Follow-on Biologics Revisited: Who’s on First?

On September 27, President Bush signed into law H.R. 3580, the Food and Drug Administration Amendments Act of 2007, which, according to the FDA, “represents a very significant addition to FDA authority” and provides “significant benefits for those who develop medical products, and for those who use them.” But what was most significant to the biotech industry was not the terms of the Act, but what was left out – the provision that would have given the FDA the authority to approve generic biotech drugs, or “follow-on biologics” (FOBs).

With no major health care bills expected to move through Congress for at least a year or two, FOBs may be dead until 2010. But, as Yogi Berra put it so succinctly…

“It ain’t over ‘til it’s over.”

On June 26, Senators Kennedy, Clinton, Hatch, Enzi et al introduced the bi-partisan Biologics Price Competition and Innovation Act, S1695, which provides a path for FDA approval of FOBs while (hopefully) continuing to stimulate new drug development. And on June 27, it was passed by the Senate Health, Education, Labor and Pensions Committee. So while it is still very early in the legislative process, S1695 is very much alive.

But not uncontested. U.S. sales of biotech drugs grew nearly 20 percent last year to over $40 billion. This is plenty of incentive for the players to draw battle lines and embark on an all-out war to win their fair share of the spoils.

“Déjà vu all over again.”

Advocates of S1695 believe the bill will significantly reduce the high cost of biologic drugs, thereby making them more widely available, reducing overall healthcare costs, and improving the general health of the U.S. population. It could also make generic drug manufacturers like Dr. Reddy’s, Barr, Ranbaxy, and Teva very rich, as they could now enter a very high stakes game previously unavailable to them.

Detractors believe that there are significant safety issues, due in great part to the well-known variability of biologics in manufacture. They also believe it will disincentivize the industry to invest in the most costly class of drugs to develop and manufacture. This will cause the pipeline of new biologics to dry up, and negatively impact the long term health of the U.S. population. Patient safety is obviously concern #1. But is the industry’s concern centered on safety or the lost profits that the big biotech makers like Genentech, Amgen, Biogen-Idec and others might face?

“When you come to a fork in the road, take it.”

I will leave it to the reader to determine which side of the fence they personally land on. Nevertheless, whether it’s the result of S1695 or some future bill, legal or regulatory action, the industry must eventually grapple with the complex issues of follow-on biologics: how to ensure they are safe and broadly available at a reasonable cost without negatively impacting the incentive for the industry to invest in a vital technology that is generating many of our most effective therapeutics.

If you would like to learn more about S1695 or read it in its entirety, please go www.BioBusinessNews.com/bonus.


Disclosure: none.