Copyright 2000 The New York Times Company
The New
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December 28, 2000, Thursday, Late Edition -
Final
SECTION: Section C; Page 1; Column
2; Business/Financial Desk
LENGTH: 1704
words
HEADLINE: Biotechnology Companies Try to Ward Off
Generic Drugs
BYLINE: By ANDREW POLLACK
BODY:
Most lucrative brand-name drugs eventually
lose their patent protection, opening the market to generic products with lower
prices. But one class of drugs, which includes some of the most expensive
products in the world, is insulated from such generic competition.
These
drugs are made using genetic engineering, and at present there are no
regulations allowing for generic versions.
But, with patents on many of
the biotechnology industry's best-selling drugs set to expire in the next few
years, companies that make generic drugs are pushing to change that, hoping to
invade new turf.
Generic drugs can sell for a fraction of the price of
the equivalent brand-name drugs. Their low prices stem in part from the fact
that generic drugs can be approved for sale without lengthy clinical trials to
show they are safe and effective. Drug makers need show only that generics are
the same chemical and act the same in the body as the brand-name equivalent.
But this applies only to drugs made using chemistry -- most of the pills
sold by big drug companies. There is no procedure for quickly approving generic
versions of so-called biologics -- drugs made from living cells, like vaccines,
blood factors and genetically engineered proteins -- because these drugs are
regulated under a different law.
"What we need to do is get a regulatory
pathway for generic biologic approval," said William H. Nixon, president of the
Generic Pharmaceutical Association, which has about 150 members.
The
timing could be right. Senator Orrin Hatch, the Utah
Republican, has indicated an interest in updating the
Hatch-Waxman Act, the 1984 statute he helped draft that governs
generic drugs. Moreover, surging drug prices have provoked a public outcry.
"Some of the most expensive drugs in the world are biologics," said
Abbey Meyers, president of the National Organization for Rare Disorders, which
represents patients and also supports new regulations for generic biotechnology
drugs.
Cerezyme, for example, a drug made by Genzyme for a rare disorder
called Gaucher's disease, can cost more than $200,000 a year. The blood-clotting
proteins for hemophilia, produced by Bayer and Baxter, can cost more than
$100,000 a year, while some of the interferons for cancer can cost tens of
thousands of dollars, she said.
An anemia drug, erythropoietin, or EPO,
made by Amgen and given to patients undergoing kidney dialysis, sells for
millions of dollars an ounce and is one of Medicare's biggest pharmaceutical
expenses.
But biotechnology companies plan to fight any new rules. The
industry maintains that its products, mainly proteins made by implanting genes
into bacteria or hamster cells, are hundreds or thousands of times larger and
more complex than chemical drugs. This makes it virtually impossible for a
generic drug maker to show that its product is the same as another biotechnology
drug.
Living things cannot be easily standardized like chemical
processes, the industry argues. What is more, even slight differences among
drugs can have a big impact on their safety and effectiveness. The Food and Drug
Administration has approved two versions of beta interferon, used to treat
multiple sclerosis, because slight changes mean that one has fewer side effects
than the other.
"Do we jeopardize public safety by assuming those minor
differences are irrelevant to the clinical impact of the product?" said Lisa
Raines, Genzyme's representative in Washington.
The F.D.A. also has
reservations.
"There are significant unresolved scientific issues about
how to show 'sameness' between complex biological macromolecules so that F.D.A.
can be assured that any generic biologic is safe, pure and potent as well as
'equivalent' to an innovator product," Margaret M. Dotzel, associate
commissioner for policy, said in a statement.
Some agency officials cite
an incident in the 1950's when a slight change in the production process led to
a failure to inactivate completely the virus used in the Salk polio vaccine.
Some people contracted the disease from the vaccine.
But the F.D.A. has
in effect already approved one generic biologic. Because of quirks in drug
regulation, hormones are regulated as chemical drugs, not biologics. And in
1997, the F.D.A. approved the Ferring Pharmaceuticals generic version of
Pergonal, an infertility treatment sold by Serono that consists of two hormones
isolated from the urine of post-menopausal women.
Serono sued to block
the approval, citing slight differences between its drug and the drug made by
Ferring, a unit of Ferring B.V. Group Holding of the Netherlands. But an appeals
court sided with the F.D.A., saying that the drugs do not have to be chemically
identical, only identical in terms of their clinical effects.
The market
for generic biologics could be sizable. EPO has sales exceeding $4 billion a
year by Amgen and its licensee, Johnson & Johnson.
Other drugs that
could lose patent protection in the next few years include human insulin for
diabetes, beta interferon for multiple sclerosis, alpha interferon for hepatitis
and cancer, and growth hormone for dwarfism and other conditions. Each of these
drugs has worldwide sales exceeding $1 billion.
Some generic drug
companies are linking up with biotechnology companies to acquire the expertise
they need.
Teva Pharmaceutical Industries, an Israeli company, has an
agreement with Biotechnology General. Ivax, another major generic producer,
signed an agreement last year with Indiana Protein Technologies. Barr
Laboratories says it is working on one biotechnology drug and is looking for
others. Sicor Inc. is building a factory in Mexico to produce biologics. For
competitive reasons, all the companies declined to say which drugs they were
developing.
Even so, some experts say most generic companies will not
pursue biotechnology drugs because the manufacturing will be costly and
difficult. And many of the drugs could be protected by additional patents that
last longer than the original. While Amgen's earliest patent for EPO will expire
in 2004, the company was granted other patents in the last few years that last
into the next decade.
Biotechnology is "fraught with levels and levels
of patents," said John Langstaff, president and chief executive of the Cangene
Corporation, of Winnipeg, Manitoba, which is developing its own generic
biologics. "It's really a dog's breakfast."
If the American market
proves tough to crack, some generic companies are likely to sell their drugs
first in Asia, Europe and Latin America, where biotechnology companies generally
have fewer patents.
Brand-name drug companies may try to protect
themselves from competition by developing improved versions of their drugs that
render the originals somewhat obsolete. Both Roche and Schering-Plough have
developed longer-lasting versions of alpha interferon that would require fewer
injections, and Amgen has developed a longer-lasting EPO.
But in
addition to competition from generic drug makers, biotechnology companies are
facing new challenges in their industry.
Biotechnology executives are
closely following the case of Transkaryotic Therapies Inc., which wants to sell
a version of EPO made with a process it says is not covered by Amgen patents. If
it wins a lawsuit filed by Amgen, the company could produce EPO and perhaps
other biotechnology drugs, even before they lose patent protection.
Human Genome Sciences, the genomics company, has said it plans to make
longer-lasting versions of nearly every protein drug on the market or in
late-stage clinical trials, using technology from a company it recently
acquired. William A. Haseltine, the chief executive, said Human Genome will
either sell the new drugs itself once the originals come off patent or license
them.
Since Human Genome's drugs will be clearly different from the
originals, the company will have to conduct clinical trials, and it is about to
start them for alpha interferon and human growth hormone. Similarly,
Transkaryotic undertook full clinical trials for its version of EPO because its
production process was different from Amgen's.
But some generic industry
officials say that if costly and protracted trials are required, competition
will be limited and the resulting drugs will not be priced significantly below
the originals. Also, they say, if the generic drugs are not considered fully
equivalent to the brand-name drug, doctors and pharmacists will not be able to
easily substitute the generic for the original.
Some experts say that it
should be possible to show equivalence between two biologics, though the tests
are likely to be more complicated than for chemical drugs. U.S. Pharmacopeia, a
nonprofit organization that sets quality standards for pharmaceuticals, has set
up a committee to explore how the comparisons could be done.
"What do
you think about a 747 -- pretty complicated, right?" said Roger Williams,
executive vice president and chief executive of U.S. Pharmacopeia. "Do you think
somebody could make a 747 beyond Boeing? Of course they could."
Moreover, for all their talk about how even slight manufacturing changes
can make a big difference in drugs, biotechnology companies themselves want to
be able to build new factories without undergoing new clinical trials. They can
generally do this. Indeed, the F.D.A. approved Avonex, Biogen's beta interferon,
even though the company used a protein produced by another company in Germany in
its clinical trials. The F.D.A. concluded the drugs were comparable and
prevailed in court.
That could provide an opening for the generic
companies. "If it's good enough for the branded industry to show comparability,
it's good enough for us," said Bruce L. Downey, chairman and chief executive of
Barr Laboratories in Pomona, N.Y.
With hundreds of new biotechnology
drugs under development, some executives think cost pressures will eventually
force changes to allow generic biologics.
"It's not reasonable to expect
a company should have a lifelong monopoly just because the molecule is larger,"
said George S. Barrett, president of Teva Pharmaceuticals U.S.A. "I think the
clamor on the consumer side is going to force it to
happen."
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