Health Care and Life Sciences > Health Reform Resource Center > Debate Over Exclusivity in Biologics Provision of PPACA Heats Up
14 Feb '11

Congress’ failure to specify what kind of “exclusivity” applies to biologics has led to a heated debate between biologic drug innovators and generic drug makers and insurers, with bipartisan groups of lawmakers on both sides.

The Biologics Price Competition and Innovation Act of 2009 (BPCIA), enacted as a part of the of Patient Protection and Affordable Care Act (PPACA), provides for 12 years of exclusivity for biologic drug products, but fails to specify whether this exclusivity applies to data or marketing. Data exclusivity is the period of time after FDA approves a new drug before a competitor can rely on data submitted in the original approval process for its own filing. Market exclusivity is the period of time after FDA approves a new drug before a competitor can begin marketing a generic version of the drug.

Although both of these favor the company that invents the drug (the brand-name), if the 12 year period applies to marketing exclusivity and not data exclusivity, generic drugs would be able to enter the market sooner. If the BPCIA exclusivity applies to data, the development of the generic drug would be significantly delayed and generic versions of the brand-name would not even be ready for approval until long after the data exclusivity expired.

Money is the major incentive on both sides. If BPCIA’s exclusivity is applied to data, brand-name drug products stay on the market longer without generic competition and would earn more profits from their new drug, something innovators argue they are entitled to because of the heavy investments they make to develop a new drug. If BPCIA’s exclusivity is applied to marketing, then generics enter the market sooner and reduce overall costs both by offering a lower-cost alternative to the brand-name, and by virtue of creating competition in the marketplace which typically forces the brand-name to come down in price. Not only does this provide profits for generic drug companies, but it also saves money for the consumers and insurance companies who pay for the drugs.

Bipartisan groups of lawmakers are falling on both sides of the issue, having written letters to FDA encouraging one interpretation over the other. At the end of the day, Congress will either have to come up with a legislative fix, or leave it to FDA to decide.