Growing industrial and geopolitical realignment of economic interests has the potential to re-define intellectual property constituencies in 2009.
1. Industrial realignment: the entry of innovator pharma companies into the generics business.
This year has already seen Merck get into follow-on biologics by buying Insimed and Pfizer build its generics business with its Aurobindo deal. As traditional innovator pharma companies become more invested in follow-on biologics and small molecule generics, they will have a greater (self-)interest in a functioning subsequent entry pathway.
Watch how this is playing out in the follow-on biologics arena as two competing FOB bills make their way through Congress. Right now, the 12-year exclusivity period in the Eshoo-Barton FOB bill and the 5-year exclusivity period in Waxman’s FOB bill are duking it out, and we’re already seeing increased industry flexibility. Innovator pharma has historically insisted on a 14-year exclusivity period to accompany follow-on biologics legislation, but BIO has already indicated some willingness to support Eshoo-Barton, as has PhRMA.
Dani’s the expert, but my layman’s guess is that we get a FOB pathway this time around, and that the exclusivity number lands somewhere in the 8-10 year range. This is consistent with a Teva-promoted analysis and it’s easy to see that it covers the arithmetic middle ground.
2. Geopolitical realignment: increasing innovative activity in Asia, which has historically focused more on generics.
In China, a recent deal between Lotus Pharmaceuticals, Inc. (OTCBB: LTUS) and Beijing Yipuan Bio-Medical Technology Co., Ltd. (“Yipuan”) to acquire the drug Yipubishan points to China’s interest in promoting innovation. Yipubishan, which is used to treat the symptoms of gastric ulcers and hemorrhages of the upper digestive tract, was partly funded through the use of grants from the Innovation Fund for Small – Medium Technology Based Firms of the Ministry of Science and Technology of the PRC. Yipubishan became the first prescription drug of its kind developed in China to be included in the National Torch Project, which recognizes and promotes commercialization of high-tech discoveries and encourages companies to use high technology. The Torch Project is one of a series of PRC Science and Technology initiatives.
In India, Wockhardt’s pioneering efforts in biotechnology are among many signs of increasing innovative activity, and have attracted interest from Pfizer and Sanofi. Wockhardt has set up a global-scale biopharmaceuticals manufacturing powerhouse, the Wockhardt Biotech Park, in Aurangabad, India. This state-of-the-art complex comprises six dedicated, manufacturing facilities, and is designed according to US FDA and EMEA standards. It will also house new biotechnology products that are currently in various stages of development. The complex has the capacity to cater to 10-15% of global demand for major biopharmaceuticals.
India and China are in the 3rd quintile of countries in the 2009 IPRI Report, with India ranking 46/115 and China ranking 68/115 but they are steadily increasing their innovative activity.
Within a short span, I would expect them to rank more like Israel, which has a world-class innovative industry as well as a strong generics industry (Teva), or Taiwan, which recently announced an initiative to boost cleantech and biotech. Both Israel and Taiwan are ranked 29/115 in the 2009 IPRI Report.