FOB Proposals Floated in the U.S. Senate; Proposals Differ on Reference Product Exclusivity Paradigms

By Kurt R. Karst –      

There has been a frenzy of activity on Capitol Hill in recent days over Follow-On Biologics (“FOBs”).  At least four different proposals – all titled as the “Biologics Price Competition and Innovation Act of 2009” – have reportedly been floated in closed-door meetings of the U.S. Senate Health, Education, Labor, and Pensions Committee. 

Senator Ted Kennedy’s (D-MA) proposal would provide a 9-year “base period” of exclusivity, a single 3-year “bonus exclusivity” period for an application supplement approved no later than 1 year before the expiration of the “base period” of exclusivity, and a single 1-year second period of “bonus exclusivity” under certain circumstances.  However, such exclusivity would only be available for products approved after enactment of the bill.  Previously approved products could get a 2-year period of exclusivity for a new indication.  The bill would also provide a 6-month pediatric exclusivity extension for both pre- and post-enactment products.

Senator Barbara Mikulski’s (D-MD) proposal, which would reportedly apply to all biologics – pre- and post-enactment – would provide a 10-year exclusivity base period, which:

may be extended by 1 year if the Secretary approves, within the first 8 years of such 10-year period, a supplemental application submitted by the sponsor of the reference product for such product.  In order for the previous sentence to apply, the supplemental application must be approved for one or more new therapeutic indications and bring a significant clinical benefit, in comparison with existing therapies. Such benefit may be based on improved efficacy or improved safety, and shall reflect a major contribution to patient care.

Senator Sherrod Brown’s (D-OH) proposal would provide a 7-year “base period” of exclusivity for a biological product approved after enactment of the bill for which “no major substance of the product, nor any highly similar major substance, has been approved in any other application . . . .”  A 3-year exclusivity period would also be available for a “major substance previously approved” if the product “represents a significant therapeutic advance.  Also, a 6-month period of “bonus exclusivity” would be available under certain circumstances.

Senator John McCain’s (R-AZ) proposal would provide a 10-year period of exclusivity that could be extended by 2 years “if there has been significant therapeutic advancements with respect to the reference product.”

FOB bills introduced in the House of Representative earlier this year by Reps. Henry Waxman (D-CA) and Anna Eshoo (D-CA) have also proposed different exclusivity periods.  Under Rep. Waxman’s bill – H.R. 1427 – an original product with a novel molecular structure would be entitled to 5 years of exclusivity, and a modification of a previously approved product would be entitled to 3 years of exclusivity.  The 5- and 3-year periods under the Waxman bill could be extended by up to 1 year if the applicant establishes that the product can be used for a new disease indication or conducts pediatric studies.  However, market exclusivity would be reduced by 3 months for a “blockbuster” product (i.e., combined U.S. annual gross sales exceeding $1 billion).  Rep. Eshoo’s bill – H.R. 1548 – would provide for up to 14.5 years of market exclusivity for a new biologic product.

Senators Orrin Hatch (R-UT) and Michael Enzi (R-WY) are reportedly poised to introduce their own FOB legislation shortly.  We understand that the Hatch/Enzi bill will be a duplicate of the version introduced in the 110th Congress – S. 1695.  That bill provided a 12-year exclusivity period.