This story was written by James Bianco, M.D., prinicipal founder, CEO, and director of Cell Therapeutics (CTIC), which is a member of the ETF Innovators Emerging Bio-Pharma Index:
Related Article on Momenta Pharma (MNTA) by Mike Havrilla:
President Obama's first budget calls for the creation of a regulatory pathway for the creation of follow-on, or biosmiliar, biologics. This is obviously now the most high-profile call yet to move forward with a system that will provide the benefit of biotech drugs to patients who need them the most.
The biotech industry has done an outstanding effort in the last 10 years producing some of the most high-tech but also the most expensive drugs on the market. Some biotech medicines cost hundreds of thousands of dollars each year. Many of these products face no competition, because there is no legal way for a generic version of the product to get on the market. Individual patients as well as the healthcare system generally simply cannot absorb these continually rising costs.
To date, the debate over follow-on biologics has been mostly political posturing between the trade groups that represent the generic drug industry and the pioneering companies. The generic industry wants biotech companies to have only three to five years of market protection after bringing a new drug to market. The industry counters it needs up to 14 years of exclusivity to recapture its investment costs, which can reach over $1 billion for a single product.
In biotech's early years, when there were no products on the market, the industry liked to call itself the "good guys with the white hats." Back then, the pioneering companies didn't act like the large pharmaceutical companies and concern themselves with protecting profits or defending high prices, and the industry avoided the public scorn that big pharma received.
Now, with its top-tier companies making large profits, the biotech industry is in danger of falling into the same trap. Its only response so far has been political obfuscation. While visiting one Congressional office last year, a staffer told me that some biotech companies claimed follow-on biologics "would kill people." This does a real disservice to the thousands of biotech researchers who work overtime to bring innovative drugs to patients.
With the President's announcement, the handwriting is on the wall—follow-on biologics will become a reality. This will be good for patients. But patients will benefit only if the law appropriately balances the need for competition with the need to protect innovation. While the innovator industry needs to be open to competition, the generic drug industry must recognize that the biotechnology industry is one of the few industries in the United States that continues to lead the world and must be given ample and reasonable opportunity to recoup research costs.
In addition, the generics must recognize that good patient care demands that manufacturers show that their products are safe and effective before they are allowed on the market. For biologics including follow-on types, the only way to demonstrate this is through clinical trials, though, follow-on biologics should be on an expedited track without the full Phase I, II, and III trials. This should be required by law. The details should be left to the scientific experts at the FDA.
Technological and scientific advances have shown that biological products can be brought to market more efficiently while maintaining the highest standards of safety and effectiveness. Congress should develop a follow-on pathway guided by science and patient care.
Patients need these drugs now. What they don’t need is more of the same politics. The biotech industry should, as it always has in the past, support scientific innovations including those inherent in developing follow-on biologics and assist Congress in making this a reality.
$7.97 (03/12/09)
