[Ip-health] WSJ: Biotech Firms Fight Generics

Judit Rius Sanjuan judit.rius at keionline.org
Thu Jan 13 07:38:18 PST 2011

Biotech Firms Fight Generics
Wall Street Journal (Online). New York, N.Y.: Jan 12, 2011.
Alicia Mundy WASHINGTON--

WASHINGTON--Brand-name drug companies are fighting to weaken a provision of the health overhaul that was designed to open up generic competition in biotechnology medicines and save billions of dollars.

The brand-name companies have drawn support from key lawmakers, raising alarms among generics makers who hoped to enter a huge market previously blocked to them.

"Biologic" drugs, which are proteins manufactured in living cells, account for some of the most lucrative products on the market and are increasingly used to treat difficult diseases such as cancer and rheumatoid arthritis. Biologics can cost tens of thousands of dollars a year.

In contrast to traditional chemical drugs, biologic drugs have rarely faced competition from generics even as their patent expired. But the health law passed last March included a provision aimed at changing that, the result of years of negotiation in Congress.

The provision says generics can enter the market after a brand-name biologic enjoys exclusivity for 12 years. A bipartisan group of senators including Sen. Orrin Hatch (R., Utah) and Sen. Kay Hagan (D., N.C.) sent a letter Jan. 7 calling on the Food and Drug Administration to interpret the law in ways favorable to the brand-name makers.

The letter says companies should get an additional 12 years of exclusivity if manufacturers alter an existing product to improve safety or potency. It also calls on the FDA to define "exclusivity" in a way that might help delay generic applicants. The Biotechnology Industry Organization helped draft the letter, their counsel said.

Kelley Davenport, A spokeswoman for biologics maker Amgen Inc., said regulators need to ensure they are "appropriately safeguarding incentives for biotechnology innovation." When the FDA asked in the fall for comments on how it should apply the law, Amgen submitted a 478-page response.

Proponents of generics say they fear brand-name companies may continually tweak their products to get 12 more years of protection. Companies often try such "evergreening" with chemical drugs, putting out extended-release or extra-strength versions to stay ahead of generic competition.

Sen. Sherrod Brown (D., Ohio) called the companies' interpretation of the law an "outrage" and said it would "increase costs for consumers, businesses and taxpayers--in an effort to inflate their already massive profit margins."

The biotech industry group's general counsel, Thomas DiLenge, said the language would protect companies' investment in research. "We're not asking for an extra 12 years exclusivity. We're asking for new exclusivity," he said.

The FDA's decision will have a critical impact on Amgen, Roche Holding AG unit Genentech and other biotechnology companies. Many large traditional pharmaceutical companies sell brand-name biologics, and some are branching out into generics or "biosimilars" as well. Merck & Co. has started clinical trials for generic versions of two Amgen drugs, and said this week it expects to have five biosimilar drugs in testing by 2012.

The provision on generic biologics in the health law, while it often flew under the radar, was the target of furious lobbying. Liberal Democrats, consumer groups and insurers wanted a shorter exclusivity period of seven years. As late as January 2010, the White House was pushing for that length. The pharmaceutical industry's then-top lobbyist, Billy Tauzin, emailed his member companies saying, "We could not support the bill if this happens. Please activate immediately all of your contacts."

The 12-year monopoly stayed, and drug companies proved to be a key force in pushing the health bill over the top in March. Juliana Reed, governmental-affairs director for generics maker Hospira Inc., said the company believes only completely new biologic drugs should get the 12-year monopoly, not those that merely alter a drug's strength or purity.

"We are looking forward to hearing from the [FDA] on how it will ensure that such a loophole does not exist in the U.S.," she said. The FDA is studying the matter, a spokeswoman said.

In Europe, Hospira already sells generic versions of top-selling drugs Epogen and Neupogen, both made by Amgen. Epogen and two similar antianemia biologics cost Medicare more than $2 billion in 2009 for dialysis, according to a Medicare spokeswoman.

The Hatch-Hagan letter calls on the FDA to interpret the law's reference to "exclusivity" as "data exclusivity." Under that interpretation, generics companies might be barred for 12 years from citing the brand-name maker's data, effectively delaying any application for a copycat version, said lawyers for the generics industry.

"It appears that the brand biologics interests are attempting to parse the meaning of exclusivity to pervert the stated intent of the statute," said Robert Billings, interim director of the Generic Pharmaceutical Association. The brand-name makers said they are clarifying the law.

Peter Loftus contributed to this article.
Write to Alicia Mundy at alicia.mundy at wsj.com

More information about the Ip-health mailing list