Following last month's conclusion of the 14th round of Trans-Pacific Partnership (TPP) free-trade talks, the United States-based pharmaceutical industry is continuing to pressure the US government to include terms requiring 12 years of data protection within any eventual treaty.
IHS Global Insight perspective | |
Significance | Pharmaceutical firms are lobbying the US government to ensure that the Trans-Pacific Partnership (TPP) treaty – currently being negotiated with 11 Asia-Pacific countries – provides 12 years worth of "data exclusivity" protection in relation to biosimilar copies of drugs, as provided under the 2010 Patient Protection and Affordable Care Act. |
Implications | The arguments in relation to the United States' international stance reflect domestic concerns: earlier this year, the US government issued budget proposals that data exclusivity protection provided under US law be shortened to seven years, from 12. |
Outlook | The 15th round of talks are scheduled for 3–12 December in New Zealand, and are entering a crucial stage. The outcome of the US general election in November will also have some bearing on the future shape of discussions. |
The US pharmaceutical industry is continuing to lobby Washington to include 12 years of "data exclusivity" protection for biological drugs against biosimilar follow-on versions within the Trans-Pacific Partnership (TPP) free-trade treaty. Although the TPP negotiations are shrouded in secrecy, Reuters reports that US drug companies are worried the US government's stance may shift towards a shorter period of data exclusivity protection for innovator biologics, with industry sources claiming that this would mean a US trade policy that contradicts President Barack Obama's healthcare reform law, the 2010 Patient Protection and Affordable Care Act (PPACA).
The 14th round of TPP negotiations, held in the US state of Virginia, came to an end on 15 September, and the debate between the industry and government is clearly continuing in the interim before the next session of talks takes place in Auckland, New Zealand, from 3–12 December. The original TPP discussions were between the US and eight other countries – Australia, New Zealand, Chile, Peru, Vietnam, Singapore, Malaysia, and Brunei – and began in March 2010. The exact makeup of the TPP treaty countries remains fluid, with Japan considering whether or not to join the talks, and Canada and Mexico to participate from December.
Outlook and implications
US law provides "data exclusivity" protection for biological drugs – meaning that generics firms attempting to file for approval of a follow-on version of a biologic drug cannot use the originator firm's clinical data, under a provision granted in 2009 during negotiations between President Obama and pharma industry association PhRMA over the PPACA.
Debates over the exact length of data protection provided under the PPACA continue: the Congressional Research Service's official interpretation is that that 12 years' exclusivity is provided under the law. But the exact wording of the PPACA grants only four years of data exclusivity – meaning that the US FDA cannot "accept" a biosimilar application within four years of the innovator product first receiving a licence – but provides 12 years of "marketing exclusivity", meaning that no applications can be "approved" by the FDA within 12 years of the innovator product. Such terms have left the industry open to accusations that they are using the law to effectively "evergreen" their products' patents – extending patents beyond the normal legal limit – to the detriment of patient access. Drug manufacturers argue that 12 years' of protection is necessary in order to recoup the average USD1.2 billion in development costs per product, and particularly given the lengthy application process involved with biological drugs. But in February this year, in response to demands for greater economic austerity measures, the US government's budget proposals included a proviso that the data exclusivity term for biologics be reduced from 12 years to seven years, stating that this could save USD2.3 billion in Medicare and Medicaid spending over 10 years due to increased generics availability (see United States: 21 September 2011: US Deficit Reduction Plan Takes Aim at Biopharma).
In terms of the TPP negotiations, the US government has now stated that involvement of less-developed countries such as Vietnam and Malaysia require that a balance be struck in terms of seeking to protect innovative firms and allowing patients' greater access to affordable generics. The Huffington Post quotes a spokesperson from the US Trade Representative's office – which is responsible for negotiating the TPP – as indicating that any terms agreed to under the TPP are unlikely to include a data exclusivity period extending to 12 years: "US negotiators have not proposed a specific term for data exclusivity for biologics. Discussions on issues relating to biologics are continuing because we want to get the substance right."
There is no official target date set for the TPP talks to be brought to a conclusion, and given the complexity of the multilateral talks – with Mexico and Canada set to be included from December and Japan a possible late-entrant – unofficial claims that they could be concluded during 2013 also seem somewhat optimistic.
Related articles
- United States - New Zealand: 28 September 2012: US Proposals for TPP Worry New Zealand's Supporters of Pharmac
- United States: 7 September 2012: Democrats Could Promote Healthcare Global Budgets to Counter Republican Medicare Reform Proposal in US
- United States: 6 January 2012: Biosimilars Guidelines Imminent for Congress Approval in US