Extra-statutory Exclusivity:
Developments Arising from the
Biologics Price Competition
and Innovation Act
By Christopher Betti, Margaux Nair, and
Jennifer Dienes, K&L Gates LLP
Christopher Betti is a partner in the Chicago
office of K&L Gates LLP. Margaux Nair
and Jennifer Dienes are associates in K&L
Gates’ Chicago office.
F
DA approval pathways for biologics are
in a state of flux and players both new
and old must take stock of the changes,
including the availability of an expedited
biosimilar approval pathway (section 351(k)
of the Public Health Service Act (PHSA)).
Deciding whether to use or how to respond
to the availability of the pathway will require
understanding the details of the statute,
including the various exclusivities.
Biologics are large molecules made,
derived, or extracted from a natural source
such as a human, animal, or microorganism
that are used in the treatment, diagnosis,
or prevention of disease. Biologics include
therapeutic proteins, DNA vaccines, monoclonal antibodies, and fusion proteins. A biosimilar is best characterized as a similar
but not identical copy of a biologic that
has previously been granted marketing
authorization by the FDA. Minor differences between a biosimilar and a biologic
may exist and are likely most often due to
the variation in the processes used in their
manufacture. These minor differences are
permitted so long as they are demonstrated
not to be clinically significant.
The Biologics Price Competition and
Innovation Act (BPCIA) was enacted in
2010 as part of the Patient Protection and
Affordable Care Act and amended the PHSA to establish an expedited pathway for FDA approval of biosimilars (often referred to
as “follow-on biologics”). This expedited
pathway requires an applicant to submit an
application containing detailed information
about their biosimilar, including analytical studies showing that their biosimilar is
highly similar to a branded biologic already
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approved by the FDA; animal studies that
include an assessment of toxicity; and a
clinical study or studies demonstrating the
safety, purity, and potency of the biosimilar.
Such requirements have been the subject of
several guidances from the FDA intended to
provide recommendations to applicants on
the scientific and technical information of
the chemistry, manufacturing, and controls
section of a marketing application for a proposed biosimilar product submitted under
section 351(k) of the PHSA. Additionally,
the BPCIA sets forth a detailed procedure
and timeline where a holder of a branded
biologic (“branded biologic”) and a biosimilar applicant are to engage in a series of
exchanges of information with the goal of
determining which if any of the brand holder’s patents will be litigated by the parties.
To date, this expedited pathway for FDA approval of a biosimilar has yet to yield any
approved biosimilars.1
It is important to note that there are
limitations on when a biosimilar applicant
can file an application under the expedited pathway, and additional limitations
on when the biosimilar applicant can market their product. Two of these limitations
are statutorily granted exclusivities that the
branded biologic receives upon approval of
their Biologics License Application (BLA).2
The first type of exclusivity is called “data
exclusivity.” No biosimilar applicant is
allowed to file an application until four
years after the branded biologic’s BLA is approved by the FDA. 42 U.S.C. §
262(k)(7)(B). Additionally, there is “marketing exclusivity.” During the marketing
exclusivity period, the FDA may accept
and review a biosimilar application but is
prohibited from granting it final approval.
As a result, a branded biologic may prevent a biosimilar from entering the market until eight years after the end of the
data exclusivity period, even if the FDA has completed its review of the biosimilar application. 42 U.S.C. § 262(k)(7)(A).
Therefore, effectively, there are 12 years
Intellectual Property Today OCTOBER, 2014
of exclusivity guaranteed to a branded
biologic that enters the market through
approval of a BLA.3
The appropriate length of the data exclusivity period was hotly contested during the
drafting of the biosimilar approval pathway.
Throughout the legislative process, parties argued both for and against a variety
of exclusivity periods.4 Branded biologics
generally argued for a longer exclusivity
period ranging from 10 to 14 years.5 The
rationale for a longer exclusivity period
was based primarily on the need to appropriately reward and incentivize innovation. Additional arguments for a longer
exclusivity period included the fact that
it frequently takes a company more than
10 years to achieve break-even returns for
research and development for the average
biologic,6 and that the investment made
in researching and developing a marketed
product should be rewarded, particularly
since the process takes about 15 years,
costs about $1.2 billion, and inherently has
substantial risks that those costs will never
be recovered.7 Interestingly, the Secretary
of Health and Human Services supported
a 12-year data exclusivity period independent of patent protection, but also believed
that supplemental exclusivity should be
provided for new indications requiring clinical trials other than bioavailability studies.8 Potential biosimilar applicants and
generic pharmaceutical companies strongly
opposed such a long period of exclusivity,
and instead generally supported a fiveyear exclusivity period.9 According to the
generic companies, biologics already benefit from patent term restoration under
Hatch-Waxman despite not being subject
to generic competition and can receive
orphan drug exclusivity and tax credits
associated with that designation, which
provides ample incentive for companies to
continue innovating.10 Additionally, generics feared that a long exclusivity period
would promote low-risk, non-innovative
development, making biotechnology less
competitive in the long term.11 The Federal
Trade Commission seemingly agreed with
the generics and found that a 12-to-14-year
data exclusivity period was not needed to
incentivize biotechnology innovation and
there was no need for exclusivity as an
incentive for development of biosimilars
that are interchangeable.12
Many of the branded biologics currently on the market were approved under
a BLA many years ago and their data and
marketing exclusivities have either already
expired or are soon to expire for the covered
biologics. However, before deciding that no
further analysis regarding exclusivities is
required, a biosimilar applicant should be
aware that there may be additional exclusivity beyond that provided by statute.
Notably, branded biologics may be able
to receive an additional six months of
exclusivity based on the statutory requirement that the biosimilar applicant provide the branded biologic with 180 days
of marketing notice (the “extra-statutory
exclusivity”).13 42 U.S.C. § 262(l)(8)(A).
Biosimilar applicants cannot commence
marketing of their biosimilar until expiration of the notice period. In the future,
when the BPCIA process coincides with
the development of new biologics, it is
likely that the extra-statutory exclusivity
will overlap with the marketing exclusivity. However, for now, the extra-statutory
exclusivity should play an important part
in both the branded biologic and biosimilar
applicant’s analysis.
The extra-statutory exclusivity is triggered by sending the marketing notice to
the branded biologic. The exact timing of
the notice requirement, and thus, the potential availability of the additional exclusivity
are likely to be affected by three currently
pending cases.
The first case is Sandoz’s appeal to the
Federal Circuit from a November 2013
decision dismissing the Sandoz Complaint
for Declaratory Judgment and Patent
Invalidity and Non-infringement from the
U.S. District Court for the Northern District
of California. See Docket No. 14-1693. The
biologic involved in that case is Amgen’s
Enbrel® (etanercept) for which Sandoz has
a biosimilar. There are two other cases
pending, both involving Remicade® (infliximab). However for the purposes of the
exclusivity analysis, the Sandoz case is
the most important as the other cases are
generally following the Sandoz litigation
strategy and the Sandoz case has progressed substantially farther than the other
cases, which still remain in the district
courts (U.S. District Court for the District
of Massachusetts and U.S. District Court for
the Southern District of New York).
The resolution of the Sandoz case may
affect the determination of whether the 180day marketing notice can be sent when the
biosimilar application is filed, or whether
it is required to be sent only after approval
of the application. Biosimilar applicants
are advocating for sending notice upon
filing, because it is highly unlikely the
FDA will be able to approve applications
in less than six months’ time, meaning
the biosimilar applicant would not have
to stay off the market for additional time.
Conversely, branded biologics are advocating that marketing notice cannot be sent
until the biosimilar application is approved
and ready to go on the market, giving
branded biologics an additional six-month
respite from competition.
Regardless of the outcome of the cases,
biosimilar applicants will have an incentive
to expedite the 351(k) review process as
much as possible, which includes sending
out their marketing notice as quickly as possible to trigger the additional extra-statutory
exclusivity as soon as possible. Conversely,
branded biologics will continue to wish
to receive the marketing notice as late
as possible to maximize the extra-statutory
exclusivity to maintain market exclusivity.
Branded biologics and biosimilar applicants
are likely to use similar tactics and strategies
to advance their goals, as are currently seen
by parties in ANDA litigation.
Whether a company is a branded biologic
or a biosimilar applicant, they should be ready
to factor additional extra-statutory exclusivity
into their analysis and business plans.
Endnotes
1. On July 24, 2014, over four years after the enactment
of the BPCIA, the FDA accepted its first biosimilar
application from Sandoz Inc. (“Sandoz”). Sandoz’s
application is for a biosimilar version of Amgen Inc.’s
(“Amgen”) Neupogen® (filgrastim). Neupogen® is a
pharmaceutical analog of human granulocyte colony
stimulating factor that is used to treat neutropenia,
a condition where the body does not make enough
neutrophils, a type of white blood cell. Amgen’s
Neupogen® is indicated for use by patients receiving
strong chemotherapy to reduce their risk of infection.
Assuming the FDA meets its goal of reviewing 70
percent of new applications within 10 months for
fiscal year 2014, as set forth in the FDA’s Biosimilar
Biological Product Authorization Performance Goals
and Procedures, review of Sandoz’s application will
be completed by mid-2015.
2. These exclusivities are based in the BPCIA statue.
These exclusivities are different from what may
be generally called “patent exclusivity.” Patent
exclusivity is the exclusivity a branded biologic
may have through its patent rights: that no one
may enter the market without risk of infringement
until the patents expire.
3. As an illustration, Figure 1’s graph marks out data
and marketing exclusivities:
4. Carver et al., An Unofficial Legislative History of
the Biologics Price Competition and Innovation Act
of 2009, 65 Food & Drug L.J. 671 (2010).
5. Id. at 735, 765, 776, 796-798.
6. Id. at 735.
7. Id.
8. Id. at 762.
9. Id. at 736, 764, 796.
10. Id. at 736.
11. Id. at 796.
12. Id. at 787.
13. The extra-statutory exclusivity is shown in Figure
2’s graph.
FIGURE 1
FIGURE 2
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