By Donald Zuhn --
Last week, the Congressional Budget Office (CBO) released a report on the Biologics Price Competition and Innovation Act (S. 1695), which would establish a pathway for the FDA to approve follow-on biologics. The report was commissioned last summer by the Senate Committee on Health, Education, Labor & Pensions, which announced on June 27, 2007 that it had passed the bill (see "Senate Committee Passes Biologics Legislation"). The Senate bill has not yet been taken to the floor for a vote.
The 11-page CBO report states that:
Enacting S. 1695 would reduce total expenditures on biologics in the United States by $0.2 billion over the 2009-2013 period and by about $25 billion over the 2009-2018 period. (Over that 10-year period, such savings would equal roughly 0.5 percent of national spending on prescription drugs, valued at wholesale prices.)
The CBO report also concludes that "enacting the bill would reduce budget deficits (or increase surpluses) by a total of $52 million over the 2009-2013 period and by $6.6 billion over the 2009-2018 period." The report notes that its savings estimates were determined by predicting spending on "a select group of biologics likely to experience competition over the next 10 years." The report does not, however, specifically identify the biologics that were analyzed in developing its S. 1695 cost estimate.
According to the CBO report, key provisions of S. 1695 include:
• A one-year period of market exclusivity for the first interchangeable follow-on biologic (FOB) that references a particular innovator, or branded, drug (wherein "market exclusivity" means that the FDA would be prohibited from approving a subsequent interchangeable product during that period, and "references" means to rely on data from the innovator's original FDA application).
• A twelve-year period of data exclusivity for the innovator drug beginning with the FDA's licensing of the innovator drug (wherein "data exclusivity" means that the FDA would be prohibited from approving an FOB that references a particular innovator drug).
The Biotechnology Industry Organization (BIO) wasted little time in releasing a statement regarding the CBO report. Noting that the CBO report determined that most of the cost savings from the creation of a follow-on biologics regulatory pathway would be realized at least five years after such a pathway was established, BIO stated that this only reinforced the need for Congress to develop and pass a responsible pathway this year.
BIO also has expressed no particular preference for any of the pending follow-on biologics bills, stating that H.R. 1956 (the Patient Protection and Innovative Biologic Medicines Act of 2007), H.R. 5629 (the Pathway for Biosimilars Act), and S. 1695 all would "come close" to striking a balance between meaningful cost savings for biologics spending and providing needed protections for innovator drug makers. However, the BIO release warned that "Congress must ensure proper incentives for continued biomedical innovation in any follow-on biologics pathway so that we don’t achieve relatively minor savings as a percentage of overall health care spending at the cost of continued innovation."
For additional information regarding this and other related topics, please see:
• "Follow-on Biologic Drugs and Patent Law: A Potential Disconnect?" March 25, 2008
• "New Follow-on Biologics Bill Introduced in the House," March 18, 2008
• "Dr. Robert Shapiro Discusses Follow-on Biologics Report," February 19, 2008
• "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation - Part II," February 14, 2008
• "Senate Committee Passes Biologics Legislation," July 5, 2007
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