By Kevin E. Noonan —

The efforts of the Obama Administration and
Congressman Henry Waxman to reduce the term of the data exclusivity period
contained in the House and Senate versions of the health care reform bill (12
years) has been noticed by others.  The basic story is the same, but each new report adds some additional
information.

Last Thursday, Alan Fram wrote an article for The Washington Post regarding the meeting
between Congresswoman Anna Eshoo (D-CA) and the President as reported in
BioCentury last Saturday (see "Snatching Defeat from the Jaws of Victory?").  The story was reported with substantial identity in
BioCentury and the Post, but the Post added that the day after the reported
set-to between the President and the Congresswoman, a letter was sent to
Speaker Pelosi and Majority Leader Reid by "39 patient groups and research
universities . . . backing the 12-year period."  These groups recognized that "12 years of protection
would balance patients' access to the drugs with incentives for companies to
develop more of them."

John Carrol, in a FierceBiotech article, reported on the
story last Friday.  The report
contained no new information, but did provide this political analysis:

It's hard to see, though, how Obama
and Waxman could cobble together enough support from members of their own party
to make a switch at this point.  Waxman was handed what amounted to a public
rebuke by Democrats on his own committee when they voiced their support of 12
years of data protection.  With all the other compromises built into the reform
bill to garner a solid majority of lawmakers, where are the votes in Congress
to buck the outspoken backers of a bill cherished by biotech?

Finally, TIME
Magazine, in a story last Friday by Karen Tumulty, reported on a possible basis
for the President's position on data exclusivity:  a 2008 report by Robert
Shapiro, a former Clinton administration official, on the effects of generic
competition in the biologics area (Dr. Shapiro's report was discussed on Patent Docs in February 2008; see "Dr. Robert Shapiro Discusses Follow-on Biologics Report").  The report appears to be completely results-oriented, to the effect that
"generic versions of the
top 12 categories of biologics whose patents have expired or will expire soon
could save Americans up to $108 billion in the first 10 years and as much as $378
billion over two decades."  Unfortunately, the story as originally reported erroneously stated that
the 12-year data exclusivity period would run after patent protection had
expired (i.e., consecutively).  Ms.
Tumulty even emphasized this error in an on-line comment.  In response, Congresswoman Eshoo,
through a spokesperson, attempted to correct the record, stating (accurately):  "The
patent and data exclusivity run concurrently."  Ms. Tumulty further "clarified" the record as
follows:

A more precise way to describe this is
a period of "data exclusivity" (that is, use of the data used to
develop the drug) guaranteed separate and apart from the patent.  The amount of
time we are talking about differs from drug to drug, because of the varying
amounts of time that it can take to test a drug and win regulatory approval.  For instance:  If a drug comes to market with, say, five years left on its
patent, this bill would give it an additional seven years.

Congresswoman Eshoo's spokesman
made the point more clearly:

To further clarify, just like chemical
drugs, biologics have a 20-year patent protection from the date the patent is
filed.  Data exclusivity begins the date the FDA approves a drug or biologic,
running concurrently with whatever patent protection may be left at that time
(generally this is about 12 years, according to the CBO).

The tumult over the data exclusivity period in
biologics is put in context by a report by Ben Hallman in The Am Law Litigation
Daily on a study from Adam Greene of RBS Capital Markets.  The report involves statistics from
ANDA litigation, arguably the most significant legal legacy of Congressman
Waxman's seminal generic drug legislation for small molecule drugs.  Mr. Greene looked at 370 ANDA
litigations over the past 10 years and reported on outcomes.  (Patent Docs will provide a more
detailed analysis of the report in a later post.)  Of the 370 lawsuits, 54% (200) either were dropped by the
generic company or settled (presumably some of which involved "pay-for-delay"
arrangements opposed by, inter alia, the Federal Trade Commission).  Of the remainder, the results were
about even:  82 cases were won by
the generic drugmaker and 89 by the branded drugmaker.  The report states that the motivation
for ANDA litigation is the 180-day exclusivity period that rewards the first
ANDA filer, stating:

[I]t's
easy to see why generic firms focus on first-to-file opportunities.  Settlements
provide clarity for the company and shareholders, and we see them as a win-win
for the generic and brand company. 

These results are consistent with those reported by Matthew J. Higgins
and Stuart J.H. Graham in Science
last year ("Balancing
Innovation and Access: Patent Challenges Tip the Scales";  see "Maybe Hatch-Waxman Data Exclusivity Isn't So Good for Traditional Drugs After All").

For information regarding this and other related topics, please see:

• "Snatching Defeat from the Jaws of Victory?" January 17, 2010

•
"Follow-on Biologics News Briefs – No. 11," December 30, 2009
•
"Follow-on Biologics News Briefs – No. 10," November 30, 2009
•
"House Health Care Bill Includes Biosimilar Licensure Pathway,"
November 3, 2009
•
"12 Senators Write in Support of 12-Year Data Exclusivity Period,"
November 3, 2009
•
"Four Senators Write in Support of 12-Year Data Exclusivity Period,"
October 19, 2009
•
"Governors Send Letter to Congressional Leaders in Support of 12-Year Data
Exclusivity Period," October 2, 2009
•
"Follow-on Biologics News Briefs – No. 8," August 19, 2009
•
"House Committee Approves Health Care Reform Bill Calling for 12-Year
Exclusivity Period," July 31, 2009
•
"Follow-on Biologics News Briefs – No. 5," July 19, 2009
•
"House Subcommittee Holds Hearing on Follow-on Biologics," July 14,
2009
•
"Senators Champion 12-Year Data Exclusivity in Senate," July 14, 2009
•
"Senator Kennedy Weighs in on Biosimilar Data Exclusivity Period,"
July 9, 2009
• "White House Recommends 7-Year Data Exclusivity Period for Follow-on
Biologics," June 26, 2009
•
"No One Seems Happy with Follow-on Biologics According to the FTC,"
June 14, 2009
•
"Third Follow-on Biologics Bill Introduced in 111th Congress," April
1, 2009
•
"Second Follow-on Biologics Bill Is Introduced in House," March 18,
2009
•
"Waxman Introduces Follow-on Biologics Bill," March 11, 2009
•
"Congressman Waxman Tells GPhA Meeting that Hatch-Waxman Model Will Work
for Follow-on Biologics," February 25, 2009