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Debate Over the Exclusivity Period for Biologics in the Trans-Pacific Partnership

A group of Democratic lawmakers and advocacy organizations criticized protections for brand-name biologics in the current draft of the Trans-Pacific Partnership, or TPP, a free-trade agreement among a dozen Pacific Rim nations, including the United States, Japan, and Australia. The U.S. has been pushing for the inclusion of a 12-year non-patent exclusivity period for biologics, which would match the exclusivity period provided for under domestic law. The exclusivity period is a crucial and hotly-contested issue, as negotiators must balance the interests of innovators investing in the development of complex, life-saving biologics and those of other nations with shorter exclusivity periods for biologics or no exclusivity at all.

Under current domestic law, the Affordable Care Act provides 12 years of exclusivity from biosimilar competition for biologic drugs. In its recent Amgen v. Sandoz decision, the Federal Circuit described this period as one designed to “balance innovation and competition.” During this period, biosimilar manufacturers cannot be approved to sell biosimilars of FDA-approved biologics. The Affordable Care Act, which the President signed into law in 2010, provides this 12-year period in return for the use of the pre-clinical and clinical data developed for the FDA-approved biologics. This data enables biosimilar manufacturers to secure regulatory approval for their products with less than a full complement of pre-clinical and clinical data thereby greatly reducing the cost and time needed to develop these complex drugs. The U.S. has sought to include the same 12-year period as part of the TPP.

At a media briefing last Friday, Representatives Jan Schakowsky (D-IL) and Rosa DeLauro (D-CT) took issue with the TPP’s proposed 12 years of exclusivity. While the Obama administration has pushed to strengthen the protections afforded by the TPP to pharmaceutical innovators, Reps. Schakowsky and DeLauro called on negotiators to ease the way for biosimilar manufacturers to bring their products to market. Rep. Schakowsky said she could not support a trade deal that she claimed “would raise the cost of drug prices,” while Rep. DeLauro argued that the U.S. “should be expanding the access” to biosimilars. Reps. Schakowsky and DeLauro were joined by representatives of Mylan, AARP, Doctors Without Borders, and the American Foundation for AIDS Research.

Last Friday’s remarks stand in stark contrast to the support that other lawmakers have shown for biologic exclusivity. In May, a group of Republican Senators wrote a letter to U.S. Trade Representative Michael Froman to “reinforce the importance of securing strong intellectual property rights protections in the [TPP], specifically 12 years of data protection for biologic medicines.” The Senators pointed out that biologics “are the future of medicine but are riskier endeavors” than traditional drugs, and therefore must receive robust protection “to spur innovation and investment” in life-saving treatments. They also stressed that protection is “a critical safeguard for biologic treatments,” since they may only be protected by “weaker process patents.”

Previously, the Trade Representative also heard from the Biotechnology Industry Organization, or BIO, which submitted a letter and white paper in support of a 12-year exclusivity period in the TPP. BIO has urged negotiators to look to the U.S. regulatory pathway for biosimilars, which “balances a number of critically important considerations, particularly the need to provide a continued, robust incentive for development of new biological products.” The white paper expands upon the importance of the exclusivity period for biologics, arguing that because biologics have narrower patent protection than small molecule drugs, it is important to ensure 12 years of non-patent exclusivity. In the white paper, BIO notes that “[e]xtensive research by noted economists demonstrated that developers of innovative biological products require a period of market exclusivity of between 12 and 15 years simply to break even on their investments.”

The exact details of the TPP’s treatment of biologics remain obscure, as both the negotiations and any drafts are highly secret. A final agreement, however, may be in sight. Negotiators are set to meet in Maui, Hawaii at the end of the month to hammer out remaining details. Last month, Congress voted to give President Obama additional power to negotiate trade pacts like the TPP.  The so-called trade promotion bill provides that any agreement over the next six years will receive a straight up-or-down vote, free from the threat of amendments or filibusters.

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