Health Care Reform: Senate HELP adopts 12 Year Patent Exclusivity for Biologic Drugs

 

The Senate Health, Education, Labor, and Pensions Committee (HELP) Tuesday passed an amendment that giving biologic manufactures 12 years of patent exclusivity from date of FDA approval.

 

The amendment was approved by a 16-7 vote, this change has now become “part of the larger healthcare overhaul."

 

The amendment was introduced by Senator Sherrod Brown (D-OH) to grant drugs five years of exclusivity, with the possibility of extension, noting that "a Federal Trade Commission report…said that a 12- to 14-year period of exclusivity was not necessary."

On the other side of the aisle, Senator Orrin Hatch (R-UT) asserted that a period shorter than the 12-year amendment would “stifle innovation.”

 

Furthermore, proponents of the longer time frame believe that products are entitled to longer market protection because:

– They are more expensive;

– More time-consuming to produce than regular drugs; and

– The extra time and money is needed to attract investors

 

Seemingly, the Obama administration was pushing for a seven-year exclusivity period, along with AARP, one of the most powerful lobbying groups. In fact, AARP was disappointed with the amendment because they have “great difficulty supporting legislation that would delay the availability of safe, affordable generic biologic drugs," according to Reuters. Moreover, AARP President Kathleen Jaeger called "This unprecedented action … a huge blow to consumers at a time when many Americans are struggling to pay for the medicines they need."

 

Conversely, the amendment was a victory for major biotech drugmakers such as Amgen Inc (AMGN.O) and Roche Holding AG (ROG.VX).

 

As a result, this new addition could alter the course of when the healthcare bill reaches the floor for a vote in Congress because Senators will need to work out an agreement with the House, where the issue is still being debated. For example, House Energy and Commerce Committee Chairman Henry Waxman, backs up to five years of protection.

Ultimately, former congressman Jim Greenwood, president of the Biotechnology Industry Organization, said it best: "A minimum of 12 years of data exclusivity establishes a fair and reasonable period to ensure continued biomedical innovation and provide the benefits of competition."

 

Biologics are complex protien chains which are significantly more complex than small molocule compounds.  Their introduction has lead to advances in major diseases including anemia, cancer, rheumatoid arthritis and multiple sclerosis and plethora of smaller diseases.   Small changes in manufacturing can make huge differences in how the drugs work in humans.

 

It is encouraging that the HELP committee adopted the Hatch language.  As healthcare reform move through the house and senate there will be glimmers of hope along the way, this time the democrats are much more careful not to loose the battle and fumble the health care reform ball, reasonable exclusivity for follow-on  biologics will take us a long way there.

 

Clarification:  The exclusivity period of (12) twelve years applies to all biologics and the expiration clock is retroactive  i.e. (if your drug was approved by the FDA longer than  12 years then it would be automatically open to generic competition), if you are 1 – 11 years then you would have what evertime is left up to 12 years, and if you are approved after the bill is adopted then you would have 12 years after approval of market exclusivity.