Global Externs' Blog

For over a decade the pharmaceutical industry and patients worldwide have been witness to a revolution in drug research and development. Biotechnology has saved or extended the quality of life for millions of patients and changed the way diseases like cancer, heart disease, and multiple sclerosis are treated. Biologics, or biopharmaceuticals, represent one of the fastest growing health care industries in the U.S. and have outperformed the traditional chemical pharmaceutical market by increasing at an annual growth rate of nearly 28 percent, as compared to 14 percent. The growth of biologics is matched by an equally skyrocketing price, as the average research and development for these drugs has increased by up to 505 percent, reaching estimates upwards of $1.2 billion. These ground-breaking drugs are now a significant factor in the increasing prescription drug costs, which are shouldered by consumers as innovators try to realize a return on their investment. And while millions of patients have benefited from biologics, many millions more cannot afford the price tag.

Increased access to medicines largely relates to the competition brought by increased market access for generic manufacturers; correspondingly, increased market access for generic manufacturers means patent disputes and heated intellectual property debates. When it comes to protecting U.S. industry abroad, pharmaceutical trade policy is built on the need to protect the substantial investments into research and development, attempting to strike the careful balance between encouraging and guaranteeing further innovation and protecting public health. But in which direction will the world move when it comes to the truly remarkable future of biologic drugs? With exorbitant costs, biologics have no market place in the developing world, and developing a market will mean a future where biosimilar drugs (those approved through reliance on innovator safety and efficacy data) create price competition for the world’s innovators.

Traditional generic pharmaceuticals provide a cost effective alternative for consumers around the globe, while producing the same result. In 2007, on average a generic drug cost $34.34, while the average retail price for the brand name equivalent was $119.51. And while generic medicines now account for 69% of all prescriptions in the United States, they account for only 16% of all the dollars spent on prescription medication. A growing portion of the ever-increasing costs—burdening an already over-burdened health care system—are drugs that have the potential to cure and treat some of the most devastating and complex diseases around the globe. The future of a biosimilars market is still developing, but estimates for cost savings are not nearly as significant as in the traditional generic market. This is largely due to a number of market barriers, including higher manufacturing costs, additional testing requirements including some degree of clinical trials, and advocates for longer periods of market exclusivity than traditional pharmaceuticals enjoy.

My work at DOC-ITA this summer will be to prepare a report surveying the current legal landscapes surrounding biologics and biosimilars (i.e. global regulatory approval pathways and intellectual property protection). The World Trade Organization’s Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) sets minimum requirements for intellectual property protection for its Members and has pledged a commitment to global health by including flexible provisions allowing countries to alter IPR protection in response to public health needs.  What public policy and legal framework best balances international intellectual property and global health/access to medicines as they relate to the coming emergence of biosimilars in the global pharmaceutical marketplace? Is TRIPS sufficient? How do all of these pieces affect U.S. trade policy and the U.S. pharmaceutical industry’s competitiveness abroad?

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