Patent Extension Delays Biosimilars Competition

A small provision within the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) established a way for biologic drugs, which are derived from living material of humans, plants, animals, or microorganisms and are used to prevent, treat, or cure human disease or injury, to face competition from generic versions known as biosimilars.  PPACA set a 12 year limit on patent protection for these biologics; the provision was added because biologic drugs were not covered by previous law governing most pharmaceutical competition.  The biosimilars provision was touted as a way of allowing generics to get to market faster, reducing the overall burden to the healthcare system, and still protect the research and development interests of the branded drug manufacturer.  Although biologics are harder to replicate because of their large molecule composition, pharmaceuticals have been increasing their focus on this potential revenue stream.

Some of the savings may be lost, however, as Amgen recently announced a new patent approval that could protect its big-selling drug Enbrel® , used to treat rheumatoid arthritis and psoriasis, from generic competition for 17 more years.  Sales of the drug reached $3.5 billion in 2010, accounting for nearly one-quarter of the pharmaceutical’s sales.  The patent approval has placed a major barrier to competitor pharmaceutical plans to develop a biosimilar to Enbrel.  As a result, the upwards of $20k per year price tag for Enbrel may remain high unless there is a successful patent challenge.  Earlier this year, Amgen had indicated competition was at least five years away, due to other patents covering the use or formulations of Enbrel, although those patents by nature are weaker than patents on the basic composition of a drug.  Merck, for instance, struck a deal earlier this year with South Korea’s Hanwha Chemical to develop a version of Enbrel.

The application for the new patent was filed in 1995, but it took until late November 2011 for it to get through the U.S. Patent Office because of reworking and rejection of the patent.  The main patent on Enbrel was to expire in October 2012, but with the 17 year patent grant, biosimilar competition would be delayed until November 2028.  The result would be a lengthy 30 year market window for Enbrel, which the New York Times reported, exceeds the general 20 years of protection granted by current U.S. patent law.  Revisions to patent laws after 1995 rewarded a 20 year exclusivity from the date of application, to avoid situations where extended protection was granted because of delays or maneuvers at the patent office.  Amgen’s filing occurred before the change in patent law, so the previous rules govern and the newly awarded patent will last 17 years from the date of patent issuance.

The question now is whether it makes sense for 16 years to pass before a patent is granted when other patents related to the product were already enforcing exclusivity.

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