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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.


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