By Donald Zuhn --
For the past two years, much of the debate surrounding the various follow-on biologics bills that have been introduced in Congress has centered on the exclusivity periods provided by each bill. So far, three follow-on biologics bills have been introduced in the 111th Congress: H.R. 1427 and its companion bill, S. 726, which would provide up to 5.5 years of exclusivity, and H.R. 1548, which would provide up to 14.5 years of exclusivity.
At last month's Biotechnology Industry Organization (BIO) Intellectual Property Counsels' Committee (IPCC) conference, Stuart Watt, Vice President and Law & Intellectual Property Officer at Amgen Inc., made a strong case for an exclusivity period closer to that provided by H.R. 1548. In a presentation entitled: "Why Hatch-Waxman Is Not a Good Model for Biosmilars Legislation," Mr. Watt asserted that an exclusivity period of at least 12 years was needed to provide incentives to innovator drug companies to continue developing new biologic drugs.
Mr. Watt began by noting that H.R. 1427, introduced by Rep. Henry Waxman (D-CA), was not very favorable to innovator drug companies such as Amgen, contending that Rep. Waxman even "went beyond" the parameters set out in the Hatch-Waxman Act for small molecule therapeutics. In support of a longer 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). With respect to the second factor, Mr. Watt noted that product development times for proteins had almost doubled from five years in the mid 80's (three years in the clinic and two years securing regulatory approval) to nine years today. As a result of these factors, every product that gets to market must pay for the numerous candidates that never make it to market.
Looking at the impact of the Hatch-Waxman Act on small molecule drugs, Mr. Watt argued that if Rep. Waxman was successful in pushing his bill, and its shorter exclusivity period, through Congress, it would likely be the death knell for the industry. Under the Hatch-Waxman regime, Mr. Watt noted that 67% of prescriptions of small molecule drugs are filled with generic versions of the drug and innovators lose 85% the market within six months of a generic company's entry into the market. As a result, he argued that there has been a lack of sufficient innovation, which has resulted in pharma company consolidation, and that investment in innovation has shifted from pharma companies to biotech companies.
Mr. Watt told conference attendees that he was not trying to take on Hatch-Waxman, since Amgen had no choice but to deal with the 25-year-old regime, but that he was trying to make a case for ensuring that the same "mistake" was not made with follow-on biologics. As for supporters of the Waxman bill, who point out that its regulatory scheme would generate large healthcare cost savings (Mr. Watt mentioned that the Obama Administration has estimated such savings to be $9.2 billion over 10 years), Mr. Watt argued that one or two breakthrough products could achieve even greater cost savings.
Now that a representative from an innovator drug company has indicated that a 12-year exclusivity period would be agreeable, the question remains: will the generic industry support such an exclusivity period, or will it stick to the maximum 5.5 year period provided under Rep. Waxman's bill?
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