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As the Congressional debate over follow-on biologics slogs on, the Obama Administration has finally weighed in and backs 7 years of data exclusivity for follow-on biologics. As you may recall, innovator companies want a 12-14 year data exclusivity period whereas follow-on biologics manufacturers are seeking a 5-year period (which is identical to the data exclusivity period for small molecules generic drugs outlined in the Hatch Waxman Act). What this means—based on the Obama Administration's proposal—is that a follow-on biologic manufacturer must wait seven years from the date of approval for the innovator (branded) drug before the US Food and Drug Administration could consider approval of a follow-on version of the molecule.

It is not surprising that the Obama Administration supports a 7 data exclusivity period--it is, after all, a compromise between the 5 year period sought by the follow-on manufacturers and the 12-14 years that the innovator companies are seeking. And, Mr Obama has repeatedly shown a willingness to compromise when it comes to getting important legislation passed. Hopefully, Congress will take the Obama Administration's compromise to heart and pass follow-on biologics legislation as quickly as possible.

 Until next time...

 Good Luck and Good Job Hunting!

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GlaxoSmithKline (GSK) inked a deal yesterday with the Indian generics manufacturer Dr. Reddy’s Laboratories giving it access to over 100 future generic drugs and a gateway to Asia’s emerging pharmaceutical markets. The therapeutic areas covered under the agreement include diabetes, cardiovascular, pain management, gastroenterology and oncology. Dr Reddy’s Laboratories is one of India’s largest generic drug manufacturers. Like many of its competitors, Dr. Reddy’s Laboratories also have active development programs for new biotechnology drugs and biosimilar products.

UK-based, GSK joins a growing number of pharmaceutical companies including Pfizer, Merck and others that have entered into deals with major generic drug manufacturers—or purchased smaller generics companies—to gain access to generics pipelines and an ability to compete in emerging  non-branded pharmaceutical markets. Impending US healthcare reform and downward pricing pressures (resulting from increased global competition) have forced drug makers to reevaluate the role that generic drugs will likely play in future pharmaceutical revenue streams.

While generic drug makers have outstanding manufacturing capabilities, they generally lack the marketing, sales and distribution channels necessary to penetrate foreign markets and quickly ramp up drug sales. I suspect that the number of deals between pharmaceutical companies and generic manufacturers will continue to increase as many of the patents for multibillion, blockbuster drugs continue to expire in the next few years.

Until next time....

Good Luck and Good Job Hunting!!!!!!!!!

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A much-anticipated Federal Trade Commission (FTC) report was released on Wednesday that will likely help House Energy and Commerce Chairman Henry Waxman bolster support for his fledgling follow-on biologics (FOB) bill. For those of you who haven’t been closely following the debate over proposed legislation to create a regulatory framework for approval of FOBs in the US, I provide a brief synopsis.

The Promoting Innovation and Access to Life-Saving Medicines Act (H.R.1427) introduced by US Representatives Henry Waxman (D-CA), Frank Pallone (D-NJ) and Nathan Deal (R-GA) calls for an abbreviated development pathway (at the discretion of the agency), the possibility of substitution or interchangeability (if the follow-on biologics manufacturer can prove a high degree of structurally similarity and an identical mode of action) and five years of data exclusivity. In contrast, The Pathways for Biosimilar Act (H.R. 1548) introduced by US Representatives Anna Eshoo (D-CA), Jay Inslee (D-WA) and Joe Barton(R-TX) requires clinical data, rigorous immunogenicity testing and limits on interchangeability and substitution provisions for follow-on biologics. Further, it calls for a minimum of 12 or up to 14 years of data exclusivity for innovator companies—a period during which FDA can’t rely on innovator data to approve follow-on biologics. For example, if a biotechnology drug was approved in 2009, the earliest that FDA could consider and approve an application for a competing follow-on product is 2021.

The FTC report concluded that a 12- to 14-year wait is unnecessary because follow-on biologics will not be offered at the same steep discounts as traditional generic drugs. It also pointed out that no evidence exists that biologic patents will not hold up. The agency estimates follow-on biologics would be sold at discounts ranging from 10 percent to 30 percent. Not surprisingly, the FTC did not recommend a specific number of exclusivity years. This allows legislators to continue to squabble and debate the point ad nauseum, until concessions are made by both innovator and follow-on biologics proponents.

The measure by Eshoo and Barton has garnered 88 co-sponsors, while Waxman and Deal's bill has 11. In the Senate, the Health, Education, Labor and Pensions Committee reached a bipartisan compromise on follow-on biologics in 2007 that allowed for 12 years of exclusivity, but that deal seems unlikely. Democrats are trying to address generic firms' concerns that brand companies could make slight changes to their products and start the exclusivity period over again. Some senators introduced a more generic-friendly bill like Waxman's earlier this year.

Conventional wisdom suggests that the data exclusivity provisions in the final legislation will be five years—a period identical to that provided stipulated in the 1984 Hatch Waxman Act, which created the US generic pharmaceutical industry. 

Stay tuned for new updates on this unfolding drama!

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!! 

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Previously, the US Congress proposed legislation to create a regulatory approval process to allow the Food and Drug Administration (FDA) to approve generic versions of blockbuster biotechnology drugs known as follow-on biologics (FOBs). While a regulatory pathway exists for approval of generic versions of small molecule drugs (as outlined in the Hatch-Waxman Act) there is no legally-approved regulatory pathway to bring FOBs to market in the US. In contrast with the US, the European Union crafted legislation five years ago that allows biosimilars —the name given to FOBs in Europe—to be approved and sold in EU member states. Since 2004, the European Medicines Agency (EMEA), the EU regulatory body, has approved the sale of six biosimilar drugs with many more in the queue awaiting regulatory review.

The debate over FOB legislation started in the US about 10 years ago when patent expiry of many  multi-billion blockbuster biotechnology drugs was fast approaching. From the beginning, many so-called innovator companies (the companies that produced the original branded biotechnology drugs) and the trade associations that represent them on Capital Hill, the Biotechnology Industry Organization (BIO) and the Pharmaceutical Manufacturing Association (PhRMA), aggressively lobbied against any form of FOB legislation. However, late last year, several senators introduced legislation that would permit FDA to approve generic versions of many blockbuster biopharmaceutical products following patent expiry. The proposed legislation stipulated that FOB manufacturers would have to wait 12 years —after patent expiry of previously approved biotechnology drugs—before generic versions of those drugs could be sold in the US. That legislation, which unabashedly favored innovator drug manufacturers, passed the Senate health committee but died without being voted on. The new measure, introduced Thursday, cuts by more than half — to 5 years, from 12 — the time allowed before cheaper versions of biotechnology drugs could compete with the originals. A similar bill was introduced two weeks ago in the House by Representative Henry A. Waxman, Democrat of California and chairman of the Energy and Commerce Committee.

While the proposed reduction in the so-called “FOB waiting period” is commendable, I don’t think that any waiting period is necessary before FOBs can be sold in the US. It is difficult to understand why innovator companies require an additional patent protection—beyond the 20 years already afforded to them under US patent law—to continue to sell their blockbuster products! To that end, Jeff Joseph, a spokesman for the BIO said that the FOB waiting period reduction, “.... Would jeopardize patient safety and undermine our ability to develop future cures and therapies.” I believe that the FOB waiting period being championed by innovators companies is nothing more a thinly veiled attempt by them to continue to maintain monopolistic control over lucrative multibillion dollar biopharmaceutical drug franchises. Biotech executives have vowed to vigorously fight the new legislation, saying it could result in unsafe medicines, fewer cures and fewer jobs in biotechnology centers like Boston, California and elsewhere. Interestingly, similar arguments were put forward by the pharmaceutical industry before the Hatch-Waxman act was passed by Congress in 1984..

Despite the claims that FOBs will stifle innovation and may jeopardize the safety of Americans, the current high costs and lack of access to affordable healthcare will almost certainly leave Congress no choice but to pass legislation that permits the marketing and sale of FOBs in the US. While FOB legislation is a likely fait accompli, US drug manufacturers remain steadfastly opposed to any FOB legislation. I believe that innovator company opposition to FOB legislation is really a “red herring” that serves to detract attention away from the real issue that the drug industry is deathly afraid of federal regulation of drug prices. Interestingly, the US is one of the only countries in the world where drug prices are not regulated or controlled by the government. This permits drug manufacturers to set prices based exclusively on “what price the US market will bear.” In other words, they can charge as much as they want for their drugs, as long as third party payors, insurance companies and Medicare and Medicaid agree to continue to cover the costs of the drugs that they manufacture (it should come as no surprise to anyone that the American pharmaceutical and biotechnology markets are the largest and most financially lucrative in the world).

I have no doubt that innovator companies will continue to fight hard and as long as possible prevent adoption of legislation regulating the approval of FOBs. After all, there are huge sums of money and corporate profits at stake. Like it or not, FOBs will ultimately be sold in the US—the current costs of drug and healthcare are simply too high to sustain. Despite a fierce decade-long struggle, most American drug makers will privately concede that sale of FOBs in the US is inevitable. Nevertheless, innovator companies will likely not publicly endorse FOB legislation until the US government provides them with assurances that it will not seek to regulate American drug prices for the foreseeable future.

Until next time...

Good Luck and Good Job Hunting!!!!!!

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It seems that every day a new American industry asks the US government for a bailout because of impending financial exigency. That said, I was somewhat surprised to learn today that the biotechnology industry is planning to ask Congress for a bailout. The plan calls for Congress to temporarily changes tax laws to allow unprofitable biotech companies to get cash now, in exchange for tax credits that they would pledge not to take if they eventually become profitable. The companies that receive the cash would pledge that the money would be used ONLY for research and development activities. The reasoning behind the proposed government bailout is that the infused capital would allow struggling biotech companies to keep their current employees, stay in business and help to stimulate the US economy. It is not clear whether or not all biotechnology companies—publicly traded or privately held—would be eligible for the bailout package.

Currently, there are 327 publicly traded and roughly 1,000 privately held biotechnology companies in the US. A majority of these companies are not profitable and operate almost exclusively on institutional and private venture capital funds. According to the Biotechnology Industry Organization (BIO), 125 of 327 public companies currently have less than 6 months of cash on hand—nearly double the total last year. It is not surprising that the biotechnology industry like most other US industries is struggling and feeling the impact of recent financial meltdown—there simply isn’t enough liquidity in the system to keep all companies afloat. While I am not opposed in principle to government bailouts, there are several reasons why the proposed rescue plan for the biotechnology industry doesn’t sense to me.

First, unlike the automobile industry which employs millions of workers, the biotechnology industry only employs about 200,000 workers, many of whom have advanced degrees and possess specialized technical skills. And, studies show that during recessionary periods workers with specialized skills are more likely to find employment after losing a job than their unskilled counterparts. This suggest that it may be better for the American economy in the long run if the government bails out the auto industry before it even considers a bailout for biotech. Nevertheless, BIO is actively lobbying for a government bailout because it believes that a bailout will not only stimulate the American economy but also help to “preserve American innovation and competitiveness.” Of interest, the pharmaceutical industry which shed over 123,000 jobs in the last year or so is not asking for government assistance. As one Washington lobbyist aptly quipped after hearing about the proposed biotech bailout: saving “research-based companies that employ 30 people won’t necessarily stimulate the economy.”

Second, the biotechnology business is inherently a very risky one. The failure rate among biotech companies is roughly 90%. And, as many of you know, biotechnology companies are always started with venture capital from investors who are willing to invest in risky projects because of possible financially-lucrative returns. Because of this, biotechnology executives are generally beholden to their investors rather than their shareholders, stakeholders or employees. Unfortunately, important business decisions are frequently made at venture-backed biotech companies for financial reasons rather than scientific or medical ones. Further, many financially-challenged, biotechnology companies that would benefit from the bail out started up almost a decade ago when venture capital was abundant and IPOs were daily events. In retrospect, many of these companies shouldn’t have been started in the first place because their technology platforms were either inadequately vetted or their business models were fundamentally flawed. I believe that these financially troubled companies ought to be allowed to fail just like the technology companies that had to close down in the early 2000s after the Internet bubble finally burst.

Third, why should unprofitable companies without products or revenues be bailed out and rewarded for failure? As I posited in a previous post, a company really isn’t a business until it has a product, generates revenues and turns a profit (or at least break even). If a company cannot create a viable business after 5-10 years of capital investments then it wasn’t a good value proposition at the outset. Perhaps a better use of the proposed bailout money would be for the US government to create public funding vehicles for companies that have developed promising new drugs that already have proof of concept in humans and are ready for clinical testing.

Finally, over the past decade, the biotechnology industry has spent hundreds of millions of dollars lobbying against the reimportation of drugs from foreign companies and the development of so-called follow-on biologics (potentially cheaper versions of blockbuster biotechnology drugs that have lost patent protection). This decade-long lobbying effort was undertaken to preserve America’s biotechnology monopoly and to insure that biotech drug prices remain high. Maybe BIO and its member companies should have considered using some of those monies to help struggling biotechnology companies rather than using it to influence politicians for tax breaks and pork barrel legislative initiatives.

Lastly and perhaps most importantly, why should taxpayer dollars be used to bailout an industry that has actively opposed and steadfastly refused to provide ALL Americans with access to reasonably priced, potentially life-saving biotech drugs? Because the biotechnology industry isn’t fundamentally different than any other American industry, I believe that the Darwinian principle of “survival of the fittest ought” to be applied to it. Unless, of course, you work on Wall Street or in Detroit—but don’t get me started!

Until next time…

Good Luck and Good Job Hunting!!!!!!!

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At its annual business briefing, Merck’s CEO, Richard Clark, announced that the company is creating a new division called BioVentures that will develop and sell follow on biologics. Clark said that the reason for this surprising decision was based on “the arrival of the Obama administration and renewed enthusiasm on Capitol Hill for legislation that could create an easier path for generic biotech medicines.”

Merck’s new BioVentures division will be built around the humanized yeast manufacturing platform developed by Glycofi, a privately-held, company that Merck acquired two years ago. While most of big pharma and big biotech publicly lobbied against new legislation that would make follow-on biologics legal in the US, Merck was surprisingly low key on the subject (now, we know why).

I first learned about Glycofi’s technology platform shortly after the company was formed in the early 2000 and immediately recognized its implication for follow-on biologics manufacturers. I immediately contacted Glycofi’s CEO at the time to see whether or not they would hire me as a “follow-on biologics consultant.” Sadly, because cash was tight (as it always is at start ups) I didn’t get the gig but I did get to know Tillman Gerngross, one of the Glycofi’s founders and its Chief Scientific Officer. Tillman and I spent some down time together at many of the follow-on biologics conferences that I organized where he was an invited speaker.

I was glad (mostly for Tillman) when I learned that Merck was going to by Glycofi for $400 million in cash. That said, the acquisition didn’t make sense to me at the time because Merck didn’t have a biologics division (although it did have a successful vaccine division).  After today’s announcement, Merck’s decision to purchase Glycofi makes perfect scientific and financial sense to me. I wish I could have gotten a piece of Glycofi before Merck bought the company. Nevertheless, I take solace in the fact that I, like Merck’s executives, can recognize a winning technology when I see one!

Maybe Merck will turn itself around after all!

Until next time…

Good Luck and Good Job Hunting!!!!!!!

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The Pharmalot blog reported today that this coming Friday, the US Federal Trade Commission (FTC) will conduct a workshop on the issue of follow-on biologics. The roundtable will apparently be organized into five panels to discuss: 1) the price and market share effect of entry by both biosimilar and biogeneric drugs, 2) the likely competitive effects of reference product regulatory exclusivity, 3) biotechnology patent issues, 4) the likely competitive effects of follow-on biologic regulatory incentives, and 5) the patent resolution process.

The first thing that comes to mind is “beating a dead horse” (euphemistically of course). Call me crazy but these very issues have been bandied about and discussed ad nauseum and  for the past decade or so. I am not sure what new revelations will come to light at this Friday’s FTC roundtable meeting. 

Here’s a thought. Maybe industry representatives, FDA regulators and the insurance companies ought to ask the European Union how they were able to craft their version of a regulatory pathway for approval of these products way back in 2004. Nah…let’s let the lobbyist duke it out and see which side wins!

Until next time…

Good Luck and Good Job Hunting

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According to the WSJ Health Blog “Wyeth is overhauling its early-stage research by slashing in half the number of therapeutic areas and diseases for which it will pursue new medicines. The idea is to concentrate on more innovative products and get them to market faster.” Whenever large companies restructure or announce reorganization plans, job cuts are soon to follow. So, if you are a Wyeth employee I recommend updating that resume as soon as possible!

People close to the R&D restructuring (part of a larger plan, dubbed Project Impact) said the overall number of scientific jobs won’t change under the plan but some scientists will be cut because their skills aren’t transferable to other areas. Wyeth will eliminate discovery work in women’ health, reduce its therapeutic areas from 14 to 6 and continue to focus vaccines and biologics, where it has had great success with its pediatric pneumococcal vaccine, Prevnar, and the anti-inflammatory biologic Enbrel.

Wyeth joins several pharmaceutical companies, including Bristol-Myers Squibb and Pfizer, which have already decided to narrow the focus of their development efforts and focus more on biotechnology products. Don’t be surprise if other pharmaceutical companies announce similar restructuring plans. I predict that within 10 years or so, pharma companies will no conduct basic discovery research and abandon their internal pipelines. Instead, they will become drug “clearing houses” that specialize in developing products that were either purchased or in-licensed from smaller biotechnology and specialty pharmaceutical companies.

Until next time…

Good Luck and Good Job Hunting!!!!!!!

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Just when I thought the absurdities surrounding the American follow-on biologics debate couldn’t get any sillier, the US Federal Trade Commission (FTC) announced today that it would sponsor public workshops and round table discussion to learn more about the impact of follow-on biologics on American competitiveness, regulatory policies and healthcare costs.

I am not certain what role the FTC has in the follow-on biologics debate (as far as I am concerned, it shouldn’t have much of one) but what new information does the FTC think that it is going to get that other more relevant government agencies like FDA or the US Congress don’t already have about follow-on biologics? After all, the debate to formulate an approval pathway for follow-on biologics in the US has gone on for almost 10 years now. How ineffectual and ineffective can the US government and its agencies be (rhetorical question)?

As far as I can ascertain, the main reason why follow-on biologics are not already being sold in the US are the never-ending efforts of power, well-funded lobby organizations like BIO and PhRMA. The data are incontrovertible: 1) the cost of branded drugs is out of reach for many Americans, 2) access to potentially life-saving drugs and treatments is hindered by restrictive drug formularies and onerous insurance co-pays and 3) many local and state governments and large, multi-national corporations can no longer provide adequate healthcare coverage for their employees because of out-of-control medical costs and expenditures.

In my opinion, the irony of the US follow-on biologics brouhaha is that it is putting American companies at a competitive disadvantage in the biosimilar/follow-on biologics space. Selling profitable, cheaper generic versions of blockbuster drugs is no longer a dream but a reality in countries like China and India whose middle class has finally come of age. True, the American pharmaceutical/biotech market is still the largest in the world—but will it still be the largest 10 years from now? Only time (and Asia) will tell.

Until next time….

Good Luck and Good Job Hunting!!!!!!!!

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Earlier this week, Roche announced that it wanted to buy the remaining portion of Genentech that it doesn’t already own. On Friday, one of Europe’s largest pharmaceutical companies, Sanofi-Aventis, announced that it was buying the UK-based vaccine manufacturer Acambis for $547 billion.

Like Roche and Genentech, Sanofi-Aventis was already partnered with Acambis and by purchasing Acambis, Sanofi gains a smallpox vaccine that was contracted by the US government for $425 million. Sanofi is the world’s largest manufacturer of influenza vaccines and last month announced plans to open a $157 million manufacturing facility in France, citing projections that demand for vaccines will double by 2016. In case you didn’t know, vaccines, once the scourge of the pharmaceutical industry, are now the hottest”pharmaceutical” products on the market!

Because of growing demand and lucrative margins for biologics and biotechnology products, many big pharma companies are attempting (through acquisitions and mergers) to quickly enter the biologics and biotechnology markets. These days, small molecules are passé and biotech is the next big thing (where have all the pharma execs been for the past 20 years).  

Europe has long wanted to dominate the biotechnology market. This has not been possible because of the US’s large lead in the space. However, all this can change because of a weak dollar and a surging Euro! Rather than attempt to create their own biotechnology companies, large cash-rich, European pharma companies can simply buy profitable US biotechnology companies with strong product pipelines.

I suspect that the weak dollar and failing US economy contributed to Roche’s decision to buy Genentech and Teva to buy Barr Pharmaceuticals last week. I would not be surprised if there are more acquisitions of American biotechnology and pharma companies in the very near future. I think that it may be time for Amgen and Bristol-Myers Squibb employees to begin to brush up on their French or German.

Until next time….

Good Luck and Good Job Hunting (in Europe)!!!!!!!!

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A post today on the Pharmalot blog suggests that Israeli generic manufacturer Teva is in talks to acquire US-based Barr Pharmaceuticals for  $7.0 -7.5$ billion. Barr’s present market cap is approximately $5.0 billion.

The acquisition would make sense for Teva to broaden its reach into the generic and branded generic markets in the US. Also, Barr recently acquired PLIVA which has active research programs on biosimilars and is currently selling its version of EPO in Croatia and other parts of Eastern Europe.

Teva has been trying to get into the biosimilar/follow-on biologics market for the past eight years or so. The company previously bought several early stage biogenerics manufacturers but have yet to advance their plans to formally enter the biosimilar/follow-on biologics market. This may be the opportunity that Teva has been looking for!

Check back for updates.

Until next time…

Good Luck and Good Job Hunting!!!!!!

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Richmond Va-based INSMED, a US-based follow-on biologics manufacturer, posted a press release on its website entitled: “Insmed Announces First Human Bioequivalence Data for a Follow-on Biologic by a U.S. Company” that reports on the results from a Phase I clinical trial that demonstrated that it lead product INS-19 was bioequivalent to Amgen’s Neupogen^(R) (recombinant G-CSF) in stimulating human white blood cell production. 

, Dr. Geoffrey Allan, President and CEO of Insmed said  "These results are very exciting, as they represent Insmed's ability to replicate a protein product, to bring that product rapidly through the clinic and to demonstrate clear bioequivalence to the innovator drug," said "To our knowledge, we are the first U.S. company to report human bioequivalence data for a follow-on biologic product, validating the idea that follow-on biologics can be a scientific reality in the U.S. and that Insmed is well positioned to be a leader in the field. “ The company has requested a meeting with FDA to discuss the design of a Phase III human clinical trial for INS-19.

I am not sure why INSMED is so excited about its results. Sandoz essentially accomplished the same feat with Omnitrope, its biosimilar version of recombinant human growth hormone (HGH)and it took a law suit and a loophole in the approval process for growth hormones for FDA to allow it to be sold in the US. In my opinion, until legislation is passed that provides a clearly defined legal pathway for approval of follow-on biologics I suspect that INS-19 will suffer the same fate (or perhaps worse) than Omnitrope. Bioequivalence is only legal defined for and relevant for approval of small molecule NOT BIOLOGICS when seeking expedited approval for generic versions of branded products. That said, I want to tip my hat to INSMED for its willingness to take a lead role in the fight to get follow-on biologics approved in the US. Finally, there is nothing like an edgy press release and a few bloggers to bring an issue that is rapidly losing momentum back to the forefront.

Kudos to INSMED!!!!!!

Until next time….

Good Luck and Good Job Hunting!!!!!!

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Just when you thought the obvious couldn’t be anymore obvious to US lawmakers, the Congressional Budget Office (CBO) today released a long-awaited assessment of the cost of a biogenerics bill and found that the legislation, if enacted, would reduce total expenditures on biologics in the US by $25 billion over the next decade—duh!!!  

According to a post over at Pharmalot, “The report comes as a growing group of drugmakers, insurers and employers agitate over the high cost of biologics, which may only be rectified if Congress passes legislation that would give the FDA guidance on creating a so-called pathway to approve biogenerics, or follow-on biologics. Two House bills have been proposed that are similar to the Senate bill reviewed by the CBO, although the looming summer recess and election-year politics suggest passage may not occur this year.”

Unfortunately, as I suggested in a previous post, the bills currently under consideration are flawed and would give unwarranted patent exclusivity to innovator companies if enacted. Nevertheless, as Kathleen Jaeger, head of the GPHA (a generic manufacturing trade group) aptly stated “We are still reviewing the analysis, but we are pleased that CBO agrees that significant savings will be achieved by bringing biogeneric medicines to consumers and that even greater savings will result from removing harmful barriers to access, including brand evergreening and unprecedented market exclusivity provisions. With Americans growing increasingly concerned about health care costs, we should be increasing access to affordable medicines while fostering competition in the pharmaceutical marketplace. “

By the time that a US approval pathway for biogenerics is divined, European and Asian biogeneric manufacturers will already control the market and the “new” (what took you so long) American legislation will provide little financial incentive for US companies to enter the biogenerics market space.

Until next time…

Good Luck and Good Job Hunting!!!!

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I have been following the pharmaceutical business for the past 20 years or so and without fail; Bristol-Myers Squibb has been rumored to be a takeover target. Well, here we go again!

 that floated the possibility that BMS is a prime takeover target again. Like many other financial pundits, Zachs believes that a takeover by Sanofi-Aventis makes the most sense. As many of you may know, BMS and Sanofi-Aventis co-own the multibillion dollar Plavix franchise (which will lose patent protection in 2011).

Rumors of a BMS takeover started in 1988 and they have always proved to be false. In my opinion, BMS has one of the stronger biologics pipeline in the pharmaceutical industry. Further, BMS is spending an enormous amount of time and resources to vigorously reinvent itself as a “next generation biopharma” company (whatever that means). The impending loss of Plavix revenues does put some pressure on the company’s ability to remain independent, but BMS has weathered many storms in the past (and lived to talk about them). That said, it is anybody’s guess whether the current rumors are real or imagined.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!

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In 2004, the European Commission adopted a new directive that paved the way for legal approval of biosimilars in the European Union (EU). To date, five (5) biosimilars have garnered marketing approval in the EU. Of the five, two are generic versions of recombinant growth hormone (rHGH)–Omnitrope (Sandoz) and Valtropin (Biopartners). The remaining three are “knock off” versions of erythropoietin alpha–Binocrit (Sandoz), Epoetin alpha Hexal (Hexal) and Abseamed (Medice Arneimittel Putter).

There is no doubt, at this point, that Europe is leading the way in the biosimilar space. However, it is important to point out that a variety of biosimilars, developed by Indian generic manufacturers and others, are already being sold in less- regulated Asian markets (see Table 1). Unfortunately, political issues and the fierce struggle between innovator

Table 1. Biosimilar Manufacturers and Their Products

biotechnology companies and generic manufacturers have delayed development of legislation for regulatory approval of follow-on biologics (American lingo for biosimilars) in the US. Further, and perhaps more perplexing, the FDA has been reluctant to issue any guidance on the topic. However, rising drug costs and increasing expenditures on biologics (both by Medicare and private insurers) have left American lawmakers with no choice but to craft legislation for approval of follow-on biologics.

In the first half of 2007 alone, three different bills were proposed to craft a statutory pathway for the approval of follow-on biologics under the Biologic License Application (BLA). The first of these bills–The Access to Life-Saving Medicine Act– was introduced into Congress by Representative Henry Waxman (CA) and into Senate by Senator Chuck Schumer (NY) in February. The second bill–the Patent Protection and Innovative Biologic Medicine Act –was introduced in Congress in April by Representative Jay Inslee (WA). Neither bill made any progress. This is because the Access to Life-Saving Medicine Act was considered to be heavily pro-follow-on whereas the Patent Protection and Innovative Biologic Medicine Act was deemed to favor innovator companies and did not provide any financial incentives for follow-on manufacturers.

A compromise was reached by both Republican and Democrat Senators and the Biologics Price Protection and Innovation Act was approved by the Senate on June 27.  It proposes 12 years of market exclusivity for the patent holders but also one year of exclusivity to the first follow-on biologic to be approved as interchangeable with the reference product.  I previously aired my views on the proposed legislation. For a more in depth analysis of the issues and the bills, please read this.

Recently, there was an important new regulatory development in the European biosimilar landscape. Sandoz’s EPO, Binocrit, received the same nonproprietary name (INN) as Amgen’s original erythropoietin alpha (Epogen in the US, Eprex in Europe).This was a big win for the biosimilar industry because the INN debate had been raging in the EU for the past several years. Innovator companies wanted biosimilars to have different INN than their products whereas biosimilar manufacturers were lobbying for identical INN designation. An identical INN designation allows for  interchangeability of medicines. The fact that EMEA granted Binocrit the same INN number as Eprex, means that the agency views the two products as biologically-equivalent and interchangeable. This paves the way for EU pharmacists to freely substitute Binocrit for the more expensive Eprex. Also, it sends a message to US lawmakers and FDA that the EU considers certain biosimilars as interchangeable with their innovator counterparts. As you may have guessed, the issue of interchangeability is being hotly debated and contested by advocates on both sides of the follow-on biologics fence.

The US is clearly dragging its feet in the follow-on biologics arena. The prime driver of this inertia is the imagined loss of revenue that many innovator companies fear will occur if the US ultimately divines a regulatory approval pathway for follow-on biologics. That said, with Europe and India leading the charge into Asia, it looks as though the US is going to loss a substantial amount of money (not to mention market share) anyway.

With regard to biosimilars in the US, it is no longer a question of “if” but “when.” That said, I think that the one seminal issue that needs to be addressed is what to call these things in the US?  In my opinion, the European moniker, biosimilar, is particularly apt and appropriate for this new class of medicines. Unfortunately, we Americans don’t like to play second fiddle to anybody, especially the Europeans. With this in mind, I have no doubt that they WILL NOT be called biosimilars in the US. Whatever they are called, don’t be surprised to find them your pharmacist’s shelves in the next couple f years!

Until next time….

Good Luck and Good Job Hunting!!!!!!!!!

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About five years ago, a friend of mine and I had an idea to form a non-profit dedicated to providing consumers with information regarding the safety of marketed pharmaceutical and biotechnology medicines.  At the time, we observed that consumers were repeatedly being misinformed about the safety and efficacy of many products, most notably follow-on biologics aka biogenerics. Unfortunately, we could not garner enough interest or financial support to get the organization off the ground. I guess that  we had a good idea, but, as usual, were a little ahead of our time. A new organization called The Coalition for a Competitive Pharmaceutical Market has recently set up shop with the same concept in mind.

Members of the coalition include insurance companies (Aetna, Humana, United Health Care and Blue Cross Blue Shield), pharmacies and drug distributors (CVS, Medco, Express Scripts, Rite Aid and Wallgreens), generic manufacturers (Barr Laboratories, Hospira, Teva, Mylan Laboratories and Watson Pharmaceuticals) and a large roster of Fortune 500 companies including General Motors, Ford, Caterpillar, Chrysler, Dow and Eastman Kodak. Think of the lobbying power–how cool is that?

I guess the time has come for rational drug pricing for the US. Big pharma and biotech beware–a nationalized healthcare system may not be far behind!

Until next time….

Good Luck and Good Job Hunting!!!!

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Ed Silverman over at Pharmalot reported today that Health Canada, the Canadian equivalent of the FDA has beaten the FDA to the punch and issued draft guidance for follow-on biologics known in Canada as subsequent entry biologics. The Canadian regulatory agency recently posted on its website requirements for manufacturers and says it could approve products under existing regulations until laws are amended to include the new approval pathway.

If approved, a subsequent-entry biologic would have to be similar to a previously approved biologic, relying in part on publicly- available safety and efficacy data. Product interchangeability and substitutability would not be automatic, but would be decided on a case-by-case basis, according to the draft guidance. Health Canada says it plans to publish additional guidance documents on specific product classes.

A subsequent-entry biologic would not automatically be approved for all the same indications as the reference product, and data would be required to support each indication in most cases. A meeting to review the draft document is scheduled for May. The proposed Canadian legislation is very similar to that adopted by the European Union for biosimilar products (what they are called in Europe). Not surprisingly the recently proposed US legislation is markedly different than the Canadian and European legislation. Go figure!

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Despite what the American public has been led to believe, the scientific, regulatory and safety issues related to biogenerics aka follow-on biologics, biosimilars, or subsequent entry biologics have been clearly are no longer controversial issues. They have been identified, analyzed and carefully vetted. This allowed EMEA, the European Medicines Agency in 2006 to craft a comprehensive regulatory approval pathway for biosimilars. For those of you who may not know, several biosimilar products are currently are the market and sold in all European Union member states. This begs the question–what is taking the US so long?

From the beginning, big pharma and big biotech have unequivocally and steadfastly opposed any legislation that would allow biogenerics to be approved and sold in the US. The trade groups BIO and PhRMA have literally spent millions of dollars lobbying members of Congress to oppose any legislation that would allow approval of biogenerics in the US. Now, in a sudden and unprecedented about face, big biotech and pharma have thrown their collective weight behind proposed biogenerics legislation that will be introduced in the near future by Representative Anna Eshoo (D-CA).

As far as I can tell, the primary reason for this sea change is the market exclusivity that may be afforded to innovator companies by the legislation. A quick perusal of the bill reveals that innovator companies will be granted 12-year market exclusivity for a product after its initial licensure. Further, under certain circumstances, this period of market exclusivity for an innovator product may be extended to 14.5 years. Also, reference product sponsors (innovator companies), as well as interested third parties (most notably universities) that own patents on the reference product may sue a biogeneric applicant for patent infringement. Under certain circumstances, such litigation could delay or prevent approval of the biogeneric product.

So what does the proposed legislation mean for biogeneric manufacturers seeking regulatory approval for their products in the US?  Unfortunately, it means that a biogeneric product application may not be approved or made effective until 12 to14 years after the original date of licensure of the innovator (reference) product. It also opens the door for patent litigation against biogeneric manufacturers to hinder or delay approval of their products. In my opinion, the proposed legislation is extremely one-sided and biased toward innovator companies. More importantly, it seems to me that the real intent of the legislation is to discourage (rather than encourage) biogeneric manufacturers from seeking US approval for their products, i.e. there are no real financial incentives or inducements for these manufacturers to seek approval because of the excessively-long market exclusivity period for innovator products.

On the surface, the proposed legislation would appear to be a long sought victory for biogeneric advocates and the American public which would benefit from less costly versions of potentially life-saving biotechnology drugs. That said, it seems to me that the proposed legislation is nothing more than a disingenuous attempt by big biotech and pharma to placate biogeneric advocates and the American public. In reality, the legislation provides innovators companies with a legally-binding regulatory approval pathway that will allow them to maintain or extend their monopolistic stranglehold on blockbuster biotechnology products. I think that the US Congress can do better when it comes to biogeneric legislation–the American public not only deserves it but demands it!

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!!!

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Insmed a small, Richmond Va-based biotechnology and manufacturing company has upped the ante in the fight to bring follow-on biologics to America.  After spending some time on Capitol Hill, company executives  found that “people in Washington, as well as payors and patients don’t have an understanding at a reasonable level of the debate that is going on and the issues” surrounding that follow-on biologics debate. To reach as wide an audience as possible and frame the debate on the issues” the company decided to use the Internet to take the initiative to the next level–the Internet.

A key to Insmed’s initiative is an economic study on the potential savings follow-on biologics could provide to patients, payors and healthcare providers. The study is still being conducted and its results will be published on the net when available. The campaign also includes advocacy components that like user-generated content (blogs) and social networking sites. Recently, Insmed posted a video clip on YouTube that feature one of its scientists extolling the virtues and cost-saving advantages of follow-on biologics.

As many of you may know, I have long been an advocate of legislation to allow the approval and sale of follow-on biologics in the US.  Unfortunately, until now, only one side of the debate–from big biotech and BIO–has been heard by the American public. This has largely been due to marketing muscle and deep pockets of big biotech coupled with a lack of unity among follow-on biologics advocates. Web 2.0 with its social networks, blogs and video sites allows people with the smallest voices to be heard. And, sometimes those small voices can turn into  roars!

Kudos to Insmed for having the courage to boldly go where no generics manufacturer has gone before–on YouTube! Yeah baby!!!

Until next time….

Good Luck and Good Job Hunting (see you on Web 2.0)!!!!!!!!

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The Bush administration's proposed 2009 fiscal year budget for the FDA includes not only a 5.7 percent increase but a plan to seek authority to allow the agency to approve abbreviated applications for follow-on biologics.

As part of the budget package, the administration said it is seeking regulatory authority for the FDA to approve follow-on biologics, also called biosimilars or biogenerics, which would be financed through user fees.

The House and the Senate both introduced follow-on biologics legislation in 2007, with the Senate's bill moving the furthest by achieving passage by the Health, Education, Labor and Pensions Committee. Lawmakers have pledged to move the legislation forward in 2008.

Jim Greenwood, CEO of the Biotechnology Industry Organization (BIO), said "BIO strongly believes that the FDA should have a pathway for the approval of follow-on biologics, which protects patient safety and promotes continued innovation," Greenwood added that "The creation of a pathway for follow-on biologics is a top legislative priority for BIO, and we are meeting with members of the House and Senate to encourage them to consider and pass follow-on biologics legislation this session." This is quite a policy turnaround for BIO which over the past 8 years has spent tens of millions or more lobbying against allowing follow-on biologics in the US.

Even more shocking than the BIO turn around, was the first ever plea last week by the Whitehouse to pass legislation to craft legislation to create a regulatory approval pathway for follow-on biologics-what’s up with that? I guess Bush and his big biotech buddies finally realized that large sums of money can be made in the follow-on biologics/biogenerics business. This possibility was not lost on the Europeans, who created a regulatory pathway for approval of biosimilars (what follow-on biologics are called in Europe) several years ago! Biosimilars are already on the European market–who said that Europeans were less entrepreneurial than Americans?

Contrary to statements made by FDA officials last week, which suggested that FDA would craft the follow-on biologics legislation, it now appears that FDA will  work closely with Congress to draft a legislative proposal for approval of  follow-on biologics. I don’t think that Congress’s involvement is a good idea given the political wrangling, deal-making and concessions that must be made in order to get legislation passed. As the old adage goes, something is better than nothing.

It looks as though follow-on biologics may become a reality in the US. As I mentioned in previous posts, I don’t think Americans will see follow-on biologics on the market before 2010 or 2011. That said, it gives us Americans something to look forward to!

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!!!

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The US Congress is poised this week to pass a new healthcare bill that gives the Food and Drug Administration (FDA) more authority to scrutinize drugs after they reach the market, including power to mandate label changes that warn of new risks. This is good news!

The bad news is that follow-on biologics advocates were unable to add legislation to the bill that would allow the FDA to approve follow-on biologics for sale in the US. As many of you may know, there is no legally sanctioned pathway for approval of generic versions of protein-based biotechnology drugs in the US. In stark contrast, the European Medicines Agency (EMEA) crafted legislation in 2006 to allow these products to be approved and sold in Europe. Since that time, several biosimilar drugs (the European name for follow-on biologics) have received marketing authorization by European regulators and are currently marketed in many countries in Europe and elsewhere.

Biotechnology drugs are typically very expensive and out of reach for many people who lack adequate healthcare insurance. Follow-on biologics advocates argue that their products can be sold at lower prices –anywhere from 25%-30% less – than their branded drug counterparts. The lower prices of biosimilar products that are currently sold in the EU tend to support this assertion.

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