Obama Wants Action on Biogenerics

President Obama’s 2009 budget plan includes a call for access to “generic biologics,” which a Congressional Budget Office analysis says could save the government $9.2 billion over 10 years—money it could then use to support the overhaul of the healthcare system. The budget plan supports a period of exclusivity “generally consistent with the principles in the Hatch-Waxman law,” or five to seven years of exclusivity for new drugs and three years for new formulations of existing drugs.

Although there is currently no pathway for approval of follow-on biologics, some such drugs—Basel-based Sandoz’s Omnitrope, for example—have been filed under applications that contain full data sets on safety and effectiveness, where at least some of the information required for approval comes from prior studies, not conducted by or for the applicant. The biggest sticking point in the current biogenerics regulatory discussion is around the issue of data exclusivity; that is, the period of time before manufacturers could rely on the data from FDA’s approval of the ‘innovator’ biologic to support approval of the follow-on product.

The budget plan supports a period of data exclusivity “generally consistent with the principles in the Hatch-Waxman law,” which grants an innovator product 14 years on the market before facing generic competition. Now, the average small molecule is on the market for 13.5 years before it faces competition. A study at Duke University concluded last year that it takes somewhere between 12.9 and 16.2 years for a company to recover its investment in a biologic.

The data exclusivity periods previously proposed for biogenerics have ranged from 12 to 14 years. “I think it’s the most contentious item in the debate,” says Jim Greenwood, president and CEO of the Biotechnology Industry Organization, which supports a 14-year period. “Data exclusivity not only lays down the foundation for the future of follow-on biologics but for innovative biologics as well. If we don’t achieve the right balance between innovation and competition, companies will not be able to afford the gargantuan investment and take the huge risks of developing biologics and be able to recover their costs.”