The biotech industry went toe-to-toe with some of the most powerful Democrats in Washington when it prevailed in an intense fight for prolonged market exclusivity before the developers of biologics had to confront generic competition, successfully arguing that the big investments needed to bring their branded therapies to the market required a longer time to harvest profits. Now the two biggest biotechs in the country have opened a new legislative effort targeting a key vulnerability on the marketing front, arguing at the state level that the new generation of biosimilars now on the way should not be given a shot at easy interchangeability with the original brand. There's also a federal effort in motion that would throw a monkey wrench into the process of substituting cheaper biologics at pharmacies.
Andrew Pollack at The New York Times reports that Amgen ($AMGN) and Genentech, now a subsidiary of pharma giant Roche ($RHHBY), have been sponsoring legislation at a slate of states that would prevent pharmacists from being allowed to swiftly substitute a less expensive biosimilar, already winning one vote in the Virginia House of Delegates. In some cases pharmacists would be required to notify a physician ahead of a substitution, or consult with the patient about the switch. The Times also notes a federal offensive under way to prevent a biosimilar from having the same generic name as the branded treatment, offering another hurdle on the path to substitutions.
From a legislative perspective, these bills might look like innocuous consumer protection bills. But they're designed to throw an added ring of protection around franchises worth billions to the industry, and especially older biotechs like Genentech and Amgen. These days traditional drugs are blasted with cheap knockoffs the minute they lose patent protection. Insurers have become practiced at the art of instantly requiring members to use cheaper alternatives to the brand, and mega-blockbuster revenue melts away in a matter of months.
Biosimilars already face a higher hurdle when it comes to FDA approval, with a likely requirement for big Phase III studies to prove that these more complex therapeutics work just like the original. An interchangeable designation from the FDA, though, would make it much easier to wrest away market share. Without it, the new generation of biosimilars would have to be marketed separately, with a campaign to win over payers' support and build market share--something that is simply conceded on the small molecule front nowadays.
"These are really complex, highly sensitive molecules," Pennsylvania State Senator Patricia Vance told Pollack. "We want to make sure we are not hurting people."
The generics industry, which includes some big players, see this movement as more about making sure they don't hurt some very big markets.
- here's the article from The New York Times
Industry Voices: Biosimilars and Trade Secrets