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Senators Announce Bipartisan Proposal To Bring Generic Biologic Drugs To Market, Saving Billions In Medicare Costs

  • Measure Would End Brand-Name Drugs' Monopoly By Allowing Cheaper, Generic Versions To Compete
  • Biologics Are Cutting-Edge Drugs Made From Living Cells; Currently, Few Biogenerics Exist Because FDA Has No Pathway To Approve Them
  • Bipartisan Bill Would Allow Generics To Compete With Brand-Name Drugs After Five Years Instead of Pharmaceutical Industry's Preferred 14-Year Window


WASHINGTON, March 26, 2009—U.S. Senators Charles E. Schumer (D-NY), Susan Collins (R-ME), Sherrod Brown (D-OH), Mel Martinez (R-FL), Debbie Stabenow (D-MI) and David Vitter (R-LA) announcedThursday thatthey have reached agreement on bipartisan legislation to create an approval pathway for generic versions of biologic drugs. The measure, which was endorsed in President Obama’s budget proposal, would save federal programs like Medicare and Medicaid at least $10 billion dollars by bringing needed competition to the marketplace.
Biologics, which are also known as biotech drugs or biopharmaceuticals, are made from living cell cultures, rather than synthesized chemically. They are among the most expensive varieties of pharmaceuticals on the market, but generic versions of these drugs are rare because the Food and Drug Administration (FDA) currently lacks a formalized process, or “pathway,” for approving them. The senators’ legislation would solve this problem by establishing just such a pathway.
Consistent with the standard established by the landmark Hatch-Waxman Act of 1984, brand-name biologics would be entitled to five years of exclusive marketing under the bill introduced today. This five-year window would not begin at the time of the bill’s enactment, but rather from the time when the brand-name drug was first approved. So, in the case of some biologic drugs that have been on the market for 20 years with no competition, generic companies can seek approval for more affordable versions almost right away.
“It’s past time we created a way for generic versions of these expensive drugs to come to market. We have a bipartisan plan that we know consumers will support and we believe the President will, too. The savings reaped from this will be a down payment on health care reform,” Senator Schumer said.
“Biologic drugs provide effective treatments for some of our most devastating diseases,” said Senator Collins. “Unfortunately, however, these drugs are often prohibitively expensive and can cost tens of thousands of dollars a year.  For example, the cancer drug Avastin has an annual cost of up to $100,000. People who need these drugs should not be denied access solely on the basis of cost.  Using competition to bring generic versions of these medicines to the market will help offer patients, employers, and federal and state health programs cost savings.”
“This bill is about containing health care costs by encouraging competition in the pharmaceutical marketplace,” said Senator Brown. “The bill would create a pipeline for generic biologics by creating a safe and efficient evaluation and approval process at the Food and Drug Administration (FDA). Biologics are a new generation of life-saving treatments for diseases like cancer, arthritis, and diabetes, but they are often prohibitively expensive. Just as the availability of generic drugs have helped bring down the costs of medicines for millions of Americans, competing versions of brand-name biologics will make these breakthrough treatments more accessible and affordable for middle class families.”
“By striking the right balance between competition and rewarding innovation, we can encourage the development of new treatments while driving down the cost to consumers,” said Senator Martinez, ranking member of the Senate’s Special Committee on Aging.
“Families in Michigan and across the country are struggling with the skyrocketing cost of prescription drugs. We need to do everything that we can to keep those prices under control,” said Senator Stabenow.  “Lowering the cost of prescription drugs is not only good for patients, it is good for business.  It helps America to protect jobs and stay competitive in the global economy. Opening the market to generic biological drugs will provide real savings to businesses and consumers who use some of the most costly medications.”
“All Americans deserve access to safe and affordable medication and bio-generics provide a cost-effective alternative to high-cost, name-brand drugs,” said Senator Vitter.  “This is a truly non-partisan issue that resonates with families across the country.”
Rep. Henry Waxman (D-CA) and Nathan Deal (R-GA) have introduced a similar measure in the House.
The senators said that FDA approval for generic biologics would bring patients much needed relief from the high costs of the brand-name versions of these medicines. One of the most popular biotech drugs is Avonex, which treats multiple sclerosis. It costs almost $20,000 a year even though its patent expired in 2003.Avastin, which treats colorectal cancer, costs $43,000 per course of treatment.AndEnbrel, a drug for rheumatoid arthritis, can cost up to $25,000 per year.
Under the senators’ bill, an application for a generic version of a biological drug must demonstrate to FDA that there are no clinically meaningful differences between the two products.  The application must also show that the two products are highly similar in molecular structure and share the same mechanisms of action, if known. Importantly, the legislation establishes tracks for two different types of generic drugs: “biosimilars,” which means the generic is "like" the brand drug, and “biogenerics,” which means a doctor will be able to substitute it for the brand.
The bill also establishes a procedure for resolution of patent disputes before a biosimilar is approved, and establishes penalties for failure to litigate patents in a timely fashion.
The senators said Thursday they look forward to working with Senator Edward Kennedy, Chairman of the Senate Committee on Health, Education, Labor and Pensions, to develop a pathway based on their legislation. In 2007, Kennedy was a critical leader of a bipartisan group of senators that hatched a compromise proposal on generic biologics. Several aspects of the bill introduced today remain true to that compromise—for instance, today’s bill gives the FDA full discretion to determine what studies are necessary to establish that a biogeneric is as safe and effective as the original product.
The senators said they look forward to kicking off negotiations on this issue anew now that Congress is considering broader health reform.

Posted: March 2009