The proposal to modify the length of market exclusivity for biologic products formed part of a 141 page 2015 Budget in Brief - published by the US Department of Health and Human Services (HHS) earlier this week – and is intended to speed up the development of biosimilars.
The report said: “This proposal would increase competition for biologic drugs by reducing the number of years (from 12 to 7) that a drug company has exclusivity or monopoly pricing power and prohibits additional years of exclusivity due to formulation changes.”
Such action is estimated to save $700m spending on Medicare between 2015 and 2019, reaching $4bn by 2024. Furthermore, the report estimates an additional $190m could be saved by 2024 under the State and Federal funded Medicaid programme.
The Budget was supported by the Generic Pharmaceutical Association (GPA) whose CEO Ralph Neas said the potential savings from biosimilar – already embraced in Europe - may be even higher “with some groups predicting more than $250 billion in savings over 10 years.”
Industry body BIO (Biotechnology Industry Organisation) has issued a statement in response to the proposed change, high-lighting what it says may threaten the industry by discouraging innovation.
“The 12-year term of data protection for biologics included in the Affordable Care Act received widespread bipartisan support in the Congress during the consideration of the biosimilar pathway and is now settled US law,” BIO said.
“A reduction in this period will jeopardize the careful balance established in the law to reduce costs, expand access, and encourage continued innovation that will create good, high-paying biotech jobs and lead to breakthrough therapies and cures for deadly diseases.”
The Pharmaceutical Research and Manufacturers of America (PhRMA) also came out against the proposed measures, claiming the President’s Budget “unproductively pushes, yet again, previously rejected proposals that would hurt, not bolster, the program.”
Merck KgaA – manufacturer of the biologic Erbitux as well as having a strong stake in biosimilars – told Biopharma-Reporter.com “this proposal is not really new but more or less comes back year after year.”
The firm added as members of both PhRMA and BIO, it fully supports both statements.
For 2015, the Budget has allocated $343m for the Food and Drug Administration (FDA) to spend on its biologics programme, a 1.5% increase - or $5m more – than for 2014.