Saving Billions: The Case for Effective Biogenerics Legislation

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