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The Case For A Follow-On Biologics Global Health Exclusivity Incentive



July 14th, 2009

Global health issues, especially those affecting the world’s poor, rarely gain anywhere near the attention that the U.S. public and policymakers give to domestic concerns.  However, in one small corner of the current health reform discussion, there is a golden opportunity not only to reduce U.S. health care costs but also to improve the health of millions of the world’s poorest people.

As Congress debates giving the U.S. Food and Drug Administration (FDA) new powers to approve ”follow-on,” reduced-cost versions of biologic medicines, it can also create a new, powerful financial incentive for biologic research into developing-world diseases and build a new way to ensure access to these inventions.

Biologic medicines, unlike capsules and pills, are generally manufactured in living systems such as plant or animal cells and are primarily injected rather than swallowed. Like with generic drugs, a new category known variously as follow-on biologics or biosimilars would allow companies to create near-copies of these medicines that are at the forefront of medical science. This could save billions of dollars as the copy products increase competition and bring down the price of these medicines – some currently costing hundreds of thousands of dollars a year.

While we often think about biologic medicines as the most expensive, cutting edge of medical technology, they hold much promise for addressing the toughest health care challenges of the developing world. A report from the nonprofit BIO Ventures for Global Health found that hundreds of biotech companies have resources that can help in the fight against global diseases.  These companies have libraries of compounds that are appropriate to address the biological targets that are relevant to these diseases. They also have the speed and flexibility that may not be available in the nonprofit and academic world.

The challenge is how to encourage biotech companies and their financial backers to invest in creating medicines for people who can’t afford to buy them and how to help people in poor nations get access to them once they are created.

Congress is almost sure to include follow-on biologics authority in whatever health reform legislation it develops.  Multiple committees have considered the idea for several years, and the promised billions in savings over the next ten years are a small but necessary element to pay for coverage expansions.

The heart of the current follow-on biologics debate is how long to allow the original product to have the market to itself before facing copycat competition. There are sharp differences over how much time is enough. A recent report from the Federal Trade Commission suggested that original biologic products need no protection beyond their patents. House Energy and Commerce chairman Henry Waxman (D-CA) has introduced legislation that would set the bar at five years, and the Obama administration recently weighed in at seven. The biotechnology industry thinks at least 14 years is necessary. Congress will have to negotiate this. And that’s where the world’s poor come in.

A New Incentive That Would Boost Global Health

Whatever period of time it eventually selects, Congress can provide a boost for global health by extending that time when a medicine’s manufacturer demonstrates the likely suitability or adaptability of its product or a key technology involved in the development of its product for a significant developing-world use.

In some cases, a product itself might have a direct use in the developing world, such as in the case of a new medicine or new diagnostic for HIV. However, it might be necessary to adapt such products for an environment where, for example, there may be a lack of refrigeration or access to reliable electrical power. In other cases, a biotech company may develop a compound for a health condition common in higher-income countries but also be able to demonstrate its use for a related condition or disease in a low-income country. Perhaps the best-known example of this is Merck & Company’s donation of the drug ivermectin for the treatment of onchocerciasis in parts of Africa and Latin America. The medicine, originally developed for treating worms in cattle and other animals, proved to have a significant benefit in eliminating river blindness, a common and debilitating condition that affects many people in parts of West Africa.

A company might also qualify for the incentive by developing a critical enabling technology. Such a technology might involve a new drug discovery tool such as an animal model or an assay, or test, which could open a critical research door to a developing world disease.

There is a strong precedent for such extra exclusive marketing rights to encourage important but not necessarily profitable research. The Best Pharmaceuticals for Children’s Act gives drug makers an extra six months without generic medicine competition when they complete studies of a medicine’s pediatric uses. That law has succeeded spectacularly in getting drug companies to do research that they had previously been reluctant to undertake for several reasons, including the lack of a large market for some medicines in children.

One can imagine that, similar to the pediatric law, an incentive for global health biologics would provide a powerful incentive to conduct research into diseases that occur in both the developed and developing world. Perhaps as important, it might also encourage companies to invest in clinical research to explore and demonstrate the benefits of a medicine for developing-world conditions that may not be the intended use in the developed world.

Requiring A No-Cost License In The Developing World To Ensure Access

Congress could also require a company, in return for this extra period without competition, to provide a no-cost license for the production of its medicine for developing-world markets. With this, the developing world would not only gain the knowledge of a new cure but get immediate, affordable access to the discoveries at a low-profit or nonprofit price.

Of course, the details of such an incentive are important. The legislation would not only have to specify how much extra time a product inventor would gain, but it would also have to define the  criteria and process for certifying developing world need and suitability. It would also have to provide strong protection to ensure that licensed products do not flow back into developed-world markets.

Some might argue, as they did with the pediatric incentive, that this new incentive would simply encourage companies to do what they already had planned to do or already should do.  However, with the pediatric incentive, the carrot of extra exclusivity has worked far better than the stick of regulation or the potential embarrassment of public pressure. And while, as with any incentive, there might be cases where the extra market time buys too little, the availability of the no-cost license should itself be enough to justify the value of the incentive.

Quickly exploring how to incorporate a global health exclusivity incentive into the current follow-on biologics legislation is an effort worth making to ensure that affordable, cutting-edge medical science reaches not just American patients, but those around the world who too rarely and much too slowly benefit from it.

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1 Trackback for “The Case For A Follow-On Biologics Global Health Exclusivity Incentive”

  1. The Case For A Follow-on Biologics Global Health Exclusivity Incentive | Bioinformatics World Wide
    July 15th, 2009 at 12:56 pm

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