Obama administration looks to chop back market exclusivity for biologics

One of the signal achievements for the biotech industry in the Affordable Care Act was a provision granting 12 years of market exclusivity to biologics. The decade-plus period of protection against generic competition ensured that biologics would remain center stage in the R&D world, especially as Big Pharma tumbled over the patent cliff as it tried to rethink its megablockbuster-sized budgets for drug development.

But the Obama administration never favored that portion of the law, which was backed by a bipartisan coalition of lawmakers in Congress. And once again the administration is proposing to greatly scale down the exclusivity period, chopping the protection period from 12 years to 7 years.

The administration tackles the provision on page 64 of its summary version of the fiscal 2015 budget, noting that it will once again try to scale back exclusivity while preventing any extensions based on formulation changes. And if they succeed, the administration is claiming that they can carve $4 billion out of the Medicare budget over 10 years.

Those billions, along with billions more for private payers, would be carved out of the industry's revenues, which will leave BIO and a host of drug industry lobbyists to fight the ongoing battle against this provision. They'll likely face some major league opponents, though it seems unlikely that the administration can get the votes to alter that portion of the law at this stage of the game.

In other related budget news, there's an ever-so-slight 0.7% budget hike in line for the NIH, which isn't enough to keep up with inflation. That includes $100 million for the NIH's brain research project and a continuing focus on translational research as well as Big Data. And then there's a $970 million sweetener, a special provision that the administration wants to make for a variety of research initiatives, including Alzheimer's and vaccines research. If passed, the total NIH budget will reach $31.3 billion in the next fiscal year.

- here's the budget summary (PDF)

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