How should policymakers incentivize and regulate convalescent serum therapy for COVID-19?

By Jacob S. Sherkow, Lisa Larrimore Ouellette, Nicholson Price, and Rachel Sachs

Over 120 years ago, a milk wagon horse named Jim was the United States’ most potent weapon against a raging diphtheria epidemic. During his lifetime, Jim—inoculated against the bacterial toxin that causes the disease—produced gallons of anti-diphtheria serum that, once extracted, could then be administered directly to patients. But tragic difficulties in making a safe and standard therapy from a single horse led Congress to pass the 1902 Biologics Control Act—the predecessor to the FDA’s current oversight over biologic products.

While convalescent sera have largely fallen out of favor since the development of modern vaccines, there is renewed hope in the space: the development of therapeutic sera from recovered COVID-19 patients. Encouraging the development of safe, pure, and potent COVID-19 convalescent serum has recently tasked policymakers with numerous challenges—some old, and some new. In this post, we explain the “manufacture” of COVID-19 convalescent sera and explore the regulatory and innovation policy difficulties in maintaining it.

What is convalescent serum therapy?

Recovered COVID-19 patients—including more than one million Americans—generally have antibodies to the SARS-CoV-2 virus, proteins in the blood to help their immune systems fight the infection. Some diagnostic tests look for these antibodies to determine whether someone has previously been infected; a successful COVID-19 vaccine would help patients actively produce their own antibodies before infection. These “neutralizing” antibodies are important to combat SARS-CoV-2 and are the source of significant promise for a robust treatment. One experimental intervention is to administer serum from recovered patients containing neutralizing antibodies to those who have not yet developed them—a process known as convalescent serum therapy, convalescent plasma therapy, or passive antibody therapy.

This labor-intensive process begins with collection of plasma (the liquid portion of blood with cells removed) from a patient with SARS-CoV-2 antibodies, a process that takes around 45 minutes as blood is removed, plasma is fractionated, and the remainder—mainly red blood cells—are returned to the patient. (The FDA has compiled information on donation options.) The antibody-rich plasma or serum (plasma with clotting factors removed) can then be administered to COVID-19 patients to help them fight the disease until their immune system develops its own active response.

Passive antibody therapy has a long history—including some improvements in survival during the 1918 flu pandemic and against the coronaviruses that caused SARS and MERS—and is expected to be most effective when administered before infection (when it can provide weeks to months of protection) or shortly after the onset of symptoms. Some researchers are studying the preventative effect of convalescent plasma in health care workers, but given the scarcity of plasma donors, this intervention mostly has been used for hospitalized COVID-19 patients.

The first randomized convalescent plasma trial for COVID-19 treatment, with 103 patients in China, found no statistically significant benefit among all patients but promising enough results among severely ill patients that a JAMA editorial found “optimism for the future of antibody therapy in this disease.” A matched control study in which 39 NYC patients with severe COVID-19 received convalescent plasma transfusions concluded that the treatment improved survival for non-intubated patients but not for intubated patients. But the lack of randomization makes interpretation more challenging. A report on 5,000 hospitalized COVID-19 patients as part of the FDA expanded access program for convalescent plasma concluded that the treatment appears safe—but the study did not have a control arm, leaving efficacy uncertain. A number of registered randomized trials are recruiting patients, although enrolling a sufficient number of participants can be challenging. As the New York Times reports, although the “only way to know for sure if the treatment works is to randomly assign patients to receive antibodies or a placebo … it can be impossible to find many patients who agree to have their treatment randomized to an unknown treatment,” especially because the product is already accessible outside the clinical trial setting.

How is convalescent serum regulated?

Convalescent serum is mainly regulated through the Public Health Services Act’s oversight of “biological products.” Section 262(i)(1) of the pertinent statute defines “biological products” subject to FDA approval, and specifically includes “therapeutic serum” in its list of covered products (a prophylactic serum would presumably be included in the term “blood component or blood derivative,” also in the list). Accordingly, any therapeutic serum must be approved by the FDA, something the Agency has not yet done for convalescent serum to treat COVID-19.

Despite the Act’s specific designation of therapeutic sera as biological products, historically, they have been quite rare. The use of serum was relatively popular in the 1920s and 1930s to treat polio, measles, and mumps, before the development of vaccines. The Public Health Services Act’s placement of therapeutic sera under the FDA’s jurisdiction wasn’t enacted until 1942. More recently, convalescent sera have been sparingly used in other pandemic contexts before other treatments were available; in 2009 it was used to treat patients in the H1N1 flu pandemic, and in 2013 in the West African Ebola outbreak.

Because it has not yet approved sera to treat COVID-19 patients, the FDA regulates convalescent serum as an Investigational New Drug (IND). In general, the FDA requires information to demonstrate that a product subject to an IND is adequately identified, pure, strong, and of sufficient quality (21 CFR 312.23(a)(7) and 21 CFR 312.305(b)(2)(vi)). This is easy enough to state. But regulation of serum is tremendously difficult. Every donor is slightly different, and the things the FDA normally measures—quality, purity, strength, and manufacturing chemistry processes—are not easy to measure for a product derived from individual donors’ blood. Serum is deeply unlike the manufacture of a standardized product produced at an identifiable facility. To the contrary, it has parallels with other difficult-to-regulate human donor products, such as stem cell therapy or fecal microbiota transplants. Regulating systems like these is substantially more complex than regulating standardized antibody products, which are complex enough on their own. The FDA’s May 1 guidance attempts to standardize the process of manufacturing convalescent serum, laying out requirements for patient and donor eligibility, the labeling of products, and recordkeeping. But substantial uncertainty—and significant variability, donor to donor, batch to batch—remains.

Normally, products being studied under an IND can only be obtained by participating in a clinical trial; the FDA first approved trials of the use of convalescent serum for COVID-19 in April. However, the FDA has created a nationwide expanded access (EA) program (not to be confused with its Emergency Use Authorization (EUA) program), within which patients can access the treatment without being part of a clinical trial. The COVID-19 therapeutic serum EA centers on clinical trials being run by the Mayo Clinic; over 2,600 sites are connected with the program, and over 40,000 patients have been infused. If patients cannot access convalescent serum through this EA, a physician can request an individual patient-level emergency IND; incredibly, the FDA normally responds within four hours. While this streamlined access helps patients get treatment, it also makes it difficult to enroll robust numbers of clinical trial participants.

How can innovation policy encourage convalescent serum?

Convalescent serum differs from standard pharmaceutical therapies in ways that limit the potential effectiveness of many typical approaches for encouraging innovation of a biologic product. As noted, because convalescent serum is typically obtained from donors rather than manufactured in large factories, one may worry that the lack of standardization and some randomness associated with finding a batch of effective plasma decreases companies’ incentives and ability to study it for its intended uses. In typical circumstances, this would suggest increasing the need for governmental funding in this space to overcome FDA regulatory challenges and to encourage standardization.

But there are more ways policymakers might encourage the development of convalescent sera at their source: encouraging sera donation from and sera administration to COVID-19 patients. First, there are a number of other therapeutic areas involving donation of human bodily materials (including blood, plasma, gametes like eggs and sperm, and fecal matter). The FDA and Congress in particular can learn from the ways both monetary and non-monetary incentives have been used to encourage donation, including the ways in which recovering COVID-19 patients might feel altruistically motivated to participate in a study that might help future patients. More directly, clinicians might seek to repurpose existing donation mechanisms for COVID-19 purposes. As one example, the Red Cross has begun testing all blood donations for COVID-19 antibodies. This provides a benefit to donors, who can learn whether or not they have been exposed to the virus, while holding themselves out to be asked whether they would like their serum to go to COVID-19 patients if they test positive.

Second, policymakers should prioritize federal funding not only for clinical trials evaluating the efficacy of convalescent serum in COVID-19 patients, but also in studying additional aspects of the use of convalescent serum. For instance, as has been documented in the fecal transplant space, it might be that material from particular donors is far more effective at treating the condition in question than material from others. It would be important to determine, for instance, whether donations from patients who had developed asymptomatic COVID-19 infections differed from patients who had developed symptomatic infections and displayed different levels of efficacy when later administered to symptomatic patients. Such information—which is comparatively nonexcludable and likely under-incentivized for larger-scale developers—should be a prime target for federal funding.

Third, the FDA might seek to set ex ante standards, as it has already begun to do in its May guidance document, to help scientists determine how to structure the collection process as well as clinical trials. Standardization in collection and processing might also help regulators compare the results of different clinical trials, help determine which convalescent sera have demonstrated efficacy, and encourage efforts to characterize the sera more clearly.

Policymakers also ought to pay attention to the ethical dimensions of the donation and use of convalescent plasma. A market has developed for blood donations from COVID-19 survivors, potentially raising concerns both about exploitation of donors and access to expensive treatments. More generally, the history of research involving human biological materials is filled with examples of human tissue sampling without subjects’ consent—especially from people who were disproportionately likely to be members of minority communities (although not exclusively so). Suffice it to say, the people from these examples did not share in the profits reaped by researchers and commercial developers. Convalescent serum, like other potential COVID-19 therapies, sheds yet more light on the racial disparities in COVID-19 cases. As policymakers work through ways to fund sera-based therapies, they should be attentive to equity in all parts of sera development—from donor to patient. 

This post is part of a series on COVID-19 innovation law and policy. Author order is rotated with each post.

How will the FDA’s new COVID-19 vaccine guidance affect development efforts?

By Rachel Sachs, Jacob S. Sherkow, Lisa Larrimore Ouellette, and Nicholson Price

Policymakers are expectantly awaiting the development of a COVID-19 vaccine, which they view as critical to future management of the pandemic. A number of pharmaceutical companies have jumped into the vaccine race, moving at record speed, with several vaccines already about to enter Phase III trials. Last week, the Food and Drug Administration (FDA) released a guidance document on the development of new vaccines for COVID-19. In this post, we review the FDA’s new guidance, consider the ways in which the FDA must attempt to balance risk and access in this context, and address the critical question of patient access to future approved vaccines.

What does the FDA’s COVID-19 vaccine guidance do?

The FDA’s June 30 guidance broadly details the agency’s requirements for clinical trials of COVID-19 vaccines. These include considerations for trials’ designs and subject populations, measures of efficacy, statistical considerations, and safety thresholds, among other requirements. Notably, the guidance is the first from the FDA to establish such measures for a COVID-19 vaccine specifically. Besides providing vaccine developers, well, guidance for vaccine development, guidances issued early in the development process also bind the FDA to its own evidentiary mast against the siren song of political pressure. (In this way, guidances, too, can serve as an instrument in augmenting public trust.) 

The guidance clearly specifies current areas of scientific uncertainty and expresses what evidence the agency is looking for and how to obtain it. For example, the guidance admits that “[u]nderstanding of SARS-CoV-2 immunology, and specifically vaccine immune responses that might predict protection against COVID-19, is currently limited and evolving”—and, as a consequence, the goal of COVID-19 vaccine trials is not necessarily to demonstrate immunogenicity but “efficacy in protecting humans from SARS-CoV-2 infection and/or disease.” 

More specifically, the June 30 guidance notes a preference for vaccine trials with a 1:1 randomization of vaccine candidate:placebo, rather than trials investigating multiple different treatment arms. It also encourages following up with study participants for “at least” one or two years to determine the length of protection provided by the vaccine as well as to watch for potential adverse events. And the guidance suggests using a lab-confirmed SARS-CoV-2 infection as a trial’s primary endpoint, with incidences of severe COVID-19 as at least a secondary endpoint. The guidance also acknowledges the racial disparity in COVID-19 outcomes by “strongly encouraging” enrolling racial and ethnic minorities in any vaccine clinical trials. Developing a vaccine that is less effective when administered to Black patients, for example, would only exacerbate differential COVID-19 outcomes and contribute to health inequities.

More controversially, however, the guidance pegs studies’ primary efficacy endpoint at “at least 50%”—a far cry from the 90%+ efficacy for vaccines against polio or HPV. This means, of course, that at least some vaccinated individuals (including high-risk individuals) would become infected. At the same time, an efficacy endpoint of 50% is not unheard of for vaccine development, and is used routinely for seasonal influenza vaccines. In cases like the flu, the goal is not necessarily to inoculate everyone, but to flatten the curve enough (i.e., to bring down R0) so that transmission is effectively halted. Mandating a coronavirus vaccine to demonstrate 90%+ efficacy while the pandemic rages would be allowing the perfect to be the enemy of the good.

For now, Moderna, a vaccine developer relatively far along in the approval process, has delayed part of its trial, seemingly to conform to the guidance. Moderna’s technology—an RNA-based vaccine approach—is novel and has its fair share of skeptics. But the guidance, like all good guidances, has the salutary effect of committing the FDA and developers to a common set of principles and evidence to the usher development of important therapeutics.

How does the FDA use its information-forcing powers to balance risk and access in the COVID-19 vaccine context?

The FDA doesn’t just regulate to ensure that new products are safe and effective; a key part of its role is to require and shape the production of costly information about the products it regulates. Professor Rebecca Eisenberg has argued persuasively that the FDA is an innovation agency, not just a consumer protection agency, and this information-forcing role is central to that purpose. It is difficult and expensive to generate information about health-care innovations, whether therapeutic drugs, medical devices, or vaccines. In the face of manufacturers’ incentives to underproduce this information, the FDA steps in to require a certain amount before it will allow products to be marketed. The amount of information required is debatable—as we have previously discussed, requiring more information decreases the risk of the FDA making a mistake during the approval process but delays patients’ access. This role is particularly important in a pandemic, where urgency colors every new biomedical development but high quality information is still needed, not least because errors can be particularly costly in terms of both medical outcomes and public trust. 

The guidance’s specific requirements (e.g., 1:1 vaccine:placebo, 1-2 year follow-up, specified endpoints) are an effort to ensure that the information generated about a vaccine is robust enough to merit approval and the likely widespread use that will follow. Ideally, as multiple candidates are taken through clinical trials, developers will learn more about the virus and more about effective development efforts. The FDA may require more and better information to approve later vaccines, both because firms (and the FDA) have more experience, but also because once the first vaccine is on the market, the need for a second vaccine is not quite as desperate. That said, the FDA has suggested that accelerated approval—a faster and easier approval pathway—may be more likely later after more is known about how the virus works. More vaccines will still be needed, but the agency can afford to be slightly pickier with each approved vaccine, and correspondingly to demand better evidence of efficacy and safety (for instance, once an approved vaccine exists, non-inferiority trials for later vaccines would look for an efficacy within 10%).

One crucial step the FDA could take to improve the information produced in vaccine trials would be to facilitate the sharing of information about failures in vaccine development. In the ordinary course of drug development, failures are minimally shared, as knowledge of dead ends not to follow is considered valuable confidential business information. Keeping failures secret in the COVID-19 vaccine development efforts would be a terrible waste, particularly as the clinical landscape is already littered with inefficiency and duplication. The European Medicines Agency already exercises a similar authority more generally.

The FDA’s role of ensuring that developers generate high quality information about safety and efficacy is in some tension with another prominent government initiative: Operation Warp Speed. Operation Warp Speed is an effort to speed the development of therapeutics and vaccines as much as possible, but part of that effort means that the government (particularly BARDA, the Biomedical Advanced Research and Development Authority) will be picking winners and supporting particular candidates—long before they have the sort of information the FDA is looking for. The FDA is correspondingly emphasizing its independence from other efforts; the information required to approve a vaccine seemingly does not change based on the mechanics of Operation Warp Speed or other government efforts. Nevertheless, and with good reason, the firms operating under Operation Warp Speed will be using the FDA’s guidance to shape their development efforts.

If the FDA approves a COVID-19 vaccine, how will the United States pay for it?

The FDA’s rigorous requirements and stated reluctance to issue a vaccine EUA have been described as throwing cold water on the goal of having a COVID-19 vaccine in 2020. Experts suggest that even summer 2021 is an aggressive goal, requiring tremendous duplicative spending and a lot of luck. But while an effective COVID-19 vaccine remains aspirational, politicians, patient advocates, and pharmaceutical innovation experts have been worrying about vaccine cost since the early stages of the pandemic. We think it would be helpful if these discussions distinguished between affordability—the out-of-pocket costs to patients that can pose barriers to access—and the separate question of overall financial incentive for developers, recognizing that pharmaceutical profits and public health are not incompatible.

Any FDA-approved vaccine will likely be free for Americans who want it. The push for adoption of U.S. vaccines typically comes from the CDC’s Advisory Committee on Immunization Practices (ACIP), which formed a COVID-19 work group in April to create an independent framework for assessing vaccines and to review early clinical trial data. The Affordable Care Act requires insurers to cover ACIP-recommended vaccines with no cost-sharing (at least as long as it is not overturned). As we have previously discussed, HHS has also used CARES Act funding to create a COVID-19 Uninsured Program Portal, which will cover any FDA-approved vaccine for uninsured Americans, when available. The Trump administration stated in June that any COVID-19 vaccine will be free for “any American who is vulnerable, who cannot afford the vaccines.” It seems likely to us that Congress will allocate additional funding for vaccine coverage if necessary, including to ensure that patients are not billed for the health care provider’s administration of the vaccine (in addition to the product itself).

But free at the point of sale to patients need not—and should not—mean free to the U.S. government. Vaccine development is tremendously expensive, requiring customized manufacturing facilities that usually take many years to build. Having any chance of meeting 12-to-18-month development timelines requires building these factories now for promising candidates, with recognition that most will have to be abandoned as unrecoverable sunk costs when clinical trials do not pan out. Vaccines are also less profitable than repeat-use treatments, and political pressure often pushes profits even lower. But vaccines can have huge positive externalities for society beyond the benefits provided to individual vaccinated patients—as illustrated by the enormous daily costs of COVID-19 that an effective vaccine would eliminate.

The conventional solution for this kind of market failure in innovation policy is to supplement market rewards with public funding—and the federal government is indeed putting substantial sums into COVID-19 vaccine development. A $1.6 billion contract with Novavax was announced Tuesday, following pledges of “up to $1.2 billion” to AstraZeneca and about $1 billion more divided among Moderna, Johnson & Johnson, Merck, and Sanofi. Some commentators have pointed to this funding as justification for compulsory licenses or price caps on successful vaccines. But the goal of this funding is to correct for market rewards that are insufficient to motivate companies to build facilities at-risk, before a vaccine candidate's efficacy is known; decreasing market-based incentives would subvert this goal and exacerbate this market distortion. Total public funding for COVID-19 vaccine development so far is less than the daily social cost of the pandemic in the United States alone. If this funding speeds vaccine development even slightly, it will have been worth it.

Indeed, in addition to laying out guidance for the standards that will be used for vaccine approval, the federal government should consider committing now to reimbursement rates for an approved vaccine, akin to what it has done for advanced COVID-19 diagnostic testing technologies. As multiple scholars have noted, an effective COVID-19 vaccine is the kind of technological problem that lends itself well to an innovation challenge prize known as an advance market commitment (AMC), in which the government commits to paying a certain amount per vaccinated person, under certain assumptions about the vaccine’s effectiveness that align with the FDA’s guidance. Even though an entirely new prize system isn’t politically likely, wide-scale government purchasing can replicate most of the benefits of market-based prize systems like AMCs. Committing to a profitable reimbursement rate could provide additional motivation to get working COVID-19 vaccines into Americans’ arms more quickly.

The legal and policy issues arising in the context of vaccines for COVID-19 are not entirely unique to the vaccine context. The federal government has already faced questions around the FDA’s approval standards, regulating in the face of uncertainty, and ensuring access to other new healthcare technologies for COVID-19, such as drugs and diagnostics. But the particular facts underlying the development of new vaccines counsel in favor of solutions to this problem that differ from those the federal government has already considered. Now, several months into COVID-19’s spread into the United States, federal policymakers should work to ensure that plans specifically encouraging innovation into and access to vaccines are developed and implemented.

This post is part of a series on COVID-19 innovation law and policy. Author order is rotated with each post.

How Does Patent Eligibility Affect Investment?

David Taylor (SMU) was interested in how patent eligibility decisions at the Supreme Court affected venture investment decisions, so he thought he would ask. He put together an ambitious survey of 14,000 investors at 3000 firms, and obtained some grant money to provide incentives. As a result, he got responses from 475 people at 422 firms. The response rate by individual is really low, but by firm it's 12% - not too bad. He performs some analysis of non-responders, and while there's a bit of an oversample on IT and on early funding, it appears to be somewhat representative.

The result is a draft on SSRN and forthcoming in Cardozo L. Rev. called Patent Eligibility and Investment. Here is the abstract:

Have the Supreme Court’s recent patent eligibility cases changed the behavior of venture capital and private equity investment firms, and if so how? This Article provides empirical data about investors’ answers to those important questions. Analyzing responses to a survey of 475 investors at firms investing in various industries and at various stages of funding, this Article explores how the Court’s recent cases have influenced these firms’ decisions to invest in companies developing technology. The survey results reveal investors’ overwhelming belief that patent eligibility is an important consideration in investment decisionmaking, and that reduced patent eligibility makes it less likely their firms will invest in companies developing technology. According to investors, however, the impact differs between industries. For example, investors predominantly indicated no impact or only slightly decreased investments in the software and Internet industry, but somewhat or strongly decreased investments in the biotechnology, medical device, and pharmaceutical industries. The data and these findings (as well as others described in the Article) provide critical insight, enabling evidence-based evaluation of competing arguments in the ongoing debate about the need for congressional intervention in the law of patent eligibility. And, in particular, they indicate reform is most crucial to ensure continued robust investment in the development of life science technologies.

The survey has some interesting results. Most interesting to me was that fewer than 40% of respondents were aware of any of the key eligibility decisions, though they may have been vaguely aware of reduced ability to patent. More on this in a minute.

There are several findings on the importance of patents, and these are consistent with the rest of the literature - that patents are important for investment decisions, but not first on the list (or second or third). Further, the survey finds that firms would invest less in areas where there are fewer patents - but this is much more pronounced for biotech and pharma than it is for IT. This, too, seems to comport with anecdotal evidence.

But I've always been skeptical of surveys that ask what people would do - stated preferences are different than revealed preferences. The best way to measure revealed preferences would be through some sort of empirical look at the numbers, for example a differences-in-differences approach before and after these cases (though having 60% of the people say they haven't heard of them would certainly affect whether the case constitutes a "shock" - a requirement of such a study).

Another way, which this survey attempts, is to ask not what investors would do but rather ask what they have done. This amounts to the most interesting part of the survey - investors who know about the key court opinions say they have moved out of biotech and pharma, and into IT. So much for Alice destroying IT investment, as some claim (though we might still see a shift in the type of projects and/or the type of protection - such as trade secrets). But more interesting to me was that there was also a similar shift among those folks who claimed not to know much about patent eligibility or think it had anything to do with their investment. In other words, even for that group who didn't actively blame the Supreme Court, they were shifting investments out of biotech and pharma and into IT.

You can, of course, come up with other explanations - perhaps biotech is just less valuable now for other reasons. But this survey is an important first step in teasing out those issues.

There are a lot more questions on the survey and some interesting answers. It's a relatively quick and useful read.

Recent Advances in Biologics Manufacturing Diminish the Importance of Trade Secrets: A Response to Price and Rai

Guest post by Rebecca Weires, a 2L in the J.D./M.S. Bioengineering program at Stanford

In their 2016 paper, Manufacturing Barriers to Biologics Competition and Innovation, Price and Rai argue the use of trade secrets to protect biologics manufacturing processes is a social detriment. They go on to argue policymakers should demand more enabling disclosure of biologics manufacturing processes, either in patents or biologics license applications (BLAs). The authors premise their arguments on an assessment that (1) variations in the synthesis process can unpredictably affect the structure of a biological product; (2) variations in the structure of a biological product can unpredictably affect the physiological effects of the product, including immunogenicity; and (3) analytical techniques are inadequate to characterize the structure of a biological product. I am more optimistic than Price and Rai that researchers will soon overcome all three challenges. Where private-sector funding may fall short, grant-funded research has already led to tremendous advances in biologics development technology. Rather than requiring more specific disclosure of synthesis processes, as Price and Rai recommend, FDA could and should require more specific disclosure of structure, harmonizing biologics regulation with small molecule regulation. FDA should also incentivize development of industrial scale cell-free protein synthesis processes.

In the past few years, researchers have made rapid progress developing techniques for synthesizing, assessing the physiological effects of, and characterizing the structure of biologics. Researchers have been developing cell-free protein synthesis systems to make biologics synthesis more predictable and less path-dependent. Historically, cell-free synthesis systems have been application-specific and difficult to scale. Cell-based systems have dominated because cells maintain their own internal environments, including necessary components for protein synthesis. But cell-based systems are not perfect. For example, as Price and Rai explain at p. 1035, the pattern of carbohydrates attached to a protein is particularly challenging to replicate across different cell lines and is important for efficacy and immune response. Recently, researchers have created more flexible, generalizable platforms for cell-free synthesis. Some are developing industrial-scale cell-free synthesis processes. Others have demonstrated cell-free production of increasingly complex, proteins with attached carbohydrates. These cell-free synthesis techniques are more predictable than current cell-based synthesis, eliminating variations that arise from differences between cell lines.

Researchers have developed improved models of the immune system to improve preclinical assessment of biologics. Traditional preclinical toxicity assays and animal models have been insufficient for biologics, which are often not directly cytotoxic but instead trigger species- and patient-specific immune reactions. As the biologics industry has grown, researchers have developed sensitive in silico methods, 2D in vitro assays, and 3D in vitro models of immune response. For example, computer models can now provide good estimations of the ability of immune cells to bind with a biologics, which a sponsor can use to predict whether a product with a slightly different structure than its reference product has the same immunogenicity. If the two products are likely to be biosimilar, the sponsor can validate immunogenicity in vitro before investing in a clinical trial. The sponsor may use 2D assays to measure the response of immune cell cultures directly exposed the biologic, or the sponsor may introduce the biologic into 3D artificial lymph nodes, which model flow and other mechanical forces that affect immune cell response. With these tools, the variations arising from different synthesis processes become less of an obstacle to biosimilar development.

Technology for characterizing the structure of biologics has come especially far in the past decade, enabling high-resolution characterization of protein folding and glycosylation for increasingly large biologics. Structural characterization has been limited in the past because protein sequencing does not provide folding or glycosylation information, X-ray crystallography requires prohibitively complex sample preparation, and nuclear magnetic resonance (NMR) spectroscopy is ambiguous and computationally expensive for large molecules. In the past few years, though, researchers have developed 2D NMR methods for characterizing products as large as monoclonal antibodies. Cryogenic electron microscopy (CryoEM) is a newer technique suitable for characterizing larger biologics. CryoEM can be used to image large glycosylated structures such as viral coat proteins, and even whole cells, at near-atomic resolution. Though 2D NMR and CryoEM may be too time-consuming or expensive for rapid prototyping, computational methods for predicting protein structure and function are now adequate for prototyping new biologics.

Price and Rai theorize that the private sector underinvests in these three areas of research, but total funding may be sufficient. The above-cited advances were largely grant-funded. Defense department funding for synthetic biology has skyrocketed in the past decade, accounting for 67% of U.S. public-sector research investments in synthetic biology in 2014. Public sector investment has made technologically feasible what was once nearly impossible: reverse engineering biologics.

Price and Rai argue the costs of trade secrecy in biologics manufacturing likely outweigh the benefits, but research advances may soon reverse that assessment. As reverse engineering biologics becomes easier, the private value of keeping manufacturing methods trade secrets will decline, and we can expect biologics makers to reduce their reliance on trade secrets. Furthermore, tools for assessing immunogenicity function in silico and in vitro will eliminate some expense of failed clinical trials. Thus, the social value of disclosing synthesis processes will also decline.

Overall, these scientific advancements reduce the urgency and importance of Price and Rai’s policy prescriptions but do not render them irrelevant. Policymakers should consider the regulatory levers the paper describes at pages 1050-56 to incentivize full and specific disclosure; however, full disclosure of structure, rather than synthesis process, should be the focus. Biologics sponsors should be required to define their exact formulations. Heightened patent disclosure requirements are an option, but as Price and Rai suggest, the FDA may be in a better position to enforce heightened disclosure requirements. In fact, detailed structural characterization, to the extent it is technologically feasible, is already required to prove biosimilarity. With improved characterization and deterministic, cell-free manufacturing, it will become possible to make true generic biologics. Heightened disclosure requirements could take the form of harmonized generics and biosimilars regulation.

Policymakers should supplement disclosure requirements with incentives for the private sector to further develop cell-free synthesis processes. Reverse engineering requires both structural information and deterministic synthesis processes. Biologics sponsors may not have sufficient incentives to invest in cell-free synthesis because it facilitates biosimilars development. Fortunately, current research provides a basis for FDA to set a reasonable timeline for biologics makers to develop and adopt cell-free synthesis. Now is an appropriate time for the FDA to announce cell-free synthesis requirements, along with immunogenicity assay requirements, for biologics license applications. As escalating fuel efficiency standards have done for the auto industry, escalating application requirements would stimulate private-sector research and development to meet requirements.

Price and Rai highlight legitimate concerns with the current use of trade secrets to inhibit the development of biosimilars. However, biologics manufacturing technology has advanced enough that an end to these practices is in sight. New scientific developments will enable FDA to treat biosimilars more like generic small-molecule drugs, which would simplify the approval pathway for biosimilars and enable more effective product inspections. Though this course of action would not immediately accommodate new and complex biologics such as whole cell therapies, it does suggest a model for regulating them. For new types of biologics, FDA can start with a flexible regulatory scheme allowing approval based on manufacturing process information. Then, as deterministic synthesis processes, preclinical assays, and structural characterization techniques advance, it can transition to more rigid disclosure requirements.