TPP Negotiations Resolved: Was It Really A Win For Global Biosimilar Market?

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

After a great amount of debate, the parties involved in hammering out biologics exclusivity rules in the Trans-Pacific Partnership (TPP) have finally settled on a deal. However, these final negotiations have garnered the ire of the pharmaceutical industry and nonprofit groups alike. Despite the push from the U.S. to secure a 12-year period of data exclusivity, Australia’s demands for a five-year exclusivity period were closer to the mark. Policy makers settled on a mandatory minimum of five years for protection, The New York Times reported last week — though this length of time could also stretch to as long as eight years. While this decision does not affect pharmaceutical patents protecting the reference biologic, this decision will at least grant biosimilar makers access to clinical data for reference biologics, which they can then use to gain regulatory approval for their biosimilars. The text of the final negotiations has yet to be released, but once officially published, these new data exclusivity rules will be effective in the 12 countries involved in the TPP: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S., and Vietnam.

This decision led to complaints from both Big Pharma and nonprofits. Upon learning that policy makers selected a five-year period of exclusivity, PhRMA President John Castellani expressed the organization’s disappointment, stating, “This [12-year] 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 but gave access to biosimilars in a timely manner. While we await the final details, it appears that the Ministers missed the opportunity to encourage innovation that will lead to more important, life-saving medicines that would improve patients’ lives.”

However, from the nonprofits’ side of things, representatives of Doctors Without Borders (MSF) and Public Citizen feel that the final decision reflects the government’s protection of Big Pharma’s demands. According to Public Citizen, despite the five-year minimum, “The deal also includes mechanisms that would help the U.S. Trade Representative (USTR) browbeat countries, now and in the future, to get what Big Pharma wants, and pull countries toward longer monopoly periods.” In addition to Public Citizen’s colorful choice of the word “browbeat,” the MSF took it a step further declaring that “the TPP will go down in history as the worst trade agreement for access to medicines in developing countries, which will be forced to change their laws to incorporate abusive intellectual property protections for pharmaceutical companies.” In particular, these nonprofits are concerned about the fact that no maximum length of time for protection was set. Because of this, the U.S. could end up pushing for longer periods of exclusivity in the future.

But what surprised me most of all about the news following this resolution was the lack of attention being paid to the generics’ side of things. Headlines, such as “Final TPP Agreement Draws Ire From Both Sides Over Biologics Exclusivity,” was accurate, at least for biologics makers and the nonprofits I mentioned above. However, I question whether our industry can even be summed up as one side anymore. As the U.S. has been faced with an increasingly consolidating generics industry and a biosimilar market that has, well, one product available with more awaiting FDA eyes, the industry now seems to be split into two: those threatened by biosimilars and those making biosimilars. (This is a bit general to say, given the fact that some companies are exploring both biologics and biosimilars.) But given the recent battles between reference and biosimilar players, it feels as though the industry has become polarized. And the outcomes of negotiations such as the TPP only reveal this split more. Even though news articles haven’t focused on the generic industry’s response, the Generic Pharmaceutical Association (GPhA) and its Biosimilars Council released a statement in support of the final TPP decision. Chip Davis, president and CEO of the GPhA, stated, “Trade provisions that facilitate both the development of innovative, life-saving medicines and the availability of affordable generic medicines are a win for patients. We applaud the USTR and negotiating countries for working diligently in an effort to strike this balance.”

From this response, it becomes clear the generics industry finds the final decision to be “balanced” and a positive solution, both for patients and for biosimilar makers seeking regulatory approval. And, upon learning the TPP negotiations had come to an end, I was quick to assume this deal was a win for those in the generics industry. After all, they now are able to gain access to reference product data, which will enable them to submit and get their products approved more quickly. However, could we be too quick to accept this decision as a triumph for biosimilar makers?

According to Judit Rius Sanjuan, the U.S. manager and legal policy adviser for MSF, the new requirement that countries must have at least five years of data protection will mean that biosimilars will be delayed from entering countries that previously had no data protection rules. For instance, Sanjuan tells Vox, “Peru, Vietnam, Malaysia, and Mexico — they had zero monopoly protection on data for biologics. It’s a loss for people in developing countries. They’ll face higher prices for longer periods of time, and there are many products we need that are biologics.” While five years was a win for countries like Australia that were pushing for as short a time as possible, for countries with previously no barriers to entry, this move will keep biosimilars from entering the market for at least five years, Vox explains.

Beyond new data exclusivity time frames, certain countries could also have new patent-related obligations. For instance, pharmaceutical companies have proposed that certain modifications to drugs should warrant extended patent protection. This would encourage pharma companies to engage in “evergreening,” or the act of modifying existing drugs in order to garner a longer period of patent protection. Should pharma’s wishes come true and these proposals gain credence, this would also mean countries with few regulations surrounding patents would be held to a higher standard, barring generics’ entries to market. According to Amy Kapczynski, a Yale law professor, “We know from experience that more expansive patent laws end up reducing the availability of generic medicines. When you start mucking around in the precise ways countries can define your patents laws, you limit everyone’s policy flexibility.”

Evergreen patents aren’t entirely foreign to drugmakers navigating the U.S. market. Similarly, as negotiations did not set a maximum standard of time for data protection, this still allows drug companies in the U.S. to keep its 12-year data exclusivity period. All in all, this agreement will most likely not impact the emergence of biosimilars on the U.S. market — well, at least not immediately. As Reuters speculates, this could become a problem in the future given the rising costs of medicine and the discrepancy between the U.S. market and its TPP partners with shorter exclusivity periods. KJ Hertz, an analyst with AARP, told Reuters, “Why should we pay more than the rest of the world? We want an agreement that leaves flexibility to make changes to U.S. law.” There could also be some good news on the horizon, as late last week, the U.S. Federal Trade Commission (FTC) came out against brand makers tweaking the formulas of their drugs in order to escape generics competition. As the Generics and Biosimilars Initiative (GaBI) reported, “The FTC explains that when brand-name drugmakers ‘tweak’ the formulation of a brand-name drug shortly before its patent expires, this prevents automatic substitution of generics. They can thereby preserve monopoly profits by combining minor profit reformulations with efforts to damage or destroy the market for the original formulation.” Known as “product hopping”, this tactic, according to the FTC, violates antitrust laws. However, when it comes to the current shape of the global biosimilar market especially, the recent TPP negotiations could still leave open some potentially dangerous, market-limiting loopholes that could make these final negotiations less balanced, tipping the scale in favor of higher-priced reference drugs and their makers.