IHS Global Insight Perspective | |
Significance | The proposal introduced by Senator Edward Kennedy has surprisingly drawn flak from the innovative industry and consumer organisations. The Biotechnology Industry Organisation (BIO) has noted that the timeframe included in the proposal would be equivalent to virtual zero, as the language includes a base exclusivity only for "new major substances". |
Implications | The proposal is one of four so far introduced to the U.S. Congress as part of the legislative discussion of the biosimilars' regulatory pathway. Exclusivity on both marketing and data are the main points of conflict between legislators. |
Outlook | Given the all-round criticism it has received, it will be hard to see this proposal approved in its entirety. In terms of marketing exclusivity, however, the U.S. central administration's recommendation of seven years for innovative biologics is likely to be the front runner. |
Biosimilars Proposal
A Senate Committee on Health, Education, Labor and Pensions (HELP) is considering a new proposal from Senator Edward Kennedy on the regulatory pathway for follow-on biologics, or biosimilars. This proposal includes a data-exclusivity period of nine years, with three additional years for supplemental applications establishing a significant therapeutic advance for patients. Besides this, six months for paediatric indications was also included.
However, the Biotechnology Industry Organisation (BIO), the main trade and lobby group for innovative biologic firms, has indicated it is unhappy with the proposal. The main point of opposition is the inclusion of certain language in the proposal, namely nine years of base data exclusivity for "new major substances". BIO argues that this potentially excludes "products that are even similar to a previously approved product, in some undefined way", leading to zero years of exclusivity. The uncertainty over exclusivity periods would lead to discouragement of innovation, the organisation claimed, urging the HELP committee to reject the proposal. Furthermore, there was also reference to Bill S.1695 introduced by Senator Kennedy and Senator Mike Enzi in 2007, which included 12 years' of exclusivity, which BIO now states has not been sustained. Bill S.1695 and its amendments can be found here.
AARP and FTC's Stance on the Issue
In a separate but related development, the AARP (Association of American Retired Persons) has indicated in a letter to Congressman Burgess that the organisation is in favour of supporting the Promoting Innovation and Access to Life-Saving Medicine Act, sponsored by Democrat Henry Waxman, Republican Nathan Deal, and Senators Charles Schumer and Susan Collins. This bill provides for 5.5 years' exclusivity for innovative biologics. Furthermore, the organisation noted that other legislative bills on the same issue which included a longer exclusivity period were not favoured.
Support for Waxman's bill also came from the U.S. Federal Trade Commission (FTC) which noted that the five years' marketing exclusivity for innovative biologics provides adequate support for innovation. The FTC's June 2009 report on the subject can be found here.
Outlook and Implications
The proposal from Senator Kennedy is one of a series of legislative bills proposed in Congress outlining the regulatory pathway for biosimilars. It is important to note that branded exclusivity term periods are being described as data exclusivity by most bills including the FTC proposal. This is so because most proposals allow a follow-on biologics applicant to rely on the U.S. FDA declaration of safety and efficacy. Ideally, data exclusivity should also include protection for the time period where disclosures relating to the biologic innovation are made.
Looking at the different proposals so far, one can deduce that the main tussle is on the issue of how much marketing exclusivity should be provided. It is surprising to note that Kennedy's proposal has effectively not been supported by the innovative biologics industry, primarily due to the language used in certain clauses. With the added opposition from AARP, it is probable that this proposal will not be endorsed in its current form. Of all the proposals on marketing exclusivity introduced so far, Henry Waxman's proposal has gained most traction. The White House administration has also indicated that it supports a maximum seven-year term of exclusivity for biologics.
As part of the healthcare reform process, the biosimilars' regulatory pathway is of significance as its strength is largely as a way of generating savings for payors and reducing drug costs. Introduction of biosimilars satisfies in both these areas. It is also relevant as some blockbuster branded biologics are nearing their patent term expiry, and a spike in the number of companies developing biosimilars has increased the need for a clear pathway to be established. Over the next month, it is expected that a co-ordinated legislative effort will emerge, with Henry Waxman's proposal potentially providing the base structure for any biosimilars strategy.