The convergence of the patent system with the regulatory system presents complicated issues.
The intellectual property super session on Monday afternoon at the 2009 BIO International Convention focused on issues involving the core asset for every biotechnology company—intellectual property. A strong underlying concern throughout the BIO meeting was with regard to the pending house bills for follow-on biologics, or biosimilars, and the broader bill for patent reform.
The key policy issues consider the impact of the biggest proposed changes in patent laws in over 50 years plus the proposal for an abbreviated FDA regulatory pathway for generic biologics. One thing is for certain, if you look at all the pending legislation that will affect biotechnology and healthcare in general, the bull market will be for legal fees in and around Washington D.C.
H.R. 1260 The Patent Reform Act of 2009 is being sponsored by Rep. John Conyers (D-MI) and has been referred to the committee as a first step. Because of its far reaching consequences, it is unlikely to make it out of committee. S.515 sponsored by Sen. Patrick Leahy (D-VT) and has been recommended by committee and could get BIO support.
Another bill H.R. 1548 sponsored by Rep. Anna Eshoo (R-CA) proposes to establish a pathway for the licensure of biosimilar products and for other purposes. This bill prohibits approval of an application for licensure of a biologic product similar to an existing licensed product for a maximum period of 12–14.5 years. This is in contrast to a Rep. Henry Waxman (D-CA) bill H.R 1427, which provides five years of exclusivity and only if the “major substance” had not been previously approved. The main issue is the need to link patent protection with data protection. A working paper by Duke University economist Dr. Henry Grabowski identifies 12.9 to 16.9 years of data exclusivity as necessary to sustain investment in the R&D of new biologics.
In summary the intersection of the patent system with the regulatory system presents complicated issues, and patent reform has strong opposing constituencies. Among the organizations against the Patent Reform are VC’s, high tech and biotech industries, as well as small business and engineers.
Among the organizations for Patent reform are primarily the Business Software Alliance (BSA) with companies such as Adobe, Amazon, Apple, H-P ,Microsoft, and Google who claim that patents are too broad and lawsuits stifle innovation.
BIO will present another briefing on these IP policy matters later this summer.
Rod Raynovich is principal at Raygent Associates.