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12:00 AM
 | 
Jul 18, 2005
 |  BioCentury  |  Regulation

The confiscation gambit

While Europe's EMEA has been busy laying the ground rules for biosimilars, the status of follow-on biologics remains far murkier in the U.S. Legal ambiguities and a much more politically potent innovator industry have prevented FDA from advancing an FOB strategy as quickly as its European counterparts (see Cover Story).

As a result, the conflict is fiercer between companies seeking to promote and block FOBs on American soil as the combatants lay the groundwork for battles at the FDA, in Congress and in the courts that will determine the conditions under which off-patent versions of biologics could be marketed.

The latest salvo came last week, as opponents of FOBs set forth a constitutional argument against their approval. A legal analysis commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA) and filed with FDA on July 13 argues that the prohibition against government "takings" in the Fifth Amendment to the U.S. Constitution is a bar to approval of follow-on biologics. That clause states: "nor shall private property be taken for public use, without just compensation."

This argument seems to be part of a negotiating strategy aimed at delaying FDA action and bolstering the position of pioneer companies if and when Congress turns its attention to the topic, perhaps with a follow-on version of the Hatch-Waxman Act of 1984, which created the regulatory path for generic drugs.

Indeed, while the lawyers and Washington representatives of big biopharmaceutical companies are ratcheting up legal defenses against follow-ons, senior managers of some of the same companies are telling investors that copycat competition is inevitable. And several smaller biotechs are working on technologies that they hope will make it easier to achieve and demonstrate similarity to pioneer biologic products.

Appropriation

The 20-page PhRMA analysis submitted last week was written by Robert Long, Jr., the head of Covington & Burling's appellate and Supreme Court practice group. It starts from the premise that "because of the unique and complex nature of biologics, any follow-on application would require FDA to use and disclose the manufacturing methods and process information submitted by innovators in their applications for marketing approval."

Long contends that such use and disclosure violates the law and is contrary to "longstanding FDA regulations and policies that establish a reasonable, investment-backed expectation" that data submitted to FDA by biologics innovators will be not be released or used by the agency on behalf of another company.

In addition to the takings argument, Long argues that any decision to approve FOBs would reverse a policy against allowing abbreviated applications for biologics that FDA has had in place for 30 years and would therefore "be subject...

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