POSTED BY Sardiaa Leney
Since the passage of the Hatch-Waxman provisions 30 years ago, a fairly orderly market in generic small molecule drugs has developed, reducing the cost of some of the commonest medicines to a fraction of their pre-competition price points. Biologics medicines are another matter. Biologics are drugs comprising molecules so complex that it remains impractical to synthesize them chemically, and thus they are grown biologically. From the 19th century, antibodies were raised and harvested from animal blood to make serums. The mid-20th century saw human blood used as a source of antibodies, including products that remain on the market today. One example is intravenous immune globulin (IVIG), a pool of all naturally occurring antibodies from a donor pool (much beloved by medical dramas) as a last ditch therapy for infections that can’t be identified).
Using human blood as a raw material has some drawbacks, however, not the least of which is that blood donors carry infectious viruses. Today’s state-of-the-art antibody therapies are cloned from their original source, and expressed and harvested from industrial scale cultures of genetically engineered cells. Such recombinant monoclonal antibodies, or indeed other proteins cloned into and expressed from recombinant cells, have produced a generation of new biologic medicines. However, like fine wines or artisanal cheese, the manufacturing methods add a certain indefinable complexity to the final drug that make it hard to be sure if a copy is really as safe and effective as the original. Consequently, the Hatch-Waxman generics provisions have never applied to these biologic drugs.
We spend a lot of money on these drugs. The top three grossing drugs last year were all biologics, Humira, Enbrel and Remicade. In fact, all three treat the same condition – rheumatoid arthritis – comprising a worldwide market of about $28 billion for these three drugs alone. It’s perhaps surprising then that it took until 2010 for Congress to craft a regulatory pathway to allow competition in this market. The Biologic’s Price Competition and Innovation Act (BPCIA) arrived quietly, buried as it was in the Affordable Care Act, but essentially the BPCIA makes a couple of key interventions in the biologics space.
First it created an abbreviated approval pathway for follow-on biologic drugs that are highly similar to innovator drugs. Secondly, it created an exclusive market for innovators of novel biologics, barring FDA from granting a license for so-called ‘biosimilar’ therapies for between 12 and 14 years after the initial biologic drug enters the market.
The exclusivity provision is interesting because it appears that even if patent protection expires, or if a key patent was successfully challenged, then an innovator biologic drug would continue to exclude competitors from the market (at least in the US FDA regulated territory). This is a huge prize for a first-to-license innovator. This incentive to innovate may change the financial calculus of biotech development as it removes uncertainty and risk for those developing drugs which prove to be efficacious but that may lack solid patent protection. It could conceivably even lead to the previously unthinkable strategy of developing a biologic drug as a trade secret, without patent coverage, but rather banking on the affirmative, unchallengeable, market exclusivity granted by the BPCIA. In the post-Myriad/Prometheus world, where the robustness of a gene-based patent strategy looks increasingly questionable, this may become a genuine option for some. See Ass’n for Molecular Pathology v. Myriad, 133 S.Ct. 2107 (2013); Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012).
The BPCIA abbreviated biosimilar pathway remains more contentious. Almost a decade after biosimilars began to hit pharmacy shelves in Europe, FDA has only recently accepted the first application under the BPCIA pathway (for a drug already available as a biologic in over 40 other countries). On the other hand, AbbVie (owner of the top selling biologic Humira) has an unanswered petition on the FDA’s docket insisting that the agency refrain from considering any BPCIA pathway application for a biosimilar to Humira. The drug maker argues that for the FDA to determine whether the biosimilar is highly similar to Humira would require impermissible use of trade secret information that the drug maker submitted to FDA prior to the enactment of the BPCIA solely to support it’s own drug. Disrupting a drug-maker’s investment-backed expectation of secrecy could therefore be seen as an unconstitutional taking of AbbVie’s property. Presumably, pending an actual application for biosimilar Humira, the FDA has declined to address the petition. No doubt when the FDA does answer, one or other large pharmaceutical company will be disappointed, and we will thus see the issue argued in the Federal Circuit and then perhaps, given the clash of economic and constitutional issues, in the Supreme Court. Needless to say, delaying the arrival of biosimilar Humira will benefit AbbVie’s shareholders at the expense of those paying for rheumatoid arthritis therapy.
Bio:
Sardiaa Leney is a Staff Member of the Journal of High Technology Law. She is currently a 4L evening student at Suffolk Law, and a Patent Agent for MassBiologics of the University of Massachusetts Medical School. Sardiaa holds undergraduate degrees in Forensic Science, Chemistry and Mathematics.
