A West Virginia University legal scholar says current laws may be giving manufacturers of biologic drugs, like antibodies and flu vaccines, too much in the way of legal protections before copycat versions can be sold when compared with traditional small-molecule drugs, including antibiotics and steroids.
In an article in the Journal of the American Medical Association, Sean Tu , professor at the WVU College of Law , looks at the Food and Drug Administration exclusivity given to each of these different types of drugs and whether biologics really need longer protections than small-molecule drugs. Tu argues that while there should be parity, the solution is not to raise the small-molecule exclusivity time but to decrease the exclusivity time on biologics.
"Small molecule drugs are chemical compounds that are relatively easy to make," Tu said. "I put it in a test tube, add the chemicals, and I'm going to get the same reaction every time, whether I make it here in West Virginia versus Canada or France, because the chemistry is the same."
By contrast, biologics are manufactured in living organisms. Antibodies, for example, are created in living cells and are affected by various factors during the process.
"The temperature you keep them at, what you feed them, the serum you use — all of that can change the product slightly," he said. "So, the product I make here in West Virginia may be different from the product that I make in Canada or France. And because of that, there are some issues that make biologics harder to produce than small-molecule drugs."
Both biologics and small-molecule drugs take about 12–13 years to develop. Biologics cost slightly more to develop — $3 billion vs. $2.1 billion, on average — and have stronger patent protection, with more patents per drug. Additionally, biologics earn much higher revenues, both at their peak and overall, and are significantly more expensive for patients compared to small-molecule drugs.
FDA market exclusivities prevent the agency from even approving a drug during that period. Biologics get 12 years of protection before copycat versions can be approved. By contrast, small-molecule drugs are given five years of market exclusivity. Additionally, the Inflation Reduction Act of 2022 states that biologics are exempt from Medicare price negotiations for 11 years, compared to seven years for small-molecule drugs.
Biologics like Humira, Keytruda and Stelara comprise roughly 5% of all drugs and make up 40% of total pharmaceutical spending. Most are injected in a hospital setting. They're expensive, so they have a disproportionate effect on the cost of prescription drugs.
However, it doesn't mean they're more effective.
"We wrote this paper because the small-molecule folks say nobody's going to invest in small molecules now — everybody's going to invest in biologics because they get longer protections and they make more money," Tu said. "But small-molecules are great drugs. Some actually cure the disease, like the direct acting antiviral drugs that can cure hepatitis C in just 12 weeks."
Tu worked with fellow authors Olivier Wouters, London School of Economics; Matthew Vogel, Harvard; Reed Beall, University of Calgary; and William B. Feldman and Aaron Kesselheim, both of Harvard Medical School. The group analyzed data on development times, clinical trial success rates, research and development costs, patent protection, market exclusivity periods, revenues and treatment costs of biologics versus small-molecule drugs.
They found patents on biologics may be more effective at delaying biosimilar entry than patents on small-molecule drugs are at delaying generic entry. One strategy that biologic manufacturers have employed has been to obtain new patents just as 12-year exclusivity periods expire, thereby creating uncertainty for biosimilar firms seeking to challenge biologic patents. Additionally, biologic firms obtain almost five times as many patents to cover their products compared to small-molecule drugs. This is why market exclusivity periods appear to be several years longer for biologics.
The group saw little evidence to justify giving biologics longer legal protections. Biologics already have stronger patent protection, longer periods without competition and higher revenues than small-molecule drugs.
"The Biologic Price Competition and Innovation Act granted biologics 12 years of exclusivity based on the assumption that biologics would face earlier competition, have fewer patents, encounter greater challenges during FDA approval, and ultimately generate less revenue over time. However, our analysis shows that each of these assumptions were incorrect."
Tu said the Trump administration may focus on the issue of parity.
"Congress should reduce the exclusivity period for biologics from 12 years to five years to bring the biologic exclusivity time in parity with small-molecule drugs. Reducing exclusivity for biologics could lower drug costs."
