Australian biotechs to benefit from US health care bill

The historic health care bill that was signed into law by President Barack Obama last month could prove to be a boon for Australian biotechnology companies releasing new biologics into the titanic American market.

One of the provisions of the new bill is to provide 12 years of market exclusivity on a new biologics - or, more accurately, it prevents approval of biosimilars by the Food and Drug Administration (FDA) until a minimum of 12 years after the original product was approved.

Biologics include products such as vaccines, stem cell therapies, therapeutic proteins, tissues, gene therapies and other products that are created by biological processes.

A biosimilar product is deemed to be interchangeable with an already approved reference biologic based upon highly similar analytical studies, and clinical trials that demonstrate safety, purity and potency for the same indication.

If the company that developed the biologic then goes on to modify the product by improving safety, purity or potency, another 12 years of exclusivity may be granted.

This provision gives biotechnology companies confidence that they have a fixed time frame, and a generous one at that, in which to recoup developmental costs on new biologics.

This 12 year exclusive market access is also separate from patent protection, so the exclusivity also applies even if patents have expired.

Australian biotechs, such as regenerative medicine company, Mesoblast, have already announced that the US health care bill will be of benefit to them.

In a statement, Mesoblast claimed that "the new provisions for biosimilar biological products within the Patient Protection and Health Care Affordability Act, which was signed into law 23 March 2010, now provides both Mesoblast and Angioblast with the potential to significantly extend commercial exclusivity for their cell therapy products in the United States well beyond initial patent expiration dates.

"This will serve to significantly increase long-term revenue projections for both companies, and to facilitate their strategic business partnerships."

Companies that develop biosimilars will now have to wait longer before releasing a their generic products. This might reduce the number of generic biologics that enter the market, thus removing some of the downward cost pressure on therapeutics.