PhRMA Statement Supporting Fair Incentives for Biologics Innovation

Mon Oct 19, 2009 9:37am EDT

* Reuters is not responsible for the content in this press release.

WASHINGTON, Oct. 19 /PRNewswire-USNewswire/ -- Pharmaceutical Research and
Manufacturers of America (PhRMA) Senior Vice President Ken Johnson issued the
following statement today regarding appropriate incentives for continued
biotechnology innovation:

"PhRMA, along with research universities, patients, healthcare providers, and
elected leaders at the state and federal levels, supports the development of a
responsible, abbreviated approval pathway for biosimilars that includes a fair
period of data protection that is critical for the future of medical progress.

"Legislation moving forward in the U.S. House and Senate provides for patient
safety and strikes the appropriate balance between the desire for enhanced
competition for biologics, and the need to provide meaningful incentives for

"Such incentives are vital for ensuring continued development of new biologics
that are needed to provide future treatments and cures for such serious
ailments as Alzheimer's disease, Parkinson's and cancer. Already, biologic
medicines have revolutionized patient care. In fact, these cutting-edge
therapies are among the reasons why American patients with life-threatening
diseases, like cancer, are living longer.

"The pathway endorsed through strong bipartisan Congressional votes would
allow onto the market biosimilars -- medicines that are similar to, but will
never be exactly the same as, the original biologic.

"That key element -- similarity -- factors into investment decisions, because
the nature of patent protection for biologics is uncertain in the context of
biosimilars. Because biologics are extremely complex, patents may cover just
part of the molecule or simply cover the process for its manufacture.

"In the future, should this legislation become law, a biosimilar manufacturer
using its own manufacturing process to create a biosimilar that differs
slightly from an innovator biologic would have the potential to circumvent
patents -- while qualifying for an abbreviated application.

"Economists and the venture capitalists whose private investments shore up
this vital, yet vulnerable sector agree: 12 years of data protection, at a
bare minimum, are needed to help recoup the significant development costs for
biologic innovators. That, however, does not constitute market exclusivity.
Companies could still seek approval of competing biologics using their own
data, but for those 12 years no biosimilar competitor could rely on
innovators' hard-earned data, collected during development that may span a
decade, or more, to seek approval.

"For many biologics on the market right now, the 12-year data protection clock
began ticking long ago, when federal regulators approved the therapy. In
addition to the brand-to-brand competition that already occurs for biologics,
those biologic medicines could face biosimilar competitors relatively soon;
multiple biosimilars are already on the market in Europe.

"Biosimilar versions of current biologics may well be approved before 12 years
have elapsed after the law's enactment, but 12 years of data protection is
important to provide incentives for manufacturers to create the next wave of
innovative biologics.

"Giving short shrift to incentives for innovation would grind to a halt
uniquely American innovation, moving critically important R&D -- and tens of
thousands of U.S. jobs -- overseas. Right now, 80 percent of the world's
biotech research occurs in the U.S.

"A diverse group of supporters agree with the need for adequate data
protection, from patients eagerly awaiting new therapies to elected officials
who understand how tenuous U.S. leadership in biologics research could become
if incentives for innovation are weakened:
    --  'Many of these biologics will be developed from early-stage
        arising from basic research conducted by universities. ... [I]t will
        important to preserve sufficient incentives for innovator companies
        venture capitalists to commit the substantial investments necessary to
        develop such discoveries into new biologic treatments...' --
        of American Universities
    --  '[W]e must avoid excessive damage to the system that produces the
        majority of revolutionary and innovative new biologic drugs. NVCA
        believes a data exclusivity period of at least 12 years for innovator
        products is a critical fulcrum in the effort to balance cost with the
        preservation of biotech innovation.' -- National Venture Capital
    --  'This critically important issue has a direct economic impact on our
        states, our nation's public health, our economic success, and our
        leadership in biomedical research. ... 12 years of data exclusivity
        biologics represents a critical element needed to ensure appropriate
        incentives for continued biomedical innovation.' -- Joint letter
        by the Governors of Massachusetts, Connecticut, Colorado, Delaware,
        Maryland, North Carolina, Oregon, Rhode Island, Puerto Rico and
    --  '[I]t would be neither fair nor sound public policy to demand that one
        company spend millions of dollars to generate expensive data, and then
        allow another company to use that data for free before the first
        has had the chance to recoup its investment. This would mean fewer new
        biologics for patients and fewer future competitive opportunities for
        both innovative and biosimilar companies.' -- Dr. Henry Grabowski,
    --  'Saving money is a hollow victory if it costs lives, and elderly
        Americans are at the greatest risk. ... 12-year data exclusivity [is]
        needed to incentivize the development of new medical breakthroughs
        our seniors are counting on.' -- RetireSafe

    --  'We strongly believe that the treatments developed through
        will enable better care for a host of debilitating age-associated
        infirmities ... [A] well-defined process for approving biosimilars
        help sustain investment in this vital area of therapy development and
        allow for these treatments to one day be made widely available to
        patients who otherwise could not have access to them.' -- Alliance for
        Aging Research

"Creating a new biologic medicine is a complex, long-term endeavor that is
costly, takes years of research, and has an uncertain chance of success.
Development costs for innovative biologics alone can exceed $1.2 billion, plus
up to an additional $450 million to build specialized manufacturing

"Already, many biotechnology companies that are the birthplace for many
cutting-edge therapies face a bleak outlook. The recent financial crisis, for
some, represented a deadly blow. Twenty-two biotechs have already been
delisted from NASDAQ. This week, NVCA and Thomson Reuters reported that
venture capital funds raised in the third quarter of 2009 plummeted to the
lowest level in 15 years.

"R&D is the engine that drives continued medical advances that save lives and
improve patients' quality of life, but few would tackle biologic medicines
without a fighting chance to recoup their significant investments.

"Importantly, if we're going to cure cancer in our lifetime, as President
Obama has challenged America to do, new innovative biologics, undoubtedly,
will play an instrumental role."

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents
the country's leading pharmaceutical research and biotechnology companies,
which are devoted to inventing medicines that allow patients to live longer,
healthier, and more productive lives. PhRMA companies are leading the way in
the search for new cures. PhRMA members alone invested an estimated $50.3
billion in 2008 in discovering and developing new medicines. Industry-wide
research and investment reached a record $65.2 billion in 2008.

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SOURCE  Pharmaceutical Research and Manufacturers of America

Diedtra Henderson of Pharmaceutical Research and Manufacturers of America,
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