New biologic drugs, which are expensive to develop and made from living cells, will have at least 10 years of market exclusivity in Canada and Mexico under President Donald Trump’s revamped trade deal between the U.S., Canada, and Mexico. Currently, new drugs get eight years of data protection in Canada, five years in Mexico, and 12 years in the U.S.
Data protection prevents generic drugmakers from using the brand product information to create a cheaper version of the biologic. It is not the same as a patent but is similar in that it prevents generics from being created for however long the original drugmaker’s information is protected.
Longer exclusivity periods are expected to raise the cost of drugs because the data protection will box out generic competitors for longer periods, critics of the deal say. Drug prices have become a hotly contested issue in the U.S., particularly since Trump’s campaign platform included a promise to lower drug costs.
Trump originally proposed extending data protection for biologic drugs for 12 years in the North American Free Trade Agreement. He has since curtailed the extension and renamed the agreement the United States-Mexico-Canada Agreement.
One of the largest generic drug industry groups in the country, the Association of Accessible Medicines, cried foul on the deal and said the new deal “extends monopoly protections for manufacturers of brand-name drugs and biologics that will stifle biosimilar competition, hurt American exporters, and decrease patient access to medicines,” in a statement the group sent to Bloomberg Law on Oct. 1.
The leading trade group for branded drugmakers, the Pharmaceutical Research and Manufacturers of America, said they were still reviewing the deal and could not comment. The Biotechnology Innovation Organization, which represents drug companies like AbbVie, Bristol-Myers Squibb, and CRISPR Therapeutics AG, could not provide a comment in time for publication on Oct. 1.
Device makers are praising the new deal, saying it “includes new provisions that apply to medical devices that will foster greater patient access to the latest medical technology innovations and further regulatory harmonization,” AdvaMed said in a statement. The group represents medical device companies like Abbott, Medtronic, and Johnson & Johnson.
Devices will have more unified standards for development. The deal will also improve cooperation between countries when inspecting medical device facilities, Mark Brager, a spokesman for AdvaMed, wrote in an email. It also provides a way each country can be transparent when its health care authorities set medical device reimbursement rates, he said.
Biosimilars Still on Upswing
Although longer exclusivity for branded drug companies will keep biosimilars from being developed sooner, the trade deal will not drastically change the biosimilar industry, according to Patrick Gallagher, a partner with Duane Morris LLP in Florida who specializes in biosimilar regulation.
For U.S. biosmilars, development and approval is not the biggest hurdle. It is getting the biosimilars onto drug formularies—the lists of drugs that health insurers will cover in their plans. Twelve biosimilars have been approved by FDA, but only four are available to patients.
So while the extra two years of branded drug exclusivity will mean major money for brand drugmakers, “that’s only a delay of the inevitable,” Gallagher told Bloomberg Law. “It looks like the industry is confident that there will be uptake of market share for biosimilars in the long term.”
The U.S. is also a more attractive market for drug companies than Canada or Mexico because they can charge more for drugs here, Len Nichols said. He is professor of health policy at George Mason University. It means biologic drugmakers are more likely to develop a drug in the U.S. anyway, where the exclusivity is longer than the new trade agreement’s minimal 10 years.
But he remains skeptical the new deal will have a positive effect on drug costs.
“The biosimilars market is in its infancy, and God knows we need more of it everywhere in the world, and lengthening exclusivity periods in Canada and Mexico cannot help that,” Nichols said.
Selected information in the "Pharmaceutical Science Update" is compiled from summaries and articles from Bloomberg BNA.