When reforming healthcare earlier this year, the U.S. opened the door to increased competition for protein therapeutics. The Biologics Price Competition and Innovation Act provides a new mechanism for approving a biological product that is biosimilar to a previously approved (reference) product. Previously, biological products could only be approved after a complete battery of clinical trials. Now, an easier path to approval is available for a biosimilar, a biological product that is highly similar to a reference product and whose safety, purity, and potency show no clinically meaningful differences with the reference product.
As patents expire on existing, billion-dollar biologics, biosimilars offer a tantalizing opportunity for companies ready to jump in and compete for that market share. As an extra sweetener, certain biosimilars can be designated as “interchangeable” with a reference product if the biosimilar can be expected to produce the same result as the reference product in any given patient. For biological products that are administered repeatedly, a biosimilar is only interchangeable if switching between the biosimilar and the reference product is as safe and effective as repeatedly using the reference product.
Interchangeable products have an important advantage in the marketplace. As with generic pharmaceuticals, pharmacies can substitute an interchangeable biosimilar for the reference product without involving the doctor who originally prescribed it. In this way, interchangeable biosimilars offered at reduced prices may quickly grab market share.
To balance the benefits of competition and innovation, Congress included a period of at least 12 years of data exclusivity for a reference product, that is, a 12-year period before the FDA has authority to approve through the expedited pathway a corresponding biosimilar. The exclusivity period begins to run from the date the reference product is first approved. No biosimilar application can even be filed until four years after the approval of the reference product. In contrast, the FDA typically gives traditional pharmaceuticals (new chemical entities) about five years of regulatory exclusivity.
If biologics receive 12 years of exclusivity from the FDA, what additional protection do patents offer?