As momentum builds for legalizing follow-on proteins (FDA's preferred term), pharma wants to keep the issue from blocking speedy reauthorization of the Prescription Drug User Fee program. Billy Tauzin, president of PhRMA (Pharmaceutical Research and Manufacturers of America), said at a recent press briefing that "there will be and there should be" follow-ons, but that the legislation should be "done correctly" and not become "a political football."
Cutting CostsPayers, pharmacy benefit managers (PBMs), and patient advocates see follow-ons as a way to ratchet down the cost of increasingly expensive therapies. Life-saving drugs are not worth much, they argue, if patients can't afford them. Express Scripts, a PBM, unveiled a report in February projecting savings of some $70 billion over 10 years from biogenerics. Another study put the savings at $14 billion for Medicare alone.
Well-known health economist Henry Grabowski of Duke University explained at a hearing before the House Oversight and Government Reform Committee in March that the fairly high cost of developing follow-ons will limit market competition, resulting in discounts of 10 to 25 percent—not the 60-percent price cuts seen in the highly competitive generic-drug market. But payers say that prices even 10 percent lower will save millions on products that in some cases cost more than $100,000. The United States spends more than $3 billion a year on insulin, and state Medicaid agencies are scratching for any savings they can find.
Given the political pressures to legalize follow-ons, brand-name firms are focusing on patent protection. The Hatch-Waxman Act provides five years of exclusivity before generics can challenge a new drug's patent. In Europe, drugs and biologics essentially are protected for 11 years—and that looks good to US innovators, especially small biotech companies. The high cost of developing new biologics—which the Tufts Center puts at $1.25 billion fully capitalized—and of manufacturing them warrants stronger patent protection, the industry claims.
The lead biogeneric bill, sponsored by Rep. Henry Waxman (D-CA) and backed by Sen. Hillary Clinton (D-NY), doesn't address exclusivity. But generic-industry leaders appear willing to negotiate the issue in order to move legislation forward.
Stress on Science
The ultimate cost of follow-ons will depend largely on how much pre-clinical and clinical testing sponsors have to conduct to gain FDA approval. Innovators insist that some clinical testing is necessary and that even then follow-ons won't be equivalent to brands. Everyone says that science should determine the scope of follow-on testing, but there's disagreement over where the science stands. The key questions: