The Battle Over Biologics

“Lengthy periods of exclusivity will harm patients by diminishing innovation and unnecessarily delaying access to affordable drugs.” Nancy-Ann DeParle, director of the Office of Health Reform, and Peter Orszag, director of the Office of Management and Budget *

Biologics CostOver the past couple of months, Rheumatoid Arthritis Guy has paid quite a bit of attention to the importance of staying calm. Even during some of the roughest periods in my recent flares, one of my goals always remained unchanged: the need to maintain a sense balance both in my mind and in my thoughts.

Yesterday, all of this was thrown out the window. Oh, it was not because of anything related to my rheumatoid arthritis, per se. In fact, yesterday was one more great day in the series of great days that I have been lucky enough to have this past week. (I got on the elliptical machine at the gym for the first time in months, and then went to power pilates class.)

This is what happened. I was reading some comments on my blog, when the news ticker at the top of the page was showing results related to the term “biologics”.

(I must admit that since I currently do not take any biologics, reading and research in this area has not been one of my highest priorities. Chances are that I will need to take biologics in the future, but my attitude has been that I will cross that bridge when I come to it. As of yesterday, I have changed my approach.)

Needless to say, the following headlines piqued my interest: “Blood Boils Over Bill To Protect Biotech Drugs”, “Study Endorses Longer Market Exclusivity For Drugmakers”, and “When Should Biotech Drugs Face Generic Competition?” Thanks to the Wall Street Journal (defender of the common man – extreme sarcasm), I was thrown head first into a debate that is currently raging in the United States.

Brand name drugs have a certain period of exclusivity after their patent is granted. No generic drugs can be produced during this period of exclusivity. The shorter the period of exclusivity, the sooner it takes for generic versions to hit the market. The longer the period of exclusivity, the longer it takes for generic versions to come to market.

In March 2009, Representative Henry A. Waxman (D-California) introduced H.R. 1427: Promoting Innovation and Access to Life Saving Medicine Act. This legislation calls for a 5-year exclusivity period for biologics.

In March 2009, Representative Anna G. Eshoo (D-California) introduced H.R. 1548: Pathway for Biosimilars Act. This legislation calls for a 12-14 year exclusivity period for biologics.

It should come as no surprise that the Biotech Industry is supporting Representative Eshoo’s version of the bill. Anyone who has followed the pharmaceutical business in the past few years know the supposed reasons all too well. Research costs need to be recouped. Brand name drugs are safer than generic drugs. If companies don’t get these provisions to control the market to their advantage, it will no longer be in their favor to continue the development of these medicines. Thus, medical advances and innovation will stop.

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I have heard arguments big and small in support of delaying generic medicines as long as possible. In fact, when I read the articles in The Wall Street Journal (and corresponding studies that were no doubt funded by the pharmaceutical and biotech industries), one is actually left with the impression that these big corporations are on the verge of financial collapse should the law not be changed to their favor.

I would like to present my argument to the contrary, and I would like to keep it as simple as possible.

The “Bottom Line” Of Companies Who Manufacture And Market Biologics

Abbott Laboratories (Humira)
2006: $1.7 billion
2007: $3.6 billion
2008: $4.9 billion

Amgen, Inc. (Enbrel)
2006: $2.9 billion
2007: $3.2 billion
2008: $4.2 billion

Biogen Idec Inc. (Rituxan)
2006: $217 million
2007: $639 million
2008: $783 million

Bristol-Myers Squibb (Orencia)
2006: $1.6 billion
2007: $2.2 billion
2008: $5.2 billion

Genentech (Rituxan)
2006: $2.1 billion
2007: $2.8 billion
2008: $3.4 billion

Wyeth (Enbrel)
2006: $4.2 billion
2007: $4.6 billion
2008: $4.4 billion

Net income: the income that a firm has after subtracting costs and expenses from the total revenue.

All of the above figures represent net income, as shown on the companies’ annual income statements. (Google Finance)

Don’t forget, these figures represent the ANNUAL bottom line. Contrast these numbers above with the number below.

Average Cost to Develop a New Biotechnology Product Is $1.2 Billion

BOSTON – Nov. 9, 2006 – The Tufts Center for the Study of Drug Development today announced it has developed the first comprehensive estimate of the average cost of developing a new biotechnology product, and pegged it at $1.2 billion.

Read full press release…

These companies are making a lot of money already, and continue to make more money each year. These companies are more than recouping the cost of developing your biologics. So please, don’t try to sell me on the promise that extending the exclusivity period will benefit the patient by bringing more drugs to the market, resulting in lowered costs.

Instead, please focus on lowering the exorbitant cost of the drugs that are already on the market. This is something that might actually benefit us patients.

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“Without a fair and sustainable cycle of investment and returns in innovative R&D, biotech discovery will be stifled.” David Polk, a spokesman for Amgen. *

I don’t know about you, but I am so tired of threats like the one above. The fact that this comes from an Amgen spokesman should come as no surprise. It is a little more disconcerting, however, when I hear this same sentiment coming from one of our elected representatives. Take a look at the following press release that I found on Representative Eshoo’s website.

Eshoo, Barton Introduce Pathway for Biosimilars
March 13, 2008

Washington, D.C. – Today, Rep. Anna G. Eshoo (D-California) introduced the Pathway for Biosimilars Act, legislation to create a regulatory pathway for FDA approval of “biosimilars” or “follow-on” biologics with Rep. Joe Barton (R-Texas), Ranking Member of the House Energy & Commerce Committee.

Rule #1: The name that is given to a bill is rarely representative of what is actually contained in said bill. I believe in truth in advertising. My name for this legislation, Representative Eshoo: “Pathway to Continued Overcharging Act”.

“This legislation will establish a regulatory pathway for biosimilars that will promote competition and lower prices, and protect patient safety, drug efficacy and sound science,” said Rep. Eshoo. “The most exciting developments in modern medical science are occurring in the field of biotechnology, and this legislation will ensure that the amazing cures and treatments biotech delivers today will continue and more patients will have access to these revolutionary therapies.”

I’m no economist, but I have no clue how delaying the production of (competing) generic drugs actually “promotes competition and lower prices”. As it is, most individual’s co-payment is actually increasing each month. In terms of ensuring that biotech innovation continues, is it not the case that ALL of the current biologics were bought to market in the absence of the protections that you are requesting?

Many of the original patents in the biotechnology industry are beginning to expire and several patient groups, biotech companies, and healthcare providers have called on Congress to provide a regulatory pathway for follow-on biologics or biosimilars to be approved by the FDA. The Pathway for Biologics Act provides an abbreviated pathway for approval of biosimilars based in part on the safety and efficacy record of an innovative reference product.

The previous paragraph said that one of the aims of this legislation was to “protect patient safety”. This paragraph calls for a streamlined approval process. Is there something I am missing? I went and read the actual text of this bill, and came across this paragraph calling for the permission to waive “analytical studies, animal studies, and clinical studies”. Fewer studies are supposed to mean an increase in patient safety? [Insert the theme song from The Twilight Zone here...]

The Pathway for Biologics Act permits the FDA to make a determination as to whether the biosimilar is interchangeable with the reference product, and gives the FDA the flexibility to determine what clinical testing – if any – is required for approval. To promote continued innovation in biotechnology, the legislation provides 12 years of data exclusivity to allow innovators to market their products and recoup their investments in research and development. Finally, to prevent uncertainty and delays over patent litigation, the bill establishes a process for resolution of patent disputes prior to the time biosimilar products are eligible to come onto the market.

Once again, we are told that this extended exclusivity period allows “innovators to market their products and recoup their investment in research and development”. It seems like they are already quite successful in these regards – please see “The ‘Bottom Line’ Of Companies Who Manufacture And Market Biologics” above. It took me an entire fifteen minutes to collect these figures.

“This legislation will protect patients, promote innovation, and prevent unnecessary litigation,” said Eshoo. “I’m pleased to have my colleague Rep. Joe Barton as a partner on this important bipartisan effort and we will work together to enact this legislation before the end of this Congress.”

# # #

If your proposed legislation takes effect, this sentence is probably the ONLY place where patients will actually come first. Thanks for ranking me before innovation and litigation, though – that was a nice touch. It’s going to take much more that this, however, to win my support.

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In case you were wondering – the biggest contributor, by industry, to Representative Eshoo’s 2010 Congressional Election Campaign is: [drumroll please...] Pharmaceutical/Health Products. (www.opensecrets.org)

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The Arthritis Foundation released a Statement on Follow-On Biologics in April 2009. It is unclear which, if any, of the two versions of the bill is being supported. Exclusivity periods and drug costs are hardly even mentioned in this statement.

The American Association of Retired Persons (AARP) released a public policy statement Biologics in Perspective: The Case for Generic Biologic Drugs in May 2009. This organization comes out strongly support of the shortest possible exclusivity period for biologics. (Be sure the take a look at the PDF – DON’T MISS THE CHART ON THE SECOND PAGE!)

The Obama administration recently called for a 7-year exclusivity period, as a compromise.

This story is still being written, so stay posted in order to find out the details about the final legislation.

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Profits Before Patients

Be sure to check out this week’s Bill Moyers Journal: Wendell Potter on Profits Before Patients.

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What Can You Do To Help?

Rheumatoid Arthritis Guy has only one voice. Please add your voice to this debate that will have a profound impact on all of us living with rheumatoid arthritis or other autoimmune diseases.

1. Contact your local senator and representative, and tell him/her that you DO SUPPORT H.R. 1427: Promoting Innovation and Access to Life Saving Medicine Act and that you DO NOT SUPPORT H.R. 1548: Pathway for Biosimilars Act.

Contact Elected Officials (USA.gov)

2. Contact Representative Henry A. Waxman’s office and tell him that you DO SUPPORT H.R. 1427: Promoting Innovation and Access to Life Saving Medicine Act.

WASHINGTON, D.C. OFFICE
2204 Rayburn
House Office Building
Washington, D.C. 20515
Telephone (202) 225-3976
Fax (202) 225-4099

CALIFORNIA OFFICE
8436 West Third Street, Ste 600
Los Angeles, CA 90048
Telephone 1 (310) 652-3095
Telephone 2 (818) 878-7400
Telephone 3 (323) 651-1040
Fax (323) 655-0502

3. Contact Representative Anna G. Eshoo’s office and tell her that that you DO NOT SUPPORT H.R. 1548: Pathway for Biosimilars Act.

WASHINGTON D.C. OFFICE
205 Cannon Building
Washington, D.C. 20515
Telephone (202) 225-8104

CALIFORNIA OFFICE
698 Emerson Street
Palo Alto, California 94301
Telephone 1 (650) 323-2984
Telephone 2 (408) 245-2339
Telephone 3 (831) 335-2020
Fax (650) 323-3498

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Senate Committee Approves 12-Year Exclusivity Period

Just as I finalized this post last night, the Senate Health, Education, Labor and Pensions committee – by a 16-7 vote – approved an amendment that would grant makers of biologic drugs a 12-year exclusivity period from generic drug competition. *

This amendment was sponsored by Senator Orrin Hatch (R-Utah) and Senator Mike Enzi (R-Wyoming).

The biggest contributor, by industry, to Senator Hatch in the past five years is: Pharmaceutical/Health Products. (www.opensecrets.org)

The biggest contributor, by industry, to Senator Enzi in the past five years is: Pharmaceutical/Health Products. (www.opensecrets.org)

Is anyone else seeing a pattern here?

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In closing, please let me state that I am not trying to start a heated debate between red and blue, between republican and democratic, between public and private, between rich and poor, between insured and uninsured, between liberal and conservative. In order to solve the problems that face us, we need to dive much deeper than these labels allow us to.

It is my belief that taking care of our sick is a matter of common sense and human decency.

Here’s hoping that if and when I need to take biologics for my rheumatoid arthritis, that I can actually afford them.

*****

Stay tuned…for the next adventure of Rheumatoid Arthritis Guy!

19 Comments
19 comments
  1. Jules says:

    I am currently on Humira after a short (3 months or so) stint on Enbrel. Without my insurance I would never have been able to afford them. I don’t know how people without insurance do it. I am very bothered by the exclusivity legislation. I understand the need for profit- but there is a highway rather than a line between profit and greed- and it saddens me that the drug companies have crossed that highway at our expense.

  2. Millicent says:

    Unfortunately, greed drives most large companies, Congress, etc.–no matter what they call it. Between insurance companies (don’t even get me started on them!!) & drug companies, hell will be overflowing with evil dead people! Then there is Congress—which begs the question: Does power corrupt, or do the corrupt become powerful?

  3. Meredith says:

    Wow, thank you for this well researched, informative post. It is always shocking to me when I get the bill for my Enbrel and see that my insurance company is paying $1400 a month for it. Without health insurance there is no way I could afford it. And I assumed that the drug companies were recouping those expenses. I had no idea that they were trying to extend the exclusivity of the drugs. That really bothers me.

  4. Sara says:

    Here, here!!!! Thank you for writing such a comprehensive post about this. I admit I’ve only been able to skim some of the articles and follow along in the papers lately since I’m consumed with moving arrangements, but this, in my opinion, is whack.

  5. Diane says:

    They are just like the oil companies…..greedy little buggers!!!! Humira has been a life saver for me (along with MX). But it’s like $900 a shot! I now have insurance that covers most of it but STILL…..I hate govt. bureaucracy! Orin Hatch is my guy from Utah….grrrrrrrrr!

  6. Otis says:

    Orencia =8K-10K a dose and joint disease charges 12K a dose………yea u need to be a millionaire to have autoimmune arthritis…….my insurance company hates me. I put my 2 cents into washington

  7. Cathy says:

    My Remicade costs $4000 every time I take it (my dose is 4 vials, at $1000 a pop) and my insurance company only covers 90% – so we pay $400 out of pocket every two months for it. Between that and the other drugs I take every month, my meds are bankrupting me.

  8. Terrie says:

    Holy crap, Otis! I’m waiting for approval to start Orencia, but that cost creeps me out. I hate paying into that in any way, shape or form.

  9. Angie says:

    Not sure how I feel about generic biologics, but Remicade was my best friend for over 10 years and now, after 5 months of “YUCK” Orencia is getting me back to “normal” (Whatever that is………) I’d be a blob of nothing without these drugs!

  10. Jennifer says:

    My Orenica costs me $32.90 a month being here in OZ but the hoops I have to jump through for the government to approve me to be on it so they can pay the $1,500.00. Plus Australia follows the US so I would prefer the the patents be kept to a minimal so we can finally get some generics. This might mean the people that really need them can actually get them!

  11. Jennifer says:

    RA Guy being a Australian citizen is there anything I can do?Sorry I was a little tired last night to ask.

  12. Cathy says:

    Wowzie! The costs are unreal. I thought I was putting out a lot for alternative care, but I am getting by pretty cheap it seems. Thanks for this informative article. The cost of medications affects all of us.

  13. Joy says:

    Thanks so much for attention to this critical issue that affects so many RAers that cannot afford or have trouble affording expensive biologics.

    I’ve tried to follow this issue, as I am on a biologic, and though my insurance covers most of the cost, my heart goes out to the number of people who cannot take these drugs because of the cost — and many of them have insurance!

    I have a question though. A drug company has a patent period in which there is no competition and they can charge whatever they want. Is a “period of exclusivity” beyond the expiraton of a patent?

    In addition to RA, I also have vision problems, so researching these complex issues is difficult for me, so I appreciate any clarification.

    Also, once a brand name company’s patent runs out, and this period of exclusivity ends, whatever length of years may be decided, can’t the brand name company make and market the “biosimilar?” Hasn’t the original drug makers of brand drugs gone on to make the generics? If thats the case, then “safety and quality” wouldn’t be as big an issue.

    Another thing to consider is that once biosimilars come onto the market, the reduction in price won’t be as significant as generics made from chemicals. The process to make biologics/biosimilars is more complex, and therefore more expensive, so there won’t be a swarm of generic companies making biosimilars, so my point is, that biologic drugmakers will still be able to make a profit — and — if healthcare reform is passed resulting in more having access to affordable health insurance, these drug companies will have a bigger market, more customers, more profit.

    Sorting out the truth is difficult when you consider all for-profit companies first priority is their bottomline — their loyalty first is to their shareholders, not the consumer, and the multimillion dollar compensation packages of drug company CEOs rewards them for keeping their stock price up, not for making their drugs available to those who need it.

    I’m inclined at this point to support a period of exclusivity of five or seven years.

  14. RA Guy says:

    Wonder how the Waxman and Eshoo bills differ on safety?

    Waxman’s bill, which calls for an exclusivity period of 5 years, actually calls for more testing. In addition to having to include “(ii) information from any necessary clinical study or studies sufficient to confirm safety, purity, and potency”, it also stipulates that any such studies should avoid any unethical testing. (http://www.govtrack.us/congress/billtext.xpd?bill=h111-1427&version=ih&nid=t0%3Aih%3A43) This proposed legislation also calls for new tests, should any of these medications be introduced for pediatric use. (http://www.govtrack.us/congress/billtext.xpd?bill=h111-1427&version=ih&nid=t0%3Aih%3A238)

    Eshoo’s bill, which calls for an exclusivity period of 12-14 years, actually allows for less testing. This proposed legislation allows for the following tests to be waived: analytical studies, animal studies, and clinical studies. (http://www.govtrack.us/congress/billtext.xpd?bill=h111-1548&version=ih&nid=t0%3Aih%3A42)

    By the way, Waxman’s Bill (H.R. 1427) has currently has 14 co-sponsors in the house, while Eshoo’s Bill (H.R. 1548) currently has 131 co-sponsors in the house.

  15. Joy says:

    I was confuuusssed, but think I got it now.

    Even though a biologic’s patent may have expired, the biologic company still has “market exclusivity” because there is no “FDA regulatory pathway” for a follow on biologic or biosimilar (a generic version of a biologic).

    So, with no competition, biologic companies can continue to charge whatever they want. Ka-ching!

  16. Prof says:

    i’m never surprised when i hear about these business schemes as it seems to be normal practice for many companies. the bottom line is all that matters…never mind the people and lives that are affected by the decisions of these companies. it is so infuriating, and i find myself wondering when our elected officials will take a stand against these practices and call them out. this looks like great material for an aspiring documentary filmmaker. anyone out there??

    thanks for bringing this to our attention, RA guy!

  17. Kim (Bailey's Mama) says:

    My Daughter Bailey (Almost 5) diagnosed 2 1/2 yrs ago. Has had this affect her eyes several times —– this last month was the worst! Her Remicade bills have been coming in at almost $8,000.00 !!!!!! She was getting these every 2 weeks —so Yea, that comes to @ 16 GRAND a month?!?!!?!!!!! Thats with Insurance —- Blue Cross,….. What are we to do though – She has to have it to keep walking AND to SEE!!!!!! Check out her Blog Page: http://thewarrens-baileysmama.blogspot.com/

  18. Michelle says:

    Thanks for sharing this with us. Very informative information! I had to go two years with no treatment for my RA because of the cost of these biologics. I am now on Actemra only because of help through a foundation. When that runs out, I’m not sure what my choices will be…

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