A leading US employer has urged Congress to authorise Food and Drug Administration approval of generic biopharmaceuticals (follow-on biologics or biogenerics) as “must-pass” legislation this year.
Sid Banwart, vice president for human services at Caterpillar, the world’s leading manufacturer of construction and mining equipment, has told a Senate Health, Education, Labor and Pensions (HELP) Committee hearing that the costs to the company of biologic drugs have gone up 45% since 2004. “This is our single fastest-growing category of health cost, and the trend is simply not sustainable,” he said.
For Caterpillar, which employs nearly 95,000 employees worldwide, there is currently no certainty in its pharmaceutical spending “because we do not know when or if there will be lower-cost alternatives for biopharmaceuticals,” said Mr Banwart.”
The five key principles for Congress as its plans this legislation, he said, should be to:
– protect and promote fair and open competition – once a patent expires or is successfully challenged, biogeneric competition should be able to enter the market;
– provide a definitive pathway for biogenerics with the FDA authorised to approve both comparable and interchangeable biogenerics;
– encourage consistent and uniform terminology;
– increase revenues for the FDA so that it can carry out these new responsibilities; and
– include legal authority for a biogeneric pathway in must-pass legislation this year. “Each day that passes without biogenerics is another day of limited options,” Mr Banwart told the panel, adding: “no payer, whether individual or employer, public or private, can afford unlimited monopoly pricing.”
Savings will be “astronomical”
Democrat Senator Charles Schumer, co-sponsor with Senator Hillary Clinton and Congressman Henry Waxman of the bipartisan Access to Life-Saving Medicines Act (S 623) which would give the FDA this authority, told the hearing that treating a patent with a biologic drug can cost $100,000 a year, at a total cost to the nation of $32 billion a year. “Even if introducing competition in this market only lowers prices of biologic drugs by 10%-25%, the savings on products this expensive will still be astronomical,” he added.
However, while other speakers called for the USA to follow the European Union (EU) experience of approving biogenerics, Sen Schumer was cautious.
“As it stands today, the EU has a highly-regulated process in place that has, arguably, been unnecessarily burdensome to competitors and has only resulted in two approvals to date,” he said. In drawing up the US system, the FDA should not be forced to “swallow a complex set of regulations that has been created by another system of government” – one which has “price controls and a generic market that is not as robust as our own,” he added.
European Commission spokesman Nicholas Rossignol, who has responsibility for implementation of EU pharmaceutical legislation relating to biogenerics, told the hearing that this is “arguably one of the most complex issues that the European Community has faced in the area of pharmaceuticals in the last five years.” Nevertheless, he added that both sides of the pharmaceutical industry have welcomed the flexibility of the EU regulatory framework for biogenerics. A cautious, balanced, “not too stringent, not too loose” approach has been adopted to allow streamlined access to market for biosimilars (as biogenerics are called in the EU), without compromising public health, he said.
He acknowledged that the EU has authorised just two products so far - the growth hormone somatropin (Sandoz’ Omnitrope and Biopartners/LG Life Sciences’ Valtropin) both in April 2006. However, more applications are already in the pipeline, mainly concerning erythropoietins, interferons, insulins and granulocyte colony stimulating factors, “An early dialogue between the manufacturers, the European Medicines Agency (EMEA) and the European Commission has proven critical to sort out the various regulatory and scientific issues that applicants may face,” said Mr Rossignol.
“Too soon” to address price impact
However, pricing is not addressed in the framework, as this is a matter for EU member states. And, with so few products authorised so far, it is probably premature to assess the framework’s impact on prices of biologic drugs in Europe, he said, although the European Commission will monitor this “with particular attention” in the coming years.
The EU’s recognition that follow-on biologics can be similar but never identical to an innovator product was welcomed by Jay Siegel, group president of R&D for Johnson & Johnson’s biotechnology, immunology and oncology R&D companies. There will always been a need for appropriate pre-marketing clinical data to ensure that a follow-on biologic is safe and effective, he added.
“I would never take a biologic that had not been tested in humans – the risks are too high,” Dr Siegel told the hearing. “New legislation should not cause others, who may be less informed, to do so. Congress should not create two standards of medicines – those appropriately tested for safety and efficacy and those that are not,” he added.
He was also concerned that S 623 is silent on the matter of post-marketing safety surveillance and on the limits it would place on the FDA’s ability to require PMS studies from a biogeneric’s manufacturer. “Restricting the FDA in its efforts to carry out its explicit mission of protecting the public health in the post-marketing period would be particularly difficult to explain to the American public, given that such protections are already received by the European public,” he said.
He was also concerned that S 623 seeks to require the FDA to complete its final review and taken final action on a follow-on biologic product application within just eight months of submission. This is a faster timeline that for most new drugs and biologics and, in some senses, faster than for priority drugs, which means, he said, it gives review of a biogeneric higher priority than for most new drugs and comparable to that for a new and promising AIDS or cancer therapy.
“This kind of provision inappropriately limits FDA's ability to allocate its severely-limited resources to address the greatest public health priorities. It also runs the risk of giving FDA inadequate time to do its job,” he warned.
Senator Mike Enzi, the HELP Committee’s Ranking (Republican) Member, stressed that the creation of a regulatory pathway for biogenerics should not be a race to cut drug costs alone. Describing biologics as “the skyscrapers of the drug world,” he stressed that allowing drugmakers to duplicate them will create an unprecedented regulatory and safety challenge for the FDA, and warned: “if Congress grants that authority in haste, the results could be disastrous.”
Sen Enzi rejected calls to link the biologics legislation to the package of FDA-related bills currently being prepared by the HELP Committee, including the Prescription Drug User Fee Act (PDUFA) reauthorisation, which Senators have tagged “must-pass” bills for Congress to have approved and sent to President George W Bush before the August recess.
“Due to the scientific complexity and uncertainty regarding biologics, premature and ill-considered solutions should not be included in the discussion of those must-pass bills,” Sen Enzi told the hearing. He warned: “if we get this balance wrong, then we face two potential undesirable outcomes - either no new biologics will be available to provide the next cure for the most horrid diseases, or individuals will die as we rush products to market without considering their safety implications.”
– Meantime, this Thursday, the full HELP Committee will hold a hearing on prescription drug user fees. By Lynne Taylor