FDA Caution Tempers Race For Generic Biologics

Brad Fitzpatrick As the first biotech drugs begin to lose patent protection in the next few years, the US biotechnology industry is beginning to fear it will soon face price-cutting generic competition. Unlike the system for approving traditional, chemically based drugs, no regulatory process exists for the approval of generic versions of the newer bioengineered medicines. Many biotech executives had come to believe their products would enjoy monopolistic pricing even after their patents expired. Generic copies of biological drugs could significantly lower healthcare costs for patients who can pay as much as $100,000 (US) a year for treatment. At stake is a chunk of an estimated $15 billion in sales of biotech drugs expected to lose at least some patent protection by 2005. GENERIC INNOVATION Biotech companies argue that generic copies would create safety problems and stifle innovation and investment in an already high-risk industry. "What is important to us is the belief of our own patients that all biotech products are safe and effective," says Walter Moore, vice president for governmental affairs at Genentech. This summer, the European Union passed legislation creating a mechanism for the approval of generic biotech drugs. European regulators are expected this fall to approve a generic version of human growth hormone produced by Sandoz, a division of Switzerland's Novartis. Meanwhile, the US Food and Drug Administration also is considering whether to approve generic insulin and human growth hormone, two early biotech treatments that are already off-patent. FDA commissioner Mark McClellan earlier this year signaled that he envisions generic biologics in the "very long-term." "This will require a lot more science and legislation before we are ready for it," he said in a speech in April.1 In 1984, Congress created a mechanism for the approval of generic chemistry-based drugs in the Hatch-Waxman Amendments to the federal Food, Drug, and Cosmetics Act. Under Hatch-Waxman, once a drug reaches the end of its patent life, a competitor can get approval to market the same product using much of the first manufacturers' formulas and testing data. Without making the investment in drug discovery and clinical testing, generic manufacturers can offer their products at a much lower price than the company that did the original research. When a generic competitor enters the pharmaceutical market, prices for an already existing drug typically fall 70%. Biotech analysts say the price differential will be less for biologics because of the complexities of manufacturing protein-based drugs. FREE MARKET Up until now most biotech companies believed their drugs, spawned by recombinant technology that evolved in the 1970s and 1980s, would remain free of generic competition because no similar pathway existed for abbreviated approvals. In the United States, most biotech drugs have been approved for market under the Public Health Service Act (PHSA), which was used to regulate vaccines and serums in the early 1900s. When bioengineered products began to come through the approval process, they fell under a different center in the FDA than did chemical-based drugs, which had been governed by the Food, Drug, and Cosmetics Act and later, Hatch-Waxman. In June, those centers merged to streamline administration, but the move provided FDA with an opportunity to examine its policy on generics, says Bill Hubbard, associate commissioner of the FDA. Hubbard says the agency's current review began with insulin and human growth hormone, because those products are easier to characterize than the more complex biotech drugs; also, they had always been regulated under the drug laws and not the PHSA. "If there are going to be generic biologics," says Hubbard, "there are still significant legal and biological issues, one being, can you ever assure sameness?" Hubbard says that for many products it is possible to produce equivalent copies. "When people say the science isn't there ... that flies in the face of experience," Hubbard says. "We are advocating that as much clinical work that needs to be done should be done and no more." In Europe, regulators required Sandoz to test its generic product in humans for safety and effectiveness. However, the company did not have to prove that the active ingredient in the product worked, because regulators relied on the original manufacturer's findings. The FDA is likely to determine the pathway for biologic generics on a case-by-case basis, Hubbard says. "Even if we do insulin and hGH [human growth hormone], that doesn't mean that you go further," he adds. "What we are saying is we're open to the various legal and scientific issues, and in the case of these more easily characterized products we are most open." Brad Fitzpatrick But industry officials suspect the approval of generic insulin and human growth hormone could open the door for more generic treatments. "The concern is that the regulatory agency gets comfortable with a protocol that allows molecules that are not the same to be approved," Moore says. The Biotechnology Industry Organization (BIO) filed a citizens' petition with the FDA in April, challenging the agency's decision to consider generic approvals for insulin and human growth hormone. It argued that, owing to the complexity of drugs made from living cells, the science has not evolved to prove a generic copy would be comparable to the original product. "If you presume substitutability inappropriately, you've got a huge safety issue," says Gillian Wollett, vice president for science and regulatory affairs at BIO. Wollett says there are examples of FDA-approved drug manufacturers having difficulty maintaining sameness in biotech-derived molecules even within their own firms. She also says the industry objects to the way in which the FDA has approached the policy. "We feel that these statements have been made ad hoc, which is not an appropriate way to set such crucially important policy." Wollett says that because of the industry's long lead times, it needs a clear sense of what the rules will be for generic competition. "Whatever the rules are, they need to be transparent and they have to be anticipatable at the moment the investment is made," she says. "If there is an arbitrary change, it could be devastating." George Uveges, chief executive of TranXenoGen, a Shrewsbury, Mass., biotech firm that uses avian technology to manufacture and develop new therapeutics, says his firm has talked to the FDA about producing generic insulin. He says growing demand for medicines such as insulin require the nation to develop multiple sources of products. "We are seeing an increase in obesity, the aging of the population, and new delivery methods that require more product," he says. "To deliver that on a cost-effective basis, there has to be alternative methods of supply." Uveges acknowledged that generic competition could hurt some of his firm's products under development. "There's concern," he says, "but there's also opportunity." ROOM FOR REGULATIONS Robert Bell, chairman of the American Association of Pharmaceutical Scientists' analysis and pharmaceutical quality section, says scientists should not be concerned that generic biologics would lead to a retreat from innovation. "Overall, competition itself is beneficial to the industry and the consumer," he says. Bell, a former executive at the generic drug maker Barr Laboratories, Pomona, NY, is now starting his own firm. He says the arrival of generic biologics would not harm scientific investment at large biotech companies with substantial development pipelines, but the generics could endanger research efforts at small companies having only a single product. "I don't think this is going to happen very quickly," he says. "Only a very few generic companies have the ability to finance this type of organization and will probably be in for a very long legal battle." At the moment, there is no active movement toward congressional legislation that would settle the question, says Gregory J. Glover, a physician and an FDA regulatory specialist with the law firm Ropes & Gray in Washington, DC. But next year, he says, congressional staff may begin to seek consensus on legislation regarding generic biologics that could be enacted within two years. The biotech industry is in no hurry to change the status quo, but if generic biologics are inevitable, the industry might prefer that the rule be hammered out clearly in Congress rather than on a case-by-case basis at FDA, Glover says. BIO's Wollett says any legislation would need to take careful consideration of science. "Everybody would agree we would have to start with the scientific process," she says. "We're not the only voice that needs to be included; we need to hear scientists in academia and government. I think as you incrementally increase the debate you would set criteria that are perhaps achievable for some products, but maybe not for others." Susan Warner (swarner@the-scientist.com) is a freelance writer in Philadelphia. 1. M.B. McClellan, "Speech before the FDLI," available online at www.fda.gov/oc/speeches/2003/fdli0401.html function sendData() { document.frm.pathName.value = location.pathname; result = false if (document.frm.score[0].checked) result = true; if (document.frm.score[1].checked) result = true; if (document.frm.score[2].checked) result = true; if (document.frm.score[3].checked) result = true; if (document.frm.score[4].checked) result = true; if (!result) alert("Please select") return result; } .myradio{background-color : #94bee5} Please indicate on a 1 - 5 scale how strongly you would recommend this article to your colleagues? Not recommended 1 2 3 4 5 Highly recommended Please register your vote

FDA Caution Tempers Race For Generic Biologics

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