By Donald Zuhn --
Last Friday, Medco Health Solutions, Inc. added its name to the list of companies seeking a follow-on biologics (FOB) regulatory pathway (see Reuters report). The endorsement was not entirely surprising given Medco's vested interest -- the company, based in Franklin Lakes, NJ, is the nation's largest mail order pharmacy and a leading pharmacy benefit manager (PBM). According to Medco's website, it manages prescription drug benefit programs for about one-third of the companies on the Fortune 500 list, and counts among its clients BlueCross/Blue Shield plans, managed care organizations, insurance carriers, third-party benefit plan administrators, employers, state and local government agencies, and union-sponsored benefit plans. Medco also claims to provide PBM services for approximately one in five Americans.
In backing the establishment of an FOB pathway, Medco believes that more than $34 billion worth of biogeneric drugs could become available in the United States between 2013-2017 if Congress were to establish such a pathway. The company's calculations are based on the establishment of an FOB pathway by 2011 with a subsequent two-year interval for follow-on biologics to become available after innovator patent rights expire. Medco listed Johnson & Johnson's Remicade, Amgen's Aranesp, and Genentech's Avastin as among the big-selling biologics that would become available in the 2013-2017 time period.
Medco believes that the issue of establishing an FOB regulatory pathway will likely take on a "new urgency" now that the Democrats have gained tighter control of the House and Senate. While this may be debatable given the country's current economic crisis, there is no doubt that an FOB regulatory pathway would be a boon to Medco. The company acknowledged as much, noting that it already profits from the availability of lower-cost generic drugs, and telling investors that biogenerics would be "one of [Medco's] possible growth drivers." Chief Financial Officer Rich Rubino added that biogenerics represented a "very powerful opportunity" for Medco and its clients.
In a report in the Wall Street Journal's Health Blog earlier this month, Medco CEO Dave Snow was quoted as saying that "the odds of the Democrats’ version [of an FOB bill] going through relatively quickly are really high." Snow told the WSJ Health Blog that 16% of all biotech drugs dispensed by Medco are already off patent, and that an additional $10 billion worth of biologic drugs would see their patent protection expire by 2010.
For additional information regarding this and other related topics, please see:
• "Former House Ways and Means Economist Claims 7-Year Data Exclusivity Period Is Sufficient," November 20, 2008
• "A Second Look at President-elect Obama's Technology Platform," November 4, 2008
• "Follow-on Biologics in the News," September 23, 2008
• "BU Economics Professor Releases Report on the Impact of Marketing Exclusivity on Biologics Innovation," September 18, 2008
• "Congressional Fact-finding on Follow-on Biologics," August 13, 2008
• "CBO Releases Report on Senate Follow-on Biologics Bill; BIO Calls for Congress to Pass Biologics Bill in 2008," July 1, 2008
• "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
• "Biologics Legislation Faces Unresolved Issues," December 28, 2007
• "Senate Committee Passes Biologics Legislation" July 5, 2007
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