Can Biotech be Generic?

This past spring the Novartis subsidiary, Sandoz, made a bid to sell a copycat version of human growth hormone in the European Union and was rejected, triggering a law-suit between Sandoz and the EU that is still ongoing. In October, however, Australia approved the same copycat drug, called Omnitrope, making it the world's first approval of a so-called biogeneric in a regulated market. The approval could be the first of many. Nearly $10 billion worth of biopharmaceuticals are expected to come off patent during the next five years, and firms that produce generic drugs want to jump in to exploit the niche. The lure of less expensive medication is strong: The biogenerics market is expected to reach $16 billion by 2007. However, biotechnology companies stand to lose billions in sales and are arguing that it's impossible to create safe and effective generic versions of their drugs. Legislators around the world are weighing the arguments and struggling to craft legislation to deal with such "follow-on" or "biosimilar" products. As the Sandoz case demonstrates, different countries may take different approaches. The EU is in the process of clarifying its regulatory path for biogenerics, although interpretive differences still remain. However, Europe is still ahead of the United States when it comes to making a decision about biogenerics. Armed with well-paid lobbyists, brand-name drug companies recently convinced the Food and Drug Administration to put off the thorny task of creating a new regulatory path for such drugs. "The United States is at substantial risk of losing our preeminence in this global field," says Carole Ben-Maimon, president of Woodcliff Lake, NJ-based Barr Laboratories, which markets more than 100 generic and proprietary products. "The loss of a leadership position threatens that other countries will be dictating the standards for regulatory approval and the quality of these products." EYE ON THE EU Revenue and Growth Rate, Generics and Biogenerics Market, 2003 Biopharmaceutical medications are among the most expensive of drugs; some cancer treatments can cost $10,000 a month. Generics, on the other hand, can sell for as little as one-fifth the price of the original drug. "Biogenerics not only will provide patients the same health benefits as their brand counterparts, but also yield tremendous cost savings for consumers and healthcare providers," says Christine Simmon, vice president for public affairs at the Generic Pharmaceutical Association in Arlington, Va. Many generic biologic drugs are already sold in unregulated markets in China, Eastern Europe, India, Brazil, Peru, Egypt, and Mexico. Sicor Pharmaceuticals of Irvine, Calif., has made a generic version of interferon alpha-2b for more than a decade and is selling it in 17 countries. Vancouver-based Dragon Pharmaceuticals sells a version of Amgen's Epogen, a genetically engineered copy of erythropoietin (EPO), in five countries. Dragon is already eyeing the European Union for its generic version of EPO, with hopes of selling it there as early as next year. The patent for synthetic human hormone EPO is set to expire there this month. Marketed as Epogen by Amgen and Procrit by Johnson & Johnson, the drug had combined US sales of more than $6 billion in 2003. But the Sandoz case demonstrates that European regulators still remain at cross-purposes as to how to interpret new rules for making and selling biogenerics. European regulators required Sandoz to conduct two sets of clinical trials on Omnitrope. Though the European Medicines Evaluation Agency (EMEA), the region's equivalent of the FDA, recommended approval of Omnitrope in June 2003, the European Commission denied approval this past March while it considers whether the Sandoz clinical trials were sufficient. The disagreement between the two agencies is considered unusual, and it demonstrates what many believe are continuing interpretive differences over rules that are just now being tested. "The European guideline for biogenerics is out there," says Dhiraj Ajmani, industry manager for pharmaceuticals and clinical diagnostics at Frost & Sullivan, a New York-based consulting firm. "However ... since no biogeneric is [yet] approved, the regulatory pathways are not very clear, and nonapproval of human growth hormone from Sandoz has helped escalate doubts on the biogeneric regulatory approval process in Europe." Still, the EMEA, which regulates drugs for some 470 million people in the European Union, is far ahead of the FDA in outlining a regulatory path for biogenerics. In December 2003, the EMEA issued two final guidelines for biosimilar products, one dealing with quality issues and the other with clinical issues. By November 2005, the EMEA is expected to further clarify its rules with guidelines requiring generic firms to provide additional scientific data on a case-by-case basis. The fact that Sandoz filed for Omnitrope approval before the European guidelines came out last December indicates that future applications may have an easier time. Moreover, Australia's approval of Omnitrope will provide Europe with some regulatory precedent. "Europe has already done the work to put in place a legal and regulatory framework," says Marti Harvey Allchurch, an EMEA spokesperson in London. "The agency is talking to a number of companies, and it is a question of whether, rather than if, biosimilar products will be approved in the EU." CONDITIONS IN THE US Total Market Revenue Forecast for Biogenerics, 2002-2010 In the United States, the FDA has launched a series of public workshops on the biogenerics issue, but heated debate remains about safety and quality standards. Once the base patent expires on a traditional drug, a competitor need only prove that the copycat drug has the same active ingredient as the original. The process is more complicated for biologics, however, because large, complex molecules are not as easy to characterize. Even the smallest of changes to the three-dimensional structure can produce a copycat drug different from the original, and even potentially dangerous, detractors argue. At an FDA hearing in September, industry experts argued that if biogenerics are not made in the same facility as the original, the process can never be entirely identical. Moreover, if the patent on the drug has expired, but not the process, they say a whole new manufacturing process must be developed and shown to produce an equivalent product. Experts also argue that copycats should undergo the same clinical tests as the original drugs to prove they are safe and effective. If that happens, biogenerics may require additional expertise and facilities to conduct the trials, which could offset or even negate their low-cost advantage. "The FDA must continue to apply consistent regulatory standards for all manufacturers," says Sara Radcliffe, managing director for scientific and regulatory affairs for the Biotechnology Industry Organization in Washington, DC, which represents more than 1,900 biotechnology companies, academic centers, and other organizations. Mathias Hukkelhoven, senior vice president for Novartis, challenges Radcliffe's view. "The product is no longer the process," he says. "Technologies to make and characterize protein products have progressed rapidly in the last two decades. In the same manner, regulatory requirements need to evolve." Whatever the outcome, pressure is increasing for the United States to craft regulations to address the issue. Many predict that Australia's approval may light a fire under US regulators who have failed to craft clear regulations in the biogenerics arena. And spiraling drug costs may be an additional impetus. Sen. Orrin Hatch (R-Utah) during a Senate Judiciary Committee hearing this past summer, said: "We simply cannot sustain over time programs such as Medicare, unless we seriously explore what steps might prudently be taken to end an FDA regulatory system that effectively acts as a secondary patent for off-patent biological products."

Can Biotech be Generic?

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December 2004

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