Linking patent disputes to regulatory approval of follow-on biologics would provide no competitive benefit for patients and could discourage innovation, contends Robert Pelzer, head of Novartis' North American operations.

Pre-approval litigation is "contrary to the basic principles of competition and access," Pelzer says in a letter offering Novartis' comments to the Federal Trade Commission, which is conducting a formal review of the effects of biosimilars on competition (¹ Also see "Follow-On Biologics Study By FTC Aims “To Strike The Right Balance”" - Pink Sheet, 27 August, 2008.).

The development of a pathway for follow-on biologics - which will shift into high gear on Capitol Hill next year - gives all the stakeholders a chance to reconsider the mechanisms that have been used under the Hatch-Waxman system for small molecule drugs.

That model allows litigation to proceed concurrently with litigation and includes an automatic 30-month stay of approval. All sides have experienced complications and uncertainties they would like to design around in a new system.

Novartis is one of the few firms with robust brand and generic segments, so the company's comments presumably reflect internal calculations on the impact that various approval systems would have on both the brand and generic business models (² [A#00700060021], p. 33).

In lieu of linking patent dispute resolution to approval, Novartis recommends that upon approval of an FOB, the sponsor must notify the reference product BLA holder and delay market entry for 45 to 90 days. This would give the reference product sponsor the opportunity "to pursue its traditional patent remedies in court if it elects to do so."

A balance not reflected in legislation

Novartis' idea is not reflected in any of the current legislation being offered in Congress. A provision of H.R. 5629, biosimilars legislation introduced by Reps. Anna Eshoo, D-Calif., and Joe Barton, R-Texas, would require FOB applicants to supply the reference product sponsor with a detailed description of the proposed biosimilar product, its method of manufacture, and materials used in making the product (³ Also see "Biogenerics Bill From Reps. Eshoo And Barton “Expects” Limits On Substitution" - Pink Sheet, 25 February, 2008., p. 3).

A proposal to require FOB applicants to disclose trade secrets and confidential information to innovator firms is rejected by Novartis. A disclosure requirement "will discourage many qualified FOB applicants from developing competing products," Pelzer states. Novartis favors legislation that makes a "straightforward grant of authority to FDA to review and approve safe and effective interchangeable FOBs."

Under this approach, the "constitutionally-protected patent rights that have enabled the biotechnology industry to grow and succeed" would continue to function, the firm says.

"FOBs would follow exactly the same patent-litigation course as any other FDA-approved biologic - with the potential for litigation by another BLA holder or a third-party patent holder."

Novartis comments contrast with those from both the Biotechnology Industry Organization and the Generic Pharmaceutical Association.

BIO looks out for small FOB market

BIO favors litigating patent disputes concurrently with the biosimilars review process and prior to launch. Allowing biosimilars to be marketed while patent disputes are pending would be confusing for physicians, patients, payers and other market participants and lead to great business uncertainty for both brand and biosimilar companies, BIO contends in its comments to FTC.

Due to the large investment needed to develop a biosimilar, only the financially strongest companies could risk losing that investment by waiting until after approval to resolve patent suits, BIO says.

An "FOB framework that routinely envisions patent resolution after FOB market entry would selectively disadvantage smaller, financially weaker FOB applicants and operate to create FOB markets that are dominated by only a few, financially strong players and FOB products."

To avoid a high litigation burden, BIO suggests that an FOB framework "create incentives for timely patent dispute resolution within the innovator's statutory exclusivity period, to proceed in parallel with a FOB approval process." Approval of the FOB should be effective on the date of the reference product's patent expiration or expiration of the statutory exclusivity period, the group suggests.

GPhA has a mixed view on concurrent patent resolution and application review. The association supports H.R. 1038, introduced by Rep. Henry Waxman, D-Calif. "It permits only those patent disputes that would delay generic marketing to be litigated concurrently with FDA review of the generic application." Other patent disputes should be litigated post-launch, GPhA says.

The group opposes H.R. 5629 provisions that allow innovator companies and third parties "to litigate virtually any patent concurrently with FDA review." The result would be to "tie the generic up in patent litigation for years and years."

This approach "would be wholly unworkable and lead to significant delays in generic marketing." Timely patent dispute resolution and prevention of frivolous suits "is best achieved via a voluntary system initiated by the generic company," GPhA concludes.

Exclusivity for the first patent challenger...

FTC has indicated a concern that awarding a period of marketing exclusivity to the first approved FOB can be abused, as has occurred under the Hatch-Waxman system for generic drugs. Commissioner Pamela Jones Harbour recently suggested the need to provide biogeneric exclusivity would depend on the degree of interchangeability that is determined for follow-ons.

If brand and biosimilars are not considered interchangeable, and therefore substitution is not allowed, "the first follow-on applicant may have less to lose via subsequent entry, so an exclusivity period may not be necessary," she noted.

GPhA's comments to FTC counter that a marketing exclusivity period for first biosimilars "is the only provision that provides the incentive needed for generic companies to undertake the considerable risk that comes with navigating intellectual property for the brand product and patent."

Firms will be very reluctant to invest resources in follow-on biologics "if there is no possibility for recouping the costs that come with patent challenges," the association argues.

In contrast, BIO suggests that providing exclusivity as an incentive for the first generic to take on the cost of patent litigation "has created an unnecessarily litigious environment by placing a high premium on bringing the earliest possible patent challenge."

This often rewards the earliest challenge, "not the one with the highest merits," the group points out. In the context of Hatch-Waxman, the award of regulatory exclusivity and other incentives for challenging patents "have already led to significant litigation, regulatory scrutiny and legislative intervention." Legislation should encourage bringing follow-on biologics to market, rather than on challenging patents, BIO contends.

The group notes that because two biologics made by different manufacturers with different processes will not be the same, patent litigation for one FOB "will not necessarily apply to another FOB product, and the risk of litigation free-riders faced in the generic [small molecule] context will be much diminished under a FOB framework."

BIO points out that the data package for an FOB will be more comprehensive and expensive than that for a generic small molecule; regulatory approval will be less certain and may require additional studies, either pre- or post-approval.

"Having made a very significant investment in its follow-on biologic technology, a follow-on applicant will be sufficiently motivated to challenge any patent barriers to entry, even in the absence of artificial 'patent challenge' incentives."

...or the first interchangeable product?

If an incentive is included in legislation, the conditions should be "carefully defined" and "designed to stimulate investment in FOB development and the submission of quality, approvable FOB applications, not the submission of naked patent challenges at the earliest possible opportunity," BIO states.

Novartis suggests that if exclusivity is provided to the first FOB, it should be "directed at encouraging interchangeability status rather than challenging patents." Interchangeability "is considered the most effective way to introduce head-to-head market-based competition," the firm points out.

FTC will weigh these issues - and any others raised at a scheduled Nov. 21 public hearing - as it develops recommendations for ensuring the FOB pathway does not hamper competition. The commission's report is expected in the spring.

-Cathy Dombrowski (c.dombrowski@elsevier.com)

Biosimilars Should Face Patent Challenges Only After Approval - Novartis

More from Archive

More from Pink Sheet