Biotech Drugs Need Only 7 Years Protection, U.S. Says
Biologic drugs should be subject to
generic competition in the U.S. after seven years, the Obama
administration said, calling it a “generous compromise.”
Access to cheaper copies of medicines made by Amgen Inc.,
Roche Holding AG and other biotechnology companies is “a key
element” in reducing health-care costs, White House officials
said in a letter to Representative Henry Waxman obtained today
by Bloomberg News. Brand-name companies have lobbied for 12 to
14 years of exclusivity, while Waxman proposed only five.
Americans spend more than $60 billion a year on biologic
drugs to treat cancer, rheumatoid arthritis and other serious
illnesses at a cost of as much as $200,000 for each medicine,
Ernst & Young estimates. Unlike conventional pills, biologics
can’t be copied even after patents expire. Patient groups,
payers and generic drugmakers have battled biotechnology
companies for more than two years over how to allow competition.
“Lengthy periods of exclusivity will harm patients by
diminishing innovation and unnecessarily delaying access to
affordable drugs,” wrote Nancy-Ann DeParle, director of the
Office of Health Reform, and Peter Orszag, director of the
Office of Management and Budget, in the letter dated yesterday.
Obama has urged lawmakers to rein in record health-care
spending, expand coverage to the 46 million uninsured and
modernize record-keeping. His proposed budget in February called
for legislation allowing generic biologics after a period
“generally consistent” with the 1984 law that provides five
years of protection to most conventional pills and seven years
of protection to so-called orphan drugs for rare diseases.
Health-Care Overhaul
Waxman, a California Democrat and chairman of the House
Energy and Commerce Committee, sent a letter to Obama earlier
this month asking him to discuss the potential savings from
generic biologics and what can be done to prepare the Food and
Drug Administration to regulate this new category of products.
The White House is conducting “a serious review of FDA’s
existing authorities” to ensure that the agency can quickly
take on the role of approving generic biologics once legislation
is passed, DeParle and Orszag wrote to Waxman.
Generic biologics may be included as part of the Senate
health committee’s plan to overhaul the $2.5 trillion U.S.
health-care system, but lawmakers haven’t agreed to specific
details for their proposal. The panel passed a bipartisan bill
in 2007 that called for 12 years of exclusivity.
Advertising Effort
Drug-plan managers today began an advertising campaign
urging lawmakers to reject proposals that would delay generic
competition when biotechnology companies make “minor changes”
to their formulas. The ad is sponsored by the Pharmaceutical
Care Management Association, a Washington-based trade group
representing Medco Health Solutions Inc., CVS Caremark Corp. and
other companies that coordinate drug benefits for employers.
The U.S. lags behind Europe, where Teva Pharmaceutical
Industries Ltd., of Petah Tikva, Israel, Novartis AG’s Sandoz
division, of Basel, Switzerland, and Hospira Inc., of Lake
Forest, Illinois, have won approval for copies of three biologic
drugs.
Amgen, of Thousand Oaks, California, and Genentech, a unit
of Swiss drugmaker Roche, are the largest U.S. makers of
biologics. They say their medicines can’t be replicated like
conventional pills produced through chemical synthesis because
of complex manufacturing and finished products that have slight
variances.
Amgen Comment
“Without a fair and sustainable cycle of investment and
returns in innovative R&D, biotech discovery will be stifled,”
said David Polk, a spokesman for Amgen, in an e-mail today. “We
look forward to working with Congress on legislation which
strikes a necessary balance.”
The Biotechnology Industry Organization, a Washington-based
trade group, has backed a measure from Representative Anna
Eshoo, a California Democrat, that would set a high bar for
approving generics and only after a brand-name product was on
the market for 12 to 14 years.
Generic biologics may be sold at a 10 percent to 30 percent
discount, allowing for “substantial consumer savings” without
eroding market share for brand-name drug companies, the Federal
Trade Commission said in a June 10 report.
Amgen’s Epogen for anemia and Neupogen to boost white blood
cells after chemotherapy will probably be among the first
biologics copied in the U.S., Ronny Gal, an analyst at Sanford
C. Bernstein & Co. in New York., said in a Feb. 24 presentation.
Both drugs already have competition in Europe.
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