Health reform law gives biologic drugs 12-year exclusivity

The new measure includes a pathway for follow-on biologics, but a generic drugmakers' association said the time frame will delay competition unnecessarily.

By Doug Trapp — Posted April 12, 2010

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Manufacturers of original biologic drugs will have at least 12 years before others will be able to use their data to produce and sell similar versions of the drugs, according to a provision in the new health reform law.

The law gives the Food and Drug Administration the responsibility to implement a pathway for so-called follow-on or biosimilar biologic drugs. Unlike Europe, the U.S. had no formal process to approve generic versions of biologic drugs, which are produced through biological processes instead of chemical ones.

The law allows the FDA to approve follow-ons that have no clinically meaningful differences from the original. Follow-ons that produce the same results in all patients -- called "interchangeable" -- could be substituted by a pharmacy without physician approval. The provision is expected to save the federal government about $7 billion over the next decade, according to the Congressional Budget Office.

Associations representing generic and biotech pharmaceutical companies expressed reservations about different parts of the law. The Generic Pharmaceutical Assn. was more critical.

"Simply put, the [law] fails to infuse competition and choice into the health care system," said Kathleen Jaeger, president and CEO of the Generic Pharmaceutical Assn.

GPhA supported much faster approval of follow-ons, while the Biotechnology Industry Organization supported 14 years of protection for original biologics. Competing legislation would have provided as little as five years of exclusivity and as much as 14½ years of protection. Generic chemical drugs can be approved in as little as five years under the Hatch-Waxman Act.

No one can be certain how many years of protection are needed to protect biologic innovations without unnecessarily stifling competition, said Michael D. Miller, MD, president of HealthPolCom Consulting. Twelve years might be a good starting point, he said, but it might not still be that way in 10 or 15 years. "Over time, as the market and science changes, the balance between market competition and incentives for innovation can really shift."

Twelve years is a lifetime for seniors to wait for follow-ons, said Nora Super, AARP's director of federal government relations. She said provisions in the law could provide even longer protections through "evergreening," a tactic of gaining additional exclusivity for making minor changes to the original drug, such as its delivery system or dosage.

But Sara Radcliffe, BIO's acting executive vice president for health, said the law specifically prohibits evergreening. The Hatch-Waxman Act had loopholes, but the new law does not, she said.

BIO was less receptive to the law's patent dispute resolution provision, said Sandra Dennis, BIO's deputy general counsel for health care. It requires both sides to share more information than normally required before taking a case to court.

Although Radcliffe said the law is a substantial step forward, the FDA also must define key terms, such as the standard for a follow-on to be considered biosimilar to or interchangeable with an original biologic drug. The FDA also must determine the data needed to establish that a drug has met those standards.

American Medical Association policy supports the development of an approval pathway for follow-on biologics. But it says such a pathway should not compel physicians to consider follow-ons as interchangeable, or therapeutically equivalent to the original.

The law has few specific deadlines for the FDA to meet, Dennis said. By October, the FDA must solicit expert and stakeholder input on how to design a review process and determine user fees. These fees are to be set by 2012.

But that process could drag out, Dennis said. "It has historically been very difficult for FDA to meet any deadlines imposed by Congress."

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Pathway to approval

The recently enacted health reform law includes an approval pathway for generic versions of biopharmaceuticals, often called follow-ons or biosimilars. The provision:

  • Provides the original biologic drugmakers 12 years of protection before the drug can be subject to competition from biosimilar versions.
  • Requires the biosimilar producer to demonstrate that its drug has no clinically meaningful differences in safety, purity and potency when compared with the original biologic drug.
  • Allows the Food and Drug Administration to determine final standards for approving biosimilars, based on whether the product could be substituted for the original and produce the same clinical result in any given patient, and whether it could be substituted for the original without physician approval.
  • Provides a year of exclusivity to the first biosimilar drug the FDA declares interchangeable with an original biologic drug.
  • Provides an additional six months of exclusivity to the original biologic drug if the manufacturer completes pediatric studies of the drug.

Source: Senate Democratic Policy Committee, March

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