Biotech Values

[ghmm]

Didn't see this posted here. This could have a huge impact on some companies. Amgenhas been fighting attacks on their EPO patents for 50,000 years. With all the talk of high prices one would expect legislation to easily pass.

Sorry Dew, Looked like there was a potential quiz or two in this article, but your quizes are usually a bit more difficult :)


http://biz.yahoo.com/ibd/061013/health.html?.v=1&printer=1

Generic Threat Puts Biologic Firms On The Defensive
Friday October 13, 7:00 pm ET
Peter Benesh

Technology marches on, but the law and regulations often don't keep up. That's been the case with biological drugs, which are made from proteins instead of chemicals.

Several early biologics have lost or soon will lose patent protection. If they were chemically based, they'd be vulnerable to competition from generic drugs.

But science has outrun the 22-year-old law that made conventional generic drugs possible, says attorney Marc Scheineson, a former associate commissioner of the Food and Drug Administration and head of the food and drug practice with the law firm of Alston & Bird in Washington, D.C.

"The law did not envision application to unique characteristics of biologics," Scheineson said. "It was designed for chemical drugs, not living organisms."

The FDA contends it lacks authority to approve generic biologics. On Sept. 29, Rep. Henry Waxman, D-Calif., co-author of the 1984 law that paved the way for generic drugs to compete with off-patent branded drugs, re-entered the scene.

Backed by Democratic Sens. Hillary Clinton and Charles Schumer of New York, Waxman introduced a bill to update the law with procedures to let the FDA approve generic biologics.

"This bill will use competition to make biological drugs -- which are often prohibitively expensive -- available to those who suffer from diseases like cancer, diabetes and AIDS," Waxman said in a statement.

Biologics, also called specialty drugs or biopharmaceuticals, are a huge and growing sector of the health care economy. In 2005, biologics had U.S. sales of $32.8 billion, or 14% of total drug sales, according to market analysis firm IMS Health.

While year-over-year sales of biologics rose 17% in 2005, sales of conventional prescription drugs gained only 5.4%.

Annual sales of biologics will reach $90 billion by 2009, says Mark Merritt, president and chief executive of the Pharmaceutical Care Management Association, which represents U.S. pharmacy benefit managers. Merritt's estimate was given during July testimony before a Senate panel.

States Of Panic?

One reason sales are rising is that prices of the drugs are rising. The cost of biologics increased 17.5% last year vs. 10% for conventional drugs, Merritt told the panel.

It costs $5,500 a month to treat colorectal cancer with Genentech's (NYSE:DNA - News) Avastin. The drug might cost twice as much if approved for breast cancer because patients will need double the dose. The FDA approved it on Oct. 11 for certain kinds of lung cancer.

High prices have created alarm among officials at state governments, which pay half of the cost for Medicaid patients.

Since August, governors of seven states -- Kansas, Minnesota, New Mexico, Vermont, Virginia, West Virginia and Wisconsin -- have petitioned the FDA to set out guidelines for generic insulin and human growth hormone, two biologics that are off patent.

Patents have expired on several biologics, and more will soon. Those due to come off patent include Amgen's (NASDAQ:AMGN - News) Epogen, used to treat anemia in dialysis patients, and Neu-pogen, which boosts white blood cells after cancer treatment.

The list also includes Genentech's Activase for heart attack, and Pfizer's (NYSE:PFE - News) Genotropin for children with stunted growth, which came off-patent in February.

Several generic drug makers -- including Barr Pharmaceuticals (NYSE:BRL - News), Mylan Laboratories (NYSE:MYL - News) and Teva Pharmaceutical (NASDAQ:TEVA - News) -- are gearing up to enter the lucrative market by acquiring firms equipped to do the work.

Sandoz, a unit of Novartis (NYSE:NVS - News), is ready to start making Omnitrope, a generic version of Pfizer's $800 million-a-year human growth hormone, Genotropin.

Sandoz had to sue the FDA in federal court to force it to rule on Omnitrope. The court ordered the FDA to make a decision. In May the FDA issued the approval, though on its Web site the agency said the decision didn't necessarily clear the way for other approvals. The FDA didn't return calls seeking comment.

Burden Of Proof

Good luck trying to figure out how the FDA can approve Sandoz's generic biologic without opening the floodgates to more generics.

"(The issues) are extremely legalistic and as complicated as you can get," Scheineson said.

Much of it boils down to the FDA's inability to determine whether a biological drug is identical in all respects to the original drug. Making that exact match isn't easy.

"Biological molecules are more complex (than chemical-based drugs)," said Joseph Reisman, a biotech attorney with Knobbe, Martens Olson & Bear in San Diego. "They can react differently with cells and receptors on cells. Their presence in the bloodstream can't be tracked in any linear way to their efficacy."

The European Union is satisfied that a generic biologic can be as safe and effective as the branded original. The EU approved Omnitrope in April and created procedures for other generic biologics to follow.

The U.S. Biotechnology Industry Association wants makers of generics to have to go through all the clinical trials for safety and efficacy that the original drugs faced, something generics makers see as expensive and unnecessary.

Kathleen Jaeger, CEO of the Generic Pharmaceutical Association, says her group plans to push the Waxman bill.

That would suit the FDA, Scheineson says. "The FDA wants a congressional fix."