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Regulatory Focus™ > News Articles > 2019 > 6 > New Study Questions the Need for 12 Years of Market Exclusivity for Biologics

New Study Questions the Need for 12 Years of Market Exclusivity for Biologics

Posted 21 June 2019 | By Zachary Brennan 

New Study Questions the Need for 12 Years of Market Exclusivity for Biologics

The lengthy preclinical and clinical development necessary to bring a biologic to market has often been cited as one of the central reasons why biologics deserve 12 years of market exclusivity, or about five years more exclusivity than their small molecule counterparts.

But a new study published Tuesday in Nature Biotechnology shows that the development time of a new biologic is generally about the same as the development time of a small molecule drug.

The authors from the Program On Regulation, Therapeutics, And Law (PORTAL), Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women’s Hospital and Harvard Medical School, note that “although biologics are often thought to be more time-consuming to develop than small-molecule drugs, development times for biologics are similar to, or possibly somewhat shorter than, for small-molecule drugs.”

The study found that of the 275 new drugs approved by the US Food and Drug Administration’s Center for Drug Evaluation and Research (CDER) between 2007 and 2016 (77% were small-molecule drugs and 23% were biologics), median total development times—from first patent filing to FDA approval—were about 12 years for both types of products.

First author Reed Beall, assistant professor with the University of Calgary, explained to Focus: “The main rationales given academic debate around this issue of longer exclusivities has been that (#1) biologics are especially costly in term of time/complexity/etc. to develop and manufacture; and (#2) patents will not provide adequate protection for a long enough exclusivity periods to recoup investments and profit.”

“We know now in hindsight that #2 is likely ungrounded,” Beall said, pointing to multiple biologics that have staved off biosimilar competition in the US despite being on the market for more than 12 years. And this latest study shows how the timing of development is not different between biologics and small-molecule drugs.

“As the tech surrounding biologics is newer, it’s natural to expect that getting off the ground will be difficult in the beginning and will eventually become more efficient. However, if policy systematically gives better market protections for biologics in the long term, it may incentivize investment in the development of biologics over small-molecule drug, even though there’s no obvious reason why we should prefer larger molecules to small ones. Now that the science is more mature, it may be time to revisit the data and policies surrounding longer biologic exclusivities and pricing,” Beall said.

The study also notes how guaranteed exclusivity periods for biologics are shorter in other, similar countries.

“For both biologics and small-molecule drugs, the European Union provides 10 years of exclusivity, and Australia and New Zealand provide 5 years of exclusivity. By contrast, the United States provides 5 years of guaranteed exclusivity for small molecules that are new chemical entities, although in practice this exclusivity provides closer to 7 years of market protection for small molecules because the FDA cannot begin reviewing applications from generic competitors until the 5 years of data exclusivity have expired. This disparity in exclusivity in the United States—12 years for biologics versus roughly 7 years for small molecules—may incentivize investment in the development of biologics over small-molecule drugs,” the study says.
But Beall also notes limitations of the study, such as that it only considered drugs approved by CDER, and did not include products that failed at some point during the development process or the relatively smaller number of products approved by FDA’s Center for Biologics Evaluation Research.

Tom DiLenge, president of BIO's advocacy, law & public policy division, told Focus in a statement: "By singularly focusing on time of development, the study unfortunately ignores all of these other factors and issues and thus is not a constructive addition to the public dialogue, which is not all that surprising given the biased source of its funding."

The study was funded by the Laura and John Arnold Foundation, which has spent millions to lower drug prices and increase clinical trial transparency. And the "other factors and issues" DiLenge mentioned were related to "differences in the patent and regulatory schemes" and manufacturing costs.

BIO's comments on Friday come a day after Reps. Jan Schakowsky (D-IL), Bruce Westerman (R-AR), Rosa DeLauro (D-CT), Angie Craig (D-MN), Lloyd Doggett (D-TX), Andy Levin (D-MI) and Raja Krishnamoorthi (D-IL) introduced the Price Relief, Innovation, and Competition for Essential Drugs (PRICED) Act to reduce the exclusivity period for biologics from 12 years to five years.

"In 2017, the Obama Administration Office of Management and Budget estimated that reducing the exclusivity from 12 to 7 years could save almost $7 billion over 10 years. Reducing the exclusivity period to 5 years would save even more money, and aligns biologics with the traditional period guaranteed under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) and with the exclusivity period for small-molecule drugs," the representatives said.

The study follows a policy proposal from Pew Health in 2017, which suggested reducing the exclusivity period for biologics, noting that the costs to develop biologics and small-molecule drugs are similar.


Updated with comments from BIO and information on the PRICED Act on 6/21/19.

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