As reported in our legal briefing of March 2010, the US House of Representatives passed legislation to provide the biotechnology industry with a 12 year period of exclusivity for data relating to new biologics. The data exclusivity period is the period of protection provided for information submitted to the FDA in an application for approval of a biologic by the originator.

In somewhat of a turnaround, President Obama's proposed budget for 2012 includes a proposal to shorten the exclusivity period to 7 years. A second budgetary proposal would allow the Federal Trade Commission to stop “pay for delay” settlement agreements to generic companies in patent dispute cases. Both measures are purportedly designed to boost competition and ensure generic biologics get to market more quickly.

The proposed 7 year period of data exclusivity will in effect decrease the possibility of biotechnology companies extending the protection of the biologic beyond the lifetime of a patent.The PhRMA (representing innovative Pharmaceutical Research and Manufacturers of America) stated that that the proposal would also “diminish crucial incentives for future US medical innovations”.

Whilst originator and generic companies will obviously be divided on their opinions regarding the reduction in the data exclusivity period, it would seem they are united in their disapproval to stop “pay for delay” settlement agreements, which are typically seen as a “win-win” for both sides of the industry.