Current Congressional plans to set up a regulatory pathway for generic biologic drugs would have no value, because the pathway they propose would scarcely be used, it is claimed.

This is because the legislation approved in July by the Senate Health, Education, Labor and Pensions (HELP) Committee and in August by the House Energy and Commerce Committee would guarantee manufacturers 12 years’ market exclusivity for a new biologic before any generic versions – known as follow-on biologics, biogenerics or biosimilars – could be approved. Companies could also obtain a further 12 years’ exclusivity by making minor changes to their approved product, says an article this week in the New England Journal of Medicine (NEJM).

Supporters of these long periods of market exclusivity claim they are fair because the development costs for biologics are higher than for other drugs. However, the bills “fail to recognize the unique characteristics of biologic drugs and upsets the delicate balance between the interests of consumers and those of innovators,” claim the authors, Aaron Kesselheim and Jerry Avorn of Brigham and Women’s Hospital and Harvard Medical School, and Alfred Engelberg, a patent attorney for the generic drug industry.

The Food and Drug Administration (FDA) has made it clear that even an abbreviated approval pathway would require a great deal of independent data proving the safety and efficacy of a biosimilar, and there is no assurance that the proposed pathway would be shorter or less expensive than a full Biologics Licensing Application (BLA) for a new product, they say.

The proposed legislation would also impose additional hurdles before biosimilars could be declared interchangeable with the originator product. Currently, when a US physician writes a prescription for a branded small-molecule drug, pharmacists can almost always automatically substitute a generic. But if biosimilars are not similarly interchangeable with the original biologic, they could not be substituted for it and would have to be marketed to physicians as therapeutic alternatives. This would require promotional programmes and sales forces, the cost which would inevitably limit the number of potential market entrants and increase drug costs, they say.

Moreover, they suggest that, even if the proposed regulatory pathway were adopted, makers of biosimilars would probably prefer to ignore it and opt to file a standard BLA, which would not be subject to the 12-year delay, and any increased costs from doing so would be offset by the greater profit opportunity available to early market entrants. “Therefore, as currently fashioned, the biosimilar legislation would have no value, because it would create a pathway that would scarcely be used. Innovators would not get the benefit of the exclusivity provision, and the public would not get the benefit of the enhanced price competition that would result from increasing the number of competitors,” they say.

The authors also point to the Federal Trade Commission (FTC) report published in June which concluded that makers of pioneer biologic drugs do not need the 12-14 years’ brand exclusivity which they claim is necessary. (However, the FTC also said that neither do producers of biosimilars need additional incentives such as 180-day market exclusivity, which they say they do).

They call on President Barack Obama – who has said he supports seven years’ exclusivity for branded biologics – to encourage legislative amendments that would empower the FDA to evaluate and approve biosimilar drugs “in a reasonable period,” starting five years after the original drug was approved. “Such a compromise would best balance the need for financial incentives with the need for competition, promoting access and motivating important subsequent innovation,” they say.

- Granting the FDA a mandate to approve biosimilars would save the USA around $25 billion during 2009-18, the Congressional Budget Office (CBO) has estimated.