Bill would clear way for less-costly similar forms
By Terri Somers
UNION-TRIBUNE STAFF WRITER
July 13, 2007
It costs $1,500 a month for the biotech drug betaseron, which Joanne Alvarez takes to slow the progression of her multiple sclerosis.
At that price, Alvarez, who is disabled and on Medicare, would quickly exceed her $2,500 drug coverage and have to pay thousands out of pocket. For now, she has found a charity to underwrite her drug costs, so she pays $70 monthly out of pocket. But she never knows when that financial aid might dry up.
“It's hard enough dealing with this disease and having to worry about all this other stuff, like how can I afford to continue taking my medications,” said Alvarez, 59. “A generic form of betaseron would make my life a lot easier because it wouldn't be so expensive.”
The Lakeside woman's hope is shared by several consumer and insurance groups that have been lobbying Congress to give generic drug makers a clear and short pathway for bringing copycat versions of expensive biotechnology drugs to market.
About $40 billion was spent on name-brand biotechnology drugs in the United States last year, and with more biotech drugs coming to market, that number is expected to keep climbing. There is no law dictating the rules for manufacturing generic versions of biotechnology drugs, but that is expected to change this year.
At issue:
Senate Bill 1965
Sponsors: Edward Kennedy, D-Mass., Hillary Clinton, D-NY, Orrin Hatch, R-Utah, and Mike Enzi, R-Wyoming
Would give 12 years market exclusivity to a new biotechnology drug after it is approved by the FDA. The industry wants 14 years exclusivity. Consumer groups want 5 years exclusivity.
Would give the FDA the authority to decide on a case-by-case basis whether clinical trials are required for biosimilar drugs, and the length and scope of those trials.
Would give the FDA the authority to decide whether a biosimilar drug is interchangeable with the original biotechnology drug.
A bipartisan bill that attempts to balance consumer demands for more affordable medicine with the needs of the biotechnology industry – which makes new therapies for diseases ranging from cancer to MS to AIDS and diabetes – has passed a key Senate committee. So far, the measure has not been taken up in the House, but consumer groups are confident that it will.
“There needs to be more competition for the prices to go down, which means access will go up, and that's impossible to do unless we bring generic alternatives to market,” said Mark Merritt, chief executive of the Pharmaceutical Care Management Association, or PCMA, which represents pharmacy benefit managers. “This (bill) would allow for generics to see how they can enter the marketplace. . . . It's unsustainable otherwise.”
The issue has been percolating in Congress for years, because the 1984 law governing generic pharmaceutical drugs cannot be applied to cheaper, copycat versions of biotechnology drugs.
Under what is known as the Hatch-Waxman Amendments to the Federal Food, Drug and Cosmetic Act, generic versions of pharmaceutical drugs are considered chemically identical to the innovative version of the drug.
The so-called generic versions of biotechnology drugs could never be exact copies. At most, they could be highly similar, which is why the industry avoids the “generic” term and refers to them as “biosimilars” or “follow-on biologics.”
Making biotechnology medicines involves a complicated process of growing cells, which work as factories to make the proteins that are used as the therapies. Change the cells that are used as the factories, and the characteristics of the resulting proteins can be changed and result in a therapy with much different effects, according to the biotechnology industry.
The makers of biosimilars would like to cut costs and the time needed to bring a product to market by relying on all the safety and efficacy data that were collected by the pioneering drug maker during the long and expensive clinical trial process.
But the biotechnology companies that took the risk of investing in a developmental new drug, which had very high chances of failing, want that interest to be protected.
The industry also contends that it is equally important to ensure the safety of the biosimilar drugs – and you cannot ensure safety if the drugs are not exactly the same.
“We are agnostic as to whether or not follow-ons exist commercially. We'll have competitors in every market in which we have a therapy long before we expect follow-ons to come against our current therapies,” said Walter Moore, vice president of government affairs at Genetech. That South San Francisco company manufactures the cancer drug Avastin in Oceanside.
“Our concern has been more about patient safety and making certain that we don't have an episode that calls all genetically engineered therapies into question,” Moore said.
The Senate bill, sponsored by Democrats Ted Kennedy and Hillary Clinton and Republicans Mike Enzi and Orrin Hatch, addresses issues of market exclusivity, clinical trials and safety. And it seems just enough of a compromise that there's something to make people on every side of the debate unhappy.
“We're happy people have been working on this issue and see how important it is, but we are not happy with the result,” said Sandy Dennis, general counsel for regulatory affairs at the national Biotechnology Industry Organization. “We're not comfortable that it gives enough protection to ensure patient safety.”
As an incentive for venture capital and Wall Street to continue investing in the risky field of drug development, the bill guarantees an innovative biotechnology therapy 12 years of market exclusivity after it has been approved by the Food and Drug Administration.
The industry says it needs 14 years of exclusivity to recoup its investment.
Consumer groups want five years of exclusivity.
“Each year of exclusivity will cost billions of dollars for the consumers, unions, employers and government agencies,” said Merritt of PCMA.
“There should be some incentives, but when they are protecting the second, third and fourth generation of the same product for 20 years beyond the patent life, that's got to change,” said Merritt, whose organization has been in the forefront of pushing for follow-on biologic guidelines.
The so-called Kennedy bill allows the FDA to decide when clinical trials should be required of the biosimilars, and just how extensive those trials should be.
That does not sit well with the industry, unless there is funding attached.
“We've already got the FDA operating under some pretty severe stress and now you're saying the agency should figure out how to make it easy for people to bring follow-on biologics to market?” asked Joe Panetta, who heads Biocom, the industry trade group in San Diego.
“It has to be done in a way that ensures safety and efficacy by giving the FDA the resources it needs,” Panetta said.
Consumer groups, however, applaud that element of the bill, saying it's FDA scientists who should be making the call.
The Kennedy bill would also allow the FDA to determine whether a biosimilar product should be considered interchangeable with the original therapy. The industry said that creates the potential for safety problems. and would prefer doctors to have the power to make that determination.
In a letter sent last month to Kennedy, who chairs the Senate's Health, Education, Labor and Pension Committee, Health and Human Services Secretary Mike Leavitt stressed the importance of a doctor determining interchangeability.
Several patient advocacy groups have also sent Kennedy letters supporting doctors as the judge on interchangeability.
No matter what the final legislation looks like, consumers should not expect the same big savings on biosimilars as they received on generic drugs, industry insiders said.
Creating a manufacturing facility is an expensive and complicated investment, said Matthew Croughan, a bioprocessing expert at the Keck Graduate Institute.
All companies have the potential to improve their manufacturing process with time, so that the cost can keep dropping, Croughan said. But companies are not quick to change the manufacturing process because it is part of the FDA approval process to ensure that the drug is consistently the same, he said.
“You're not going to see as much savings in this area as with generic drugs. Maybe you'll ultimately see a follow-on biologics price that is 30 percent lower, but it's not going to be much lower because these are still fairly expensive and complicated things,” Croughan said.
Consumer groups will take the savings wherever they can get them.
“If you're saving 15 percent on a drug that costs $30,000 a year, you're still saving a good bit,” said Drew Nannis, a spokesman for AARP.
“It's good for the entire health care system, including the insurance companies that are picking up the tab, and for the 46 million people who don't have health insurance,” Nannis said.
While there are many issues yet to be worked out with the legislation, some of the smaller biotechnology companies that see generics as a potential pathway to additional revenue are happy that the debate is creating at least a silhouette of policy in this new area.
Favrille, a small San Diego biotechnology company, recently bought the rights to monoclonal antibodies that have the potential to become biosimilar therapies for cancer and other diseases. How the company would go about developing those therapies and what the FDA would want to see before approving them has been a mystery, said John Longenecker, Favrille's chief executive.
The company's biggest issue was what its clinical trials would involve, he said.
“From our point of view, because we are at the starting line, having action taken now by the legislature allows us to plan the most economical way to develop our (molecules),” he said.
Terri Somers: (619) 293-2028; terri.somers@uniontrib.com
