Market Exclusivity for New Biological Products and Pathway for Follow-on Biological Products
On March 23, 2010 The Patient Protection and Affordable Care Act, (HB 3590), (hereinafter 'the new Act') was signed into law. The Act allows manufacturers of follow-on biological products a way to market which did not previously exist. Importantly, however, it also provides innovators of biological products with 12 years of market exclusivity following regulatory approval.
The US congress enacted the US Drug Price Competition and Patent Term Restoration (Hatch-Waxman) Act in 1984, creating an abbreviated pathway for FDA approval which allowed generic versions of small molecule brand drugs to be approved without clinical studies. If the generic company could show its product was bioequivalent to the innovator ("reference") product, it could rely on approval of the reference product as evidence that the generic drug was safe and effective.
The Hatch-Waxman Act struck a balance between innovators (or sponsors) of brand drugs and generic manufacturers by implementing the following:
Although the Hatch-Waxman Act allowed patent term extension for biological products, the abbreviated pathway for FDA approval excluded biological products. The approach of establishing bioequivalence of small molecule drugs simply could not be applied to therapeutic proteins because of their size and complexity. So until passing of the new Act, it has been necessary for the producer of a follow-on biological product to duplicate the clinical testing for the pioneer biologic drug.
What types of products are covered under the new Act?
The new Act includes provisions that establish a pathway for FDA approval of two classes of follow-on biological products, i.e., (i) biosimilar versions of previously approved biological products (i.e., "biosimilars"); and (ii) of products which are interchangeable with previously approved biological products (i.e., "interchangeables").
A biosimilar is defined in the new Act as a biological product that is highly similar to an approved biological product (i.e., 'the reference product') notwithstanding minor differences in clinically inactive components; and having no clinically meaningful differences when compared to the reference product in terms of the safety, purity, and potency of the product. To qualify as a biosimilar, an application must establish amongst other things that:
An interchangeable is defined in the new Act as a biological product that may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product. To qualify as an interchangeable, an application must additionally establish that:
Exclusivity for the Reference Product and the First Interchangeable Product
The new Act establishes that an application as a biosimilar or an interchangeable cannot be filed for 4 years after the reference product is first approved. Even then, the application cannot be approved by the FDA for marketing until 12 years after the reference product is first approved. An extension of six months is also available for paediatric indications. Thus, the new Act effectively provides a period of exclusivity barring the approval of biological products highly similar to the reference product, which are to be used in the treatment of indications approved for the reference product.
If an interchangeable is the first follow-on biological product approved, it is entitled to a period of market exclusivity. This period is the lesser of one year after the date of first commercial marketing or eighteen months after FDA approval with regard to any other approved interchangeable biological product (however, the situation is somewhat more complex if patent litigation regarding the first application is still unresolved).
Patent Infringement Issues
The new Act differs from the small molecule/Hatch-Waxman approach in that there is no "Orange Book" to list patents that cover the reference biological product. Instead, the new Act requires a process of information sharing between the applicant for the biosimilar/interchangeable and the reference product sponsor. In this regard, the applicant must not only provide a copy of their application, they must also advise the reference product sponsor of how the biosimilar/interchangeable is produced. This clearly differs from the Orange Book approach, which does not permit patents for methods of production to be included.
The information sharing includes (i) an exchange of patent lists that could be asserted in litigation and (ii) detailed, claim by claim analysis of each patent by each party. The biosimilar applicant must demonstrate how each patent is invalid, unenforceable or will not be infringed by the biosimilar product. The reference product sponsor must explain how each claim is infringed by the biosimilar product and respond to the biosimilar applicant's assertions of invalidity or unenforceability.
These provisions are complex and have very short deadlines for compliance. Thus, any company considering applying for a biosimilar/interchangeable should consider these issues well in advance of submitting their application.
Unlike generic drugs, a follow-on biological product is a product that is similar to, but not the same as, the innovator drug. The USA has now joined a number of countries in establishing laws which provide an abbreviated regulatory pathway for follow-on biological products.
Importantly, the new Act offers a 12 year period of exclusivity for the innovator or "reference" product irrespective of or in parallel to patent protection. This is longer than the exclusivity period currently offered in Europe which consists of eight years data exclusivity and an overlapping ten years market exclusivity extendible by one year for a new indication of "significant clinical benefit".
Unlike the Hatch-Waxman provisions relating to small molecule drugs, there is no incentive under the new Act for producers of biosimilar products to challenge innovator patents. Furthermore, patents relating to processes for producing biological products may become increasingly important because the applicant for a follow-on biological product must inform the reference product sponsor of the process used to produce the follow-on biological product. In this way, the new Act facilitates policing and enforcing patents covering processes for producing biological products.
It is now important for companies that are developing biological products to evaluate their patent portfolio and IP management strategies in light of these new provisions.
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