By Donald Zuhn --
During a Wednesday afternoon teleconference, Jim Greenwood, the President and CEO of the Biotechnology Industry Organization (BIO), discussed a recent "flurry of activity" surrounding follow-on biologics legislation currently being debated in Congress. Noting that the Senate Committee on Health, Education, Labor, and Pensions had reported follow-on biologics legislation providing 12 years of data exclusivity in the last Congress (S. 1695), Mr. Greenwood (at right) conceded that BIO had started hearing last Thursday that agreement on the 12-year period was "unraveling."
Mr. Greenwood suggested that there were three reasons for the Committee's change on data exclusivity. First, he noted that the AARP recently sent a letter to Congress indicating that the organization would not support any healthcare reform legislation that provided double-digit data exclusivity for follow-on biologics. In its letter, the AARP also backed companion bills introduced in the House by Rep. Henry Waxman (H.R. 1427) and Sen. Charles Schumer (S. 726), which provide up to 5.5 years of data exclusivity. According to a letter published in the Waxahachie Daily Light, a version of the AARP letter sent to Rep. Michael Burgess (R-TX) states that:
AARP understands that the pharmaceutical and biotechnology industries have said that H.R. 1427/S.726 would undermine their ability to recoup the costs of drug development. However, there is little to support such an argument. In fact, 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. It is these drugs, according to a recent Federal Trade Commission (FTC) report, that will face generic competition, and not those that have relatively low sales. In addition, the FTC has concluded that brand name manufacturers will continue to reap substantial profits even after generic versions enter the market.
AARP also understands that it has been asserted that H.R. 1427/S.726 will undermine manufacturers' efforts to research and develop new life-saving medications. Yet, the FTC recently concluded that five years without generic competition is adequate to support continued innovation, and that a twelve to fourteen year exclusivity period actually negatively impacts innovation.
Mr. Greenwood next pointed to a letter sent to Rep. Waxman on June 25 by OMB officials Peter Orszag and Nancy-Ann DeParle 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"). Finally, he listed the report issued by the Federal Trade Commission (FTC) in early June indicating that no data exclusivity was needed (see "No One Seems Happy with Follow-on Biologics According to the FTC").
Mr. Greenwood suggested that the AARP and OMB letters and FTC report had caused some members of the Senate Committee to retreat from the 12-year period. Instead, the Committee appears to have settled on 9 years of data exclusivity with 3 additional years for supplemental applications establishing a "significant therapeutic advance for patients" (e.g., a new indication). The BIO CEO called the 9-year + 3-year provision "very bad language as far as we're concerned," adding that BIO continued to support the 12-year provision of S. 1695. As for the possibility of securing legislation with a 12-year data exclusivity period, Mr. Greenwood noted that "it looks to us like Republicans will hold on that, and we're hoping to have enough Democrats to prevail." However, he also noted that "the issue is far from resolved," and that a number of amendments have been filed by members of the Committee, including one by Sen. Barbara Mikulski (D-MD) that provides a 10-year + 1-year fallback option -- that Mr. Greenwood said parallels biosimilar exclusivity in Europe -- in case the 12-year period of S. 1695 fails to garner sufficient support. Despite her amendment, Mr. Greenwood was counting Sen. Mikulski among the Committee's Democratic members (along with Sen. Kay Hagan (D-NC)) who continue to support a 12-year period of data exclusivity, ading that BIO was "continuing to work other swing Democrats."
As for a timetable for resolution of the issue, Mr. Greenwood suggested that "this battle could play out Friday," and that BIO had "from now until then to round up our votes." Mr. Greenwood also mentioned that in an Op-Ed piece in Wednesday's edition of The Hill, Democratic National Committee chairman Dr. Howard Dean (at left) backed the House bill (H.R. 1548) introduced by Rep. Anna Eshoo (D-CA) in March and the Senate bill (S. 1695) introduced in the last Congress. In his article, Dr. Dean contends 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.
During the question and answer portion of the briefing, Mr. Greenwood explained why a 12-year data exclusivity period was needed. In particular, he noted that because biologics are large and complex molecules, it is possible for generic companies to "engineer around" an innovator's patent by producing a biosimilar that is dissimilar enough from the innovators' molecule so as to not infringe the innovator's patent, but similar enough that the FDA could approve the biosimilar using clinical data accumulated by the innovator. Mr. Greenwood noted that the ability of the FDA to approve such biosimilars would hinge on the text of the legislation passed by Congress, but that if the legislation was "written the wrong way," such approvals would become possible. Under the above scenario, Mr. Greenwood contended that a generic company could begin competing with an innovator company very quickly, and that this would "completely deflate the incentive" for the innovator to invest in the development of biologics. Mr. Greenwood concluded that "in order to create a legislative pathway for biosimilars, we need to have a proxy . . . for patent protection, and that's data exclusivity."
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