Patent & Trade Mark

New US law on follow-on biological products

Date: 06 April 2010
Author: Patrick McManamny

Market Exclusivity for New Biological Products and Pathway for Follow-on Biological Products

  • US law now offers:
    - A 12 year period of market exclusivity for new biological products.
    - Market exclusivity for some follow-on biological products.
    - An abbreviated pathway for registration of follow-on biological products.
    - A mechanism for identifying patent infringement disputes in respect of follow-on biological products.
  • It is now important for companies developing biological products to evaluate their patent portfolio and IP management strategies in light of these new provisions.

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:

  • Patent term extension:  A patent owner can apply to extend the term of a patent covering an FDA approved drug in order to make up time lost in clinical testing and FDA approval.  The maximum extension of the standard 20 year term allowed under this scheme is 5 years.
  • Market exclusivity for the innovator: If the approved drug is a new chemical entity, the generic manufacturer cannot apply for approval of its drug until 5 years after approval of the innovator drug.  If the approved drug is not a new chemical entity, then the generic manufacturer has to wait 3 years to apply for approval.
  • Orange Book: Innovators are required to "list" any patent that claims the drug or method of using the drug for which an action of infringement can reasonably be asserted.  The listing of patents directed to methods of manufacturing the approved drug is not permitted.
  • Paragraph IV certifications:  The generic applicant must certify the status of the drug for which it seeks approval in relation to patents listed in the Orange Book.  The applicant may certify that no patents are listed, or that the patents have expired.  Alternatively, the generic applicant may certify that the listed patent is invalid or will not be infringed.  The latter is known as "Paragraph IV" certification.  Generic manufacturers that are first to file a "Paragraph IV" certification and that successfully litigate the ensuing patent dispute are awarded 180 days of market exclusivity over all subsequent generic applicants.  This has been seen as an incentive for generic companies to challenge patents.
  • 30-month stay for innovators:  If a patent owner files an action for infringement against a generic applicant within 45 days of receiving notice of a "Paragraph IV" certification, approval of the generic drug is stayed for 30 months (or such other period as the court may order).

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:
  • the biological product and reference product are similar based on data derived from each of:
    • analytical studies that demonstrate that the biological product and reference product are highly similar and only differ in "minor differences in clinically inactive components"; and
    • animal studies; and
    • one or more clinical studies (including pharmacokinetic and immunogenicity studies) establishing safety, purity and efficacy in one or more conditions for which the reference product is approved and for which approval for the biosimilar is sought;
  • the biological product and reference product use the same mechanism(s) of action to the extent that this is known for the reference product;
  • the route of administration, dosage form and strength of the biological product and reference product are the same; and
  • the facility in which the biological product is manufactured, processed, packed or held meets specific standards.

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:

  • The biological product can be expected to produce the same clinical result as the reference product; and 
  • For products administered more than once, the risk of switching between the biological product and the reference product is no greater than continuing to use the reference product.

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.

Tags:  biological products, biosimilars
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