The Biologics Price Competition and Innovation Act of 2007 (Senate bill S 623) was approved on Wednesday by the Senate Health, Education, Labor and Pensions ("HELP") Committee. 

According to a press release issued by Senator Orrin Hatch, the key provisions of the bill are as follows:

• Creates an abbreviated pathway the FDA will use to approve “safe, pure, and potent” biosimilar products, the legal standard for biological approvals.
• Gives incentives for innovators to continue developing new breakthroughs in biologics. The incentive is crucial because currently those incentives only lie in patent law. And because the low-cost versions will be only similar, but not identical, it was unclear if all of the innovator’s patents would be protected.
• Creates a mechanism to resolve legal challenges to the follow-on products. It allows innovators, generics, and the universities that partner with them in developing biologics, to adjudicate expeditiously whether or not follow-on products are violating an innovator’s intellectual property rights.
• Allows FDA to determine if a biosimilar product is interchangeable, meaning that it could be substituted at the pharmacy level under state law. Under the law, FDA can designate a product as interchangeable if it is biosimilar in composition and action in the body and if the patient is not harmed by switching from one product to another.
• Bases its guidance on scientific standards that FDA has always relied on, giving tremendous deference to FDA in developing and administering the new program. 

DrugResearcher.com reported:

[The draft bill] finally reaches a compromise between warring factions within the US senate over three main bones of contention regarding the new legislation, first proposed in February, which would be an amendment to the Public Health Service Act. .  . .

So firstly, under the proposed compromise bill, all follow-on biologics will be required to undergo appropriate animal studies along with one clinical trial in humans in order to demonstrate adequate comparability with the innovator drug, although the FDA will retain the discretionary power to deal with companies on an individual basis on the extent of testing actually required.

Secondly, on the thorny issue of whether or not to give the green light to interchangeability between a branded biologic and its follow-on counterpart, the bill will allow for this in certain cases where the FDA deems it appropriate.

Thirdly, in order to placate the industry who are fuming over the lack of incentive to innovation that allowing follow-on biologics may cause, the length of time a branded biologic would be protected under patent has been guaranteed at 12 years under the proposed compromise bill.

The Patent Baristas provided the following explanation on the bill:

The Act amends section 351 of the Public Health Service Act to provide for an approval pathway for safe biosimilar and interchangeable biological products (relying in part on the previous approval of a brand product) while preserving the incentives that have fueled the development of these life-saving medicines. . . .

The legislation allows, but does not require the FDA to issue guidance documents to inform with the public of the standards and criteria the agency will use in approving biosimilar and interchangeable products. Development of these guidance documents will require public input. Applications can be filed in the absence of guidance documents. . . .

The Act provides incentives for the development of both new life-saving biological products and interchangeable biosimilar products: 12 years of data exclusivity for the brand company during which a biosimilar product may not be approved, and 1 year of exclusivity for the first interchangeable biological product.

How is the biotech industry going to receive this proposed bill, in light of the concerns that the industry has had about biogenerics?

A press release issued by the Biotechnology Industry Organization ("BIO") gives an initial glimpse into the biotech response, stating as follows:

“Senators Kennedy, Enzi, Clinton and Hatch deserve credit for their hard work in crafting this complex legislation, and for the bipartisan support they have achieved for the bill.  Biotechnology innovators share the goal of ensuring all patients have access to life-enhancing and life-saving biologics.  We support the development of a pathway for the approval of follow-on biologics,” said BIO President and CEO Jim Greenwood.  “Toward that goal, we will continue to work with Congress to make certain the legislation is improved to ensure it supports the principles we have outlined for a pathway to follow-on products, namely providing better protections for patient safety and the patient-doctor relationship. 

“In addition, the patent litigation rules included in the bill must be revised to improve protections for the intellectual property rights of innovators, ensure timely resolution of all patent disputes and maintain incentives to develop future medical breakthroughs,” Greenwood stated.

It will be interesting to see how the introduction of this new legislation unfolds.  I suspect that it definitely will not be embraced by the industry, but I still don’t have a sense of how strong the opposition will be.  Is this legislation something that biotech companies can work with as the BIO press release suggests, or is this something that will be fiercely opposed?  Only time will tell.

We will be following this issue as this legislation is introduced outside of the committee, and we will keep you posted.