Patent exclusivity and biosimilars: what’s a reasonable compromise?

The biotech industry, through the Biotechnology Industry Organization (BIO), has been arguing in favor of a 12-year exclusivity period for new biological agents from the initial date of approval.

Senator Waxman (he of the Waxman-Hatch amendment to the Food Drug and Cosmetic Act back in 1984) has been pushing a bill that would limit exclusivity for biologics to 5 years.

The current period of exclusivity for drugs approved as “orphans” under the Orphan Drug Act is 7 years.

Yesterday the White House weighed in on the subject by suggesting that they thought 7 years was a reasonable period of time for exclusivity for new biological agents too.

Now one can argue the relative merits of shorter and longer periods of exclusivity six ways from Sunday — depending on your point of view. Longer exclusivity favors the idea that there will be more investment in the biotech and pharmaceutical industries and therefore greater innovation (and greater profitability). Shorter exclusivity favors the idea that one of more biosimilars (“generic” biologics) can be brought to market sooner, thereby increasing the likelihood of competitive pricing and increasing the accessibility of products for the patients who need them (and reducing biotech company profits). As someone who has feet clearly on both sides of the divide, I have no problem seeing and understanding both arguments.

At the end of the day, however, there is going to be a compromise, and what I will say is that I have a hard time justifying to myself why one would give a greater period of exclusivity to a biologic agent just because it is a biologic than one would to an orphan drug that might never have been brought to market at all without the 7 years of exclusivity granted by the Orphan Drug Act. Since Senator Waxman was also the principal author of the Orphan Drug Act, I have to assume that he is going to have a similar perception, and will absolutely dig his heels in over attempts to argue that biologics need more than 7 years of exclusivity.

Please note that I am very carefully NOT saying that one side or the other is correct in this debate. I am merely expressing my perception of the differing viewpoints on an issue that is going, in time, to be very important to both the biotech community and the economists responsible for running the American health system — not to forget the poor patient who all this is supposed to help!