Enabling The Next Biomedical Revolution

In his State of the Union address President Obama singled out biomedical innovation as a key driver of America’s future prosperity. This sector has indeed generated tens of thousands of jobs, attracted billions in investment and created advanced medical treatments for Americans.

A promising new area of biomedicine, called biologics, has been particularly effective at treating late-stage cancers. Made from live tissue and cells, biologics use the human body’s own immune system to attack cancer cells while leaving healthy cells untouched. However, rather than celebrating these miraculous scientific breakthroughs, government bureaucrats have worked to squelch them.

Take Avastin, which was developed from a mouse antibody and restricts blood flow to tumors. Avastin is FDA-approved to treat colon, brain, lung and kidney cancer, and is one of the most widely prescribed cancer drugs in the world.

Last December the Food and Drug Administration revoked its approval of Avastin as a treatment for late-stage breast cancer, although three separate trials indicated the drug significantly prolonged the time some women lived without their breast cancer advancing.

Stunned by this unprecedented move, many experts suggested that Avastin’s large price tag–a treatment course can run $90,000 annually–played a role in the agency’s decision.

This is just the start of the government’s assault on biomedicines. Regulators are now moving to weaken the intellectual property protections on which pharmaceutical R&D depends.

Under the new health care law drug companies are allowed a 12-year period of “data exclusivity” for new biologics. Data exclusivity allows companies to keep their proprietary research data on new biologics private for a specified period of time. After data exclusivity expires, competitor firms gain access to that research and could use it to create “biosimilars,” which are essentially copies of biologic drugs.

Twelve years might seem like a long time. But consider the massive investment drug companies put into developing a new biologic. The average biologic requires $1.5 billion–and more than 15 years–to develop. (Avastin came in on the high side: $2.3 billion over 20 years.) The facility to produce the drug alone cost up to $450 million. And less than one-third of biologics that enter clinical trials ever gets approved for sale and use by patients.

Given these high up-front costs, innovator biotech companies need strong intellectual property protections. Twelve years of data exclusivity is just about enough time for biologic firms to break even. (Academic research suggests the ideal time frame for data exclusivity is a bit longer–13 years to 16 years.)

Yet regulators are now trying to weaken existing provisions to protect drug company patents by refusing to extend a company’s data exclusivity period–even if that company has made significant improvements to a product’s safety or potency.

Such a decision would be devastating for biologics companies–and medical innovation. Biologics are complex medicines, targeting highly specific biological mechanisms that are themselves often the subject of continuing research. As a result, a biologic is often still in a relatively early research stage at the time of FDA approval.

Biologic companies perform post-approval research not only to improve effectiveness, but also to find “new indications,” allowing the drug to be used to treat a variant of the same condition or even an entirely new condition.

Avastin, for example, was originally approved for colorectal cancer (2004) and only subsequently for lung cancer (2006), breast cancer (2008), and kidney and brain cancers (2009). In short, success against one cancer provided the foundation–scientific and financial–for additional research and clinical testing on other cancers.

Weakening data exclusivity rules would put a rapid stop to such post-approval research–and much of the pre-approval research too. After all, if competitors can just piggyback off another firm’s work–the billions of dollars spent and the thousands of man-hours employed–why would that firm bother to create the drug in the first place?

Given the risks involved and the high cost of R&D, many firms will be forced to slow down new research operations–or close up shop completely.

Make no mistake–government regulation greatly influences the rate of medical innovation. Subjected to an ever-growing array of punitive taxes, haphazard over-regulation and myopic cost-containment measures, pharmaceutical innovators have been under constant attack from Washington.

New biologics hold the promise of breakthrough treatments for cancer and countless other ailments. Our best scientists are eager to discover them. Now all we need is for Washington to get out of the way.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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