For 'Biosimilars,' Weighing Innovation vs. Access

October 17, 2008

Last summer, the group representing major research universities endorsed legislation that sought to balance the interests of drug makers and the scientists whose work can translate into new advances in medicine. At least one group, however, is sounding the alarm that the bill would make it more difficult to bring cheap, generic drugs to the market -- at the expense of both American consumers and people in developing countries.

The dispute is only the latest in a continuing tug of war between advocates of protecting innovation -- and the up-front development costs it requires -- and those who worry that tilting federal law too much toward companies that make "pioneer" drugs could sideline generic alternatives that could significantly drive down prices for many buyers, including consumers and foreign aid agencies. Universities stand to benefit from patent royalties generated from research successfully applied through technology transfer programs to start-up companies or drug manufacturers, but such income is typically negligible.

Historically, patent protections ensured a long delay between a new drug entering the market and the introduction of competing generic brands. To ease the consumer's burden and promote competition, the Hatch-Waxman Act, enacted in 1984, allowed companies to apply for Food and Drug Administration approval for their generic alternatives before the branded products' patents expired. If a generic drug is approved and considered "bioequivalent," it can go on sale the day the original innovator's patent expires, provided there is not a patent dispute.

For the latter case case, the law also created a way for pioneer drug manufacturers to sue for patent infringement and to delay the entry of generics to the market. The Pathway for Biosimilars Act, or H.R. 5629, introduced in March by Rep. Anna G. Eshoo (D-California) and Rep. Joe Barton (R-Texas), is an attempt to streamline the process by simultaneously protecting innovators and fast-tracking the approval process for so-called "biosimilars." Since many drug patents are scheduled to expire soon, drug companies and health care providers have been lobbying for a process to efficiently bring generic alternatives to the market in time.

The bill would also provide data exclusivity -- which prevents manufacturers from applying to the FDA for generic medicines -- for a period of 12 years, a provision intended to protect innovators as they bring their drugs to market. Two additional years could be tacked on for a "medically significant new indication that, if approved, would be a significant improvement over currently available therapies for the treatment or prevention of disease," along with another possible six months to conduct pediatric studies for drugs aimed at the youth population.

"Universities conduct basic research that yields early-stage discoveries," wrote Robert M. Berdahl, president of the Association of American Universities, in a letter to the principal sponsors of the bill in June. "To ensure that these discoveries will benefit the public, innovator companies and venture capitalists must have sufficient economic incentives to commit the substantial investments necessary to conduct clinical trials and develop such discoveries into new, breakthrough biologic treatments."

He continued: "It is also important for universities, which hold many of the patents on fundamental biotechnology inventions, to be able to participate in an effective and efficient process for resolution of any patent disputes raised by the biosimilar applicant. H.R. 5629 preserves the ability of third-party patent holders such as universities to defend their patents in such disputes."

Critics, however, contend that by going too far in protecting innovators, the bill would block access to cheap generic drugs by the people who need them the most.

"There is obviously a need for a pathway for generic biologics, but this is not it," said Ethan Guillen, executive director of Universities Allied for Essential Medicines, a student-run group based at research universitites in the United States, Canada and the United Kingdom. "The AAU needs to explain why nonprofit universities think the desperately poor around the world, not to mention American consumers, should have to wait over a decade to be able to buy affordable, life-saving generic vaccines."

Sam Houshower, a law student at the University of California at Berkeley's School of Law and a member of the campus's UAEM chapter, added in an e-mail that the bill's data exclusivity provisions could affect humanitarian agencies as well. "An extended term of data exclusivity in the U.S. will curtail the ability of some global health buyers to source generic versions of important new drugs, even for countries in which there is no patent protection or for which humanitarian licenses are available," he said. "Given the very high cost of brand biologics, these drugs could remain beyond the reach of many of the world's poorer populations."

"We're not opposing the legislation, we are asking AAU not to weigh in on this particular bill," Houshower said in a separate interview. "Our dog in this fight is the position universities are taking, and we think it's unconscionable for AAU to be stepping side by side with bio and pharma and backing Eshoo-Barton."

The group worries that the bill would effectively extend the patents of pioneer drugs to up to 14 and a half years through the data exclusivity provision, which, Houshower said, "basically wipes out that incentive" for generic manufacturers to challenge patents. Under Hatch-Waxman, the first approved generic alternative is granted six months of market exclusivity.

Barry Toiv, vice president for public affairs at AAU, said the UAEM seemed to be implying that patent and data exclusivity terms would run consecutively rather than in parallel. "The [group's] statement inadvertently exaggerates the length of time that is involved," he said.

He added that the AAU was planning a response. "We certainly share the goal of getting drugs to developing countries and making them affordable, and ... both the universities and industry have means for doing this.... [T]he reality is that if you don't provide for a period of exclusivity, then a lot of drugs that could be helping society will not make it from university labs into the market place. We can debate the length of time that's needed, but it's hard to dispute the need for some period of exclusivity."

"What Congress is struggling with along with industry and everybody else is, where is the balance?" said Jon Soderstrom, managing director of Yale University's Office of Cooperative Research and president of the Association of University Technology Managers. Adding that he isn't familiar with the details of the issue over H.R. 5629, he said, "It's one of those cases where I agree with both sides, because I think they both make legitimate points....

"[H]aving the debate is healthy. My opinion was last year that I thought we were getting towards a reasonable compromise ... toward the end of the last [Congressional] session, but unfortunately it didn't quite make it. It's an issue that's top of the list for a lot of people in Washington and most importantly for the biotech sector as well."

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