Senate HELP Committee Vote Favors 12-Year Exclusivity; BIO, GPhA, NVCA Weigh In

This week, the Biotechnology Industry Organization (BIO) and the Generic Pharmaceutical Association (GPhA) issued opposing statements in reaction to the July 13 passage of an amendment from the US Senate Committee on Health, Education, Labor, and Pensions (HELP) regarding the creation of a pathway for the approval of new competitors of biologic drugs. Congressional hearings on data exclusivity continued this week as representatives from BIO and the National Venture Capital Association (NVCA) testified on July 14 in support of exclusivity periods of at least 12 years.

BIO President and CEO Jim Greenwood stated the HELP vote “strikes the appropriate balance among ensuring patient safety, expanding competition, reducing costs, and providing necessary and fair incentives that will provide for continued biomedical breakthroughs.” In his statement, Greenwood claimed “the HELP Committee has embraced our long held belief that a minimum of 12 years of data exclusivity establishes a fair and reasonable period to ensure continued biomedical innovation and provide the benefits of expanded competition.”

Greenwood pointed to growing support for H.R. 1548, The Pathway to Biosimilars Act, currently with 129 cosponsors, as evidence of strong bipartisan support for at least 12 years of exclusivity.

To continue support of at least a 12-year data exclusivity period, Jeffrey P. Kushan spoke on July 14 on behalf of BIO before the House Judiciary Committee’s Subcommittee on Courts. Kushan’s testimony, titled “Biologics and Biosimilars: Balancing Incentives for Innovation,” drew from a published report and took into account the effects of biosimilar entry on market shares and prices. In part, he concluded “limiting the data exclusivity period to less than 12 to 16 years results in failure of the representative portfolio of biologics to break even within an extended period, under reasonable assumptions. An adequate exclusivity period is necessary to maintain incentives to invest in the development of innovative new biologic products.”

Also supporting a 12-year data exclusivity provision, Jack Lasersohon, on behalf of NVCA, presented his statement before the Subcommittee on July 14. His report acknowledges the fundamental task of balancing the public’s need for lower-priced biological drugs with “vigorous” investment in the development of new therapies. He pointed out that biotechnology sector mainly consists of small, private, venture capital-funded entrepreneurial companies, in contrast with conventional pharmaceutical firms. Therefore, “conclusions about how a biosimilars system will affect innovation in this sector cannot be drawn directly from experience with Hatch-Waxman in the pharmaceutical sector.”

Lasersohon also pointed out that one of the most important distinctions between these sectors is their respective cost of capital. For privately held firms, this information is proprietary, therefore current estimates regarding cost of capital, which are based on public information, are inaccurate. Lasersohon concluded that while NVCA supports “the principle of a biosimilars approval system,” venture-capital funds cannot be invested with confidence without an adequate data exclusivity period.

Not surprisingly, GPhA called the HELP vote “disappointing.” In a prepared statement, GPhA President and CEO Kathleen Jaeger said the organization would “continue to fight in the House to ensure a true balance is achieved between innovation and competition.” GPhA supports a 7-year exclusivity period, in agreement with President’s Obama administration as well as House Energy Commerce Committee Chairman Henry Waxman (D-CA).

“We hope that when the House Energy and Commerce Committee acts, it follows the lead of its Chairman in approving a market exclusivity peiod that puts patients first,” said Jaeger.