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Follow-On Biologics: Intellectual Property and Innovation Issues

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Abstract:

Biologics, which are sometimes termed biopharmaceutials or biotechnology drugs, have begun to play an increasingly important role in U.S. health care. Not only are sales of biologics growing rapidly, some experts estimate that in coming years half of all newly approved drugs will result from biotechnology.

A number of patents pertaining to certain biological products will expire in the near future. Some congressional concern has been voiced over the possibility that these patent expirations may not be accompanied by the introduction of competing, lower-cost biologics in the marketplace. With respect to traditional pharmaceuticals, the Drug Price Competition and Patent Term Restoration Act of 1984, a statute commonly known as the "Hatch-Waxman Act," is widely believed to have encouraged the availability of generic substitutes for brand-name pharmaceuticals upon patent expiration. The Hatch-Waxman Act in part permitted the Food and Drug Administration to expedite its marketing approval proceedings with respect to generic drugs.

Some observers believe that the Hatch-Waxman Act's accelerated marketing approval provisions do not comfortably apply to biologics, however. Biologics differ significantly from traditional small-molecule pharmaceuticals in their size, structural complexity, and method of manufacture. Competitors who wish to develop followon biologics may face difficult, and even insurmountable difficulties in demonstrating that their product is equivalent to a particular brand-name biologic. Other commentators assert that different kinds of biologics vary considerably in their size and structure, and believe that existing Hatch-Waxman mechanisms are appropriately applied to many biologics.

The patent system also plays a role in regulating competition in the biologics market. Patent protection is available for biologics in many circumstances, although the scope of protection may be limited by legal principles that restrict the availability of proprietary rights in naturally occurring substances.

Legislation has been introduced in the 110th Congress that would create an expedited marketing approval pathway in the Public Health Service Act. The Access to Life-Saving Medicine Act, introduced as H.R. 1038 and S. 623, would grant the Secretary of Health and Human Service certain discretion to determine, on a case-bycase basis, what studies were necessary to establish comparability. A comparable biologic would have been required to have comparable principal structural features with the corresponding brand-name product; the same mechanism of action, if known; and the same route of administration, dosage form, and strength, among other factors. Under these bills, an applicant for a comparable biological product would be allowed optionally to elect to establish "interchangeability" with the brand-name product, a status indicating that the follow-on pharmaceutical can be expected to produce the same clinical results as the innovative drug. Both bills also address the patent consequences of follow-on generics practice.