Biosimilar Producers’ Use of a CMO for Manufacturing of Biosimilar

Patricia Blom & Lise Roland Andreasen

Student thesis: Master thesis

Abstract

This thesis seeks to determine how the use of a Contract Manufacturing Organization (CMO) can affect the market access for biosimilar drugs upon patent expiry. Due to very high fixed costs, resulting from developing and manufacturing biosimilars the barriers to enter the market are very high, which makes market entry limited. In order to access the market the producer of biosimilar needs to have huge amounts of capital, why only larger producers has the means to compete on this market. For small producers to take part in the competition, alternatives have to be sought, either by seeking external investors or by using a CMO. Due to the high barriers to entry the producers of the original biologic drug will seek to apply strategies that deter entry of biosimilar drugs. The CMO can help reduce the barriers to entry, thereby increasing the biosimilar producers’ prospect of entering the market, and withstanding the original producer’s strategic use of barriers. The CMO is therefor of great importance to the biosimilar producers. Due to the requirement of marketing authorization for biosimilar drugs it is necessary to start the development and manufacturing of the biosimilar several years before the patent for the original biologic drug expires. For this reason the bolar exemption was introduced into the EU by Directive 2004/27/EC. The bolar exemption allows biosimilar producers to develop and manufacture biosimilar, before patent expiry, for the purpose of conducting studies and trials necessary for obtaining marketing authorization. However, there is uncertainty as to whether a CMO can legally develop, manufacture and deliver biosimilar product to the biosimilar producer, who then performs the studies and trials necessary for obtaining marketing authorization. The European Court of Justice (CJEU) was called on to bring clarity to the scope of the bolar exemption and determine whether the privilege of the bolar exemption can also extent to third parties developing and manufacturing a biosimilar on behalf of a biosimilar producer. Unfortunately the questions referred to the CJEU by Oberlandesgericht Düsseldorf remain unanswered. The German court provided their view on how the bolar exemption should be interpreted and determined, that third parties could be exempted from patent infringement, provided that a number of requisites is taken by the CMO to ensure that the biosimilar material delivered, is exclusively used for the purpose of obtaining marketing authorization. Like in Germany, Denmark has implemented a broad version of the bolar exemption. This thesis concludes that the Danish bolar exemption is to be interpreted and applied in accordance with the principles laid down by Oberlandesgericht Düsseldorf. Hereby a CMO can legally develop and manufacture biosimilar, provided that the contract entered into by the CMO and biosimilar producer fulfil the requirements established by Oberlandesgericht Düsseldorf. The parties therefor have to make sure that they conclude an efficient agreement containing clauses which ensure that they have taken the necessary precautions to fulfil the requirements of Oberlandesgericht.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2017
Number of pages116