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Follow-On Biologics: Intellectual Property and Innovation Issues
Introduction
Longstanding congressional interest in the availability and cost of pharmaceuticals has focused
attention upon the increasingly significant class of drugs known as "biologics."' Observers agree
that the biologics market is rapidly expanding by any number of measures, including the quantity
of approved products, the size of the market, and the importance of these drugs to the health of
U.S. citizens. The Food and Drug Administration (FDA) issued marketing approval on 36
biotechnology drugs in 2002; it also approved 37 in the following year, 40 in 2004, 38 in 2005,
and 36 in 2006.2 While the number of approvals declined in 2007, many more new biologics
reportedly are in the pipeline and/or in the approval process.3 Today, 20% of the drugs on the
market are biologics.4 Federico Polliano, head of business development at BioGeneriX, a
biotechnology company, projects that 50% of approved pharmaceuticals in 2010 will be the result
of biotechnology.
Dramatic growth in the number of approved drugs has been accompanied by a similar expansion
in sales. IMS Health, a consulting firm, found that in 2005, the size of the U.S. biologics market
was on the order of $52 billion. According to its analysis, the biologics market grew at a rate of
17%, greater than any other portion of the pharmaceutical market.6 Some experts further project
that the global biologics market will expand to $67 billion by 2010.' Awareness of the increasing
importance of biopharmaceuticals has been accompanied by an appreciation that patents covering
many of these products will soon expire. Andrew Forman of WR Hambrecht concludes, for
example, that $20 billion in biotech drugs worldwide will be off patent by 2010.8
Some commentators have expressed concerns that patent expirations may not be accompanied by
the introduction of competing, lower-cost biologics in the marketplace.9 In the traditional
1 The term "biologic" has been described as "poorly defined," and its precise parameters are themselves subject to
debate. See David M. Dudzinski, "Reflections on Historical, Scientific, and Legal Issues Relevant to Designing
Approval Pathways for Generic Versions of Recombinant Protein-Based Therapeutics and Monoclonal Antibodies," 60
Food and Drug Law Journal (2005), 143. The Public Health Service defines the term "biological product" to mean "a
virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, or
analogous product, or arsphenamine or derivative of arsphenamine (or any other trivalent organic arsenic compound),
applicable to the prevention, treatment, or cure of a disease or condition of human beings." 42 U.S.C. 262(i) (2006).
Biologics are also sometimes termed "biotechnology drugs" or "biopharmaceuticals." Dudzinski at 143.
2 Biotechnology Industry Organization, available at http://www.bio.org and Ernst & Young, Beyond Borders, Global
Biotechnology Report 2007, 25.
s Kerry A. Dolan, "Biology Rising," Forbes.com, May 12, 2006, available at http://www.forbes.com/2006/05/12/
merck-pfizer-amgen-cz_kd_0512biologicsprint.html.
4 Ernst & Young, Beyond Borders, Global Biotechnology Report 2008, http://www.ey.com/Global/assets.nsf/
Internationa/IndustryBiotechnologyBeyond_Borders_2008/$file/BiotechnologyBeyond_Borders_2008.pdf.
s "Biogenerics: A Difficult Birth?" IMS Global Insights, available at http://www.imshealth.com.
6 Nicole Gray, "Harbingers of Change," Pharmaceutical Executive, May 2005, available at http://www.imshealth.com;
Nicole Gray, "Keeping Pace with the Evolving Pharmaceutical Business Model," Pharmaceutical Executive, May
2006, available at http://www.imshealth.com.
Ramsey Baghdadi, "Biogenerics Are Happening: Slowly, Product-By-Product," The RPM Report, January 2006,
available at http://www.theRPMreport.com.
8 Aaron Smith, "Barr's Risky $2.5 Billion Bid for Biogenerics," CNNMoney.com, September 15, 2006. See also
Research and Markets, "The Biogenerics Market Outlook: An Analysis of Market Dynamics, Growth Drivers and
Leading Players," Business Wire, September 12, 2005, available at http://www.findarticles.com/p/articles/mi_mOEIN/
is_2005_Sept_12/ai_n15382946/print.
9 See Dudzinski, supra.Congressional Research Service
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Schacht, Wendy H. & Thomas, John R. Follow-On Biologics: Intellectual Property and Innovation Issues, report, March 20, 2009; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc816813/m1/4/: accessed April 25, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.