Jim Greenwood, CEO of the Biotechnology Industry Organization (BIO) gave a briefing to biotech & pharma bloggers on key issues related to follow-on biologics, patent reform and PDUFA pending legislation.

In the conference call, Greenwood provided an overview of the biggest issues for BIO and then fielded questions from the participants. Greenwood acknowledged that the Biotech industry is facing a perfect storm of troubles as it comes up against a myriad of legislation proposals aimed at the drug industry and patents.


While disappointed that about $250 million in fees, Greenwood felt that BIO has done well in getting sensible changes to the Prescription Drug User Fee Act (PDUFA) reauthorization bill. Particularly in that it has moved away from a one size fits all plan for risk management to a more rational approach on a case-by-case basis.

Mr. Greenwood said that the greatest concern right now is the timing of the renewal of the previous bill, which expires Sept. 30. He expressed concerns that moral at the FDA is not good because of layoff notices and indicated that there could be a temporary extension, which could futher lower moral.

PDUFA increases funding for the Food and Drug Administration through fees paid by the drug companies, which increase the speed of drug approval at the FDA. The user fees have gone from being 7 percent of the FDA’s budget to 59 percent.

On Follow-On Biologics:

In July, the Senate Health, Education, Labor and Pensions HELP Committee gave the thumbs up to the Biologics Price Competition and Innovation Act of 2007 (S. 1695), which lays out a pathway for approving the development of follow-on biologics. Greenwood said that they want to see a follow-on biologics law passed but that “a good law that parallels the framework laid out in the Hatch Waxman Act.

The Hatch-Waxman Act allows generic manufacturers to file an ANDA demonstrating bioequivalence to an innovator drug, rather than an NDA, which is far costlier as it requires data establishing safety and efficacy.

The legislation includes standards for the FDA to approve follow-on biologics as well as a period of exclusivity for the brand name drug company. The Act amends section 351 of the Public Health Service Act to provide for an approval pathway for safe biosimilar and interchangeable biological products (relying in part on the previous approval of a brand product):

  • A biosimilar applicant is required to demonstrate that there are no clinically meaningful differences in safety, purity and potency between its product and the brand product. A demonstration of biosimilarity includes analytical data, animal testing and one or more clinical studies, unless such a requirement is determined by the FDA to be unnecessary.
  • The Act provides incentives for the development of both new life-saving biological products and interchangeable biosimilar products: 12 years of data exclusivity for the brand company during which a biosimilar product may not be approved, and 1 year of exclusivity for the first interchangeable biological product.
  • The biosimilar applicant must provide its application and information about its manufacturing process to the brand company. A series of informational exchanges then occur in which the biosimilar applicant and the brand company identify patents in question and explain their views as to their validity or infringement.

Unlike small molecule drugs, which are approved under the FDCA, most biologics are approved under the Public Health Service Act (PHSA). The FDCA provides a framework for approving generic copies of small molecule drugs, but no commensurate legal framework is currently in place for approving follow-on biologics either under the FDCA or under the PHSA. The complexity of biologics makes it impossible to analyze them in a laboratory to the degree possible with chemical drugs, and to show without clinical trials that one biologic has the same safety and effectiveness profile as another.

To be approved as a generic, a drug must have the same active ingredient, strength, dosage form, and route of administration as the reference drug, and it must also be bioequivalent. The bioequivalence of the generic drug is demonstrated through relatively simple analyses such as blood level testing, without the need for human clinical trials.

Currently, the full Senate has not considered the bill passed by the Senate committee, and the House has taken no action thus far on two different bills addressing regulation of biosimilars. Aaron Barkoff of the Orange Book Blog said that he wondered if generic companies would try to get the legislation delayed until the next administration. Greenwood acknowledged that it is a possibility and gave a nod to the many interests involved.

Mr. Greenwood stated that any legislation should include 14 years of data exclusivity in order to protect the investment needed in the drugs from the biotechnology industry. The current protection for small molecule drugs is, on average, 13.5 years prior to generic entry. Therefore, the length of time for data exclusivity would put the biotech industry on par with the pharmaceutical companies.

Earlier, BIO released a set of principles to guide the development of a pathway for the approval of follow-on biologics. BIO also developed a detailed rationale supporting the need for substantial data exclusivity. Meanwhile, generic manufacturers expressed concern that a 12 year exclusivity for the brand company is too long.

On Patent Reform:

Greenwood noted that patent reform is being inspired by the high-tech industry, which feels threatened by so-called patent trolls. While acknowledging that the high-tech industry needs to defend itself, he expressed concern that the proposed changes are not good for the biotech business model.

Donald Zuhn of Patent Docs asked what is the most significant issue in the current patent reform bills. Greenwood indicated that the proposed rules for apportionment of damages would be most harmful to the biotech industry. Unlike a computer, which may be made up of many (often insignificant) parts, a drug company may rely on just one or two patents and need to spend a dozen years developing a drug. Apportioning damages would never take into account the true value of the invention.

The Patent Reform Acts of 2007 (both House and Senate) propose changes to damage calculations that would require specific economic analysis to ensure that any reasonable royalty damage award captures “only [the] economic value properly attributable to the patent’s specific contribution over the prior art.” These calculations would apparently apply to calculations of both past and future damages.

Such a provision on apportioning damages could require courts to adjudicate the economic value of the entire prior art, the asserted patent claims, and also all other features of the accused product or process whether or not patented. A massive undertaking. Greenwood said that he did not see any convincing evidence of the need for such a provision over the current system.

Read the draft legislation here: Biologics Price Competition and Innovation Act of 2007 (S. 1695).

About Follow-on Biologics here.

About Patent Reform Act of 2007 here.

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