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WITH LAWMAKERS SEARCHING for ways to maintain the solvency of the Medi-care program, generic drugmakers are hoping to build support for legislation that would bring competition to some of the most expensive prescription drugs on the market.

The industry has been encouraging Con-gress to create a regulatory pathway that would allow the Food & Drug Administra-tion to approve generic versions of biolog-ics, or biogenerics, a relatively new class of medicines based on proteins made by living cells. These genetically engineered protein molecules are increasingly being used to treat diabetes, arthritis, cancer, and other serious diseases.

By their very nature, biologics differ from the chemical compounds made by traditional pharmaceutical companies and therefore require a separate set of rules. Due to their size and complexity, biolog-ics are also more expensive to develop. And they cost patients and their insurers 20 times more than most small-molecule chemical drugs. With price tags as high as $200,000 per patient annually, biologic products are a drain on Medicare and thus are a significant contributor to the U.S.’s health care burden.

“We need to ensure that Medicare will be available for future generations,” says Kathleen Jaeger, president and chief execu-tive officer of the Generic Pharmaceutical

Association (GPhA), an Arlington, Va.-based trade group that lobbies on behalf of companies that make and distribute finished generic drugs and bulk active pharmaceutical chemicals. “With total Medicare expenditures expected to in-crease at a faster pace than either workers’ earnings or the overall economy, it’s clear that we need to take steps to reduce spend-ing,” Jaeger says.

“The Medicare program has reduced program costs through the use of generics, and it could lower costs even more through the availability of biogenerics,” Jaeger says. “Biogenerics would provide countless patients with access to more-affordable treatments while saving them—and the Medicare system—billions of dollars an-nually.” In their annual report released in late March, the Medicare trustees warned that unless Congress takes decisive action, the taxpayer-supported fund that finances the federal health insurance program for the nation’s elderly and disabled will be depleted by 2019.

Biologics represent big money and are the fastest growing segment of health care

spending. In 2006, U.S. sales of these bio-tech remedies surpassed $40 billion, accord-ing to market research group IMS Health. Sales could reach as high as $90 billion in 2009. Access to this lucrative market in the U.S. is currently limited to biotech and phar-maceutical companies because an approval process does not currently exist to produce generic versions of these treatments.

Generics have been saving U.S. con-sumers money since 1984, when Congress passed the Hatch-Waxman Act, which created a streamlined process for generic drugmakers to put copies of chemically synthesized drugs on the market after the patents on the originals expired. The law said nothing about the large-molecule, protein-based medicines that at the time were being rolled out by the fledgling bio-technology industry.

But now, with an estimated $20 billion worth of biologic drugs expected to come off patent by 2015, pressure is building on Congress to pass legislation that would pave the way for generic versions of bio-logic drugs, which go by a variety of names, including biogenerics, follow-on biologics, and biosimilars.

Lobbyists for the generic drug industry argue that the increased competition will lower prices for patients, employers, and government health programs. For example, according to pharmacy benefit manager Express Scripts, the generic version of human growth hormone sells at a 25% discount compared with its brand-name counterpart in Europe, where an approval process for biogenerics was established in 2006. “As health care costs escalate, increasing consumer access to generic medicines—and biogenerics—is the right choice,” Jaeger says.

SINCE TAKING CONTROL of Congress a year ago, Democrats have introduced a se-ries of bills to help rein in soaring prescrip-tion drug prices and trim federal health care spending. But lawmakers have thus far been unable to agree on how to grant ge-neric manufacturers access to the biologics market while adequately addressing the concerns of the research-based biotechnol-ogy industry.

GENERIC BIOLOGICSCongress struggles to reach CONSENSUS ON PATHWAY

to cheaper versions of protein drugsGLENN HESS, C&EN WASHINGTON

COST CONTROL

Generic biologics are expected to cost from 10 to 30% less than their brand-name counterparts.

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“It’s time for all parties to work

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Last year, there were several attempts to push through legislation to create a regula-tory framework for FDA to approve lower cost versions of biologic medicines. The most promising was the Biologics Price Competition & Innovation Act (S. 1695), which was approved by the Senate Health, Education, Labor & Pensions Committee in June 2007.

However, the fragile com-promise stalled when both the biotech and generic drug industries objected to sever-al key provisions, including one that would give biotech firms 12 years of market ex-clusivity for a brand-name drug before generic versions could be sold. The biotech industry pressed for 14 years of exclusivity, whereas ge-neric drug manufacturers called for five years.

In an effort to spur congressional action this year, the White House for the first time called for the cre-ation of an approval process for generic biologics when it submitted its fiscal 2009 budget proposal to Congress in February. Lawmakers have introduced three separate follow-on biologics bills in the House of Representatives, but the Energy & Com-merce Committee’s Health Subcommittee, which has jurisdiction over the issue, has yet to take any action. “We are serious about see-ing if we can create a path-way for generic biologics, but we want to take a look at the safety issues and hear all the different points of view,” says Rep. Frank Pal-lone Jr. (D-N.J.), the panel’s chairman.

Last month, Pallone and subcommittee ranking member Rep. Nathan Deal (R-Ga.) sent health industry stakeholders a six-page list of questions seeking input on how best to establish an approval process for lower cost versions of biologic drugs. “We have found it challeng-ing to reach consensus on a single bill that would accomplish this goal,” the lawmak-ers wrote.

The biotech industry is putting its sup-port behind the Pathway for Biosimilars Act (H.R. 5629), which was introduced in March by Reps. Anna G. Eshoo (D-Calif.) and Joe

Barton of Texas, the ranking Republican on the Energy & Commerce Committee. “This legislation will establish a regulatory pathway for biosimilars that will promote competition and lower prices and protect patient safety, drug efficacy, and sound sci-ence,” says Eshoo, whose district is home to

many Silicon Valley biotech companies.

Eshoo has made it clear that she wants the industry to have strong incentives to continue developing lifesaving therapies. “The most exciting develop-ments in modern medical science are occurring in the field of biotechnology, and this legislation will ensure that the amazing cures and treatments biotech deliv-ers today will continue and that more patients will have access to these revolution-

ary therapies,” she remarks.Like the Senate proposal, the Eshoo-

Barton bill would provide 12 years of exclu-sivity to allow brand companies to market their products without generic competi-tion and to recoup their research and de-velopment investment. But to encourage further testing, the biotech industry could

receive two years of ad-ditional exclusivity under H.R. 5629 for a “medically significant” new use of a biologic product and an ex-tra six months if the drug is approved for pediatric use. The bill would also permit FDA to decide whether the generic product is inter-changeable, or therapeuti-cally equivalent, with the brand-name biologic and gives the agency the flex-ibility to determine what clinical testing—if any—is required for approval.

“Importantly, the bill recognizes the need to protect patient safety by calling for a set of studies demonstrating the safety and efficacy of the follow-on product, including clinical and immunogenic-ity studies,” says James C. Greenwood, president of the Biotechnology Industry Organization (BIO), which represents the makers of brand-name biologic drugs. Although the bill falls short of the 14 years of market exclusivity that the industry

insists is necessary to attract the hundreds of millions of dollars needed to develop a new biotech therapy, Greenwood says the Eshoo-Barton bill would “promote contin-ued innovation.”

However, GPhA’s Jaeger calls the pro-posal “at best, a disappointing distraction that does nothing to advance legislation.” At worst, she says, “it’s a step backward that puts brand company profits before pa-tient needs.” Generic drug manufacturers would like to see a shorter period of market exclusivity for brand-name biotech com-panies than the 12 to 14.5 years included in the Eshoo-Barton bill, which Jaeger deems “unwarranted and unprecedented.”

BIO has also endorsed a bill (H.R. 1956) introduced in April 2007 by Rep. Jay Inslee (D-Wash.) that would provide the exact 14 years of market exclusivity brand-name companies are seeking. At the other end of the spectrum, a “generics friendly” proposal (H.R. 1038) offered by Rep. Henry Waxman (D-Calif.) in February 2007 provides no ex-clusivity period for new biological entities.

CONGRESS FACED this same dilemma when it created the regulatory framework for approving traditional generic drugs. “It worked hard to strike a balance between innovation and consumer access,” Jaeger notes. “This balance provides for a reason-able five-year period of market exclusivity for novel medicines and three years for new products or new dosage forms.”

As a result of the Hatch-Waxman Act, she says, millions of Americans are able to afford “safe and effective generic medi-cines, saving consumers and our health care system billions of dollars annually. At the same time, the brand pharmaceutical industry has continued to innovate and produce significant profits in return.”

The biotechnology industry wants Congress to pass a bill this year. “We urge Congress to pass the right bill as soon as possible,” Greenwood says. “It’s time for all parties to work together to place patient needs before political gamesmanship.”

Some speculate that generic drug manu-facturers might get a better deal in 2009 if Democrats, as expected, add to their congressional majorities in the November elections. But Andrea Hofelich, director of media relations at GPhA, says the generic drug industry wants lawmakers to act “sooner rather than later” on legislation that would bring patients “safe and afford-able biogenerics without needless road-blocks to access.” ■

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