Biosimilar Provisions Enacted in Health Care Bill

On March 23, 2010, President Obama signed the "Patient Protection and Affordable Care Act." The Act provides a regulatory scheme for the approval of biosimilar versions of branded biologic drugs ("biosimilars") and dictates how patent litigation on biosimilars is carried out. Rules and regulations governing the Act will later need to be promulgated and codified in the Federal Register. There also remains the possibility that Congress could amend the biosimilar provisions if the Senate makes any changes to the pending Amendments to the Act that currently do not relate to biosimilar provisions. Here is an overview of key biosimilar provisions in the Act:

• Biosimilar Application: A biosimilar applicant files a biosimilar application with the FDA to seek approval of a biological product as a biosimilar version of a branded company's reference product ("reference product"). A biological product is considered "biosimilar" if it is "highly similar" to the reference product with no clinically meaningful differences in terms of safety, purity and potency.
• Interchangeability: A biological product is interchangeable with the reference product if: (1) the biological product is determined to be biosimilar; and (2) the biological product meets safety and efficacy standards compared to the reference product.
• Marketing Exclusivity of the Branded Product: A biosimilar application may not be filed until four years after the first approval of the reference product. The biosimilar application may not be approved until 12 years after the first approval of the reference product. This 12-year term may be extended by six months if the brand company completes FDA requested pediatric clinical studies.
• Marketing Exclusivity for the First Interchangeable Biosimilar Product: There is marketing exclusivity for the first biosimilar applicant to establish interchangeability. This exclusivity bars the FDA from determining a later biosimilar to be interchangeable until the earlier of:

One year after first commercial marketing of first interchangeable biological product;

18 months after a final court decision of all patents in suit or dismissal with or without prejudice on litigation over the first interchangeable biological product;

42 months after approval if there is still ongoing patent litigation on the first interchangeable biological product; or

18 months after approval, if no patent litigation had been instituted against the first interchangeable biological product.

• Patent Litigation: The procedures are complex; a biosimilar applicant and the brand company must exchange statements and patent lists prior to beginning patent litigation. The parties must follow detailed negotiation procedures if they cannot agree on which patents will be the subject of the initial phase of patent litigation. Failure to timely provide patent information to a biosimilar applicant may bar the brand company from bringing a patent infringement suit against the applicant.

Companies will want to closely examine the biosimilar provisions in the Act to determine the impact on their business plans and development of biologics. For example, companies should assess how to maximize what IP rights survive the 12 years of exclusivity. Also to prepare for litigation, companies should compose lists of relevant patents and assess whether any license agreements affecting their biosimilar products need to be amended.

We look forward to discussing how this bill impacts your business. We are also available to tailor a CLE program to help your company understand this new Act. Please contact Shannon Mrksich, the chair of Brinks Hofer Gilson & Lione's Biotechnology & Pharmaceutical Group, at 312-321-4283 or smrksich@usebrinks.com.

This Client Alert is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or problems. This client alert was prepared by Eric Baude, Ph.D. and Rashad Morgan. Brinks Hofer Gilson & Lione does not intend to create an attorney-client relationship by offering this information and review of the information shall not be deemed to create such a relationship. You should consult a lawyer if you have a legal matter requiring attention.