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New U.S. Law Establishes Long Awaited Abbreviated Approval Pathway for Biosimilars

On March 21, 2010, the U.S. Congress passed landmark healthcare reform legislation, known as the "Patient Protection and Affordable Care Act," that will dramatically reshape the biopharmaceutical industry. This historic piece of legislation contains provisions that establish, for the first time ever, an abbreviated regulatory approval pathway for generic versions of biological medicines (i.e., biosimilars) in the United States. The bill was signed into law by President Obama on March 23, 2010.

The progress of the biosimilars legislation in Congress has been closely watched by innovator biopharmaceutical companies, as well as generic drug manufacturers and big pharma. The biosimilars provisions avoided most of the contentious debate that was focused on parts of the bill related to health insurance coverage. Congress also passed H.R. 4872, the Reconciliation bill that made certain amendments to the Senate version, though the bill's provisions establishing the approval pathway for biosimilars remained untouched.   Here, we explain the most important features of the new biosimilars legislation.
 
Biosimilarity vs. Interchangeability
 
The "Drug Price Competition and Patent Term Restoration Act of 1984," also known as "The Hatch-Waxman Act," established an abbreviated regulatory process for generic drug products. Under the Hatch-Waxman Act, applicants for an Abbreviated New Drug Application ("ANDA") must show the bioequivalence of a generic drug, but do not need to conduct a full panel of clinical trials to demonstrate safety and efficacy of the drug. Generic drugs are not evaluated or differentiated based on their class or type and, once approved, can be substituted for brand name drugs automatically. For generic biological products, however, the requirements established by the Patient Protection and Affordable Care Act will be quite different. For example, the new legislation establishes two distinct categories of biosimilar products: 1) biological products that are "biosimilar" to a reference biological product, and 2) biological products that are "interchangeable" with the reference product. 
 
A "biosimilar" product is defined as a biological product that "is highly similar to the reference product notwithstanding minor differences in clinically inactive components" and for which "there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity and potency of the product."  A biological product is "interchangeable" with a reference biological product if (i) it meets the criteria for being biosimilar to the reference product, and (ii) it can be expected to produce the same clinical result as the reference product in any given patient, and (iii) the risk in terms of safety or diminished efficacy in alternating or switching between use of the biological and reference product is not greater than the risk of using the reference product without such alteration or switch. 
 
FDA Guidance Documents
 
The legislation makes clear that the FDA will play a central role in defining the specific criteria needed to demonstrate biosimilarity for a given class of biological. In deference to the FDA's expertise in this area, the legislation specifically states that the FDA can issue guidance documents with respect to the approval of a biosimilar product.  The guidance can be general or specific in nature, and the public must be provided with an opportunity to comment.  The guidance document can be product class-specific (e.g., specific to monoclonal antibodies). Nevertheless, the failure of the FDA to issue such a document cannot itself serve to delay consideration of a biosimilar application.  
 
While the FDA is not obligated to issue such a document, if it does, it must contain the criteria that the FDA will use to determine whether a biological product is highly similar to, or interchangeable with, a reference product.  Also, the legislation permits the FDA to indicate in a guidance document that "the science and experience, as of the date of such guidance, with respect to a product or product class (not including any recombinant protein) does not allow approval of an application for a license as provided under this section for such product or product class."  Importantly, in a recent statement by the FDA to Congress, the FDA indicated that the science and experience of the agency is not yet to the point where it can approve any biological product as interchangeable with a reference product.
 
Contents of the Biosimilar Application - Clinical Studies
 
An application for a biosimilar product must demonstrate that the biological product is biosimilar to the reference product based on data derived from 1) analytical studies, 2) animal studies, and 3) "a clinical study or studies (including the assessment of immunogenicity and pharmacokinetics/pharmacodynamics)." The biosimilar applicant must also show that the biological product uses the same mechanism(s) of action as the reference product (to the extent such mechanisms are known) as well as the same route of administration, dosage form and strength. The condition(s) of use in the labeling for the biosimilar product must have been previously approved for the reference product. Finally, the facility used to make the biological product must meet standards for safety, purity and potency. The legislation, however, allows the FDA discretion to determine that any of these requirements, including the requirement for clinical studies, are unnecessary for a particular application. 
 
The legislation also requires the FDA to approve the application for a biosimilar if the applicant shows that the biological product is either biosimilar or interchangeable with the reference product. 
 
Differences Between "Biosimilar" and "Interchangeable" Products
 
There are a number of important distinctions between biosimilar products and interchangeable products.  First, only biosimilar products that meet the heightened interchangeability criteria are eligible for market exclusivity.  The first applicant to meet the lower threshold of biosimilarity is not entitled to any market exclusivity. Moreover, the market exclusivity provisions only keep other interchangeable products off of the market for the exclusivity period (e.g., up to one year after the first commercial marketing of the first interchangeable biosimilar product to be approved for a particular reference product).  However, other biosimilar products can be approved during that period.  Second, only interchangeable biosimilars can be substituted for the reference product without the intervention of the health care provider who prescribed the reference product.  Finally, biosimilar products are deemed to contain a new active ingredient, while interchangeable products are not.
 
Data Exclusivity
 
One of the most hotly contested provisions of the biosimilars legislation was the data exclusivity provision. The legislation provides the reference product sponsor with 12 years of data exclusivity, i.e., no application for any biosimilar product can be approved using the reference product sponsor's data prior to the date that is 12 years after the reference product was first licensed.  The legislation also provides that no biosimilar application can be submitted to the FDA until four years after the reference product was licensed.  The 12 years of exclusivity is viewed as a victory for developers of new biological products, as President Obama had sought a period roughly half of that, and the Federal Trade Commission had recommended that no data exclusivity period at all was necessary for biosimilars. By comparison, there is a five-year data exclusivity period for a new chemical entity under the Hatch-Waxman Act.
 
Patent Dispute Procedure
 
The biosimilars legislation contains extensive provisions for dealing with patent disputes between the reference product sponsor and the biosimilar applicant.  In particular, a biosimilar applicant is required to provide to the reference product sponsor's in-house and designated outside counsel, as well as to a designated representative of the owner of any relevant patent exclusively licensed to the reference product sponsor, a copy of the biosimilar application, including information regarding how the biosimilar product is manufactured.  This information will remain the property of the applicant and must be kept confidential by the reference product sponsor.  The purpose of this disclosure is to provide the reference product sponsor with the information needed to ascertain if the biosimilar product would infringe any patents owned or exclusively licensed by the reference product sponsor. 
 
After receiving the application, the reference product sponsor must then provide the biosimilar applicant with a list of patents owned or exclusively licensed by the reference product sponsor that it reasonably believes would be infringed if the biosimilar product is made, used, sold, offered for sale, or imported in the U.S. without a license from the reference product sponsor.  The reference product sponsor must also identify any patents it is willing to license. 
 
The biosimilar applicant then has the opportunity (but not the obligation) to provide the sponsor with its own list of patents for which it believes that the reference sponsor could reasonably claim infringement.  At a minimum, the applicant must provide the sponsor with a detailed, claim-by-claim statement as to the patents in the sponsor's list that the applicant considers invalid and/or not infringed, or a statement that the applicant is not going to market before the sponsor's patents expire.  In response, the reference product sponsor must provide a detailed statement why it believes that the patents are valid and infringed. 
 
After exchanging these papers, the parties would be required to negotiate to determine the patents to be litigated.  If no agreement is reached, the biosimilar applicant will identify the number of sponsor patents it believes should be litigated.  Simultaneously, the sponsor will identify the patents it believes should be litigated.  Importantly, the legislation requires that the number of sponsor patents cannot be greater than the number of patents the applicant identifies.  The sponsor must then bring an infringement action at this point.  If a new patent issues to or is exclusively licensed by the sponsor after the initial patent lists are exchanged, the sponsor is obligated to update the list and the applicant is required to provide the statement mentioned above.  If a patent should have been but is not included in the list, the legislation provides that patent owner will forfeit the right to bring an action against the biosimilar product on that patent. 
 
Notice of Commercial Marketing
 
The legislation requires the biosimilar applicant to provide the reference product sponsor with notice of commercial marketing at least 180 days before the first commercial marketing of the biosimilar.  Neither party can initiate a declaratory judgment action before the notice of commercial marketing is provided.
 
Other Provisions
 
The legislation will phase out the existing 505(b) approval pathway for biologics over time. In addition, it provides for an additional period of market exclusivity for pediatric uses of biosimilars.  
 
Summary
 
The long awaited abbreviated approval pathway for biosimilar products is now a reality in the U.S. and will have major implications for both innovators and manufacturers of biosimilar products. The legislative and regulatory approval scheme for approving biosimilar products will be very different from the existing Hatch-Waxman scheme for generic drugs. The new legislation will have an important impact on patenting strategies for biopharmaceutical products that will require many new and different considerations than those developed for generic drugs over the last 25 years.  
© 2019 Sterne Kessler

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About this Author

Tracy L. Muller, Patent Portfolio Attorney, Sterne Kessler, law firm
Of Counsel

Ms. Muller counsels domestic and international biotechnology clients on the strategic preparation, prosecution, and management of complex worldwide patent portfolios.  Ms. Muller also specializes in advising clients on intricate legal issues relating to freedom-to-operate, patentability, and validity and infringement analyses.  Ms. Muller's practice focuses on the technology areas of therapeutic antibodies, immunology, diagnostics, molecular and cellular biology, and biologic drugs. 

Ms. Muller is the Treasurer of the Women's Bar Association of the District of Columbia (WBA).  Prior...

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Timothy J. Shea, Jr., Ph.D., Biotech Patent Attorney, Sterne Kessler, Law firm
Director

Mr. Shea is a director in the Biotechnology/Chemical Group where he specializes in advising biotech and chemical companies and research institutions on complex legal issues relating to the protection, enforcement and transfer of their intellectual property.  He practices primarily in the fields of immunology, molecular biology, genomics, proteomics, medical diagnostics, biotherapeutics, and drug delivery.  He has extensive experience advising clients on the creation and management of strategic patent portfolios, freedom-to-operate and patentability issues, complex prosecution strategies, validity and infringement issues, and due diligence investigations in connection with acquisitions and investments. 

A significant portion of Mr. Shea's practice involves counseling emerging companies on strategies for creating, protecting and leveraging their IP assets to grow their businesses. He frequently advises clients on all aspects of technology transfer, including the drafting and negotiation of patent and technology license agreements, material transfer agreements, sponsored research agreements, confidentiality and nondisclosure agreements, joint developments agreements, etc.  Mr.  Shea is currently Vice-Chair of the Life Sciences Committee for Licensing Executives Society International, an international network of IP licensing professionals.

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