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BIO: Exclusivity Limit Would Hurt Biotechs(BioWorld Today Via Acquire Media NewsEdge) WASHINGTON - Mandating a data exclusivity period below 14 years in follow-on biologics (FOBs) legislation would save the federal government at most an additional $1.4 billion over 10 years, the Biotechnology Industry Organization (BIO) asserted in a new report, calling that figure a "relatively small savings." The report also contended that anything less than 14 years would have significant negative impacts on R&D spending for biotechs. But Kathleen Jaeger, CEO of the Generic Pharmaceutical Association (GPhA), called BIO's report "more of the same" in an effort to "erect barriers to competition." BIO's report conflicts with an assessment released this past December by the Congressional Budget Office (CBO), which said FOBs could save the nation $10.6 billion over 10 years, with drug costs for Medicare and Medicaid alone being reduced by $8 billion. (See BioWorld Today, Dec. 24, 2008.) A June 2008 report from the CBO, which provides Congress with nonpartisan information, said U.S. spending for protein-based medications could be reduced by $25 billion over 10 years and the nation's budget deficit would decrease by $6.6 billion over the same period if FOBs legislation introduced in the Senate in June 2007, known as S. 1695, was enacted. That bill called for at least 12 years of data exclusivity for brand-name drugs. (See BioWorld Today, June 27, 2008.) GPhA, lawmakers and consumer groups have argued that FOBs would be sold at lower prices than the innovator biologic drugs, and therefore, could save patients and health care payers on medication costs. However, the authors of the BIO paper asserted that an equally important consideration should be how much FOBs will cost innovative biotechnology firms and the public in terms of future new biologics. Biotechs will lose a significant portion of their sales to copycat FOB firms, said Ted Buckley, director of economic policy at BIO, and co-authors, Joseph Golec, from the School of Business at the University of Connecticut, and John Vernon, of the University of North Carolina-Chapel Hill. They maintained that the average biotechnology company does not cover its costs of a biologic until 17 years after the firm starts selling the product. "Because firms rely heavily on cash flow from sales to fund their R&D, fewer sales imply less R&D spending," the authors contended. Data exclusivity of 14 years is the "bare minimum required" for biotechs to recoup their R&D expenses of developing a biologic, the BIO report argued, adding that for some firms, the time period "may still be too short." If data exclusivity is set at 12 years, as proposed in S. 1695, innovator biologic firms would lose $117.4 billion in sales to companies making FOBs during the CBO's scoring window, leading to the brand-name biotechs spending $41.1 billion less on R&D, the BIO report said. "With less R&D spending, fewer new innovative biologics will come to market, which will result in fewer treatment options for patients," the authors claimed. If data exclusivity is set at 12 years, all but three of the top-selling 11 biologics will potentially face FOB competition in 2014, the BIO report noted. And if five years of data exclusivity is assumed, as proposed by Rep. Henry Waxman (D-Calif.), the father of the 1984 generic drug act, all of those biologics could be immediately subject to FOB competition in 2014 "because their data exclusivity would already have expired by then," the authors said. While pharmaceutical and biotech firms both reinvest a portion of their sales revenues into R&D on new drugs, biotechs reinvest about twice as much of their per-dollar-of-sales revenue into R&D, according to the BIO report. "The primary problem that we see with selecting a data exclusivity period shorter than 14 years is that it will shift revenues from innovative biotech firms to copycat FOB firms before innovator firms can break even in order to adequately fund R&D for future innovative therapies," the authors alleged. Anything shorter than 14 years, "could lead to the worst of both worlds - fewer new biologics to treat patients and little savings," they declared. BIO's "attempts to justify an unprecedented and unnecessary 17-year market exclusivity period," said GPhA's Jaeger, is really an effort to preserve profits for brand-name biologic makers and delay savings for consumers. "This is a losing proposition for all involved," she said in a statement. Jaeger noted that market exclusivity protection is separate and distinct from the patent protection and corresponding patent extensions afforded brand biopharmaceuticals. Market exclusivity, she said, acts as an "absolute shield" to "weak patents" held by innovator biologic makers. "Thus, from a practical perspective, extending market exclusivity beyond the Hatch-Waxman period would block the introduction of generic competition for almost 20 years, derailing any potential cost savings to Americans," Jaeger said. She called for lawmakers to use the 1984 act as a model for FOBs legislation "to ensure that there is a balance between pharmaceutical competition and innovation." Bill Would Boost FDA Overseas Inspections Lawmakers last week introduced legislation intended to boost the FDA's ability to monitor food, drugs, devices and cosmetics manufactured overseas. The Food and Drug Administration Globalization Act, introduced by Reps. John Dingell (D-Mich.), Frank Pallone (D-N.J.) and Bart Stupak (D-Mich.), would require that inspections of foreign facilities be as strict as those in the U.S. for drug and device makers and would increase the number of preapproval drug inspections. The lawmakers first proposed the legislation last year. (See BioWorld Today, Feb. 25, 2008, April 21, 2008, April 23, 2008, April 25, 2008, and May 5, 2008.) If enacted, the FDAGA would prohibit the entry of drugs into the U.S. that lacked documentation of safety, require manufacturers to ensure the safety of their supply chain and would grant the FDA authority to mandate recalls of unsafe drugs. The bill also guarantees the FDA the funding needed to significantly increase inspections of food facilities and improve outdated information systems. The legislation requires food producers to have preventive food safety plans in place and subjects the plans to FDA inspection and mandates food imports to meet all U.S. standards. The legislation also is intended to close the loopholes in the FDA's ability to trace the source of contaminated products and imposes stiff penalties on companies that violate safety standards. The bill also creates a dedicated foreign inspectorate to increase the FDA's ability to monitor foreign facilities producing food, drugs, devices and cosmetics. "Antiquated authorities and years of starving FDA of resources has put the public health at risk," Dingell said in a statement. The latest salmonella outbreak involving peanut and peanut butter products, which has been linked to at least eight deaths and about 500 illnesses, is evidence that "food manufacturers cannot be trusted to self-regulate," Pallone charged. Rep. Henry Waxman (D-Calif.), chairman of the House Energy and Commerce Committee, and Stupak, the chairman of the Oversight and Investigations Subcommittee, announced that they plan to hold a hearing on Feb. 11 to examine the salmonella outbreak and have summoned the owner of the Peanut Corp. of America - the plant linked to the tainted peanut and peanut butter products - to testify at the hearing. Pallone said he also plans to hold a series of hearings in the coming weeks on the FDA. Stupak noted that his subcommittee already has held at least 16 hearings since January 2007 about failures at the FDA. n ? ? Copyright ? 2009 Thomson BioWorld, All Rights Reserved. |