Trans-Pacific Partnership: Compromise on Biologics Exclusivity Unclear
Earlier this month, a final agreement was reached on the Trans-Pacific Partnership that could provide for as little as five years of exclusivity for biologics. In recent months, it was reported that the biologics exclusivity period remained one of the thorniest issues facing the TPP, a free-trade accord among a dozen Pacific Rim nations, in its final rounds of wrangling. The final text of the agreement is not yet officially available, and thus the exact contours are not yet clear. There are reports, however, that a complicated compromise has been struck, providing for, on the one hand, eight years of exclusivity or, on the other hand, five years of data exclusivity and up to three more years of exclusivity under a regulatory framework.
Data exclusivity refers to the period during which a biosimilar maker cannot piggy-back off the regulatory data of the innovator company. But it is unclear whether the eight years of exclusivity in the TPP that have been reported refer strictly to market exclusivity, a period during which the biosimilar cannot be approved by the regulatory authority, or whether some period of data exclusivity can be built into those eight years. The reports also do not explain what regulatory framework can add up to three years of additional exclusivity, when the framework would be applicable or what the nature of the exclusivity would be. It may simply be a reference to the time it takes a biosimilar to be approved by the relevant regulatory authority. Other reports suggest that while member states must set a minimum five years of data exclusivity, there is no maximum exclusivity period under the TPP.
On October 9, Wikileaks released what it claims to be the full intellectual property chapter of the TPP. Article QQ.E.20 of that chapter has a maximum exclusivity period of eight years and a minimum period of five years of data exclusivity. The same article of the leaked document also suggests biologics may instead be protected through other measures such as market circumstances.
Regardless of its final details, the compromise represents a setback for the United States, which consistently sought twelve years of market exclusivity during the negotiations. Other nations, such as Australia, pushed for five years of data exclusivity. Under United States domestic law, biologics enjoy twelve years of exclusivity – four years of data exclusivity during which a biosimilar maker cannot submit its biosimilar application to FDA, followed by eight years of market exclusivity. Australia has five years of data exclusivity without any additional market exclusivity; the regulatory process itself, however, adds on another year or more of effective market exclusivity depending on how long it takes for the biosimilar product to be approved.
BIO, the Biologics Industry Organization, released a statement expressing disappointment that the TPP failed to include a twelve-year exclusivity period. BIO called the move “short sighted” and noted that twelve years of exclusivity “is a prerequisite to attract the investment required to continue medical innovation and develop new biological cures and therapies.” BIO pointed out that while the TPP agreement will not impact the twelve-year exclusivity period in the United States, it may “chill global investment” and slow development of new biologics. PhRMA, the Pharmaceutical Research and Manufacturers of America, expressed similar disappointment. PhRMA noted that twelve years of exclusivity was “not a random number, but the result of long debate in Congress.”
The Obama administration must now submit the agreement to Congress, which must give the deal an up-or-down vote. Debate is expected to stretch into 2016.