OT - An article on generics. It will be interesting to see how the proposals to allow generic biotech drugs will fare. Unlike traditional small molecule drugs, many biotech drugs are complex proteins. It will be extremely difficult to demonstrate that a generic protein is the exact chemical equivalent of the original approved drug, without doing extensive clinical trials. Very slight diffences in chemical structure could produce vastly different actions in the body. Investment-wise, I like the generics industry, but getting generic biologics may be a tough road -
>>> Democrats' Rx? Generics
Copycat Drugs May Get Boost to Rein In Health-Care Costs
By ANNA WILDE MATHEWS
November 21, 2006
Newly empowered Democrats' vow to cut health-care costs might spell bad news for the brand-name pharmaceutical industry, but their efforts could provide new momentum for the generic-drug rivals' agenda.
Boosting the generics industry may prove to be the most politically palatable way to follow up on the party's campaign promises. That's because making more room for generics is meant to cut prices through increased competition -- a solution that is easier to sell as pro-market than other proposals Republicans will portray as precursors to federal price controls. In addition, some legislation that must be renewed in 2007, including laws providing vital funding to the Food and Drug Administration and encouraging studies of drugs' use in children, could provide gridlock-proof vehicles for generics provisions.
"Overall, because of the shift in Congress, next year could be the most important year to the generics industry since 1984," when Congress passed the law that opened the door to the modern generics business, says Jake Hansen, a vice president at generics maker Barr Pharmaceuticals Inc., of Woodcliff Lake, N.J.
The most important question will likely be how and whether to create a legal pathway for the FDA to approve generic versions of biotechnology drugs. The 1984 law that created a framework enabling the FDA to approve generic drugs focuses on traditional, chemically derived drugs such as Prozac, but didn't give the agency a way to approve generic versions of most biotech products. Now, the issue will get a push from several key Democrats, though it will be difficult to pass such a complicated and contentious change in 2007.
An array of other measures aimed at smoothing the way for traditional generic drugs will also get attention, and could well be tucked into broader bills next year. Among them are proposals to limit branded-drug company tactics that thwart generic competitors, such as licensing additional companies to sell their drugs and thus diluting the profits to be made from copying them [so-called authorized generics].
The FDA generics office is likely to get more funding to speed its reviews now that the Democrats are in charge, and there may be limits put on FDA petitions filed by brand-name makers that can delay generic-drug approvals. Another likely goal for Democrats: shortening a six-month period of exclusive marketing that branded-drug makers get in exchange for their pediatric research, a benefit that can be worth billions of dollars because it delays generics competition.
Makers of traditional chemical generics sell versions that can be substituted for the originals, typically at a substantially lower price. The generics companies have far smaller development costs, since they don't have to duplicate years of research and regulatory review borne by branded-drug makers.
A number of Democrats who have been allies of the generics makers are slated for positions that could help in pushing forward such changes. In the Senate are Vermont's Patrick Leahy, the expected Judiciary Committee chairman, as well as high-profile lawmakers such as New York's Hillary Clinton and Charles Schumer. Sen. Edward Kennedy of Massachusetts, who will head the health committee, is among the key Democrats who have signaled that health-care costs will be a major focus for next year.
Sen. Herb Kohl, a Wisconsin Democrat who is expected to head the Senate Appropriations subcommittee that handles the FDA's funding, says, "We really want to promote the use of generics because of the savings."
In the House, California Rep. Henry Waxman, a sponsor of the 1984 generics law, will be chairman of the Government Reform Committee, while FDA appropriations will go through a subcommittee headed by Connecticut Rep. Rosa DeLauro. The generics makers count some Republican supporters as well: Mississippi's Trent Lott, who will be the new Republican whip in the Senate, co-sponsored a bill supported by the industry last year with Michigan Democrat Debbie Stabenow.
"I'm obviously supportive of whatever we can do to make generics more available," says Democratic Rep. Frank Pallone of New Jersey, who may become chairman of the House Energy and Commerce health subcommittee. Drug prices are the kind of "affordability issue" that drew votes to Democrats, he says, adding that he supports the idea of generic biotech drugs. Mr. Waxman, with Sens. Schumer and Clinton, has introduced a bill to create a generic biotech pathway, which he says is "very, very much needed."
Generics makers are leaning on a coalition that has worked in the past, drawing on big employers and others scared by rising health-care costs. European regulators, meanwhile, have already begun crafting guidelines for what they call "biosimilars."
The generics makers' pitch is simple, and likely to resonate with many lawmakers: Helping them means lower drug costs, and doesn't involve government-imposed price controls or the controversies surrounding imported medicines.
The generics industry complains about remaining "loopholes" in law and regulation exploited by branded-pharmaceutical makers to delay generic competition. On the issue of generic biotech drugs, they argue that they can safely create copies without duplicating all the expensive studies done by the original manufacturers. "Right now, there's a regulatory monopoly" for biotech drugs, says Kathleen Jaeger, chief executive of the Generic Pharmaceutical Association.
Branded-drug companies defend their tactics. In a statement, the Pharmaceutical Research and Manufacturers of America says licensing additional competitors increases competition and brings down prices beyond the introduction of a generic version. The group also says the FDA needs to consider safety issues raised by petitions before it approves a drug, and such petitions allow consumers and others to "present their views on important FDA issues."
The biotech industry, for its part, is pushing its own case on Capitol Hill. One argument: Science isn't advanced enough for generics makers to produce truly identical duplicates of their medications. It is likely to get a good hearing from Democrats as well as Republicans, partly because of its strong base in Democratic stronghold states of California and Massachusetts.
Some biotech officials argue that generics makers will need to redo all the studies performed by the original manufacturer, in order to guarantee their copycat products are effective and safe for patients. That would likely eliminate much, or all, of the price advantage offered by the generics rivals. "There is no way to characterize a biological," says James Greenwood, a former congressman who heads the Biotechnology Industry Organization, a trade group.
Biotech companies also argue that their products take longer to develop, and are often tested for use in fighting more illnesses than traditional drugs. For small start-ups, they say, generic competition could be devastating. So if legislation moves forward, they will press for trade-offs such as extra years of exclusive marketing. Such a compromise was the basis for the 1984 passage of the generics bill.
"I would like to see Congress be fair to the innovators," says Jim Green, a senior vice president of Biogen Idec Inc., of Cambridge, Mass. "The level of research-and-development investment in the next product is not going down."
<<<
