The generic drug industry is poised to go after a new and potentially lucrative market: the $18-billion-a-year biotechnology drug business. "The next big legislative battle will be generic biologics," said Kathleen Jaeger, president of the Generic Pharmaceutical Association (GPhA), Washington, D.C.
Legislative action is needed because there is no regulatory pathway permitting generic drug manufacturers to market biotech drugsalso called biologicsin the United States. The Waxman-Hatch Act (1984) governs the Food & Drug Administration generics application process for replication of chemically based drugs. But it does not cover biologics, which are created from living organismsprimarily proteins and other large molecules. Consumer and employer concerns about soaring drug costs, and recent federal regulatory and legislative initiatives reflecting those concerns, are encouraging generic manufacturers to push Congress to create an approval process for biologics.
"This isn't part of a formal initiative on our part, not yet," said Steve Bende, a molecular biologist who is v.p. science, professional and regulatory affairs, for GPhA. "Right now we're pushing hard for legislation that will amend Waxman-Hatch. But we will pursue this issue, and soon."
Under Waxman-Hatch, brand-name pharmaceutical companies are permitted to market drugs under exclusive but temporary patent protection. After they complete an FDA approval process, known as an abbreviated new drug application (ANDA), generic pharmaceutical companies are allowed to manufacture and sell the same drugs when they come off patent. Uncomplicated and comparatively inexpensive, the ANDA requires duplication of the patented chemical compound to prove bioequivalence.
Biologics are more complicated than chemically based drugs. For this reason, biotech industry officials claim that manufacturers can't safely copy their products under an ANDA. They say the development process is unpredictable and that the slightest change can result in significant differences in a drug's safety and efficacy. For example, human growth hormone, one of the first biologics on the market, has proven difficult to reproduce. Six different brand-name drug companies produce the hormone, and no two are the same.
"The science doesn't exist today to allow the approval of biotech drugs without rigorous clinical trials demonstrating both safety and effectiveness," said Steve Lawton, v.p. for regulatory affairs and general counsel of the Biotechnology Industry Organization in Washington, D.C. "Frankly, neither GPhA nor anyone else has demonstrated to a regulatory authority that that statement is not correct. They [generic manufacturers] have some strong sense that there are shortcuts in this business, and it's our strong view that there are not."
FDA officials have publicly echoed the biotech industry's concerns about the complexity of replicating biologics. "There are significant unresolved scientific issues about how to show sameness between complex biological macromolecules so that FDA can be assured that any generic biologic is safe, pure, and potent as well as equivalent to an innovator product," said FDA Associate Commissioner for Policy Margaret M. Dotzel in public comments on the issue.
GPhA's Bende said his association appreciates that concern but that the biotech industry is misrepresenting its position. "We do want the science to dictate what happens," he said. "We're not saying to insert the word biologic into Waxman-Hatch or the ANDA. That would be inappropriate. The science is more complicated [than chemically based drugs]. But we believe a somewhat abbreviated process is possible. The level of clinical work would depend on the molecule at hand."
The potential market for generic biologics is large enough for the GPhA to push hard for a regulatory process. There are more than 100 biotech drugs on the market and about 300 in development. Among the more familiar brand names are Xenical for obesity, Singulair for asthma, Prevacid for ulcers, and Zoloft for depression. The acne biologic Accutane, made by Roche, which recently lost its patent protection, generated $636 million in sales in 2000. Human insulin for diabetes, alpha interferon for hepatitis and cancer, beta interferon for multiple sclerosis, and growth hormone for dwarfism will also lose their market exclusivity in coming years. Each of these markets exceeds $1 billion in worldwide sales. There are three biotech drugs without patent protection, including Accutane, and three more losing protection this year. Industry analysts predict that about 25 biologics will be off patent by 2010, representing a $20 billion market.
Even determining when a patent expires is controversial. For example, Biogen Inc.'s interferon beta-1a (Avonex) patents expire in 2011 and 2013, but when the drug was developed, it was granted orphan drug exclusivity status, which expires in 2003. (Orphan drugs are a category created by the 1983 Orpan Drug Actfor medications used to treat diseases that occur in fewer than 200,000 cases or for which there is no hope for recovery of development costs. Once a drug is designated an orphan by the FDA's Orphan Products Development, manufacturers are eligible for significant tax breaks and grants, and they receive automatic seven-year exclusivity patents.)
Another example is Amgen Inc.'s patents on epoetin alfa (Epogen) and fil-grastim (Neupogen), which expire in 2004 and 2006, respectively. Amgen said it has other patents protecting those drugs that don't expire until after 2010. When a patent truly expires is the type of issue Waxman-Hatch was designed to resolve, but only for chemically based drugs.
Given the chemical complexity of biologics and the political complexity of current patent law, the generic industry is fighting a tough battle. But, given what already occurred this year, the current legislative and regulatory atmosphere is encouraging for generic manufacturers. The Federal Trade Commission has been cracking down on patent-extension maneuvers by brand-name companies, and in July the Senate passed legislation making it tougher for brand-name manufacturers to receive extension. (As of mid- October, the legislation appeared dead in the House. Supporters say it will be reintroduced in the next Congress.)
Potential generic biologic manufacturers hoping for regulatory relief are looking to Sen. Orrin Hatch, the Utah Republican who cosponsored Waxman-Hatch and frequently talks publicly about the importance of encouraging the development of all biotech drugs. And in June, Sen. Jay Rockefeller (D, W.Va) introduced legislation that could start creating a regulatory pathway for approval of generic biologics. The proposed legislation calls for an Institute of Medicine study on the feasibility of generic biologics, and, if the report is positive, instructs the Department of Health & Human Services to design regulations governing their creation. The bill (S 2677, Consumer Access to Prescription Drugs Improvement Act of 2002) never got out of the Senate Finance Committee, but the issue will be revived in the next Congress, say generic industry officials.
A new development at the FDA is also encouraging to generic manufacturers. In September, the agency announced the consolidation of responsibility for reviewing all new pharmaceutical products into the Center for Drug Evaluation & Research (CDER). The work is currently shared by FDA's Center for Biologics Evaluation & Research (CBER) for approval of biologics. An FDA working group has been ordered to develop a consolidation implementation plan by January. CBER will retain many of its functions, including those over blood products, vaccines, gene therapy, and tissues. But the reviewers themselves will probably shift divisions, so new people will not be reviewing applications, and by blending operations with the larger drug division, the biologics reviews could come to employ many of the same standards as drug reviews.
Switching approvals of biologics from CBER to CDER could help speed the approval of biologic-drug applications. Biotech industry officials have long complained that the current dual-agency process is slow and inconsistent, and that applications are subject to different scientific standards and levels of proof between the two divisions. According to one industry analyst, CDER is more responsive to the industry and better-managed. So the biologics industry is pleased by the proposal. But the generic industry is also pleased. "The move could signal the FDA's willingness to begin to address the issue [of creating a generic biologic pathway] more aggressively," said a generic industry analyst. "Given the history of both agencies, CDER will probably more readily assist in developing draft guidance to help this happen."
|Brand||To treat||Sales in 2000 (in millions)||Marketed by||Expires|
|Intron||Leukemia, hepatitis B and C, melanoma, lymphoma||1,316||Schering-Plough||2002|
|Humatrope||Growth hormone deficiency||303||Eli Lilly||2003|
|Nutropin||Growth hormone deficiency||226||Genentech||2003|
The biotech drug, or biologic, industry is large and growing. The FDA approved 11 new therapies developed by biotechnology firms between January and July this year alone and cleared eight clinical applications for existing biologics. They are used to treat a wide and increasing array of diseases, including but not limited to:
Source: American Council on Health
Martin Sipkoff. Biologics: Next big milestone for the generic drug industry. Drug Topics 2002;25:17s.