Monday, March 16, 2009

Legislation for Follow-on Biologics Must Not Hinder Innovation

California Healthcare Institute supports the creation of a science-based pathway for the U.S. Food and Drug Administration (FDA) to review and approve follow-on biologic drugs. But we are concerned that the legislation introduced today by Chairman Waxman, Representatives Pallone, Deal and Emerson may actually hinder the development of new biotechnology therapies.

To serve the public interest, follow-on biologics legislation should incorporate three essential principles: employing the best science to make sure that products are safe for patients, encouraging price competition among manufacturers, and providing ample incentives to encourage continued private-sector investment in the next generation of breakthroughs.

While the FDA has an excellent track record ensuring the safety of generic drugs, scientists at the agency are far more cautious about follow-on biologics. Generic drugs are chemical compounds whose molecular structure can be copied precisely. The Waxman legislation would give the FDA wide discretion to determine what studies are necessary to determine the safety and efficacy of a follow-on biologic, and whether a follow-on product could be considered interchangeable with an innovator’s drug. In fact, the bill would empower the Secretary of Health and Human Services to make determinations of interchangeability before the FDA has completed its scientific and technical analyses. Yet biologics are genetically engineered living cells, which are vastly more complex than traditional pharmaceuticals. Indeed, FDA officials have suggested that biologics’ complexity is so great that even using the most advanced science, there is no way to know whether or not a follow-on biologic is an exact copy. Clearly there is a need for clinical studies, well beyond the requirements of the Waxman bill, to ascertain the safety of follow-on biologics.

The new legislation poses economic risks as well. It mirrors the Hatch-Waxman bill of 1984, which opened the door to generic drugs. Hatch-Waxman allowed innovators a protection known as the “data exclusivity period.” The innovator’s drug was permitted a minimum of five years post-approval on market before a generic competitor could use the original manufacturers’ clinical trial data to establish the generic’s safety and efficacy. The new legislation would extend this same approach to biologics. Yet today’s biotech industry, and the time and expense of developing a novel biotech drug—now more than 15 years and almost $1 billion—bear little resemblance to 1984’s pharmaceutical industry. Other legislative approaches, including one endorsed by Sen. Kennedy, have included substantially longer periods of data exclusivity. And we believe an extended period is necessary to encourage investors to continue to put up the risk capital on which the entire American biotechnology industry was founded.

Biologic drugs represent the cutting edge of medical research and biotechnology has developed advanced therapies and treatments for patients based on this technology. Continued research and development will lead to better, more personalized treatments, and perhaps cures, for these and other rare diseases.

Our industry supports more than 270,000 jobs in California—a number that balloons to more than one million when one considers indirect employment statistics—many of which are high-wage, high-value jobs. We are one of the few sectors of the economy creating jobs; a vital engine driving California’s future. As an industry dependent on large and risky investments to support research and development timelines that take more than 15 years, though, our firms are struggling like many others in the current economy. Promising research that could lead to cures and treatments for cancer, HIV/AIDS, Parkinson’s and other diseases are jeopardized by policies that do not reward innovation.

We urge Congress to move carefully on this issue and ensure that any pathway for approving follow-on biologics respects sound science, safeguards patient safety and provides incentives to continue research and development of breakthrough therapies and cures.

CHI-Advancing California biomedical research and innovation

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