Issues

Biogenerics

GPhA Position

GPhA along with AARP, consumer, patient, labor and business organizations support the bipartisan biogenerics consensus bill, “The Promoting Access to Life-Saving Medicine Act”, introduced on March 11, 2009 by Chairman Henry Waxman (D-CA) and Rep. Nathan Deal (R-GA), Rep. Frank Pallone (D-NJ) and Rep. Jo Ann Emerson (R-MO). This bill achieves the right balance of fostering pharmaceutical innovation while also making affordable medicines available to consumers.

As our nation acts to strengthen our health care system, our priority must be to reduce costs while increasing access to quality care. Studies continue to show that creating a workable biogenerics approval pathway will not only bring life-saving medicines to patients in need, it will also save our health care system billions of dollars.

This consensus legislation brings biogeneric medicines to consumers sooner rather than later through a science-based approval process, timely resolution of patent disputes and market exclusivity provisions consistent with the Hatch-Waxman model.

Key Points

Unlike traditional chemical-based prescription drugs like Lipitor® and Nexium®, biologic medicines are derived from living organisms, such as yeasts or bacteria. Biologics typically are administered via an injection in a doctor's office or hospital setting, and are used to treat cancer, HIV/AIDS, Alzheimer's and other life threatening diseases.

Nearly 1.5 million Americans are diagnosed with cancer each year. More than 79 million suffer from some form of cardiovascular disease. In most of these cases, biologic medicines are the only drug treatments available that offer hope to these patients.

The cost of biologic medicines can be tremendous, reaching tens of thousands or even hundreds of thousands of dollars each year. For instance, the lung cancer drug Avastin® costs about $100,000 per year; and the cost for Cerezyme®, used to treat Gaucher disease, can run $300,000 or more per patient per year. Such high costs put these lifesaving treatments out of reach for many Americans. The need to act has become more critical as Congress and the Administration work to reduce health care costs while increasing access to quality care.

There currently are more than 150 biologic medicines available, many of which have either lost patent protection or soon will be off-patent. And it is expected that by 2012, nearly half the products approved by FDA will be biopharmaceuticals. However, while affordable generic versions of biologics are available in 11 countries around the world, there are no generic versions available for most products in the U.S. because the FDA does not have the authority to implement a comprehensive biogeneric approval process.

By every account, competition from biogenerics in the biologic sector would save patients, insurers and the government billions of dollars each year in treatment costs. Estimates from various economic impact studies pin the projected savings from $42 billion on the low end to as high as $108 billion over the first 10 years of biogeneric market formation. Even stakeholders on the brand side of this issue—namely BIO and PhRMA—recognize that biogeneric competition will significantly reduce health care costs.

Support for biogenerics has swelled over the past three years: more than 70 corporations, labor unions and consumer organizations—including Fortune 500 companies, the AFL-CIO and Consumer Union—now are advocating that Congress grant FDA the authority and flexibility to put in place a safe and workable biogeneric approval process. Dozens of governors and state legislatures also are calling on Congress to pass legislation as soon as possible that would create a biogeneric market.

President Obama’s FY10 budget proposal, released on February 26, 2009, calls for a workable biogenerics approval pathway and supports ensuring that this process mirrors the proven Hatch-Waxman market exclusivity model, by making sure that brand companies cannot extend exclusivity using “evergreening.”

Background

Access to biogeneric medicines will reduce health care costs and increase patient ability to afford lifesaving medicines. GPhA supports the “Promoting Innovation and Access to Life-Saving Medicine Act” that provides the balance between incentivizing the innovation of new biopharmaceuticals and facilitating the development of competing, affordable biogenerics.

Legislation

As noted above, the “Promoting Innovation and Access to Life-Saving Medicine Act” championed by Congressmen Henry Waxman and Nathan Deal, along with Congressman Frank Pallone and Congresswoman Jo Ann Emerson, achieves the right balance between fostering true innovation and patient access. This consensus bill contains three fundamental principles:

Science-based regulatory process that gives FDA the flexibility to determine specific product approval requirements and potential generic interchangeability;
An efficient, effective and timely patent resolution procedure; and
Reasonable market exclusivity periods that do not lead to indefinite or excessive product monopolies.

These principles are the foundational "pillars" of a reasonable and workable biogeneric bill that will create a pathway to timely access to affordable biogenerics.

Flexible, Science-Based Approval Pathway means that FDA can use its science expertise to determine product approval and interchangeability for biogenerics on a case-by-case basis. The pathway must be free of needless barriers, such as mandatory guidance process and clinical trials. In fact, the same broad statutory framework that the brand companies enjoy under the Public Health Service Act (PHSA)—a federal approval program that allows science to drive the system—should be used for biogenerics as well. A workable and flexible regulatory approval pathway also means allowing FDA to determine brand-generic interchangeability on a case-by-case basis. Interchangeability is an essential component of achieving cost savings downstream.

Timely Patent Resolution Process means provisions that provide for an effective mechanism for resolving patent infringement disputes and prevents frivolous suits from delaying competition in the marketplace. Patent uncertainty acts as a drag on generic product investment and market introduction. This is a critical component of workable legislation because biologic products typically have many multiple patents claiming the brand product and manufacturing processes.

Reasonable Exclusivity Period means not granting innovator products unprecedented and unwarranted periods of market and data exclusivity, which serve only to extend monopolies by delaying competition from biogenerics. Exclusivity periods need to be of sufficient length to incentivize innovation of new drugs, but not so long as to create a barrier to competition.

In the chemical drug sector, brand companies do very well with the current five years of exclusivity for a novel drug and three years of exclusivity for a new product representing incremental innovation. In regard to the biologic exclusivity period, it is interesting to note that a 2007 BIO: DiMasi-Grabowski study (Duke Univ. Department of Economics) shows that the average development and regulatory review time for chemical drugs is 90.3 months, with the average development and regulatory review time for biologics being 97.7 months. That translates into a 7.4 month differential, or an increase in development and review time of less than 10%. Hence, a five-year exclusivity for novel entities and three-year exclusivity for new uses and new dosage forms are reasonable periods for biologics products, as well.

Related Information

Issues

Biogenerics

GPhA Position

Key Points

Background

Legislation

Related Information

Background

Letters

Testimony & Content

Other

Latest on Biogenerics