Financial Incentives to Encourage Development of Therapies That Address Unmet Medical Needs for Nervous System Disorders Workshop Summary (2015) / Chapter Skim
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2 Improving Market Protection
2 Improving Market Protection
Pages 13-30
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From page 13... ...
Drug-related patents are typically filed early during the discovery period, before clinical test ing and the regulatory approval process. In addition to long devel opment times, patents could be found invalid if later challenged, all of which may result in little patent protection time when a drug reaches the market (Longman, McLeod, Reddy, and Roin)
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From page 14... ...
Many participants also pointed out that uncertainties about markets and changing policies complicate the ability to assign value to drugs. HOW COMPANIES MAKE DECISIONS To inform the discussion about what might encourage companies to embrace CNS programs, several speakers outlined how drug pipeline decisions are made.
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Project Prioritization 1. R&D costs: In neuroscience, these costs are especially high because clinical trials are large and lengthy.
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Finally, the return on investment is important and relates to the number of patients multiplied by the price. Several participants noted that a crucial component of reimbursement is how much health care systems are willing to pay; regulatory approval alone does not guarantee that third-party payers will cover the drug (see Chapter 3 for more details)
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SOURC CE: RxScorecaard™ by Real Endpoints E LLC C; presented byy Roger Longm man at the IOM I workshopp on Financial Incentives to S Support Unmeet Medical Neeeds for Nerrvous System Disorders, D Januuary 21, 2015.
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At that point, the patent clock starts, and it continues through all subsequent drug development stages. As a result, preclinical and clinical studies that are necessary to establish key features of the agent's physiological impact, safety, and effectiveness consume potential market protection time.
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This is the case even if all safety and effectiveness data have become public.1 When a patent challenge is initiated, the first generic company that challenges patents can bar FDA approval of all competing generic drugs during a 180-day period after marketing commences for the first generic agent. This incentive encourages patent challenges, said Armitage; consequently, an entire legal industry of patent disputes be 1 See the IOM (2015)
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Congress has enacted several pieces of legislation intended to counteract some of the negative incentives that the standard patent system offers, particularly in medical areas where drug development is challenging and potentially unattractive. Hatch-Waxman Act The Hatch-Waxman Act,2 formally called the Drug Price Competition and Patent Term Restoration Act of 1984, created the abbreviated FDA approval pathway that made the generic drug industry possible.
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. Biologics Price Competition and Innovation Act As part of the 2010 Patient Protection and Affordable Care Act, Congress created an abbreviated approval pathway for large molecules derived from living cells -- biologics -- that are "biosimilar" to an FDAlicensed product.
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ODA provides numerous incentives, including tax credits and grants, a fasttrack approval pathway, and a 7-year period of market exclusivity for use on the "orphan" condition from the time of FDA approval. Originally, orphan drugs were for unpatented drugs only, said Armitage.
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; this period augments the 5-year data protection package provided by the Hatch-Waxman Act or ODA's 7-year registration exclusivity. The act also provides a special regulatory approval pathway.
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of data exclusivity plus 2 years of market exclusivity; in addition, it grants an extra year of protection for innovative drugs that provide significant clinical benefits over existing therapies for unmet medical needs (Frias, 2013)
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• Streamlines clinical trials • Modernizes medical product regulation The market protection section in the original draft of the bill drew upon the Modernizing Our Drugs & Diagnostics Evaluation and Regulatory Network (MODDERN) Cures10 and Dormant Therapies11 Acts to allow added marketing exclusivity for a product that is intended to treat an unmet medical need.
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Determining Market Exclusivity According to Armitage, the biggest challenge about the portion of 21st Century Cures that drew from the MODDERN Cures/Dormant Therapies Acts is its fixed market protection -- designed to afford parity in market protection for medicines being investigated to address unmet medical needs in life-threatening or other serious diseases, or conditions with medicines that have strong patent protection -- of up to 15 years (i.e., the 15-year protection periods serves as both a floor and a ceiling on protection from competition from generic drugs and biosimilar medicine. This section has since been removed in the second draft of the bill.
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From page 27... ...
"We call it GAIN PLUS," he said, "because the extra protections accorded to breakthrough CNS drugs for unmet medical needs are added on top of existing protections, not subsumed within." Although workshop participants discussed at length whether such a proposal would be feasible, Bonnie Weiss McLeod, partner at Cooley LLP, stated that patent law carries a huge amount of risk. "The law is 12 For more details on this proposal, see Choi et al., 2014.
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This provision aimed to encourage companies to pursue drugs that are not under patent protection, but that might prove beneficial in areas of unmet medical needs, regardless of medical area. While several participants were uncertain whether the 15 years is the optimal length of market protection (as noted in the previously mentioned acts)
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From page 29... ...
At the moment, antibiotics and neuroscience drugs rank high by this metric; in the future, other fields might rise in ur gency. The infectious disease community has driven passage of the GAIN Act, which provides extra market protection for anti biotics that address unmet medical needs.
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