[Ip-health] Regulatory Explainer: The 21st Century Cures Act | RAPS

Jamie Love james.love at keionline.org
Fri Feb 20 03:03:06 PST 2015

Alexander Gaffney
​ has ​an "explainer on the 21st Century Cures Act proposal.


Below is one section of the explainer, on the proposal to allow ​developers
of antibiotic drugs to transfer (sell) 12 months of market exclusivity to a
company selling a differ type of drug, presumably a blockbuster drug with
multi-billion dollar sales.  Among other things, the company receiving the
added year of monopoly has to pay (during the extended period of the
monopoly) 5 percent to the NIH for research on antibiotic drugs, and 5
percent into a fund to help people who cannot afford the product.

​This section of the bill will have support from companies developing
antibiotic drugs, some advocates ​of more antibiotic drugs being developed,
the NIH, and some patient groups.   It will also be very expensive, in
terms of the cost of the monopoly,   I spent some time working out the
inefficiencies of such exclusivity transfers in my recent WIPO patent
(CDIP/14/INF/12 Annex I, page 83), but I don't think I was harsh enough.
In any event, here is the explainer's take:


Take This Antibiotic Exclusivity and Transfer It

A subsequent section (Section 1063) is also geared toward providing a new
incentive for antibiotic products approved under a special designation.

Under FDASIA, legislators established a new designation for antibacterial
drugs known as the Qualified Infectious Disease Product (QIDP). Products
approved by FDA with QIDP status are eligible for an additional five years
of marketing exclusivity in addition to whatever other exclusivity they
obtain from FDA as a new drug (5 years for brand new drugs, 3 years for
repurposed drugs, 12 years for new biologics, and 7 years for so-called
"orphan" drug products).

Read more about the QIDP and the Generating Antibiotics Incentives Now
(GAIN) Act here.

The Cures Act largely leaves this section intact, but with one major
change: Companies can transfer as many as 12 months of marketing
exclusivity from their five-year QIDP status to "one or more other drugs."

That could be a powerful incentive for companies to develop new antibiotic
products, especially since the bill allows them to sell these exclusivity
rights to other companies ("Nothing in this Act shall be construed as
prohibiting the sale of any conveyed exclusivity period.")

A similar market now exists for companies to sell and re-sell priority
review vouchers, which have sold for as much as $125 million. The voucher
allows a company to obtain market access up to four months faster than

If a similar market develops for QIDP exclusivity transfers, some drug
companies might pay hundreds of millions—even billions—to keep exclusivity
for their blockbuster drugs. The bill, however, seems to limit transfers of
exclusivity to just 12 months per drug—but doesn't clarify if that applies
to transfers from a drug or to another drug. The distinction could be

However, the legislation also notes that companies cannot purchase the
added exclusivity if they have fewer than four years of marketing
exclusivity (or parent protection) remaining on their product. That might
limit the effects of the transfers, especially for companies wishing to eke
out an added year of exclusivity on an expiring patent. However, for
companies which have just received approval for a new drug, the ability to
purchase an additional year of protections might prove valuable.

The proposal is also highly unusual in that it comes with a requirement: A
company purchasing added exclusivity from another company is required to
donate up to 5% of gross sales to the National Institutes of Health (NIH)
to help advance antibiotic resistance research, as well as an addition 5%
to patient assistance programs meant to help patients afford their drugs.

The sales calculation is made on the final year of exclusivity—not the
entire term of the patent or exclusivity.

- See more at:

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