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Nov. 5 — The final text of the Trans-Pacific Partnership Agreement (TPP) released Nov. 5 provides up to eight years of data exclusivity for biologic products and lets countries develop an approval system for generic drugs and biosimilars.
The U.S. can retain its 12-year term for biologic data exclusivity under the TPP while this exclusivity for other signatory countries is likely to range from five to eight years.
The exclusivity period for biologics was one of the final topics that was settled in marathon talks last month, as developing nations sought quicker access to generic drugs and biosimilars.
Underlying the agreement are “principles” listed at the beginning that could provide leeway to countries that object to some provisions, possibly diluting the overall impact of the agreement.
The TPP says, “A Party may, in formulating or amending its laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Chapter.”
The agreement also allows countries to develop either an approval system for generics and biosimilars that is similar to that of the U.S. or an even more difficult approval process that wouldn't issue a patent for a generic or biosimilar unless the patent holder approved.
The TPP subject eligibility section permits the exclusion of patents for diagnostic methods but not for patents on genetic materials, the latter being different from U.S. case law.
Reaction to biopharma-related provisions of the agreement tended to be split.
U.S. biopharma groups complained that the TPP didn't adopt the U.S.'s 12-year exclusivity period for biologics created under the Affordable Care (ACA), generic pharma groups agreed with the TPP that 12 years is too long and smaller countries like Malaysia predicted that the agreement will lead to more expensive drugs.
The agreement, which covers the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, must now be approved by the U.S. Congress.
A drug is typically manufactured through chemical synthesis, which means that it is made by combining specific chemical ingredients in an ordered process, and a generic is chemically identical to a brand name drug. A biologic is manufactured in a living system such as a microorganism and therefore is structurally complex and often extremely expensive. In the U.S., a biosimilar is defined as a biologic product that is approved for market by the Food and Drug Administration based on a showing that it is highly similar to an already approved biologic product.
Data exclusivity refers to the amount of time after approval of a drug or biologic by a country's regulatory agency during which no generic drug or biosimilar maker can rely on the brand manufacturer's safety and efficacy tests.
The data exclusivity term for new pharmaceutical products is five years and three years for a new indication, formulation or method of use of an existing drug in both the TPP and the U.S. The length of data exclusivity for biologics under the ACA in the U.S. is 12 years and the TPP allows up to eight years.
The wording in the final TPP agreement is identical to the draft that was leaked by WikiLeaks in October (9 LSLR 1185, 10/16/15).
Under Chapter 18.52 of the TPP agreement, a country can opt for exclusivity of eight years for biologics, comprising five years plus an additional three years under certain market conditions.
A country also can choose to adopt only the five-year exclusivity provision.
A Malaysian organization, however, complained that the TPP is requiring that country to have a more expansive exclusivity period than it now has.
Mohd Nizam Mahshar, chairman of Bantah TPPA, a coalition of anti-TPP organizations, noted in a statement that, while Malaysia already observes the required exclusivity period for new pharmaceutical products, the TPP will lock it in.
As for biologics, Mahshar said, “Under the TPP, Malaysia must provide five years' data exclusivity for biologics. Malaysian law currently does NOT have data exclusivity for biologics and therefore will have to be amended to incorporate this. The number of years of biologic exclusivity has led to such high prices that even in the U.S., the Obama administration has repeatedly sought to reduce the number of years of biologic data exclusivity in that country.”
He added, “Our worst fears are confirmed, there will be pricier meds under the TPP.”
The Pharmaceutical Research and Manufacturers of America Nov. 5 issued a reaction statement that was similar to the one it released in response to the October leaked draft (9 LSLR 1185, 10/16/15).
PhRMA Deputy Vice President Mark Grayson said in a Nov. 5 e-mail to Bloomberg BNA, “PhRMA believes that strong intellectual property protections are necessary for the discovery and development of new treatments and therapies for the world’s patients. We are disappointed that the Ministers failed to secure 12 years of data protection for biologic medicines, which represent the next wave of innovation in our industry. This term was not a random number, but the result of a long debate in Congress, which determined that this period of time captured the appropriate balance that stimulated research and gave access to biosimilars in a timely manner.”
Grayson added that PhRMA is reviewing the text to determine the full extent and impact of the provisions affecting the biopharma industry.
A spokesperson for the Biotechnology Industry Organization declined comment, saying that the organization was still reviewing the agreement. In response to the October leaked draft, BIO President and Chief Executive Officer Jim Greenwood said in a e-mailed statement, “BIO strongly believes that 12 years of data exclusivity is a prerequisite to attract the investment required to continue medical innovation and develop new biological cures and therapies” (9 LSLR 1186, 10/16/15).
Citizens Against Government Waste on the day the final TPP agreement was issued released a report that described how the TPP will hold the non-U.S. countries to a higher standard for intellectual property such as patents and copyrights except for the biologics provision. Like Bantah TPP, the CAGW cited the Obama administration's desire to decrease the years of biologic data exclusivity in the U.S. and wondered if that had been reflected in the U.S.'s approach to the TPP agreement negotiations.
The Generic Pharmaceutical Association was generally supportive of the TPP provisions. GPhA President and CEO Chip Davis said in an e-mail to Bloomberg BNA, “It is important to note how far we have come, particularly with biologics exclusivity provisions. The negotiators realized that 12 years of exclusivity protections could be excessive and that more can be done to promote access to affordable medicine around the world. As Congress reviews this agreement, GPhA is hopeful that its bedrock principles of expanding patient access and increasing market competition are prioritized.”
The TPP also describes a framework for marketing approval of biosimilars and generics that could differ in the difficulty of obtaining approval, depending on the country.
Chapter 18.51 of the agreement allows countries to develop systems for pharmaceutical products relying on a previously approved product. The system must give notification to the holder of the patent covering the brand product and time for a patent holder to seek remedies such as a preliminary injunction to delay the release of an allegedly offending product until the matter is resolved.
Such a system would be comparable to the ones established in the U.S. by the Hatch-Waxman Act for generics and the Biologics Price Competition and Innovation Act under the ACA for biosimilars.
As an alternative, however, the section allows a country to develop a system that would preclude the issuance of approval to any third person seeking to market a pharmaceutical product relying on the safety and efficacy data of an approved product without the consent of the patent holder.
The TPP includes Section 18.37 on patentable subject matter.
It establishes that an invention must be new and have an inventive step. It also permits a country to exclude from patent eligibility those inventions from which it is necessary to protect “ordre public,” which means “public policy,” or morality, including the protection of human, animal or plant life or health, nature and the environment.
The TPP lets countries exclude from patent eligibility diagnostic, therapeutic and surgical methods for the treatment of humans or animals.
The final agreement then is similar to U.S. case law in its exclusion of diagnostic methods from patent eligibility (6 LSLR 404, 4/6/12) and to the European Union in its evocation of “morality,” which has led to court decisions that denied patents to inventions that involve the use of human embryos (5 LSLR 994, 10/21/11). U.S. court decisions have reached the opposite result in regard to human embryo research (7 LSLR 6, 1/11/13).
The TPP doesn't specifically exclude genes from patent eligibility, which the U.S. (7 LSLR 622, 6/14/13) and Australia (9 LSLR 1140, 10/16/15) do as a result of court decisions.
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The text of the agreement is at https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/TPP-Full-Text.
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