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Cheaper Clinical Trials: The Real Solution to the Biologic Industry's Gordian Knot

Published online by Cambridge University Press:  06 January 2021

Alana Montas
Alana Montas*
Affiliation:
Boston University School of Law
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Extract

Biologics include a wide range of products, such as vaccines, allergenics, gene therapies, and tissues, among others. Biologics are complex combinations of sugars, proteins, or nucleic acids that are produced by biotechnology methods or other advanced technology. Biologics often represent the only medical treatment for complex medical conditions such as: Hepatitis B; Measles, Mumps, Rubella and Varicella; and Tetravalent meningococcal conjugate among others. As a result, biologic sales are growing at twice the rate of chemical pharmaceuticals and are expected to exceed $158 billion by 2015. Various interest groups, including patients, insurers, and regulatory agencies, raised concerns about the financial impact that biologics may have on health care costs. Congress and the Food and Drug Administration (FDA) faced pressure to provide a solution to the soaring biologic costs, namely through a regulatory pathway for generic biologics (“follow-on biologics”) to manufacture cheaper products. Although a regulatory pathway for generic chemical pharmaceuticals (“generic”) exists under the Hatch-Waxman Act, a similar regulatory pathway for follow-on biologics did not exist prior to 2010.

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Article
Information
American Journal of Law & Medicine , Volume 37 , Issue 1 , March 2011 , pp. 172 - 193
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Copyright © American Society of Law, Medicine and Ethics and Boston University 2011

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References

1 See 42 U.S.C. § 262(i) (2000).

2 FDA, What are “Biologics” Questions and Answers, http://www.fda.gov/AboutFDA/CentersOffices/CBER/ucm133077.htm (last updated Apr. 30, 2009).

3 Id.; FDA, Biologic Product Shortages, http://www.fda.gov/BiologicsBloodVaccines/SafetyAvailability/Shortages/default.htm (last updated Aug. 30, 2010).

4 Throughout this note, the phrase “chemical pharmaceutical” refers to the class of chemically, rather than biologically, synthesized pharmaceutical products.

5 Biologics Market Worth $158bn by 2010, New Report, In-PharmaTechnologist.com (Aug. 19, 2010), http://www.in-pharmatechnologist.com/Industry-Drivers/Biologics-marketworth-158bn-by-2015-new-report. Some reports estimate the biologic market will be valued at $239 billion by 2015. The biologic market estimates are based on “the need for a more extensive drug pipeline, attractive targets against challenging diseases, a push to pursue biosimilars, and enabling manufacturing technologies that reduce the cost to produce profitable products.” Biologic Therapeutic Drugs: Technologies and Global Markets, BBC Research (Jan. 2011), available at http://www.reportlinker.com/p0363452/Biologic-Therapeutic-Drugs-Technologies-and-Global-Markets.html.

6 “Follow-on biologic” is the biologic industry term for a generic biologic. Wendy H. Schact & John R. Thomas, Cong. Research Serv., RL33901, Follow-on Biologics: Intellectual Property and Innovation Issues 3 (2008) [hereinafter CRS Report].

7 Drug Price Competition and Patent Term Restoration (Hatch-Waxman) Act, Pub. L. No. 98-417, 98 Stat. 1538 (1984) (codified at 21 U.S.C. § 355); see infra Part III.

8 See infra Part III.D.

9 See id.; Letter from Steven K. Galson, Dir., Ctr. for Drug Evaluation & Research, FDA, U.S. Dep't of Health & Human Servs., to Kathleen M. Sanzo, Stephan E. Lawton, & Stephen G. Juelsgaard 13 (May 30, 2006), available at http://www.fda.gov/ohrms/dockets/dockets/04P0231/04P-0231-pdn0001.pdf [hereinafter FDA Response to Citizen Petitions].

10 See FDA Response to Citizen Petitions, supra note 9, at 50-52.

11 Biologics Price Competition and Innovation Act, Pub. L. No. 111–148, § 7001, 124 Stat. 804 (2010).

12 42 U.S.C. § 262(i) (2000).

13 Gitter, Donna M., Innovators & Imitators: An Analysis of Proposed Legislation Implementing an Abbreviated Approval Pathway for Follow-On Biologics in the United States, 35 Fla. St. U. L. Rev. 555, 561 (2008).Google Scholar

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15 CRS Report, supra note 6, at 2.

16 See Letter from the Department for Professional Employees, AFL-CIO, to Chairman Edward M. Kennedy & Senator Mike Enzi, Senate Committee on Health, Education, Labor, and Pensions (June 5, 2007), available at http://dpeaflcio.org/pdf/DPE-mega-letter.pdf.

17 Grabowski, Henry et al., The Market for Follow-On Biologics: How Will It Evolve?, 25 Health Aff. 1291, 1291 (2006).CrossRefGoogle ScholarPubMed

18 Drug Price Competition and Patent Term Restoration (Hatch-Waxman) Act, Pub. L. No. 98-417, 98 Stat. 1538 (1984) (codified at 21 U.S.C. § 355); see infra Part III.

19 See FDA Response to Citizen Petitions, supra note 9, at 51-52.

20 See, Pathway for Biosimilars Act, H.R. 5629, 110th Cong. (2008); Biologics Price Competition and Innovation Act of 2007, S. 1695, 110th Cong. (2007); Patient Protection and Innovative Biologic Medicines Act of 2007, H.R. 1956, 110th Cong. (2007); Access to Life-Saving Medicine Act, H.R. 1038, 110th Cong. (2007).

21 Kelly, Jeremiah J. & David, Michael, No Longer “If,” but “When”: The Coming Abbreviated Approval Pathway for Follow-On Biologics, 64 Food & Drug L.J. 115, 117, 119 (2009).Google Scholar

22 See id. at 118.

23 See generally CRS Report, supra note 6 (discussing innovation and intellectual property issues for follow-on biologics).

24 See generally Biotechnology Industry Organization, BIO: A Follow-on Biologics Regime Without Strong Data Exclusivity Will Stifle the Development of New Medicines, available at http://www.bio.org/healthcare/follo-wonbkg/FOBSMarket_exclusixity.20070926.pdf (last visited Jan. 29, 2010) [hereinafter BIO Paper].

25 See Patient Protection and Affordable Care Act, Pub. L. No. 111–148 §§ 7001-7003 (2010).

26 See generally 35 U.S.C § 101 (2006) (“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”).

27 21 C.F.R. § 312.21 (2010).

28 21 U.S.C. § 355(a) (2006).

29 See Berndt, Ernst R. et al., Opportunities for Improving the Drug Development Process: Results from a Survey of Industry and the FDA, in 6 Innovation Policy and the Economy, 91, 96 (Jaffe, Adam B. et al. eds., 2006), available at http://www.nber.org/chapters/c0206.pdf.CrossRefGoogle Scholar

30 See 21 U.S.C. § 355.

31 See FDA Response to Citizen Petitions, supra note 9, at 43-46.

32 “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” U.S. Const. art. I, § 8, cl. 8. See also Graham v. John Deere Co., 383 U.S. 1, 8-9 (1966) (explaining Thomas Jefferson's opinions about monopolies and patents after the drafting of the Bill of Rights).

33 See Graham, 383 U.S. at 8-9.

34 35 U.S.C § 101 (2006).

35 Id.

36 Id. § 102 (“A person shall be entitled to a patent unless (a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or (c) he has abandoned the invention … .”).

37 Id. § 112.

38 Id. §§ 131, 151.

39 Id. § 154.

40 See Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1358-60 (Fed. Cir. 1984).

41 See 21 U.S.C. § 355(a) (2006).

42 U.S. Const. art. I, § 8, cl. 3.

43 21 U.S.C. § 371(a) (2000); 42 U.S.C. § 262 (2000).

44 See 21 U.S.C. § 355.

45 See 21 U.S.C. § 355(a).

46 See 42 U.S.C. § 262(a).

47 The term “drug” refers to both biologics and chemical pharmaceuticals.

48 See 21 U.S.C. § 355(b)(1); 42 U.S.C. § 262(k)(2).

49 Ninety percent of drugs that successfully complete safety and efficacy testing receive NDAs or BLAs. Berndt et al., supra note 29, at 10.

50 Naureen Mirza, Treating Rare Diseases: The Orphan Drug Act, in Public Health Management and Policy: An Online Textbook (11th ed. 2010), available at http://www.cwru.edu/med/epidbio/mphp439/Orphan_Drug.htm#_ftn3.

51 21 C.F.R. § 312.21 (2010).

52 For example:

Phase 1 includes the initial introduction of an investigational new drug into humans. Phase 1 studies are typically closely monitored and may be conducted in patients or normal volunteer subjects. These studies are designed to determine the metabolism and pharmacologic actions of the drug in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. During Phase 1, sufficient information about the drug's pharmacokinetics and pharmacological effects should be obtained to permit the design of well-controlled, scientifically valid, Phase 2 studies. The total number of subjects and patients included in Phase 1 studies varies with the drug, but is generally in the range of 20 to 80.

Id. § 312.21(a).

53 Specifically:

Phase 2 includes the controlled clinical studies conducted to evaluate the effectiveness of the drug for a particular indication or indications in patients with the disease or condition under study and to determine the common short-term side effects and risks associated with the drug. Phase 2 studies are typically well controlled, closely monitored, and conducted in a relatively small number of patients, usually involving no more than several hundred subjects.

Id. § 312.21(b).

54 See id.; see also Romano, Leah Voight & Jacobson, Peter D., Patient Access to Unapproved Therapies: The Leading Edge of Medicine, 2 J. Health & Life Sci. L. 45, 51 (2009).Google Scholar

55 In fact:

Phase 3 studies are expanded controlled and uncontrolled trials. They are performed after preliminary evidence suggesting effectiveness of the drug has been obtained, and are intended to gather the additional information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug and to provide an adequate basis for physician labeling. Phase 3 studies usually include from several hundred to several thousand subjects.

21 C.F.R. § 312.21(c).

56 Berndt et al., supra note 29, at 9-10.

57 Id. at 10.

58 See 21 U.S.C. § 355(j) (2006).

59 See id. § 355.

60 See Hearing Before the Subcomm. on Agric., Rural Dev., and Related Agencies Appropriations, 99th Cong. 271 (1986) [hereinafter HWA Hearing] (“We feel that this legislation will be helpful to mankind in the sense that it will bring forward drugs that could come now out of the patent protection to the generic market.”).

61 Id.

62 Id.

63 See 21 U.S.C. §§ 355(b), (j).

64 Id. § (b)(2)(A). These certifications categories are often referred to as paragraphs I, II, III, and IV certifications. See Mossinghoff, Gerald J., Overview of the Hatch-Waxman Act and Its Impact on the Drug Development Process, 54 Food & Drug L.J. 187, 189 (1999).Google ScholarPubMed

65 See 21 U.S.C. § 355(c)(3)(C).

66 Id.

67 See 21 U.S.C. § 355(j)(5)(B)(iv).

68 See HWA Hearing, supra note 60, at 271.

69 21 U.S.C. § 355(j)(2)(A).

70 21 C.F.R. § 314.92(a).

71 See Assessing the Impact of a Safe and Equitable Biosimilar Policy in the United States: Hearing Before the H. Subcomm. on Health, Comm. on Energy and Commerce, 110th Cong. 48 (2007) [hereinafter Hearing on Biotech Drugs] (statement of Janet Woodcock, Deputy Comm’r, Chief Medical Officer, Food and Drug Administration).

72 Id.

73 Id.

74 The FDA interprets the full report of investigation requirement under Hatch-Waxman Act § 355(b) to include “published data, selected pre-clinical and perhaps additional clinical studies.” 45 Fed. Reg. 82,052, 82,052 (Dec. 12, 1980).Google Scholar

75 Id.

76 See Gitter, supra note 13, at 560-61.

77 Additional exclusivity can equal one half of the time the patented drug was in development but not more than five years. 35 U.S.C. §§ 156(c), (g) (2000).

78 See id.

79 See 21 U.S.C. §§ 301-99 (2000); 42 U.S.C. § 262 (2000).

80 See 21 U.S.C. §§ 355(b), (j).

81 Hearing on Biotech Drugs, supra note 71, at 20.

82 See id. (“FDA has approved several follow-on proteins under 505(b)(2) including a recombinant, hyaluronidase and a recombinant version of human growth hormone.”)

83 Woodcock, Janet et al., The FDA's Assessment of Follow-On Protein Products: A Historical Perspective, 6 Nature Revs. Drug Discovery 437, 438 (2007).CrossRefGoogle ScholarPubMed

84 See Sandoz Inc. v. Leavitt, 427 F. Supp. 2d. 29, 32 (D.D.C. 2006); Our Company, SANDOZ, http://www.sandoz.com/about_us/our_company.shtml (last visited Apr. 1, 2010).

85 Gitter, supra note 13, at 577; see also FDA Response to Citizen Petitions, supra note 9, at 2-3.

86 Gitter, supra note 13, at 577.

87 See Sandoz, 427 F. Supp. 2d. at 32. FDA must come to a decision on a manufacturer's drug application within 180 days of the submission. 21 U.S.C. § 355(c).

88 See Sandoz, 427 F. Supp. 2d. at 41.

89 FDA Response to Citizen Petitions, supra note 9, at 2-3.

90 See id. at 14-18.

91 See id. at 52.

92 See id.

93 See id.; see also infra Part V.

94 See FDA Response to Citizen Petitions, supra note 9, at 47-48.

95 See id. at 51-52.

96 See FDA Response to Citizen Petitions, supra note 9, at 47-48; Kelly & David, supra note 21, at 136-39.

97 21 U.S.C. § 355(j).

98 See Dobson, Christopher M., Protein Folding and Disease: A View from the First Horizon Symposium, 2 Nature Revs. Drug Discovery 154 (2003).CrossRefGoogle ScholarPubMed

99 See CRS Report, supra note 6, at 8-9. Small molecule drugs represent over half a billion prescriptions that doctors issue. See Press Release, IMS, 2004 Year-End U.S. Prescription and Sales Information and Commentary (Feb. 14, 2005), available at http://www.imshealth.com/portal/site/imshealth/menuitem.a46c6d4df3db4b3d88f611019418c22a/?vgnextoid=003a1d3be7a29110VgnVCM10000071812ca2RCRD&vgnextfmt=default.follow-onbiologic.

100 Kelly & David, supra note 21, at 136-38.

101 See id.

102 See generally Lubert Stryer, Biochemistry 417-43 (4th ed. 1995). Amino acids are composed of carbon, hydrogen, oxygen, and nitrogen molecules that combine to form proteins. Id.

103 See generally id.

104 See generally id.

105 For example, sickle cell anemia occurs because a genetic mutation removes a string of amino acids from a protein. See, e.g., Ingram, Vernon M., Sickle-Cell Anemia Hemoglobin: The Molecular Biology of the First “Molecular Disease”—The Crucial Importance of Serendipity, 167 Genetics 1, 6 (2004).CrossRefGoogle ScholarPubMed

106 Id.

107 Hearing on Biotech Drugs, supra note 71, at 21.

108 See FDA Response to Citizen Petitions, supra note 9, at 47-48.

109 Id.

110 See Kelly & David, supra note 21, at 139.

111 See generally Pub. L. No. 111–148 § 7001, 124 Stat. 119 (2010).

112 BIO Paper, supra note 24; see also infra Part VI.

113 BIO Paper, supra note 24, at 1.

114 Patient Protection and Affordable Care Act § 7002 (k)(6)-(7).

115 Id.; see also BIO Paper, supra note 24, at 4.

116 See Hearing on Biotech Drugs, supra note 71, at 84.

117 Wasson, Andrew, Taking Biologics for Granted? Takings, Trade Secrets, and Off-Patent Biological Products, Duke L. & Tech. Rev. 0004, ¶ 12 (2005).Google Scholar

118 U.S. Const. amend. V.

119 Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1000-01 (1984). The Monsanto Court also questioned whether the statute adequately provided for just compensation. Id. at 1017. The Court noted that the Tucker Act issues jurisdiction to the United States Claims Court over any constitutional claims against the United States. Id. at 1016-17; 28 U.S.C. § 1491 (2006). The Court determined that a statute permits the Tucker Act remedy so long as Congress has not specifically withheld the Tucker Act grant of jurisdiction to the Court of Claims. Monsanto, 467 U.S. at 1017. Therefore, pending legislation would fulfill element four of the Monsanto Court analysis.

120 See Wasson, supra note 117, at 5-6.

121 21 C.F.R. § 20.61(a) (2004).

122 See id.; see also Monsanto, 467 U.S. at 1012 (holding that “despite their intangible nature, trade secrets have many of the characteristics of more traditional forms of property”).

123 Monsanto, 467 U.S. at 1002.

124 Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978).

125 See Wasson, supra note 117, at 6-7.

126 Monsanto, 467 U.S. at 1007.

127 See Wasson, supra note 117, at 9.

128 21 U.S.C. § 331(j) (2000).

129 Id.

130 Id.

131 Monsanto, 467 U.S. at 1014-15.

132 Id. at 1015.

133 Id.

134 See generally Pub. L. No. 111–148, § 7001, 124 Stat. 119, 804 (2010) (“It is the sense of the Senate that a biosimilars pathway balancing innovation and consumer interests should be established.”).

135 See 7 U.S.C. § 136a(c)(2) (1976).

136 See generally Hearing on Biotech Drugs, supra note 71, at 21 (statement of Deputy Comm’r Janet Woodcock).

137 Cf. id. (“Using today's science, it would not be possible by using analytical and functional tests alone to be sure that a complex follow-on product was very similar to an innovator product.”).

138 Manheim, Bruce S. Jr., et al., ‘Follow-On Biologics’: Ensuring Continued Innovation in The Biotechnology Industry, 25 Health Aff. no 2, 2006 at 394, 397.CrossRefGoogle ScholarPubMed

139 Id.

140 See, e.g., H.R. 5629, 110th Cong. (2008); S. 1695, 110th Cong. (2007); H.R. 1956, 110th Cong. (2007); H.R. 1038, 110th Cong. (2007); see also supra Parts III-IV.

141 Sahr, Robert N., The Biologics Price Competition and Innovation Act: Innovation Must Come Before Price Competition, 2009 B.C. Intell. Prop. & Tech. F. 070201, at *42 (2009).Google Scholar

142 Mirza, supra note 50.

143 Id. Roughly 70% of pharmaceuticals do not gain FDA approval after clinical trials. Grabowski, Henry G., Data Exclusivity for New Biological Entities (Duke Univ. Dep't of Econ., Working Paper, 2007).Google Scholar

144 See BIO Paper, supra note 24, at 1.

145 Sahr, supra note 141, at *42.

146 Patient Protection and Affordable Care Act, Pub. L. No. 111–148, § 7002, 124 Stat. 119, 807 (2010).

147 See id. at 806.

148 Id.

149 Id.

150 Id.

151 Id.

152 Id. at 807.

153 Id. at 806.

154 Id. at 805.

155 Id.

156 Id. Analytical studies are laboratory tests that review the molecular structure of the biologic. See id. Animal studies are laboratory tests that show safety and “potential” for efficacy for the biologic. See id.

157 Id.

158 See id.

159 Sahr, supra note 141, at *47-48.

160 Grabowski, et al., Entry & Competition in Generic Biologics, 28 Managerial & Decision Econ. 439, 447 (2007).CrossRefGoogle Scholar

161 Id.

162 Grabowski, supra note 17, at 1296.

163 Kelly, supra note 21, at 147.

164 See supra Parts III, IV.

165 Mirza, supra note 49, ¶ 4; see also supra Part V.

166 See Hearing on Biotech Drugs, supra note 70, at 21.

167 Robinson, Laura J., Analysis of Recent Proposals to Reconfigure Hatch-Waxman, 11 J. Intell. Prop. L. 47, 47 (2003).Google Scholar

168 See BIO Paper, supra note 24, at 1.

169 Sahr, supra note 141, at 42.

170 Reichman, Jerome H., Rethinking the Role of Clinical Trial Data in International Intellectual Property Law: The Case for a Public Goods Approach, 13 Marquette Intell. Prop. L. Rev. 1, 29-30 (2009).Google ScholarPubMed

171 See Manheim, supra note 138, at 397; see also supra Part V.

172 Manheim, supra note 138, at 397.

173 See Wasson, supra note 117, at 6.

174 Reichman, supra note 170, at 29.

175 Id. at 7.

176 Id.

177 Id.

178 Id.

179 Federal Insecticide, Fungicide and Rotenticide Act, 7 U.S.C. §§ 136-136(y) (2004); see also Reichman, supra note 170, at 30.

180 Orphan Drug Act, Pub. L. No. 97-414, 96 Stat. 2049 (1983).

181 See Flynn, John J., The Orphan Drug Act: An Unconstitutional Exercise of the Patent Power, 1992 Utah L. Rev. 389, 389-90 (1992).Google Scholar

182 See Mirza, supra note 50, at 1.

183 Id.

184 Id.

185 21 U.S.C. § 360ee (1988).

186 26 U.S.C. § 28 (1988).

187 21 U.S.C. § 360cc.

188 Amendment to Provisions of the Orphan Drug Act; Availability of Revised Interim Guidelines, 50 Fed. Reg. 19,583 (May 1, 1985).Google Scholar

189 Flynn, supra note 181, at 390-91.

190 Id.

191 See Mirza, supra note 50, at 5.

192 Orphan Drug Act, Pub. L. No. 97-414, § 5(b)(2), 96 Stat. 2049 (1983), amended by Health Promotion and Disease Prevention Amendments of 1984, Pub. L. No. 98-551, 98 Stat. 2815 (codified at 21 U.S.C. § 360ee(b)(2)).

193 21 U.S.C. § 360bb(a)(1)(c) (1988), codified as amended by Orphan Drug Amendments of 1985, Pub. L. No. 99-91, § 3(a)(2)(A), 99 Stat. 387.

194 See Mirza, supra note 50, at 6.

195 Id.

196 Id.

197 Id.

198 Id.

199 Reichman, supra note 170, at 59.

200 See 21 C.F.R. § 312 (2010).

201 52 Fed. Reg. 19,466, 19,476 (May 22, 1987) (to be codified at 21 C.F.R. pt. 312).

202 Id.

203 See Romano & Jacobson, supra note 54, at 55.

204 Id.

205 Id.

206 Id.

207 Id.

208 Berndt et al., supra note 29, at 9.

209 Manheim, Jr. et al., supra note 138, at 402-03.

210 Id.

211 Id. at 403.

212 See U.S. Const. art. I, § 8, cl. 8.