Balancing Innovation, Access, and Profits: Market Exclusivity for Biologics

From the New England Journal of Medicine

By Alfred B. Engelberg, JD; Aaron S. Kesselheim, MD, JD, MPH; Jerry Avorn, MD

SUMMARY: This NEJM Perspective by Engelberg, Kesselheim, and Avorn examines the debate over how long biologic drugs should enjoy market exclusivity before biosimilar competition is permitted — a policy decision then being shaped by the 2009-2010 health care reform process. The authors use the Hatch-Waxman Act's track record for small-molecule generic drugs as a reference point, noting that generic drugs then accounted for more than 70% of prescriptions dispensed in the US. They apply this framework to biologics, weighing the interests of innovation incentives against patient access and the sustainability of health care spending, and offer recommendations for an exclusivity period that balances these competing considerations.

BACKGROUND: The 2009-2010 health care reform debate included the question of what period of market exclusivity biologic drugs should receive before biosimilar competition is permitted, drawing on the Hatch-Waxman framework for small-molecule generics.

KEY FINDINGS: Generic drugs already accounted for more than 70% of prescriptions and 20% of drug spending in the US under Hatch-Waxman. The structure of market exclusivity for biologics would determine the pace at which lower-cost biosimilar competition could emerge.

IMPLICATIONS: The market exclusivity period for biologics represents a critical policy lever balancing innovation incentives against patient access and health system sustainability, with multi-billion-dollar consequences for public and private drug spending.