New Legislation Supports Biosimilar Drugs, Clarifies Qualifications for Obtaining FDA Exclusivity

May 20, 2021

Recent litigation, including the Federal Circuit decision in Amgen v. Sanofi, has created concern among biologics manufacturers with regard to whether their existing intellectual property will remain protected, and whether they will be able to secure patents for future drugs. The uncertainty surrounding the patentability of biologics has led the industry to search for potential alternatives to patent protection. One such alternative could lead to pharmaceutical companies leaning on the exclusivity granted by the U.S. Food and Drug Administration (“FDA”) as a way to avoid the patent route entirely. Where patents are a property right granted by the United States any time during the development of a drug, FDA exclusivity attaches upon approval of the drug and grants certain delays and prohibitions on the approval of competitor drugs. Biologics are covered by a considerably longer exclusivity period than other drug types, usually with 12 years total of market protection, as delineated by the Biologics Price Competition and Innovation Act (“BPCIA”). Biologics exclusivity serves the purpose of promoting innovation and continuing the development of novel therapies by granting the manufacturer a fixed period of time following drug approval during which they can market the drug without direct competition from manufacturers of duplicate or reformulated products. In order to obtain exclusivity, the FDA requires a description of the biologic and the difference between it and any licensed biopharmaceuticals structurally related to it, including those which target different epitopes of the same molecular target. However, if the biologics manufacturer does not have a patent disclosing functional limitations, as courts are making it more difficult for certain kinds of biopharmaceutical claims to meet the enablement standard, there may be difficulty in meeting the specificity requirement with regard to defining the biosimilar for the purpose of an submitting an exclusivity application. The specificity requirement is part of the FDA’s effort to combat the skyrocketing price of drugs, as one of the driving factors of prices is the manufacturer’s ability to keep cheaper competitors out of the market. Recent legislation, introduced last month, aims to support this goal.

On April 23, 2021, President Biden signed into law two new bipartisan bills, the Ensuring Innovation Act and the Advancing Education on Biosimilars Act. The legislation is intended to lower prescription drug prices by supporting generics and biosimilars, cheaper drug alternatives with no clinically meaningful difference from brand-name therapeutics. The Ensuring Innovation Act supports generic and biosimilar drugs by further clarifying the technical qualifications for drug exclusivity. The law essentially codifies the FDA’s attempts to award drug exclusivity for drug products that qualify as a new chemical entity (“NCE”) based on the drug’s “active moiety” rather than its “active ingredient.” The result places a limit on when pharmaceutical companies can obtain exclusivity related to existing drugs by preventing them from making minor changes to existing drugs in order to obtain new, and perhaps undeserving, exclusivity and prevent generic alternatives from entering the marketplace. Energy and Commerce Committee Chairman Frank Pallone stated, “One way to help reduce drug costs is to provide early access to generic drugs. This legislation [. . .] will help to do that by ensuring that exclusivity, which can delay generics from entering the market, is only made avail to truly innovative products.” The law aims to provide much-needed clarity with regard to the drug-approval process by increasing the specificity of the language used in the exclusivity applications and ultimately reserve exclusivity for truly innovative developments, rather than serving as an unintended loophole for pharmaceutical companies to secure market protection and hinder competition. 

The other newly introduced law, the Advancing Education on Biosimilars Act provides increased federal government effort toward educating medical providers and the general public about biosimilar drugs. There are currently only 19 biosimilar drugs on the market in the United States, even though the BPCIA has been in effect since 2010. The purpose of the Advancing Education on Biosimilars Act is to increase awareness of biosimilars and improve confidence in the safety and efficacy of biosimilars which in turn would promote competition in the drug market to reduce overall drug costs.

The new legislation supports specificity in obtaining FDA exclusivity with the goal of limiting market protection to truly innovative products. The recent litigation surrounding biologics echoes the concern that companies have been able to get protection, via the patent system, for broad claims that discourage competitors from developing alternative products. With the recent court decisions and the action taken from FDA and the legislative side, the recent attention on the development of biologics will likely continue, with a renewed focus on safeguarding innovation and public accessibility.