With the introduction of the bipartisan Pathway for Biosimilars Act, H.R.
5629 introduced by Congresswoman Anna Eshoo (D-CA) and committee ranking member
Joe Barton (R-TX), many questions have arisen as to whether this proposed
legislation creates an easier path for generics to enter the biologics market,
or does it simply send them on an unnecessary detour? The question must be
asked, is the Act a pathway in name only?
What does the Legislation do?
According to Eshoo, this “legislation will establish a regulatory pathway for
biosimilars that will promote competition and lower prices, and protect patient
safety, drug efficacy and sound science . . .” However, some representatives of
the generics industry view it as a substantial roadblock in providing patients
with safe and affordable biogenerics. According to the Generic Pharmaceutical
Association, in order to “. . . increase competition and ensure timely patient
access, Congress needs to enact a workable pathway without barriers. This
workable pathway must spark innovation by brand and generic companies without
requiring unwarranted and unprecedented market exclusivity or patent extension
So what are the barriers that the Generic Pharmaceutical Association are
referring to? Eshoo-Barton provides for 12 years of market exclusivity for the
innovator product. However, the Eshoo-Barton bill goes beyond S. 1695, a
comparable bipartisan bill introduced by Senators Kennedy, Enzi, Clinton and
Hatch, by including a provision that allows for 14 years of innovator market
exclusivity if, within 8 years after approval of the reference product, a new
indication for use is approved which would be a “significant improvement,
compared to marketed products, in the treatment, diagnosis, or prevention of
disease.” Additionally, Eshoo-Barton provides for 6 months of exclusivity for
approval of a pediatric indication for the reference product.
What does the Legislation mean for the Biologics Industry?
With the exclusivity provisions contained in the legislation, innovative
companies will enjoy a period of absolute data exclusivity. During that time,
generics will be denied access to the data that they would need in the research
and development of follow-on drugs. Some view this as an opportunity for
innovative companies to experience a windfall of profits while simultaneously
preventing any reliance on clinical data of the innovator as evidence of safety
From a market perspective, this issue will remain the subject of significant
debate. It is no secret that venture capital funds have seen an enormous
percentage of funds dedicated to the Life Science Industry. The uncertainty
surrounding the exclusivity period involved in the Act leaves the biologics
industry in a bit of a quandary. Investors may be hesitant to invest funds into
a follow-on drug that has had too short a study period by the innovative. On the
other hand, however, a period of exclusivity that is too long might negatively
affect market competition.
Generic manufacturers, innovative manufacturers and investors alike will
continue to watch the development of this with a keen eye.