This episode is audio from the What’s Next? panel from the Engelberg Center's Hatch-Waxman at 40 and Beyond Symposium. It was recorded on September 27, 2024.
Donald Beers, Office of Chief Counsel of the Food and Drug Administration (FDA) (retired)
Alfred B. Engelberg
Abbe Gluck, Yale Law School
Arti Rai, Duke University School of Law
Ameet Sarpatwari, Harvard Medical School
Michael Weinberg, Engelberg Center on Innovation Law & Policy, NYU School of Law (moderator)
Speaker 1 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 what's next panel from the engelberg Center's hatch waxnet 40 and beyond symposium. It was recorded on September 27 2024,
Michael Weinberg 0:25
Just as the sun sets in the west and summer turns to fall, the last panel on a symposium has to be, what next? Where do we go from here? And so this is a this is an exciting opportunity. We've got a great panel of people who've been here, who've been thinking about this. This is obviously an audience that is deeply engaged with these questions, and I appreciate that. And so part of the reason that we have, you have this very thick packet of information, is that we put all of the biographies in the packet. I think everyone up here is very well known to the audience. So instead of spending time going down reading their very impressive bios, I'm actually gonna let them just jump in and say their piece, and we're gonna open up, open up with three to five minutes. Everyone gets to gets to say the thing that is sort of burning at the tip of their tongue? I'm going to ask some questions about some of the things that we've discussed today, and then we're going to move into audience questions, and maybe even that most dangerous of things, audience comments. But I will let Don since you are to my left, and you are first alphabetically. I will give you the first five minutes to reflect, to share the things that you are thinking about when you think about the question, what happens from here and what next?
Donald Beers 1:56
Okay, there is a theory, which I'm not sure I expose entirely, that if you're going to try to predict the future, you need to look at the past. You need to look at how things have worked in the past. And I'm assuming, as a guy who retired three years ago and spent my life in the FDA and also in private practice. That must be why I'm here. So I as I've thought about what I might have to contribute, I think I'll just say, in my view, the the hatch Waxman Act, which I spent a lot of my life dealing with has worked remarkably well for an entirely convoluted and difficult to explain statute I've had, particularly in recent years, the opportunity to Try to explain our statute to representatives of other countries, the Europeans have their own thing, which is sort of like ours. But other countries, you know, they're often defensive. They wonder, you know, what is this all about? But I noticed some are actually quite interested. And why is that? And I think the answer is, the one we get invasion. Europeans do too, but it's largely the innovation pharmaceuticals comes from our industry, and also the generic drugs we have we can rely on. So I'm just going to mention why I think of there may be three home truths of this industry as I've observed it, and one comes from my days before the hatch Waxman act, when I was a young litigator at FDA, and I spent several years trying to establish the FDA had to review and approve generic drugs before they were on the market. Now, this predates some, not all of you, but there was a time when there was quite a respectful legal theory. I didn't say it was respectable then, but it was, I guess, that generic drugs, once the innovator had been on the market for a while, could just be put on the market without FDA approval. And we litigated that for several years. The Third Circuit took the view that FDA did not expose then we through a series of cases, seemed to one the issue, and then the 11th Circuit agreed with the Third Circuit, which disagreed with the Second Circuit. And we went to the Supreme Court, and the Supreme Court had the good judgment to agree with FDA. But then something happened. One. And you needed to have the hatch Waxman act, because there was no way for FDA to approve generic drugs. But the other thing was, people began to be comfortable taking generic drugs in the United States, I have to say, when I started that litigation and we went up to Newark to seek a preliminary injunction the last day I spent trying to figure out whether we were going to use the autopsy of someone who may or may not have died because of a generic drug wasn't bioequivalent to the innovator. In those days, I would not want my family to use generic drugs. Now, I'm very comfortable with it, and other countries seem to see that in our system. So the one home truth here that I would start with is that FDA has to approve generic drugs and biosimilars. Hopefully, most, maybe not all of our group here agree with that and that the FDA has to do that without economic considerations. They just have to make the decision on safety and effectiveness grounds. The Second, and this is no big revelation for anyone, is that the innovator industry, to me, is very much high stakes gambling. I don't think anyone, if you talk to someone in the innovator pharmaceutical industry, at the beginning of an adequate and welcome trial, trial, the first one for a particular drug, and they say they know how it's going to turn out, probably should be talking to somebody else, because I don't this whole reason for doing these trials, and most of the innovator industry is going to have failures that can be extremely expensive, as well as a few successes. And some don't have enough successes, and they get acquired by their competitors, and that's just the reality of it. So if it's high stakes gambling, then there's got to be a high reward. And fortunately or unfortunately in our society, that high reward is a monopoly in which prices get raised to the extent we try to fool with that. We just have to worry about how the incentives work. Now that leads me to the third point I want to make, and that is, if monopoly is how innovator pharmaceutical companies make their money, they're going to do everything they can legally to extend that monopoly. And that's why, when I was in a partner in one of the large law firms that represented innovator pharmaceutical companies, we spent a lot of time working on that. What's the point that I'm making here? There has to be an incentive for people to take on the innovators as they seek to extend their monopolies. When explaining 180 day exclusivity is always a challenge to those uninitiated. But there has to one way or another. We have to be sure that biosimilar manufacturers, generic manufacturers, see themselves a benefit that outweighs the cost and the risk. So if we're looking at what's, what's the future going to be? It can be going all sorts of directions, but if it doesn't respect those three home truths, I think it isn't going to be workable.
Michael Weinberg 8:52
Great. Thank you. Al,
Alfred B. Engelberg 8:55
yeah, first, first and foremost, I want to thank the Center for doing this program, it's been terrific.
And Michael for all your hard work in putting it together. Secondly, I think I should probably apologize to this great law school for any embarrassment I called up that have caused them for failing to pay adequate attention when I took a course in legislative drafting four years ago. Because if I've learned anything in the last couple of days, we could have done a lot better. I want to get back. We started yesterday. Seems like three weeks ago, with the discussion between Bob and I, on, on, on, one and done. And I think in some, some way, to, you know, have a more definite exclusivity period and get rid of all the games and. And I think a lot of the discussion the panels has proven that to be correct, but there's, there's sort of an elephant in the room in that we have to acknowledge. It comes from the way different people have spoken, and that is, there's a complete lack of trust between the people who look at the consumer side and the health care side and the people on the pharmaceutical side. And that trust comes from a lack of belief that the numbers are accurate. I don't I think nobody really knows what research costs. Nobody really knows why the profits are as high as they are. And so while I do think it's worth pursuing the conversation we were having and trying to find a space to do that, we need to deal with these trust issues. We need to get the facts out. And I think that's that's a big problem, because I don't think innovation has a higher calling than taking care of the health of people that need access to these drugs. And we need a different kind of partnership to deal with this, the whole Bayh Dole area, I think we can talk about March and licensing, whatever, but the truth is that there's, there's no other area I'm aware of in government where the government spends over $50 billion a year, basically providing the basic information without which there wouldn't be any biomedical information. And and the system we have doesn't reflect that. You know, what's the best way to preserve that? And while preserving investment and incentives? I don't have the answer, but I think we have to start looking for it. And that takes me to a second point that that sort of bubbled up in my head in the last couple of days, and that is, we need some, some sort of, I wouldn't call it agency, but somebody at the highest levels of HHS, or possibly even In the Domestic Policy Council focused on drug economics, we have NIH doing one thing, FDA doing another thing, and, and, and nobody sitting there saying, Well, what is the impact on this, on the price of drugs? And I, and I take one example and buy doll, and didn't come up during these discussions, NIH has given over over 100 waivers of the domestic manufacturing requirement that's that's embodied and by adult. And we, you know, we're sitting around in other rooms talking about supply chain and the need to have essential drug manufacturing done in this country. Leave aside the tax revenue that's being lost on the FDA side. You know, we need to be maximizing the ability to preserve the right to copy the original product. You know, one way to deal with patent that gets is to avoid infringement, and you would, you would think that, as we all know from basic patent law, that 20 years less than, far less than 20 years, because the patents are filed earlier, far less than 20 years after a drug is approved, all the patents claiming that drug Have to be gone by definition. Otherwise, the patents, you know, any patents obtained later, would be barred by public use. So we, we, we just, we just need the better coordination here. And it seems to me, I don't think we're going to get more legislation, and I hope we don't waste time legislating Pay for delay, or some of the other things that I'm convinced, from what I've heard in the room last couple days, are disappearing as problems. Congress has a tendency, once they deal with an issue, what, however they deal with it, they think they dealt with it, and then they don't want to hear for you, from hear from you for another five years. That's why he Waxman, you know, took 20 years or more to get amended for the first time. So those are, those are some of the thoughts I take away from from the last day and a half.
Michael Weinberg 14:38
Thank you, Abby,
Abbe Gluck 14:42
okay, so when Scott asked me to be on this panel, my first question was, why would I be on this panel? And so the reason I asked that is that, you know, I do health law and policy generally, and of course, that involves pharma, but I don't specialize in pharma, like most of the speakers who were here. And you know, Scott. Desire was to have somebody who doesn't do that in that kind of specialized way, kind of reflect writ large on the system. So I am going to make some comments on that order which reflect similar comments that I made to my response to Richard, which is that, you know what struck me most, sitting here over the last two days, and it's been a great conversation, and I actually really love the trust comment that you make and synergistic with what I'm about to say. Actually, Alice that you know, the discussion has shown, has been so siloed and so narrow, and really, until the IRA panel we just had this morning, it really felt like it was about this piece of the healthcare system that was in a vacuum or existed without anyone realizing that in the 40 years since hatch Waxman has passed, we've had transformational legislation across the board in healthcare. And so, you know, my main reaction is hatch Waxman the next 40 and this is where I think it's energetic. What you saying is has to think about the role of pharmaceuticals, not as a separate, preserved, special entity, but integrated into the landscape of our broader changing healthcare system, which has had a transformation in favor of access and away from the market. And, you know, it's a really hard question. I am not an economist, and I don't I don't purport to speak about how we're going to encourage innovation. I think Al is getting at that same difficulty, but it doesn't seem to be sustainable to keep pharmaceuticals in this little isolated vacuum. I'll give you just a couple quick examples of what I'm thinking about. So, you know, I mentioned in my response to Richard that, you know, we haven't really talked about how the advent of Medicare's coverage of prescription drugs really changed the way in which the pharmaceutical market worked. The ACA also dramatically increased access to health insurance, right? Which changes those people who have access to drugs? Across the board, more than 16 million more people have health insurance in the last 15 years alone. It's not just Medicare, and it's not just Medicaid, as Rachel said, but we also have the 340 B drug pricing program, which gives discounts to hospitals that serve disproportionately low income individuals, right? So we and we, and also the PBM issue pharmacy benefit managers, which we talked about yesterday, I was happy to hear that mentioned. Actually, I was wondering when that was going to come up, is the bridge between pharmaceuticals and the insurance industry, and the big elephant in the room that we haven't talked about pretty much at all, I think, is the insurance industry. And it's really hard, if you study health policy and the question of access and the role of government to even think about anything without thinking about who are the insurers and who is paying so several times during the conference, people have said something like, well, the insurers can handle it, or this should be covered by insurance. The pharmaceuticals can make money. Insurers can cover it, okay, but who's going to pay for that? The federal government is going to pay for that. So that's six of one, half a dozen of another. We're going to transfer the weight of higher pharmaceutical profits onto more generous insurance coverage. It's still going to be a government subsidy, just like the ACA effectively gives subsidies to the insurance industry in exchange for tighter regulatory regimes. It was alluded to earlier today how the ACA left out, largely left out regulating pharmaceuticals. You know, there's a very famous story about this sort of face off between Rahm Emanuel and the pharmaceutical industry, and it's recounted with some profane language that I won't recount. You can look at the book and you can get the profane language yourself. But this idea that the idea originally did, was to bring pharmaceuticals into the ACA, my question about going forward is, imagine what it would look like if we had integrated landscape of drug development and drug pricing into the Affordable Care Act, just like we worked a major transformation of the insurance industry. What would the system look like? I can't begin to imagine it, but I would look different. And then, you know, just a few other things that I would just say about this. I think, I do think I was really happy to hear in the last couple of panels, beginning of a discussion of access. I think, you know, I think in the health policy and law space in general, outside the drug market, we're not just talking about pricing, we're talking about access. Who gets access, how they get access, whether there's a two tier system of access, and that's something that goes outside this fear think about a lot more, and I think that's an important thing to think about. And the last thing I would say is just a lot more to say. But last thing I would say is I also feel like two points, this idea of fragmentation of the healthcare system is not unique to pharmaceuticals alone. So if you're a pharmaceutical person, I'm not dissing you guys only, like, for example, in the public health our public health regime is totally separate right Prevention, CDC is totally separate from the way we think about insurance and reimbursement for ordinary medical care. So we have this problem of siloed institutions, all many of them operating within HHS that are operating under sort of different historical legacies, different philosophies and different economic structures and. One challenge for all of us is to integrate pharmaceuticals, public health and sort of what I call mainstream healthcare policy into one bucket. The last thing I'll say is a small comment to Lisa's comments I love, which is just that I personally worry about CMS attaching social value to various pharmaceutical products, in part because I've taken this broader lens of a history of our healthcare system making decisions about the deserving, poor or deserving treatments, and not right. So I worry about anyone saying this obesity drug doesn't have value because fat people deserve to be fat and they should go on a diet, or this HIV drug doesn't have value because I don't like gay people, right? So I worry a little bit about the social value. I don't think you actually invent social value. I think you'd like efficacy, but just in terms of thinking about the role of government in determining the value of a pharmaceutical, one thing again to keep in mind is against the backdrop of many years of sort of value judgments about insurance, you know, I'll tell you there's a great example of a case where there was one insurance policy about 20 years ago where florists couldn't get insured during the AIDS epidemic. Why do you think florists were denied under this particular insurance policy? Because a lot of florists were gay men, right? So just to think about the way in which we think about we make implicit social value judgments in healthcare all the time, and as we think about sort of ranking drugs, or thinking about which drugs are valuable, to remember this long term history of the way we've made these kinds of judgments and try to avoid replicating those mistakes.
Michael Weinberg 21:38
Thank you. Archie.
Arti Rai 21:41
Great, is this on? I probably don't need it, but so plus one to what everyone has said so far, and maybe in particular, plus one to Abby, because I do think one of the things I really like about this conference, and I'm going to look internally and point the finger at ourselves as law professors and others in cognate fields, you know, innovative innovator types don't usually talk to the access types and and so we get siloed in our own vision of like, what sort of things are most important in life, and obviously they're both important So, and that's true for law professors. I love best. Love best. Exactly. I was talking to Rachel sax once, who was pointing out that the IP conferences are very different culturally from the health law conferences, and that's absolutely true. Okay, so with that so on the conference. So great, great. Thank you for everyone who participated in the panels, and I will mostly reflect on some of the big picture questions that came up yesterday, I would say, although also bringing back the inflation Reduction Act, which I think relates quite closely to the big picture questions that came in came out yesterday. So I was struck by how much agreement there was between Al and Bob about like, sort of one and done. And then Bob and told us that we're basically hatch. Roxanne just gets us back to square one after 10s of millions or hundreds of millions of dollars are spent on lawyers, which is great for us, but not for anyone else. Now we can talk about gaming of that one and done system with respect to product topping and so forth. But, you know, that's a fairly small question relative to the question of, you know, how many years would it be? And this goes to Al's trust point. You know, no one trusts anyone else, and maybe even within industries, people don't trust each other. And so, you know, I am very sorry that Bob's proposal for one and done didn't get off the ground, because there was so so much lack of trust about the numbers. Because I think the number is, is just one small piece of the puzzle, if we can just get past some of the gaming. So let me just point that out now it would be a uniform exclusivity period. I think would be third best. Maybe, you know, second best would be something else, and first best would be an exclusivity period that depended upon clinical value, not social value, necessarily, but clinical value, I like Abby, I'm very worried about, actually, maybe going beyond Abby. I'd be worried about any single decision maker trying to measure clinical value. With apologies to Stu Pearson, who I think does a great job, but no single decision maker should make that decision, I think, for a country of two, three, 50 million people. So, so I think that a single term is great. I would really want a single term as opposed to calibrated terms based upon what we think the clinical value of a drug is. And then, of course, in principle, you know, that's what insurers are supposed. To do they're supposed to pay during that single term, if that were to exist, what the drug is supposed to be worth. And I do think that if we had that system on the demand side, we would be able to deal with some of the gaming with respect to launch costs and the ways in which we can I mean, there are lots of ways to manipulate any exclusivity period such that you do this or do that, depending on what you think Congress is going to do. And so, you know, I obviously there's going to be gaming of any exclusivity period, even if it's a single exclusivity period, but I don't think it would be as much gaming as we see now we have hatch Waxman gaming. I'm not even going to talk about biologics, because that will be in our Q and A. I'm very passionate with biologics and all the gaming we see there. So that's not even, let's stick to hatch Waxman gaming for the moment, which ends up just getting us to the same old place, basically as Bob and Scott pointed out. So, so that's the exclusivity part on on the IRA. So the IRA, as I see it, is sort of an attempt to get at a single exclusivity of sorts on the back end from the purchaser side. And, you know, I get Erica listens point about small molecules, yet once again, being thought of as lesser than that's completely true, and I think that's just unfortunate. But you know it and it will create all sorts of distortions. I'm not as concerned about some of the trickiness around the 12 year exclusivity that she was concerned about. I think that there are smart people can deal with that sort of thing, but there are, I think, bigger issues with respect to the IRA that will have to be litigated, regrettably, and as I made clear in my comment to Dave capos in the last panel, I'm really concerned about our institutional structure for dealing with any of these issues going forward, because it can't be Congress. Congress gets tired. They're out for five years. So the agencies have to deal with it, and agencies are going to I mean, we all know this. We've talked to GCS at agencies, or at least I have, and they're scared. I mean, they're completely scared of what the Supreme Court has done, and that means that they're not going to do anything. And that's, that's a problem. I mean, that's a that's a real, serious problem. I'm not a libertarian, so I do think government has a role to play, and I think agencies are a really important key player if we're going to get this really complex system right, and they're not going to be adaptable in any way to all of the inevitable gaming that's going to take place of any regulatory structure, including my ideal regulatory structure. Well, third best ideal structure, which would be basically some sort of single exclusivity term. So I'll leave it at that. On that sort of macro point, I have lots of things to say, as I said, about biologics and antitrust and data, but I'm for those of you who are agency employees, you know, God bless you, and I wish you the best.
Ameet Sarpatwari 28:22
I I mean, all right, well, thanks. I get the distinct pleasure of batting cleanup here. And just want to say thanks for the organizers. This really has been a very great event. And so I just want to make a couple of observations get us quickly into Q and A. The first observation is just we should step back and just acknowledge how amazingly impactful the hatch Waxman Act has been. If we just think about the past decade, the hatch Waxman act coupled with drug product selection laws, has saved over a trillion dollars, a trillion dollars and so Al and others who were helpful in the instrument, instrument in the passage of that should definitely get great kudos. That said we haven't spent much time diagnosing the specific problems that exist in the market, and I think that's important for the solutions that we're eventually going to be talking about. We pay the highest drug prices in the world. All of this is going to be too much of a surprise to anyone. A fifth of people say that they have not taken a drug as prescribed owing to cost. And what are we getting? Well, this is, I think, an important point, that we are getting new drugs, but most of drugs do not offer additional benefit over acute needs, and I think that we are getting some remarkably new drugs with price tags that are two and 3 million. I know it gives Steve Pearson a headache in terms of. Be dealing with them. For small molecule drugs, we have a lack of competition in many cases, and a lack of timely competition is also part of life Michael's life cycle management strategies, you see. And for biologics, we've created an even more complicated system than the with the bpci A and have a non obligatory pattern dance now. And now, the issue is, we have lots of biosimilars, but the Biosimilars are not being uptaken in the same degree that we would have thought was possible. So the time, I think, is important to I think we have an opportunity here to reset the pharmaceutical social contract, and in doing so, I think we need to also note some considerations with this, as Abby mentioned, has no not in any respect to real market. And we can bring it back to trying to be a real market. And I think that's what some of hatch what hatch maximum does, I think, with Richard mentioning early that there will be glitches in anything that the government does, that's true, there's going to be some uncertainty and possible glitches, but this shouldn't preclude us from taking action. So with regard to hatch Waxman, there is an acute need of trust being reestablished. And I think al mentioned this issue of trust, and I think that trust is really rests on transparency. And I think if you read what Chris Morton said yesterday and put up in terms of the statutory language of hax Westman, there's a lot more transparency that we can get out of the Act than we currently do, and I think that will be helpful for establishing trust. One thing we haven't two things we haven't talked about, actually, also, in addition to reforming the hatch, Waxman Act is the 30 month stay. Is it still needed or not? And FDA is role in the Orange Book. Can it play more than a ministerial role? I think it should. And now I'll just comment really briefly more broadly on things. So we've talked about the IRA with a great divergence of thought. I think it's a promising step forward. We have partially unshackled a major payer, making the system a little bit more like a market, as Stephen Pearson mentioned the other countries have been successful in this model. There's no reason to think that we can't be successful, but it is critical to have that cookbook to establish trust, to maintain trust, there needs to be consistent, non arbitrary action by the government, and this will monitor. We'll have the chance to assess this in short order. Other areas where we haven't really talked about in terms of reforming the system, are changes that are possible at the USPTO. So I know Melissa and Michael have written a lot about that there's low hanging fruit there that could increase competition and then providing greater resources to the FTC to address product topping and patent thicketing. And importantly, in the biosimilar space, where we have, not necessarily, we have exclusive dealings, we have biosimilars coming to market, but there are, there's specific reasons why they're not that successful when they enter the market, and so I think those are areas in which we can also talk about. I'll end with one final point, which is really to the left, but is actually being seriously considered right now. Is government manufacturing of drugs there? We do know that government has increasingly taking drugs closer to the finish line, and we know industry is largely dominant in the late stage high risk sector, but can government step in and play a role in that environment, particularly in markets that aren't functioning well, I think that there is an opportunity for government manufacturing, or an active more government in that respect. So I'll stop there, so we can get to questions. But thanks. Thank
Michael Weinberg 34:32
you. So one of the things that has come up a lot over the last two days, and already, I'm going to start with you, with this, because you've mentioned it in your comments, is this sort of like thinking about the future in the context of biologics, right, and where where that will go, and how that will play into the as we think about sort of next steps here. So I'm gonna ask this question of you, although I will very much encourage any of the panelists to jump in. But how are you thinking about biologics in this context of, sort of, what's next?
Arti Rai 35:05
I appreciate that, because I have so much to say that I couldn't possibly put it into my overview comments. That's not surprising, given the prior work with Nicholson. And Nicholson talked about this a little bit yesterday, and that's great. And actually, I'm working with a bunch of people in the room on these follow on studies, including Nicholson. So I owe you some drafts, I know, but that will happen. So Ms, Nicholson said, I do think that there is a trade secrecy problem, and then there's a patent problem, and depending upon which biologic we talk about. Not all biologics are the same, either. And some biologics are more complex than others, and so depending on which biologic you talk about, the balance will be different. And that's a tricky set of questions for for any regulatory entity, whether Congress or agencies, to think about. And we talked about this a little bit yesterday as well. And there's, there's, there's this gap between small molecules and biologics of complex molecules fewer than 40 amino acids. And it that sort of thing gets, gets to be important and litigated, um, so, um, so that balance, I think, will, will shift over the years, and we have to adapt to the fact that at some point trade secrecy diminishes because knowledge is more broadly diffused. But the problem we have in our current system, with respect to the BP CIA in particular, is that we are setting up mechanisms that make it really hard to diffuse the knowledge by design. So Nicholson talked about greater access to the originators CMC package. I don't know that that's something that would be possible at all in terms of total transparency, but I do think, and this is the Nicholson and I have talked about that certainly that CMC package is something that could be exchanged among agencies continuing to be protected by trade secrecy, and that would help with some of the patent problems. Because, yeah, it is odd that we have all these post approval patents, I mean, so dozens and dozens of them, and that's just really strange that shouldn't be in quite the way it is. Yes, you could get a post approval patent if you're planning to assert it, and this is the work we're doing now against a future drug that's going to come on the market. So that would be approval, approval patent for the future drug, but it shouldn't. It should be either invalid or not infringed. There's bucket a and bucket b, and because of the secrecy, both of the science and of the law around what's a trade secret, we don't know the answer to those questions, and so I do think that that's going to be a continuing problem with the BP, CIA, and what we're working on right now, Nicholson and several others in this room, and I is thinking about the problem in like even one step greater level of complexity, which is, let's say we do get to the, what I think is a valuable end state, at least, and possible for, let's say monoclonal antibodies, which is a standardized manufacturing process, at least within a firm. And there's a piece of legislation that Congress passed about a year ago encouraging that by saying that, basically, if you can get your platform technology designated as the platform technology, you'll get more efficient approval of all subsequent drugs using that platform. And that's, that's good. I mean, that's, that's really good. But those of you who think about digital technology know that any time you get to standardization and there are patents involved, one can have a little bit of, shall we say, complications standard essential patents have been the lifeblood of many patent litigators lifetimes, and I think that we can begin to think about some of those issues if we get more of a good thing, which is standardization going forward. And the FDA, needless to say, in its guidance on platform technologies, which it put out about six months ago, says zilcho about IP. Because, as Becky pointed out, it really just doesn't want to deal with that. P and, you know, it doesn't have the resources for, frankly, or the expertise so, so that's my view on biologics, that I do think that standardization of manufacturing processes is the end state we want to achieve for cost reasons, for quality reasons, for all sorts of good reasons, but it's going. To create lots of IP issues.
Michael Weinberg 40:02
Great. Thank you. You want to go next, but before you do, you have to leave. So I want to give you a chance to give any final, final thoughts, responses, angry diatribes you want
Abbe Gluck 40:13
to deliver going to the fourth floor. Because, apropos of myself as a generalist, I'm speaking at a different conference here in about a half an hour, so I have to go off and meet the people I was speaking to. No, I mean, I'd rather give you the time to talk. I would say, I want to say that a lot of what I learned about FDA, I've learned from Aaron kesselheim, and he said something interesting to me yesterday that I'm going to say, because listening to me talk, it actually came to mind, which is this idea that transparency is only so helpful. There's an actual price, right? And Aaron, I were talking about this yesterday, whereas I was talking about 340 B and the Medicaid rebates and all the different things, you know, is there really a price for a drug if a drug is being priced completely differently in all different institutional structures across the fragmented health care system, right? So the value of transparency is only valuable if there's a price. But could we even have a single price? We probably wouldn't given all these different entities and the different subsidy transfers that are going to these different entities. So the other thing I would just say about transparency that I forgot to say earlier is we're talking about the federal government, but obviously state governments do a lot of health policy as well, and some of the states have been trying to pass transparency laws for a long time. Some have been challenged preempted. Some haven't. But you can't forget the role of state governments in this mix as well, and I will quietly exit in a few minutes where I'll listen to a few more so thank you for tolerating my schedule. Michael Al,
Alfred B. Engelberg 41:38
yeah, when I was going to say is, whatever the biologics act did or didn't do, it didn't create a generic drug industry. I mean, there's no price competition at the end of this and but what it did do is it created like a whole new intellectual property or monopoly regime with a 12 and a half year exclusivity that probably should have been traded for disclosure so that identical copies could be made at the end of the process. And that would be the end of the patent that could problem, and you would have a generic competition with at the end, with price competition. I mean, to tell you the truth, it goes to the heart of why I agreed with Bob about the modern Cures Act, because we could get around it on the small molecule side, but you can't get around the patent that get problem on the biological side, even after the exclusivity, because there's just too many patents, and that takes a lot of time, and then the product you sell doesn't have a market. It's a me too drug. So, I mean, this is a place where it should be relatively easy with the appropriate education to get a change in the law that says, if you want these exclusivities, you're going to have to give something back for it, which is the ability for the industry to copy the product and have true competition.
Michael Weinberg 43:13
I mean, the transparency has now come up a couple of times, and I wonder if you could talk a little bit more about how you understand the role of transparency, and what a more vibrant and robust, transparent regime would would look like from your perspective? Sure.
Ameet Sarpatwari 43:30
So I think what transparency? There's transparency with regards to many different things, but with regard, I think, to the biologic market, it is the CMC, it is that information that's needed to make, make the biologic that's most important. And I'm sorry, what was the rest of the question? You were,
Michael Weinberg 43:53
how do you How could you imagine a more robust transparency regime, like, how? Yeah, how would it work if you were, if you were king of pharmaceuticals for the day,
Ameet Sarpatwari 44:03
if I could wave my wand, then, no, I think this is an important point, because you're saying the what and the how, the how is that the agencies are not going to act without someone pressuring them to act to get better transparency. But I do think that you can have better transparency, and that that transparency is the basis for trust. So one thing the IRA it's a shame that the information that's being submitted by the drug manufacturers is not being publicly available. So there are areas in which we're continuing to leave elements of transparency and not get information that can be critical, but at the end of the day, where I worry about transparency most is the biologics market moving forward.
Michael Weinberg 44:56
And Don given your background at the FDA, how does. Does the FDA currently see its role when it comes to transparency, especially in the context of biologics, and is there a mechanism if that should change? Is there an internal mechanism for that to change, or is there, does it need outside pressure?
Donald Beers 45:15
Well, I have to qualify my response by saying it's almost three years since I left the FDA, and things possibly can't change. I doubt it. The agency is, I think, quite good at what it does, which is decide whether drugs and biologics are safe and effective, whether the risks that you take by taking the product is outweighed by the benefit, but once we start getting into some of these other issues, how would this work, someone in FDA is supposed to decide, you know, how much information is to be released, and then they would be sued by whoever is affected. And they have a limited amount of resources, realistically to defend lawsuits. They're not unwilling to take positions and get sued. But the question is going to be, you know, how important is that, as a realistic possibility, someone came in and they decided that was the most important issue, then maybe you would roll the dice on it. But I think it's interesting to me, as a non academic, to hear people's views on what could be done. But I think we all then come back to and people have said, well, you know, not going to get anything more out of Congress for five years. That's probably about right. Agencies do things, particularly given recent Supreme Court decisions, they are likely to get knocked down, so you are left with questions of what's what's realistic? I don't think we should take the position nothing can change, and it's certainly useful for people to think about what could be done. Can I ask a question?
Michael Weinberg 47:18
Of course, the microphone, whoever you want.
Donald Beers 47:21
Love the platitudes here. The one thing that I've always wondered about, because it seems to me, might be something you could get a congress behind, is why? Why wouldn't the law say what you charge for this drug in the United States can't be higher than what you charge in other first world countries. And that would, you'd seem like there'd be a fairly high populist demand. What would the effect of it? Presumably, would be that would raise the prices in the other first world countries. But,
Ameet Sarpatwari 47:58
well, that's to be debated. But I'm just saying that's what was President Trump's attempt, this was to actually have prices lower than anyone else paid for but Sorry,
Donald Beers 48:16
I think what I'm talking about is something real, not campaign rhetoric. Yeah,
Arti Rai 48:23
you mean legislation along those lines. There has been, you know, there have been proposals, but I don't know that. I mean populism can get you to some degree down the field, but it doesn't get you to the finish line necessarily.
Alfred B. Engelberg 48:38
Look, the Can I just comment. The reality is, and the Part D, the IRA title, didn't address it, but all the indications are that the CMS didn't get anywhere close to that in this first round of negotiations. If you look at the prices, there's still two or three times the price of Europe. My own informal calculation, doing a quick look, is basically they rolled back price increases to the extent that the increases exceeded inflation over the last 10 years, and very little more than that.
Michael Weinberg 49:16
All right, now, as promised, I'd like to open the floor to audience questions. I will, I will walk the mic around and practicing for this the last two days. So see, I see one in the back, and I will, I will move my way through. So catch my eye.
Speaker 2 49:37
First, I want to congratulate the room, because it's very difficult to stay focused for this long a time, a day and a half of this, if you want to fix then I'll get to my statement, and then my question. The statement is, I think you're trying to find a way, as it says in the health care. Reasonable cost biosimilars, right? Let's finish that conversation. There are multiple, maybe more than 40, biosimilars currently that have been tested. They've been created, they've been tested. It's all run, but the legal system is what's literally holding it up. So if you want to find legislation to fix it, let's look at your legal system to find a fix to enable these people to get on the market. If you want them on the market, because they're there, they're real products. They exist. They've been proven to be biosimilar. They can do it. But one of the other problems is that people are afraid that if they change from the existing product to a biosimilar, will it work as well, but the testing already shows that it does. So it's annoying that we have a legal system blocking it. So the question I have for the group is, is this really that difficult a problem to fix.
Michael Weinberg 51:03
Yeah, is this why we saw this already?
Arti Rai 51:07
I mean, I do think that that it, there is a level of caution at the FDA with respect to just saying things are interchangeable, because I think that would help a lot in terms of, not necessarily in terms of automatic substitution, but it would help, certainly on the the kind of vibe element of people being scared about switching and doctors being scared about switching on the patent side. I mean, I do think that it is difficult, I mean, and this is where I've been thinking about this, in the context of the sharing information. So I'm not necessarily going to go all the way to where Amit is on transparency, with respect to full public transparency, but I do think that there is legislation in Congress, actually right now that is was unanimously voted out of the Senate Judiciary Committee. So talk to getting very detailed on this, but both Senator Coons and Senator Tillis, who are vigorously pro patent, sponsored it that would allow this CMC to be exchanged between agencies. So we're getting there, but, you know, it's, it's really technical and nerdy and and I think that it's not going to, you know, be the sort of thing that they're going to be able to run on. And so, you know, it's just good government, and it's hopefully it'll get done.
Speaker 3 52:45
So both yesterday and today, there was discussion about how these manufacturing patents that the firm these companies obtain for Biologics after marketing the drug are a problem, but if we think about the patent as the quid pro quo for disclosure, would more regulation of these patents actually give incentives for companies to keep these manufacturing mechanisms as trade secrets rather than disclosing them at all? Like, do you think it's better that they're disclosing after the fact than not disclosing at all?
Arti Rai 53:25
I can start with that anyway. That's a really excellent question. And, you know, it's a question in part about how much disclosure there really is in the manufacturing patent. I think Nicholson and I have generally thought there's not a huge amount. So it's a situation where patents and trade secrecy kind of cover the same thing. And that's, you know, that's just how the disclosure system ends up working in certain areas with respect to the patent system. And you know, we can talk about some of Michael and Melissa's work on whether examiners could do more on that side, but you know, that's not how we have it currently. So. And I guess I should just speaking for myself, and not for any co author, I think that they should absolutely get, be able to get patents that they're going to assert against future drugs they put on the market, just not against what they did in the past. So there's still an incentive to improve manufacturing processes and maybe disclose, although you know whether patents discloses an open question. But you can't go backwards. You can go forwards, but not backwards, it seems to me. Yeah,
Alfred B. Engelberg 54:39
I was just going to say the crux of hatch Waxman is that you couldn't assert a patent that you weren't yourself infringing in making the approved product. And the other hand, in the biologic space, you have 12 years to accumulate as many patents as you possibly can, whether they cover your. Product or not, and simply use them as a roadblock. And so it's a very, very different regime.
Ameet Sarpatwari 55:13
And if I can just go back to the one question that was asked about what can be done, shouldn't it be easier? There are multiple angles in which you can address it. The issue, one interesting way is to have state drug product selection laws be broader and mandate substitution. Right now for biosimilar, is there a step above what they are for small molecule drugs? So just again, going along with the point that we shouldn't just be thinking about it at a national level, but at a state level as well.
Speaker 4 55:46
Yeah. So this question is probably mostly for Professor Arti Rai and Professor AMI, but I love to hear from anyone in the panel and also in the room, one of the policies that we haven't talked too much about and maybe even at all in the last day and a half, is about embedding greater access provisions on licensing agreements between universities and developers and also between the NIH and developers. In May, the NIH proposed a new policy to require licensees to submit and access plans once a product candidate reaches a pivotal trial. And it sort of aligns with something that advocates have been calling for a very long time to be to be put greater provisions on public funding it perform a pharmaceutical development, right? And so I wonder we haven't talked too much about this policy. So I wonder, where will you put this in, sort of, like, the spectrum of things that we should be thinking about and prioritizing to ensure greater access?
Ameet Sarpatwari 56:58
Well, I think that's a great point. I know there's a lot of controversy about including such access plans, but you know it is otherwise a case of the government paying twice, and you want to make sure that they get a proper that the public, who the taxpayer, gets a proper return on their investment, and that it returns should be access. One point I'd like to make about that, which will there's a lot of scaremongering about this and the experience of NIH previously, the height of the AIDS crisis, which attempted to put a reasonable pricing clause on craters that actually we revisited in an article. So self selfishly plugging an article. But I don't think that that showed that that condition was really a problem. It was the way in which it was administered was a problem. So I think the real question is there will be some deterrence in terms of manufacturers wanting to pick that up, but if the rules are clear, and there's still the ability to profit off of what you've done in an adequate respect, I think that we should have NIH having access plans for all of What it's licensing.
Arti Rai 58:20
So one question that I have, I'm less familiar with the specific aspects of how the access plan enforcement would work, but in the past, NIH has placed plan requirements for plans in for data sharing and other things. And typically the, you know, people do submit stuff, but it's not particularly good in terms of detailed enough such that it could ever be enforced. I don't know think NIH actually has any enforcement authority, per se. So that's a the enforcement question is always been a concern for me with respect to NIH.
Nina Srejovic 59:12
Hi, Nina sarajevic And I have two quick questions. One question both Artie and you both mentioned that you think that the PTO can do some things to help in this area, and I'm wondering if you have specific ideas in mind. And my second question is, I teach an intellectual property clinic, and so all this discussion has been about things that could be done. And often my students have questions about what, how can we do these things? And so I'm wondering if we have any ideas around that. I know there are issues with patient groups and their ties to pharmaceutical companies, so that is a complication. But I'm wondering if there, if you have ideas of how these changes can be made.
Unknown Speaker 59:54
Yeah, sure. So,
Arti Rai 59:56
so the PTO right now is. Is trying to do some stuff on the so called ex ante side, with respect to small molecule and biologics patents, and it's collaborating with the FDA, the they've drawn the line at anything that could be a trade secret, and that's just the line. They're not going to, even though I think they have some authority, but they're not going to, per my earlier comments about agencies being very scared these days, and maybe always, they're not going to touch that unless Congress does something with respect to the trade secrecy piece of things. But they are. They are doing cross trainings they're doing, you know, I mean, I worked at the PTO, and I have a lot of respect for it, but sometimes I do wonder whether, given the time constraints that Melissa and Michael have talked about on patent examiners, any of this really filters down to the examiner in any kind of meaningful way, and everything that they're doing cross training on is public. And there's that's good, but it's and so it's, for example, I think that, you know, it would be really good if an FDA, if the patent examiner, knew that this particular if Amgen is applying for a patent on this particular thing, it's already got like, eight drugs out there, and they could ask, and the PTO has allowed them to ask, you know, are you using this in any of your prior drugs? Apparently, Sean tells me that they do sometimes do that in Europe. I mean, that's a perfectly legitimate question to ask. Are you using this particular invention in any of your prior drugs? And I don't know whether that's being implemented. The guidance came out in July 2022 I don't know whether it's being implemented at the ground level.
Ameet Sarpatwari 1:02:03
I think in terms of your second question, one interesting thing would be for a clinic to pursue a PTAB case, and whether or not that might be possible, but I want to see the floor really quickly if Sean, if you're, if you're a game for it, because Sean has done so much thinking about exactly what PTO could do, that would be helpful.
Arti Rai 1:02:28
Microphone,
S. Sean Tu 1:02:32
so, yeah, there are lots of things that I feel like PDO could do. The first super low lying fruit is to just help the FDA understand what can and cannot be listed on the orange book. If the FDA says that they have no kind of institutional knowledge about patents, and the PTO says, Well, we have no institutional knowledge about drugs, maybe those two institutions get together and work to maybe kind of do what both of them should be doing in the first place, and that seems pretty easy to me. The universe of small molecules, small molecule patents since 1984 is less than 10,000 IBM puts out more than that in a year so, and most of those are expired, right? So the universe is probably like 3000 active patents. And so these are things that the the amount of resources is not insurmountable, because the universe of patents is not, you know, a million patents that we're looking at. So the first easy thing is, like, kind of review these things. The second thing is maybe the incentives for examiners are all wrong. At the PTO, we incentivize quantity and not quality, I think, and that comes with continuation patents and the count system, and so I feel like the one of the best ways to kind of get quality patents is count reform and really tying quality patents and exercising some amount of quality control when it comes to a heightened obviousness standard, and Getting rid of a lot of the ability to kind of say, well, use a procedural tool. This is the terminal disclaimer, kind of practice that we see with patents. And the USPTO has actually proposed a rule to do exactly this. And we've done some studies. I know Lisa has done some studies showing that this affects about 44% of patents. Like, if you look at the history of patents, like, think it was like 6 million patents or 7 million since, like, the year, 2000 and then 4 million for the last, like, 10 years. I don't feel like we're really innovating all that much. I think we're just patenting a lot more. And. And the these kind of continuation patents that necessarily don't disclose anything new, but allow you to get lots of patents is that's probably problematic.
Alfred B. Engelberg 1:05:12
Can I just add one thing? I've scratched my head over this, and I've been in some patent challenges that involve this standard for making a change to a approved drug in the FDA is that it can't have any material effect on safety or efficacy. So you really have to think hard about how that could be a patentable how there could be a patentable invention under those circumstances. And the answer is, in a lot of cases, the applicant saying one thing to the FDA and something entirely different to the patent office. And and you'd be, you'd be amazed at how much different and in the time, same time frame that happens. And I, you know, I've done a patent challenge where I just pointed that out in a in the in the patent certification notice, and got a disclaimer the patents a week later. I mean, that's how crazy the system is.
Donald Beers 1:06:09
I would say, I just want to say, I would second that based on my own experience, what you say to the PTO and what you say to the FDA seems to be different, and that at least could be sorted out.
Michael Weinberg 1:06:22
I may let that be the last word I say a couple more hands. I apologize for running up on time on the last panel. So I'm I'm wary of extending it. So first, please join me in thanking our panel.
Unknown Speaker 1:06:33
Thank you so much.
Michael Weinberg 1:06:39
And I also want to thank the real people responsible for organizing this, which is Katrina and Nicole who make all the engelberg center events actually happen, Rochelle Chris and Scott for doing all of the planning and the thinking, all of the panelists who joined us today, all of you who came and engaged. It's great when we have an event where the audience is as deeply engaged as all of you have been for the last day and a half. So I just want to say thank you all so much. I hope to see you again at future engelberg Center events. Please grab the last of the sandwiches. We're not kicking you out of this room right now. So chat, have further conversations, and thank you all so much for joining us today.
Announcer 1:07:37
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