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Regulatory Approval of Follow-On Biologics: Takings Implications of Twelve Years of Market Exclusivity and Future Conflict in Determinations of Bioequivalence
Unpublished (2010)
  • Aileen M McGill, University of Pennsylvania Law School
Congressional interest in the availability of low-cost pharmaceuticals has focused on the increasingly important class of drugs known as “biologics.” Biologics are protein-based pharmaceuticals derived from living matter or manufactured in living cells, which are more complex than the chemically synthesized molecules found in most pharmaceutical products. While there are many scientific differences between small-molecule pharmaceuticals and biologics, one of the most significant is the inability to reproduce them in generic form, creating a legislative division between generic entry for standard pharmaceuticals governed by the Hatch-Waxman Act and a similar approval process for “follow-on biologics” (FOBs). With the passage of the healthcare reform bill in March, 2010, Congress has finally given the FDA authority and guidance for the approval of FOBs. This article discusses two key provisions in this bill that differ from the Hatch-Waxman Act and the problems that are likely to arise from these terms. First, the statute implements twelve years of market exclusivity for pioneer products, a lengthy term that reflects the position advocated by the biotechnology industry after an ongoing debate with consumer advocacy groups and the FTC who advocated a substantially shorter term. This prolonged market exclusivity reflects the need to protect the substantial investments in R&D required to produce biological products. By adopting a lengthy market exclusivity term, however, Congress may have foreclosed future opportunities to shorten this term even if biological research advances lower the time and expense required for biological R&D because reducing market exclusivity would likely be an unconstitutional taking of pharmaceutical companies’ interest in exclusive marketing rights under the Fifth Amendment. Second, this bill implements notice-and-comment procedures for individual case determinations of bioequivalence. This provision reflects legitimate scientific concerns that have thwarted a regulatory approval pathway for FOBs until this time: unlike small-molecule pharmaceuticals which carry a presumption of bioequivalence, biologics that are appear to be similar by methods that separate and measure proteins may in fact not have equivalent biologic actions due to structural alterations such as protein folding or changes in charge. The solicitation of public comment for product-specific testing requirements, however, raises some interesting questions under the Administrative Procedure Act and may lead to significant conflict between the FDA and FOB entrants due to the high costs of biosimilarity testing.
  • FDA,
  • Pharmaceutical,
  • Biologics,
  • Market Exclusivity,
  • Data Exclusivity,
  • Generic,
  • Patent
Publication Date
Citation Information
Aileen M McGill. "Regulatory Approval of Follow-On Biologics: Takings Implications of Twelve Years of Market Exclusivity and Future Conflict in Determinations of Bioequivalence" Unpublished (2010)
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