EDITORIAL - Balancing innovation, access, and profits - market exclusivity for biologics

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Balancing Innovation, Access, and Profits — Market Exclusivity for Biologics

Posted by NEJM • October 14th, 2009 • Printer-friendly

Alfred B. Engelberg, J.D., S. Kesselheim, M.D., J.D., M.P.H.,

and Jerry Avorn, M.D.

Twenty-five years ago, Congress enacted the Waxman–Hatch Act to

facilitate the approval by the Food and Drug Administration (FDA) of

low-cost generic drugs that are bioequivalent to approved brand-name

drugs. This law has been largely successful, in that generic drugs now

account for more than 70% of prescriptions dispensed in the United

States (and for 20% of dollars spent on medications). In most cases, a

generic version becomes available immediately after the patent

protection for a brand-name drug ends. This year, Congress is

considering legislation to translate this approach to biologic drug

products — larger, more complex molecules that are often produced from

living cells. These agents, few of which existed in 1984, include many

important new therapies and constitute the fastest-growing segment of

the pharmaceutical market.

The Waxman–Hatch Act successfully balanced the public interest in

providing adequate incentives for investment in innovation with the

public interest in providing affordable medications. It did so through

three key provisions: the extension of pharmaceutical patent terms for

up to 5 years to make up for time lost to regulatory review; a

guarantee of 5 years of market exclusivity independent of any patent

considerations; and the creation of a simple, inexpensive pathway for

FDA approval of bioequivalent generic drugs. With these provisions in

place, the research-based pharmaceutical industry has remained a

leader in earnings growth and return on equity for its shareholders

despite the dramatic increase in the use of generic drugs.

Biologics represent one of the most promising frontiers in

pharmacotherapy, but their costs can be substantial, reaching $200,000

or more annually for treatments such as imiglucerase (Cerezyme,

Genzyme) for Gaucher’s disease (see table).1 This past summer,

committees in both the Senate and the House approved bills that would

authorize the FDA to create an approval pathway for follow-on

biologic, or “biosimilar,” products that would guarantee manufacturers

12 years of market exclusivity for a new biologic agent before any

biosimilar product could be approved, even in the absence of a valid

patent. Manufacturers could also obtain an additional 12-year

exclusivity period by making minor changes to the structure of an

approved product, such as those that could lead to changes in

administration schedules (e.g., from weekly to monthly). Supporters

argue that these much longer periods of protection from competition

are fair because the development costs for biologic products are

higher than they are for other medications. However, the bills fail to

recognize the unique characteristics of biologic drugs and upsets the

delicate balance between the interests of consumers and those of

innovators.

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Read the full editorial here:

http://healthcarereform.nejm.org/?p=2070 & query=TOC

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