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Generic Biotech Effort Picks Up Steam in Congress

Thu, 03/26/2009 - 11:33am
MATTHEW PERRONE AP Business Writer WASHINGTON (AP) — Biotech drugs that now cost thousands of dollars per month would have to compete with lower-cost generic versions after just five years on the market, under a new congressional proposal. The bipartisan bill introduced Thursday is the latest salvo in a years-long effort to lower the price of biotech drugs, high-tech injectable medications that cost the nation more than $40 billion per year. The proposal from Sen. Charles Schumer, D-N.Y., and Susan Collins, R-Maine, suggests generic drugmakers are gaining traction for their long-sought goal: a speedy, low-cost pathway to market for generic biotech. Biotech drugs, which are made in living cells, currently don't face generic competition because the Food and Drug Administration doesn't have power to approve copies of such medications. Efforts to change that have been held up for nearly a decade by squabbling between the biotech and generic drug industries and their allies on Capitol Hill. Biotech companies have demanded at least 14 years on the market before their products face generic competition. But that number appears increasingly unlikely as President Obama and congressional Democrats hail generic biotech as a way to lower health care costs. The bill authored by Schumer and Collins would give biotech drugs just five years of market exclusivity and up to three more years for modifications. "It's past time we created a way for generic versions of these expensive drugs to come to market," Schumer said. "We have a bipartisan plan that we know consumers will support and we believe the president will too." The bill from Schumer and Collins closely mirrors legislation introduced earlier this month by Rep. Henry Waxman, D-Calif., a longtime ally of generic drugmakers like Teva Pharmaceutical Industries. Similar to Waxman's bill, Schumer would have the FDA determine whether a company must test its generic biotech drug on patients before launching it. Generic companies are concerned a requirement for clinical testing could drive the price of generics nearly as high as the originals. Industry analysts said Thursday's announcement does not bode well for biotech powerhouses like Amgen Inc. and Genentech. "From the biotech perspective, this is not a positive development," said Mark Schoenebaum, an analyst with Deutsche Bank. "But I think most of the stakeholders understand there's going to be a compromise on exclusivity." The lawmaker best positioned to hammer out an agreement is Sen. Ted Kennedy, D-Mass, who heads the committee that oversees the FDA, which would have to approve any generic biotech drugs. Biotech drugs were not included in the 1984 law that first allowed the FDA to approve copies of traditional, chemical drugs. At the time the biotech industry successfully argued that their drugs were too complex to be duplicated by generic competitors .A Senate aide said Thursday that Kennedy would not endorse the five-year approach. Instead the 77-year-old Democrat — whose home state is a biotech stronghold — plans to seek 12 years of market exclusivity. Companies like Cambridge, Mass-based Biogen Idec. argue that their products deserve longer market protection because they are more expensive and time-consuming to produce than regular drugs. Industry groups warn that a truncated exclusivity period could discourage companies from investing in drug development, resulting in fewer new medications.
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