Presentation to the Louisville Life Sciences Community - July 2010

1. Health Care Reform and Biologics
Pathway for the approval of “generic” versions
of genetically engineered medicines

2. Biologics Price Competition
and Innovation Act
nThe Patient Protection and Affordable Care Act
signed into law on March 23, 2010
– includes a subchapter called the Biologics Price
Competition and Innovation Act (“Biologics Act”).
nCreated a regulatory path for expedited approval
of “biosimilar” versions of pioneer biologics.
nRegulates the interaction between patent holders
and manufacturers of biosimilars.

3. Biologics Price Competition
and Innovation Act
nBiologics
– therapeutic drugs that are derived from biological
processes, i.e. a virus, serum, toxin, antitoxin, vaccine,
blood, blood component or derivative, allergenic
product or analogous product (PHSA, 42 USC § 262)
nBiosimilars
– refers to new versions of existing biologics
– often called “follow-on-biologics”

4. Biologics Price Competition
and Innovation Act
nFunction
– to expedite approval of new biologics sufficiently
similar to FDA approved biologics by allowing
biosimilars to use submitted data obtained from
predecessor biologics for the FDA approval process.
nGoal
– to increase competition and reduce the cost of
biologics as well as reformation of patent litigation
procedures as they relate to biologics.

5. Biologics Price Competition
and Innovation Act
nAct provisions
– standards for application and approval similar to those
for generic pharmaceuticals
– provides data and market exclusivity for the pioneer
biologic
– provides biosimilar exclusivity for the first approved
follow-on product
– establishes a scheme for handling patent disputes

6. Biologics Price Competition
and Innovation Act
n New requirements to deal with patented reference products
– notice to pioneer within 20 days of application
– strict timelines on disclosures similar to those used in patent
litigation rocket docket districts
– requires good faith negotiations
– goal is to force patent litigation soon after the application is filed to
avoid removing biosimilars from the market
– non-compliance by pioneer can limit damages to a reasonable
royalty or even loss of rights to enforce the patent
– non-compliance by follow-on gives pioneer right to file an action
outside of the 30 day window for filing an action after disclosures

7. Biologics Price Competition
and Innovation Act
n Concerns of the biotech industry
– difficult to recoup investment back in the time allotted by the
Act
– could lead to compression of recoupment period and increase in
the cost of biologics
– anticipated shift of investment income to more lucrative
investments
– potential antitrust issues related to anticipated creative patent
infringement action settlement agreements as well as the
appearance of collusion with biosimilar manufacturers

8. Biologics Price Competition
and Innovation Act
n Safety issues
– biosimilar products more likely to result in adverse health effects
due to impurities
– biosimilars may perform differently from pioneer biologics due to
high molecular complexity and the negative impact of nearly
undetectable levels of impurities
– the follow-on manufacturer does not have access to the
originator's molecular clone and original cell bank, nor to the
exact production processes

9. Biologics Price Competition
and Innovation Act
n Ultimate effect of the law?
– accelerates the availability of biosimilars
– will likely will increase the cost of biologic therapeutics
– may drive needed investment capital away from startups and
decelerate the discovery of pioneer biologics
– forces patent holders to initiate patent litigation during the
approval process
– increased need for competent patent and antitrust counseling
for both parties

10. James M. Francis, Esq.
Greenebaum Doll & McDonald, PLLC
Co-Chair, Life Sciences Team
Registered US Patent Attorney
101 S 5th St., Suite 3500
Louisville, KY 40202
502-587-3661 (Office)
502-540-2261 (Fax)
jmf@gdm.com