For an updated analysis, go to the May 2, 2010 column: Data Exclusivity and Bio-Similars: Both More and Less Than It Seems.Read the rest of this entry »
On several occasions, FDA Matters has asked Congressional staffers: how many of the Senators and Representatives understand that the follow-on biologics debate is about the amount of data exclusivity, not market exclusivity? In reply, I always get a smile that confirms my suspicion.
The confusion is not limited to the Hill. The New York Times referred to “market exclusivity” in its article on industry winners and losers on the day of the key House vote. A prominent industry trade publication—whose staff clearly knows better—referred to “bullet-proof market exclusivity” in a story the next day. The San Francisco Chronicle got it right—perhaps because of the concentration of bio-pharmaceutical companies in the Bay Area.
None of this would matter if data and marketing exclusivity were similar to each other…or even of roughly equal value. They are not. The future of bio-similar products cannot be understood without grasping the difference.
Intellectual property (IP) protection comes in several forms—the more types you have for the longest possible time, the less likely you will have competition.
The most familiar is patent protection. You own a product, formula or process for a number of years set by law and subject to various other considerations. For example, Hatch-Waxman provides for patent extensions to cover part of the time that pharmaceutical products are delayed in regulatory review.
On the other hand, patents can be challenged both as to their legitimacy and when they expire, thus negating or shortening the patent. At the end of the patent’s life, the product, formula or process is (at least potentially) in the public domain, available for copying.
Another form of intellectual property protection is market exclusivity. For a period of time, a regulatory approval agency (FDA) will not accept another application for the same drug and indication. The best-known example is the seven years of market exclusivity granted to orphan drugs.
Market exclusivity runs independently from the patent. It can also protect the ability to market a product that is unpatentable or for which the patent has expired. With some exceptions, market exclusivity cannot be challenged in court….meaning that there are situations where it is better than a patent. Note that market exclusivity is primarily about regulatory forbearance, not ownership.
Data exclusivity under the new law is about ownership of the safety and efficacy data that supported the reference (originator) product when it received regulatory approval. Specifically, for a period of 12 years, FDA cannot approve a bio-similar product using the data (owned by a different company) that supported the original approval.
Data exclusivity does not prevent a second company from generating their own data. Nor does it prevent FDA from deciding that a 200 person trial is sufficient when the original approval was based on 2000 patients. Further, the science of characterizing biological substances is likely to advance rapidly over the next few years, providing the potential for additional ways for a bio-similar product to satisfy FDA requirements.
Data exclusivity is valuable. The investment community’s enthusiasm for the 12 years of protection is appropriate. However, patents and market exclusivity are extremely powerful barriers to competition….and data exclusivity is not.
In a future column, I will further explore the implications of these distinctions…particularly, my view that the new law will lead to significant growth in the biopharmaceutical marketplace for both innovator and bio-similar products.
If you are not a subscriber and don’t want to miss that column and future analysis of FDA and bio-pharmaceutical issues, I recommend going to www.fdamatters.com to register for free updates.
Steven
Two earlier columns on this topic:
Follow-on Biologics: 1-2-3-GO
March 21, 2010
The long fight is over for follow-on biologic (FOBs). The Senate-passed version of health reform will become law, even while the larger fight continues over the reconciliation package. Within 10 days, FDA will be busy implementing an approval pathway for FOBs.
The world of biopharmaceuticals will never be the same, but not in the ways that many players expect. Here is FDA Matters’ guide to understanding the next phase. Read the rest of this entry »
The Follow-on Biologics Market
June 23, 2009
Since the debate began several years ago, the policy and politics of follow-on biologics (FOB) have been driven by assumptions and projections of the anticipated market. There has been a lot of fuzzy thinking about what type of companies will be players and how they will position themselves. Read the rest of this entry »