BIO Reiterates Support for 12-Year Data Exclusivity Period for Biologics

by McDonnell Boehnen Hulbert & Berghoff LLP

Biotechnology Industry Organization (BIO)Last month, in a letter to the U.S. Trade Representative, Ambassador Michael Froman, Biotechnology Industry Organization (BIO) President and CEO James Greenwood expressed support for the efforts of the Obama Administration to develop a "comprehensive, forward-looking Trans-Pacific Partnership (TPP) agreement."  The Trans-Pacific Partnership Agreement (TPP) is a multilateral free trade agreement currently being negotiated by Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam (Canada, Japan, the Philippines, South Korea, and Taiwan have also expressed interest in participating in the agreement).

Accompanying Mr. Greenwood's letter was a white paper, entitled "The Trans-Pacific Partnership and Innovation in the Bioeconomy: The Need for 12 Years of Data Protection for Biologics," which Mr. Greenwood indicated "provides a comprehensive overview of the considerations related to an area of critical importance to our members -- effective legal protections for innovative biological pharmaceutical products."  Noting that the U.S. enacted a biosimilar regulatory pathway (the Biologics Price Competition and Innovation Act (BPCIA)) as part of the Patient Protection and Affordable Care Act (PPACA), the letter states that the U.S. regulatory pathway "was developed after extensive deliberations by the United States Congress, and balances a number of critically important considerations, particularly the need to provide a continued, robust incentive for development of new biological products and new uses of existing products."  Mr. Greenwood urged Ambassador Froman "to draw from this record of experience in developing the U.S. system as you engage in deliberations with other TPP countries to fashion international standards that will relate to these products and our industry."

The 40-page white paper accompanying Mr. Greenwood's letter, which was prepared by BIO, notes that "[t]he biotechnology industry is one of the most research-intensive industries," adding that "[t]he vast majority of biotechnology companies are small, start-up companies that are heavily reliant on private investment capital, lack revenues from marketed products, and operate in financial loss positions."  According to the paper, "on average, [it takes] more than a decade and in excess of $1.2 billion to bring a biological product to market."  Because biologic drugs are complex and more difficult to manufacture than small molecule drugs, "[t]hey present unique considerations relative to pharmaceutical products containing active ingredients made by traditional chemical synthesis."

One of those unique considerations involves the ability of innovators to obtain adequate patent protection for biologic drugs.  In particular, because a generic biologic -- or biosimilar -- does not have to be identical to a biologic, "there is greater uncertainty as to whether an innovator's patent rights will cover a biosimilar version of the innovator’s product, as compared to a traditional generic drug."  The paper contends that "[w]ithout the certainty of some substantial period of market exclusivity, innovators will not have the incentives needed to conduct the expensive, risky, and time-consuming work to discover and bring new biological products to market."  The paper also indicates that the legislative process that resulted in enactment of the BPCIA was "deliberate, thoughtful, and driven by rigorous analysis," and points out that "[e]xtensive research by noted economists demonstrated that developers of innovative biological products require a period of market exclusivity of between 12 and 15 years simply to break even on their investments in developing a new biological product."

The paper argues that "[t]o encourage continued development of innovative biological vaccines and therapies, it is critically important to implement effective standards of IP protection within the TPP region."  BIO's white paper contends, therefore, that "[i]t is imperative that the TPP create a set of strong intellectual property standards -- particularly those governing data protection, patents and trade secret protection -- that are relevant to biological products."

For additional information regarding this topic, please see:

* "Senators Back 12-Year Data Exclusivity Period for Biosimilars and President Obama (Once Again) Does Not," May 9, 2013
• "U.S. Negotiators on TPP -- Don't Trade Away the Biopharmaceutical Research Sector," September 30, 2012
• "Senators Support Inclusion of 12-Year Exclusivity Period in Free Trade Agreement," September 12, 2011
• "House Legislators Lobby to Exclude 12-Year Data Exclusivity Period from Free Trade Agreement," August 11, 2011


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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