Time is Money

May 1, 2009 Corporate Counsel

Reprinted with permission from the May 1, 2009 issue of Corporate Counsel magazine. Copyright 2009. Incisive Media US Properties, LLC

Now that the Democrats control the legislative agenda in Washington, D.C., the debate over a federal regulatory approval pathway for follow-on-biologics (similar to generic drugs) is again in play. A critical development in this area is the introduction of H.R. 1427, the "Promoting of Innovation and Access to Life Saving Medicine Act," a bipartisan bill recently introduced by U.S. representatives Henry Waxman (D-California), Frank Pallone (D-New Jersey), and Nathan Deal (R-Georgia).

A central issue in this debate turns on the extent of data exclusivity for an approved new drug; the amount of time subsequent to approval where a competitor is prohibited from relying on the innovators' data to support their subsequent filing with the Food and Drug Administration. Advocates for the generic industry argue for limited data exclusivity (such as five years in H.R. 1427, or even no data exclusivity, as seen in H.R. 1038, which was introduced last year but failed to gain any traction). Innovator companies in turn continue to push for legislation effectively extending data exclusivity to 14 years. As the originators of the intellectual property, and the ones to secure approval from the FDA, producers of the brand name biologics feel entitled to something for their trouble.

While this issue will continue to take center stage in the debate over H.R. 1427 and other bills expected in the near term, lobbying for legislation that parallels the current patent term extension (PTE) language of 35 U.S.C. section 156 could also be attractive for innovator companies to preserve effective life cycle management strategies. The manufacturing process of a biological product from a branded pharmaceutical plays a determinative role in immunogenicity (the ability of a particular substance, such as an antigen, to provoke an immune response), safety, and efficacy of the final drug product. Given that any future data exclusivity period may not favor the drug inventors, they should strive to establish a strategy maximizing the patent term covering the manufacturing process for any such biological product.

The time is right to take a fresh look at the process of manufacturing claims. The statutory authority for PTE is codified in section 156, as part of the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act). The Hatch-Waxman Act was intended to strike a balance of incentives for the first entrants of pioneer small-molecule drugs and the first entrants of generic drugmakers on the market. The Hatch-Waxman Act allows the owner of an approved pharmaceutical drug product to recover a portion of the time lost from the patent term that is spent during the regulatory review period regarding the patented drug product.

The legislative history of the Hatch-Waxman Act suggests that Congress was primarily concerned with PTE covering product and method of use claims. Regardless, section 156 allows for PTE covering a method of manufacture , even though these patents are not listed in the FDA's Approved Drug Products and Therapeutic Equivalence (the Orange Book). Currently the process of manufacturing an innovator biologic is subject to intense scrutiny by the FDA. These manufacturing processes are crucial for the innovator company to maintain a competitive edge. Effective life cycle strategies demand that branded biologics reserve PTE for the most valuable patent in the portfolio. Thus, negotiating points for legislation addressing follow-on biologics should include the promotion of PTE for process-of-manufacturing claims. The breadth of such exclusivity, and the listing of such patents in the Orange Book or any like publication, are also of considerable import.

Lessons learned under the current patent term extension model can be invaluable. The evolution of PTE jurisprudence has been unpredictable. Despite this uncertainty, language expressly relating to PTE for process-of-manufacturing patents should be considered for any legislation covering follow-on biologics. Congress should take a proactive role in defining not only the eligibility criteria of any PTE, but also the scope of any such extension offered.

Any new legislation covering approval of follow-on biologics will likely in part take the form of an amended version of section 156. This language should provide clear guidelines as to eligibility under the new language and the scope of afforded rights. The ambiguity in current PTE jurisprudence concerns the terms "approved product" and "active ingredient," with this confusion finding its roots in the divergent interpretation of the term "active ingredient" by the Patent and Trademark Office and the FDA. Both the PTO and the FDA examine these terms in view of multiple statutory definitions, creating a disconnect when defining the "active ingredient" and how it is claimed in its respective product patents.

The right to extend the term of a U.S. patent with one or more claims covering an FDA-approved product centers on exactly what component the FDA and the PTO determine to be the "active ingredient contained in the approved product." Once the active ingredient is identified, the scope of the right extended is limited to the approved use of the active ingredient, its salts, and its esters.

Given the structural intervariabilities for therapeutic biologics and their direct correlation to the way such products are manufactured, determining just what is protected by patent claims can be difficult. Determining the extension time for a patent claim covering an FDA-approved product begins with interpretation of the term "product" within the current statute. The U.S. Court of Appeals for the Federal Circuit holdings provide a degree of guidance as to the scope of the term "product" for satisfying the eligibility criteria of disputed approved products. Yet this issue remains ambiguous. In Fisons PLC v. Quigg, the Federal Circuit interpreted the scope of the terms "product" and "drug product" for the purpose of satisfying the eligibility requirement of an FDA-approved drug for term extension. Accordingly, a human drug product was interpreted as the active ingredient contained in an approved drug product. New formulations that contain already approved active ingredients would not be eligible for term extension.

The case law also suggests eligibility of improved biologic products for term extensions. In Glaxo v. Quiqq, the Federal Circuit took an expansive position for "improved biologic products" and allowed extension of term for new salts and esters of previously approved active ingredients. This interpretation paves the way for eligibility of the improved biologic products and supports claiming improved or alternative derivatives of therapeutic biologics separately.

But companies wishing to extend the patent expiration date of a biologic product to increase its life cycle face another difficulty, that of reconciling the PTO's position and the Federal Circuit's decisions in Glaxo and in Pfizer Inc v. Dr. Reddy. In Pfizer, the scope of patent term protection was extended to other variations of the approved active ingredient that was not ultimately the subject of an approved marketing application. The holding in Pfizer provides a contrasting interpretation as to the reasoning used in Glaxo to define the term "product" as applied throughout section 156, because it interpreted the term "product" for purposes of enforceability to other variations of an approved active ingredient.

In a decision issued in September 2007 by the commissioner's office, the PTO denied an application for patent term extension for U.S. Patent No. 6,143,772, submitted by AstraZeneca and covering Nexium IV. In this decision, the PTO defined the term "active ingredient" to mean "active moiety." Relying on the definition used in Pfizer, the PTO first declared Glaxo overruled and then, realizing its error, declared their definition of the term to be consistent with the ruling in Glaxo.

Considering the current ambiguity in the Federal Circuit's interpretation of a "product" under section 156, it would be advantageous that any new legislation relating to follow-on biologics contain clear, express, and meaningful language directed to PTE for patents applying to methods of manufacturing the approved product.