By Donald Zuhn --
Last week, we reported on a campaign being initiated by Insmed Inc. to raise public awareness regarding the importance of establishing a regulatory pathway in the U.S. for follow-on biologics. As part of the campaign, Insmed commissioned a study by economist Dr. Robert J. Shapiro (at right) to determine the cost benefits to patients and healthcare providers from the establishment of a follow-on biologics market in the U.S. Earlier today, Dr. Shapiro held a conference call with a handful of biotech and pharma bloggers to provide a briefing on his report, entitled "The Potential American Market for Generic Biological Treatments and the Associated Cost Savings."
Dr. Shapiro, who served as Under Secretary of Commerce in the Clinton Administration and who is the current chairman of Sonecon, LLC, a private firm advising U.S. and foreign businesses, governments, and non-profit organizations, concludes in his report that "generic versions of the top 12 categories of biologic treatments with patent protections that have expired or that are due to expire in the near future could save Americans $67 billion to $108 billion over 10 years and $236 billion to $378 billion over 20 years." During the conference call, Dr. Shapiro reiterated that the cost savings to patients and health care providers from a European-style follow-on biologics regulatory pathway would be "very, very large."
While acknowledging that Congress could craft a regulatory pathway that places many barriers in the way of the biogenerics, he did not think Congress would do so in view of the healthcare financing burdens it was facing. Moreover, in order for the cost savings detailed in Dr. Shapiro's report to be realized, it was imperative that Congress create an "expedited" pathway in which biogeneric companies would not be required to conduct full clinical trials, but rather would only have to show that a follow-on biologic meets the standard of "profound" or "effective similarity" with respect to the corresponding brand name biologic. According to Dr. Shapiro, if biogenerics were required to perform full clinical trials, fewer biogenerics would attempt to enter the market, and the reduced competition would result in far less cost savings. However, with a fairly expedited regulatory pathway in place, Dr. Shapiro predicted cost savings of at least 35%, if not more.
Dr. Shapiro dismissed a conclusion reached by other researchers that the barriers to entering the biologics market would be large for biogenerics, since biologics are much more expensive to manufacture than small molecule therapeutics. Instead, Dr. Shapiro contended that the barriers would actually be smaller than others predict since biogenerics have alternatives to erecting costly biologics manufacturing facilities, including outsourcing to foreign producers, partnering with European biogenerics, or using now idle U.S. plants. However, when reminded about the problems Chinese companies have been having in providing safe chemicals, Dr. Shapiro conceded that "whatever the price savings are, they're not enough if the [foreign-produced] product is not safe."
Although Dr. Shapiro recognized that data exclusivity was an "important issue" and noted that he had written about this issue in the past, he stated that he did not take any data exclusivity provisions into consideration in preparing his report. Interestingly, when asked to identify the largest obstacle that Congress would face in creating a regulatory pathway for follow-on biologics, Dr. Shapiro responded that it would be designing a pathway that establishes both the safety and effectiveness of follow-on biologics, and not selecting an acceptable data exclusivity period. Nevertheless, Dr. Shapiro was confident that Congress would be able to overcome the "fairly unique challenges" that creating a follow-on biologics -- as opposed to small molecule -- regulatory pathway presented.
For additional information on this and other related topics, please see
• "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation - Part II," February 14, 2008
• "Insmed Announces National Awareness Campaign Regarding Follow-on Biologics," February 13, 2008
• "Millennium Pharmaceuticals Spent $1.28 Million on Lobbying in 2007," February 8, 2008
• "Biologics Legislation Faces Unresolved Issues," December 28, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Biotechs Facing New Challenges," August 13, 2007
• "Three New Biosimilars Pass EMEA Test," July 26, 2007
• "European Medicines Agency Releases Paper on Biosmiliar Medicines," July 23, 2007
• "Senate Committee Passes Biologics Legislation," July 5, 2007
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