July 1, 2010 (Vol. 30, No. 13)
Brian A. A. Fairchild, Ph.D.
Follow-On Biologics Enhance Need for Patent Protection
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?
The First 12 Years
First, during that 12-year window, patents play the same role they always have: preventing others from developing and marketing a competing product requiring a traditional FDA approval process. The 12-year FDA exclusivity blocks only the new, abbreviated biosimilar approval process. Competitors willing to invest in a full set of clinical trials can seek FDA approval through the traditional pathway for biologics, without waiting 12 years. Against such motivated competition, patents offer the only protection.
For example, the U.S. market for erythropoietin is about $3 billion annually, a market in which Amgen and its licensees are the only players. In the past, multiple companies have sought to challenge Amgen’s position by offering a competing product, despite the absence of any biosimilar pathway for FDA approval. Amgen thwarted each would-be competitor, not through exclusivity from the FDA, but through patent protection.
After 12 Years
Second, after the 12-year window has expired, only patents will offer exclusivity.
The sponsor of the reference product can sue a biosimilar applicant for patent infringement, based on the filing of the biosimilar application. Because the biosimilar application can be filed as early as four years after approval of the reference product, any patent litigation may be resolved well before the 12-year period of regulatory exclusivity has expired.
The FDA does not prepublish a list of corresponding patents for a biological product, as they do in the “Orange Book.” Instead, the sponsor of the reference product and the biosimilar applicant exchange information according to a detailed process to identify the patents that will be included in litigation.
Although the new legislation provides a trigger for patent enforcement, the protection is meaningless against biosimilars unless the patents are still in force more than 12 years after FDA approval of the biologic. The time required for FDA approval of a biologic is highly variable: a period of four to ten years from the first clinical trial to final approval is not uncommon and does not include the time required for preclinical studies and optimization. If the entire process of developing the biologic through FDA approval could be completed in about 10 years, then the exclusivity period from the FDA would expire after about 10 + 12 = 22 years. Typically, a U.S. patent has a term of only 20 years from its filing date—potentially expiring before the FDA-mediated exclusivity.
As such, inventors of therapeutic biologics will be under greater pressure to delay the filing of patent applications, to avoid starting the patent clock prematurely. A patent application can be delayed one year by the filing of a provisional patent application, which serves as a placeholder for one year without starting the 20-year clock. Companies may also need to consider waiting longer to file patent applications on biologics, to give them more time to advance the FDA process.
On the other hand, the benefits of delaying patent protection must be weighed against the risks of later filing, including inadvertent disclosure of the invention to third parties or intervening discoveries by third parties that could hinder or prevent patent protection. If patents on the biological product expire too soon, dosing or formulation improvements developed during clinical trials may offer the only meaningful opportunities for patent protection.
Patent terms can be increased if the USPTO fails to meet certain deadlines in examining a patent application (patent term adjustment), an increase that can be partially or completely forfeited by delays introduced by patent applicants. Patent terms can also be extended to compensate an applicant for delays in the FDA approval process (patent term extension). However, the enforceable rights during the period of patent term extension may be limited in scope to the approved product, without covering other biosimilars.
Indeed, because biosimilars can differ from a reference product, the scope of any patent protection is important. Traditional generic pharmaceuticals have the same chemical structure as a branded pharmaceutical, so a patent that covers a branded pharmaceutical will normally also cover a corresponding generic. Not so with biosimilars! Even an interchangeable biosimilar can be different from the reference product, as long as it is expected to produce the same clinical result. The FDA has yet to indicate how different interchangeable amino acid sequences may be.
The courts recently made it harder to claim therapeutics broadly (see Ariad v. Lilly as just one example). Companies looking to enter the biosimilar market can target the sweet spot of proteins similar enough to be interchangeable with a reference product but different enough to escape the scope of any patent protection. On the other hand, current inventors can focus on obtaining patents that cover the range of variants expected to produce the same clinical result.
The biosimilar legislation will spur new competition for biologics—and new patent strategies for addressing the changing competitive landscape.