Follow-on Biologics: As Mark-Ups Loom, What's Waxman's End Game?

Coming to an abrupt halt after racing at full speed is never easy, but that seems to be the best play available to generic advocates of a legislative pathway for follow-on biologics.

The week of July 13 could see mark-ups of health care reform bills on both sides of Capitol Hill, and proponents of brand-friendly FOB legislation seem poised to win inclusion of their proposals, which feature longer data exclusivity for brands and tighter approval criteria for follow-ons than the generic-backed bills do.

Both the brand and generic camps in the FOB debate state they are in favor of a pathway for follow-on biologics, but generic firms seem to have the most to gain from the new class of products, and their legislative proposals were the first to be introduced as bills in Congress.

But now the tables have in many ways turned, with generic firms hoping to slow the process down while brand firms advance their legislation. In the House Energy and Commerce Committee, Chairman Henry Waxman's H.R. 1427 was the first to be introduced this session, followed by H.R. 1548 from his fellow California Democrat, Rep. Anna Eshoo.

But Eshoo's bill was faster out of the blocks and has picked up 125 cosponsors, compared to 12 for Waxman's bill. The strength of conviction of some of those co-sponsors will be put to the test during committee mark-up, when Eshoo plans to offer her FOB bill as an amendment to the health care reform legislation, and appears to have the votes to pass it .

It would be a stunning vote if Eshoo's bill were adopted in the face of a rival proposal from the committee's chairman, but Waxman has suffered surprising mark-up defeats on health legislation before.

In 2007, during the mark-up of what would become the FDA Amendments Act, restrictions on direct-to-consumer advertising were removed from the bill, with then-Chairman John Dingell, D-Mich., famously voting against the language in the Health Subcommittee's "print" that had been developed by Waxman and Frank Pallone, D-N.J. (Also see "Risk Disclosure In Drug Ads Will Be FDA’s Focus After House Defeats DTC Ban" - Pink Sheet, 25 Jun, 2007.).

Waxman ousted Dingell as full committee chairman at the end of the next year, but the DTC episode clearly serves as a lesson for Waxman in counting every vote and a reminder that controlling the agenda does not mean controlling the outcome.

Legislative challenges are nothing new to Waxman, of course, who is on a bit of book tour promoting "The Waxman Report," an account of his political upbringing and adventures. In the book, Waxman emphasizes the virtues of vote counting and persistence, slowly building alliances over many years.

Now, however, Waxman may be in the position of trying to put the breaks on legislation, since it seems unlikely that he'll be able to achieve an outcome that his primary allies find acceptable.

Sandoz, for one, has said that Eshoo's approach would result in an uworkable market for follow-on biologics (Also see "Follow-On Biologics Under Eshoo’s Bill Not A “Viable Business,” Sandoz Says" - Pink Sheet, 30 Mar, 2009.)

Generic firms want a follow-on biologics bill that gives FDA maximum approval flexibility for the new category of products, and limited exclusivity for brand products. The Eshoo bill certainly doesn't do that, and none of the proposals before the Senate Health, Education, Labor and Pensions Committee appear to meet those criteria (Also see "Follow-on Biologics Base Camp: Senate Has Four Rival Proposals" - Pink Sheet, 8 Jul, 2009.).

Even the lowest exclusivity provision - the proposal from Sen. Sherrod Brown, D-Ohio, for a maximum of eigtht years - shows that brand firms will be comfortably positioned in the Senate if the legislation reaches a House/Senate conference.

Brown is a Senate co-sponsor of Waxman's legislation, which would offer a maximum of only six years of exclusivity. Brown's amendment, however, abandons that bill as a model, using Kennedy's approach as the backbone but starting with a base of seven years of exclusivity.

An amendment from Republicans Michael Enzi of Wyoming and Orrin Hatch of Utah, joined by North Carolina Democrat Kay Hagan, retains the simple, fixed 12 years contained in the bill approved by HELP in the 109^th Congress.

Kennedy's new amendment departs from fixed exclusivity, offering a base-plus-plus approach that starts at 9 years but builds higher, going to 13.5.

The Biotech Industry Organization is concerned that the new proposal does not offer enough exclusivity since it does not start high enough, and since "drug developers can only receive the base nine years of data exclusivity if they prove there is no major 'similar' substance already on the market, but the bill fails to explain what 'similar' means. Under this language, the first product within a class of medicines could receive a full nine years of protection, while all others could receive only two years - or even no protection at all."

If health care reform bills pass both chambers, Waxman can use his political savvy in conference committee, of course, where he expects to get support for low exclusivity from President Obama (Also see "FOBs: White House Says 7 Years Of Exclusivity Is "Generous Compromise"" - Pink Sheet, 29 Jun, 2009.). But a brand-friendly bill in the Senate, and even a close vote in the House would leave Waxman with little maneuvering room.

Could Waxman abandon the legislative push and try again later, as he notes in his book he has successfully done in the past? The idea that the follow-on pathway would not be part of this year's legislation was floated by his staff in April (Also see "Follow-On Biologics Legislation Faces Tough Road Ahead; Momentum Stalled" - Pink Sheet, 27 Apr, 2009.), but it seems unlikely, given the savings any pathway would produce are vitally needed for the reform legislation. And his brand opponents sense that they may be able to end the debate on their own terms.

It is in this political climate that Waxman's allies must assess their stances.

In a July 8 letter to Waxman, the National Organization for Rare Disorders said that while it "continues to wholeheartedly support" his bill, "the purpose of this letter is to modify NORD's position on the period of marketing exclusivity that the law should provide for biological products that are intended to treat rare disease" (Also see "Orphan Biologics Should Get Two Extra Years Of Exclusivity, NORD Says" - Pink Sheet, 9 Jul, 2009.).

Orphan biologics, NORD says, should get two additional years beyond the exclusivity for common diseases - however long that might be - in order to preserve the extra incentive for those products.

"An additional two years of exclusivity is necessary to make the development of a therapy for a rare condition sufficiently appealing to help mitigate the risk of developing a medicine for a little known, difficult to recruit, small patient population," the letter states.

While the letter could be read as positioning NORD for further negotiations as the follow-on biologics debate progresses, the organization also appears to be opening up a discussion on length of orphan exclusivity in general. At the very least, the letter raises questions about NORD's legislative focus going forward.

With those kinds of distractions on the home front, Waxman's battle against the brands will only get more complicated.

- M. Nielsen Hobbs ([email protected])