The debate over follow-on biologics legislation has largely focused on the length of data exclusivity that should be awarded to innovators. But provisions for resolving patent disputes between innovators and follow-on applicants are also a source of contention.

Sandoz in-house attorney Mark Bowditch is concerned about the data that follow-on applicants would have to share with brand-name companies and generic competitors under pending legislation.

"What horrifies me most" about the follow-on biologics amendments in the House and Senate health reform bills, Bowditch said, "is the absolute requirement in those two bills that the follow-on applicant has to turn over its entire application, as well as all information relating to the process and the materials used in the process."

Bowditch spoke at an American Conference Institute meeting on "Maximizing Pharmaceutical Patent Life Cycles," held in New York City Oct. 7. Panelists discussed the two follow-on biologics bills that have advanced furthest in Congress - the FOB bill attached to the Senate Health, Education, Labor and Pension Committee's health reform bill and the House health reform bill provisions first championed by Rep. Anna Eshoo, D-Calif. (¹ Also see "Follow-On Biologics: Defeat For Waxman, Win For Health Reform" - Pink Sheet, 3 August, 2009.).

Both bills specify procedures for the innovator and follow-on applicant to negotiate which patents would be subject to an infringement claim, set deadlines for the follow-on applicant to provide information to the innovator and for the innovator to pursue litigation and specify the terms under which an innovator can get a stay of FDA approval of the follow-on product.

In a sign of just how badly the follow-on biologics debate is going for the generic camp, neither bill offers a particularly attractive patent challenge mechanism for firms who wish to market a follow-on, but the Senate version seems more generic-friendly (see chart: " ² FOB Patent Disputes: Two Bills Set Procedures For Resolution ").

Follow-On Must Submit Competitive Data

Bowditch said follow-on applicants will have to submit competitive data regardless of whether they have any intention of challenging an innovator's patent. Applicants will have to turn over "the processes for making the vector into which you've inserted the DNA, which is then inserted into the cell which is then expressed."

He noted that the HELP bill and Eshoo amendment require the information to be kept confidential and only be used to determine if an infringement suit should be brought. The HELP bill also specifies which categories of people are allowed to see the information. But Bowditch said the bills do not restrict anyone involved in prosecuting patents related to the product from seeing the follow-on applicant's file. "It is very hard once that is in your brain to forget it" when you're prosecuting another patent, Bowditch said.

Bowditch also noted that the Eshoo amendment to the House bill allows third parties to identify patents that the follow-on applicant would infringe. "You have to keep in mind that one big class of third parties that might participate are your generic competitors," Bowditch stated. "All they have to do is ask and they get your file. So you're giving primo competitive intelligence to the whole gamut of your competitors."

Senate Bill More Favorable To FOBs

Michael Dougherty, of Cadwalader, Wickersham & Taft, gave an overview of the House and Senate measures at the ACI conference. He indicated there are features in the Senate bill that may be problematic for innovator companies.

"If you put the two bills together side by side, you'll see that the Senate bill is significantly more favorable to follow-on applicants than the House bill," he said. For example, he said the Senate bill allows the follow-on applicant to limit litigation to one patent, does not permit participation of third parties, provides severe penalties if the innovator fails to timely identify patents on time or file suit on time, and requires a final court judgment to obtain a stay of FDA approval.

By contrast, the House bill allows third parties to participate and assert patents to the same extent as the reference product sponsor, has no penalty for failure to identify patents or file suit, and enables innovator companies to obtain a stay of FDA approval upon getting a favorable judgment in district court.

Innovators are concerned about provisions in the Senate bill that would preclude enforcement of a patent that was not initially identified as being relevant.

Making a patent unenforceable is a huge sanction, Genzyme's Maggie Shafmaster said at the Biotechnology Industry Organization's IP Counsels Committee meeting in Washington, D.C. on Oct. 26.

The potential for that outcome is increased by confidentiality restrictions that only permit one in-house lawyer to have access to the FOB application.

That one person is going to need the scientific knowledge to be able to sift through the application and identify affected patents, and will have to do it within 60 days - not an easy task, Shafmaster suggested.

The House version of the patent challenge procedures is cleaner and simpler, brands argue.

At the recent Generic Pharmaceutical Association's policy conference, attorney Christine Siwik acknowledged some potential inelegance in the Senate bill, but said it is "kind of ... a middle ground between letting the generic call the shots and letting the brand call the shots" in patent litigation.

Siwik, a name partner at law firm Rakoczy Molino Mazzochi Siwik LLP, said that the House version, which does not set any limit on pre-market litigation, could create a "disincentive to pursue at least certain products" if they have a particularly dense patent thicket.

The House and Senate versions of the FOB pathway will need to be reconciled in conference, and generic firms clearly hope that the Senate becomes the base language for the merged legislation. But in both bills, all three of the major elements (brand exclusivity, abbreviated approval pathway, and patent challenge mechanism) seem tilted in the brands' favor, giving generic firms essentially no negotiating room, although the new version of the House bill does offer some potential leverage related to reimbursement coding (see ³ Also see ""Interchangeable" Biosimilars Get Same Medicare Code As Innovators In Bill" - Pink Sheet, 2 November, 2009.).

At present, though, the generic industry's best hope is that the conference committee members will be proportionately more pro-generic than the committees that initially approved the bills.

- Brenda Sandburg ( ⁴ b.sandburg@elsevier.com )

Follow-On Biologics' Other Pathway: Mechanisms To Resolve Patent Disputes Vary In Legislation

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