News March 2007

Biotech Drugs Could Soon See Generic Rivals

Biotech drugs — some of which cost tens of thousands of dollars per patient — treat such diseases as cancer and multiple sclerosis. They are produced using living organisms; traditional drugs are made from chemicals.

The biotech industry doesn't face generic competition partly because the Food and Drug Administration lacks authority to approve biotech generics, as it does for easier-to-copy traditional drugs.

He expects passage of some legislation this year or next. Others say 2009 is more likely.

Despite the uncertainty, generic companies are investing now:

•Barr Pharmaceuticals has at least six biogenerics in its pipeline. Barr fortified its efforts last year when it paid $2.5 billion for Croatia's Pliva, a pioneer in the field. Barr CEO Bruce Downey expects the first biogenerics within five years.

Some biologics have already lost patent protection, including insulin. Citigroup says drugs worth $5 billion a year in sales will lose patent protection before 2015 and are at high risk for generic competition.

•Teva Pharmaceuticals, which already sells some biogenerics in Eastern Europe, Mexico and Asia, has three of 14 research centers devoted to the field. None were five years ago, says Amir Elstein, Teva executive vice president.

•Hospira, a leading maker of injectable generic drugs, last year struck a deal with a German drugmaker to bring a copy of biotech drugs that stimulate red blood cells to market in Europe. Hospira also spent $21 million last year for biotech research firm BresaGen.

•Sandoz has six biotech copies in development. CEO Andreas Rummelt says the market will build slowly but will open because of the potential cost savings.

Traditional generics can cut drug costs 70%. Because biotechs are harder to make and copy, savings may not be that great.

At a Senate hearing Thursday, Sen. Orrin Hatch, R-Utah, expressed concern the proposed legislation may not require enough testing of biotech copies. He co-authored legislation in 1984 that helped propel the traditional generic-drug industry. The biotech industry opposes the legislation, saying it doesn't do enough to protect patients.

Source http://www.usatoday.com