Biosimilars Provision Included in House Health Care Reform Bill — The Time Has Finally Come

02 November 2009 Publication
Authors: Nathan A. Beaver Gabor Garai Stephen B. Maebius David L. Rosen Michele M. Simkin Judith A. Waltz

Legal News Alert: Life Sciences

On October 29, 2009, the Democratic leadership of the House of Representatives released the Affordable Health Care for America Act, H.R. 3962. The proposed legislation contains provisions that, if enacted, would result in numerous changes in the way that health care insurance is provided and paid for in the United States.

H.R. 3962 includes section 2575 entitled, “Licensure Pathway for Biosimilar Biological Products,” which is intended to give the U.S. Food and Drug Administration (FDA) the authority to approve biosimilar versions of biotech drugs.

Similar to previous bills, H.R. 3962 provides for the approval of biosimilar products, defined as those “ … being highly similar to the reference product, [i.e., the brand name biologic that is referenced by the biosimilar product], notwithstanding minor differences in clinically inactive components” and “no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency of the product.” H.R. 3962 also includes a section allowing for, but not mandating, “interchangeable” biosimilars, defined as a product that meets certain standards and can be “substituted for the reference product without the intervention of the health care prescriber who prescribed the reference product.” There also are exclusivity provisions for the first interchangeable biological product. The biosimilar product would be required to bear a name that distinguishes it from the reference product. The bill also permits the FDA to issue guidance documents concerning the licensure of biologic products; however, such issuance, or non-issuance, of any such guidance cannot preclude the review or action on any application.

The bill also strikes a balance by providing incentives for brand companies to develop new therapies. The bill provides a 12-year period of market exclusivity from the date of approval of the reference product. The length of this period of market exclusivity has been the subject of much debate. An application for a biosimilar cannot be submitted for four years from the date of approval of the reference product. There also is a six-month pediatric exclusivity period. There is no period of exclusivity for supplements providing for changes to the reference product, if the change (other than a modification to the structure of the biological product) results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength, or if the modification of the structure of the biological product does not result in a change in safety, purity, or potency. This is quite different from the current exclusivity scheme under Hatch-Waxman for approved drugs.

Patent Disputes Addressed

The bill establishes a new, complex procedure for resolving patent disputes before a biosimilar is approved.

As provided in the current bill, a biosimilar applicant, within 30 days of its application being accepted by FDA, must provide the reference product sponsor with a copy of the application and information concerning the biosimilar product and its production. This information is required to include a detailed description of the biosimilar product, its method of manufacture, and materials used in the manufacture of the product.

Within 60 days of receipt of the above information, the reference product sponsor is required to provide notice to the biosimilar applicant a listing of all relevant patents — patents that could be reasonably asserted against the biosimilar applicant due to the unauthorized making, using, or sale or offer for sale in the United States or materials used in the manufacture or a method of treatment — for the reference product. New patents granted or licensed by the reference product sponsor are required to be provided to the biosimilar applicant within 30 days of the patent grant or license.

Third parties with relevant patent interests also may provide notice to the biosimilar applicant concerning relevant patents. Within 30 days of receipt of such a notice, the biosimilar applicant must provide the interested third party with a copy of the application and information concerning the biosimilar product and its production. This information is required to include a detailed description of the biosimilar product, its method of manufacture, and materials used in the manufacture of the product. Within 90 days of receipt of this information, the interested third party is required to provide the biosimilar applicant with a list of all relevant patents. New patents granted or licensed by the interested third party after the list is provided to the biosimilar applicant are required to be provided to the biosimilar applicant within 30 days of the patent grant or license.

The reference product sponsor or interested third party is required to provide a written statement to the biosimilar applicant that: (1) explains why each relevant patent would be infringed; (2) states whether the patent is available for licensing; and (3) provides the patent number and expiration date of each relevant patent.

The biosimilar applicant, within 45 days of receiving the above written statement is required to send a written statement regarding each identified patent to the party that identified the patent. The written statement should state that the biosimilar applicant will not commence marketing prior to the expiration of the patent and has requested that the FDA not grant final approval until the patent expires, or the statement should:

(1) Set forth the reasons why the biosimilar applicant believes the making, using, or sale or offer for sale of the biosimilar in the United States or materials used in the manufacture of the biosimilar or a method of treatment using the biosimilar indicated in the biosimilar application would not infringe the patent

(2) Set forth the reasons why the biosimilar applicant believes the patent is invalid or unenforceable

The reference product sponsor or interested third party may instigate patent litigation in federal court as long as it is within 60 days of receipt of the notice from the biosimilar applicant.  If a court determines that at least one patent is infringed prior to the expiration of applicable exclusivity provisions, the FDA will make the approval effective for the biosimilar product on the day after the date of the expiration of the last expiring relevant patent.

The bill also provides for submission and review by the assistant attorney general and Federal Trade Commission of agreements made between the reference product sponsor and biosimilar applicant and between biosimilar applicants that relate to the manufacturing, marketing, or sale of the biosimilar product. Such agreements are required to be submitted within 10 business days of being executed and prior to the first commercial marketing of the biosimilar product that is the subject of the agreement. Agreements that deal solely with purchase orders for raw materials, equipment and facility contracts, employment or consulting contracts, or packaging and labeling contracts are exempt from the notification requirement. There are certification requirements with respect to such agreements as well as civil monetary penalties and other judicially ordered equitable relief for noncompliance with the notification provisions.

Battle of the Associations

Two major trade associations, the Generic Pharmaceutical Association (GPhA) and the Biotechnology Industry Organization (BIO), each having constituents with significant interests in biosimilars, had opposing views of some of the basic approaches reflected in the bill, particularly with respect to the 12-year exclusivity provision.

On October 27, 2009, GPhA sent a letter to President Obama, requesting the president to “urge congressional leaders to strike the biogeneric language from pending health care reform legislation unless the provisions are materially altered to ensure timely entry of safe and affordable biosimilars and biogenerics to the market. The inclusion of the current fatally flawed language is arguably worse than the effective monopoly that the biotech industry enjoys because it represents an empty promise to Americans who may falsely believe that the legislation will provide for meaningful competition. This simply will not increase access or contain drug spending costs; rather, it represents little more than camouflaged protection of the unacceptable and unsustainable status quo.” GPhA is advocating a much shorter period of exclusivity.

On October 30, 2009, BIO responded by stating that “GPhA’s request to the Administration is a cruel trick to the millions of patients who are awaiting the benefits of biosimilars. GPhA is asking the Obama Administration to hold patients and consumers hostage unless it gets its way on this critical provision of health care reform. … The innovator biotechnology industry actively supports efforts to expand competition in our sector through our strong support of the bipartisan Committee-passed regulatory pathway for biosimilars. … Creating a pathway for biosimilars that includes 12 years of data exclusivity will help the biotech industry realize this potential, to the benefit of millions of patients worldwide. Congress should act now to establish a balanced, pro-patient pathway to biosimilars.”

A Glimpse Into the Future

Given the disagreements among industry associations about the market exclusivity provisions of H.R. 3962, Foley will continue to monitor the situation and provide information about the provisions that are ultimately passed by Congress and signed into law by President Obama. With other controversial provisions concerning health care reform proposals, it remains to be seen how the section on biosimilars ultimately will proceed during the upcoming debates in the House and the Senate.  


Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and colleagues. If you have any questions about this alert or would like to discuss this topic further, please contact your Foley attorney or any of the following individuals: 

David L. Rosen
Chair, FDA Practice and Co-Chair,
Life Sciences Industry Team
Washington, D.C.
202.672.5430
drosen@foley.com

Nathan A. Beaver
Partner, FDA and Public Policy Practices
Washington, D.C.
202.295.4039
nbeaver@foley.com

Gabor Garai
Chair, Private Equity & Venture Capital Practice and Co-Chair, Life Sciences Industry Team
Boston, Massachusetts
617.342.4002
ggarai@foley.com

Stephen B. Maebius
Chair, IP Department and Co-Chair,
Life Sciences Industry Team

Washington, D.C.
202.672.5569
smaebius@foley.com

Judith A. Waltz
Partner, Health Care Industry Team and
Co-Chair, Life Sciences Industry Team
San Francisco, California
415.438.6412
jwaltz@foley.com

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