Therapeutic Monoclonal Antibodies: The Dilemma of Delivering Affordable Biologics to Patients While Continuing to Incentivize Innovation
Volume 82, No. 4, Winter 2009
By Carolyn A. Castagna

In October 2008, Eli Lilly agreed to acquire ImClone for six and a half billion dollars. Eli Lilly outbid Bristol-Myers Squibb and “cleaned out the cash coffers” to seal the deal. The company did not pay billions of dollars for a huge, diverse portfolio of established drugs. Rather, the transaction was driven by a single blockbuster, Erbitux, and three drugs still in clinical trials awaiting FDA approval. ImClone’s three pipeline drugs, while a significant financial risk, are likely worth the gamble. Erbitux and the other three treatments are monoclonal antibodies, highly complex molecules derived from living cells. In addition to their value as successful treatments, the antibody drugs are valuable because they are inherently difficult for competitors to copy.

Besides Eli Lilly, other pharmaceutical titans are similarly hustling to settle acquisition deals to secure promising biologic drugs. When asked about the general shift of pharmaceutical companies’ resources “into biologics, such as therapeutic antibodies, as opposed to small-molecule drugs,” the Research and Development (“R&D”) Chairman at GlaxoSmithKline replied that “[t]here is a scientific driver and a business driver. . . . Strategically, I do not think that biopharmaceuticals will experience the same cliff when the patent expires as new chemical entities. It is extremely complex to make an identical biopharmaceutical.” Simply put, “big pharma” is banking on complex biologics to provide a portfolio resistant to generic competition.

Small-molecule pharmaceuticals embody the traditional notion of therapeutic drugs: chemically synthesized pills composed of a homogenous collection of molecules. Biologics are a separate class of drugs distinguished by their biological origin. Rather than being synthesized in test tubes using chemical building blocks, biologics are produced by living cells using life’s building blocks: sugars, proteins, and nucleic acids. Biologics are generally more complex than small-molecule drugs and are more difficult to characterize. Pharmacies dispense most prescription small-molecule drugs as pills, in quantities lasting days or weeks. In contrast, a health care provider must administer most biologics intravenously on a dose-by-dose basis. Currently, a legislative pathway exists for copycat small-molecule pharmaceuticals to obtain FDA approval. Such copycats are known as generics. An analogous abbreviated approval pathway for biologic copycats, known as biosimilars or follow-on biologics, is in the process of being implemented.

Biologics is a broad category that includes molecules varying widely in size and complexity. A monoclonal antibody (“mAb”) is a type of protein molecule. Therapeutic mAbs are a class of biologic drugs that are particularly large and highly complex. Some biologics, like insulin, are relatively small and are more easily analogized to small-molecule drugs. An antibody molecule is about twenty-five times the size of an insulin molecule. Because greater size correlates to greater complexity, therapeutic mAbs are particularly difficult to design and manufacture. They also often come with a staggering price tag.

Avastin, a therapeutic antibody that targets cancer cells, costs over one hundred thousand dollars each year for a single patient. Exorbitant costs have forced health insurers to adopt specialized policies such as requiring patients to cover a portion of the drug’s actual cost rather than paying a fixed copayment. Those engaged in the debate have not only questioned who should pay but whether dosing should be reduced to the minimum to lower costs. Some cancer doctors have opted to administer only half the recommended dosage of Avastin, pressured by the cost and emboldened by a study suggesting that a lower dose could be equally effective. A 2008 report by the Congressional Budget Office estimated that passing follow-on biologics legislation would reduce expenditures on the products by twenty-five billion dollars over the next decade. Monoclonal antibodies represent a significant proportion of the products targeted by follow-on legislation. Manufacturers of therapeutic mAbs earned $14.5 billion in U.S. sales during 2006, representing about one-fourth of all biologic sales.

This Comment will demonstrate that therapeutic monoclonal antibodies are a distinct class of biologic drugs requiring special consideration in creating an effective follow-on biologics pathway. Part II.A provides scientific background relevant to understanding antibodies and why they present exceptional challenges. Part II.B describes the current FDA approval process for new drugs, the abbreviated approval pathway for generic small-molecule drugs, and the recently enacted framework for the abbreviated approval of biosimilars. The final portion of the Overview, Part II.C, details a federal statute permitting the licensing of government-funded inventions. Building on the policy reasons for this statute, Part III argues that the new biosimilars approval pathway should have included provisions to permit the compulsory licensing of intellectual property necessary to make a therapeutic antibody product after a reasonable exclusive marketing period expires. To support this argument, Part III.A asserts that follow-on antibody drugs will require new clinical trial data and other costly expenditures. The increased cost of entering the market will prevent a competitive market from developing unless, as Part III.B explains, legislation allows for compulsory licensing and encourages data sharing. Part III.B.2 then demonstrates how key objectives of an existing federal statute support such a provision. This Comment aims to prove that, in the case of monoclonal antibody drugs, compulsory licensing will retain incentives for innovation while creating a competitive market and increasing the safety and accessibility of modern treatments.

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