Evolving Industry Structures in Biosimilar Development

By Rachel Sachs

Yesterday, I had the privilege to moderate a fantastic event here at the Petrie-Flom Center on Assessing the Viability of FDA’s Biosimilars Pathway.  Bringing together expert panelists from legal practice (Donald R. Ware, Partner, Foley Hoag LLP), industry (Konstantinos Andrikopoulos, Lead IP Counsel, Manufacturing, Biogen, Inc.), and academia (W. Nicholson Price II, Assistant Professor of Law, University of New Hampshire School of Law), the event explored different aspects of the biosimilars issue, considering the guidances issued (and still to be issued) by the FDA, the role of the “patent dance” in biosimilar litigation, and whether Europe’s experience with biosimilars has helpful lessons for our own situation.  For those who weren’t able to make it, video of the event will be posted on the Petrie-Flom Center’s website soon.

But I wanted to write here about one of the very last questions we explored during the panel, because its implications are more far-reaching than we had the time to consider.  The situation is as follows:  In the decades after the Hatch-Waxman Act created a generic pathway for small-molecule drugs, companies typically specialized in developing either innovator or generic drugs, but not both.  And although generic drug companies had great capacity for innovating in manufacturing, they were not research companies in the way that we think about innovator companies.  The situation has changed somewhat over the years, as generic companies began to invest in innovative products, and as innovator companies put out authorized generics, but in general this broad division within industry has persisted.

In the biologic context, by contrast, the biosimilar applications being filed with the FDA are more typically being filed by innovator companies themselves or by subsidiaries thereof.  For instance, the only biologic approved in the United States thus far is marketed by Sandoz, which is part of the innovator company Novartis.  Instead of a situation in which innovators battle generic companies for access to the market, now innovator companies are battling themselves.  There are a host of reasons for this development, most notably including the complex manufacturing processes involved in the biologics space and the need for the development of expertise there.

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Bioethicist Art Caplan: Shkreli Isn’t to Blame For High Drug Prices in U.S.

A new piece by Bill of Health contributor Art Caplan on NBC News:

Should we care about Martin Shkreli, the man I call the “Wolf of Pharma Street”? His hoodie-wearing perp walk sparks outrage, but he is diverting attention from far bigger and more important systemic problems regarding the cost of drugs for all Americans.

Shkreli, the former Turing Pharmaceuticals CEO, has been indicted by the feds for allegedly running a Ponzi scheme to keep his various drug company investments afloat.

Before the feds came calling to charge him with securities fraud, Shkreli had secured the manufacturing license for Daraprim which is used to treat nasty, often fatal protozoal infections in, among others, those with AIDS. Shkreli, grinned, flipped the rest of humanity the bird, and raised the 62 year-old drug’s price by 5,500 percent; from $13.50 to $750 per tablet overnight — thus retiring the “Biggest Jerk in Health Care Award” forever. […]

Read the full article here.

Presidential Campaigns Focus on Drug Costs

By Katherine Kwong

Drug prices have become a hot topic on the presidential campaign trail following recent stories such as the sudden spike in price from $13.50 to $750 for the parasitic infection treatment Daraprim. This story is the latest example of a growing number of complaints about steep increases and high prices for many drugs, including those used to treat multiple sclerosis and cancer, as well as commonly-used generic drugs used to treat everything from high cholesterol to bacterial infections.

In contrast with the Republican presidential candidates, who have generally not supported additional government regulation of drug pricing, Democratic presidential candidates responded to the Daraprim story by urging greater government action to lower drug costs.

Hillary Clinton cited Daraprim as an example when unveiling a proposal to cap drug costs to $250 per month, require pharmaceutical companies to spend a minimum amount on research and development, and allow Medicare to negotiate drug prices. She would also end tax credits for drug advertising to consumers and allow the importation of drugs from other countries.

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Generic Drug Price Increases: Implications for Medicaid

By Rachel Sachs

The internet (not just the health policy part of the internet!) is fascinated by today’s New York Times story about dramatic recent increases in the costs of many decades-old drugs.  The story focuses on the case of Daraprim, the standard of care for treating the parasitic infection toxoplasmosis.  Daraprim was recently acquired by a start-up, which then raised the drug’s price from $13.50 a pill to $750 a pill.  Daraprim has been around for decades, and as the story notes, it’s just one of many recent examples of dramatic price increases for generic drugs, often after their acquisition by other companies (as in this case).

The article raises an enormous number of issues of interest to intellectual property and health policy scholars, both explicitly and implicitly, and other commentators have begun to canvass them.  But I want to spend the rest of this blog post unpacking a single point made in the article, because it actually contains an enormous amount of complexity.  As the author notes, “[the company’s] price increase could bring sales to tens or even hundreds of millions of dollars a year if use remains constant. Medicaid and certain hospitals will be able to get the drug inexpensively under federal rules for discounts and rebates. But private insurers, Medicare and hospitalized patients would have to pay an amount closer to the list price.”

The author is right that there’s one sense in which Medicaid and entities eligible for the 340B program (I assume this is what the author is referring to when he says “certain hospitals”) will be able to obtain this drug “inexpensively” – but there’s another sense in which they won’t be able to.

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Induced Infringement in Patent Law and the Doctor-Patient Relationship

By Rachel Sachs

Regular readers of this blog will recall that I often think and write about the interaction between the induced infringement doctrine in patent law and medical method patents of various kinds (previous blog posts are here and here).  Until the recent en banc decision in Akamai v. Limelight, courts had been extremely reluctant to attribute the actions of multiple parties to a single actor for purposes of assigning infringement liability.  These cases have largely involved business method or software patents, but I had hypothesized in prior work that this analysis would extend to medical method patents, making them difficult to enforce.

Last week, Judge Tanya Walton Pratt of the U.S. District Court for the Southern District of Indiana provided evidence for the opposite proposition.  Eli Lilly had sued a set of generic drug companies for patent infringement, arguing that they had induced physicians to infringe a set of method-of-treatment claims involving a chemotherapy drug.  The problem for Lilly was that its claims require action by both physicians and patients, who must take certain other medications, including folic acid, before the physician administers the chemotherapy drug.  Judge Pratt was tasked with determining whether the actions of the patient in preparing for their chemotherapy could be attributed to the physician.  She ruled that because the physician “directs or controls the patient’s administration of folic acid,” “the performance of all the claimed steps … can be attributed to a single person, i.e. the physician.”  As a result, the generic companies could be held liable for infringement.

One problem with Judge Pratt’s ruling is that it fails to confront the single Federal Circuit opinion to have considered and rejected this argument.  McKesson Technologies, Inc. v. Epic Systems Corporation dealt with a patent on electronic communication between physicians and their patients.  In that case, the Federal Circuit had occasion to consider how the doctor-patient relationship fits into the induced infringement paradigm.  Judge Linn’s opinion concluded that “[a] doctor-patient relationship does not by itself give rise to an agency relationship or impose on patients a contractual obligation such that the voluntary actions of patients can be said to represent the vicarious actions of their doctors,” declining to attribute the patients’ actions to their physicians for purposes of assigning liability.

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Ensuring Timely Approval Of Generic Drugs

By Ameet Sarpatwari and Aaron S. Kesselheim

Cross posted from Health Affairs Blog

Having saved US consumers over $1.5 trillion in the past decade, generic drugs are one of the most cost-effective interventions in our entire health care system. Using generic drugs instead of brand-name drugs, when a generic is available, has been shown to increase medication adherence and improve health outcomes for chronic conditions.

Importantly, generic drugs offer these advantages without sacrificing quality; the Food and Drug Administration’s bioequivalency standards are met and often exceeded by generic-name manufacturers, and no randomized controlled trials—the gold standard of medical evidence—have identified clinically significant variations in outcomes between brand-name and FDA-approved interchangeable generic drugs.

However, to perform the tests the Food and Drug Administration (FDA) requires before approving a generic drug, manufacturers need access to one vital component: the brand-name product. Samples of the brand-name version of a drug can be used as a comparator to demonstrate the similarity of the molecular structure, or even the clinical outcomes from the generic product. Physico-chemical details about the brand-name drug, such as its molecular structure, stability, and cross-reactions, can be even more helpful in ensuring that the generic version adheres to the highest quality standards.

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The People of the State of New York v. Actavis: Making a Hard-Switch Procompetitive

By Ryan Abbott

Actavis is back in the spotlight regarding its allegedly anticompetitive behavior. Last month, the U.S. District Court for the Southern District of New York issued an injunction against Actavis and its subsidiary, Forest Laboratories LLC based on the New York Attorney General’s “product hopping” suit.

The suit concerns Actavis’ attempt to extend monopoly protection for its drug Namenda. Namenda is one of only a few FDA approved drugs to treat Alzheimer’s disease, and the only approved drug in a class of medications that act on the glutamatergic system by blocking NMDA receptors. Namenda is also Actavis’ largest revenue generating drug; it brought in $1.5 billion in sales last year. Unfortunately for Actavis, Namenda’s patent protection is due to expire in 2015. Once the patent protection for Namenda has expired, Actavis should ordinarily expect to see a dramatic reduction in sales revenue, as much as 90% in the first year, as consumers switch to a lower-cost generic version.

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Congressmen Express Concern About Proposed Changes to Generic Drug Labeling Rules

By Bob Bohrer

I have previously posted on pharmaceuticalpolicy.blogspot.com about the FDA’s proposed change to the rules for generic drug labels and an estimate of the liability costs that might be incurred by the generic drug industry as a result of the proposed change.  The Generic Pharmaceutical Manufactuer’s Association lobbying efforts appear to have motivated Congressmen Steve Israel (D-NY) and Timothy Bishop (D-NY) to draft a letter to the FDA requesting changes to the proposed rule.  A copy of the Congressmen’s letter to the FDA can be downloaded through this link.

9/22/14: HLS Health Law Workshop with Thomas McGuire

HLS Health Law Workshop: Thomas McGuire
September 22, 2014 5:00 PM
Griswold Hall, Room 110 (Harvard Law School)
1525 Massachusetts Ave., Cambridge, MA [Map here.]

Download the Paper: Do ‘Reverse Payment’ Settlements of Brand-Generic Patent Disputes in the Pharmaceutical Industry Constitute an Anticompetitve Pay for Delay?

Thomas G. McGuire, PhD, is a professor of health economics in the Department of Health Care Policy at Harvard Medical School. His research focuses on the design and impact of health care payment systems, the economics of health care disparities, and the economics of mental health policy. Dr. McGuire has contributed to the theory of physician, hospital, and health plan payment. His research on health care disparities includes developing approaches to defining and measuring disparities, and study of the theory and measurement of provider discrimination. For more than 30 years, Dr. McGuire has conducted academic and policy research on the economics of mental health.

Bumps on the Road Towards Clinical Trials Data Transparency- A recent U-Turn by the EMA?

By Timo Minssen

In a recent blog I discussed the benefits and potential draw-backs of a new “EU Regulation on clinical trials on medicinal products for human use,” which had been adopted by the European Parliament and Council in April 2014. Parallel to these legislative developments, the drug industry has responded with its own initiatives providing for varying degrees of transparency. But also medical authorities have been very active in developing their transparency policies.

In the US, the FDA proposed new rules which would require disclosure of masked and de-identified patient-level data. In the EU, the EMA organized during 2013 a series of meetings with its five advisory committees to devise a draft policy for proactive publication of and access to clinical-trial data. In June 2013 this process resulted in the publication, of a draft policy document titled “Publication and access to clinical-trial data” (EMA/240810/2013).

Following an invitation for public comments on this document, the EMA received more than 1,000 submissions from stakeholders. Based on these comments the EMA recently proposed “Terms of Use” (TOU) and “Redaction Principles” for clinical trial data disclosure.

In a letter to the EMA’s executive director Dr. Guido Rasi, dated 13 May 2014, the European Ombudsman, Emily O’Reilly, has now expressed concern about what seems to be a substantial shift of policy regarding clinical trial data transparency. Read More