Countries with successful biotechnology sectors invest heavily in R&D of biotechnology products. This often includes:
providing funding support for basic and translational research;
creating a hospitable environment for risk taking in an already risky sector which includes strong IP protections;
providing a flexible framework for technology transfer of any IP created;
science-based regulation of the resulting products; and
creating a market in which the product can be sold.
Regulatory approval
After an invention has been sufficiently developed, regulatory approval of a product is a critical step towards entering the marketplace. But since the marketplace is limited only to the jurisdiction where the approval is obtained, sponsors must file for approval in many countries around the world, each with their own laws and regulations. Some countries require new (sometimes redundant) testing at various stages of the development and manufacturing processes and still others require new, additional clinical trials, all of which add to the cost and time of development.
Governments can provide consistency in regulatory filings and improve the availability of biotechnology products by better streamlining their systems with globally recognized standards provided by institutions such as the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH). Nearly all countries require some form of dossier with regulatory data
Confidential information and data
Article 39 of the World Trade Organization’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) provides protection for this non-patented or confidential information/data for a period of time generally determined by the WTO member states. During this time, ranging anywhere from five to 12 years depending on the country, the company that has developed the product can benefit from exclusivity in the marketplace. Pursuant to Article 39, paragraph 3 of the TRIPS Agreement, WTO member states, “when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use”. In addition, WTO member states “shall protect such data against disclosure, except where necessary to protect the public or unless steps are taken to ensure that the data are protected against unfair commercial use”. As a consequence, in the pharmaceutical field Article 39 paragraph 3 of the TRIPS Agreement deals with undisclosed test data that refers to “clinical trial data of a new drug which has to be mandatorily submitted before a regulatory agency in order to obtain marketing approval for the drug”.
Data exclusivity
In certain jurisdictions, such data are given exclusive property rights if they pertain to a new drug, thereby preventing the authority from relying on such information while approving other similar drugs for which similar sets of data would have to be submitted in order to obtain approval once the protection of the patent and the SPC has expired. This approach is known as “data exclusivity”. In other jurisdictions, the authority is allowed to rely on such data about a new drug for approval of generic drugs provided that the generic drug is proven to be “bioequivalent” to the new drug.
This procedure applies only to a limited extent for biosimilars as the succession products of biopharmaceutical products (which are, in general, biotechnologically produced drugs). The data exclusivity period, in addition to IP rights, allows the originator company that first brought the drug to the market to sell its product free from competition for a limited period to recoup investments in the drug’s R&D and market authorization.
Access to medicines
In the health sector, there have been instances where restrictive drug regulation has affected the availability of medicines. This concern has typically been related to individuals with serious or life-threatening illnesses who might benefit from drugs that have been denied market approval or whose approval has been inordinately delayed because regulations are too strict. At times, governments have responded to these concerns by streamlining drug laws and regulations. Many countries, including the United States, Japan, Australia, Canada and Brazil, have developed country- and region-specific frameworks for regulating access to unapproved medicines. Examples of the types of drugs given expedited approval are cancer drugs, AIDS drugs and other drugs regulated under the auspices of compassionate use laws in the United States, EU member states, Switzerland and elsewhere.
Compassionate use laws generally regulate the use of an unapproved drug outside of clinical trials in people with serious or life-threatening conditions who do not meet the enrollment criteria for the clinical trial in progress. These serious or life-threatening conditions play an important role in the risk–benefit analysis regarding the use of unapproved drugs. In these instances, regulatory measures that allow for rapid approval of new drugs have sometimes led to the marketing of drugs with more toxicity than the public finds acceptable. The risk–benefit analysis in these instances is a fine line that generally falls within the jurisdiction of the role that governments play in the biotechnology sector.
Additional governmental incentives
Some drugs have benefited from additional government incentives. These incentives may include quicker approval time, as well as financial assistance and in some instances a guaranteed term of market exclusivity. Orphan drugs (that is, drugs designed to treat neglected or rare diseases) receive special consideration from various regulatory authorities, which encourages pharmaceutical companies to develop treatments for rare diseases. In the European Union, for example, a rare disease is one that affects no more than one person in 2,000
In Switzerland, as another example, there is also an orphan drug designation. However, this designation does not lead to additional market exclusivity but to an extension of data exclusivity (15 years instead of 10 years after market authorization). Consequently, the development of orphan drugs normally grows at faster rates than the development of traditional pharmaceuticals. These facilitated regulatory pathways can be used to incentivize development of medicines for a variety of unmet medical needs including diseases of the developing world such as malaria, tuberculosis, Chagas’ disease, dengue, trypanosomiasis, schistosomiasis and HIV.