WASHINGTON – The Congressional Research Service (CRS) has a few words for those hoping to use the new biosimilar pathway as a shortcut to cash in quickly on the high price of biologics. Be patient. And watch out. This new road could be under construction for a long time.

In a recent report on follow-on biologics law and intellectual property rights, the CRS predicted that scientific and legal issues could be road hazards that will likely keep the FDA and the courts busy for many years.

Likewise, it also may take some time for the biologics industry "to develop a working familiarity and appropriate strategies within the BPCIA [Biologics Price Competition and Innovation Act] framework," the report said. "As a result, marketplace availability of significant numbers of follow-on biologics may not be a short-term proposition."

Some of the twists and turns on the biosimilar path may work against the makers of innovator biologics. If the brand firms miss the tight statutory deadlines laid out by the BPCIA, they could be hit with substantial patent enforcement penalties, according to the report.

The BPCIA, unlike the Hatch-Waxman Act for traditional generics, does not tightly link FDA approval with patent rights. Thus, "brand-name firms must wholly rely upon the judiciary to stay the release of follow-on biologics into the marketplace," the CRS said.

However, other obstacles may work to the advantage of the innovators, the CRS found. For instance, the lack of a biologic equivalent to the FDA's Orange Book, which lists relevant patents for small-molecule drugs, may place biosimilar applicants at a disadvantage. Without that resource, they can't readily assess the patent positions of the reference biologic. As for those biosimilars that make it to market, they'll have a tough road. The CRS noted that in Europe, where biosimilars have been approved since mid-2003, follow-ons have barely penetrated the market, due to safety concerns, brand loyalty and competitive pricing strategies by innovator companies.

The report illustrated its point with Omnitrope (somatropin [rDNA origin], Sandoz GmbH), which has claimed only 1 percent of the $831 million European human growth hormone market. Its slow uptake is attributed to doctors' unwillingness to change products, issues with delivery mechanisms and prices that are "only" 20 percent to 25 percent below that of the innovator. (See BioWorld Today, July 26, 2011.)

Since the biosimilar pathway is still under construction, CRS predicted some considerable changes could be in the works – and not just for biosimilars. Reading between the lines of the BPCIA, the CRS said the patent dispute resolution system included in the act suggested congressional dissatisfaction with the Hatch-Waxman Act, which sparked a seemingly endless round of patent suits and settlements. It also suggested a desire to try new approaches. (See BioWorld Today, June 29, 2011.)

The CRS' conclusion? "Individuals interested in pharmaceutical patent law would be wise to remain vigilant concerning developments to the new law of follow-on biologics in coming years," it said.

Bill Would Speed Access to Orphan Drugs

One of the final pieces of legislation introduced in Congress last year would speed approval of treatments for ultra-rare diseases. In introducing the Unlocking Lifesaving Treatments for Rare-Diseases Act, or ULTRA, Rep. Cliff Stearns (R-Fla.) said that the FDA's approval rate for drugs has slowed immensely. His bill, H.R. 3737, is intended to remedy that by allowing surrogate endpoints to be used in the accelerated approval of fast-track drugs aimed at ultra-rare diseases.

The bill also calls for guidance, within one year, on qualifying surrogate endpoints without supporting clinical data. It stipulates that in qualifying a surrogate endpoint, the FDA must balance other considerations, such as:

the unmet need the drug is intended to address, and the adverse effects the disease is likely to have on the quality or length of life;

the very low likelihood that supportive data would exist or that studies could be completed to support the surrogate, given the small size of the patient population and other barriers;

the full scope of available scientific information.

Stearns noted that at a hearing he held last year, he "found that the FDA has not used all the tools available to them to help bring new drugs to market to treat rare and ultra-rare diseases."

H.R. 3737 has been referred to the House Energy & Commerce Committee.

OIG Seeks Anti-Kickback Safe Harbor Ideas

While the Department of Justice is cracking down on drug companies that violate the federal anti-kickback law, the Department of Health and Human Services Office of Inspector General (OIG) is taking suggestions on safe harbors from that law. "Since the statute on its face is so broad, concern has been expressed for many years that some relatively innocuous commercial arrangements may be subject to criminal prosecution or administrative sanction," the OIG said in a Federal Register notice Tuesday.

In response to that concern, OIG is annually tasked with ensuring that safe harbor provisions appropriately limit the reach of the statute. Recommendations for developing new or modified safe harbor regulations should be submitted to the public docket OIG-120-N by Feb. 27.