Study Promotes Hatch–Waxman Model for Biologics Exclusivity

September 25, 2008
Pharmaceutical Technology Editors
ePT--the Electronic Newsletter of Pharmaceutical Technology

A new study concludes that an approval pathway for affordable follow-on biologics should be based on the Hatch–Waxman Act of 1984.

Boston (Sep. 17)-A new study concludes that an approval pathway for affordable follow-on biologics should be based on the Hatch–Waxman Act of 1984. The study, titled “Stimulating Innovation in the Biologics Industry: A Balanced Approach to Market Exclusivity,” compares four bills pending in Congress that are intended to foster competition, lower drug prices, and encourage innovation in the biopharmaceutical industry. The bills are the following:

All but Waxman’s bill contain exclusivity provisions that could potentially overextend monopoly protection, delay the introduction of cheap follow-on biologics, and undermine innovation. In contrast, the Hatch–Waxman Act has successfully balanced incentives to innovate with the need for access to new medicines, according to the study.

In a press release, Kathleen Jaeger, president and chief executive officer of the Generic Pharmaceutical Association (GPhA), said her organization strongly supports the study’s conclusion “that excessive exclusivity ‘reduces the pace of innovation’ and that exclusivity provisions such as those that formed the basis of Hatch–Waxman strike the appropriate balance that promotes both competition and innovation.” Excessive exclusivity would deprive consumers of access to affordable and innovative follow-on biologics, Jaeger said.

In a statement available on its website, the Biotechnology Industry Organization argues that an approval pathway for follow-on biologics should include a 14-year period of data exclusivity to encourage investment in biopharmaceuticals and promote the development of new therapies. Biologics research and development entails higher costs, longer development times, and lower late-stage success rates than small-molecule drugs. The majority of biopharmaceutical companies are small startups, and an appropriate period of data exclusivity would encourage the venture-capital investment that these companies need, according to the statement. 

The new study was written by Laurence J. Kotlikoff, professor of economics at Boston University. Kotlikoff examined the effect of various market-exclusivity periods on innovation in the biotechnology industry. Teva Pharmaceuticals USA (North Wales, PA) provided the funding for this study.