Value of Exclusivity Leads to FDA Challenges, Debate
By Mari Serebrov
With exclusivity assuming a bigger role in the life cycle of a drug, Gilead Sciences Inc. wants more for its Stribild HIV drug than the three-year exclusivity the FDA typically grants to new fixed-dose combination (FDC) drugs.
In a citizen petition filed this month, Gilead made a case for five years of exclusivity, noting that two of the four drugs in the product, elvitegravir and cobicistat, contain new active moieties, which should qualify the FDC for the longer exclusivity.
The petition challenged how the FDA has historically interpreted provisions of the Federal Food, Drug and Cosmetic Act to deny the longer exclusivity when any component of an FDC has already been approved.
That interpretation "pre-dates the significant advances in medicine in which FDC therapies have been recognized as essential for the treatment of HIV/AIDS and other critical diseases," Gilead said in the petition, adding that a new interpretation "is necessary to keep pace with advances in medical science."
Gilead's challenge comes as exclusivity is assuming a more prominent role globally in protecting drugmakers' intellectual property. For instance, when it comes to limiting competition from biosimilars, market and data exclusivity can be just as important, if not more so, as a patent, Mary Webster, a patent attorney with BakerHostetler, said in an interview for the newest BioWorld Data report, The Biosimilars Game: A Scorecard for Opportunities, Threats and Critical Strategies.
That's particularly true in the European Union, where a combined 10 years of market and data exclusivity may have more value than a patent, she said. Since biologics are patented early in their development, much of their patent protection may be gone before they hit the market.
In the U.S., originator biologics get 12 years of data exclusivity – the longest in the world. However, several members of Congress, with support from the president, have tried to shorten that exclusivity to increase competition and lower prices.
The length of biologic exclusivity is just one exclusivity-related policy issue that could come up in the 113th Congress, as what has been mostly an academic debate on the ethics of patenting drugs, especially genetic-based therapies and diagnostics, could gain ground as a legislative issue.
Exclusivity has been seen as a way to supplement patent protection in the U.S., the Congressional Research Service (CRS) said in a newly released report, "The Role of Patents and Regulatory Exclusivities in Pharmaceutical Innovation." But that's changing, the report noted, and exclusivity could soon surpass patents as the primary protection for intellectual property for some FDA-regulated products.
"Exclusivities provide Congress with a more adaptable option for stimulating specific sorts of hoped-for private activity than do patents," according to the CRS, which suggested replacing patents with exclusivity in some cases.
Such a switch would have trade-offs policymakers may want to consider, CRS said, including the expense and uncertainty of patent enforcement proceedings, and the impact on drug innovation, cost and availability.
Another issue is whether the Patent and Trademark Office or the FDA, which grants exclusivities, is the better agency for awarding proprietary rights for innovative therapies.
'Anti-Amgen' Bill Introduced
Reacting to a media report that the recently passed fiscal cliff bill included a "backroom deal" for Amgen Inc., Rep. Peter Welch (D-Vt.) introduced legislation Wednesday to repeal what he called a "$500 million giveaway to Amgen."
The end-of-the-year fiscal cliff bill, which gave Congress two more months to try to avert a budget sequester, exempted oral-only end-stage renal disease (ESRD) drugs for two more years from Medicare's ESRD bundled payment system. Amgen's Sensipar (cinacalcet) is among the drugs that would be exempted. Currently, the drugs are covered under Medicare Part D. (See BioWorld Today, Jan. 17, 2013.)
Quoting the media report, Welch claimed the carve-out would cost Medicare nearly $500 million over the next two years.
The temporary exemption is part of Section 632 of the fiscal cliff law. One of 28 Medicare and other health extensions in the law, Section 632 revises Medicare's bundled ESRD payment system to reflect findings from a 2011 Government Accountability Office (GAO) report.
In that report, the GAO outlined a potential adverse impact on patients if the oral-only drugs were included in the Medicare Prospective Payment System (PPS) in 2014, as initially planned.
Part of the problem is that the Centers for Medicare & Medicaid Services (CMS) has insufficient data to determine the utilization and payment rate for the oral-only drugs. "Adding these products into the PPS before CMS has reliable data and quality metrics in place could impact patients' quality of care," Amgen said.
Another problem with including the pills in a bundled payment to dialysis centers is that many of the centers don't meet state pharmacy licensure requirements, so they can't legally dispense the outpatient drugs, the GAO noted.
Noting the complexities of adding the oral drugs to a bundled payment, Amgen said the premature inclusion of the medications in the PPS "before the CMS and healthcare providers are able to administer them could result in disruptions in care and impact the availability of vital medicines for this highly vulnerable patient population."
Altogether, nearly 100 exemptions, tax credits and special provisions were passed as amendments to the fiscal cliff bill.
IPAB on the Chopping Block Again
For the second time in as many years, the Independent Payment Advisory Board (IPAB), created under the 2010 Affordable Care Act, is facing the congressional chopping block.
Rep. Phil Roe (R-TN) reintroduced the Protecting Seniors' Access to Medicare Act, H.R. 351, Wednesday with the sole intent of repealing the controversial board, which was set up to dictate Medicare cuts if Congress fails to act. The bill has 83 co-sponsors from both sides of the aisle.
"We all agree that the rate of growth in costs under Medicare should and can be contained and that the current payment system is flawed and must be replaced," said Rep. Allyson Schwartz (D-Pa.), the lead Democrat co-sponsor. However, she added, "history has taught us that blunt instruments aimed at simply reducing costs are not the best solution."
The first incarnation of the bill passed the House last year with bipartisan support. But it failed to get traction in the Democrat-controlled Senate. (See BioWorld Today, March 26, 2012.)
Editor's note: For a copy of BioWorld's new biosimilars report, please contact the BioWorld Data account managers for exclusive introductory pricing at (800) 477-6307.
Suite: 1100 | Atlanta, Georgia 30346, USA
Outside of the US
In the U.S. and Canada: +1-800-336-4474
Outside the U.S.: +44-203-684-1796
Hours: Monday - Friday, 8:00am - 6:00 pm EST
Sign up for Highlights FREE e-mail newsletter