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US House panel adopts 12 years’ biologicals exclusivity Posted 01/10/2009

The powerful US House Committee on Energy and Commerce (HCEC) has voted to give branded biological drugs 12 years’ market exclusivity from generic competition, but also to ban ‘pay-for-delay’ settlements.

On 31 July 2009, the HCEC voted 47–11 in favour of the 12-year exclusivity amendment put forward by Ms Anna Eshoo over a provision drafted by the Committee’s Chairman, Mr Henry Waxman, who has introduced legislation that would provide just five years’ exclusivity.

President Barack Obama, who supports seven years’ market exclusivity for branded biologicals, commented on 31 July 2009 that while extending the data exclusivity period for biologicals further would obviously be better for the drugmakers’ bottom lines, “It also means you’re keeping important drugs off the market and driving up those costs further.”

“I think that this amendment sets forth a straightforward, scientifically based process for expedited approval of biologicals based on innovative products already on the market,” Ms Eshoo said in the Committee hearing. “It ensures that patients are given safe and effective treatment, that they are subjected to thorough scrutiny and testing by the FDA, and that the bill provides for the promotion of competition and the lowering of prices.” In March 2009 she introduced, with Representatives Jay Inslee and Joe Barton, the Pathways for Biosimilars Act (HR 1548), which would offer 14 years’ data protection.

However, Representative Waxman – whose Promoting Innovation and Access to Life-Saving Medicine Act (HR 1427), also introduced in March 2009, proposed five- and three-year exclusivity periods for biologicals premised upon the Hatch-Waxman scheme for small molecules – said although he endorsed creation of a biosimilars pathway he could not support Ms Eshoo's amendment because it would not increase competition or lower costs. The proposal's ‘lengthy monopoly period’ of 12 years could be extended indefinitely through ‘evergreening’ practices, he argued.

Mr Waxman cited opposition to the 12-year period from generics makers who say the lengthy exclusivity term will preclude them from entering the biosimilars market and from payers and patient groups who assert the measure will not lower costs. He also cited a recent Federal Trade Commission (FTC) report that concluded a 12-year term would neither promote competition nor spur innovation.

“By passing this amendment we're not only missing a historic opportunity to bend the cost curve, we're guaranteeing higher drug costs for the foreseeable future," Mr Waxman said. "I understand a large majority of this Committee supports this amendment. I do not. And I will continue to make my case that we need real competition to bring down [costs]. As members continue to look at this issue, I think they will come to understand that this amendment is not the right way to go.”

The Senate and House Committees’ healthcare reform bills will now be melded with other bills in each chamber and brought to the floor, where votes will not take place until September 2009. After that, the two chambers' bills must be reconciled through a conference committee. The biosimilars provisions could be changed during floor debate or in conference committee, although the fact that the same exclusivity term has now been adopted by both the House and Senate Committees make that possibility less likely.

The vote by the HCEC, which added the amendment as it finished work on the health reform legislation – America’s Affordable Health Choices Act (HR 3200) – before the start of the August recess, follows a similar vote on 13 July 2009 by the Senate Health, Education, Labor and Pensions Committee, which also rejected the Administration’s call for branded firms to have just seven years market freedom before biogenerics (or ‘biosimilars’, as the branded industry calls them), can come to market.

Mr Billy Tauzin, CEO of the Pharmaceutical Research and Manufacturers of America, welcomed the House panel vote as “a step in the right direction because it strikes an appropriate balance between the desires for enhanced competition and preserving incentives for innovation.” And Mr Jim Greenwood, CEO of the Biotechnology Industry Organization, said the Committee vote represented “a decisive win for the patients of today and tomorrow.”

However, the Generic Pharmaceutical Association (GPhA) said it was “sincerely disappointed that some members of the HCEC have decided to put brand pharmaceutical profits before patient needs.”

Mr Billy Tauzin, CEO of the Pharmaceutical Research and Manufacturers of America, welcomed the House panel vote as “a step in the right direction because it strikes an appropriate balance between the desires for enhanced competition and preserving incentives for innovation.” And Mr Jim Greenwood, CEO of the Biotechnology Industry Organization, said the Committee vote represented “a decisive win for the patients of today and tomorrow.”

However, the Generic Pharmaceutical Association (GPhA) said it was “sincerely disappointed that some members of the HCEC have decided to put brand pharmaceutical profits before patient needs.”

“The amendment passed tosses patient needs out the window,” said GPhA CEO Kathleen Jaeger, adding, “it is ironic that as Congress works to reduce health care costs and increase access to high-quality care that some members are choosing to go down a path that only benefits the brand pharmaceutical industry.”

The amendment was welcomed by Mr Jon Leibowitz, Chairman of the FTC, who had long called for such deals to be outlawed. “If enacted into law, this measure will put an end to the sweetheart deals between brand and generic pharmaceutical companies that force consumers to wait, sometimes years, for more affordable generic drugs. We estimate that this critical provision will save consumers about US$3.5 billion (Euros 2.42 billion) per year and advance the cause of affordable health care for all Americans,” said Commissioner Leibowitz.

However, the GPhA responded to the vote by claiming that an outright ban on settlements would have “the unintended effect of benefiting the brand industry and ultimately harming consumers by keeping more affordable generics from getting to the market in a timely manner.”

“What is often overlooked in this debate is that settlements that successfully conclude patent litigation typically result in the early and predictable introduction of generic competition, at tens of billions of savings to consumers. Without the settlement, there would be no certainty to the introduction of generic competition for the brand product being challenged. That’s why the current system of a case-by-case review by the federal government to ensure that pro-consumers settlements are not blocked benefits consumers over brand companies. Unfortunately, an outright ban has exactly the opposite effect by putting brand companies in the driver’s seat,” said Ms Jaeger.

Pay-for-delay
In an earlier vote on the healthcare reform bill, the House Committee adopted an amendment offered by Representative Bobby Rush to make illegal reverse payment patent settlements, in which a brand company gives a generic firm something of value in exchange for an agreement to delay market entry.

Representative George Radanovich spoke out against the measure, saying it is not for Congress to determine the terms of litigation settlements that must be reviewed by courts. The measure would not guarantee lower drug prices and could result in fewer challenges to brand name drug patents, he said.

Source: PharmaTimes; Scrip

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