Big Molecule Watch
July 7, 2015

Impending TPP Agreement’s Potential Impact on Biologics

On June 23, 2015, the U.S. Senate authorized President Obama to negotiate on a “fast-track” basis the Trans-Pacific Partnership agreement (TPP).  TPP is a proposed trade agreement between several pacific countries concerning a variety of matters, including intellectual property and pharmaceutical products.  Negotiations over TPP, which have been taking place since 2008, have escalated in recent months, and many believe that an agreement could be reached as early as the end of this summer, as the Senate’s recent vote gives the president the power to negotiate the trade deal without amendment or filibustering by Congress.  Recent news sources have reported that a ministerial meeting aimed at finalizing the TPP agreement is set for the last week of July in the United States.  Because the discussions are confidential, however, the only public source of information on the text under negotiation comes from on-line sources, such as WikiLeaks and Politico.

In addition to the United States, Brunei, Chile, Singapore, New Zealand, Australia, Canada, Japan, Malaysia, Mexico, Peru, and Vietnam are participating in the TPP negotiations, and other countries, such as Taiwan, South Korea, Columbia, and the Philippines, have expressed an interest in joining the negotiations and the trade agreement.  If enacted, the TPP will become the largest free trade zone, linking 40 percent of the world’s economy.

Not surprisingly, one of the most controversial aspects of the trade negotiations is the data exclusivity period for biologics.  The United States has a 12-year data protection for new biologics, which resulted following much debate and negotiations between different constituents in Congress regarding the duration of data exclusivity for these molecules.  Many other countries in the TPP, however, provide five years of data protection for new biologics, which is the same amount of time provided in those countries for new pharmaceutical products containing small molecules.  Indeed, amongst the 11 countries (excluding the U.S.) that are involved in the TPP, current data exclusivity protections range from zero (Brunei) to eight years (Japan and Canada).  Some believe that the United States may have to accept a shorter data exclusivity for biologics as part of the overall trade package, although a number of members of Congress have expressed their views to the Obama administration that the 12-year exclusivity period for biologics should be a critical part of the TPP.  No final decision has been made or publicly announced on this issue.

According to WikiLeaks, which has been releasing the confidential TPP agreement drafts, other IP provisions could include a presumption of patent validity in the member states, and patent “linkage” for pharmaceutical products, which would require TPP countries to adopt an Orange Book-like system giving notice and an opportunity to resolve patent infringement and validity issues prior to approval of generic drugs in those countries.  It is unclear from what has been released whether patent linkage would apply to biologics, although some believe that such a provision is on the table.  The TPP negotiations are confidential and ongoing, so it remains to be seen what type and duration of drug product IP and exclusivity protections will ultimately result.  We will continue to monitor and provide updates as more information becomes available.