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New Biosimilars Bill Introduced in U.S. Congress as Wal-Mart Reveals US$1 bil. Savings from its Generics Programme25 Mar 08As retail chain Wal-Mart revealed that U.S. consumers saved US$1 billion in 2007 due to the retail giant's cheap generics programme, efforts are being reinitiated in Congress to pass legislation allowing the abbreviated approval of biosimilars.
Biosimilars Bill Introduced in House of Representatives On Thursday (20 March) Representatives Anna Eshoo (Democrat, California) and Joe Barton (Republican, Texas) introduced a bill that would allow the U.S. FDA to approve generic versions of biotechnology drugs, according to CongressDaily. A similar bill proposal stalled in the House last year, while the Senate's Health Committee has approved its own version of a biosimilars approval bill. Based on the CongressDaily report, it seems that there is great similarity between the House and Senate versions. The proposed House bill also seeks to guarantee at least 12 years of market exclusivity for originator biotech products before FOBs are allowed on the market. However, the House bill could also see the market exclusivity extended by another two-and-a-half years in certain cases. Both the Senate and proposed House versions would allow the FDA to remove clinical testing requirements at its discretion. Furthermore, the House bill would allow FOBs to be classified as interchangeable with the originator product (as generics copies are) if the FDA is satisfied that the scientific evidence supports interchangeability. As Wal-Mart Tallies 2007 Generics Savings Meanwhile retail giant Wal-Mart announced that U.S. consumers saved US$1 billion in 2007 thanks to its cheap generics programme. The programme was launched in 2006 and offers 361 generic formulations of 157 active ingredients for US$4 per 30-day supply (or US$9 for a month's supply of contraceptives). Last year was the first full year that the generics programme has been in place. Wal-Mart also claims that there have been indirect as well as direct savings, because its initiative has forced other retailers and pharmacies to lower their own prices for generics as well. Outlook and Implications Wal-Mart's data puts a monetary value to savings made from access to cheap generics under its own programme. Across the U.S. market, the savings made as a result of increased generic use are even more substantial and have managed to offset the spending growth linked to price increases for branded drugs. Considering the higher cost of biotech drugs in comparison to small chemical drugs, biosimilars carry an even greater potential for savings. The chief medical officer at the PBM Express Scripts, Steven Miller, recently testified at a congressional hearing that biosimilars could generate savings of US$71 billion over 10 years—of which US$3.5 billion would come in the first year. Despite the appeal of pharma cost savings, Congress has so far failed to authorise the FDA to approve FOBs. Biosimilars or FOBs are more difficult to produce compared to generics, which are copies of simpler small molecule drugs. Generic producers can fairly easily demonstrate that their product is an exact chemical copy of the reference drug and are allowed to skip clinical trials if they can establish bioequivalence to the reference product. This results in lower clinical trial costs and allows numerous companies to cheaply manufacture copies of branded drugs after their patent has expired, resulting in sharp price declines and substantial savings. Things are more complicated for copies of biotech drugs. The reference biotech product is often not fully characterised and exhibits significant differences between lots. Those wishing to make copies of it can hope to achieve biosimilarity at best, which suggests that some degree of clinical testing is required to ensure safety and efficacy. Companies attempting to make FOBs claim that new characterisation techniques are so advanced that they ensure a high degree of similarity and eliminate the need for large trials. Drug regulators, on the other hand, maintain that some degree of clinical testing is needed. Establishing the type and amount of tests required to establish the safety and efficacy of FOBs will emerge as a major challenge for the FDA once Congress grants it the required authority to approve FOBs. It will take months for the House and Senate to approve a final harmonised version of their respective biosimilar bills. It will then take the FDA at least 2-3 years to establish abbreviated approval guidelines for the main classes of biotech drugs. However, pressure from PBMs and from employers participating in the Coalition for a Competitive Pharmaceutical Market—who are motivated by the desire for greater pharmaceutical cost savings—could speed up the biosimilars bill and its practical application. |
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