Biologics Exclusivity and the TPP: An International Balancing Act

Pharma Corner blueBiologics Exclusivity and the TPP: An International Balancing Act
October 6, 2015

With sufficient participation, trade pacts have the potential to set international standards that eventually become global norms.  This is exactly what opponents on both sides of the Trans-Pacific Partnership (TPP) agreement fear will happen when it comes to biosimilar drug development.  The deal, announced October 5, 2015, would apparently commit the 12 participant nations to guarantee at least 5 years of data exclusivity for biologic drugs, thereby assuring them immunity from biosimilar competition for at least that period, regardless of the existence of any patent protection.   Some reports have suggested that there may be an additional 3 years of exclusivity tacked on in the form of a “safety monitoring period” that would precede commercial sales–and possibly even regulatory review–of the proposed biosimilar. Given the prominence this issue attained in the TPP negotiations as one of the last stumbling blocks to consensus, it is rather remarkable that the key provisions have not yet been made public.

Major drug developers had hoped to persuade other countries to adopt the U.S. standard of 12 years, the longest period of exclusivity anywhere in the world. They argue that, because biologics take more money and time to develop than chemically synthesized “small molecule” drugs, they should be entitled to a longer period of exclusivity to encourage innovation.  This logic prevailed with the adoption of the U.S. Biologics Price Competition and Innovation Act of 2009, which enlarged the 5 year data exclusivity period previously available for small molecule drugs to 12 years of combined exclusivity for biologics, comprised of 4 years of data exclusivity and another 8 years of marketing exclusivity. This allows the maker of a biosimilar to begin its development process using the reference drug’s clinical data after 4 years but prevents it from competing in the market for at least 12 years.

The U.S. was unique in granting a different (and longer) period of exclusivity for biologics.  This was a major win for developers of biologics, and one they hoped to propagate to other countries using the TPP.  Standardizing this regulatory protection would not only assure longer exclusivity in each of the non-U.S. countries, but also would prevent biosimilar development from getting an early start in countries with more lax data exclusivity provisions.  Major differences in patent laws have allowed this to happen with small molecule generics; India, for example, has become a huge supplier of generics in part because its more exacting patent standards leave fewer brand drugs with patent protection.

On the other side, some groups have argued that the U.S. exclusivity period is far too long and merely contributes to higher drug company profits, while depriving end payers of access to affordable biosimilar medications. Outspoken members of the camp opposing lengthy TTP exclusivity include non-governmental organizations such as Doctors Without Borders, consumer advocates such as Public Citizen, and official spokespersons for governments that cover prescription drug costs for their residents, including Australia. Indeed, the Obama administration itself has made repeated efforts to shorten the data exclusivity period here in the U.S., arguing that 7 years should be sufficient to encourage biologics innovation.

The final compromise (which still remains hazy) has, apparently, left both sides unhappy.  It would increase the existing data exclusivity protections for just three of the participating countries:  Brunei (population less than 500,000) which had no drug data protection law on its books; and Mexico and Peru, which had no data protection provisions specific to biologics. For six other participants (Australia, Chile, Malaysia, New Zealand, Singapore and Vietnam), the TPP would mirror their current legal frameworks, continuing to provide 5 years of data exclusivity for biologics but assuring that this exclusivity period will not be shortened as long as the TPP remains in effect.  The three countries that currently provide longer periods of exclusivity would presumably continue to do so, at least for the foreseeable future.  Canada and Japan currently provide eight years of exclusivity.  In the case of Japan, that exclusivity arises from a “post marketing surveillance period” applied to all new drugs, requiring them to be monitored for eight years before an application to make a generic or biosimilar can even be submitted.

Whether the TPP’s minimum exclusivity period is 5 years (data only) or 8 years (data plus “safety monitoring”) will hopefully be disclosed very soon.  What is clear now is that the ambitious industry goal of protecting each biologic from biosimilar competition for at least 12 years could not garner international support. Whether the lower bound set by the TPP provides a rationale for eroding longer-term protections in the U.S., Canada or Japan remains to be seen.