Tuesday, March 06, 2007

Generic biotech drugs would be safe, cut costs, coalition says

Continuing the ongoing coverage I have given to the issue of legislation to support the introduction of generic insulin (including my original post, a follow-up based on NYT coverage, and the recent news that legislators have finally introduced a bill that would force the FDA to permit generic biopharmaceuticals where patents had already expired, as is the case with human insulin such as Humulin R and N or Novolin R or N), yesterday, several of the biggest private insurance providers were in Washington lobbying for support of the recently introduced legislation.

Generic biotech drugs would be safe, cut costs, coalition says
By Justin Blum, Bloomberg News
March 5, 2007

General Motors and Aetna were among companies that sent executives to Washington, D.C., on Monday to press for legislation allowing copies of medicines made from biotechnology as a way to reduce drug costs.

The companies planned meetings with White House aides and congressional staff to make a case that generic versions of gene-based biotech medications can be made safely. Biotech-drug makers are telling Congress that copies may pose health risks.

Generic biotech drugs could reduce prices by almost a third and cut into the profits of brand-name biotech companies such as Amgen and Genentech, analysts said. Some of the medications are among the costliest on the market and include treatments for cancer and arthritis.

"You can give great care but at a substantially reduced cost," Steve Miller, chief medical officer for Express Scripts, a manager of prescription-drug benefits based in Maryland Heights, MO, said at a news conference Monday in Washington.

The companies in the lobbying effort belong to the Coalition for a Competitive Pharmaceutical Market.

The group, which includes GM, the biggest U.S. purchaser of health care outside the government, says biotech generics would result in significant savings for companies that provide drug benefits for employees.

The company representatives will deliver their message on cost and safety in meetings at the White House and on Capitol Hill, coalition chairwoman Annette Guarisco, a GM executive, said in an interview.

The coalition also includes companies that make generic versions of conventional drugs, including Hospira and Barr Pharmaceuticals.

"Biogenerics represents a logical next step given the business we're already in," Edward Ogunro, a senior vice president for Hospira, said at the news conference.

Developing generic versions of some biotech medications might cost $10 million, compared with the $400 million to $800 million that brand-name manufacturers pay for the original versions, Ogunro said.

The Biotechnology Industry Organization, a trade association for biotech-drug makers, says the legislation could lead to sales of products that have harmful side effects and aren't as effective as the original version. The trade group made its case last month in a briefing for congressional staff.

U.S. law allows the Food and Drug Administration to approve generic versions of conventional drugs, made mostly through chemical synthesis, after their patents expire. There is no similar legal process for most biotech medicines, genetically engineered versions of human proteins such as insulin or growth hormone.

House and Senate members introduced legislation last month that would for the first time routinely allow copies of medicines made using biotechnology. Sponsors of the measure include U.S. Rep. Henry Waxman, D-CA, and Sen. Hillary Clinton, D-NY.

Biotech drugs generated revenue of about $32.8 billion, or 13% of the $251.8 billion in prescription sales to U.S. pharmacies in 2005, according to market-research firm IMS Health.

Generic versions of biotech medications may lower prices by 20% to 30%, according to Citigroup.

Companies that pay for insurance plans are eager to find ways to reduce costs of biotech medications, said Steven Meholic, head of pharmacy management for insurer Aetna.

"It's something our customers are very focused on," Meholic said.

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