[Ip-health] NY Times: Congress Seeks Compromise on Generic Biologics

[Mike Palmedo]

http://www.nytimes.com/2007/04/08/washington/08drug.html?_r=3D1&oref=3Dslog=
in

Congress Seeks Compromise on Generic Drugs

By ROBERT PEAR
New York Times
April 8, 2007

WASHINGTON, April 7 =97 Senior members of Congress from both parties are
working feverishly on legislation that could give consumers access to
lower-cost copies of biotechnology drugs that now cost tens or hundreds
of thousands of dollars a year.

Prospects for the legislation have increased since Democrats took
control of Congress this year. Consumer groups, employers and insurers
are lobbying for the bill, which they see as a way to hold down health
costs.

The proposal faces formidable scientific and political obstacles.
Brand-name pharmaceutical companies contend that biotechnology products,
made from cells and living organisms, are so complex that a copy will
never be identical to the original and therefore cannot be certified as
safe without testing in humans.

Biotech medicines are the fastest-growing category of health spending,
with sales of $40 billion last year, up 20 percent from 2005, according
to IMS Health, a market research company. More than 400 biotech products
are in the pipeline, for more than 100 diseases, including cancer, AIDS,
diabetes and Alzheimer=92s.

Conventional drugs are synthesized by putting atoms together from basic
chemicals and are often in pill form.

Biotech drugs, also known as biologic products, are typically proteins
made by modifying the DNA of bacteria, yeast or mammal cells, and they
are often given by injection or infusion.

Supporters of the legislation received an unexpected boost when the
chief medical officer of the Food and Drug Administration, Dr. Janet
Woodcock, told Congress last month that the agency had the expertise and
experience to decide what types of human and laboratory tests were
needed to ensure that copies of a biotechnology drug worked as well as
the original.

Brand-name drug manufacturers have urged Congress to require human
trials before allowing the sale of any products billed as comparable or
equivalent to biotechnology medicines already on the market.

=93Some level of clinical testing should be required in all cases,=94 said
Dr. Susan D. Desmond-Hellmann, president for product development at
Genentech.

Dr. Jay P. Siegel, a senior scientist at Johnson & Johnson, said: =93I
would never take a biologic that had not been tested in humans. The
risks are too high.=94

But Dr. Woodcock said: =93Where trials are not needed, it is of
questionable ethics to repeat them. The use of human subjects for trials
that are not needed is not desirable.=94

Many biotech drugs are effective but expensive. Avastin, a cancer
treatment made by Genentech, can cost $4,400 to $8,800 a month, with a
maximum cost of $55,000 a year for people who qualify for the company=92s
patient assistance program.

Cerezyme, a drug made by Genzyme for Gaucher disease, costs $200,000 a
year. Enbrel, made by Amgen for rheumatoid arthritis and psoriasis,
costs an average of $16,000 a year.

Biotech treatments for multiple sclerosis range in price from $16,000 to
$25,000 a year. =93Many patients are denied access to these important
drugs because even the co-payments can reach thousands of dollars a
year,=94 said Arney Rosenblat, a spokeswoman for the National Multiple
Sclerosis Society.

Consumers save billions of dollars a year by using low-cost generic
versions of conventional drugs, which are approved by the government
under a 1984 law.

One author of the 1984 law, Representative Henry A. Waxman, Democrat of
California, is pushing a bill that would authorize the Food and Drug
Administration to approve safe, lower-cost versions of biotechnology drugs.

Senators Charles E. Schumer and Hillary Rodham Clinton of New York, both
Democrats, have introduced an identical bill, with support from several
Republicans, including Senators Susan Collins of Maine and David Vitter
of Louisiana.

The chief lobby for makers of biotech drugs, the Biotechnology Industry
Organization, strongly opposes the bill, saying it would endanger
patients and kill incentives for research and innovation.

But AARP, the lobby for older Americans, has joined the Consumers Union,
Aetna, the Blue Cross and Blue Shield Association, Caterpillar, General
Motors, Kaiser Permanente, and Walgreens and other chain drugstores in a
coalition supporting the legislation.

The bill reflects the initial negotiating position of the generic drug
industry and its allies as Congress begins serious negotiations to reach
a compromise.

A co-author of the 1984 law, Senator Orrin G. Hatch, Republican of Utah,
predicted that Congress would pass legislation on the issue this year.

Mr. Hatch is trying to work out a compromise, more acceptable to
brand-name drug makers, in negotiations with Mrs. Clinton and Senators
Edward M. Kennedy, Democrat of Massachusetts, and Michael B. Enzi,
Republican of Wyoming.

Mr. Kennedy represents a state with scores of biotech companies and is
chairman of the Senate committee with authority over the issue. Mr. Enzi
is the senior Republican on that panel.

They are seeking a balance like the one struck in the 1984 law, which
fostered a booming generic drug industry while protecting the patent
rights of brand-name drug makers =97 a crucial incentive for research on
new drugs.

The manufacture of biotech drugs is more complex and costly than the
production of conventional medicines. But economists cite another reason
for the high prices: biotech medicines generally face no competition
from copycat drugs.

When the first generic copy of a conventional drug becomes available, it
may cost 15 percent less than the brand-name product. If several
competing generic versions are available, the price often falls by 60
percent or more.

Prof. Henry G. Grabowski, a health economist at Duke University, said
prices would decline less for biotechnology drugs.

But Scott McKibbin, an aide to Gov. Rod R. Blagojevich of Illinois, said
biotech drugs were so expensive that discounts of just 10 percent to 20
percent would save tens of millions of dollars for the state=92s Medicaid
program and the state employees=92 health plan.

The debate over biotech drugs is filled with paradoxes. Brand-name drug
companies, which have for years criticized the regulation of drug prices
in Europe, now point to Europe=92s strict regulation of =93follow-on
biologics=94 as a possible model for the United States. Democrats, who
have often criticized the F.D.A. as lax in enforcing drug safety laws,
now say they trust the agency to decide whether copies of biotech drugs
are safe and effective, without the full range of tests required for new
products.

--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu