* Ex-Barr CEO says U.S. biogenerics law unlikely in 2009 * Downey sees more consolidation, particularly ex-U.S.
By Lewis Krauskopf
NEW YORK, Jan 30 (Reuters) - U.S. lawmakers are unlikely to pass legislation this year to create a process for approving generic versions of biotechnology drugs, the former chief executive of Barr Pharmaceuticals Inc said on Friday, but he is optimistic about a bill winning approval in 2010.
In a wide-ranging interview at the end of his 15-year tenure as Barr's chief, Bruce Downey also predicted more consolidation will sweep through the generic drug industry, particularly outside the United States.
In five years, a greater percentage of global market share will be controlled by the top players, said Downey, who engineered the recent sale of Barr to Teva Pharmaceutical Industries Ltd.
"I think it's not only possible; I think it probably will happen," said Downey of industry consolidation.
At Barr, Downey has been one of the leading advocates of "biogeneric" legislation.
Many observers have believed the U.S. Congress would approve a regulatory process this year for generic biologic medicines. Such drugs are based on living organisms and are more complex and expensive to manufacture and more difficult to duplicate than traditional chemical pills.
But proposals to address the weak U.S. economy are consuming the legislative agenda and pushing down other issues on the priority list, Downey said.
"I think it's probably unlikely given the agenda that the Congress has that you'll see generic biologic legislation this year," Downey said. "It's possible, but I think the probability is declining. I think it's very high that you'll see it in 2010."
Even as companies wait for such legislation, Downey said he believed the top generic companies will be able to prepare applications used for brand-name biotech drugs for biogeneric drugs if they have to.
Such applications require costly clinical trials that a new process might help generic companies avoid.
"We at Barr were prepared to, if we needed to, go the BLA (Biologic License Application) route," Downey said. "We weren't waiting for the legislation. We were working for it, but we covered our bets."
Merck & Co and several other pharmaceutical companies have indicated their interest in biogenerics or biosimilars, as they are also known.
But Downey said they will have to catch up to the leading biogeneric players, including Teva and Novartis AG's Sandoz unit, and thinks the traditional generic companies will fare well in the burgeoning field.
"I would put my money on the people in the generic industry," Downey said. "They have the intellectual firepower and the financial resources to do it, and I would think that in the end I think we'll be the most successful."
Pharmaceutical companies also have signaled interest in becoming more involved with generics in general.
But, Downey said, "If they do, I think that the established generics companies will be the dominant players, and they're going to have a very hard time competing."
At Barr, Downey said consolidation was the dominant theme, but it was driven by similar changes with wholesalers and other industry customers.
"The consolidation on one side of the equation contributed to consolidation on the other," he said.
Downey, who is planning to join NewSpring Ventures, a venture capital fund, said he still plans to track the biogenerics issue. The key for his longevity and success in the sometimes-volatile generic drug industry?
"I think you have to be very risk tolerant, and you have to have a high tolerance for uncertainty and a willingness to change on a dime," he said. "That's helped me a lot."
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