Sturm und Drang: The TPP Agreement and Biologics Exclusivity

August 7, 2011

By Kurt R. Karst –      

The latest battleground over the period of exclusivity that should apply to biological products is the Trans-Pacific Partnership (“TPP”) trade agreement.  As you might recall, earlier this year there was quite a hubbub over whether the 12-year reference product exclusivity period provided by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) is appropriately termed “marketing exclusivity” or “data exclusivity” (see our previous post here).  Then there was President Obama’s Fiscal Year 2012 Budget, which proposed slashing the BPCIA’s 12-year exclusivity period, such that “innovator brand biologic manufacturers would have 7 years of exclusivity and would be prohibited from receiving additional exclusivity by “evergreening” their products.” (See our previous post here.)   Cutting exclusivity, “would yield savings of $2,340,000,000 between 2012 and 2021,” according to the Obama Administration’s estimates.  Now there’s the TPP.

The TPP is an Asia-Pacific regional trade agreement being hammered out among the United States (specifically, the United States Trade Representative, Ron Kirk) and eight other partners (i.e., Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam).  Currently, the TPP is composed of four members (Singapore, Brunei, New Zealand, and Chile) and endeavors to have full free trade between member countries by 2015.  The TPP would cover trade in goods and services and also includes a proposed chapter on intellectual property.  That proposed chapter is where the debate over biologics exclusivity is happening.

A July 27, 2011 letter signed by several members of Congress urges the Obama Administration to push for strong intellectual property rights in TPP negotiations, including consistency with U.S. biologics exclusivity under the BPCIA.  According to the letter:

Critical to increasing U.S. companies’ ability to export and contribute to U.S. GDP growth is ensuring that our government does all it can to help provide a level playing field for U.S. companies globally and advocate for intellectual property rights that provide certainty for America’s innovative companies in the biosciences and other sectors. . . . 

In the course of the TPP negotiations on intellectual property rights issues, we urge you to support current U.S. law on biologics, which provides for 12 years of protection.  The U.S.-led biopharmaceutical industry would be disadvantaged if the U.S. does not ensure consistency with U.S. law as part of the TPP, because foreign countries do not provide the same type of protection rules.  The current protections for biologic drugs were debated extensively and received strong bipartisan support in both the House and the Senate.  This provision is critical to keeping and expanding high-value U.S. jobs offered by America’s biotech sector and spurring the R&D investment needed to seize extraordinary opportunities for medical advances to combat our most costly and challenging diseases.

A rebuttal of sorts to the July 27th letter was sent to President Obama on August 4, 2011 and urges the President to refrain from negotiating exclusivity protections for biologic medicines.  According to that letter, also signed by several members of Congress:

[T]he consequences of [the BPCIA’s] mandated 12 years of biologics exclusivity are not yet known.  Additionally, the Food and Drug Administration has not yet promulgated any regulations to implement the biosimilars provisions of the new law, nor has the Agency approved any biosimilars in the United States. . . . 

Proposing 12 years of exclusivity in the context of TPP negotiations would also conflict with stated Administration policy, as reflected in the FY 2012 budget proposal, recommending that the exclusivity period for biologics be reduced to 7 years. . . .  Were the TPP ultimately to contain a 12 year biologics exclusivity provision, it would impede the ability of Congress to achieve the Administration’s proposed 7 year change without running afoul of U.S. trade obligations.  We see no reason for the United States to agree to such a provision, much less to propose it.

Another Member letter, dated August 2, 2011, and sent to Ambassador Kirk, raises several intellectual property issues regarding TPP talks.  Among other things, that letter raises concerns with proposals “that would undermine access to affordable medicines,” and specifically, one that would “propose expanding data exclusivity requirements . . . .”  The signatories to that letter “urge that any data exclusivity provisions, if included at all, be made voluntary, expire no later than a comparative period in the U.S., and include public health safeguards.” 

Outside of the TPP agreement talks, there is significant activity in the biologics/biosimilars space.  We understand that discussions about the structure of a user fee program for applications for biosimilar and interchangeable biological products are continuing.  FDA must submit its recommendations to Congress by January 15, 2012.  (See our previous post here.)  And last week, several FDA officials co-authored an article that appeared in the New England Journal of Medicine, titled “Developing the Nation’s Biosimilars Program.”  That brief article notes that FDA’s “totality of the evidence” approach, under which the Agency  integrates various kinds of evidence in making regulatory decisions, “along with the FDA’s experience with fingerprint-like characterization of complex products, will be essential in designing a U.S. biosimilars policy that encourages development of biosimilars, emphasizing the use of innovative technologies.”