Senate Committee: 12 years of data exclusivity is cool

The U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee voted last month in favor of a proposal by Sens. Kay Hagan (D-N.C.), Michael Enzi (R-WY) and Orrin Hatch (R-UT) to create a follow-on biologics (FOB) pathway that provides 12 years of data exclusivity for brand-name biologic drugs.

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"To amend the public health service act to establish apathway for the licensure of biosimilar biologic products, to promoteinnovation in the life sciences." Amendment No. 297.

The U.S. Senate Health, Education, Labor, and Pensions(HELP) Committee voted last month in favor of a proposal by Sens. Kay Hagan(D-N.C.), Michael Enzi (R-WY) and Orrin Hatch (R-UT) to create a follow-onbiologics (FOB) pathway that provides 12 years of data exclusivity forbrand-name biologic drugs.

In looking for a way to create an abbreviated pathway forthe Food and Drug Administration (FDA) to approve generic biologic therapies(aka biogenerics or follow-on biologics), there are lots of questions about howto achieve the proper balance between innovation and competition. The stickingpoint (in general) has been that the brand name drugmakers and generics can'tagree on how long a biotech drug should be on the market before a genericdrugmaker can market a generic.

Under the proposed law, if FDA approves a biological producton the grounds that it is interchangeable to a reference product, theDepartment of Health and Human Services (HHS) is prohibited from making adetermination that a second or subsequent biological product is interchangeableto that same reference product until one year after the first commercialmarketing of the first interchangeable product.

The act also authorizes HHS to issue guidance with respectto the licensure of biological products under this new pathway, and it includesprovisions governing patent infringement concerns such as the exchange ofinformation, good faith negotiations and initiation infringement actions.

The Biotech Industry Organization (BIO) has called for 14years of market exclusivity, while generic makers want the period limited to nomore than five years of protection. Not to be confused with patents, dataexclusivity is the period after the FDA approves a product during which animitator can't rely on the innovator's clinical data for safety andeffectiveness. It can run during and longer than the period of patentprotection.

The current measure for 12 years passed 16 to 7, despite anearlier decree by the Obama administration that a seven-year exclusivity limitsounded good. The Obama administration had sent out an earlier warning shotthat it considered seven years enough time to protect brand-name biotechnologymedicines from generic competitors. In a letter to Rep. Henry Waxman (D-CA),the White House said seven years "strikes the appropriate balance betweeninnovation and competition by providing for seven years of exclusivity."

The posturing by the current administration is not asurprise given that the U.S. government is the largest consumer of medical carevia Medicare and Medicaid and the fact that sales of biotech drugs were $40.3billion last year. With creating a governmental health care system at the topof its priority list, ways to cut costs are critical to any reform.

After considering at least four proposals all titled the"Biologics Price Competition and Innovation Act of 2009," the HELP committeedeclined several other proposals including voting down one by Sen. SherrodBrown (D-OH), which would have provided only seven years of exclusivity forbrand name biologics.

Sen. Barbara Mikulski's (D-MD) proposed a 10-yearexclusivity period, which could be extendable by one year if a supplementalapplication was approved for one or more new therapeutic indications. Sen. JohnMcCain's (R-AZ) proposal would have provided a 10-year period of exclusivitythat could be extended by two years "if there has been significant therapeuticadvancements with respect to the reference product."

The vote was at least a small victory for major biotechdrugmakers, which have been lobbying for a period of 12 to 14 years beforegeneric equivalents could be approved. Biotech companies have been pushing for a longer period of dataexclusivity, saying that it can take 15 years and a $1 billion to develop andmarket a biotech drug, so they need the longer period to make back theirinvestment. Generic drugmakers, not surprising, would like the exclusivityperiod to be as little as possible.

This is just as small step, since the Senate plan couldchange when the healthcare bill goes to the floor for a vote. It also must beapproved by the House.

So, what will the final number be for exclusivity? We'llhave to wait to see.

Stephen Albainy-Jenei is a patent attorney at Frost Brown Todd LLC, serving up chat at Write him with comments or questions at Albainy-Jenei doesn't own shares of companies mentioned in this article.

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