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Summary

Biologics, which are sometimes termed biopharmaceutials or biotechnology drugs, have begun to play an increasingly important role in U.S. health care. Not only are sales of biologics growing rapidly, some experts estimate that in coming years half of all newly approved drugs will result from biotechnology. A number of patents pertaining to certain biological products will expire in the near future. Some congressional concern has been voiced over the possibility that these patent expirations may not be accompanied by the introduction of competing, lower-cost biologics in the marketplace. With respect to traditional pharmaceuticals, the Drug Price Competition and Patent Term Restoration Act of 1984, a statute commonly known as the "Hatch-Waxman Act," is widely believed to have encouraged the availability of generic substitutes for brand-name pharmaceuticals upon patent expiration. The Act in part permitted the Food and Drug Administration to expedite its marketing approval proceedings with respect to generic drugs. Some observers believe that the Hatch-Waxman Act's accelerated marketing approval provisions do not comfortably apply to biologics, however. Biologics differ significantly from traditional small-molecule pharmaceuticals in their size, structural complexity, and method of manufacture. Competitors who wish to develop followon biologics may face difficult, and even insurmountable difficulties in demonstrating that their product is equivalent to a particular brand-name biologic. Other commentators assert that different kinds of biologics vary considerably in their size and structure, and believe that existing Hatch-Waxman mechanisms are appropriately applied to many biologics. The patent system also plays a role in regulating competition in the biologics market. Patent protection is available for biologics in many circumstances, although the scope of protection may be limited by legal principles that restrict the availability of proprietary rights in naturally occurring substances. Several bills introduced in the first session of the110th Congress, including H.R. 1038, S. 623, H.R. 1956, S. 1505, and S. 1695 (ordered to be reported, with amendments in the nature of a substitute), would create an expedited marketing approval pathway for follow-on biologics within the Public Health Service Act. The bills vary in important details, such as the need for the FDA to have promulgated regulatory guidance with respect to particular product classifications prior to receiving follow-on applications. Certain of these bills also establish specialized patent dispute resolution proceedings with respect to follow-on biologics. A number also create varying periods of exclusive marketing rights for biologic products, both in favor of brand-name firms and follow-on companies.

Related Legislation:
• H.R.1038
• S.623
• H.R.1956
• S.1505
• S.1695

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