IPR for Biologicals -- the legislative battle

Source: "Biotech Campaigns for Easier Access to Generic Drug Market: Richmond Firm Wants Congress to Revamp FDA Approval Process." by Kendra Marr, The Washington Post, August 13, 2008.

Chemical drugs are relatively simple molecules manufactured by chemical processes; if they are identical by standard chemical tests they can be assumed to have identical biological action. Biological drugs are relatively complex molecules manufactured in cell cultures by biological processes; even if indistinguishable by standard chemical tests, biologicals produced in different cell lines and different culture conditions may have different biological activities.

Intellectual property rights protection is used by the pharmaceutical industry to generate high levels of profits from new drugs, which can be used to fund future research and to repay investors for the relatively risky investments they have made in pharmaceutical R&D. When that protection is exhausted, new firms can market generic drugs and the competition drives the price of drugs down from the value to the patient towards their manufacturing costs.

There are all sorts of intellectual property rights used, including patents on products and manufacturing processes and on cell lines, as well as trade secrets protecting aspects of the manufacturing process, and trade mark protection to protect established brand names. Perhaps less well understood is "test data exclusivity" used for protection of clinical test data required to be submitted to a regulatory agency to prove safety and efficacy of a new drug.

Two decades ago.....Congress passed the Hatch-Waxman Act, which opened the doors for generic competition after patent expiration. Once a company demonstrates that its generic is chemically identical to a brand-name drug, it can use the approval of the brand-name drug as evidence that its copycat works just as well without additional human trials.

When the Hatch-Waxman Act passed.....lawmakers didn't think to give the Food and Drug Administration an abbreviated review process to swiftly approve biosimilars. Now, escalating health-care expenditures have prompted Congress to consider one. Last year, two bills were introduced into the House and are still pending. Then, in March, representatives drafted yet another.

A recent Congressional Budget Office analysis of a Senate bill, which passed unanimously last year in committee, found that biosimilar competition would reduce expenditures on biologics by about $200 million by 2013 and about $25 billion by 2018. These savings would represent about 0.5 percent of national spending on prescription drugs, at wholesale prices, over the next decade.

The main point of contention among these bills: the length of an innovator company's "data exclusivity."

Generic manufacturers and consumer groups are lobbying for five years data exclusivity for biologicals, the same length as chemical drug data exclusivity.

Because biosimilars aren't exact duplicates of the original drugs, they don't violate the original drug's patent, enabling legal distribution before patent expiration. As a result, the Biotechnology Industry Organization, as well as the handful of biotechs that control most of the market, supports a 14-year period to allow companies to recoup their investment and conduct further clinical trials to improve the product.....

And because biosimilars aren't perfect copies, patients rights groups and biotechs are asserting that patients should not be forced to take them. It is up the discretion of individual physicians, not insurance companies or pharmacies, to substitute a branded biologic for a biosimilar, they said.....

Global prescription sales of biotech drugs increased 12.5 percent in 2007 -- nearly double the rate of the overall pharmaceutical market, which includes the biotech sector -- to more than $75 billion, according to a June report by IMS Health, a health-care information company.