This episode is audio from the Extending the Hatch-Waxman Act Model panel from the Engelberg Center's Hatch-Waxman at 40 and Beyond Symposium. It was recorded on September 26, 2024.
Michael Frakes, Duke University School of Law
Emily Marden, Sidley Austin LLP
Nicholson Price, The University of Michigan Law School
S. Sean Tu, West Virginia University College of Law
Melissa Wasserman, The University of Texas School of Law
Bruce Wexler, Paul Hastings LLP (moderator)
Announcer 0:00
Welcome to engelberg center live a collection of audio from events held by the engelberg center on innovation Law and Policy at NYU Law. This episode is audio from the extending the hatch Waxman act Model Panel from the engelberg Center's hatch Waxman at 40 and beyond symposium. It was recorded on September 26 2024
Bruce Wexler 0:24
Hello everyone. Thank you. My name is Bruce Wexler. I'm global co chair of IP, of Paul Hastings. I represent general innovators, small, medium, large, but I also do innovators against other innovators. And I represented, for example, Barringer in the humera wars on the biosimilar side. And I represented Lilly, for example, on basic lar, which was a sort of generic on date on Atlantis. So I've seen both sides of it. We're going to do something a little different now, slight shift. There was an allusion to it before biologics. So we're going to do it even though it's extending hatch Waxman, it's really focusing on the biologics and the BP CIA. So what we have is our steam panel here. The plan is that I will do a little bit five, five to 10 minutes of just groundwork, setting the stage on the biologics, and then each member of the panel will get up and talk for five to 10 minutes about what they're working on or what's of interest to them in the biologic space. And then we will have conversation and questions and answers. Okay, so I'm not going to do a deep dive into the BP, CIA that would take a week to do. What I really want to focus on is a couple of things, which is sort of significant differences from hatch Waxman and how it was informed by it. So the timing, first of all, it's it's more recent. And what's interesting about the BP CIA is that it was enacted in 2010 and it took a long time before it really got going for for various scientific also, the FDA regulatory scheme hadn't been established very clearly, so you didn't start to see biosimilars for a while. In terms of hatch Waxman, the experience with hatch Waxman laid a lot of groundwork for the BP CIA, but significant differences are sort of the new drug application cost versus the PLA the biologic license application cost significantly different. Also the investment in a bio similar, very different from a generic small molecule. Both, both involve much more significant investment, much more complexity. We heard, I think it was a question about sort of the players on the biosimilar space. And I have a slide that'll show that, in terms of lingo, you know, the reference product sponsors, what we talk about for the bla, the biologics license, the biosimilar applicant, the BA I had a case where the lawyer representing the HUMIRA tried to call us the BS, the biosimilar. I knew that was intentional, but we don't say BS, especially if you're on the biosimilar side, and one of the key factors for this whole scheme is the manufacturing process. So on the hatch wax side, manufacturing is sort of, sort of takes aside. You know, the process patents aren't listable. They don't generally get enforced. You know, generics can make stuff. It's not a big deal. On the biologic side, manufacturing is a huge place for the action, and that's because historically, although not today, there was a time when you would characterize your biologic by how you made it, as opposed to what it was. Today, technology is much different, where you can actually know better what it is, but the It grew out of not knowing what it is and talking about how you made it. And so the process was integral to the to the to the scheme, the there's two words that we use in terms of the kind of biosimilar. You have a biosimilar and you have an interchangeable. An interchangeable is essentially like a generic. So what it means is that if it's an interchangeable biosimilar, you can take one and then the patient can switch to the other, and they can switch back and forth, and they're interchangeable. A biosimilar is not interchangeable. It's not like an AV rated drug. It requires its own marketing. It requires its own entire scheme. One of the things FDA has been doing recently is trying to make it easier to be interchangeable, because it was very, very, very hard to show interchangeability. Another key difference is that the patents that you see, like I said, are on process innovations. And this is another important difference is your patent doesn't have to cover your product. So with hatch Waxman in the Orange Book, the orange book is all about your patents that cover your product, the biosimilar game, the litigations often involve patents that Don't cover your product. Because, again, it's maybe processes that for making it and you have a landscape a. This is a point I made before about interchangeability. The FDA is trying to make it easier, and part of the reason it's so difficult is biologic is notoriously susceptible to inducing an adverse immune response. You're essentially taking a protein and putting it directly into your blood, and your body evolved to not like that, right, and it might see it as a virus or something. So unless you do it right, you can have a very significant immune response. So the switching studies are very important. But if you think about the fact that a single patient may react differently for dosing over and over again, how do you prove that that patient's going to react the same to two drugs? It's very challenging, and the FDA has been working on that. And here's a few charts. It's in the materials. So I have a few charts here that basically what we tried to do is take every biosimilar, find every biosimilar, and so we listed it by in chronology of when the first biosimilar appeared. We have the brand, the reference drug, and then the biosimilars. But the takeaway here is, first of all, you start to see them appearing years after the enactment of the law, and then you start to see them increasing. The second thing to notice is that the players, if you look at the biosimilar applicant to the question before, what you see are two things. You see innovator drug companies like Amgen. And in this slide, you have Amgen, you have Pfizer, and what you see is also on the other side of it, companies like Amgen. So Amgen is a biosimilar and an innovator, but you also see generics, but the generics tend to be very what I would call sophisticated generics, like a Mylan, Samsung, bioethics, Sando, you don't see sort of so what I would consider one of these smaller generics who are pumping out small molecules and just chipping out the pills, you know. And that may be changing as technology gets easier, but as you go down the list again, you see this same pattern. And so here we tried to show the list. This list was very small a few years ago. It got much bigger in the recent years. So it's not a linear growth. It's a little bit more exponential. I'm almost done. I just want to show we heard about the regulatory we heard a lot about the NC minus one and the regulatory period. This slide shows you the basic structure, the regulatory accessivity, so the biologics licensed in Year Zero, they get an exclusivity for 12 years, and after four years, they can start seeing biosimilars. And during that four to 12 year window is when you're supposed to resolve all your patent issues. Now, of course, if the biosimilar files much later, they have a shorter window. And we saw that when the law first got enacted, a lot of the drugs had already passed. The 12 window, 12 year window, we saw that, like with Humira, there is no orange book. And so this is, this essentially the structure for how these things work. And this is, I think, my final slide, yeah. So basically, what I'm showing here is some of the key differences. I'll just list them out in the in the hatch Waxman, you have the orange book. There is no orange book for biologics. There's something called the purple book. We might hear, we're gonna hear a little bit about it, but it's not like the orange book. And so how do you know what the patents are? The concept is, it's a sui gene I think of it as a sui generis generation of an orange book in the context of a litigation, somebody came up with that idea. So I file my biologics application, and then we go through what's called a patent dance. And through that dance, we essentially create a list of patents cooperatively, theoretically, and that creates this set of patents that get litigated in two phases, ridiculously complicated. I don't know whoever who thought of it. It's like nothing I've ever seen. There's no 30 month stay now there is, there is a stay, an effective stay, because the bio similar, has to give what's called a Notice that I'm going to launch. They can give it any time, but they have to give a notice, and that gives a six month cushion. But once they give that notice. It's a declaration of certain kind of war. So if you're a biosimilar, you sit and you wait and you time when you're going to give that notice, knowing you're creating a new wave war. But you need to give that notice to get on the market. It's, I think what we're seeing in the BP CIA is what we saw with hatch Waxman at the beginning, where these sophisticated companies tried to figure everything out. And it's happening now. It's very fertile ground, and there's a lot of law being generated. All right, I think I'm, I think I'm done for now. And if there's any questions, obviously I'll come back with that. I'm going to turn it over to each panel member who's going to talk about what they've been working on, or things of interest. I think Emily, you're you're up, it's however. However,
Emily Marden 9:40
I'm just gonna sit Hi. My name is Emily Marden. I'm a food and drug regulatory lawyer at Sidley Austin, which is a large law firm, and I focus specifically on regulatory law. So I think about hatch Waxman, and the expansion of hatch Waxman in various areas, really, from a regulatory perspective. We heard a lot about exclusivities pathways, and that's what I'm thinking about. And I just, you know, the the request for this panel was to think about issues that have arisen as the hatch Waxman model, which was developed for small molecules, has been expanded. And I just wanted to kind of make two observations from a regulatory perspective. And with all due respect to that very helpful overview of the BP CIA, I first want to back up, back into the hatch Waxman model, because the interesting thing there, again, from an FDA perspective, as we've all acknowledged, and FDA acknowledges, hatch Waxman was developed with small molecules in mind, and the 505 J The anda generic pathway is really designed around that. However, in the 40 years that have passed since hash Waxman, the landscape of drugs has changed significantly and includes many more highly complex drugs. These can be large macromolecules, they can be nanomaterials, all kinds of things. When the bpcia was passed in 2010 there was an explicit move by Congress to move proteins which are also very large molecules, over to the biological pathway, because of concerns about copying and manufacturing and all these things that we see by similars. And we'll come back to that. But there are an awful lot now of these complex drugs that are approved under new drug applications. And so in the drug pathway, and the pathway for a follow on to be approved remains those hatch Waxman pathways, namely, either 505 J, true, generic, or 505 b2, we can come back to later. So the 505 J pathway for approval of a generic requires pharmaceutical equivalence or sameness, and bioequivalence, which is essentially equal rate and extent of the active pharmaceutical ingredient in the body or the site of drug action. FDA and sponsors of generic complex drugs have really struggled, because oftentimes these very large drugs cannot be fully characterized. So to achieve sameness can be very complicated, like a lot of biologics, manufacturing is critical, bioequivalence can be really difficult to establish. And so my comment here is that FDA itself has made efforts to expand the hatch Waxman model in developing strategies to get to generic approvals of these complex drugs, and it has involved gdufa, which is the generic drug user fee, large amounts of cash to develop regulatory science. I mean, I think there's a meeting going on, even this week at FDA, on complex drug kind of regulatory strategies, analytical methods. How do you get to sameness? The other thing you know, from a legal perspective, that's interesting, that FDA has done is try to wiggle a little bit away from the sameness requirement. So if you read FDA guidance and FDA commentary, they start using things words like, no significant difference, or, you know, sufficiently similar. And these things just sort of start to pop up, which are maybe semantics or maybe not, but it just shows there's this struggle? What's my point? This is difficult, not only for FDA, but also for generic sponsors. I mean, you can track the data of the time it often takes to get generic complex drugs developed and approved. You can see that some are submitted and withdrawn. We have something called bioequivalence guidance that FDA started issuing some years ago, and was urged to issue by a GAO report for complex drugs, these change over time. So there's just a tremendous This is another expensive aspect of hatch Waxman, a tremendous amount of effort in dealing with complex generics. And so that's one area where I think FDA, on its own, has really made efforts to address this problem. I'm not sure it's resolved, but it's an area to watch. And one thing to think about is whether the 505 b2 pathway, which allows for studies but not automatic therapeutic equivalents, is a possible avenue to help facilitate faster and more streamlined so that's one comment, and then I just want to tie back to the overview of the biosimilar pathway and the bpcia and just comment on reference product exclusivity, which, as Bruce mentioned, is 12 years. And I think we'll have some more discussion here about whether 12 years is right or wrong, or too long or too short. But the interesting thing I want to comment on, from a regulatory perspective, is that it's been 15 years now since this was introduced, and there's still significant uncertainty around it, such that for many biological product developers and bio similar market entries, you simply don't know if there's reference products. Exclusivity for a product. And just to note, it is a 12 year form of exclusivity, four years of data exclusivity. FDA has taken the position, really since the BP CIA was passed, and in its initial guidance as to how to interpret reference product exclusivity in 2014 that it would figure out if a product had reference product exclusivity when it needed to. And the net result is, if you open the purple book, which is supposed to have all this information about approved biological products, you simply don't know if a product has exclusivity. And one of the reasons is the structure of that reference, product exclusivity, in many ways, the BP CIA was an extension of hatch Waxman that also attempted to correct for what was perceived as flaws in hatch Waxman. And of course, there's been a lot of criticism, and there will be more discussion here today about the possibility for sequential exclusivities on drugs, new chemical entity exclusivity, and then three year new clinical study exclusivity, which can be gained for anything that adds to the label that requires clinical studies and that's seen as a way of evergraining or gaming system. When the reference product exclusivity section was added. The effort was to be to make sure that wasn't going to happen and to make sure a product sponsor or their licensee or related party could only get one shot at that 12 years. And that's very clear. I mean, the statute says no exclusivity for supplements to a bla, but what is very unclear is what happens when the same sponsor or a related party develops a drug or a biologic. I should say that is different in some ways, but related in some way, but it's still the subject of a full bla, the words of the statute essentially say for there to be another period of reference product exclusivity, for an already approved biologic or some relation to it, there has to be a change in structure that results in a change to safety, purity or potency. But there's very little insight, since FDA is not making these decisions as to the scope of the change in structure necessary, or the scope and change to safety, purity or potency. As I said, FDA has issued guidance that offers some language, but repeatedly over the last decade, has said, you know, we'll figure it out when the questions asked. And FDA really doesn't figure it out until there is a biosimilar coming along the pipeline and patents being filed. But of course, for biosimilars, this makes the situation very challenging too, because they may be seeking to enter a market without knowing there's exclusivity. So I will stop there. But those are sort of my two observations on expansion of patent election.
Melissa Feeney Wasserman 18:02
I Yeah, okay, so my name is Melissa Wasserman. I'm a law professor at the University of Texas, and this is a work that's co authored with Michael Frank Suzette Duke, and I'm going to start, and then he's going to kind of take over midway through the presentation. So thank you very much to the organizers. I'm delighted to be here. I always love to come back to my own ladder. So what was really the impetus behind this work was a lot of concern with prescription drug prices, right? This is a huge issue on Capitol Hill, lots of hearings, and we think one area, right, or one issue that's really at the heart of high prices that hasn't received as much attention as it should, is the role that biological drugs are playing in prescription drug prices. So biological drugs, right, represent about 2% of all US prescriptions, but close to 50% of the spending that we have on on pharmaceuticals now, and they seem to also contribute to the vast majority of increases in drug spending over the last decades have come from biologicals. Okay, so Bruce already covered this, right? What's the difference between small molecules and large molecules? Small molecules have relatively simple structures, relatively easy to chemically process. Been around for a long time. Count about 90% of our prescription drugs today. Biologics are more recent vintage. Came around the 70s, 1970s they're derived from living organisms, and their components are characterized by these large, complex macromolecules. Fuels. Now there are a number of factors that contribute to the high prices of biologics that both include the complexity and how they're made, but there's also concerns about patents. Right? We know, right. We've already, already been told how much that pharmaceutical firms often obtain a whole series of patents associated with one approved drug product that may be a primary patent that covers the active biological ingredient that forms the basis of the drug. And then as the drug development process goes on, they obtain more secondary patents that could be method of uses, manufacturing, right formulation, patents, etc. Now there are really two patenting strategies that have been controversial to the extent that people debate whether these strategies are actually legitimate extensions of the monopoly period or really unnecessarily delay biosimilar entry. And one of them is kind of pejoratively reformed to as evergreening. This is the idea just because pharmaceutical firms are getting a whole series of patents, the later filed patents extend later. So we may think that the effective lifetime of the drug is more than 20 years, although Robin and Scott suggest that that's kind of stayed constant over time. And then the second one is patent thickets, right? This is the idea that you protect a drug with a bunch of patents that create such a dense web that it's almost impossible for the biosimilar to go through and get rid of all of those, right? So they just have to wait until they expire. And now these are both concerns with small molecules, but we think in some ways they may be even more salient for biologics, because they're just much more complex, and there's many more aspects that you might be able to patent right with their production than small molecules. So what do we know about the biologics patent landscape? Virtually nothing, right? Why is that? Well, Bruce also told us right that for small molecules, we have the hatch Waxman Act, which gives us this high degree of transparency of patent rights. When you file right your new drug application for a small molecule, you also have to list or tell the FDA what patents you think would be infringed if a generic launched, and then they list this in the orange book. And as been mentioned earlier, this has been great for researchers, right? It links the patents to the approved drug, and we've been able to study how that patent ecosystem has been working for small molecules. But Congress took a different path with the transparency of patent rights associated with biologics, that biologics price competition and Innovation Act, which empowered the FDA to have this abbreviated pathway for biosimilars does not require biologic companies to provide patented patent information to the FDA upon the filing of a license application. Right? This information only comes out if there's a lawsuit and there's something called the patent dance, right? And it is only if the biosimilar kind of agrees to it, and even if there's an exchange of patent information, it wasn't, I think, until 2020 that the FDA actually had to publish it. So as a result, this purple book, right, which is the orange book, counterpart to biologics, is largely devoid of really meaningful patent information. Okay, so what we did was we applied that a grant from the NIH which what we're doing is building a biologics database. We're trying to build a database of patents that would likely be infringed upon the launch of a biosimilar for each FDA approved biologic, and then we're going to try to repeat some of the research that we've done on the small molecule side for on the biologic side. And so what we have done, or what does this mean, that we're including patents in the database that we think will likely be infringed upon the launch of a biosimilar. We don't include method abuse patents for unapproved methods, right? So if a biologic has only been approved for method A, we're not improved. We're not including patents to use that biologic for method B. We also don't include combination patents. For example, if the biologic has approved by itself, it's not conjugate with something else. And so for our methodology that we've used to identify patents is we're going to we started with the purple book, which only had a few 100 so that didn't get us very far right. And then we moved on to look to identify patents that were asserted in litigation, patents asserted in PTAB, right, the adjudicatory board at the PTO, we identified patents in the three a list we look at patents that were extended, had patent term extensions, right? They're listed at the PTO for approved biologic but by far the most intensive thing is that we're doing patent searches on this Orbitz intelligence software. So what are we doing for these searches, for each approved biologic? The first thing we do is we're going to look at the assignee, and we are going to look at anything that's related in that corporate tree. So that's one. Of the nice things about using this orbit software is it links anything that's related. And then we're looking for the trade name, the chemical name, the internal classification code and the drug class, whether this shows up in the abstract, the title or the claims. And then the second search we're doing for that biologic is now we get rid of the restriction to the assignee, right? Or who, by assigning, I mean, who's submitting the license right for the biologic at the FDA. And then we look for the trade name, chemical name and internal classification code. We get rid of the drug class, because it's just overwhelming with how many returns that we get. And then the third one that we do for the search is there's no restriction on assignee, and we look for the bio sequence that's been approved. Now, not every biologics associated with the bio sequence, right? About 50% of them have, and we search for those particular returns. Now, the best selling biologics, we got close to over 1000 patents, right? And then we're going through and reading the claims to see if they meet our search criteria. So we have a postdoc named Jared. He has a PhD, recent grad from UT wants to go and be a patent attorney. Wants to get his JD. He's been doing this for a year, and he still wants to go to law school. So I take that as a win for patent law. So finally, what we do then is classify each patent into one of these different five types, right? So we read that, and we're doing this mainly just by the first claim, right? We can't, we're not. We don't really have the manpower to go through every claim, right? But based on the first kind of claim, is a main compound method of treatment, method of manufacturing, formulation or device. Okay, so that's it. I'm going to turn it over to Michael, and he's going to talk about some very preliminary results that we have so far. Hi,
Michael Frakes 26:57
I'm Michael Frates, professor of law and economics at Duke University. Yeah, I want to emphasize really preliminary. You're going to see some descriptive statistics that we're going to show in connection with this database that we're building that Melissa just described. And some of the some of the figures that I'm going to show are in the spirit of some of the figures that Scott and Bob and depicted. They're not nearly going to be as kind of far along in the analysis as what they had. We're really at the data, the data building stage. And I would say anything on the analysis front is in its infancy. It's even earlier than that's really in the neonatal period. So, but so I wanted to, we wanted to show you something now, since, since you're here, and if it's preliminary enough, I would say that, you know, if you're taking a photo, maybe not tweet it look I could use the total elevation in my social media profile, but still, like, you know, I'm little little nervous. So far, it's early, and so some of the figures I'm going to show you are are going to speak to, kind of, some of the behaviors we've been talking about today, the degree of thickening and the degree of evergreening, to use, to use those particular terms. So the first figure actually just gives you a sense of, kind of think about organizing the data at the at the drug level, and question of how many patents are associated with the the large molecule drugs in the database that that we are building. And so, and first, I actually, actually even say, like one aspects of the preliminary nature here is, this is itself. We've been kind of organizing the search at like the alphabetically through the brand name listing right now. This is just showing you up through R and I think Melissa clerk went wrong. I think it's also just sort of kind of showing what we're getting from the orbits intelligence so far. So this
Melissa Feeney Wasserman 28:35
is, yes, this doesn't include the litigation or PTAB, OK.
Michael Frakes 28:39
And so So, so, what we're showing here is just a histogram, sort of a distribution of the number of patents, you know, per large molecule drug, and so, you know, kind of, what you see here is, you know, that's, you know, there's, there are a lot of sort of patents. And the main takeaway here is, there are, on average, even think about the average of the media. I think, I think right here the about average of 59 again, subject to limitation. This is still not catching everything yet, because we're still, we're still building here about average of 59 drugs. Sorry, 59 patents per drug, a median of 49 so we have got right skewed here, sort of a large mass on the really large end. So think about, like the humerus are, sort of are over here.
S. Sean Tu 29:24
So one thing, so think about,
Michael Frakes 29:25
sort of one of the figures I think Scott showed earlier, like, kind of the number of drugs per small molecule we're looking at, sort of, you know, sort of number of patents I keep, sort of switching there. And number of patents per drug on the small molecule is way smaller. Now, there is a little bit of an apples to oranges sort of challenge here, because the Orange Book is technically not getting literally every patent associated with sort of a small molecule drug, but we don't necessarily have the database yet of, sort of all of the small molecule drugs that are beyond what's being picked up in the orange book. This is kind of the sphere of the conversation. Earlier was great about the orange book provides a lot of information for us as researchers. So there. A little bit of a challenge of, sort of check out what the benchmark is here. But at least we've done some work. If we think about, we look at the orange book, sort of small molecule patents, as being probably like the important ones associated with them. These are the ones that are very much we've done some work. These are the ones that really winded up in litigation. You're not seeing a lot of the non Orange Book ones, sort of in a small molecule winded up in litigation. I think it's we feel relevant, relatively comfortable saying that you look at this figure in comparison to what Scott showed earlier, and we're looking at sort of a lot more patents per drug in the large molecule context. This might not be sort of, for those been reading sort of the literature in the biologic space. This part of these is not necessarily new, I will say that. But we've seen some studies kind of showing similar sort of analysis really just focusing on, let's say, the top six big spenders in the biologic space. And we've also seen some studies just focusing on those that have wound up in litigation so far, and how many sort of patents per drug are associated with them. So one thing that we're sort of getting away here is, at least, you know, our findings are the large number of patents per drug that have come out of those studies are certainly generalized in terms of a much larger, sort of base of large molecule drug. Okay, so next figure is just, really just Melissa, sort of walk through the different ways in which we're categorizing the categorizing the type of patents, device formulation, such drug delivery, delivery, main compound, method of manufacture, method of treatment. So if you're interested, just gives you a sense of, sort of sort of like, how many are falling into, into the various buckets. But I want to say a little bit something about, kind of, if you think about the earlier figure, sort of speaking to shedding some light on the degree of thickening that might go on here. What about the degree of potentially evergreening? And I think it's important to like to at least also acknowledge that these are not necessarily really distinct concepts. There's a lot of intersectionality between these concepts. There's so this is, I'm going to show you basically this figure in a couple, and the subsequent figure are going to be in the spirit of also, sort of one of the figures that's gotten Bob and showed earlier in the try to get a sense of, sort of, for each of the drugs. There's a lot, a lot of patents in connection with each drug, and some of those are being sort of filed later on. And so we're since you can think about like the last Expiring Patents per drug, or often expiring sort of much later than the earlier patents expiring and the first patents expiring for each drug. There's a number of different ways to, sort of to show the figure, but this is really speaking to, kind of like the nominal patent term results that we saw earlier. So for instance, one thing I'll say up front is I'm not actually even showing you, like, a nominal patent term here. I'm really, actually just showing you some numbers about what's the time of expiration of the earliest expiring patent associated with one of these large molecule drugs. And then for that drug, what is the, you know, you could think about, what is the last expiring patent associated with that drug? One way you could say, and so really, really, what we're sort of, we're showing here is like, kind of the length of time between the first expiring and then the sort of the in the later Expiring Patents. One way to actually do this is, I think, similar what Scott showed earlier, is just like per drug truly figure out, kind of like, you know, how you know, really, what is that length of time associated with the last expiring I considering that there are just so many darn patents associated with each drug, I thought that it might be even more for informative to kind of show this at the per patent level. So really, what this what this graph is showing, is like per patent associated with the we're building in this large molecule patent database. What is the length of time between when that patent is expiring, and then when is the length of time of the for the drug product associated with that patent, the first expiring patent associated with it, and so and what's applied the distribution of that so you can think about this as kind of like a distribution of how much, you know, have basically, kind of how much patent term extension you're getting out of, kind of like the secondary patenting practices, the evergreening practices. And what you see here is, I mean, this is a, it's a pretty wide distribution with, you know, with pretty big numbers here and so and again, this is not even if it's not even, this is not even really just thinking about the nominal patent term. This is itself even, just kind of like even after the first one expires, which is, there's already some period of time before that. How much additional time are we getting from like, you know, the the fact that these other patents are, are sort of being filed and therefore sort of expiring later. There's like a real central tendency here around, sort of 20 years in this with also sort of a decent amount of mass, even later than that. So we have a lot of patents per drug, and a lot of them are really sort of coming later than the other, than the first expiring one. So we, effectively, it's we should do some work to try to put it in like the same terms, like the what does it mean in terms of the nominal patent terms? But I think we also the sense that these are WAY longer, way longer here, I kind of want to stop here. Just one last thing that we did is also that same figure, but also sort of broken down by the different types of patents. And so one thing that you can do, one thing that sort of jumps out here is like the device patents are sort of particularly being effectively sort of filed later and later. Into life. I want to stop there so the panel can sort of keep moving on.
Nicholson Price 35:14
Hi. I wanted to just say in response to a little bit of what sounds like doom and gloom about man, this system is so expensive, it's so complicated, we have no idea what's going on. We can't even see the patents. Man, the purple look wildly opaque, all of that stuff on the plus side, that does represent a huge transfer of money to lawyers, which may be very bad for society, but sitting where I am, I thought I should at least point that out. All right, so I want to talk about some work about manufacturing. So as Bruce mentioned earlier, manufacturing is really a different thing about biologics. A hat tip to Artie Rai with whom I've been doing this work since longer than I've been a professor, and also to Saurabh, with whom I've been collaborating a little bit more recently on this. So basically, the story is, right, these biologics are pretty idiosyncratic in the way they're made. They're typically made in living cells. Living cells are wildly complicated things. You make a bunch of choices when you figure out how to make the thing. And for a while we were not particularly good about characterizing the thing, the biologic itself. Now that's changed. We've gotten much better about that, but part of this is a story of where we've been and where we're going. And so one area, and I'm very I've never, I never get to go to an IP focused conference and introduce a type of IP that we haven't talked about at all yet, but I get to because it's not just patents, right? This is also a space where trade secrecy ends up mattering a lot, and that's kind of unusual, right? And think about this from the hash from Waxman framework. You're like, what are the secrets about small molecule drugs? Right there? Kind of aren't any yes, there's the molecule cool. There it is. I can draw it. Can I manufacture it? Yes, of course, I can do I know what it does. Yeah, I do because they told the FDA, great. It's all pretty out in the open for lots of small molecule drugs anyway, but for biologics, trade secrecy and how you make these things ends up mattering a whole lot, and so for all quite a while, and to some extent still, trade secrecy ends up keeping biosimilars off the market, or at least limiting biocentric biosimilar entry significantly. I'm going to tell one story that's really out of date, but I love it so much because it lasted for so long. So there's a story of a drug called Premarin, which is a mixture of conjugated estrogens extra distilled from the urine of pregnant mares. This is not actually a biologic. It's too old for that. It was. It's regulated by Sidra, but it's one of those complex products that Emily mentioned, and the patents, they filed patents. They filed patents for how to make it those patents expired. All of the patents expired, and 70 years later, they still had a monopoly because nobody could figure out how to make exactly the same thing similarly, not quite exactly a biologic under the traditional version, but the mRNA vaccine that moderna meant they had their patent pledge, and they said, Hey, we're not going to sue you on any of our patents. And then in a call with investors, the CEO of moderna said, By the way, we're deeply unworried about this, because we are totally certain no one else can actually figure out how to make the vaccine that we are making. Trade Secrets matter a lot in the biologic space, in a way that's really just not captured by the bpcia as an extension of the hatch Waxman framework. The second thing I want to talk about is how patents end up being different here, which is, as has been alluded to, manufacturing patents matter a lot. They used to not be quite so much. Now there are lots of them. Of course, there are still trade secrets. You can have trade secrets on some stuff, patents on the other what we're getting now is an awful lot of both. We're seeing more and more patents on manufacturing platforms, and we are seeing just more patents on manufacturing methods in general. So Artie and I were in a ran a study in 2021 looking at the 554 patent assertions over the course of 34 That's right, only 34 bpci litigations. And found that of the patents, the ortho patent assertions, half of them, were from manufacturing process patents, huge fraction, and of those half, three quarters of those manufacturing processes process patents were for patents that were filed more than a year after the drug was approved. So Scott alluded to this earlier, talking about late patents, right? It is weird. It is weird in a lawsuit keeping a product off the market by saying you can't make the exact same product to say based on a patent that I filed more than a year after I started selling that product. Very strange when we think about patent law and the idea that once you start saying something, once you start selling something by inherent anticipation or just by regular novelty doctrines, everything you're doing to make that product. Is already in public use. These are weird patents, and they are filed and asserted all the time. It's a strange space. Again, when we talk about weird incentives created by the hatch Waxman act and VP CIA, we've got those going on here in spades. So I'm going to close with one kind of broad point, and then one meta point. The broad point is these manufacturing methods and the fact that we think about these products as being relatively, relatively idiosyncratic, idiosyncratic screws are one of the big things that impacts the market dynamics of hatch Waxman, which is to say generic entry, where we actually get a lot of competition, because we are not convinced the Biosimilars are, in fact, the same as biologics, in part because the manufacturing is so hard, and that is secret. Now we have biosimilars which don't compete in the same way as generics, which is part of the reason we have so much less entry, and we have price erosion that's so low, there's really no automatic substitution for anything except interchangeables, and even that's proceeding very slowly, we have space for lots more intellectual property shenanigans, lots more maneuvering. Again, terrific for lawyers, but a whole growth industry of all sorts of different maneuvering that takes place against this background. The very last point I'll come back to where I'll say is a meta point about secrecy, which is to say, I wish that I could tell you things like, hey, of those three quarters of manufacturing process patents that were filed more than a year after the drug was launched, how many of them is the originator company actually using? I have no idea, because that's a different type of secrecy, a different type of opacity than all the things that we would like to know, to know how well this is working and what's getting screwed up are things that we don't know, because all of that is also opaque. So hats off to Michael and Melissa for trying to, like, shine light into this. But there is so much that we just don't know about how well this system's working. Thanks so much. Applause.
S. Sean Tu 42:05
All right, so I had all of this stuff prepared, and then al took about 70% of what I was going to say, which actually is good, because I can now talk a little bit about a study that I published that kind of deals with trade secret, the intersection of trade secrets and biologics. I'll do it in a in a fashion a little bit less passionate than Nicholson, but, but I think it's important nonetheless. This was a study published with Rachel good in JAMA last year, and what we found was, not only are they patenting manufacture patents and using them as a trade secret, but they have what we call ancillary product patents. These are patents to the post translational modifications, stuff like glycosylation, ciliation, the purity, all of the stuff that has to happen to these drugs in living organisms. What's particularly problematic with these patents is they're on the product themselves, and I cannot make the product and get FDA approval unless I have a substantially similar glycosylation pattern or substantially similar ciliation pattern, or whatever it is, they're holding this as trade secret. Why do I know this? Because I try to get this information. It's actually in the CMCS of the FDA approval, but it's all redacted, and so I've tried to FOIA it, and I and FDA said, No, we can't give you this information. It's all protected via trade secret. And I said, Well, you know, biosimilars can't produce their biosimilar product unless they're similar enough to this. And why? Why is that trade secret? And you know, FDA does get sued over this stuff, and so I understand their reticence to not give out this information, but we give 12 years of market exclusivity for use of clinical trial data, and I can't use that clinical trial data unless I have a product that's similar enough to the reference product. And so right now, what happens is the biosimilar will make a product, they'll submit the dossier to the FDA and say, Hey, is this good enough? And the FDA looks at those CMCS and says, yes, you're good to go. Then they can move on, or they say no, and then they have to go back to the drawing board. That is a waste of effort to me for stuff that they know, and we give them exclusivity for and then, to add insult to injury, they patent these things much later on. And so we look at all of the reference biologics, find that about 40% of them have these ancillary product patents, which they file about 15 years after the primary patent. And it these, this adds about 20. 20 or 18 extra years, nominal years, and all of these patents get litigated. Why? Because they are powerful primary patents that are to the product themselves and very difficult to invalidate, because they are kind of primary patents. Okay, so that was me going off script what I was going to talk about today is actually kind of the difference in exclusivities, the five year versus 12 year exclusivity for small molecules versus biologics, and then under the IRA, you can negotiate after seven years for small molecules, 11 years for biologics. That whole idea behind this kind of longer exclusivity was that it costs more to kind of produce these biologics, the resources needed to develop them are higher. They would have weaker patent protections, which would necessitate additional market protections for manufacturers to recoup their R and D costs as well as generate enough return on investment. The origin of this project actually came when Aaron was talking at Congress and one of the small molecule manufacturers said, Hey, I don't like the fact that we only get five years people are now moving to biologics because they get way more protection, they make more money. Why not make this in parity? And I thought to myself, hey, that is actually a legitimate argument. Maybe we should understand kind of the reasons and rationales why we get five years worth versus seven years. So what we did was we reviewed development times, clinical success rates, R and D costs, patent protection, market exclusivity periods, revenues, treatment costs and treatment costs of both biologics versus small molecule drugs. And here's what we found. So we looked at 599 enemies approved between 2009 and 2023. Of those, we had about 27% biologics, 73% small molecules. Olivier waters, who's the co author on this paper, found that development times were about two point or 12.6 years for small molecules and 12.7 years for biologics, so pretty close clinical success rates. Biologics actually do better than small molecules at every stage, at phase one, phase two and phase three, their likelihood of success is greater than small molecule drugs. I looked at the patent portfolios, and this was across multiple years, and we so it's a little bit skewed, because there are some earlier patents that were included, but we found a median of about three patents per small molecule drugs and 14 patents for biologic drugs per biologic drugs as far as revenues go, Matt said this is work that Matt Vogel did. He found that, of course, biologics make much more money than small molecules, their median revenues were about 1.1 billion compared to about 500 million for small molecules, and had a higher median revenue every year past FDA approval for Biologics versus small molecules. And then finally, the annual cost of treatment was about 92,000 for biologics and 33,000 for small molecule drugs. So in this study, we kind of argue there's really not a ton of evidence to show why biologics should have an extended market exclusivity protection that's a little bit longer than small, small molecules. Interestingly, as all had mentioned, there's an FTC study that was done in 1984 or not, 2010 and they actually made the same arguments, and they were proven to be correct in pretty much every respect. So it is true that the development costs are higher for Biologics about $500 million that's not nothing, but in every other respect, they're getting longer protections, they're making more money, and they're doing it for longer periods of time. So, you know, a lot of people in the room are academics. The way I kind of explain the situation is, if two students come to me after a final exam, I scored one at an 85 and I scored one at a 95 Five. And they say, Hey, why don't you raise my grade up to a 95 and I look at the two papers and I say, oh, what I really did was made a mistake in the 95 what i The answer the solution isn't to raise the 85 to 95 it's the lower than 95 to the 85 so I think the real solution here is, if we, if we want parity, we should probably think about lowering the amount of exclusivity time that we give to biologics.
Bruce Wexler 50:35
Okay, so thank you. What we could do now is, why don't we go to questions and just see if there's a lot of questions, and then so we don't run out of time there, and then we can always come back to moderated. Yes, I just
Unknown Speaker 50:50
have a question for Sean Thomas. Comparison that you're
Speaker 1 51:00
doing. You're looking at things like the median revenue, cost of treatment. I don't know if you're also including and if you're not, I think you might want to also look at number of indications. Because I think, I think the number of indications May the median number may be higher with biologics, I don't know. And if you can get it, cost
Speaker 2 51:17
of the R and D process, even I realize a lot of that so paid, right? But that, to the
S. Sean Tu 51:23
extent you can get something on that, I think that will help wash up, yeah, we rely only on publicly available resources. So unlike the Grabowski case, we're only relying on stuff that's available publicly,
Speaker 1 51:37
right? So then it may just be important to note the things that may be different than maybe material that you don't have access. That's right.
Speaker 3 51:51
Yeah, to on the pawn landscape for biologics, I'm wondering whether you have seen the Assign need, and in
Speaker 3 52:01
particular, one that you are interested or you have seen, what share of biological patterns are assigned to universities and or have a government interest statement in order to talk about marching right later, one of the important questions about marching rights that we don't, that we don't currently have the data for is how many biologics patents would be subject to margin rights and could be sort of opened up to competition, these from apple cider, if margin rights are used. So I know that you're there, but if you have any insights so far
Speaker 4 52:37
around that, and also, similarly, I know that you start with the little applicant for a biological license
Speaker 3 52:47
in your data that will capture students, like the upstream patents, the patents that were perhaps coming out of a university licensed to a developer, and not naming the developer in the
Unknown Speaker 53:01
puppy, yeah, but
Melissa Feeney Wasserman 53:04
the license, that's a great question. So we do try, obviously, to search for not just the assignee, right, or the person who did, the licensee at the FDA, but it is a little bit more limited, right? Searches, we have to drop out the drug class. What we have noticed for the patents that have a patent term extension, a number of them have been assigned multiple times, right? And so one thing that we're looking at adding onto our search system is any kind of press release about partnerships, etc, to try to catch more of those that we might be missing. And I don't know off the top of my hand, there's certainly patents by universities in there. I just don't know what the percentages off the top of my head, but we, I don't think I have to go back and look. I haven't looked for that declaration, right? Like that. They used NIH money or something along those lines. I'm not sure we have the we could probably search for that on the number of patents that we have at the end, right? But we haven't been looking for that yet, but those, it's great questions, because we were surprised. I was actually surprised how many of the peak the patent term extended patents at the PTO or not by who submitted the license right for the biologic at that at the FDA, and that many of them had been assigned multiple times. So yeah,
Unknown Speaker 54:24
I just, I'll get to, I
Bruce Wexler 54:26
just want to comment, you know, I we, I represent, I'm representing biontech Now in the covid vaccine wars, being defending them against moderna. And in the background, you have the NIH and moderna and this whole fight. It isn't necessarily that clear to me that if the government's involved, it's going to make anything better, because it's there's an opportunity for money for the government if they can get a piece of the action, and they really haven't done anything to sort of step in and stop moderna from doing anything. So there's a there's a bit of hesitancy that I've seen for the government. To jump in. And also, there's a sense of opportunity for revenue for the government. So I, you know, it would be interesting to see if you think about the government as helping things. Whether it actually would, I just leave that open,
Unknown Speaker 55:11
yes, yeah. So I'll stick
Speaker 5 55:18
with one question now, maybe for Michael and Melissa, this is a huge undertaking. I know you said it's in the very early stages of the analysis, but I would love to hear more about your plans for looking at some of the device patents, because if you think about maybe the differences between small molecule drugs and biologics, these are much less likely to be oral therapies, maybe the use of devices will be even more important in the delivery of these products. Maybe you even think about stratifying by Part D versus Part B. And I wonder whether I'm just looking at the distribution that looks very different from the others, whether you have plans to look more closely at some of those patents and what they might do to the effective exclusivity periods. So
Melissa Feeney Wasserman 55:57
I think those are all kind of great suggestions. I should say we are kind of for any of the device Pat, like the biologics that have device patents with them, we're going back and doing, like, a separate, more robust search for devices, where we're not requiring those things to be listed in the claim. Right? We kind of started off that way, a little bit, because that was what's going on in the orange book. But there's reasons for that, right? Because you can only list products, right, drug substances and the orange book. So I feel like the FTCs position about it has to be listed in the claim, right? The biologic makes more sense. I mean, the small molecule makes more sense for listing the orange book. So we're expanding that, and we're redoing kind of searches for that. But, you know, again, as Michael just said, we this is like we're up to letter R, right? We haven't even finished it off about yet. So we are kind of trying to get all of that, all of that data, and that's a great question to kind of dig in more about what work the device patents are, and if we can kind of figure out, yeah, how are they being utilized and how frequently and when? Because they are very late, right? It seems like they're all being filed, or many of them are being filed after the biologics then on the market.
Henry Hadad 57:13
Hi there. Thank you for sharing this state. I realize this is a huge undertaking, so I appreciate the magnitude of what you're trying to do here. I was curious as to, when you look at this landscape, can you tease apart those patents which are alleged to cover the original product versus those patents which are are really directed to subsequent innovations, different indications, maybe a new device which goes from an IV to a sub q, maybe a combination with another drug, all of these actually provide potentially meaningful benefit versus I think the questions that maybe are raised generally are about patents which are filed later, which may potentially cover the first approved product, yeah, thank you.
Melissa Feeney Wasserman 57:54
So what I'll say is, you know, for the first like approved product, for the biologic, right? If it's been approved for use a that's the only method of use patents that we're keeping in our biologic base, right? We'll return other results for other method of uses. But if they are not FDA approved yet, they're not being included. Right? Now, you're right. There are many biologics that have been approved for many different indications, and we're keeping those in, and we'll we'll need to kind of go back, like what we're doing right now is everything just aggregated, but we can go back right, because we're treating each time it's approved for an indication, right, as an as a new biologic, right, that's been approved for this particular indication. So we can go back and and segment those out to see how many of these are really associated with kind of, what we'd say is new innovations. But the same thing with combinations right or conjugates, right? If it's not approved as a conjugate, or if it's not approved in combination, those, those patterns aren't being approved, like aren't being included in the database. So yes, that could be innovation down the road, but if they, if they're not associated with an approved biologic, right meaning the biologics been approved as a conjugate or whatever, then we're not including them right now. So
S. Sean Tu 59:07
to build on, I think what you're asking, we have a study that looks at all biologic patents that have been asserted so much smaller universe than what Michael and Melissa have worked on, but we looked at all different types of this was published in JAMA, two all different type. We classified the different type of patents, and we also classified, did they have a later? Were they filed later? Did they have a terminal disclaimer or not? And you can see manufactured patents as what Nicholson had shown is the majority. I think 46% of them were manufactured patents, and of those, more than half were had terminal disclaimers associated with them. So see, see a lot of that. And we looked at some of the device patents. Most of the device patents that we found were on prefilled so. Fringes. So
Bruce Wexler 1:00:06
then you're, I think it was next, and then you're in charge. I mean, I'm not in charge.
Speaker 6 1:00:13
It sounds like that, to the extent that we obviously see a very different landscape for biosimilars in Europe versus the US? What part do the different regulatory patent landscapes play in that versus other factors? In your view,
Bruce Wexler 1:00:36
I don't know. I don't know that we're maybe a question that we're not as familiar with the regulatory lands. What I would say is the money is driving a lot of the differences. And to the point that was earlier on. Can you think of a situation where Europe alone is innovating a drug that isn't in the US? It's, I can't think of any major drug that only was in Europe. The US market is, by far the market that is driving investment and innovation. So the regulatory landscape may be lurking out there, but the US is where the action is essentially
Speaker 7 1:01:13
so I guess my question was, why is biosimilar? Why are they so much more successful in Europe, and they get earlier, and their uptake is much higher. And so part of that has to be the patent
Bruce Wexler 1:01:27
I think it is because what we saw, for example, with some of the like HUMIRA and things of that nature. I don't have all the details. I'm not a European patent lawyer, but I will say Europe is much more restrictive on the kinds of patents you can get, especially in the biologic space, and they're not as forgiving, I guess, as the US Patent Office, if you stay with them. I mean, it was Learned Hand. I think you said the ant, like persistence of the patent solicitor. You stay with the patent office long enough you get your patent right. So, I mean, that's just the way it is Europe doesn't have that vibe. I don't think. I'll
Michael Frakes 1:02:03
just quickly add if you're interested, there is, there's an article in the Journal of Law and biosciences by Bernard Chow and the other co authors. It speaks exactly this point.
S. Sean Tu 1:02:11
The title of that article is biologic patent thickets an American problem. So
Bruce Wexler 1:02:19
I do want to say I feel a little guilty because that thicket term we created as an unclean hands defense in the HUMIRA case, and I got it from being an associate against the coudere brothers, lawyer who's Long's gone, and he was an antitrust lawyer, and I used to be a tech I used to do tech stuff, and I represented cannon, and he accused us of a patent thicket in the tech space. And that word stuck with me for like, 20 years, and then when we got sued in the HUMIRA case, I said, Ah, that patent thicket. Let me try that. And we put it in an unclean hands defense, and it took on a life of its own. It's a long story, but it just took on this life that is different from what we ever meant by it. So I'm sorry,
Speaker 8 1:03:02
also, the Europeans have gotten started on biosimilars a lot sooner than we did. As your point earlier, right? We got to get started late in the process. I actually had a slightly separate question, I think is mostly directed to Nicholson, because he mentioned the trade secrets. But I was wondering how it is that you can have a patent, or multiple patents, that cover the manufacturing process, and then still other companies not able to duplicate that manufacturing process, because I thought the point of patents was to provide enough information so that other once they're finished, you could, they go into the public domain, and other companies can, can, can do the same thing. And then as a sort of higher question, policy level question, we've also been talking earlier today about one and done, or sort of limited periods of time, after which there would be, after which there would be, you know, sort of open competition. And under those circumstances for that really to work, wouldn't companies have to give up their trade secrets in order to make sure that those products would be do you think companies would actually do that just
Unknown Speaker 1:03:56
in
Speaker 9 1:04:00
the essence of tackling trade secrets? Independent?
Nicholson Price 1:04:09
Yeah. So on the first point, like, what's up? Aren't patents supposed to disclose to the positive how to make them use the invention? And the answer is like, yeah. But the question is, what's the invention? And if the answer, if the question is, like, Oh, can I make EPO so that I can give it to people and they can ride their bikes really fast? Like, sure, okay, here's a patent on EPO. It's the sequence, like, Here's a basic process for making EPO, great, cool. Now I have disclosed that, and the patent covers EPO, and I've told people how to make it, and the father can make people now, can they make the form of EPO that I have gotten approved by FDA, and I'm selling with its own particular glycosylation pattern. It's a ciliation pattern, and like, with exactly this purity from this particular cell line and all the weird impurities that mean, like. A it will have this particular immune profile that clinical studies have shown is acceptable and effective. No, my patent definitely doesn't disclose all that stuff. In part because of the time I filed for the patent, I don't know all that stuff now, later on, I do, but by then, I already have my patent, hooray. And to the extent I want to file patents on the other stuff, those are those later patents and so, yes, patents are supposed to disclose it, but they don't disclose all of the things. Now I am very deeply a proponent of saying we should disclose all of those things. Like, what do I want? I want the CMC to be a public document. I think once you file like an NDA or blah or an Abla or an Anda, like your CMC should just be out there. That's part of the bargain. Now I don't think we can do that without legislation. I sure wish we could actually, I take that back. I have no deeply considered opinion as to whether we can do that without legislation. My inclination is probably not. But the last time I looked at this, I can't remember what I thought before I figured out,
Bruce Wexler 1:06:07
yeah, I don't think we need to change the hypothetical a little bit, though, because your assumption is that for these questions, is that I have a trade secret process and I should disclose it, and how can I get a pat Well, what if we change the hypothetical where the biological process is evolving over time, because any company who has a biological process continues to improve it. That's going on internally. Meanwhile, what they're doing is they're trying to look out at the biosimilars and figuring out the landscape for what approval they need to get approval, and then filing patents on that so that those patents aren't necessarily the trade secret work. And so now you have a trade secret, and you have a series of patents that are forecasting what a biosimilar is going to do. I mean, that's the landscape, and that's why they're popping out later, and that's what we faced when we we got sued. Interesting
Emily Marden 1:06:58
comment on that. I mean, the CMC is, I mean, you're right. These processes are always changing, but they constantly being obligated, obligated to
Bruce Wexler 1:07:06
update the regulator. But isn't that that's confidential, it and it's confidential.
Emily Marden 1:07:10
So to your point,
Nicholson Price 1:07:12
you still want it to be Yeah, no, I
Emily Marden 1:07:14
hear you. But I mean, there are changes. There may be patents or not patents, but there that information exists. Also,
Nicholson Price 1:07:19
to be clear, I'm totally fine with the idea that says, hey, you make this drug. You make this biologic with this particular process at time a and by time b, you've gotten so much better. Your drug is like, you make it more cheaply and more efficiently and more effectively. Like, it's 2% more like, 2% pure. Great. Love. It awesome. And if you want to market on that and say, Okay, our drug is slightly better than the other one because we're pure, first off, we don't let you do that, but maybe we should let you do that. But the old version, like the thing you were making at time, a why not share that? And if it's if it's the same drug for you, then it should be the same drug for the biosimilar manufacturer.
Unknown Speaker 1:08:07
So my question is somewhat related. So to what extent do you think the AI is crippling of the best mode requirement is responsible for these problems?
Unknown Speaker 1:08:20
I don't think that is I think
Nicholson Price 1:08:23
it was Toothless before the AIA remains Toothless after the AIA. It's more Toothless now. But I don't think people cared about it that much before, at least. But my impression was that it didn't have much bite before. Well,
Melissa Feeney Wasserman 1:08:34
you never had to say the best mode, right? Or, like you didn't have to say the best when you said, say why? You have to identify it, and you didn't have to update it over time if it became better, right? So I don't really feel like that was that would help us a whole lot here.
Bruce Wexler 1:08:47
Yeah, if I was had to defend someone and all I had was the best mode, I'd be very worried. But I think about the only time you ever really saw it come up was if someone, like intentionally lied about a mode to just throw people off or something, and that was so rare, and then that still probably could be fraud, if some sort, you know, defense, yeah, I think you have.
Arti Rai 1:09:16
So I just did want to note that on the non use issue, which is has come up. Nicholson mentioned this, there is a bill in Congress that passed the Senate that said that for patents that are not used by the manufacturer, presumably at time a although that could be tweaked a little bit to be clearer, Congress is interested in limiting that to some extent, and I hope it's limiting, even more so than it is. This is the corner in bloom with a bill for some of you who may be following this closely, so,
Unknown Speaker 1:09:52
related to the discussion about trade secrecy and the earlier question about like these patents and how many reflect new innovations versus the original? Think to what degree is it possible, given publicly available data to say which patents are covering the drug as it was originally marketed, and which ones are like what Nicholson and already call logically possible, and that they like really under on sale and public use should be invalid in light of the original marketing. I
Nicholson Price 1:10:23
yeah, I have no idea how to do it, publicly available information. We have thought lots about how to try to do that, and we haven't figured it out, which is partly why we wrote the logically impossible piece. Because we're like, okay, there are a bunch of patents these ones. Maybe they're invalid. We don't know if they're not invalid. Seems like we shouldn't be able to use them for this purpose. So like, Column A or column B, you both pretty bad, but it would have been much it would have been so much cleaner and easier if we had been able to say, like, hey, here are all these patents. They're all bad. We don't have to make a silly A or B, sorry, an awesome A or B argument. We can just say these patents are all invalid or not enforceable, whatever. We couldn't figure out a way to do a public data if someone else can, that's awesome, and please do that, and then tell us,
Bruce Wexler 1:11:11
I will say that's what we get hired to do confidentially. I mean, you know, they say class about these good, bad junk, not junk, and it's a lot of work. You know why? When it's very hard to hold us for free, I don't
Michael Frakes 1:11:27
even want to do it for money. It's
Bruce Wexler 1:11:30
free. I think I don't know if we have more questions, Chris or
Unknown Speaker 1:11:38
Okay, yeah,
Bruce Wexler 1:11:39
whoever was first, sorry. We had a little time. We went to questions. We this is
Bhaven Sampat 1:11:43
a question nominally for Sean, but could be for anybody. So on, the 12 years versus five years, like, one of the things in the small molecule space is, you know, I mean, is it the five year rarely binds, right? It really, because you typically have a strong patent that gets you, you know, whatever it is, 1112, years, something like that. What do we know about the strength of the primary patents in biologics, and whether, in some sense, the argument for 12 is that the patents are more vulnerable themselves,
S. Sean Tu 1:12:10
right? So one thing that I didn't talk about is a new standing paper, so we look at generic entry past the primary patents expiration date in the small molecule field. Reid Beale is also on this paper, but he shows that plus minus a quarter, so three months, you get generic entry. If it has a primary patent, you typically get generic entry close to the primary expiration date with biologics not so it's plus or minus two years. Or plus two years, it's never minus two years. Part of the reason why is, I think, the standing requirement. You can't bring a biologic to market. You can't even start suit to clear the patent field until you submit your FDA dossier, which requires you to do the clinical trials first. And because of that, there's this huge like three to five year delay. And so you're not clearing the patent ticket and then going right on the market when the primary patent expires, you have to clear the patent ticket much later. And so what we've done in a study that is under review right now is look first to see how often so we argue that we should really allow biosimilars to start litigation at the start of phase three, and then the question is, well, how often does phase three fail, or how often does phase three get abandoned? And in 92% of the cases, if you get past, if you start phase three, you finish it, and you are able to get onto the market. So once you start phase three, it's, you're pretty much okay. And then the question is, well, what would happen if you started litigation at phase three, versus versus what's currently being done, and you save about two years, which would put it a little bit after the primary expiration date, primary patent expiration date, but certainly not what we're seeing right now, which is much, much later,
Bruce Wexler 1:14:30
I think, Chris and then Bob.
Christopher Morten 1:14:33
Thank you all so much for this discussion. I can't help but pick up on the discussion of CMC data, and I have a question that's sort of a provocation. So just to say I agree with Artie and Nicholson. I think Amit and Aaron and others have written about this. I don't think the FDA has legal authority under existing statute to disclose CMC data. There's a provision of the FDCA that seems to me to say you can't do that. But I don't think that same statutory. Prohibition exists for other parts of the US government, and as we think about, for example, Operation warp speed or NIH partnering with, say, vaccine manufacturers and others to develop manufacturing processes, they may come into possession of some of this data, and I think the legal analysis may be different. And I guess I'll just lob that at you and see if y'all have reaction.
Nicholson Price 1:15:23
That's super fun. I don't know the details. I don't know enough to comment on that. I will say when I said I'm not sure about FDA as legal authority, it's not because I don't think there isn't a law telling them they shouldn't do this or they can't do this, and because there isn't a law saying they can. It's because FDA is full of some adventure some lawyers. And I'm not always like I don't think it's always the case in the past that the mere existence or nonexistence of a law saying this is a thing you can or mustn't do has always fully determined the agency's actions. This might be pushing it too far, but I have lots of faith in FDA general counsel's ingenuity. Maybe not enough to go quite there, but a decent amount. But as to other agencies, that's super fun and interesting, and I have no developed laws there.
Bruce Wexler 1:16:19
Bring us home. Bob,
Bob Armitage 1:16:22
okay, it can't be hard to drive a car just looking in the rear view mirror. So I was trying to look ahead on a technology level. And the last time I took a serious look at biologics, it looked like there was emerging science that was going to allow you to highly control glycosylation of glycoproteins and silylation and the like, so that by the time you actually got to the FDA, they were going to insist on a well controlled process that would fundamentally fully define the molecule in structural terms. In other words, the anathema of the old biologic. It's just how we made it. And so if you get to that area, you should have just exactly what you have with small molecules. And that is, you know, once section 11 of the prescribing information explains what the molecule is, and there's all this existing prior art technology that allow anyone to make it with fidelity, then all of these so called patent thickets go away. There's no novelty and clearly nothing non obvious. So is this a rear view mirror issue, rather than Hey, looking ahead, this is not going to be a problem if there's a reason to change hatch Waxman or the biologics bill, it has to be, find some way to provide assured exclusivity and an assured time point for biologic generic drug entry. Thank you
Bruce Wexler 1:17:57
very much. And I just on that note, and we're not going to talk about it, but just remember AI, because looking ahead, everything we're talking about today may be different very soon on all of the things Bob was talking about with the implementation of AI. So thank you very much. All
Unknown Speaker 1:18:17
right, thank you. Applause.
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