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101 Iowa L. Rev. 1023 (2015-2016)
Manufacturing Barriers to Biologics Competition and Innovation

handle is hein.journals/ilr101 and id is 1057 raw text is: Manufacturing Barriers to Biologics Competition and Innovation W Nicholson Price II & Arti K. Rai** ABSTRACT: As finding breakthrough small-molecule drugs becomes more difficult, drug companies are increasingly turning to large molecule biologics. Although biologics represent many of the most promising new therapies for previously intractable diseases, they are extremely expensive. Moreover, the pathway for generic-type competition set up by Congress in 2010 is unlikely to yield significant cost savings. This Article provides a fresh diagnosis of and prescription for this major public policy problem. It argues that the key cause is pervasive trade secrecy in the complex area of biologics manufacturing. Under the current regime, this trade secrecy, combined with certain features of Food and Drug Administration (FDA) regulation, not only creates high barriers to entry of indefinite duration but also undermines efforts to advance fundamental knowledge about how biologics function and are best produced. In sharp contrast, offering incentives for information disclosure to originator manufacturers would leverage the existing interaction of trade secrecy and the regulatory state in a positive direction. Trade secrecy, particularly in complex areas like biologics manufacturing, often. involves tacit knowledge that is difficult to codify and thus transfer. In this case, however, regulatory requirements mandate that originator manufacturers submit manufacturing details. As a consequence, manufacturers have already codified the relevant tacit knowledge. Carefully structured mechanisms for incentivizing disclosure of these regulatory submissions would not only spur competition, but would * Assistant Professor of Law, University of New Hampshire School of Law; Ph.D. Biological Sciences, Columbia University, 2010. ** Elvin R. Latty Professor of Law, Duke Law School; Faculty Co-Director, Duke Law Center for Innovation Policy. Thanks tojamie Boyle, Molly Van Houweling, Peter Menell, Barak Richman,Jacob Sherkow, Michael Tarlov,Jonathan Wiener, and Gillian Woollett for helpful discussions and comments. We presented earlier versions of this Article at Boalt Law School, Duke Law School, the 2014 Intellectual Property Scholars Conference, and the 2015 Works-In-Progress in Intellectual Property (WIPIP) Colloquium. We thank the participants in those fora for their questions and comments. Rai's research on this Article was supported by NIH's National Human Genome Research Institute under Grant P5o HGoo3391. Any errors are, of course, our own. 1023

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