Download Addressing Biosimilars: Federal Legislation for a Pathway

Addressing Biosimilars: Federal
Legislation for a Pathway
May 28, 2009
Kerry A. Flynn
Shire Human Genetic Therapies, Inc.
Shire Human Genetic Therapies, Inc.
 Specialty pharmaceutical company with a range of products on
the market for Attention Deficit and Hyperactivity Disorder
(ADHD), gastrointestinal (GI) and therapies for human genetic
diseases
 Shire Human Genetic Therapies business unit pursues treatments
for patients and families facing such rare (“Orphan” or “UltraOrphan”) diseases as Fabry disease, Hunter syndrome, Gaucher
disease, hereditary angioedema, and metachromatic
leukodystrophy
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Hot topics:
 Data Exclusivity
 Regulatory Pathway
 Patent Issues
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Data Exclusivity Periods: Considerations
 Biosimilar may be similar enough to a pioneer biologic for regulatory
approval purposes, but different enough to avoid the innovator's patents
 New therapies will never be developed for some addressable diseases
 The current orphan incentives mean that the development of a therapy
for some diseases will never yield a return
 Lower commercial returns for similar development costs
 Prospective commercial returns for orphan biologics are much lower
than for other biologic drugs due to the significantly smaller addressable
patient populations. Any future pricing pressure will reduce incentives
further
 Magnifies risk of failure (lower portfolio profits to cover failed products)
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Data Exclusivity: Considerations (Cont’d)
 Large orphan markets have already been addressed
 Many of the larger orphan markets already have approved and
effective therapies (‘low hanging fruit has gone’)
 Greater commercial risks in remaining markets
 Remaining markets include diseases with high morbidity where there is
little ability to understand a drug’s impact on life expectancy (a key
driver of commercial return) prior to pivotal trials (ie. after much of the
investment has been made)
 In order to preserve innovation for orphan drugs in the future (and
in an environment of tighter pricing), exclusivity periods need to be
longer (than for non-orphans) to compensate innovators for
increased development and commercial risks in these challenging
markets
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Theoretical market model analysis
 Theoretical product development / commercialisation model
 Range determined for key variables
 Peak sales - $100m-$500m
 COGS – 12%-15% (implicitly captures facility investment)
 S&M % sales – 10%-20%
 Total development costs over 9-year period - $150m - $300m
 CMR biotech PoS benchmarks
 Other assumptions kept fixed
 Discount rate – 11.5%
 Tax rate – 30%
 Working capital – 20% of y.o.y change in sales
 Ranges of key variables were simulated using uniform distribution assumption
 Assumes that each value in the range is equally likely
 Simulated eNPV after defined periods of exclusivity assuming terminal perpetuity decline rate
of 50% post exclusivity expiry
 Analysed % of outcomes where eNPVs were positive for different exclusivity assumptions
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60% of hypothesized outcomes never make a return
with 7 years of exclusivity
Peak sales range $100m - $500m
 Peak sales range ($100m$500m)
100%
90%
80%
70%
60%
NPV > 0
50%
NPV =< 0
40%
 Reflects market size for vast
majority of small orphan
diseases
 Excludes large orphan
markets (>$500m)
30%
20%
10%
0%
6 year
7 year
8 year
9 year
10 year
11 year
12 year
 ~60% of outcomes never
generate a return assuming a 7
year exclusivity period
 ~35% of outcomes never
generate a return assuming a 12
year exclusivity period
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Duration of Patent and Regulatory Exclusivity
Peak sales
range ($m)
ELAPRASE*
2013**
2019
(500-600)
2011
REPLAGAL EU*
2020
(300-350)
FIRAZYR EU*
2018
2009
(350-400)#
2000
2005
2010
Patent Term
*Orphan Drug
** Regulatory Exclusivity in EU until 2017
# Assuming US approval
2015
2020
2025
Regulatory Exclusivity
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Regulatory Pathways: Considerations
 clinical trial evidence and data are fundamental for evaluating and
demonstrating the safety and effectiveness of a follow-on biologic,
and must be conducted on a product-by-product basis
 Avoid constraints on the scientific conclusions FDA can reach in
evaluating the similarity or comparability of follow-on biologics
 Trade secret and confidential commercial data and information of
an innovator must be protected
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Patent : Considerations
 Must not limit constitutional or statutory rights of patent holders to
protect against infringement
 Patent challenge involving the follow-on biologic product must be
litigated prior to marketing approval of the follow-on product
 No special patent litigation rules that favor follow-on biologics
manufacturers
 Interplay between Orphan drug legislation (“Same product”),
Biosimilar legislation (“similar product”) and Patent legislation
(“literal infringement/doctrine of equivalents”)
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Patent considerations
 Biotechnology processes define product
 Yeast fermentation
 Budweiser
 Amstel
 Heineken
 Molson
 Are these products equivalent? Similar?
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 Hormone Res. Foundation v. Genentech, 904 F. 2d 1558 (Fed. Cir. 1990)
 Patent
 Accused hGH product differed by two amino acids from claimed product
 CAFC held no literal infringement
 Regulatory
 Would product be similar enough to be approved as a Biosimilar?
 Orphan
 Is it the “same drug”? rhGH found to be “different drug” than pituitary derived hGH
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Amgen v. Hoechst Marion Roussel (EPO cases)
 Patent
 Patent claimed 166 aa mature sequence
 Accused product had 165
 No literal infringement
 Infringement under doctrine of equivalents
 Regulatory
 Products similar?
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Conclusion:
 Legislation must:
 Provide adequate incentives for development of orphan
biologics
 Not abrogate the rights of patent holders
 Rely on scientific evidence
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