The full text of the Pathway for Biosimilars Act (H.R. 1548) introduced in the House has now been released.  The Act is set to amend the Public Health Service Act in order to establish a pathway for the licensure of biosimilar biological products, and for other purposes.

The Act provides for the following:


The Secretary shall not make a determination under paragraph (4) that a second or subsequent biological product is interchangeable with the same reference product for which a prior biological product has received a determination of interchangeability until 24 months after the later of–

(A) the date of the first commercial marketing of the first biosimilar biological product determined to be interchangeable for that reference product; or

(B) with respect to a product marketed before the date the product is determined to be interchangeable, the date that the product is determined to be interchangeable.

…approval…may not be made until the date that is 12 years after the reference product was first licensed…


(A) EFFECTIVE DATE OF BIOSIMILAR APPLICATION LICENSURE- Subject to subparagraph (D) and paragraph (8), approval of an application under this subsection may not be made effective by the Secretary until the date that is 12 years after the date on which the reference product was first licensed under subsection (a).

(B) FILING PERIOD- An application under this subsection may not be submitted to the Secretary until the later of–

(i) the date of commencement of a proceeding for issuance of guidance pursuant to paragraph (9) with respect to the product class within which the product that is the subject of such application falls; or

(ii) the date that is 4 years after the date on which the reference product was first licensed under subsection (a).

(C) FIRST LICENSURE- For purposes of this paragraph, the date on which the reference product was first licensed under subsection (a) does not include the date of approval of a supplement or of a subsequent application for a new indication, route of administration, dosage form, or strength for the previously licensed reference product.

(D) MEDICALLY SIGNIFICANT NEW INDICATION- If, during the 8-year period following licensure of the reference product, the Secretary approves a supplement to the application for the reference product that seeks approval to market the reference product for a new indication that, if approved, would be a significant improvement, compared to marketed products, in the treatment, diagnosis, or prevention of disease, approval of an application submitted under this subsection may not be made effective by the Secretary until the date that is 14 years after the date on which the reference product was first licensed under subsection (a).


(A) EXCLUSIVITY- If, before or after licensure of the reference product under subsection (a) of this section, the Secretary determines that information relating to the use of such product in the pediatric population may produce health benefits in that population, the Secretary makes a written request for pediatric studies (which shall include a timeframe for completing such studies), the applicant or holder of the approved application agrees to the request, such studies are completed using appropriate formulations for each age group for which the study is requested within any such timeframe, and the reports thereof are submitted and accepted in accordance with section 505A(d)(3) of the Federal Food, Drug, and Cosmetic Act–

(i) the period referred to in paragraph (7)(A) of this subsection is deemed to be 12 years and 6 months rather than 12 years; and

(ii) if paragraph (7)(D) of this subsection applies, the period referred to in such paragraph is deemed to be 14 years and 6 months rather than 14 years.

(B) EXCEPTION- The Secretary shall not extend the period referred to in subparagraph (A)(i) or (A)(ii) of this paragraph if the determination under section 505A(d)(3) of the Federal Food, Drug, and Cosmetic Act is made later than 9 months prior to the expiration of such period.

(C) APPLICATION OF CERTAIN PROVISIONS- The provisions of subsections (a), (d), (e), (f), (h), (j), (k), and (l) of section 505A of the Federal Food, Drug, and Cosmetic Act shall apply with respect to the extension of a period under subparagraph (A) of this paragraph to the same extent and in the same manner as such provisions apply with respect to the extension of a period under subsection (b) or (c) of section 505A of the Federal Food, Drug, and Cosmetic Act.

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Representatives Anna Eshoo (D-CA), Jay Inslee (D-WA), and Joe Barton (R- TX) have introduced the Pathway for Biosimilars Act (H.R. 1548).  The key provision of the Eshoo-Inslee-Barton bill is the 14-year data protection period.  It would offer all new biological drugs a base period of 12 years of data protection with the right to obtain an additional two years once a further indication for use of the product is approved by the FDA.

The California Healthcare Institute (CHI) President and Chief Executive Officer David Gollaher, Ph.D., issued his support for the bill:

While focused on the development of the next generation of innovative medicines, we understand that the increasing cost of healthcare is a growing burden for private-sector and government budgets. In the long term, competition among biosimilar products is likely to yield savings within the U.S. healthcare system. Considering the complexity of large molecule product development and manufacturing, CHI believes that it is possible to develop a successful, science-based FOBs approval pathway. This pathway must employ the best science to ensure the safety of products for patients, encourage price competition among manufacturers, and provide ample incentives to encourage continued private-sector investment in the next generation of breakthroughs.

The CHI contends that the Pathway for Biosimilars Act’ meets these standards:

1. Clear Guidance: As suggested by the FDA’s Chief Scientist in his recent letter to Congress, this legislation requires the FDA to formulate scientific standards for FOBs approval and determination of interchangeability through a flexible, clear, and public guidance process;

2. Clinical Trials and Safety: Ensures that no follow-on product is approved without appropriate and careful scientific demonstration, including the assessment of immunogenicity, that the product is ‘biosimilar’ to the approved reference biological product;

3. Patent Dispute Resolution: Establishes an equitable framework for exchanging information among innovator manufacturers, biosimilar manufacturers and third-party patent holders, such as universities and private research institutes whose scientific breakthroughs are licensed to the private sector for commercial development.

4. Innovation: Encourages future investment in biopharmaceutical research and development by providing at least 12 years of data exclusivity before the FDA can reference the expensive and time-consuming safety and efficacy testing conducted by an innovator in order to approve a follow-on product. This critical element both recognizes that follow-on manufacturers, developing products that are ‘similar’ to innovators’ products, may work around innovators’ patents. The protection of clinical trials data is thus far more important for biologics than for traditional chemical pharmaceuticals; we believe that 12 years of protection will produce outcomes for biotechnology companies similar to those currently in place for traditional pharmaceuticals under the Hatch-Waxman bill of 1984.

The Biotechnology Industry Organization (BIO) president Jim Greenwood said the bill strikes the right balance between innovation and balance. The industry group is against the earlier bill introduced by Rep. Henry Waxman, that would give brand-name biologics just five years of exclusivity, saying it would undercut innovation.  The Eshoo-Barton-Inslee bill “provides patients with the right balance between innovation and competition,” said Greenwood in a statement.

Needless to say, the Generic Pharmaceutical Association (GPhA) released its statement from GPhA President and CEO Kathleen Jaeger opposing the introduction of the Pathway for Biosimilars Act:

Unfortunately, The Pathway for Biosimilars Act is the wrong medicine for patients and our nation’s health care system. This bill will only benefit brand companies by erecting barriers including an unprecedented and unjustifiable 14 years of market exclusivity. Given that there is a minimal difference of less than eight months longer in the development of biopharmaceuticals when compared to traditional pharmaceuticals, there is little justification for excessively expanding exclusivity beyond the Hatch-Waxman model. Excessive exclusivity means that it will be decades before patients have access to affordable biogeneric medicines.

Follow the progress of the Pathway for Biosimilars Act here.

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Consumer Reports is using giant jogging pills on treadmills in order to announce its launch of a public campaign in support of comparative effectiveness research to urge policy makers to get behind the effort to provide doctors and patients with independent comparisons of different treatments for medical conditions.The interactive display is set up in Washington’s Union Station today where CU is running some medications through vigorous testing.

While patients have spent about $286 billion on prescription drugs in 2007 alone, about 75 percent of it on brand-name products, drug makers spent about $5.4 billion in 2007 on advertising medicines.  The companies also spend about $15 to $20 billion annually on trade journal advertising and other outreach including in-person sales calls, professional symposia and gifts to spread their message to doctors, pharmacists, benefit managers, and others.

You can stop by and pick up a copy of their latest publication, Best Drugs for Less or learn about Best Drugs for Less online. Best Drugs for Less is supposed to provide “unbiased, independent evaluations to help people choose medicines that are safe, effective, and affordable.”  The magazine is aimed at helping patients and doctors cut through the clutter of drug advertising so they can make informed decisions about their medications.

You can also check out their list of 10 ways to reduce your drug costs.

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The Small Business Innovation Research program, and the related Small Business Technology Transfer program, were created to help small companies work with government agencies and large contractors to bring new technologies to market.

The program is set to currently operating under a continuing resolution (CR) with re-authorization due for re-upping on March 20.  Now, the House and the Senate have reached a compromise on legislation that will amend PL 110-235 (the current CR) to extend the SBIR Program from March 20, 2009 to July 31, 2009. This means that there will be yet another urgent need for re-authorization in just a few months.

On another front, SBIR availability appears to have dodged a bullet after President Barack Obama’s stimulus package lacked support for the SBIR program. The current stimulus bill has a section granting $7.5 billion to the National Institutes of Health to fund research. But that funding comes with a stipulation that it cannot be used for certain projects, including the SBIR program (15 U.S.C. 638(f)(1) and 15 U.S.C. 638(n)(1)) — a stipulation added by the NIH.

The SBIR and STTR programs have provided small tech companies with more than $26 billion in funding since the programs were launched in 1982. Nearly 18,000 firms have participated, with 6,244 currently active in at least one project. Those companies have also obtainedmore than 67,500 patents.  SBIR accounts for over half of all the federal R&D awards that small companies receive.

The Senate Committee on Small Business & Entrepreneurship (SBE) Chair, Mary Landrieu (D-LA) and ranking member Olympia Snowe (R-ME), sent a letter to Mr. Charles E. Johnson, Acting Secretary of Health and Human Services to express their concern over the $8 billion in ARRA funding exempted from SBIR. They are asking for a response from Secretary Johnson by March 24, 2009.

Senators Russell Feingold (D-WI) and Benjamin Cardin (D-MD) have sent their own letter to NIH stating:

Thus, notwithstanding passage of the ARRA, HHS remains responsible for allocating 2.5 percent and .3 percent of its research and development funds to SBIR and STTR, respectively. Since the ARRA provided $8.2 billion to the NIH for research and development, HHS must ensure that an amount equivalent to 2.8 percent of this total, or $229 million, is allocated to these two programs. We look forward to HHS’s explanation of how it will meet these requirements. 

Basically, the NIH claims that there are not enough “high quality” SBIR proposals from small businesses to fund with ARRA dollars before the expiration date. The NIH also claims that it can use some ARRA monies for SBIR/STTR where appropriate, and contend that their new NIH Challenge Grants in Health and Science Research, will have $200m available for 200 or more grants up to $1m each (see here).

For now, SBIR money should remain available.

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You’re not alone in your suffering.  The recession has even hit the U.S. Patent and Trademark Office, which is funded by fees from patent applications and other services.  John Doll, acting director of the U.S. Patent and Trademark Office, said the patent office is projecting a 2 percent drop in applications, if trends continue.

What’s more, some are indicating that applications could end up being down 10 percent for the year:

“I talked to a large corporation today and they’re going through their patent portfolio to see what’s core,” said Doll, adding that the company could decide to abandon much of its portfolio.

jdoll-allowance-thumb.jpgSo, what does that mean for the patent office?  In the short run, the office has stopped recruiting examiners, which it had been doing in an effort to clear the backlog of patent applications.   After remaining fairly steady over decades, allowance rates have now plummeted from over 70% in 2000 to an allowance rate of 44.3 % in 2007 (Note, the allowance rate hadn’t dropped below 50% in the prior 30 years).

Earlier, the Patent Office claimed that it would hire additional examiners to deal with the backlog.  Doll now contends that that “If we closed our doors today, it would take us almost two years to clear out our backlog.”  It’s not clear how a hiring freeze will make things better other than frustrated applicants will give up and abandon their applications.  Or, stop filing applications in the first place!

So what do we do?  Gene Quinn of IP Watchdog has proposed that if we really want to get out of this economic downturn we need a Patent Stimulus Plan.  This would require President Obama to issue an Executive Order directing the Patent Office to start allowing patents.  According to Gene:

A backlog of 800,000 patent applications that are pending and have not even been considered on any level by a patent examiner is unacceptable.  Why would anyone want to get a patent when you apply today and if it is a real invention where there is a lot of innovative activity you have to wait 8 to 11 years to get a patent, which are the current estimates used by experts familiar with the likely time applications filed today will have to wait in high-tech areas.  So while you are at it President Obama, order the Patent Office to issue a patent UNLESS there is a reason to deny it.

Don’t look for the current budget problem to solve itself.  All the many patents that have not been allowed will not issue as patents.  The Office will not pass go and collect the issue fees on all these applications.  This is further perpetuated downstream as the Office will not collect the large maintenance fees that would have been due at are 3 ½ years, 7 ½ years and 11 ½ years after the date of issuance.  The low patent allowance rate will set in motion a budget shortfall that will play out over decades.


The European Patent Office (EPO)  and Japanese Patent Office (JPO) announced that their allowance rate is also below 50% — with the EPO at 49.5% and the JPO at 48.9% (via the 271 Patent Blog).

See also Gene Quinn’s post “Perspective of an Anonymous Patent Examiner,” where a PTO examiner comments:

This “reject, reject, reject now” policy is encouraged by management’s policy of issuing a written warning on an examiner’s permanent file for allowance error percentage above 10%. While this may seem high, if you only allow 20 cases a year it is no problem for quality to find some kind of error in your cases, especially when they aren’t experts in your art. Additionally, there is a lack of motivation to get cases allowed, because there is no incentive for the examiner to do the extra work required to arrive at claim language which can be allowed.


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Vaya con dios, Genentech

Swiss pharmaceutical company Roche is going to pay $46.8 billion in cash to buy the 44 percent of biotech leader Genentech that it doesn’t already own.  The deal values Genentech at more than $100 billion.  Fortunately, one of Roche’s big products is the tranquilizer Valium.  Genentech’s Avastin, a treatment for various types of breast, lung and colon cancers, is one of the best-selling biotechnology drugs in the world.  The combined company will be the seventh-largest U.S. pharmaceutical company in terms of market share.  It remains to be seen what effect thishas on the culture of Genentech, which is known for innovative research and one of the best places to work.  See Roche Press Release.

Lions, Tigers and Frankencows.  Oh, My.

The USDA Animal and Plant Health Inspection Service (APHIS) plans to hold public meetings in April to address issues raised by its proposal to revise its regulations on the importation, interstate movement, and environmental release of genetically engineered organisms.  The APHIS has requested comment on the following four issues:

(1) Scope of the regulation and which Genetically Engineered  organisms should be regulated;
(2) Incorporation into APHIS regulations of the Plant Protection Act’s noxious weed authority;
(3) Elimination of notification procedure and revision of the permit procedure;
(4) Environmental release permit categories and regulation of GE crops that produce pharmaceutical and industrial compounds.

APHIS is extending the comment period for the proposed rule until 60 days after the April meetings. (via FDA Law Blog)

What’s a Federal Circuit Good For?

The Court of Appeals for the Federal Circuit, in In re Ferguson, shot down the claims of U.S. Serial No. 09/387,823, which claimed a “paradigm for marketing software” — whatever that is —  the “machine-or-transformation” test from the Court’s In re Bilski decision.  Noteworthy is the underlying debate on whether the Bilski decision overturned not only State Street but other precedent (including the Freeman-Walter-Abele test, the “technological arts” test and the “physical steps” test), constituting a “sweeping rejection of precedent [that] simply enlarges the taint on the thousands of patents that were granted in application of these tests.”   (via Patent Docs)

More Stem Cells, Still No Human Clones

President Obama on Monday lifted the Bush administration’s limits on human embryonic stem cell research.  He did take time to note that this still means no human cloning so forget about a bunch of mini-me’s.  The Bush administration had only allowed tax dollars to support studies on a small number of existing lines, or colonies, of stem cells that had already been derived from embryos, but not on creating new lines. Because embryonic stem cells are capable of developing into any type of cell or tissue in the body, many scientists believe they hold the possibility for treatments and cures for ailments as varied as diabetes, Parkinson’s and heart disease.

Et cetera

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31lbnoi3i8l_sl160_.jpgThe Apple iPhone has really converted me to a podcast listener.  While I had an iPod and listened to a few podcasts before, I rarely had it with me.  Now, with the iPhone as my podcast player, I always have it with me.  This past week, I got an up-close encounter with a new podcast, the IP Think Tank podcast.

The IP ThinkTank podcast with Duncan Bucknell is exceptionally well done and makes for an enjoyable way to get caught up on the week’s IP events.  This past week’s episode featured Andrew Watson and myself as guest panelists to discuss:

  • Director’s liability for mismanagement of IP assets;
  • Strategic IP Management in Business School Curricula; and
  • Patent Reform in the United States.

We hope you enjoy this week’s podcast and look forward to your comments and feedback.  Listen or subscribe at the IP ThinkTank Podcast page.


Andrew Watson,  ipVA: Intellectual Property strategy and advisory consultants
Stephen Albainy-Jenei, Patent Baristas: Freshly brewed Bio/Pharma chat.

More:  MBAs and IP: Survey of course offerings

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The U.S. Department of Health & Human Services is looking for input on a report looking at the effects of gene patents on patient access to genetic tests.  The Advisory Committee on Genetics, Health, and Society (SACGHS) is requesting public comments on a draft report to the Secretary of Health and Human Services, “Public Consultation Draft Report on Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests.”

The review was limited to those genetic tests, whether used for diagnostic, predictive, or other clinical purposes, that rely on analysis of nucleic acid molecules to determine human genotype. As such, the kinds of patent claims evaluated were nucleic acid-related patent claims associated with genetic tests for human genotype. The report does not address protein-based genetic tests or protein-related patent claims associated with tests designed to infer genotype.

Now, the Committee is looking for public input on several issues, including whether changes are needed in patenting and licensing practices that affect genetic testing, and the appropriateness, feasibility, and implications of the report’s policy options.

The report showed:

Based on its review of the literature, case studies, and review of international policies regarding gene patents, SACGHS found little in the way of broad or consistent evidence that indicates either positive or negative effects of gene patents on patient access to diagnostic tests.

Although it is difficult to document measurable and systematic impacts, either positive or negative, of gene patents on patient access to tests, SACGHS did identify several issues of concern that, if not addressed, might result in future barriers to patient access as the number and complexity of gene tests increases.

Finally, in the case of patents, perceptions can have important impacts on behavior and can affect the willingness of researchers to investigate a particular problem, the willingness of companies to operate in a particular region, the willingness of academic laboratories to develop a given test, and the actions of clinicians who order and utilize genetic tests.

SACGHS identified key findings for the following issues:

Did the prospect of a patent encourage researchers to search for gene-disease associations that could be developed into a genetic test? 

In general, the prospect of receiving a patent was not the major force motivating scientists to search for gene-disease associations that could be used to develop a genetic test. However, it also appears that the prospect of a patent for a therapeutic attracted investment …

Based on the above, it seems to reasonable to conclude that if patent protection for genetic tests did not exist, scientists likely would continue to pursue research into gene-disease associations with equal fervor, motivated by various factors, including the desire to advance the understanding of a disease, earn the esteem of their colleagues and advance their individual careers. Whether companies would continue to pursue this research if patents did not exist is unclear and would be a difficult hypothesis to test.

What role did patents play in the commercialization of the genetic tests? 

The case studies suggest that for those who secured a patent on a gene-disease association, there was an incentive to commercially develop a genetic test. [A] patent apparently is not uniformly a necessary incentive to develop or commercialize a genetic test. Patents, however, may be necessary to stimulate commercial development of genetic tests for rare alleles.

How did patents and licensing practices affect price? 

The case studies attempted to evaluate how patents and licensing practices affected the price of genetic tests, but could not always reach definite conclusions because of difficulties in obtaining relevant data and challenges in determining the relative contribution of various factors, including overhead costs, to price.

Thus, there is at least the risk that a patent-protected genetic test will have an inflated price; this inflated price, in turn, may reduce how many patients use the test. Licensing many providers may mitigate price inflation. However, various factors other than patenting and licensing affect the price of genetic tests, including ordinary market forces, such as demand and market size (where there is a large market and high demand, the company stands to make considerable revenue even at a lower price). Many of these factors exert a downward pressure on price.

How did patents and licensing practices affect availability? 

The case studies generally found that for patented tests that were licensed to many providers, there was no evidence of any limitations on availability. Where there is a sole provider, due to the patent holder practicing the patent exclusively or licensing exclusively to a single entity, the effects on availability can be positive or negative.

What is the potential that the patent may cause some future harm? 

The case studies note that patents relating to genetic tests could hinder the anticipated increase in multiplex genetic testing and the foreseeable clinical use of whole genome analysis/sequencing.

Preliminary Conclusions

Patents and Pricing — Evidence from the case studies did not reveal widespread overpricing for genetic diagnostic tests that were patented and exclusively licensed relative to tests that were either unpatented or non-exclusively licensed. In addition, SACGHS did not find quantitative information in the general literature on this issue nor has it been addressed in international policies.

Effects of Patents on Access — Thus far, patents covering genetic tests and related licensing practices do not appear to be causing wide or lasting barriers to patient or clinical access.

Effects of Patents on Innovation and Development — Two principal ways patents are supposed to promote science is through stimulating research and inventive activity and through stimulating investment to commercially develop promising inventions. While there is a longstanding consensus that patents function this way in many arenas, the findings from the Committee’s work thus far suggest that they do not serve as powerful incentives for either genetics research in the diagnostic arena or development of genetic tests.


Members of the public are invited to provide any additional information and data regarding the positive or negative effects gene patenting or licensing practices have had, are having, or may have on patient and clinical access to genetic tests.

To submit comments to SACGHS, please e-mail them to Darren Greninger, at, by May 15, 2009. Alternatively, comments can be mailed to Mr. Greninger at the National Institutes of Health (NIH) Office of Biotechnology Activities, 6705 Rockledge Drive, Suite 700, Bethesda, MD 20892 (20817 for non-U.S. Postal Service mail), or faxed to 301-496-9839.

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