Establishing a Pathway for Generic Biologics

Providing Affordable Access to Cutting Edge Therapies

THE ISSUE

When we think about taking medicine, we usually envision swallowing a pill to treat what is ailing us. But as science and technology advance, so do the mechanisms that make medicine effective. A newer class of drugs, called biologics, differs from traditional, chemical-based drugs because they are manufactured from living organisms. Biologics are given via injection and have been developed to treat a range of diseases such as multiple sclerosis, Alzheimer’s disease, asthma, diabetes, heart disease and rheumatoid arthritis. They can also prolong the lives of patients suffering from illnesses like AIDS and cancer. Unlike a flu shot, which is a preventative vaccine designed to help the body develop antibodies to resist the illness, biologics are genetically engineered drugs – meaning that human genes that normally guide the production of these natural human immune proteins are used in non-human cell cultures to produce the medicine (American College of Rheumatology, 2008).
Currently, biologics are only available for prescription as their brand names. Without competition from generics, brand-name biologics can be prohibitively expensive – ranging in cost from $5,500 to $66,000 per month. Today manufacturers have the technology to produce generic biologics or “biogenerics” that would make these medications more affordable and accessible to Americans. However, legislation is needed to grant the Food and Drug Administration (FDA) authority to approve biogenerics.

TEVA’S POSITION
Teva Pharmaceuticals supports a competitive pharmaceutical marketplace. When the patents on brand-name biologics are successfully challenged or expire, generic competition should be allowed. Well-crafted legislation authorizing biogenerics should:

• Establish a fair, clear pathway for approval – The FDA process should operate efficiently, produce timely and consistent reviews and assure the safety and efficacy of approved biogenerics.
• Ensure prompt resolution of patent disputes – Congress should establish a court process so that the validity and applicability of patents can be assessed in a timely way. Such a program could limit frivolous lawsuits that restrict access to biogenerics and delay marketplace competition.
• Create a reasonable period of brand exclusivity for patent holders – Brand exclusivity for biologics should be limited to truly innovative products and must reflect the balance between encouraging innovation and timely access to affordable medicines.

BACKGROUND
Medicine is Changing – Today more than 250 biologic products have been brought to market and another 400 are currently in various stages of clinical development. As more and more life saving biologics are approved and enter the market, the greater the need becomes for biogenerics. The availability of traditional generic drugs has created savings from $8 billion to $10 billion annually and the potential savings for biogenerics is even greater.

Pharmaceutical Costs: Biologics v. Drugs – The average daily cost of a biologic product is approximately 22 times greater than a traditional drug.
The cost of biologic drugs increased 17.5 percent in 2005, while other drugs only went up 7.9 percent. The chart below shows a cost comparison displaying the exorbitant costs of brand-name biologics against other types of brand-name drugs.

Biologic (Indication) Monthly Cost (Product Only)

• Avastin (Colorectal Cancer) $5,550
• Herceptin (Breast Cancer) $12,000
• Enbrel (Rheumatoid Arthritis) $17,000-$25,000
• Remicade (Inflammatory Disorders) $35,000-$66,000

Drug (Indication) Monthly Cost

• Lipitor (Cholesterol) $130
• Plavix (Coagulation Disorders) $140
• Nexium (Reflux Disease) $150
• Zocor (Cholesterol) $160;

There are several reasons why the biotech industry can command high price premiums for biologic medicines, including:

• There are no existing generic treatment alternatives (i.e. no competition in the marketplace)
• Patients who need biologic drugs tend to need the medicine for the rest of their lives to treat chronic illnesses
• Biologics treat an increasing diversity of diseases and conditions

With more than $10 billion worth of biologic prescription patents expiring by 2010, a huge savings could be passed on to patients if generic formularies were available.

A Model for Legislation - The Drug Price Competition and Patent Term Restoration Act of 1984, usually referred to as the Hatch-Waxman Act, was designed to create a pathway for generic drugs while providing additional patent term restoration to continue to innovation. Hatch-Waxman allows generic medicines to win FDA marketing approval by submitting bioequivalence studies, as opposed to conducting all of the clinical trials as required of the brand.

All stakeholders agree that Hatch-Waxman has worked and has resulted in safe, effective and affordable medicines being made available to Americans. For biogenerics, FDA should have the discretion to require any studies – including clinical data – that officials determine are necessary to evaluate the drug’s safety and effectiveness. The process should include an abbreviated application protocol and produce consistent and timely reviews that yield the safest products.

Joining Forces – Many employers, insurers, pharmacy benefit managers, chain drug stores and Fortune 500 companies like General Motors, Ford and Eastman Kodak recognize the urgent need for biogeneric legislation. These groups and other stakeholders have formed the Coalition for a Competitive Pharmaceutical Market (competitiveRx.com) to support public policies that facilitate timely access to affordable pharmaceuticals.

Reports

• Economist Finds Flaws in Exclusivity Claim for Biogenerics, 2010