It appears that no matter who wins the presidential election this November, both Barack Obama and John McCain back expanded use of generic drugs as a way to lower drug costs [1], According to their advisers, both campaigns have pledged their support to help create a market for generic biotech drugs or biosimilars.
As a part of their respective strategies to contain healthcare costs, both candidates want shorter exclusivity periods for branded biologics. When generic biologic treatments (biogenerics) find a pathway in the U.S., the introduction of a biogenerics will put a serious damper on biopharmaceutical revenues. I say when and not if since the government is the largest consumer of medical care via medicare and medicaid and given the fact that sales of biotech drugs were $40.3 billion last year.
The sticking point is (in general) that the brand name drugmakers and generics are unable to agree over just how long a biotech drug should be on the market before a generic drugmaker can market a generic. The Biotech Industry Organization has called for 14 years of market exclusivity, while generic makers want the period limited to no more than five years of protection.
Not to be confused with patents, data exclusivity is the period after the FDA approves a product during which an imitator can’t rely on the innovator’s clinical data for safety and effectiveness. It can run during and longer than the period of patent protection.
The generic and biotech drug industries have spent a lot of cash lobbying Congress over how generic biotech drugs should be approved although McCain has not been the the sector’s favorite [2] in terms of donations. This is probably because McCain has also argued for re-importation to save money and he voted against the expansion of Medicare to include a drug benefit because it didn’t allow direct price negotiations by the government and because the program covers too many people. You can see a complete side-by-side comparison of healthcare policy positions here [3].
The Center for Responsive Politics reports that McCain has received $39,797 in donations from pharmaceutical manufacturers. That puts him behind Obama ($154,710), Clinton ($140,544), Mitt Romney ($103,825), Rudy Giuliani ($91,550) and even Chris Dodd ($68,200)
Unlike traditional chemical drugs, biotech companies currently face no generic competition in the U.S. because the Food and Drug Administration lacks authority to approve copies of biotech medicines. Generally, biotech drugs are more complicated than regular drugs because they are made from living cells or bacteria.
For a generic drug manufacturer to win approval of a generic version of a traditional prescription drug, the product must have the same active ingredient, strength, dosage form and route of administration as the original drug. This means that generic drugs are the exact same chemically as their brand name counterparts and they act the same way in the body.
Such a process is not possible with biologics. Biologics manufacturers must ensure that the manufacturing process remains the same over time by controlling the source and nature of starting materials and controlling the manufacturing process. When a follow-on biologic is created, it requires a new manufacturing process with new starting materials. As a result, it will produce a product that is different from and not therapeutically equivalent with that of the brand name biologic.
In an earlier proposed update in the regulatory pathway for FDA approval of follow-on biologics, the Senate’s Senate Health, Education, Labor and Pensions HELP Committee [4] gave the thumbs up to the Biologics Price Competition and Innovation Act of 2007 (S. 1695) [5], which would address the scientific, regulatory and legal issues involved in bringing generic biologics to the marketplace. See also H.R. 5629: Pathway for Biosimilars Act [6].
The legislation includes standards for the FDA to approve follow-on biologics as well as a period of exclusivity for the brand name drug company. The Act amends section 351 of the Public Health Service Act [7] to provide for an approval pathway for safe biosimilar and interchangeable biological products (relying in part on the previous approval of a brand product):
- A biosimilar applicant is required to demonstrate that there are no clinically meaningful differences in safety, purity and potency between its product and the brand product. A demonstration of biosimilarity includes analytical data, animal testing and one or more clinical studies, unless such a requirement is determined by the FDA to be unnecessary.
- The Act provides incentives for the development of both new life-saving biological products and interchangeable biosimilar products: 12 years of data exclusivity for the brand company during which a biosimilar product may not be approved, and 1 year of exclusivity for the first interchangeable biological product.
- The biosimilar applicant must provide its application and information about its manufacturing process to the brand company. A series of informational exchanges then occur in which the biosimilar applicant and the brand company identify patents in question and explain their views as to their validity or infringement.
Earlier, BIO released a set of principles to guide the development of a pathway for the approval of follow-on biologics [8]. BIO also developed a detailed rationale supporting the need for substantial data exclusivity [9]. Meanwhile, generic manufacturers expressed concern that a 12 year exclusivity for the brand company is too long.
This issue will continue to be hotly debated.
See Primer for Follow-On Biologics [10]. [11]