FOR DECADES, patients have benefited from the lower prices of generic drugs after name-brand patents have expired. Now, government officials want to do the same for a new type of drugs called biologics, which are based on living cells.
But the biotech companies that devise and produce these complex new drugs are at odds with the generic manufacturers that want to get into the market. The dispute is so deep that biotech officials refuse to call the copycats "generics" or "biogenerics," since those terms carry a suggestion of duplication. Biotech prefers to call them "follow-on" drugs or "biosimilars." The two sides are so deeply divided that Congress has not been able to legislate ground rules for approval of the knockoffs by the Food and Drug Administration.
This failure is lamentable; the sooner the cheaper drugs can be approved for use, the better.
President Obama has stepped into the donnybrook by calling for a resolution to the FDA approval issue. The budget he released last month would devote the savings that government health programs would gain from using generic biologics to a healthcare reserve fund for overall reforms of the system. In 2006, patients spent about $40 billion on the drugs to treat diseases ranging from multiple sclerosis to cancer. Analysts believe generics could reduce their cost by about one-third.
But government action should not be so supportive of generics that innovation by biotech would be stifled. A 2006 study by the Tufts Center for the Study of Drug Development found that clinical development times for biologics were longer than for regular drugs. Biotech firms say that for this and other reasons their products deserve at least as long a period of patent protection from competition - roughly 14 years - as regular drugs. Not surprisingly, generics makers think the period should be much less.
In 2007, Senator Edward Kennedy's health committee approved a bill that granted biologics a 12-year free pass, which pleased biotech companies. To aid generics makers, the bill granted the FDA the discretion to waive costly human clinical trials for generic biologics. The bill also envisioned the possibility that generic biologics might one day be considered interchangeable with the original drugs, allowing pharmacists to make the switch without a doctor's OK.
It's a delicate balance. Congress should have passed the Kennedy bill or something close to it two years ago. A push for action from Obama now is welcome, but it should not leave the biotech industry so weakened by generic competition that the pipeline for new life-saving medications dries up.