated in the debate. Among those who have advocated for shorter data exclusivity periods (i.e., less than 8 years) are:

• Alex Brill (at right), a principal at Matrix Global Advisors, LLC and former chief economist to the House Ways and Means Committee, who released a white paper entitled "Proper Duration of Data Exclusivity for Generic Biologics: A Critique," which asserts that a follow-on biologics regulatory pathway providing a data exclusivity period of seven years would be "sufficient for maintaining strong incentives to innovate while fostering a competitive marketplace" (see "Former House Ways and Means Economist Claims 7-Year Data Exclusivity Period Is Sufficient"). The paper, which was funded by Teva Pharmaceuticals, finds fault with some aspects of an economic model described by Duke University economist Henry Grabowski in a paper published in Nature Reviews Drug Discovery, and specifically determines that a biologic's "break-even" point (i.e., "the number of years required for an average portfolio of biologic drug investments to recoup all development and fixed production costs and to also reward the investors their expected (double-digit) rate of return") is just under 9 years -- as opposed to Prof. Grawbowski's calculation of between 12.9 and 16.2 years.

• Dr. Laurence J. Kotlikoff (at right), a professor of economics at Boston University, who authored a report entitled "Stimulating Innovation in the Biologics Industry: A Balanced Approach to Marketing Exclusivity," which contends that Congress should look to the Hatch-Waxman model (which generally provides four years of data exclusivity and one year of approval exclusivity) when determining an appropriate exclusivity period (see "BU Economics Professor Releases Report on the Impact of Marketing Exclusivity on Biologics Innovation"). The report, which was funded by Teva Pharmaceuticals USA, concludes that "[t]here are, quite simply, no compelling differences between the chemical-based and protein-based medication industries to justify deviating from a policy [embodied in the Hatch-Waxman Act] that has succeeded for over a quarter of a century in both dramatically reducing drug prices and stimulating innovation."

• The National Coalition on Health Care (NCHC), which describes itself as a non-profit and "rigorously non-partisan" coalition comprised of more than 70 organizations, and which wrote a letter to the Senate Health Committee urging it "to oppose generic biologics legislation that contains excessive periods of exclusivity or that contains other unnecessary and significant barriers to generic, biologic competition." The group concluded that "[t]he five year period of exclusivity provided in [Rep. Waxman's biosimilar bill] follows the Hatch-Waxman model and is the appropriate period of exclusivity," and suggested that "[a]n unnecessarily long period of exclusivity would . . . diminish the incentives for other companies to continue innovating, actually resulting in less innovation over time." (see "NCHC Sends Letter on Biosimilars to Senate Health Committee").

Among those who have advocated for longer data exclusivity periods (i.e., 10 or more years) are:

• Amgen Inc. Vice President and Law & Intellectual Property Officer Stuart Watt, who told attendees of the Biotechnology Industry Organization (BIO) Intellectual Property Counsels' Committee (IPCC) conference in March 2009 that an exclusivity period of at least 12 years is needed to provide incentives to innovator drug companies to continue developing new biologic drugs (see "Amgen VP Makes Case for Longer Exclusivity Period in Follow-on Biologics Legislation"). In support of a 12-year exclusivity period, Mr. Watt pointed to three factors: the research and development costs for bringing a biologic drug to market ($1 billion), the average product development time (12-15 years), and the product development risk (1 out of 100 candidates).

• Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood (at right), who stated that BIO supports a 14-year exclusivity period, noting that while "[l]ots of folks in the generic industry think it should be less," BIO was concerned that "if the industry does not have enough time to recover its investments, those investments will never be made" (see "BIO CEO Outlines Challenges for Obama Administration").

• Eli Lilly and Company Senior Vice President and General Counsel Robert Armitage (at right), who stated In an interview with the Washington Legal Foundation (WLF) that "Lilly has been adamant that a period of data exclusivity of 15-20 years for innovative products would represent the best policy choice for overall patient welfare," and further, that a 5-year or 10-year period of data exclusivity did not "make sense" in view of the safety hurdles and small number of new medicines coming to market (see "Washington Legal Foundation 'Conversations With' Series Examines IP Issues").

• In a paper primarily concerned with patent reform (as evidenced by its title: "Promoting Innovation with Patent Reform: A Memo to President-elect Obama"), Senior Legal Policy Analyst Andrew Grossman (at right) of The Heritage Foundation also touched on the issue of data exclusivity under a follow-on biologics regulatory pathway (see "Heritage Foundation Offers Patent Reform Proposals to the New President"). Stating that "[w]ithout adequate data exclusivity, innovation in the biotech sector will dry up, leading to fewer lifesaving treatments and eroding America's leadership in this field," Mr. Grossman advised against "[i]mposing a short exclusivity period or otherwise limiting enforcement of biologic patents." While exclusivity periods of between 0-14 years had been proposed in various follow-on biologics bills introduced in the House and Senate at the time of the publication, the Heritage Foundation paper only mentions the 14-year period.

• The Intellectual Property Owners Association (IPO) Board, which passed a resolution during its 2008 Annual Meeting supporting biosimilar legislation that would "promote[] continued innovation by providing at least 14 years of data exclusivity for an innovator’s biological product with additional periods of exclusivity available for new indications and/or for approval for use in the pediatric population (see "Follow-on Biologics News Briefs - No. 1").

• Johnson & Johnson executive director for biotechnology policy Audrey Philips, who contended that follow-on biologics legislation should strike "the right balance between saving money and still having medicines to advance in the future," and concluded that a 5-year exclusivity period would "certainly have a chilling effect on [biotech] investment" (see "Follow-on Biologics News Briefs - No. 3"). Instead, Ms. Philips argued for a 14-year exclusivity period.

• The National Venture Capital Association (NVCA), which released the results of a study conducted by Iain Cockburn, Professor of Finance and Economics at the Boston University School of Management, and Josh Lerner, Professor of Investment Banking at the Harvard University School of Business, suggesting that "a data exclusivity period of at least 12 years for innovator products is a critical fulcrum in the effort to balance cost with the preservation of biotech innovation" (see "NVCA Study Supports 12-Year Data Exclusivity Period"). In particular, the NVCA concludes that "the exclusivity period should be at least 12 years so that investors in innovation can exceed the [cost of capital] hurdle rate," and states that a 7-year data exclusivity period "would not be long enough to clear the 20% hurdle rate for investing in early stage companies," and would "drastically reduce such investments and thwart future innovation in a meaningful way."

Readers are encouraged to review our prior, more detailed coverage of the paper, letters, and statements described above.

Posted at 11:59 PM in Follow-on Biologics | Permalink | Comments (3) | TrackBack (0)

October 27, 2009

Time Magazine on Data Exclusivity Debate

By Donald Zuhn –-

A report in last week's Time magazine focuses on the ongoing debate over "an obscure but crucial health-care provision": follow-on biologics data exclusivity -- the period of time that generic biologic manufacturers would have to wait before they are allowed to use an innovator's data to secure FDA approval for their generic biologics, or biosimilars, under a follow-on biologics regulatory pathway. The article, entitled "How Drug-Industry Lobbyists Got Their Way on Health Care," examines the reasons behind the passage, by the House Committee on Energy and Commerce, of a health care reform amendment that would prevent the FDA from approving a biosimilar application until 12 years after the date on which the reference product -- the innovator biologic -- was first licensed (see "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period"). (The Senate Health, Education, Labor and Pensions (HELP) Committee has approved a similar amendment; see "Senators Champion 12-Year Data Exclusivity in Senate.")

The Time article nicely characterizes the dilemma facing both the House and Senate on the data exclusivity issue, stating that legislators are trying to balance the need "to foster cost-saving competition without killing the financial incentives that have put the U.S. biotechnology industry at the vanguard of medical science and without stifling the development of even more drugs that could save lives and eliminate suffering." However, while acknowledging the adverse consequences that might result if Congress chooses the "wrong" data exclusivity period, the article seems to side with Rep. Henry Waxman (D-CA), who favors a 5-year data exclusivity period, and the generic drug manufacturers rather than with innovator companies and their army of lobbyists. With respect to the passage of a 12-year data exclusivity period by the House Committee on Energy and Commerce -- a Committee chaired by Rep. Waxman -- the article argues that "Waxman's loss . . . was a big victory for drug companies, which have spent more than any other segment of the medical industry to make sure that they come out winners in the effort to overhaul the nation's health-care system." The article notes that biotech/pharma companies and their trade associations utilized 1,288 lobbyists and spent more than $110 million in the first six months of the year lobbying lawmakers. In a paragraph at the end of the article, Teva Pharmaceutials' expenditure of $2 million on lobbying is mentioned, but lobbying efforts by the rest of the generic industry or its trade associations (such as the Generic Pharmaceutical Association, where Rep. Waxman spoke on September 18th and back in February; see "Congressman Waxman Tells GPhA Meeting that Hatch-Waxman Model Will Work for Follow-on Biologics") are not explored.

In addition to Rep. Waxman's call for a 5-year data exclusivity period, the article discusses the Obama Administration's support for a 7-year period (see "White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics") and the FTC's support for no data exclusivity period (see "No One Seems Happy with Follow-on Biologics According to the FTC"). The article also mentions the study conducted by Duke University Prof. Henry Grabowski (see "Professor Grabowski's Economic Analysis of Data Exclusivity for Follow-on Biologic Drugs"), which is frequently cited in support of double-digit exclusivity periods, but notes that Prof. Grabowski's study was funded by the Pharmaceutical Research and Manufacturers of America (PhRMA) and two patient groups:

One, called RetireSafe, receives regular infusions of "general operating support" from Pfizer and operates out of a small Washington law-firm office. . . . The other group, the Alliance of Aging Research, is also run by the drug industry. Its chairman is the managing partner of Foxkiser, a drug-company consultant, and its vice chairman is with Novartis.

The Time article does not mention, however, that Prof. Grawbowski's study remains the only peer-reviewed analysis of the topic.

Posted at 10:22 PM in Follow-on Biologics | Permalink | Comments (4) | TrackBack (0)

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