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Biologics Get 12-Year Exclusivity Period Under Proposed Reform Bills

Janice Simmons, for HealthLeaders Media, August 12, 2009

Manufacturers of biologic drugs would get 12 years of exclusivity—not seven years as had been suggested by President Obama—under an amendment to the House healthcare reform bill (HR 3200), which has been approved by the Energy and Commerce Committee.

The amendment language and proposed exclusivity period (12 years) closely follow the provisions in the biologic amendment included in the Senate Health, Education, Labor, and Pensions (HELP) Committee reform bill approved in July.

However, while the amendment had received strong bipartisan support (a 41-11 voice vote) within the House committee, opposition to the amendment has emerged in the form of committee Chairman Henry Waxman (D-CA). Waxman and several others introduced a bill (HR 1470) this spring that they said would sharply narrow the exclusivity period to 7 years for most biologic drugs and 7.5 years for biologic drugs used to treat rare diseases or conditions.

The biologic amendment, offered by Rep. Anna Eshoo (D-CA), reflects language in her bill (HR 1548) that she had introduced earlier this year, she said. The amendment calls for "developing a pathway" for "biosimilar" drugs—or generic drugs that have similar properties to the biologic drugs.

Biologics—one of the fastest growing segments of the drug industry—are complex medicines derived from large molecules of living tissues or organisms. They include popular drugs, such as the breast cancer drug Herceptin and the anti anemia drug Epogen. Biologics account for the top six drugs sold last year, and account for sales of $40 billion annually—with much of those sales going to Medicare beneficiaries.

Supporters of the 12 year exclusivity period say it is needed to allow enough time to develop safe generic versions of the biosimilars. A "properly designed pathway" for biogeneric entry will over time, "lead to additional market entrants, lower prices, increased access to drugs and a few billion dollars a year in reduced spending," said Alex Brill, a research fellow with the American Enterprise Institute, at a hearing on biologics last month of the House Judiciary Committee Subcommittee on Courts and Competition.

However, Waxman said during the markup of HR 3200 last month that Eshoo's amendment not only enacted "a lengthy monopoly period" of 12 years, but it "allows those periods to be extended with so-called evergreening." This is a practice by pharmaceutical manufacturers of making small adjustments or changes to their drugs as a way to extend their control over the product, he said.

Overall, the Federal Trade Commission, in a report released this summer, noted that the entry of biosimilar drugs into the market "will be less dramatic than generic drug competition." The entry into the biosimilar market is likely in biologic drug markets larger than $250 million in annual sales.


Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.

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