The Pharmaceutical Research and Manufacturers of America (PhRMA) is urging the Office of the U.S. Trade Representative to go beyond the Korea-U.S. free trade agreement (KORUS) and include 12 years of data protection for an emerging class of drugs that are derived from living organisms in a Trans-Pacific Partnership (TPP) final deal.

A specific term of data exclusivity for these drugs, known as biologics, was established as part of the health care reform legislation signed into law by President Obama last year. U.S. drug companies now want USTR to include that same 12-year period of data exclusivity in its forthcoming TPP proposal on intellectual property (IP) protections.

This is a new issue for U.S. trade agreements. While drug companies generally want USTR to replicate patent provisions found in KORUS in the TPP context, KORUS did not contain a 12-year period of data exclusivity for biologics because it was not a part of U.S. law when KORUS was negotiated.

"Protection consistent with U.S. law -- i.e. at least 12 years for biologics and at least 5 years for non-biologics ... is essential," PhRMA wrote in an April 2011 document that it is using for TPP lobbying purposes. Harrison Cook, Vice President of International Government Affairs at Eli Lilly, made similar remarks in an April 26 interview.

"We think anything that is agreed to in any agreement, including TPP, has got to meet the level of U.S. law," he said. Twelve years of data exclusivity for biologics is important because it "creates parity with the strong patent protection you would expect to have on a chemical drug," he argued. Eli Lilly is a member of PhRMA.

Cook said he was "confident" that USTR understood the importance of this issue for brand-name manufacturers.

While stressing that KORUS is still the "gold standard" when it comes to IP protections, Cook said this is one area where USTR could improve on KORUS in the context of TPP. There are "always areas" for improvement when it comes to IP in trade; for instance, KORUS improved upon the IP provisions of the U.S.-Australia FTA, he said.

Under U.S. law, conventional pharmaceuticals that are chemically synthesized are granted five years of data exclusivity. During those five years, a generic competitor cannot rely on the clinical data generated by a brand-name drug company to obtain marketing approval for a generic version of the drug.

The United States has demanded that trading partners agree to provide five years of data exclusivity for pharmaceuticals in past free trade agreements, although the United States altered the data exclusivity provisions of trade deals with Panama, Colombia, and Peru to take into account some objections from public health advocates.

Before last year, however, U.S. law did not contain a specific data exclusivity period for biologics. Moreover, there was no comparable "regulatory pathway" to expedite the production of cheaper versions of biologics akin to the pathway that has long been in place to speed production of generic versions of chemically synthesized drugs.

Cheaper versions of biologics are known as "biosimilars." Biosimilars are comparable to generic versions of conventional drugs, but are not called generics because, unlike a true generic version of a chemically synthesized drug, they are not identical to the brand-name drug.

The 2010 health care reform bill for the first time established a regulatory pathway to speed approval of biosimilars. As a tradeoff, however, it also established a new 12-year period of data exclusivity for biologics. Public health advocates object to this period of data exclusivity and do not want it replicated in the TPP agreement.

One public health advocate warned that if the United States secures a 12-year period of data exclusivity in the TPP deal, that would mean that biosimilar producers would not only be barred from producing biosimilars in the United States for that period of time, but in foreign countries as well, with potentially adverse public health consequences.

Several public health advocates pointed out that the Obama administration, in its latest budget proposal, is calling for a reduction to seven years for the data exclusivity period for biologics.

The administration, which pushed for a shorter protection term in negotiations on the health care reform bill but ultimately agreed to 12 years, believes that reducing this data protection period would speed the introduction of biosimilars in the United States, driving down the costs of medicines and reducing health care spending, they said.

Brand-name manufacturers, on the other hand, argue that 12 years of data exclusivity is critical in order to recoup money spent on research and development of biologics. They also claim that a longer period of protection is necessary when it comes to biologics because of the nature of patent protections for this type of drug.

The new "regulatory pathway" set out in the 2010 health care reform bill covers drugs that are biosimilar to, but not identical to, the brand-name drug. For that reason, cheaper versions of the biologics are called biosimilars.

The reason for this greater leeway is that biologics are more complex and are derived from nature, meaning that it is much harder to make an exact copy of a biologic than it is to make an exact copy of a chemically synthesized drug.

Because drugs under the new "regulatory pathway" established for the approval of biosimilars do not have to be identical, pharmaceutical companies argue that biosimilars could potentially circumvent patent protections in place for the original, brand-name drugs, because the biologics are biosimilar and not technically the same drug.

A longer, 12-year period of data exclusivity compensates for this by ensuring that a biosimilar drug most likely cannot come onto the market for at least 12 years after the brand-name drug starts to be sold, industry sources said.

Approval for biologics have made up for 25-35 percent of new drug approvals by the Food and Drug Administration (FDA) since 2000, a public health advocate said, and often represent cutting-edge treatment for difficult diseases.

They can also be expensive: this advocate said that prices for biologics such as Genentechs Avastin -- used to treat various types of cancer -- is about $92,000 per patient, per year. Even under Genentechs discount program for patients earning an annual income of less than $100,000, Avastin still costs $55,000 per patient, per year, this advocate said.