More on Data or Market Exclusivity

01/27/2011

The Patent Doc blog provides another clear discussion explaining the debate on data versus market exclusivity resulting from the Patient Protection and Affordable Care Act and its provisions for follow on biologics.

What do we know for sure? The PPACA says the FDA cannot accept an application for a follow-on biologic until 4 years after the reference drug. The follow-on biologic cannot be approved until 12 years after the reference drug. That apparently is clear.

What's not clear is the term "exclusivity" in the bill. Innovator drug manufacturers and their Senator or Representative allies say that the bill clearly means that the innovator's data is to be held exclusive for 12 years after the reference product. That means a follow-onproducer could not use the data before that time and therefore would not reach market until much later than 12 years after the reference product.

The follow-on manufacturers, payers and their Senator or Representative allies say the bill allows the data to be cited after four years and that the remaining 8 years gives the reference product market exclusivity. Thus a follow on application could well be ready for approval when the 12 year market exclusivity period had expired for the reference product. This will result in lower prices for patients and the Federal goverment.

The Patent Doc blog points out that if the intent is to get follow-on biologics on the market as quickly as possible then the latter argument makes most sense as to the policy. However, if the latter path is pursued then the innovator may find it much more difficult to earn a return on their investment in creating the reference product -- which is a big problem.

History shows that generic producers in the non-biologic space don't produce innovative products typically in the absence of an innovator. If no innovator - then no new drug. In the non-biologic space, innovators were given longer patent life under Hatch-Waxman to compensate for generics entry. There is no such provision in PPACA. A couple economic studies in the biologic and non-biologic space have concluded that a longer period of exclusivity for the innovator actually does lead to more drugs being produced and introduced to market - and results in patient benefits in terms of things like life-expectancy gains.

The Post conlcudes that there may be a need for a compromise and a modification of the exclusivity language in the law to accomodate both sides of the argument. In the meantime, in the absence of clarification it is up to the FDA to sort out the policy -- thus the politicking now.