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Cost-control plan: generics

Drug makers may lose - or gain - if copying pricey treatments for rare illnesses is made easier

Email|Print| Text size + By Todd Wallack
Globe Staff / March 3, 2008

Cambridge-based Genzyme Corp. has developed a portfolio of life-saving medications to treat a number of rare illnesses, such as Pompe disease and Gaucher's disease. But the drugs come at a steep price: $200,000 to $300,000 a year.

In a bid to control the soaring costs of drugs, Congress is edging closer to approving a formal process to let generic drug makers market knockoffs of advanced biologic drugs, such as those made by Genzyme. Biologics are made from living organisms instead of chemicals. Europe has already approved several biogenerics - also called "biosimilars" or "follow on biologics."

"The train is leaving the station," said Barry Karger, director of the Barnett Institute at Northeastern University, which is hosting a workshop today and tomorrow to help more than 100 industry leaders prepare for the coming wave of biogenerics in the United States.

"It's happened in Europe. It's happening in Canada. And it's going to happen in the US," he said.

Whenever it happens, it's likely to have a major impact on Massachusetts, which is home to one of the largest biotechnology clusters in the world.

Drug makers like Genzyme and Biogen Idec Inc. could potentially lose billions of dollars to generic competitors. And at least one Massachusetts company, Momenta Pharmaceuticals Inc., of Cambridge, hopes to cash in on the trend by helping to develop some of the biogenerics.

In addition, health insurers and advocates are counting on legislation to help rein in drug prices and the soaring cost of healthcare. Generic biologics are expected to cost 10 to 30 percent less than traditional biotech drugs.

But the issue is hardly clear-cut. Generic versions of traditional "small molecule" drugs have been around for decades, but industry officials say it's nearly impossible to produce an exact replica of a more complex biologic.

Biotech companies sometimes have trouble replicating even their own drugs when they build new plants or change production processes.

Genzyme Corp., for instance, has struggled for months to persuade the Food and Drug Administration that the Myozme drug produced in Allston to treat Pompe disease is equivalent to the drug produced at a much smaller factory in Framingham. It now hopes to win FDA approval for the plant in May.

But because of the difficulty in copying biologic drugs, some advocates contend that any generic versions must be rigorously tested to make sure they are safe and effective - instead of just relying on the data for the original brand-name therapy. But requiring clinical trials would also be likely to deter some generic competitors, because trials typically take years and cost tens of millions of dollars or more. So far, Congress appears to be leaning toward leaving it up to the FDA to decide case by case.

In addition, generic and biotech lobbyists are bitterly divided over how long biotech companies should be able to keep their monopoly on a drug before facing competition from generics.

The generic drug industry has proposed that Washington use the same formula set up for traditional generic drugs, called the Hatch-Waxman Act. Under that 1984 law, drug makers are protected from competition for at least three to five years (plus the life of their patents).

"For the last 25 years Hatch-Waxman has been working tremendously well," said Kathleen Jaeger, president of the Generic Pharmaceutical Association, adding that there's no reason to think it won't work for biologic drugs.

But the biotechnology trade group contends companies deserve 14 years of "market exclusivity," because patent protection may be less meaningful when it comes to biologic drugs.

Executives say it takes longer to develop biotech drugs, eating up a valuable chunk of patent protection before a drug even reaches the market. And even if a patent is still in force, the group argues, generic companies might have an easier time "designing around" the patents - since biogenerics need not be exact copies of the original drugs.

"Patents don't protect us," said Jim Greenwood, president of the Biotechnology Industry Organization. Greenwood said traditional drugs are currently on the market an average of nearly 14 years before they face generic competition, so it only makes sense to give biotech companies the same protection.

Last year, Democratic senators Edward Kennedy of Massachusetts and Hillary Clinton of New York, along with Republicans Orrin Hatch of Utah and Mike Enzi of Wyoming, proposed a compromise that would give drug makers 12 years of protection for each drug, two years less than the biotech industry had proposed.

"Its provisions balanced the important goals of improving access to low-cost drugs while preserving the incentives needed for innovation to thrive," Kennedy said in a videotaped speech scheduled to be presented at the Northeastern conference.

And Representative Anna Eshoo, a California Democrat, recently teamed up with Representative Joe Barton, Republican of Texas, to propose rival legislation. It would give biotech companies 12 to 14.5 years of market protection, something the generic industry opposes as too much.

Last year, Eshoo made it clear she wants to make sure that biotech companies have strong incentives to continue developing life-saving therapies.

"We should look at ways to make biologic products more cost-effective," she said. However, "There will be nothing to copy if we don't ensure sufficient incentives exist to develop these already life-saving medicines in the first place."

Both sides expect some version of a bill to pass this year or next. But it will still probably take at least two more years for regulators to put new rules in place and for generic drug makers to win FDA approval to market the discounted drugs.

Meanwhile Cambridge-based Momenta is working with Novartis AG's generics division, Sandoz, to make copies of two brand-name biologics in Europe. Momenta is optimistic that it will eventually be able to use its expertise with complex sugars to help develop generic biologics in the United States, as well.

"We look at it as a tremendous opportunity because of the large size of the biologics marketplace," said Momenta's chief executive, Craig Wheeler.

And in a twist, Momenta hopes to use its expertise to do more than copy existing drugs - taking what it learns in the process to make even better versions of the drugs.

Unlike traditional drugs, Wheeler argues, the biology of many new biotech drugs is not well understood, leaving plenty of room for improvement.

Todd Wallack can be reached at twallack@globe.com.

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