Biologics Battle Over Billions of Dollars

Fight Fueled by FTC Report That Says 12-Year Exclusivity Unnecessary

Lobbyists who want Congress to approve a swift pathway to generic versions of biotech drugs say the Federal Trade Commission last week handed their side a boost just as Congress wades into the health care reform debate.

But biotech brand companies, which have billions of dollars at stake, stepped up their own lobbying efforts, calling the FTC report flawed and working to give their side momentum on Capitol Hill.

“This study is an enormous game-changer,— said Mark Merritt, president of the Pharmacy Care Management Association, which supports a bill by House Energy and Commerce Chairman Henry Waxman (D-Calif.) that would give brand-name companies five years of market exclusivity for their biotech drugs before generics enterprises could market their versions.

Brand-name companies argue they need at least a dozen years of market exclusivity in order to make it worth their bottom lines to keep producing the products.

The FTC report stated that such a lengthy period of exclusivity was unnecessary.

The Senate Health, Education, Labor and Pensions Committee, which last week unveiled its health care reform bill, left out the details when it comes to biologics. Lobbyists for both sides say this week, when the committee is expected to mark up its bill, Senators will determine the length of exclusivity.

But on the House side, a competing bill to Waxman’s — one sponsored by Reps. Anna Eshoo (D-Calif.), Jay Inslee (D-Wash.) and Joe Barton (R-Texas) and generally supported by the brand industry — is adding co-sponsors.

“It blows apart this mythology that you need all these extra years of exclusivity to protect innovation,— added Merritt, whose group is part of the Coalition for a Competitive Pharmaceutical Marketplace. “This gives hope that there can be real biologics legislation that can provide real savings that can finance broader health reform.—

Biotech drugs, or biologics, are some of the costliest therapies on the market. They include such products as Genentech’s Herceptin, a cancer treatment, and Amgen’s Enbrel, which is used to treat rheumatoid arthritis. Biologics are almost never taken in pill form but are injected. And brand makers say they cannot be replicated exactly.

The debate is so contentious that even the terms are politically loaded. Brand makers use the terms biosimilars or follow-on biologics; Merritt’s side calls them biogenerics.

Tom DiLenge, general counsel for the Biotechnology Industry Organization, says his group is in favor of creating a pathway but needs a 12-year exclusivity. Otherwise, he said, “there would be much less incentive to engage in all of that work, if a competitor can free-ride on your work— immediately.

The brand-name side also says that the amount of money a quicker path to generics could save is not nearly as much as Merritt and his allies claim. David Beier, senior vice president of global government and corporate affairs for Enbrel’s maker Amgen, said that the most recent Office of Management and Budget report says the savings to the federal government would be about $6 billion over 10 years.

“People who claim that somehow there’s going to be a massive amount of savings, that just doesn’t work as a matter of mathematics,— Beier said.

But according to a draft letter from the Coalition for a Competitive Pharmaceutical Marketplace, “Growth in spending on biologics continues to outpace that of traditional pharmaceuticals, creating an ever-increasing multi-billion dollar savings opportunity for these life-saving products.—

The letter is expected to go to the Hill today, and its signers include consumer groups, unions and employers. The letter urges passage of the Waxman bill and a similar version in the Senate (S. 726) backed by Sens. Charles Schumer (D-N.Y.) and Sherrod Brown (D-Ohio).

A brand pharmaceutical industry source said the HELP Committee is considering three possible scenarios, including one that would give brand biotech drugs closer to 12 years of exclusivity and one that would provide far fewer years. (HELP Chairman Edward Kennedy [D-Mass.] sponsored a bill two years ago that provided 12 years of exclusivity.)

“Frankly, it’s in flux,— said this brand industry source. “There is some language that was circulated that troubles our industry quite a bit.—

Regardless of the number that comes out of the markup, the brands won’t stop there.

“The markup is only the first step,— this brand industry source said. “I don’t see it as being the end of the debate.—

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