Wednesday, April 22, 2009

Follow-On Biologics: 1984 All Over Again?

Orwellian resonances aside, the year 1984 is a turning point in the history of the biopharmaceutical industry. That is the year when the generic drug industry was born, thanks to a critical and unlikely compromise between Senate Republican Orrin Hatch and Democratic Rep. Henry Waxman.

Their landmark bill created an abbreviated approval process (championed by Waxman) in exchange for enhanced patent and data exclusivity protections for innovator companies (pushed by Hatch). So critical were those two lawmakers to the crafting of the legislation that the entire generic approval/patent restoration process in the US is now known simply as Waxman/Hatch (or Hatch/Waxman, depending on which party is in the ascendancy).

As 2009 gets under way, one key question for biopharma companies of all shapes and size is: can history repeat itself?

It sure looks like the stars are aligned for another historic compromise, this time over a regulatory system for abbreviated approval of biologic products coupled with some version of data exclusivity for innovators. And, as fate would have it, Henry Waxman and Orrin Hatch find themselves add odds over some key points.

Waxman, as chair of the Energy & Commerce Committee in the House, will be at the center of any legislative work on follow-on biologics this year. And he has already put a stake in the ground, offering legislation that gives innovators the same five year data exclusivity that pharmaceuticals get under the 1984 law.

Hatch is not in the same leadership position he held as a member of the Republican majority in 1984, but he is working closing with Senate Health Committee Chairman Edward Kennedy on FOB legislation. Hatch and Kennedy were among a group of senators that forged a compromise in 2007, one that would have granted 12 years of data exclusivity to innovators.

That compromise failed to reach enactment—in no small part because Waxman refused to sign on to push for action in the House.

As Congress gets back to work in 2009, it sure doesn’t sound like a compromise is close. As we reported in The Pink Sheet DAILY, Ann Witt—the key staffer to Waxman on FOBs—sure didn’t sound optimistic about getting a bill done this year when she spoke during a forum sponsored by the Jefferson School of Population Health yesterday.

Then today, Hatch himself addressed the Food & Drug Law Institute annual conference. Like Witt, he did not make any optimistic sounding assessments about the prospects for speedy enactment, saying only that “we are working on it.”

Instead, he highlighted his frustration with New York Democratic Sen. Chuck Schumer for, in effect, defecting back to Henry Waxman's camp in 2009.

"I have some very serious reservations about some of the bills that have been recently introduced," Hatch said. "Sen. Schumer’s bill mirrors Chairman Henry Waxman’s….I was surprised to see Sen. Schumer pushing for this new approach, especially since he was the one who really sealed the deal for 12 years of data exclusivity in the last Congress with us. He came along and realized it was an important thing to do. It is frustrating to me to see that we are so quick to wipe out the incentives for innovation."

This whole exclusivity question sure does get people fired up. Indeed, your humble blogger can testify that innovators and would-be follow-on companies seem very far apart on the question of exclusivity, having gotten an earful from both sides for suggesting during a presentation at the Jefferson School event that the whole question of how much exclusivity is less important than what the follow-on biologics marketplace will actually look like. (A webcast of the event is available here.)

Generic companies, in the words of Boston University Economics Professor Laurence Kotlikoff described industry’s “support” for follow-on biologics in exchange for 14 years of exclusivity protection as simply an effort to “kill biogenerics.” Away from the dais, representatives of innovator biotech companies suggested five years of exclusivity would kill innovation.

Still, as David Nash, Dean of the Jefferson School of Population Health, said in his closing summary of the event: Despite the “fireworks,” most observers can see that there “will be some kind of a compromise” on exclusivity.

And it sounds like Hatch at least is ready to try to make that happen. With Waxman due at the FDLI conference tomorrow, Hatch enlisted the audience to help: “When Congressman Waxman is here, you might encourage him to come on board.”

“Let me tell you something. Henry knows I’m serious. He knows I’m bipartisan. He knows I want this done. I care a great deal for him,” Hatch said. He joked about that unlikely turn of events: “We’ve been good friends for all these years, although he comes from Hollywood and you can’t be any more whacked out than that that group, but he for some reason comes through. He’s a very, very complicated but a very, very good, bright guy.”

“I want this to be the Hatch/Waxman—or let’s make it Waxman/Hatch” of the biologics era, Hatch declared.

But, he added, “Henry’s going to have to come up. He was at zero, then he was at five.” President Obama’s budget proposes seven years of data exclusivity, Hatch added, indicating that too would be too low for him.

Is a compromise likely any time soon? It sure seems like the answer is no, that the two sides are--if anything--more entrenched than ever in their respective corners. But a compromise certainly didn't seem inevitable in 1984, a point that Hatch made in his opening comments to the FDLI conference.

"I can vouch for the fact that the negotiations on Hatch Waxman were, shall we say, trying at times," Hatch said. In fact, "who knows what would have happened had I not needed a root canal right in the middle of negotiations. I threatened to kill every doggone negotiator."

"Toward the end, the two leading negotiators, one for the generic industry one for the innovator industry, they jumped up and said, 'We’re outta here,' and they ran to the door, and they both arrived at the door at the same time and they got stuck in the door. It was one of the greatest days of my life."

Right now it sounds like both sides are heading to the door. Whether they actually get out the other side, we will have to wait and see...

1 comment:

Anne PME said...

Is anyone looking at the number of US biotech jobs that might be lost as the result of biosimilars and factoring this into the cost savings equation? Does anyone know if more biotech jobs would be outsourced as the result of creating an FDA framework for the approval of biosimilars? I worry that hasty approval of a framework for the FDA approval of follow on biologics (or biosimilars) will hasten outsourcing of high paying biotech jobs.

I am not an expert but it would seem to me that the issue of exclusivity may be off point. We've gotten reports from credible sources of outdated insulin dispenses and samples, including one that may have precipitated changes in glucose levels and additional medical expense. Even before biosimilar versions were approved, we were hearing about diversion of expired HgH. Unfortunately, lack of state oversight resources did not and does not allow these types of issues to be followed up on in my and likely many other states. I seem to recall that there was a false claim settlement several years ago related to the over-marketing of HgH. In addition, there are new reports about the over-marketing of ESA's. This seems to indicate that the real problem...the gap...that is creating access issues is not one of manufacturing capacity. If anything, these antidotal reports appear to indicate that there is excess manufacturing capacity and more than ample product supply in at least several components of the biotech sector.

While there appears to be adequate manufacturing capacity in at least some parts of the biotech sector, the patients who need these medicines are not able to access them. Maybe the real problem - the gap that needs to be closed- is one of access due to hurdles such as inadequate insurance coverage and inability to pay for medically necessary medicines. This is likely because of high co-pays and/or high cost, not because of lack of product availability.

These medicines do not go directly from the pharmaceutical company to the patient. There are middlemen in between. It seems like these middlemen may have some control over patient access and cost. Maybe it would make sense to look at all of these sectors as well.

I also worry that if biosimilar legislation is approved at this time it will amplify and further overwhelm FDA oversight and enforcement capacity at a time when new FDA appointees and FDA line personnel badly need our support. It seems like it would make sense to first ensure that the FDA, state pharmacy boards, other oversight entities, doctors and pharmacists have the resources that they need to ensure that current and future supplies of biotech drugs are both efficacious at time of use and accessible in a high enough (but not too high) doses to all of the US patients who need these lifesaving drugs.