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Key Democrats Back BIO Industry Against Consumers to Delay Generic Medicines (Biosimilars)

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Congress is considering a long overdue reform in the way the FDA regulates medicines that are classified as "biologic products." For medicines classified as pharmaceuticals, the FDA created a system for allowing new drugs on the market if they were "bioequivalent" to a drug that had already been approved. This is the mechanism used to make it easier for generic medicines to enter the market, and drive prices down through competition.

Like pharmaceutical drugs, biologic products are used in the prevention, treatment, or cure of diseases. Examples of biologic products include Zostavax , the herpes zoster (shingles) vaccine, erythropoietin (EPO), a therapeutic agent used in the treatment of anemia resulting from chronic kidney disease, or Herceptin/trastuzumab, a treatment for breast cancer.

Unlike for pharmaceutical drugs, there is no easy way to get FDA approval for a generic biologic product (called biosimilars). Congress is considering an FDA reform to fix this. But the reform is being derailed by an effort by BIO, the trade association for the biotechnology industry, to create a long period before generics can enter the market. BIO is asking Congress to approve 12 to 14.5 year legal monopoly on a biologic product, that has nothing to do with the patent status of the product. Given the way that many biologic products are used, a monopoly of up to 14.5 years will discourage entry by generic producers.

Representative Henry Waxman has tried to keep the monopoly at 5 years -- the same minimum monopoly that exists now for pharmaceutical drugs, and the Obama White House has drawn the line at 7 years. But BIO now has Howard Dean pushing for the longer monopoly (See his recent op ed in the Hill), as well as Joe Trippi, and a number of key Democratic in Congress, including Senator Edward Kennedy, and Representatives John Conyers and Anna Eshoo.

The Senate Help Committee recently rejected an effort by Senators Brown, Sanders, Harkin, Bingaman, and Merkley to limit the monopoly to 7 years. Senator Kennedy and many other liberals on the Senate Help Committee backed the BIO 12-14.5 year monopoly position.

In the House, the evil proposal is HR 1548, sponsored by Representative Anna Eshoo and more than 130 co-sponsors, including several democrats, such as John Conyers, the Chairman of the Judiciary Committee. A Tuesday Judiciary subcommittee hearing on "Biologics and Biosimilars: Balancing Incentives for Innovation," was loaded up with 5 industry lobbyists/experts, and one consumer group.

BIO has enlisted endorsements from several industry funded "patient groups", but consumer groups not funded by drug companies, such as AARP, PIRG, Essential Action, UAEM, KEI, are opposing the longer monopoly.

The US generics association GPhA has also.

In June the Federal Trade Commission unanimously approved a report that found a 14 year-period excessive and unnecessary to induce further biomedical innovation . (Bio's rebuttal is here).

Our letter to Congress on the issue follows:

Congress should reject the 12-14.5 year monopoly for biologic products provided for in HR 1548

KEI* opposes H.R.1548, the bill to "establish a pathway for the licensure of biosimilar biological products," on the grounds that the period of the monopoly is excessive, and not subject to safeguards that would protect consumers.

HR 1548 conditions market entry for biosimilar products on a 12 to 14.5 year period of legal monopoly for products that is independent of the patent status of products. The putative rationale is to reward investments in new products. However, there is no requirement that the monopoly bear any relationship to the investments in particular products, pricing, or the cumulative revenues generated by the product. The period of exclusivity can extend 9 years beyond that currently exists for pharmaceutical drugs, and presents considerable risks to the public as consumers, taxpayers, employers and subjects of medical experimentation.

The alternative approach supported by Representative Waxman and the White House of providing a 5 to 7 year monopoly is also excessive, but certainly preferred to an approach that provides a 14.5 year monopoly.

KEI agrees with Essential Action and others that believe a bill based upon exclusive rights to rely upon safety and efficacy of products is itself fundamentally flawed, for several reasons, including the fact that it provides economic incentives for unnecessary and unethical clinical testing of products on human subjects. KEI encourages members of Congress to reflect on the provisions of the Declaration of Helsinki on the ethical principles for medical research involving human subjects, including but not limited to Articles 20 and 21, and to consider if other approaches are more appropriate, including those that allow biosimiliars to enter into agreements to share the risk adjusted costs of clinical trials.**

Congress should reject the 12-14.5 year approach provided for in HR 1548.

In any case, the grant of a monopoly should not be without limits or safeguards to protect consumers and taxpayers. Any bill that grants a legal monopoly from competition should also include provisions that allow the monopoly to be eliminated if products are priced excessively, or if other factors merit a review of the monopoly status. The bill should also require that companies disclose actual R&D costs, prices and revenues for products, and that that the federal government should have the opportunity to review the provision periodically to determine if the term of the monopoly is excessive, or if there is a need for additional safeguards to protect the public, or if new approaches, such as cost sharing, are more appropriate in the context of a policy to advance health interests.

Knowledge Ecology International
FMI: Judit Rius judit.rius@keionline.org
James Love james.love@keionline.org

*Knowledge Ecology International (KEI) is a non-profit organization that focuses on issues about innovation and access to knowledge goods, including new medical inventions.

** See: Judit Rius Sanjuan -- James Love -- Robert Weissman, PROTECTION OF PHARMACEUTICAL TEST DATA: A POLICY PROPOSAL, 21 November 2006.

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