Senator Cites Ethical “Defect” in Biosimilars Law Exclusivity Provisions; Proposes Legislative Fix

November 4, 2010

By Kurt R. Karst –      

Just as FDA was getting started with its two-day public meeting earlier this week on the Approval Pathway for Biosimilar and Interchangeable Biological Products, which occurred a little more than seven months after the enactment of the Biologics Price Competition and Innovation Act of 2009 (“BPCI Act”), Senator Bernie Sanders (I-VT) sent a letter to FDA Commissioner Margaret Hamburg, M.D. criticizing the 12-year exclusivity period created by the law.

The BPCI Act amended the Public Health Service Act to create a new pathway for the approval of applications for biological products shown to be biosimilar to or interchangeable with a licensed reference product.  The law now provides for up to 12.5 years of non-patent market exclusivity for a biological product approved under a BLA, consisting of an initial 12-year exclusivity period that may be extended by 6 months of pediatric exclusivity.  The first 4 years (or 4.5 years with pediatric exclusivity) is a period of data exclusivity during which time an application for a biosimilar or interchangeable version of the reference product may not be submitted to FDA. The 12-year exclusivity period is not be available with respect to the approval of a supplement or subsequent application submitted by the sponsor of the reference biological product for certain changes or modifications.  The licensure of a biosimilar or interchangeable version of a reference product that was designated and approved as an orphan drug may only occur after the later of the expiration of any applicable 7-year orphan drug exclusivity or the 12-year market exclusivity period (or 7.5 years and 12.5 years with pediatric exclusivity).

Sen. Sanders states in his November 2nd letter that the BPCI Act is “the first instance of . . . a licensing barrier that, in effect, legislatively mandates that an applicant for marketing approval violate the ethical standards set out in, among other ethical codes to which the United States, its doctors and its researchers adhere, Article 20 of the Declaration of Helsinki on Ethical Principles for Medical Research Involving Human Subjects.”  Article 20 of the Declaration of Helsinki states that “[p]hysicians may not participate in a research study involving human subjects unless they are confident that the risks involved have been adequately assessed and can be satisfactorily managed.  Physicians must immediately stop a study when the risks are found to outweigh the potential benefits or when there is conclusive proof of positive and beneficial results.”

Referring specifically to the 12-year exclusivity period under the BPCI Act, which  “would prevent an applicant for marketing approval of a biosimilar or bioequivalent product from relying on existing data establishing the safety and efficacy of the product” and would require generic applicants to “repeat clinical trials to answer questions that have already been answered,” and Article 20 of the Declaration of Helsinki on stopping studies in the face of “conclusive proof of positive and beneficial results,” Sen. Sanders takes aim at the exclusivity provision, stating that:

a 12-year data exclusivity period by design requires exactly that: the conduct of a clinical trial despite the fact that ‘conclusive proof of positive and beneficial results’ already exists.

By establishing such a de facto requirement, the biologics industry has achieved something quite profound: a virtually absolute bar to competitors for a full 12 years from market entry of a new product, regardless of the patent status of the product . . . .

(Interestingly, according to a  November 3rd Bloomberg article, some companies might decide to bypass the the BPCI Act and conduct their own studies in support of a BLA instead of pursuing a biosimilar or interchangeable version of a reference product.)

Sen. Sanders has a solution, however, to “reform [the] indefensible requirement” and “defect” created by the BPCI Act: S. 3921, the Ethical Pathway Act of 2010.  Introduced in September 2010, S. 3921 would, according to Sen. Sanders, “mandate that applicants for drug marketing approval, including generic and biosimilar producers, be allowed to rely on existing test data when applying for marketing approvals, subject to paying an appropriate share of the costs to rely upon the results of such trials.”  Another version of S. 3921 was submitted as an amendment to legislation that eventually became the Patient Protection and Affordable Care Act (Pub. L. No. 111-148), but it failed to pass.  It seems likely that the Ethical Pathway Act of 2010 will have a similar fate.

Sen. Sanders has been a harsh critic of patent and non-patent market exclusivities for drug and biological products.  In 2007, Sen. Sanders introduced S. 2210, the Medical Innovation Prize Act of 2007.  That bill proposed to  replace the then-current patent and non-patent market exclusivity system for drugs and biologics with a new “prize system.”  Specifically, S. 2210 would have amended the law to provide that notwithstanding the U.S. patents laws, the Hatch-Waxman Amendments, the Medicare Modernization Act, the Orphan Drug Act, the Best Pharmaceuticals For Children Act, and “any other provision of law providing any patent right or exclusive marketing period for any drug, biological product, or manufacturing process for a drug or biological product . . . , no person shall have the right to exclusively manufacture, distribute, sell, or use a drug, a biological product, or a manufacturing process for a drug or biological product in interstate commerce, including the exclusive right to rely on health registration data or the 30-month stay-of-effectiveness period for Orange Book patents. . . .”  Instead, a person could receive a “prize payment” “in lieu of any remuneration the person would have otherwise received for the exclusive marketing, distribution, sale, or use of a drug, biological product, or manufacturing process,” and “in addition to any other remuneration that such person receives by reason of the nonexclusive marketing, distribution, sale, or use of the drug, biological product, or manufacturing process.”