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Feature Articles : Dec 1, 2008 (Vol. 28, No. 21)

Status of Biosimilars in U.S. Could Soon Change

Review of the Technical and Legal Issues Delaying Approval of Generic Biologics
  • Veronica Mullally

Biologics are one of the fastest growing and most expensive categories of drugs. They typically cost 20 times more per patient per day than traditional small molecule drugs. By 2009, U.S. sales alone are estimated to reach $90 billion and by 2010, approximately $10 billion worth of biopharmaceutical drugs are expected to lose patent protection. This article reviews biologics and the regulatory framework governing them in the U.S.

Biologics comprise a wide range of products such as vaccines, blood and blood components, antitoxins, allergenic products, diagnostic devices, somatic cells, gene therapy, and tissues. It is the therapeutic proteins and antibodies, however, that form the largest part of the surging biologic drug market.

Large pharmaceutical companies, whose focus has traditionally been on small molecule drugs, are now seeking out biologics to bolster their pipelines. Recently, Schering Plough paid $12.1 billion for Akzo Nobel’s biotechnology division and AstraZeneca followed suit with its $12.3 billion purchase of MedImmune.

Nevertheless, biotechnological manufacturing is particularly challenging. The development of biotherapeutics (complex proteins and antibodies) is much more costly than the development of traditional synthetic organic chemical drugs. Because biologics are mostly large molecule drugs and can be produced only within living cells, the complexity and cost of producing biologics is far greater than that of manufacturing traditional, small molecule drugs in specialty chemical plants.

Traditional small molecule drugs are approved under the Food Drug and Cosmetic Act (FDCA) through an NDA. Since small molecule drugs are capable of chemical synthesis, identical generic versions of these drugs can be approved under Hatch-Waxman through the ANDA. Contrastingly, biologics are regulated by the FDA under the Public Health Service Act via a BLA.

These are typically protein hormones or monoclonal antibodies made via genetic engineering in living cells. Generic versions are made in different cell lines than the innovator’s cell line and therefore can never be identical to the approved drug because each different cell line and any variation in the tissue culture conditions can result in changes in the protein structure and its glyscosylation pattern.

In 1984, Congress amended the FDCA and the patent laws to provide access to cheaper generic drugs by allowing ANDA to rely on the clinical trial data of the innovator thereby significantly reducing the cost of achieving approval of a generic version of the innovator’s drug. The Act incentivises innovation by providing for various terms of market exclusivity for newly approved drugs and by offering an automatic stay of approval of ANDA applications to permit the NDA holder to assert its patents against the generic.

In the past, the FDA approved a few simple biologics as drugs with NDAs under the FDCA, which caused some confusion regarding potential approval of generic versions. Since most biologics are approved by BLA, they are not listed drugs under the FDCA that can be relied upon in a 505(b)(2) application for a generic version.

There are major safety concerns with biologics and the central issue for the FDA is how to evaluate the safety of a generic product without requiring clinical trials. Innovator companies continue to argue that the science is not advanced enough to allow generic biologics to bypass clinical trials. On the other hand, generic manufacturers argue that there is no reason to delay consumer access to affordable medicines when sound science supports approval via an abbreviated less costly route. The FDA’s position is that Congress must act to provide new statutory authority before it can approve generic biologics.

The U.S. is lagging behind the EU in addressing the issue of biogenerics or biosimilars, and many believe it will be several more years before biosimilars are allowed access to the market. In Europe, numerous generic biologics have already been approved. While U.S. lawmakers have continued to delay in creating a regulatory pathway for biosimilars, or biogenerics, Canada has followed Europe’s lead.

Proposed Legislation in Congress

The high cost of biotech drugs continues to provide significant motivation for Congress to act. Sales of biologics accounted for $40.3 billion of the total U.S. drug expenditure in 2006. Furthermore, billions of dollars worth of biologics are losing patent protection in the next few years without a route for approval of generic versions.

Over the last few years, various bills proposing a route to approval for generic biologics have been introduced in the House and the Senate. Further legislative developments are likely to be postponed until after President-elect Obama is inaugurated.

Biotech innovators should realize that it is only a matter of time before legislation will be passed to provide for the approval of generic biologics and they must begin thinking about life-cycle management for their products just as their small molecule pharma counterparts have been doing for years.

One advantage that the biotech innovator may have over a pharma counterpart is that generic versions of biologics are not likely to be significantly cheaper than the innovator product, as generic small molecule drugs typically are. Also, patients are less likely to switch to the generic version of a first-generation product if it is not significantly cheaper than the second-generation product, which may offer significant improvements. In any event, biotech innovators should be aware that generics are on the horizon and that their R&D and patenting strategy should reflect that.

While high costs may deter small players from entering the generic biologics market in the U.S., major generic players have been getting ready to enter the U.S. market for years by honing their biotech skills in nonregulated markets and building biotech plants in Mexico and Canada. Controlling healthcare costs will no doubt be a top priority for Congress and President-elect Obama and allowing access to generic versions of biopharmaceuticals will likely be seen as a step toward that goal. Therefore, it is highly likely that we will see legislation to provide for generic biopharmaceuticals enacted in 2009.