The American: Following Europe’s Lead on Biotech Drugs « The Enterprise Blog

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When Congress rushes to pass a healthcare reform bill of 2,000 pages or so, you have to worry about what will be slipped in, pulled out, or just changed in a few details. One inside-the-Beltway item is constructing a regulatory pathway for the approval of “biosimilars” or “follow-on biologics” (FOBs for short). Biologics are different from traditional drugs because instead of being relatively simple chemicals, they are hideously complex proteins that are essentially grown in high-tech vats, often after undergoing sophisticated biotechnology procedures that may involve changes in DNA, the use of bacteria to express humanized proteins, and so on and so forth. For old-fashioned drugs, the 1984 Hatch-Waxman Act makes it easy for generic manufacturers to enter the market after pioneer patents expire. They can do that because they do not have to re-run the clinical trials that supported original FDA approval of the pioneer drug, but instead can make use of the data from those trials even though the data are the intellectual property of the pioneer firms.

There is no Hatch-Waxman-like regulatory pathway for most biologics, and thus no easy way to foster competition after patents expire. Both the House and Senate healthcare bills include an FOB provision. Of special importance is “data exclusivity.” This refers to how long a generic manufacturer must wait until it can piggyback on pioneer drug data—in case the patents expire unusually soon after the pioneer obtains FDA approval. For chemical-based drugs, this is about five years, but it does not often come into play because most drugs are approved with more than five years of patent life left. For biologics, the situation is murkier, for two reasons. One is that for the foreseeable future, exact generics—which are essentially interchangeable with the original, like a generic version of amoxicillin—will not be created by anyone. The manufacturing process is just too complex and unpredictable. That means that the FDA will require at least some clinical trials for the FOB, although probably nowhere nearly as long or intense as were required for pioneer drug approval.