Implementing the Biologics Price Competition and Innovation Act?

Intellectual Property and Technology News

The vigorous debate over the Biologics Price Competition and Innovation Act (BPCIA), which aims to provide an expedited approval framework for follow-on biologics, will likely inform the final rules the FDA implements, and those rules will determine the business strategies of innovator companies and the extent to which generic companies use the BPCIA.

Biosimilars vs. interchangeable biologics

Under the BPCIA, generic biologics can be characterized as “biosimilar” to or “interchangeable” with innovator products. Both require clinical studies for approval, with interchangeability requiring a higher showing. Only those follow-on biologics designated as “interchangeable” can be automatically substituted by a pharmacy for the innovator’s product. As a result, generic companies will have to market biosimilars to boost prescriptions and sales. Thus, when seeking approval, generic companies will weigh the cost of marketing biosimilars against the cost of the yet-to-be-determined clinical testing requirements for interchangeables. If those requirements are too onerous, the generic company may instead choose to pursue a Biologic License Application (BLA), which has the benefit of circumventing the innovator company’s marketing exclusivity.

Patient safety is the biggest concern voiced by both innovator companies and patient advocacy groups,1 who note that little is known about biologics and any impurities or minor structural or formulation changes could have unanticipated effects for patients. Some groups have suggested substantial clinical testing for biosimilars and a delay in any interchangeability determination until after post-marketing studies have been conducted on the biosimilar in question. Others have suggested that interchangeability decisions should not be made at all – an unlikely outcome because the BPCIA specifically provides for interchangeable biologics.

Generic companies, unsurprisingly, want minimal requirements for approval to avoid the cost of clinical testing. The FDA, they argue, is already equipped to make both biosimilarity and interchangeability determinations.

Another facet of the debate is Congress’s intent: making low-cost generic biologics available to consumers. Congress probably intended something less than full clinical trials for approval of biosimilars and interchangeable biologics. But, motivated by patient safety concerns, the FDA is unlikely to implement the minimal requirements that generic companies seek. Ultimately, the FDA rules will likely provide a pathway less onerous than a BLA, but more stringent than that advocated by generic companies.

Twelve-year exclusivity for innovator companies

The BPCIA includes a 12-year exclusivity period for innovator biologics to encourage continued innovation. The 12 years of exclusivity applies even if the relevant patents are found invalid or not infringed during the pre-launch litigation procedures of the BPCIA.

Given the timeframe for FDA approval of biologics, 12 years of exclusivity may provide more protection than the patent system. But that does not eliminate the need for patents. Generic companies can still file BLAs, and in some situations it may be more economical or advantageous for them to do so. Innovator companies can expect generics to choose an approval pathway based at least in part on the existence of and perceived strength of the relevant patents. The more robust the portfolio, the less likely a generic will pursue a costly BLA and at-risk launch over the BPCIA with its pre-launch litigation process.

Patent protection will also be needed for next-generation biologics because the BPCIA places limitations on additional exclusivity periods.2

Final rules will not end the debate

The FDA’s final rules are unlikely to end the debate surrounding the BPCIA. Whatever the rules may be, both innovator and generic companies will have to consider and pursue competitive strategies in the biologics market. Generic companies will formulate strategies for pursuing a BLA, interchangeability or biosimilarity based on the innovator company’s remaining exclusivity period, the time it will take to gain FDA approval, the cost of clinical testing, the need for marketing and the strength of the innovator company’s patent portfolio. Innovator companies will need to evaluate and keep abreast of the competitive landscape and pursue a strategic patent portfolio covering both the approved product and next-generation versions.

 


1 Comments and testimony are available at www. regulations.gov, docket no. FDA 2010-N-0477.

2 See 42 U.S.C. § 262(k)(7)(C). Adapted with permission from the Pharmaceutical Law and Industry Report, (©The Bureau of National Affairs, Inc. 2011) www.bna.com.