Trade Talks Stumble Over Biologics Data Exclusivity

Posted 11 February 2015 By Michael Mezher


Trade officials from around the world are potentially just months away from completing what would be the largest free-trade deal in history, but the completion of that deal is reportedly struggling to get past an issue related to the regulation of biologics.

Biologics and Data Exclusivity

At issue is what is known as "data exclusivity," the period of time during which other products cannot be approved using the data generated by an innovator company. The term is also known as "regulatory data protection" in some parts of the world.

Biopharmaceutical companies have argued that it is more complex, expensive and time-consuming to develop a biologic medicine relative to a chemically derived pharmaceutical, and that the added complexity should warrant a great period of data exclusivity for biologics.

This means that a company looking to market a "generic" biologic, known as a biosimilar, would be unable to use the innovator company’s data to approve its product until the period of data exclusivity expired. This is different from marketing exclusivity, where other products cannot be approved for a given indication until the marketing exclusivity period ends.

Traditionally, issues about intellectual property (IP) protection have mostly focused on patents, but according to the Biotechnology Industry Organization (BIO), a US biopharmaceutical trade group, patent protection is not as effective for biologics because biosimilars do not “require identity with the innovator product it references.”

In plain terms: Unlike pharmaceutical products, whose generics are an exact chemical copy of the original, so-called "biosimilars" aren't exactly the same as the innovative biologic due to inherent differences in the way the products are manufactured.

The group says that 12 years of data exclusivity is necessary to give biologics makers a level of protection from competition similar to what traditional drug makers enjoy for their innovative products. The group also points to the high cost and complexity associated with biologics development as justifications for greater protections.

The Fight Over Exclusivity

There is significant debate, both domestically and internationally, over how long biologics should be protected from competition.

Advocacy group Médecins Sans Frontières (MSF) called the 12-year period of data exclusivity for biologics the US is reportedly seeking in TPP negotiations “devastating” and “unprecedented.” MSF claims these provisions will “limit access to medicines for at least half a billion people.”

US-based consumer interest group Public Citizen refutes the claims made by BIO in a December 2014 report. In the report, Public Citizen says patents are already a powerful incentive for biologics makers, and quotes a 2007 article which states:

“Biotechnology innovation has the potential to provide cures and treatments for some of the world's most intractable diseases, such as cancer, Alzheimer's, Parkinson's, and HIV/AIDS ... All of this innovation is possible because of the certainty and predictability provided by the U.S. patent system.”

The Public Citizen report also calls into question the development cost cited by BIO, and points to a study that found the cost of developing a biologic drug to be about $1.3 billion versus $1.2 billion for chemically derived pharmaceuticals.

Biologics in the US

In the US, where biologics enjoy 12 years of data exclusivity, the length of the exclusivity period was hotly debated by members of congress and the Obama Administration.

Within Congress, proposals for data exclusivity ranged from five to 15 years, while the Obama Administration fought for a seven-year period. A 12-year period was ultimately agreed on and made it into the act as passed; however, the Obama administration is proposing a seven year period in its Fiscal Year 2016: Budget in Brief. The administration claims reducing the period of exclusivity to seven years could save Medicare $4.4 billion in the next decade.

Data Exclusivity Around the World

Among the TPP countries the period of exclusivity for biologics ranges from zero to 12 years.

Brunei, for instance, does not have any provisions for data exclusivity in the country’s Guide to Application for Registration of medicinal Products or its 2007 Medicines Order. In Malaysia, a company can request data exclusivity for a drug for up to five years by submitting a letter of intent when applying to register a drug, though biologics are not mentioned specifically in the country’s directive. In some cases, local laws are unclear as to whether biologics are given the same treatment as other pharmaceuticals.

The only countries in the TPP aside from the US that offer more than five years of data exclusivity are Canada and Japan, where both pharmaceuticals and biologics are given eight years of exclusivity.

Comparing Data Protection

The US Chamber of Commerce Global Intellectual Property Center (GIPC) released the third edition of its GIPC International IP Index in the first week of February 2015. The index attempts to rank 30 countries based on their level of IP protection. Of the 12 TPP countries, 11 are included in the index.

One of the categories included in the index is “Regulatory Data Protection.” Countries are given a score between 0 and 1.0 based on their data exclusivity for pharmaceuticals. Half (0.5) of the measure is based on each country’s provisions for biologics data exclusivity, using the EU’s ten years market exclusivity as a baseline.

Regulatory Data Protection (RDP) in TPP Member States
TPP Member StateGIPC RDP Score (out of 1.0) Pharmaceuticals RDP (Years)Biologics RDP (Years)*
New Zealand0.555
United States0.75512
European Union1.0 (Baseline)1010
*Excludes further extensions for pediatric approval, orphan designation, new indications, and other incentives.
**It is uncertain whether RDP will apply to biologics in Chile, Mexico and Peru. These countries do not specifically grant RDP to biologics.
***Malaysia begins counting RDP from the date a product is approved and given data protection in its originator country and allows for up to five years RDP from that date.

Most countries party to the TPP negotiations offer biologics a similar level of data exclusivity as chemically derived pharmaceuticals. The United States is the only country in the TPP negotiations that offers greater data exclusivity for biologics. For countries that do not provide additional RDP for biologics, reaching consensus with the United States for a longer period of RDP may be difficult.

USTR Senate Testimony

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Categories: Biologics and biotechnology, Government affairs, Regulatory strategy, US, Canada, Japan, Latin America and Caribbean, Oceania

Tags: Trans-Pacific Partnership, TPP, intellectual property, patents, regulatory data protection, data exclusivity, USTR, Michael Froman

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