Intellectual property protection may not immediately come to mind when one considers health care reform, but it should.

Those interested in patent protection should pay special attention to provisions in this pending legislation that would authorize the Food and Drug Administration to approve follow-on versions of biotech medical products (“biosimilars”).[1]

These provisions would establish a complex dispute resolution scheme for biotech medicine patents that departs significantly from the rules of civil litigation.

If enacted, the legislation threatens to convert the U.S. patent system into a two-tiered regime in which biotech medicine patent holders would have fewer rights to enforce their patents. This could diminish the value of biotech patents.

The Legislation
Two biosimilar bills currently before Congress would establish new rules to govern biotech medicine patent disputes between the party that developed and secured approval of a biotech medicine (hereafter, “innovator”) and the manufacturer that seeks to market the follow-on or similar version of the innovator product (hereafter “biosimilar applicant”).

On the Senate side, the Committee on Health, Education, Labor and Pensions approved a biosimilar amendment to the “Affordable Health Choices Act” (“HELP bill”)[2] On the House side, Congressman Waxman introduced H.R. 1427, the “Promoting Innovation and Access to Life-Saving Medicine Act” (“Waxman bill”).[3]

A third biosimilar bill, the “Pathway for Biosimilars Act” (H.R. 1548), was introduced by Congresswoman Eshoo.[4] This bill (including the patent provisions) has largely been incorporated into the House Energy and Commerce Committee bill on health care reform by a strong bipartisan vote of 47 to 11.

The Eshoo bill is not discussed here because it builds upon the existing patent system rather than adopting entirely new and different rules to govern certain fundamental aspects of litigation involving biotech medicine patents alone.[5]

Both the HELP legislation and the Waxman bill would create a bifurcated scheme in which certain innovator patents may be litigated early in the biosimilar application process (“early litigation”), while other patents may not be litigated until much later when the biosimilar product is close to approval or is on the market (“later litigation”).[6]

To determine which patents are litigated and when, both proposals would establish a scheme governing the exchange of information between the parties.

If enacted, these legislative proposals would impact key aspects of any litigation surrounding biotech medicine patents. Indeed, as described below, the legislation would establish inefficient and unbalanced rules to control key phases and actions in a biotech patent case.

Pre-Litigation Information Exchange
Frequently, before parties resort to litigation, they may of their own volition attempt to resolve a dispute through the exchange of information and their respective positions on a matter.

Whether through a “demand letter” or a “cease-and-desist letter,” these exchanges put the alleged offending party on notice and may serve to avoid the costs and expense of full-blown litigation. This exchange may be especially important for patents since IP litigation is complex, protracted and expensive.

The biosimilar bills would create a much different process for the exchange of information before litigation. They would establish strict procedures and timelines for exchanging patent information before a lawsuit may be filed by an innovator. This process appears to be unbalanced and may carry severe penalties for innovators.

For example, if the innovator omits a patent from its response to a biosimilar applicant’s request for information — either inadvertently or because it believes a patent would not be implicated — it is precluded from enforcing that patent against the biosimilar applicant at any time.[7]

In any other setting, no such penalty accompanies the exchange of information between parties before a civil lawsuit is filed. This severe penalty would be unique to biotech medicine patents and out of line with other civil suits, including those involving nonbiotech patents.

Shifting the Focus of the Complaint
If a lawsuit is commenced, the first step in any civil case is, of course, the filing of a complaint. Subject to the pleading requirements of the Federal Rules of Civil Procedure (“FRCP”),[8] the plaintiff is the “master of the complaint.”

The plaintiff chooses what the complaint will say, when it will be filed, what issues it will raise and what relief it will seek.

Although the defendant may raise defenses and add its own counterclaims to the action, and even move to dismiss certain claims or file its own declaratory judgment action, it may not dictate the content of the complaint filed by the plaintiff.

In contrast, both biosimilar bills would effectively shift control of the complaint from the plaintiff to the defendant in any patent litigation involving a biosimilar product.

Specifically, the biosimilar applicant gains this control through the information exchange process, which gives the applicant the final word on which patents are subject to early litigation and which may only be disputed in later litigation (which may take place only after the biosimilar product has gone to market).

By vesting this authority with the biosimilar applicant, the bills allow the presumptive defendant in patent infringement litigation to dictate how many patents (in the case of the HELP bill)[9] and which patents (in the case of the Waxman bill)[10] may be included in the innovator’s complaint in actions brought both in early litigation and later litigation.

The division of biotech patent litigation by the alleged infringer into two distinct phases does not advance judicial economy and may hinder enforcement of patent rights.

Additional Factors to Govern Venue
The location of the litigation is an important strategic consideration for the parties and one that is also generally controlled by the plaintiff. The law requires that the geographic location for the litigation have some relationship to either the parties or the issues in dispute.[11]

Choice of venue is important because of convenience to the parties and the differing temperaments of the courts. A defendant may request transfer of the lawsuit to a different venue, and the court is required to decide whether to transfer based on the evenhanded criteria of “convenience of parties and witnesses” and “justice.”

Although the courts have for many years routinely applied the foregoing criteria in myriad cases, the Waxman proposal would establish two additional factors to which a court must give “greatest weight” if a biosimilar applicant moves to transfer venue.[12]
One of these additional factors would appear to impose a bias in the choice of forum in favor of the biosimilar applicant.

As set forth in the Waxman bill, that factor requires the court to consider “[t]he strong public interest in obtaining prompt judicial resolution of patent disputes so that the biological product which is the subject of the patent dispute may be brought to market as expeditiously as possible, consistent with fair and prompt resolution of patent disputes.”[13]

Limits on Representation by Counsel
Not surprisingly, the FRCP allow and, in fact, encourage reliance on counsel by all litigants.[14] Courts recognize that litigants have a right to select counsel of their own choice and that disqualifying a litigant from use of an attorney should only be required when failing to disqualify poses significant risks to fairness.

Notwithstanding this basic principle, the HELP bill would significantly limit the ability of innovators to rely on important in-house counsel and outside counsel in patent litigation, thereby potentially hindering the innovator’s ability to mount an effective case.

The bill limits disclosure of confidential information about the biosimilar product to only one of the innovator’s in-house attorneys.[15]

Moreover, neither the in-house lawyer nor any outside counsel may access such information if they have been engaged in patent prosecution related to the products at issue.

Thus, the HELP bill would preclude meaningful involvement of counsel for the innovator who may be most familiar with the patents at issue. Protective Orders that contain prosecution limits typically restrict in-house lawyers from prosecuting after, not before, receipt of the other side’s confidential information.

Restricting Declaratory Judgment Actions
In recognition of the importance of clarifying the legal rights of parties to a dispute, Congress passed the Declaratory Judgment Act (“DJA”) to allow “any interested party” to seek an authoritative declaration by a federal court of “the rights and other legal relations” of the party where an actual dispute exists.

A party need not wait for some violative action to take place before seeking relief from a federal court under this statute.[16] Rather, declaratory judgment actions (“DJ actions”) are intended to “minimize the danger of avoidable loss,” remove threats of impending litigation, prevent violations of law or breaches of contract and avoid unnecessary multiple lawsuits.[17]

Although a party in a typical civil case may unilaterally seek clarification of its legal rights by filing a DJ action, the Waxman bill would allow the biosimilar applicant to restrict the rights of an innovator to bring such actions.

A biosimilar applicant could, for example, choose not to include a patent in its initial notice to the innovator during the information exchange process.

Under the Waxman proposal, that omission would bar the innovator from filing a DJ action on that patent until after the biosimilar product is actually on the market.[18] This prohibition is inconsistent with the DJA, which allows parties to bring actions in anticipation of a product coming to market.

Requests for Preliminary Injunctions
A plaintiff may also seek a preliminary injunction (“PI”), asking the court to preserve the status quo until it decides whether the defendant’s alleged acts are permissible.

This is a critical litigation tool that allows plaintiffs to prevent the irreparable harm that may flow from a defendant’s actions. In patent litigation involving drugs, innovators frequently rely on PIs to prevent harm from an at-risk launch of an allegedly infringing product.

The HELP bill would limit the conditions under which an innovator may seek a PI. In fact, the bill appears to preclude the possibility that an innovator may obtain a PI with respect to any patent that is the subject of the early litigation process.[19]

It only authorizes PI applications for those patents that are the subject of later litigation and, thereby, creates the inference that this remedy is not available for patents that are disputed in early litigation.

If that were the case, then an innovator may be especially disadvantaged since it presumably would seek to litigate its strongest patents during the early litigation process.

No Forgiveness for Minor Mistakes
Deadlines and disclosure requirements are common in ordinary litigation. It should, therefore, not be surprising that, occasionally, even conscientious litigants make mistakes and miss deadlines or make other minor errors.

The rules governing civil litigation acknowledge this reality and frequently provide ways for litigants to recover from mistakes — sometimes even enormous mistakes — without penalty.

For example, the FRCP allow a court to provide relief, upon a finding of “good cause,” for defendants that default by failing to respond in a timely manner to a complaint.[20]

Other provisions reflect the flexibility of the civil justice system and allow a court to correct a mistake or error made by a party in the case.[21]

No latitude for error is permitted in either the HELP or Waxman bills. Rather, both bills would impose stiff penalties on innovators who make minor mistakes and they would not permit courts to redress such mistakes upon a finding of good cause.

Thus, if an innovator were to make a clerical error and fail to timely include a patent in its response to a biosimilar applicant’s request for patent information or omit the patent because of an incorrect belief that a patent would not be implicated, the innovator would forever be barred from bringing an infringement action relating to that patent.[22]

Moreover, if an innovator were to fail to file suit in a timely manner against a biosimilar applicant, it would be limited solely to a royalty in any infringement action, rather than an injunctive relief.[23]

These penalties for innovators can hardly be said to fit the crimes nor do they comport with the standard rules that apply to other litigants, including all other patent holders.

Conclusion
In light of the foregoing, the following conclusions can be drawn about the Waxman and HELP bills currently before the Congress.

First, these bills would impose unique patent dispute resolution rules which deviate significantly from the procedures governing other patent suits and nonpatent civil litigation.

Second, altering the basic rules could have a material impact on the outcome of any litigation involving patents on biotech medicines.

And, third, were that to be case, biotech medicine patents may ultimately hold less value than other patents for which enforcement is routinely available under traditional principles of civil litigation rules.

As Congress considers health care reform, it must be mindful of these possible consequences. Surely, any patent dispute scheme adopted for biotech medicines must be fair and balanced and encourage judicial efficiency.

 
References
[1] FDA is authorized to approve generic versions of drug products under Section 505 of the Federal Food, Drug and Cosmetic Act. 21 U.S.C. § 355(j) (“Hatch-Waxman Amendments”). Unlike most drugs, biological products are derived from living organisms and they include medicines derived from biotechnology. The FDA is authorized to review and approve biological and biotech products under the Public Health Service Act. 42 U.S.C. § 262.

[2] See “Biologics Price Competition and Innovation Act of 2009” This Amendment appears as Subtitle A of Title VI of larger bill approved by the committee, which is available at: help.senate.gov/BAI09I50_xml.pdf. (See pg. 774, line 13 to pg. 820, line 11).

[3] See “Promoting Innovation and Access to Life-Saving Medicine Act” available at: frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1427ih.txt.pdf

[4] See “Pathway for Biosimilars Act” available at frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1548ih.txt.pdf

[5] See Eshoo Amendment, available at: energycommerce.house.gov/Press_111/20090731/hr3200_eshoo_2.pdf The patent provisions in this bill were subsequently dropped out of the legislation with the consent of Congresswoman Eshoo to avoid points of order against the bill, but she expects to reincorporate her patent provisions when the bill comes to the House floor for a vote. Meanwhile, Mr. Waxman has vowed to return his bill’s patent provisions to whatever biosimilar legislation is passed by the House.

[6] See HELP Bill, at pg. 792, line 4 to pg. 800, line 16. See Waxman Bill, at pg. 30, line 14 to pg. 36, line 2.

[7] See HELP Bill, at pg. 808, lines 10-16; see Waxman bill, at pg. 45, line 22 to pg. 46, line 4.

[8] See, e.g., Fed. R. Civ. P. 8(a), 9(b), 10(a)-(b), and 11(a)-(b).

[9] See HELP Bill, at pg. 797, line 21to pg. 798, line 9 (restricting right of innovator to list more patents than those listed by biosimilar applicant; if applicant lists none, then innovator may list one patent).

[10] See Waxman bill, at pg. 34, lines 1-8 (limiting right of innovator to bring an infringement action only with respect to patent(s) included in the notice received from the biosimilar applicant).

[11] See, e.g., 28 U.S.C. § 1391(b); and 28 U.S.C. § 1404(a). In Hatch-Waxman litigation involving generic drugs, because there is no actual infringing product on the market, venue is limited to jurisdictions where the generic is incorporated, resides or has a principal place of business.

[12] See Waxman Bill pg. 41, line 24 to pg. 43, line 16.

[13] See Waxman Bill pg. 43, lines 4-10.

[14] For example, see Fed. R. Civ. P. 5(b)(1); Fed. R. Civ. P. 11(a); Fed. R. Civ. P. 16(c)(1); Fed. R. Civ. P. 26(b)(5); and Fed. R. Civ. P. 54(d)(2).

[15] See HELP Bill, at pg. 788, lines 9-16.

[16] See e.g., Medimmune Inc. v. Genentech, 549 U.S. 118 (2007) (finding that a patent licensee does not have to breach the terms of the contract in order to meet the actual controversy requirement and challenge the licensed patent in court).

[17] 10B Wright, Miller & Kane, Federal Practice and Procedure § 2751, at 457-58 (3d ed. 1998).

[18] See Waxman Bill, at pg. 34, lines 9-19. The HELP bill provides that DJ actions may not be brought by either party before 180 days of first commercial marketing of the biosimilar product as long as the applicant complied with the relevant information exchange requirements. If not, then an innovator may file a DJ action when it chooses to do so. See HELP Bill, at pg. 802, line 5 to pg. 803, 15. While more even-handed, this provision still allows the biosimilar applicant to control the timing of a DJ action by the innovator.

[19] See HELP Bill, at pg. 801, lines 1-21.

[20] Fed. R. Civ. P. 55(c) and 60(b).

[21] Fed. R. Civ. P. 15(a), (c); Fed. R. Civ. P. 26(b)(5)(B); and Fed. R. Civ. P. 36(b).

[22] See HELP Bill, at pg. 808, lines 10-16; see Waxman bill, at pg. 45, line 22 to pg. 46, line 4.

[23] See HELP Bill, at pg. 807, line 11 to pg. 808, line 9; see Waxman bill, at pg. 44, line 18 to pg. 45, line 21. This contrasts sharply with the Hatch-Waxman scheme governing litigation of patents involving generic drug products. If an innovator were to fail to file suit in a timely way, it would only lose its right to a 30 month stay on FDA approval of the generic drug. 21 U.S.C. § 355(j)(5)(B)(iii). The innovator would not be forever foreclosed from injunctive relief.
All Content © 2003-2009, Portfolio Media, Inc.

For too long, the health care debate has focused on issues that divide the political parties, undermining meaningful reform. Many lawmakers have, however, been able to find common ground on one issue in this massive debate: the approval of biosimilars. Biosimilars, often erroneously referred to as biogenerics, are medicines that are similar to, but not the same as breakthrough biologic medicines.

Biologics represent the cutting edge of medicine, providing advanced therapies and drugs that are saving and extending the lives of patients living with debilitating diseases including cancer, Multiple Sclerosis and HIV/AIDS. Continued advancements hold the promise of improved medicines and, one day, cures. By allowing biosimilars to enter the marketplace, Congress can increase patient access to life-saving medicines, reduce costs and provide a foundation for continued biomedical innovation.

It’s easy to assume that continued biomedical advancement is a given — that the hard work and dedication of our scientists will move research forward, unaffected by the health care reform debate taking place. Thoughtful lawmakers know otherwise. That’s why we saw such strong bipartisan support in both Houses of Congress for language included in health care reform bills that would create a pathway for Food and Drug Administration (FDA) approval of biosimilars. Both provisions strike the right balance among increasing access, ensuring patient safety and promoting continued biomedical breakthroughs.

These provisions first and foremost ensure that biosimilars are safe. Biologics are extraordinarily complex medicines made from living organisms, and as the FDA has noted, biologics cannot be copied exactly. Therefore, it is critical that the FDA base its approval of biosimilars on the same rigorous standards of safety, purity and potency it applies to all other biologics.

These measures also balance the need for continued innovation with provisions aimed at expanding the robust competition already in place. There are currently hundreds of biotech companies competing against one another in a race to find a cure for cancer, heart disease and other diseases and disabilities. Allowing biosimilars to enter the marketplace not only will increase this vibrant competition, it will expand access to the life-saving medicines available today and ones yet to come.

Meanwhile, the pathway supported by bipartisan majorities in key committees in the House and Senate includes incentives to continue innovating. Developing a new treatment or therapy can cost upwards of one billion dollars and require a decade or more of research, development and testing. The pathway adopted by the committees would protect the intellectual property of the innovators and maintain the incentives necessary to secure the investment that leads to new therapies and cures.

It’s good to know that when patients are on the line, Republicans and Democrats were able to put their differences aside, and move well-crafted, balanced policy forward.

As both the House and the Senate continue their debate on health care reform, I call on Connecticut’s lawmakers to ensure that this biosimilars language is included in the final legislation. Patients and their families deserve a bill that promises increased access to safe, life-saving medicines and ensures the continued development of new therapies and cures.

Earlier this month, James Love and James Glassman, writing in the Congressional newspaper Roll Call, expressed “alarm” regarding recent Congressional action concerning the establishment of a follow-in biologics (FOB) regulatory pathway (“Don’t Kill Competition for High-Tech Drugs”).  That action included the recent passage by the House Committee on Energy and Commerce of a health care reform bill containing a licensure pathway for biosimilar biological products that would prevent the FDA from approving a biosimilar application until 12 years after the date on which the reference product (i.e., the innovator biologic) was first licensed (see “House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period”), and prior approval by the Senate Health, Education, Labor and Pensions (HELP) Committee of an amendment providing a 12-year data exclusivity period for biologic drug makers (see “Senators Champion 12-Year Data Exclusivity in Senate”).

 James Love, the director of the public interest advocacy group Knowledge Ecology International, and James Glassman the former under secretary of State for public diplomacy and public affairs in the George W. Bush administration and editor of Roll Call from 1988-93, contend that passage of FOB provisions by the House Energy and Commerce and Senate HELP Committees would “make it difficult, if not impossible, for generic drugs to compete with biologics, even after patents have expired.”  The authors add that these provisions, if reconciled and passed into law, have “the potential to harm millions of sick people, in the United States and beyond.”

Mr. Love’s and Mr. Glassman’s assertions are based on a comparison of the predicted impact of the House and Senate provisions with that of the Hatch-Waxman Act, which they note provided “streamlined procedures [that] lowered the cost of entry by generic suppliers and created a highly competitive environment that has saved consumers billions of dollars.” According to the authors, the FOB regulatory pathway currently being proposed by Congress is “deeply flawed and will reduce, or even eliminate, potentially significant savings to consumers.”

Mr. Love and Mr. Glassman make it clear that the “flaw” in the process is the exclusivity period, which unlike the 5-year period for small molecule generics under Hatch-Waxman, at present stands at 12-years for biogenerics. They state that “[t]he original proposal for biogenerics would have retained most of the features of the 1984 Hatch-Waxman Act, including the five-year exclusion [i.e., exclusivity period].” However, their assertion is not entirely accurate, since one of the two House FOB bills introduced last spring (H.R. 1548) called for up to 14.5 years of exclusivity (see “Second Follow-on Biologics Bill Is Introduced in House”). It also disregards the White House’s call, in June, for an exclusivity period longer than 5 years (see “White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics”). Instead, the authors argue that “after an intense lobbying campaign by the manufacturers of biologics, new amendments to the Senate and House versions of the bill made it much more difficult for makers of generics to enter the market.” Again, this statement is somewhat disingenuous in that it ignores the fact that Rep. Anna Eshoo (D-CA), who helped introduce the 12-year amendment in the House Energy and Commerce Committee, also introduced H.R. 1548 last spring as well as a similar bill in the last Congress (see “New Follow-on Biologics Bill Introduced in the House”). Thus, Rep. Eshoo did not succumb to “an intense lobbying campaign” in introducing the amendment, but rather has been pushing for a double-digit exclusivity period since March of 2008. (In fact, in proposing a 12-year period, Rep. Eshoo actually backed off the longer period she had been seeking.)

Noting that “Members of Congress from both parties have claimed that long monopolies are needed to stimulate investments in research and development,” the authors declare their strong disagreement with this position. Although they acknowledge that developmental costs for new biologics are “undoubtedly expensive,” they contend that “this is just as true for products that the FDA classifies as ‘small-molecule,’ or conventional, drugs as it is for biologics.” Mr. Love and Mr. Glassman also argue that “innovation has prospered under the Hatch-Waxman regime.” Biologic manufacturers, however, would likely disagree with these assertions, and Amgen Inc. Vice President and Law & Intellectual Property Officer Stuart Watt did just that last March in a presentation at the Biotechnology Industry Organization (BIO) Intellectual Property Counsels’ Committee (IPCC) conference (see “Amgen VP Makes Case for Longer Exclusivity Period in Follow-on Biologics Legislation”).

Mr. Love and Mr. Glassman conclude their article by noting that while Article I, Section 8, Clause 8 of the Constitution confers upon Congress the power “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries,” the Founders “understood the need for balance in creating monopolies that were temporary” — i.e., which existed for limited times. The authors state that “[e]ndless monopolies, particularly those created by regulatory measures, must be avoided,” concluding that “a 12-year exclusion simply does not meet the test of logic.”

President Barack Obama is keenly interested in holding down the cost of healthcare while increasing access for tens of millions of Americans and has strongly advocated for a public option. And while Congress is consumed with debating this major change in our healthcare system, it is also debating another controversial issue, also intended to improve access and contain costs — the issue of “follow-on biologics” or “biosimilars.”

These are injected biologicals used to treat many truly dreaded diseases such as cancer and multiple sclerosis, as well as other serious illnesses. They are made from organic sources such as animal cells, microorganisms and yeast, and have given new hope and new life to many people with crippling illness.

 Highly complex products, biologics are comprised of proteins as well as other biological materials.
Even though for the first time in recent history overall expenditures for drugs increased at a lower rate than for healthcare in general, expenditures nevertheless did increase, especially for biosimilars. Patients (or their payers) can spend thousands of dollars per month for some of these biologicals, and overall, expenditures for these life-saving products can top $40 billion annually.

Generic drugs approved under what is known as the ANDA (abbreviated new drug application) are able to take advantage of the Hatch-Waxman Act passed in 1984. This act created a scientifically-based scheme for approval of generic drugs once the patent on the brand or innovator has expired. Patients have come to rely on generic copies of brand-name small molecule drugs to cure their illnesses and maintain their lives. Unfortunately, Hatch-Waxman made no provision for biologicals and almost all of the large molecules for serious illness are biologicals.

Congress is trying to remedy this, but the science is not the same. Simply put, “generic” biologicals may not be an exact copy of the originator brand-name product. So recognizing this, the proposed legislation seeks to give the Food and Drug Administration discretion to determine whether a biosimilar is close enough for all intents and purposes to be considered a substitute for the originator brand-name product.

In this present-day environment, it would be unrealistic to fail to support any reasonable measure to make medicines more affordable. Congress should grant FDA the authority to require both safety and efficacy testing where needed, on a case-by-case basis. There should also be well spelled-out and publicly reviewed criteria for FDA to use in making this determination. And, one biosimilar should not be substituted for another without the express permission of the prescriber. This is science, not policy. It is in the interest of good patient care, and is certainly in keeping with the need for evidence-based medicine.

Washington state has long been a home for innovative thinkers. From Boeing to Microsoft to Amazon.com, companies based in Washington have pushed the envelope on what’s possible. Senator Patty Murray (D, WA) and Representative Jay Inslee (D, WA-1) have followed suit with their leadership on legislation that would enable biotech companies in Washington and across the nation to continue their quest for innovative cures and therapies to address unmet medical needs.

The most promising medical innovations are coming from biotechnology companies in Washington and across the United States. Among the most advanced innovations are biologics – complex proteins produced by living cells that have been custom designed using our newly acquired understanding of human genetics and DNA. Biologics have added major therapeutic options for the treatment of debilitating diseases (such as cancer, HIV/AIDS, Alzheimer’s, multiple sclerosis and many rare diseases) including some for which no effective therapies were available and others for which previously existing therapies were clearly inadequate.

Because the cutting-edge technology used to create biologics is far more complex than the process used to manufacture chemical-based drugs such as aspirin, there is currently no regulatory pathway for the approval of biosimilars (medicines that are similar to, but not the same as, innovator biologics).

Done correctly, the approval process for biosimilars will protect patient safety, expand competition to reduce costs for consumers, and provide fair incentives for continued biomedical innovation.

During its recent consideration of health care reform legislation, the Senate Health, Education, Labor and Pensions (HELP) Committee adopted an amendment supported by Senator Murray which will provide out a safe, effective and reasonable pathway for approval of biosimilars. The amendment, approved by a bipartisan vote of 16-7, strikes the right balance between expanding competition to lower costs for consumers and preserving incentives for continued biomedical innovation by providing a 12 year period of data exclusivity (during which the Food and Drug Administration cannot rely on the innovator biologic’s safety and efficacy data to approve a competitor’s products). A similar process and timeline currently guides the development of generic versions of traditional pharmaceutical drugs.

The House Energy and Commerce Committee also adopted an amendment to create a pathway for biosimilars during its consideration of healthcare reform legislation. Rep. Inslee championed the amendment which was approved by an overwhelming bipartisan majority in a vote of 47-11. This amendment, like the one approved by the Senate HELP Committee, would provide a safe and reasonable pathway for biosimilars. Rep. Inslee is also a lead sponsor of stand-alone legislation, H.R. 1548, to create such a pathway.

Biotechnology is a capital-intensive sector with a long investment timeline. On average, it takes more than a decade of research and testing and more than one billion dollars to develop a new biotech therapy for patients. The biotech industry consists primarily of small start-up companies that rely on venture capital investment to fund the research and development that leads to breakthrough medicines. In considering biosimilars legislation, Congress must maintain incentives for continued investment in order to realize the full potential of this sector to provide new therapies and even cures to patients.

This issue is particularly important for Washington. The bioscience industry in Washington employs more than 23,000 people. Academic bioscience research expenditures totaled $685 million in 2006, and the state ranked eighth nationally in funding from the National Institutes of Health and outpaced national growth.

Senator Murray and Representative Inslee recognize that incentives for biomedical innovation are critical for patients and their families, and necessary for the biotechnology sector to succeed and grow in Washington.

FOR DECADES, patients have benefited from the lower prices of generic drugs after name-brand patents have expired. Now, government officials want to do the same for a new type of drugs called biologics, which are based on living cells.

But the biotech companies that devise and produce these complex new drugs are at odds with the generic manufacturers that want to get into the market. The dispute is so deep that biotech officials refuse to call the copycats “generics” or “biogenerics,” since those terms carry a suggestion of duplication. Biotech prefers to call them “follow-on” drugs or “biosimilars.” The two sides are so deeply divided that Congress has not been able to legislate ground rules for approval of the knockoffs by the Food and Drug Administration.

This failure is lamentable; the sooner the cheaper drugs can be approved for use, the better.

President Obama has stepped into the donnybrook by calling for a resolution to the FDA approval issue. The budget he released last month would devote the savings that government health programs would gain from using generic biologics to a healthcare reserve fund for overall reforms of the system. In 2006, patients spent about $40 billion on the drugs to treat diseases ranging from multiple sclerosis to cancer. Analysts believe generics could reduce their cost by about one-third.

But government action should not be so supportive of generics that innovation by biotech would be stifled. A 2006 study by the Tufts Center for the Study of Drug Development found that clinical development times for biologics were longer than for regular drugs. Biotech firms say that for this and other reasons their products deserve at least as long a period of patent protection from competition – roughly 14 years – as regular drugs. Not surprisingly, generics makers think the period should be much less.

In 2007, Senator Edward Kennedy’s health committee approved a bill that granted biologics a 12-year free pass, which pleased biotech companies. To aid generics makers, the bill granted the FDA the discretion to waive costly human clinical trials for generic biologics. The bill also envisioned the possibility that generic biologics might one day be considered interchangeable with the original drugs, allowing pharmacists to make the switch without a doctor’s OK.

It’s a delicate balance. Congress should have passed the Kennedy bill or something close to it two years ago. A push for action from Obama now is welcome, but it should not leave the biotech industry so weakened by generic competition that the pipeline for new life-saving medications dries up.

Congress is considering two bills that could make practicing medicine in the U.S. a much riskier business.

Both bills pertain to state-of-the-art drugs known as biologics. Unlike conventional pharmaceuticals, which are created using simple chemical compounds, biologics are created from living organisms. They have proven to be some of the best treatments available for debilitating illnesses like cancer and multiple sclerosis.

Unfortunately, they are also some of the priciest.

That’s why there’s a push to expedite the release of imitation, or “follow-on,” biologics. The way Congress sees it, since conventional generic drugs cost about 70 percent less than brand-name pharmaceuticals, follow-on biologics could deliver the same benefits as brand-name biologics at a much lower price.

But it’s not that simple.

With conventional drugs, the manufacturing process is relatively straightforward and easily standardized. Generics are chemically identical to their brand-name counterparts. There’s no need for additional clinical trials to test the generics’ safety and efficacy — the fact that the original passed is sufficient.

Producing follow-on biologics, on the other hand, is a far more complex science. Unlike regular pharmaceuticals that typically consist of small molecules, biologics are often much larger and more complex drugs.

Manufacturing a biologic, therefore, is a long and complicated process.

In fact, manufacturing biologics is such a difficult process that no two biological products are exactly the same, and that is why there is technically no such thing as a “generic” biologic. Follow-ons are, at best, rough copies of brand-name biologics — not exact duplicates.
Just look at a recent study in the journal Movement Disorders on botulinum toxin type A, one of the more common biologics.

Researchers found that the strength of the toxin varied so greatly from manufacturer to manufacturer that, depending on which drug is used, the proper dosage for treatment of dystonia — a muscular condition affecting the neck — could vary widely

In other words, copies of a brand-name biologic had markedly different therapeutic effects. That’s why follow-on biologics need their own clinical trials before they can be judged safe.

Unfortunately, some in Congress may think otherwise. One of the bills being considered would treat follow-on biologics like traditional generic drugs.

In most cases, a successful clinical trial for a name-brand biologic would vouch for the safety of a follow-on version.
But that’s like deciding that a Buick is safe based on the crash-test results of a Rolls-Royce. The two cars share certain features — both have four wheels, a glove compartment, airbags, etc. But they’re different enough to warrant separate safety tests.

Similarly, follow-on biologics would share certain fundamental characteristics with brand-name biologics. But they aren’t exact copies. And even small variations in their chemical makeup can lead to dramatic differences in their physical effects.

If either one of these bills passes, could countless untested follow-on biologics be rushed to market before anybody knows for sure if they’re safe or effective?

As a neurologist, I find this prospect particularly frightening. Finding the correct dosage level for my patients is a difficult process that requires detailed clinical trials. These bills would increase that uncertainty and could needlessly place patients at risk.

If lawmakers determine that it’s in the public interest to expedite the approval of follow-on biologics, they need to institute the necessary safeguards. The drugs must undergo separate clinical trials before going to market. Otherwise, there won’t be a guarantee they’re safe and effective, and physicians won’t be able to prescribe them with confidence.

The Congressional Budget Office (CBO) today released a cost analysis finding that the creation of an abbreviated pathway for follow-on biologics — or biogenerics — would save the federal government $6.6 billion over ten years and lower total expenditures for biologics by $25 billion over the same time period.

“For a quarter century, generic versions of chemical drugs have saved consumers and payors billions of dollars. Now, CBO has confirmed that giving FDA additional authority to approve generic versions of biologics will save billions more,” said PCMA President and CEO Mark Merritt. “Even greater savings would be available if Congress simply applied to biologics the Hatch-Waxman standards that are currently used to approve generics for chemical compounds. It would be helpful if some provisions in the bill — such as ‘evergreening’ — which unnecessarily delay the entry of biogenerics were reconsidered. CBO acknowledges that the ‘evergreening’ issue will present significant problems beyond the ten-year scoring window.”

CBO estimates that:

• Enacting S. 1695 would reduce total expenditures on biologics in the United States Hidden List by $25 billion over the 2009-2018 period.
• Enacting the bill would reduce budget deficits (or increase surpluses) by a total of $6.6 billion over the 2009-2018 period.

Unlike conventional drugs, there is no clear regulatory process where biogenerics can be approved by the FDA. PCMA was joined by a number of influential consumer, employer, and insurer groups who endorsed the “Access to Life Saving Medicine Act of 2007,” bipartisan legislation that seeks to create a clear regulatory pathway for biogenerics.

PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 210 million Americans with health coverage provided through Fortune 500 employers, health insurance plans, labor unions, and Medicare Part D.