Data Exclusivity - Lines are Drawn in the Battle for Biosimilars

The fight over biotechnology drugs has boiled down to a single number: the years the producers of those drugs should be exempt from generic competition. Over the last six weeks, some of the most influential politicians, government agencies, and lobbyists have drawn lines in the sand over what they feel is an appropriate time period to protect branded biotechnology medicines from cheaper generic rivals. Although the “Battle for Biosimilars” in unlikely to generate the dramatic protests that have plagued town hall Healthcare Reform Meetings across the country, the result of this battle will be crucial for both maintaining incentives for innovation and reducing health-care costs.

In March, Congress began to develop two different pieces of legislation for bringing follow-on biologics to market. In the “Promoting Innovation and Access to Life-Saving Medicine Act” (H.R. 1427) (the “LSMA”), the period for market exclusivity is 5 years. In the “Pathway of Biosimilars Act” (H.R.1548) (the “PBA”), the exclusivity period is 12 years. As of July the “12 Year” bill had well over 100 sponsors in Congress, while the “5 Year” bill only had about a dozen sponsors.

After a brief pause in the action, the last months have seen another flurry of activity as lobbyists, the White House, government agencies, and influential members of the Senate have weighed in on the biosimilar data exclusivity period.

The first developments clearly favored the branded biologics industry. In early June, the Federal Trade Commission (FTC) issued a detailed report on follow-on biologics questioning the need for a 12-year data exclusivity period. This sentiment was echoed in the second half of June by a letter from the White House stating that a follow-on biologics regulatory pathway providing a 7-year data exclusivity period would strike the appropriate balance between innovation and competition.

In July, members of the Senate countered with very different recommendations. First, Senator Ted Kennedy (D-MA) broke ranks with the White House, proposing on July 8 that any follow-up biologics legislation considered by Congress should give innovator biologic drugmakers up to 13.5 years of exclusivity. A mere five days later, the Senate Health, Education, Labor, and Pensions (“HELP”) Committee voted in favor of a pathway that provides 12 years of exclusivity, handing a major victory to the branded biotechnology industry.

The reaction to these new developments has been swift and strong. Jim Greenwood, the President of the Biotechnology Industrial Organization (BIO), expressed his disapproval that the White House derived its policy from the FTC report, which he argued “was based upon highly selective assumptions and has been rejected by many members of Congress as fundamentally flawed.” In contrast, the AARP has written Congress to urge support for the LSMA 5 year exclusivity, stating in a letter to house members that “it is critical that Congress pursues a legislative option that does not delay consumer access to less expensive generic versions of these life-saving medicines,” and in a letter to Senate members that no bill at all is better than a bill that gives brand-name pharmaceutical companies 12 years of protection.

The pharmaceutical industry has eagerly awaited news about where the most influential politicians and groups would come down on the length of time for market and data exclusivity. Now that the lines are clearly drawn, the battle can begin in earnest between those supporting the generic biologics industry, and those supporting the branded biologics industry.

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