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Spending bill's change to biologic definition will harm competition, groups say

Tucked inside Congress' $1.4 trillion fiscal 2020 spending bill is a provision that changes the definition of biological products to include chemically synthesized polypeptides, which some groups say will harm lower-cost competition for those therapies.

Chemically synthesized polypeptides are used to treat a number of conditions, including cancer, diabetes, heart failure and osteoporosis.

There are over 60 peptide drugs approved in the U.S., Europe and Japan and more than 150 in active clinical development, according to the Association of Accessible Medicines, or AAM, the trade group that represents makers of generic drugs and lower-cost versions of biologic therapies, or biosimilars.

The Biologics Price Competition and Innovation Act of 2010, part of the Affordable Care Act, excluded chemically synthesized polypeptides from its definition of biologic therapies — complex molecules derived from living cells.

The BPCIA was the law that gave the U.S. Food and Drug Administration the authority to approve biosimilars for the American market.

Under the law, innovator biologic medicines were granted 12 years of marketing exclusivity protection against biosimilar competitors.

In guidelines and a proposed rule issued in December 2018, the FDA said it interpreted "chemically synthesized polypeptide" to mean any alpha amino acid polymer that was made entirely by chemical synthesis and was greater than 40 amino acids but less than 100 amino acids in size.

The FDA determined those substances were not biological products unless the statutory definition was changed — an action Congress took in the spending bill and one the brand-name industry has long sought.

The Pharmaceutical Research and Manufacturers of America told the FDA in 2010 comments that the distinction between proteins and polypeptides was ambiguous because they both involve chains of amino acids.

The U.S.-Mexico-Canada Agreement on trade initially sought to consider chemically synthesized polypeptides as biologics, making them eligible for at least 10 years of market exclusivity protection — an action AAM said would have impeded competition.

But the measure was dropped from the USMCA.

Lawmakers, however, gave the brand-name industry a win in the spending bill with the biologic definition change, said the consumer advocacy group Public Citizen.

"We'd be giving big pharma longer market exclusivity for certain drugs and treatments," Peter Maybarduk, director of Public Citizen's Access to Medicines program, told S&P Global Market Intelligence in an email response. "It would cost consumers and force patients to wait longer for affordable competitors to treatments for conditions such as diabetes and osteoporosis."

AAM spokeswoman Rachel Schwartz said the spending bill provision was "not in the best interest of patients."

"It delays access to more affordable generic and biosimilar medicines," she said.

FDA backs definition change

But U.S. regulators said changing the biologic therapies definition would help patients.

In March 2020, most protein products that were approved as drugs by the FDA, including all insulins sold in the U.S., will be deemed biologic therapies under a transition process mandated by the BPCIA.

Products already on the market that are transitioning will not be permitted under the FDA's guidelines to gain unduly additional market exclusivity — something lawmakers codified in a separate provision of the fiscal 2020 spending bill.

When Congress excluded chemically synthesized polypeptides in the BPCIA, it meant lower-cost follow-on versions of those products would not be able to go through the FDA's biosimilar pathway, hurting potential competition, Janet Woodcock, director of the agency's Center for Drug Evaluation and Research, said in a Dec. 17 statement.

Removing that exclusion will expand access to lower-cost versions of the drugs, while also helping to promote potential innovation in manufacturing methods, "which could lead to future efficiencies," she said.

But Maybarduk said the FDA's position does not address the longer exclusivity terms that new polypeptide products will receive as biologics.

"FDA just isn't focusing on that aspect," he said. "It seems to us FDA should be able to come up with a narrowly tailored solution to the pathways issue without providing a giveaway that presumably will cost taxpayers billions of dollars."

While the change in the biologic definition was Congress' doing, "by looking away, FDA would risk making the pricing problem worse," Maybarduk said.

"At some point, we need our regulatory agencies and everyone responsible for medicines to take more responsibility for their price," he said. "FDA knows well the consequences and can't ignore that when it assigns a category of products to a new regulatory regime, the consequences for price can be serious."