By
Donald Zuhn —

On
Saturday, reports began to circulate regarding President Obama's recent
interest in "renegotiating" the data exclusivity provisions of the
health care bills that were passed in the House and Senate late last year (see "Snatching Defeat from the Jaws
of Victory?").  In a discussion at the White House, the
President informed Rep. Anna Eshoo (D-CA) that he did not support the 12-year
period in both bills and would prefer that the bills specify a shorter period
instead.

The
President's position was not too surprising, given the Administration's assertion
in a letter to House Energy and Commerce Chairman Henry Waxman (D-CA) last June
that a 7-year data exclusivity period would "strike[] the appropriate
balance between innovation and competition" (see "White House Recommends 7-Year Data Exclusivity Period for
Follow-on Biologics").  However, the President's last-minute
efforts to convince the House and Senate to change their bills startled many in
the biotech/pharma industry. 
Writing in the congressional daily The
Hill, Jeffrey Young opined that by "jettisoning" the 12-year data
exclusivity period in the bills, President Obama would be "ignoring one of
the few substantive bipartisan amendments approved during committee consideration
of healthcare reform" ("Obama at odds with some Dems on key provision
in healthcare").  In mid-July, the Senate Health,
Education, Labor and Pensions (HELP) Committee rejected an amendment for a
5-year data exclusivity term, and instead voted 16-7 in favor of an amendment
providing a 12-year term (see "Senators
Champion 12-Year Data Exclusivity in Senate").  At the end of July, the House Committee
on Energy and Commerce approved an amendment to its health care bill that would
provide a 12-year data exclusivity period (see
"House Committee Approves Health Care Reform Bill Calling for 12-Year
Exclusivity Period").  While the House health care bill itself
was passed out of Committee by a narrow 31-28 margin, the biosimilar licensure
pathway amendment, including its 12-year data exclusivity provision, sailed
through the Committee in a 47-11 vote.

On
Tuesday, in response to the President's comments last week, six Governors sent
a letter to the President, "to express [their] concern about recent
proposals that have been made to provisions that relate to biosimilars in the
health reform bill."  In the
letter, which was sent by Gov. Martin O'Malley (D) of Maryland, Gov. Bill
Ritter (D) of Colorado, Gov. Jack Markell (D) of Delaware, Gov. Deval Patrick
(D) of Massachusetts, Gov. Beverly Perdue (D) of North Carolina, and Gov. Donald
Carcieri (R) of Rhode Island, the signatories told the President that:

We oppose limiting the period of data
exclusivity for developers of biosimilar products as well as any revision to
the "evergreening" language contained in both House and Senate passed
bills.  The balance struck by
Congress — both through the Senate Health, Education, Labor and Pensions
Comminee and House Energy and Commerce Comminee — on 12 years of data
exclusivity for biologics and reasonable "evergreening" language
represents a critical element needed to ensure appropriate incentives for continued
biomedical innovation.  We urge you
to continue working with the congressional leaders to carefully evaluate the
product of the extensive work that they have already done on this matter and
retain the provisions that were passed in both chambers of Congress.

The
Governors reminded the President about the economic impact of the bioscience
industry, noting that "[t]he biopharmaceutical and life sciences workforce
in this country is nearly 700,000 strong and supports more than 3.2 million
total jobs in associated sectors," and that "employment in the
biopharmaceutical sector grew more than twice as fast as all other sectors
combined between 1996 and 2006." 
The Governors also argue that:

The high risk and uncertain nature of biologics R&D, combined with the economic
downturn, underscores the sector's vulnerabilities.  Thus this critically important issue has a direct economic
impact on our states, our nation 's public health, our economic success, and our
global leadership in innovation in biomedical research.

In
support of the data exclusivity period in the House and Senate bills, the
letter notes that:

With biotechnology products in
particular, data exclusivity provides a critical incentive for innovation, as
patent protections may be limited by the highly complex nature of these
products, which are produced from living cells.  Economic modeling has shown that a provision of at least 12
years of non-patent data exclusivity allows innovator companies to recover
their original investment in the marketed therapy.  Equally important, however, revenues from successful marketed
therapies offset the hundreds of millions of dollars spent on drug discovery
R&D on candidates that do not make it to market.  Thus, these revenues support pipeline drug candidate development
and investments in costly and complex manufacturing facilities for FDA approved
therapies.  In order to assure
these companies continue to make investments in medical innovation and take the
risks necessary to bring these important products to patients, innovators should
be provided with appropriate incentives, including data exclusivity and
protections for their patents.

The
Governors conclude the letter by asking the Administration to "work closely with
Members of Congress to gain a better understanding of the complexity of this
issue before making a decision that could hinder scientific innovation and
jeopardize our nation's role as a leader in the development and delivery of
lifesaving therapeutics."

Tuesday's letter marks the second time these Governors have addressed the issue
of data exclusivity.  In a letter sent
to Congressional leaders in September, Governors O'Malley, Ritter, Markell, Patrick, Perdue, and
Carcieri were joined by Gov. M.
Jodi Rell (R) of Connecticut, Gov. Theodore Kulongoski (D) of Oregon, Gov. Luis
Fortuño (R) of Puerto Rico, and Gov. Christine Gregoire (D) of Washington in asserting
that "the balance struck in the Senate Health, Education, Labor and
Pensions Committee on 12 years of data exclusivity for biologics represents a
critical element needed to ensure appropriate incentives for continued
biomedical innovation" (see
"Governors Send Letter to Congressional Leaders in Support of 12-Year Data
Exclusivity Period").

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

• "Data Exclusivity Follow-up: More of the Same," January 18, 2010
• "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