Fact Sheets

Healthcare Reform Offers Only the Illusion of Generic Competition for Biotech Drugs: Patient Access To Expensive New Medicines at Stake

U.S. Congress is considering proposals to establish a process for regulatory approval of generic versions of biotech drugs ("biologics"). The Food and Drug Administration (FDA) approval process available for conventional pharmaceuticals does not apply to biologics, which are drugs engineered from human or animal cells using biotechnology. New and different procedures are required to demonstrate the safety and efficacy of comparable and interchangeable biologic pharmaceuticals (called “biosimilars” or “biogenerics”).

Proposals passed by the Senate and House health committees as part of healthcare reform in July 2009, however, will establish prolonged delays before permitting price-lowering generic competition. Even worse, they will facilitate brand-name companies’ ability to renew their monopolies, potentially keeping generic firms out of the market for biologics altogether and creating only the illusion of generic competition. Either result will torpedo the objective of healthcare cost containment so crucial to current reform efforts, and severely limit patient access to these important and exceptionally high-priced medicines for conditions like cancer, arthritis and diabetes.

The bottom line is this: Under these proposals, Medicare and other federal programs will find their budgets increasingly strained by growing biologic drug costs. Employers will continue to struggle to provide affordable health insurance to their employees. Americans with insurance will find it even more difficult to pay for their already sky-high prescription drug co-payments. And the uninsured may have to go without crucial lifesaving biologics.

For more information, download the .pdf version of the briefing note here: BiologicsBriefingNote28_Sept_09.pdf

Download a .rtf version of the briefing note here: BiologicsBriefingNote28_Sept_09.rtf

For more details about one of the most pressing issues in these proposals, the creation of almost indefinite monopolies through the evergreening of the data exclusivity monopoly, please see the fact sheet available here.

The Eshoo-Barton-Inslee and Hatch-Enzi-Hagan Approach to Biogenerics:
Evergreening and the Creation of Perpetual Monopolies

Congress is now considering proposals to establish a process for regulatory approval of generic versions of biotech medicines ("biologics"). Proposals passed by the Senate health committee and sponsored by Representatives Eshoo, Barton and Inslee, however, would establish prolonged delays before permitting price-lowering generic competition.

The HELP (Senate Health, Education, Labor and Pensions Committee) and Eshoo-Barton proposals would establish a 12-year marketing monopoly (known as “data exclusivity”) for brand-name biologics, a monopoly that is separate and distinct from the patent monopoly. During this period, generic competitors would be prohibited from relying on the safety and efficacy tests conducted by brand-name companies, effectively preventing them from coming to market. This excessively long period of monopoly protection (conventional drug makers get only five years) has no correlation with biologics' manufacturing or research and development (R&D) costs.

Even more worrisome, the HELP and Eshoo-Barton proposals would permit brand-name companies to pursue "evergreening" strategies that would enable them to obtain sequential 12-year marketing monopolies on biologics. The effect would be to prevent price-lowering generic competition for decades and to torpedo the objective of cost containment, which is central to current healthcare reform efforts.

You can read the remainder of the fact sheet in the continuation of this post, or download a copy below.

Click here to dowload the .pdf version of a fact sheet on this topic: BiogenericsEvergreeningJuly2009.pdf

Click here to download a .rtf version of a fact sheet on this topic: BiogenericsEvergreeningJuly2009.rtf
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The U.S., E.U., and key trading partners are negotiating an Anti-Counterfeiting Trade Agreement (ACTA). ACTA is one of several major new initiatives seeking, in part, to protect drug monopolies under the guise of fighting counterfeits. Much like a counterfeit, ACTA misrepresents its true ingredients to the public.

In a new fact sheet, Essential Action outlines some key concerns ACTA may pose, focusing on access to medicines. Then we recommend basic principles the United States and other countries should follow if they decide to continue participating in ACTA negotiations.

The concerns outlined in the fact sheet are:
- ACTA will keep medicine prices high
- ACTA threatens the generics industry
- ACTA fails to adequately address public health & safety concerns
- ACTA’s draft text is secret
- ACTA enforces private monopolies at public cost

Download a .pdf version of the fact sheet here: ACTAFactsheet.pdf
Download a .doc version of the fact sheet here: ACTAFactsheet.doc

The global "intellectual property" enforcement agenda poses profound risks for consumers in the U.S. and around the world in many ways. The risks include privacy and transparency issues and threats to access to medicines in the U.S. and the developing world.

Essential Action and other public health and consumer groups have identified several particular risks posed by the pharmaceutical monopoly enforcement agenda on access to medicines. They include:

- risks for global access to medicines and other public costs,
- how the enforcement agenda misleads policymakers and confuses public debate,
- the actual relationship between drug quality, the enforcement agenda, and counterfeit medicines,

To learn more about the the access to medicines concerns as well as to review some policy recommendations , download an Essential Action powerpoint introduction to the pharmaceutical monopoly enforcement agenda here: IPenforcementagenda.ppt

Providing timely access to affordable, safe and effective products should be the central purpose of U.S. legislation that introduces a regulatory pathway for the approval of generic substitutes for biologic pharmaceuticals (also known as “biotech drugs”). Provisions that extend the monopoly protection period of brand-name companies, making it unreasonably difficult to sell affordable biogenerics to patients as soon as possible after patent expiration, would defeat the purpose of the new rules.

What is Data Exclusivity?
When a generic company seeks approval from the Food and Drug Administration (FDA) for a generic drug, it shows that its product is the same as, or essentially similar to, a brand-name product. It then relies on, but does not repeat, the clinical tests performed by the brand-name maker. Data exclusivity prohibits the generic firm from relying on the brand-name test data, effectively barring the generic competitor from the market for a set period of time and extending the monopoly period. Data exclusivity can delay the introduction of generic competition -- keeping prices high longer -- for drugs that are not able to obtain patent protection, or for which the patent term has expired.

The Legislative Landscape and Data Exclusivity
All but one of the legislative proposals introduced by Congress to amend the Public Health Services Act (PHSA) over the past two years call for significant and unprecedented periods of data exclusivity prior to marketing approval of biogenerics (for periods ranging between 8 to 15 years, plus extensions in some cases). Essential Action believes that data exclusivity provisions should not be included in U.S. biogenerics legislation.

Click here to download a .pdf version of a fact sheet on this topic: Biogenerics_and_Data_Exclusivity.pdf

Click here to download a .doc version of a fact sheet on this topic: Biogenerics_and_Data_Exclusivity.doc

If U.S. policymakers wish to create an additional incentive in biogenerics legislation specifically to cover the cost of the clinical trials required to obtain FDA marketing approval of new biologic drugs, there are approaches -- such as sharing the cost of clinical trials -- that satisfy the public policy rationale for providing data exclusivity to innovators, at a much lower cost and while avoiding data exclusivity-conferred marketing monopolies that undermine access to medicines and other public health objectives.

If a policy decision were made that innovator companies need investment protections beyond those afforded by the patent system, the cost-sharing approach would be an efficient and pro-public health alternative to the data exclusivity (marketing monopoly) approach. This approach gives generic firms an automatic right to use brand-name originators’ data, but requires them to pay a share of the documented costs of generating the data, proportionate to the size of the markets in which they are selling their product.

Click here to download a fact sheet on this topic:Biogenerics_RD_Cost_Sharing.pdf

Providing timely access to affordable, safe and effective products should be the central purpose of U.S. legislation that introduces a regulatory pathway for the approval of generic substitutes for biologic pharmaceuticals (also known as “biotech drugs”). Provisions that extend the monopoly protection period of brand-name companies, making it unreasonably difficult to sell affordable biogenerics to patients as soon as possible after patent expiration, would defeat the purpose of the new rules.

To meet these objectives, U.S. biogenerics legislation should include provisions that encourage rapid resolution of patent disputes. Requiring brand-name companies to disclose all relevant patents is one key element to ensure potential generic competitors have sufficient information to make an informed assessment of the potential barriers to competition. Several of the biogenerics proposals under consideration by Congress do not require such disclosure as part of the proposed patent dispute resolution system, or do not contain any provisions governing patent dispute resolution related to biogenerics. Essential Action recommends that biogenerics legislation should incorporate the four principles outlined below.

Click here to download a fact sheet on this topic:Biogenerics_Patent_Litigation.pdf

There is currently no regulatory means for the United States Food and Drug Administration (FDA) to grant marketing approval to generic substitutes for brand-name biotech drugs (also known as "biologics"). The regulatory approval process available for traditional pharmaceuticals does not apply to biologics, which are sometimes more complex than conventional “small molecule” drugs both in their make-up and method of manufacture. New and different procedures are required to demonstrate the safety and efficacy of comparable and interchangeable biologic pharmaceuticals.

Generic competition is the most important means to reduce the price of medicines. A Congressional Budget Office study shows that after generic versions of conventional drugs enter the U.S. market, prices fall on average between 40 and 80 percent, depending on the number of firms entering the market. Brand-name biologic drugs cost significantly more on average than brand-name conventional pharmaceuticals, heightening the need for generics. In some cases, the cost is more than $100,000 annually, and products costing tens of thousands of dollars per year are common. But while growing numbers of patents on biologic drugs are set to expire over the next decade, American consumers will continue to pay extremely high monopoly prices for this important class of drugs, unless a regulatory process for granting marketing approval to safe and effective generic substitutes for biologic drugs is adopted.

Authorizing sales of generic biologics will save consumers and government purchasers of drugs tens of billions of dollars every year. How much consumers and taxpayers will save, however, depends crucially on the details of the new FDA regulatory approval process. A streamlined approach would ensure that safe biogenerics reach market – and deliver savings to consumers – as soon as possible. An overly bureaucratic approach, or one that confers new monopolies, will needlessly delay and reduce generic savings.


To download the .pdf version of a fact sheet on this issue, click here: BiogenericsGeneralFactSheetFinal.pdf

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