Senator Kennedy Weighs in on Biosimilar Data Exclusivity Period

    By Kevin E. Noonan --

Yesterday, Senator Ted Kennedy (D-MA) proposed that innovator biologic drugmakers should be given up to 13.5 years of data exclusivity in any follow-on biologics legislation to be considered by Congress this session.  As reported by Catherine Larkin at Bloomberg.com, the Senator's proposal was introduced as a "placeholder" that could be adopted, modified, or discarded after other Senators have the opportunity to introduce their own amendments to biosimilars legislation being prepared by the Senate Committee on Health, Education, Labor, and Pensions.  Two of the three follow-on biologics bills introduced in the current Congress (H.R. 1427 and S. 726) provide for no more than 5.5 years of data exclusivity to innovator biologics companies, a term most industry representatives (including, inter alia, AEI, BIO, the IPO and, notably, the only peer-reviewed study by an academic; see "Follow-on biologics: data exclusivity and the balance between innovation and competition") have assailed as being inadequate to protect biotechnology innovation (see "Docs at BIO: 'Perfect Storm' Super Session").

The Senator's proposal comes in the face of a flurry of recommendations recently sent to the Senate's Health, Education, Labor and Pensions committee (which Senator Kennedy chairs), including a letter from the AARP, a letter from the Office of Management and Budget (see "White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics") and a report from the Federal Trade Commission (see "No One Seems Happy with Follow-on Biologics According to the FTC"), all of which urged shorter data exclusivity periods.  As reported by Patent Docs yesterday, BIO CEO James Greenwood contends that a 12-year period, agreed to as recently as the last Congress, was a minimum term sufficient to protect innovation (see "BIO CEO Provides Update on Follow-on Biologics Legislation").  And industry leaders have stated publicly that any data exclusivity period shorter than 12 years would be bad for innovation and compromise patient health (see statement by Audrey Philips, Johnson and Johnson Executive Director for Biotechnology Policy in a Bloomberg.com report and comments by Stuart Watt, Vice President and Law & Intellectual Property Officer at Amgen Inc. in "Amgen VP Makes Case for Longer Exclusivity Period in Follow-on Biologics Legislation").

Even proponents admit that follow-on biologic drugs may yield no more than a 10-30% reduction in biologic drug costs.  While this represents significant savings for government programs like Medicare and Medicaid, the cost reductions have potential risks, including increased adverse patient events (i.e., increased morbidity and mortality) and dangers to biotechnology innovation; see "Docs at BIO: Patent Reform Super Session").  The importance of setting an appropriate data exclusivity period is highlighted by predictions that biologics drugs will become predominant market leaders over the next 5 years (see "Future Drug Sales Predictions Highlight Importance of Follow-on Biologics Legislation").

The Senate health committee has set no dates for hearings or further action on biosimilars legislation, and Congressman Waxman has been unable to move H.R. 1427 out of his committee in the face of Congresswoman Eshoo's competing (and more heavily-supported) bill, H.R. 1548 (see "Uncertain Future for Waxman Follow-on Biologics Bill").

Comments

[Influence Peddler]

The Kennedy proposal does not provide 13.5 years exclsuvity. It provides 9 years with possible extensions. Moreover, a product would only receive 9 years if it is approved after enactment--existing products receive no data protection. Additionally, only new "major subtsanceS" are allowed exclusivty; if a similar product has been approved previously, you also receive zero years of protection. No exclusivity if the application for the new product relies on any clinical study from any other approved application. No exclusivty for products that may deliver major therapeutic changes but only have "minor" post-transaltion or structrual changes...the list goes on.

There are also 20 pages laying out a new patent notification and show-tell system; no precedent for this.

[Kevin E. Noonan]

Dear Influence:

Absolutely correct, Influence, but that is the meaning of the modifier "up to." In view of the rather tentative existence of Senator Kennedy's proposal (described by Senate staffers as a "placeholder"), we thought it best to wait until we could get a copy of the proposal from thomas.gov before we went into the nitty-gritty. Also, in view of the other issues on the Senate's plate (healthcare reform, a possible additional stimulus package, the Sotomayor confirmation), it seemed like the better tack was to give our readers the punchline - "up to 13.5 years" - which could then be compared with 12, or 9, or 7, or 5.5, or 3.5 or zero, depending on the bills/proposals/recommendations of others).

We will certainly do a more thorough review if any of these bills starts to get sufficient traction to have a meaningful chance of passing.

Thanks for the comment.