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Orphan Drugs and Bio-Similars: Is 12 Better than 7?

In the new bio-similars legislation, orphan drugs were granted protection for the longer of 12 years of data exclusivity or 7 years of market exclusivity. Since both are triggered by the date of approval, many people have assumed that 12 years protection is always better than 7 years protection.

FDA Matters says: not so. Other than patent protection, the Orphan Drug Act’s grant of market exclusivity to orphan drugs is still the best friend of an innovator company.

The new bio-similars law creates a regulatory pathway by which biologics similar to ones already on the market can get approved more quickly and with less original data. In a prior column, FDA Matters pointed out that the data exclusivity provisions were both more and less beneficial to originators than it seemed:

  • More because no bio-similar can use the abbreviated approval pathway if the reference (originator) drug was approved less than 12 years before. This “pathway exclusivity” includes data exclusivity, but is more far-reaching. Even if a bio-similar has its own data, it still can’t use the new pathway to approval.
  • Less because the new law protects reference (originator) products against bio-similars for 12 years, but only if the bio-similar seeks to use the new abbreviated approval process. Many of the companies planning bio-similars are going to use the full BLA approval process instead, where the 12-year pathway/data exclusivity doesn’t apply.

When this is applied to orphan drugs, two different situations emerge:

  • If the bio-similar wants to use the abbreviated pathway, then the 12 years of pathway/data exclusivity protects the original orphan product. In this case, the 12 years is better for the originator than 7 years of market exclusivity.
  • If the bio-similar wants to use the regular BLA pathway, then the 7 years of market exclusivity protects the original orphan product. The 12 years of pathway/data exclusivity doesn’t apply at all.

What comes next depends heavily on FDA. The law is new and lacks clarity on many key points; the patent provisions border on the unworkable. The new pathway may not turn out to be usable.

Nonetheless, the new law clearly empowers FDA to find ways to get more bio-similar products on the market. Since, at best, this can only be partially achieved through the abbreviated pathway, I believe the agency will be looking for ways to make the BLA process friendlier for bio-similar and bio-better products.

This suggests that bio-similars of orphan products are going to use the BLA process a lot. Seven years of market exclusivity will still be the core protection that all orphan companies will want for their products.

For innovators of orphan drugs, the message is: prepare for competition. Don’t assume that you will have more time because of problems with the new pathway or the protections it grants. Seven years of market exclusivity is all you can really count on.

For those planning bio-similars of orphan drugs, the message is: don’t violate the originator’s patent(s) and get your own data to support a BLA filing. Also, prepare to discount in order to get market share. It will never be like the generic drug market, but with biologics costing upwards of $300,000 per year….offering a 20% discount is serious money that will be welcomed by health plans and patients.

A final thought: costs to enter the bio-similar market are going to come down over the next 5 to 8 years. This means that orphan products with less than $1 billion in annual revenue are going to see competition much sooner than many predict.


My earlier column:

Data Exclusivity and Bio-Similars: Both More and Less Than It Seems
May 2nd, 2010

FDA Matters has been very upbeat about the prospects for the bio-similar marketplace. “Smart money” (i.e. companies currently making billions from their ability to discover or license new bio-pharmaceuticals and market them) decided to play before they knew the ground rules on exclusivity and patents. We can only conclude that there must be substantial amounts of money to be made, regardless of the specifics.

With this in mind, FDA Matters explores why there is a persistent belief that the bio-pharmaceutical industry got something better than data exclusivity. I also explore whether data exclusivity will really provide valuable protection for original reference biologic products. Read the rest of this entry » or go to: www.fdamatters.com/?p=921.

2 Responses to “Orphan Drugs and Bio-Similars: Is 12 Better than 7?”

  1. mgraper says:

    Does 12 vs 7 years really matter when we are talking about orphan drugs? We in the orphan disease business are fortunate that even one pharma has agreed to develop a drug to help these patients. I can’t imagine any other pharma wanting to develop a bio-similar drug given the costs and years involved in doing so. There is just simply not that much market competition out there for “us”.
    However, I do believe that the FDA should slack up a bit on what is required to bring an orphan drug to market. There are simply not enough patients around to satisfy the FDA’s current requirements for all of the phases and cohorts of study patients that is required. There should certainly be stringent safety measures, yes. But, if “we” are to help those small groups of orphans to seek treatments and/or a cure, surely there must be a better way.

  2. Mary—For most rare diseases, you are correct. It’s hard enought to get one company interested, impossible to imagine competition. But for a small but growing number of rare diseases, there is one very expensive orphan drug and one or more companies interested in competing with them. For a rare disease without any good treatments, it can be a cruel twist to see that the orphan drugs in their future are going to be expensive. If given a choice, I think most individuals with rare diseases would prefer the treatment be developed, anyway. It is a positive sign for patients that others might want to compete with a bio-similar product, which should drive prices down by 15% to 30%.

    Your other points about clinical trials and approval standards for orphan drugs are appropriate. This is a topic I will explore in a future column. Steven

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