Enabling the US Food and Drug Administration (FDA) to approve generic versions of biologic drugs would save the USA around $25 billion during 2009-18, the Congressional Budget Office (CBO) has estimated.

This would equal some 0.5% of total US spending on prescription drugs at wholesale prices over the period, say the government economists, who examined - at the request of the Senate Health, Education, Labor and Pensions (HELP) Committee - the potential for savings presented by the Biologics Price Competition and Innovation Act of 2007 (S 1695). Last year, the HELP Committee approved S 1695, which seeks to set up an abbreviated regulatory pathway at the FDA for biogenerics - or “follow-on biologics” (FOBs), as the CBO terms them.

Total US spending on biologic drugs has been growing around 15%-20% annually in recent years and reached about $40 billion in 2006, say the CBO economists. By 2018, around 75% of biologics now on the market, representing about $70 billion in national spending on biologics, could face competition from FOBs because of the procedure for their regulatory approval which S 1695 would establish, they estimate.

Assuming that S 1695 is enacted near the beginning of FY2009, it would enable federal budget deficits to be reduced by $52 million during 2009-13 and $6.6 billion over the 2009-2018 period, the report adds.

The cost estimate has been welcomed by S 1695’s sponsors on the panel, Democratic Senators Ted Kennedy (HELP Committee chairman) and Hillary Clinton, and Republicans Mike Enzi and Orrin Hatch.

“Our bill is an important step to ensuring our aging population has access to innovative, affordable and safe medicines,” said Sen Enzi. It preserves incentives to develop new, life-saving therapies and, “most importantly, we protect patient safety every step of the way,” he added, and urged the House of Representatives to pass companion legislation “soon, and not wait until the next Congress.”

Sen Hatch agreed that the savings outlined in the CBO cost estimate underscore “the absolute need” to pass the bill, and added: “biologics are the future of medicine, and S 1695 ensures that we will continue to lead the world in biotechnology.”

However, the Biotechnology Industry Organization (BIO) points out that the CBO’s estimate of savings resulting from S 1695 would in fact constitute just 0.065% of total health care spending over the next ten years. “Therefore, Congress must ensure proper incentives for continued biomedical innovation in any [FOB] pathway so that we don’t achieve relatively minor savings as a percentage of overall health care spending at the cost of continued innovation,” said BIO’s chief executive Jim Greenwood. He also urged Congress to develop and pass a “responsible” pathway this year, adding: “we are essentially leaving money on the table the longer we wait to implement a pathway.”

The Pharmaceutical Research and Manufacturers of America (PhRMA) said the CBO’s findings were “good news for patients and for public health.” However, added PhRMA senior vice president Ken Johnson: “regrettably, critics use the term ‘evergreening’ to mischaracterize and minimize the important and essential work that innovative pharmaceutical research and biotechnology companies do to continually improve their products and to create better second- and subsequent-generation versions.”

“Critics would have you believe that the second- and subsequent-generation biologic products that innovator companies introduce have no value. That is simply untrue,” he said; in fact, they often improve dosing and reduce side effects, which may improve compliance and outcomes, while a broad array of therapeutic alternatives benefit patients whose therapies have become ineffective or who cannot tolerate existing treatments. Moreover, said Mr Johnson: “entry of second- and subsequent-generation biologics does not preclude potential competitors from developing or marketing their products.”

- Similar bills to S 1695 currently going through the House are HR 1038, the Access to Life-Saving Medicine Act and HR 1956, the Patient Protection and Innovative Biologic Medicines Act, which were introduced in February and April 2007 by Democrats Henry Waxman and Jay Inslee, respectively, while HR 5629, the Pathway for Biosimilars Act, was introduced this March by Democrat Anna Eshoo.