The FTC gets a copy of every single settlement agreement that occurs…and they put out a yearly report analyzing settlement agreements, and what has come out of the last 2 yearly reports that the FDC has issued is that Activis has been highly effective in policing these agreements.
Business Practice
CME/CE
Subscribe
BIOSIMILAR APPROVALS
- Bone Health
- Immunology
- Hematology
- Respiratory
- Dermatology
- Diabetes
- Gastroenterology
- Neurology
- Oncology
- Ophthalmology
- Rare Disease
- Rheumatology
Pharmaceutical Pay-for-Delay Settlements "Have a Good Side"
Pay-for-delay settlements between drug companies are better regulated than in the past and are in danger of being overregulated, one panelist said.
“Pay-for-delay” settlements between originator companies and biosimilar developers have a bad reputation that may not be wholly deserved, said an intellectual property attorney at the American Conference Institute’s 12th summit on Biosimilars & Innovator Biologics.
These agreements are now reviewed by the Federal Trade Commission (FTC), and there is evidence that they are better structured in recent years and play a constructive role in allowing competitor drugs to come to market sooner, said Karin A. Hessler, assistant general counsel for the Association for Accessible Medicines.
Panelists also discussed recent changes to the Purple Book manual of patent information on biologics and various legislative developments that are intended to improve the competitiveness of the US biologics market.
Much alarm has been raised about settlements between originator and biosimilar developers that involve an exchange of royalties or agreements not to enter certain markets before a certain time. In exchange for these agreements, biosimilar companies may avoid costly litigation battles and bring their products to market sooner.
Hessler said an important 2013 Supreme Court decision, FTC v Activis, clarified when reverse payment patent settlements (pay for delay) are in fact acceptable and this, she said, has led to a gradual improvement in the quality of such agreements, such that pay-for-delay deals are in many cases playing a constructive role in facilitating patient access to lower-cost medicine.
“The FTC gets a copy of every single settlement agreement that occurs…and they put out a yearly report analyzing settlement agreements, and what has come out of the last 2 yearly reports that the FDC has issued is that Activis has been highly effective in policing these agreements,” Hessler said.
Quoting from the December 2020 FTC report, Hessler stated that despite a high number of such settlements, “those that include the types of reverse payments that are likely to be anticompetitive remain very low.”
Recent legislation would take Activis a step further by strengthening the test for anticompetitiveness, Hessler said. Under the proposed Preserve Access to Affordable Generics and Biosimilars Act, if there are both a payment of “anything of value” from the originator company to the biosimilar company, such as “an exclusive license,” and any delay in market entry, “even by a day,” there’s a presumption of anticompetitiveness that both parties would have to overcome with compelling evidence that theirs is not an anticompetitive deal.
More pending legislation that is concerning is the Protecting Consumer Access to Generic Drugs Act of 2021, and this, too, hinges on the “anything of value” and “exclusive license” measures of unfairness, Hessler said. This is problematic, she said, because licenses are a necessary tool of business, especially when allowing another party to have use of patented intellectual property, and without such licenses, the settlement process could grind to a halt.
“I think when you’re a party looking at settling, you want to make sure you do it right, and you don’t want to have to be in a grey area where you’re not clear something can or cannot be included,” she said. “I think it’s very important to have predictability. These settlement agreements in some ways have gotten an unfair reputation. They can expedite generic and biosimilar entry by many years. I think there’s some belief that there’s somehow an extension of the patent term that’s occurring here, when what you’re really having is an acceleration relative to the expiration of the patent where generics and biosimilars are coming in early.”
Purple Book Enhancements
The Purple Book Continuity Act, signed into law in December 2020, improved the amount of patent information available on originator brand products, to make it easier for biosimilar developers to understand where they might infringe on originator company patents.
Hans Sauer, general counsel and vice president of the Biotechnology Innovation Organization, said this act also expanded the information available on original licensing dates for originator products. "This makes it clear when the 12-year automatic product exclusivities begin for originator drugs. If you went to the Purple Book last year, you would have seen that the FDA listed the genuine date of first licensure only for a small number of biologic products,” Sauer said.
Also, “the bill clarifies that these determinations [of first licensure date] are to be made early in the process, and certainly, there’s a big stack of existing reference biologics for which such a determination hadn’t been made. Every product will have a note attached to it as to when its data exclusivity expires,” Sauer said.
Sauer also noted that much information about product patents that was previously not public will be available now, and not in a dusty tome, but in a convenient, searchable FDA website format.
“I think we’ll have a much better understanding across the board of the patents that are being talked about when there is a ‘patent dance’,” Sauer said in reference to the patent information exchange when originators and biosimilar companies face off during the FDA product approval review.
The equivalent to the Purple Book in the generic drugs world is the Orange Book, and in this the patent listings are more complete, noted Hessler.
With the Purple Book, patents are disclosed only as they become relevant to individual biosimilar applications, so the first biosimilar applicant for a particular drug type will find the Purple Book information less complete than the second or third biosimilar applicant. And even for subsequent applicants, the patent information already available may be irrelevant, Hessler noted.
“There’s obviously a situation where different biosimilar applicants may use different manufacturing processes, so the relevant patents that are listed [in the Purple Book] may just not be applicable for the second biosimilar applicant,” she said.
Insulins and Other Biologics
For biosimilar developers in 2020, the FDA worked hard to clarify its guidance, said David E. Korn, vice president of Intellectual Property and Law for PhRMA. One key regulatory development was a shift toward approving insulins and certain other biologics under the Biologics Price Competition and Innovation Act, which created a pathway to streamline the approval of competitive biologics agents, Korn noted. Some of these biologics will end up serving as originator drugs upon which copy drugs are based, he said.
“Even products such as insulins that were approved under a [section] 505(b)(2) application now are 351(k) products that can even be reference products, so the potential pool of reference products got larger through the transition.”
In April 2021 the Advancing Education of Biosimilars Act was signed into law. This provided for educational material to be published by HHS to enable health care providers to understand biosimilar benefits, safety, and conditions for approval. “Overall, this is a well-intentioned and beneficial piece of legislation that we’re going to see implemented by the FDA over the course of this year,” according to Sauer.
Related Videos
Related Content
AMCP Posters Tackle Interchangeability and Medicaid, Factors Driving Biosimilar Access
April 24th 2024Article
Two posters from the Academy of Managed Care Pharmacy (AMCP) annual meeting explore how an interchangeable insulin glargine biosimilar plays into Medicaid budgets and the top factors driving access to biosimilars.
Decoding the Patent Puzzle: Navigating the Legal Landscape of Biosimilars
March 17th 2024Podcast
On this episode of Not So Different, Ha Kung Wong, JD, an intellectual patent attorney and partner at Venable LLP, details the confusing landscape that is the US patent system and how it can be improved to help companies overcome barriers to biosimilar competition.
The 6 Key Policy Factors to Ensure Biosimilar Market Sustainability
April 16th 2024Article
Magnus Bodin, senior director and head of international access and policy at Biogen, presented warning signs for unsustainable biosimilar markets as well as key factors needed to create effective policies and future-proof biosimilar markets globally.
What AmerisourceBergen's Report Reveals About Payers, Biosimilar Pricing Trends
May 28th 2023Podcast
On this episode of Not So Different, Tasmina Hydery and Brian Biehn from AmerisourceBergen discussed results from a recent survey, that were also presented at Asembia 2023, diving into the payer perspective on biosimilars and current pricing trends across the US biosimilar industry.
Eye on Pharma: Canadian Aflibercept Settlement; Sandoz Acquires Cimerli; Payer Chooses Cyltezo
March 6th 2024Article
Biocon Biologics settled with the maker of Eylea (aflibercept), announcing a launch date for its biosimilar competitor in Canada; Sandoz has officially acquired Cimerli, a ranibizumab biosimilar; AARP Medicare Rx from United Healthcare has added Cyltezo (adalimumab-adbm) and removed the originator (Humira) from its formulary.
