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Biogeneric Bureaucracy

Technical arguments aside, many contend that the FDA doesn’t even have the authority to approve most biogenerics. When U.S. generic-drug laws were passed in the 1980s, the brand new, complex biotech drugs were not under discussion. “At the time they were debating, it didn’t occur to anyone that technology would advance to the point it would be possible to create generic biologics,” says Janice Reichert, a senior research fellow at the Tufts Center for the Study of Drug Development. As a result, existing generics legislation applies only to small-molecule drugs, not biologics.

During a 2003 push to improve patient access to drugs, the FDA announced plans to issue guidelines that would begin to define an approval process for generic protein drugs, but they have so far been delayed twice – perhaps because of the agency’s uncertainty over its legal position. Even those guidelines, regulators have indicated, would apply only to a few biologics: relatively simple, well-defined proteins such as human growth hormone and insulin. (In fact, Sandoz, the generics arm of Swiss drug company Novartis, has already submitted an application for a generic version of human growth hormone in the belief that the FDA has the authority to approve it.) The easiest solution would be an extension of existing generics laws to cover all protein-based drugs, and Senators Orrin Hatch and Patrick Leahy seem primed to take that action. The pair sponsored hearings on biogenerics within the Senate Judiciary Committee in June, and Leahy’s staffers say he hopes to introduce legislation in 2005 that would apply the framework for small-molecule generics to biologics.

Biotech companies will inevitably fight such legislation, just as traditional drugmakers opposed the advent of small-molecule generics. Many of the current arguments parallel those made two decades ago. Companies assert, for instance, that copycat proteins will cut into revenues so severely that the expensive research needed to develop new lifesaving drugs will slow or even halt. The pace of innovation in small-molecule drugs, however, suffered no such deceleration. Indeed, generics have forced pharmaceutical companies to develop improvements, such as time-release or longer-acting formulations, in an effort to maintain market share.

In the meantime, the FDA has begun a series of public workshops designed to assess the available technology and get feedback from stakeholders. The first session, held in September and designed to help regulators assess scientific arguments, became a highly polarized back-and-forth between biotech pioneers and biogenerics makers. The agency has so far remained silent about the form any rules might take and has planned a second workshop for early 2005.

But even when biogenerics do appear in the United States, patients and insurers might not see the same cost savings they have with traditional generics. “The prices may not go down as much,” says Momenta’s Crane, “because the hurdles are higher in the first place.” The lower prices of generic drugs – typically 50 to 66 percent those of the originals – stem from their abbreviated approval process and from the fact that many states mandate generic substitution at pharmacies, so manufacturers can dispense with costly marketing. Biogenerics will almost certainly face stricter preapproval testing requirements than small-molecule generics, at least until the FDA gains confidence that copycat proteins can be analyzed well enough to prove that they are identical to the originals. And most biologics are administered in hospitals rather than dispensed at pharmacies; since generics companies may face an uphill battle convincing doctors of the safety and efficacy of their drugs, this means more spending on marketing.

Still, says Carole Ben-Maimon, president of biogenerics developer Duramed Research, a back-of-the-envelope calculation shows that in the long run, biogenerics – particularly self-administered drugs such as insulin and human growth hormone – may reach the half-off mark. John Langstaff, CEO of Canadian biogenerics company Cangene, similarly believes that a 40 percent price drop is possible for some drugs. Others see decreases of 10 percent to 20 percent as more realistic. Though not ideal, even a 10 percent discount would be significant for drugs costing thousands of dollars each year.

Biogenerics are almost certain to make their U.S. debut within the next five years: costs will compel it, technology will enable it, and politics will delay it. In the most optimistic vision of the biogeneric future, diabetics will be able to control their condition for the cost of a daily latte, and cancer sufferers will be able to fight their disease without bankrupting their families. Lower costs could also make insurers, including federal and state agencies, more willing to cover biologics, further expanding their availability. As the number of invaluable protein drugs swells, biogenerics will become not just helpful but essential – driving a new sort of biotech revolution.

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