Democrats in Congress Press for Generic Biologics

Legislation Would Allow Generic Biotech Drugs in U.S. (Update1)

By Justin Blum

Feb. 14 (Bloomberg) -- Lawmakers in the U.S. House and Senate introduced legislation that would for the first time routinely allow copies of medicines made using biotechnology.

The measures offered today would permit generic drugmakers, such as Barr Pharmaceuticals Inc. and Teva Pharmaceutical Industries Ltd., to produce medications that are now off limits to competition.

``Without action, the manufacturers of these biotech drugs can continue to charge monopoly prices indefinitely,'' Senator Hillary Clinton, a Democrat from New York, said at a news conference in Washington. ``Biotech drugs hold great promise, but we break that promise when the costs push treatments out of reach.''

Generic biotech drugs may reduce prices by almost a third and cut into the profits of brand-name biotech companies including Amgen Inc. and Genentech Inc., analysts say. Opponents of the legislation say attempts to copy complex gene-based medications could pose health risks.

Sponsors of the legislation in the House include Henry Waxman, a Democrat from California, and Jo Ann Emerson, a Republican from Missouri. Backers of a matching Senate version include Clinton and Charles Schumer, Democrats from New York.

Lawmakers introduced similar measures last year that didn't advance in the Republican-controlled Congress. Supporters say prospects have improved with Democrats in control.

Opposition is being led by the Biotechnology Industry Organization, a Washington-based group that represents makers of brand-name biotech drugs.

Passage of the legislation ``may mean that these drugs come onto the market without the testing necessary to make sure they are safe and effective,'' said Paul Winters, a spokesman for the Biotechnology Industry Organization.

FDA's Authority

U.S. law allows the Food and Drug Administration to approve generic versions of conventional drugs, made mostly through chemical synthesis, after patents expire. There is no similar process for most biotech medicines, genetically engineered versions of human proteins such as insulin or growth hormone.

Biotech drugs generated revenue of about $32.8 billion, 13 percent of the $251.8 billion in prescription sales to U.S. pharmacies in 2005, according to IMS Health Inc., a research company in Fairfield, Connecticut.

Many biotech medicines carry high price tags, and generic versions could lower prices by 20 percent to 30 percent, Elise Wang, an analyst with Citigroup Inc. in New York, said in an interview. One of the most expensive biotech medicines is Genzyme Corp.'s Cerezyme, a treatment for a rare enzyme disorder that can cost $200,000 a year.

Expiring Patents

Barr of Woodcliff Lake, New Jersey, says in lobbying literature that patents have already expired for some top- selling biotech medications, making them vulnerable to competition if lawmakers act. Among the products listed is an anemia treatment sold in the U.S. by Amgen as Epogen and by Johnson & Johnson as Procrit. U.S. sales of the drugs, sold by both companies under a marketing agreement, totaled $4.71 billion in 2005.

A report from Citigroup says that one of Amgen's patents lapsed in 2004 and others expire in 2012 through 2015.

Conventional drugs are small molecules that generic makers can reproduce in versions that are almost identical to the original product and change little from batch to batch.

Biotech medications use bacterial cells to produce human proteins, and the final composition can vary, depending on the techniques used.

The legislation would permit the FDA to decide whether generic makers can skip or abbreviate human clinical trials, and supporters say that would give the agency full authority to guarantee the copies are safe. Such studies aren't required for copies of conventional drugs.

Proponents of the legislation use the term ``generics'' for the biotech drugs they want to reproduce. Some brand-name makers say the drugs should be called ``follow-on biologics'' because the new versions aren't identical. European regulators call them ``biosimilars.''