US Lawmakers Propose Generic Biotech Drug Plan

* Would pave way for cheaper copies of biotech drugs

* Generic biotech drugs could save govt, patients money

* Brand-name makers say measure jeopardizes new treatments (Adds industry, lawmaker, analyst comments)

By Lisa Richwine

WASHINGTON, March 11 (Reuters) - U.S. lawmakers unveiled a bipartisan proposal on Wednesday to allow government approval for cheaper copies of biotechnology medicines that cost as much as tens of thousands of dollars per year.

Representative Henry Waxman, joined by a Democratic colleague and two Republicans, said biotech drugs were the fastest-growing and most expensive part of the nation's prescription drug bill. Generic versions could provide safe alternatives while saving money for patients, employers, insurers and the federal government, the lawmakers said.

If the measure becomes law, it would open a vast new market for generic drugmakers such as Teva Pharmaceutical Industries Ltd (TEVA.TA) and Mylan Inc (MYL.O) and lead to competition for brand-name biotechnology companies.

Biotech drugs, or biologics, are man-made forms of human proteins and tougher to produce than traditional medicines.

They are typically injected and treat conditions ranging from anemia and rheumatoid arthritis to cancer. Examples include Genentech Inc's (DNA.N) Herceptin and Avastin cancer treatments, and Amgen Inc's (AMGN.O) Epogen and Aranesp anemia therapies.

The legislation would give the Food and Drug Administration authority to approve "biosimilar" drugs that are "highly similar in molecular structure" and provide no meaningful difference to patients.

Companies also could try to prove their copies were "biogeneric," or interchangeable. The first maker to show interchangeability would win six months of market exclusivity.

Similar bills died in the previous Congress, but prospects may be better now with support from President Obama and a desire to cut soaring health costs. Waxman has called the effort one of his highest priorities this year.

Brand-name biotech companies back the idea if it includes an adequate period of market exclusivity for the original products and safety protections for patients.

Waxman's measure would give original products five years of market exclusivity, and three years for modifications of existing drugs in some cases. The exclusivity prevents patent challenges during that period, and the length of time is consistent with the approach in place for chemical-based drugs.

The exclusivity could be extended by up to one year for pediatric studies or new uses, according to a summary of the legislation.

"This bill will lead to healthy competition and long-term savings for patients and payers, and will preserve innovation in the biotech marketplace," said Waxman, chairman of the House of Representatives Energy and Commerce Committee and co-author of a 1984 law that opened the door to generic competition for traditional, chemical-based drugs.

Brand-name companies, however, are pushing for 14 years of exclusivity for biotech drugs. That time is needed to entice manufacturers to develop new treatments, the companies say.

"The legislation introduced today would take patients and our industry down the wrong path - a path that jeopardizes the continued development of new breakthrough therapies and potential cures for debilitating diseases," said Jim Greenwood, president of the Biotechnology Industry Organization.

Obama called for access to generic biologics in a budget outline last month, and the authors of the new bill said their approach was consistent with the president's proposal.

The Generic Pharmaceutical Association (GPhA), an industry group for generic drugmakers, welcomed the bill. GPhA President Kathleen Jaeger said it would "save our health care system billions of dollars."

A broad range of groups and employers support the measure including seniors lobby AARP, General Motors (GM.N), the AFL-CIO labor group and others, Waxman said.

Sanford Bernstein analyst Ronny Gal said the bill was more pro-generic than an earlier version but he thought the final law would be "a lot more balanced" after lawmakers debate the exclusivity period, approval standards and other issues. (Reporting by Lisa Richwine and Susan Heavey; editing by Matthew Lewis and Tim Dobbyn)

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