THUNDER BAY – HEALTH – Biologic medicines save lives and improve the quality of life for millions of people. To date, almost 200 biologic medicines have been brought to market. It’s projected that by 2017 biologics could comprise seven of the top 10 global pharmaceuticals and account for up to 30 per cent of pharmaceuticals under development.
That’s great news for patients. Unfortunately, biologic medicines are difficult and expensive to develop and manufacture, and Canadian policies, particularly Canada’s weak protections of intellectual property, are making it even harder.
Historically, medicines and the first drugs originated from plants and other natural sources. These drugs were followed by traditional pharmaceuticals, where the chemical structures are commonly well-defined. In contrast, biologic medicines are typically produced by genetically engineering living cells rather than through traditional chemical synthesis. Each of the thousands of steps in the process of developing and manufacturing biologics is intricate, highly delicate, and requires precise technique.
As such, biologics are more difficult to manufacture than traditional pharmaceutical drugs. Consequently, quality control is even more critical and production complications are potentially more catastrophic.
Precision in manufacturing becomes even more important as the market for biologic medicines matures and generic versions – properly known in Canada as subsequent entry biologics or SEBs – enter the market. The creation of SEBs is considerably different from the creation of generic versions of traditional pharmaceutical drugs because SEBs, unlike generic pharmaceuticals, are not identical to the pioneer version. This raises questions about interchangeability – whether or not a SEB can substitute safely for a pioneer biologic.
Also, due to the tremendous costs of bringing new biologic medicines to market and the ease with which biopharmaceutical innovations can be copied and sold by competing firms, the protection granted to innovators through intellectual property rights is disproportionally important for the biopharmaceutical industry.
Recent studies estimate that the preapproval cost of developing a biologic medicine approaches $1.2 billion and that the time needed to recover the preapproval R&D costs is between 12.9 and 16.2 years. While the generic versions of traditional pharmaceuticals can be produced at a fraction of the cost of the innovative drug, biosimilars do not enjoy the same cost-savings in production. Current studies estimate cost-savings from biosimilars will be between 10 and 20 per cent less than the cost of the pioneer biologic. Given the uncertainty that surrounds these investments and the unpredictable nature of discovery, it may be the case that too little is invested in the production of new knowledge.
Canada’s protection of intellectual property (IP) in the life sciences significantly lags behind that provided by many other industrialized countries, including the United States, the EU and Japan. A 2011Canadian Chamber of Commerce study found that Canada provides less robust IP protections for the pharmaceutical sector than the 31 peer countries utilized for comparison. This directly translates into less investment, less innovation and fewer biologic medicines for Canadians.
While Canada possesses many strengths in the life science arena – world-class talent, outstanding universities, a strong health-care system, and rigorous regulatory framework – the existing gaps in the IP architecture significantly weaken Canadian competitiveness. In contrast to recent changes that have weakened IP protections in Canada, consider the 1987 and 1992 changes to Canada’s Patent Act that strengthened IP protection in the life sciences. The result was a 1,500 per cent increase in investment in pharmaceutical research and development between 1998 and 2002. Given the potential for a rigorous IP environment, Canada’s existing level of intellectual property protection in the life sciences is strikingly disappointing.
This is particularly true in a global context. In 2012, the global biopharmaceutical industry invested US$135 billion in research and development, with life-sciences R&D spending projected to reach US$162 billion by 2020. However, for Canadian pharmaceutical companies, total R&D expenditures have fallen below $1 billion since 2011.
Moving forward, policymakers should reflect on what has worked in the past and increase levels of IP protection. For Canadian patients pinning their hopes on future biologic medicines, this protection is essential for incentivizing investment in new breakthrough therapies and cures.
Kristina M. Lybecker is an associate professor of economics at Colorado College, senior fellow at the Fraser Institute, and author of the Fraser Institute study The Biologics Revolution in the Production of Drugs.
© 2016 Distributed by Troy Media
