What do you call a drug that costs as much as $100,000 a year but doesn't face competition?
If you're a consumer footing the bill, you might call it an unfair monopoly. If you're the biotechnology company selling the medication, it's a money machine that needs to be protected at all costs.
For The Record
Los Angeles Times Thursday November 16, 2006 Home Edition Main News Part A Page 2 National Desk 1 inches; 35 words Type of Material: Correction
Generic biotech drugs: A chart accompanying an article in Saturday's Business section said the anemia drug Procrit was manufactured by Amgen Inc. Procrit is made by Ortho Biotech Products, a subsidiary of Johnson & Johnson.
All this could change soon. Democratic control of Congress -- gained through dramatic victories this week -- is expected to lead to legislation allowing generic versions of popular biotech drugs, lowering their costs.
Unlike with most pharmaceuticals produced by traditional drug companies, there is no federal regulatory system to approve generic versions of biotech drugs.
Patent laws are the same for biotech drugs as for regular ones, generally giving 20 years of exclusivity from the filing of an approval application. The biotech industry largely took off in the 1980s, so the earliest biotech medications such as insulin and human growth hormones are already off patent in the U.S. Over the next several years, the list is set to grow substantially.
Some lawmakers, such as Rep. Henry A. Waxman (D-Los Angeles) and Sen. Charles E. Schumer (D-N.Y.), have been trying to pass generic biotech legislation for years. One obstacle: The biotech industry has aggressively lobbied Congress to hold off, and many members have agreed until now.
With Democrats gaining power, however, the industry isn't likely to stave off competition much longer.
A lot will depend on the influence of Waxman, chairman-elect of the House Committee on Government Reform, and others interested in seeing greater drug competition. In 1984, Waxman coauthored the law, known as the Hatch-Waxman Act, that allows the Food and Drug Administration to approve generic drugs.
But it applies only to traditional, chemically based medicines. Biotechnology drugs such as insulin and some cancer drugs are made using living organisms and manufactured inside bacteria or yeast cells in large bioreactors.
When the law passed, there weren't many biotechnology drugs on the market. Since then, more than 300 have been approved, as the underlying science has improved markedly and manufacturers were lured by the hope that their products might never face competition.
In an interview Wednesday, Waxman said he planned to introduce legislation early next year that would set up a clear approval process for generic biologics.
"Biotech drugs promise life-saving benefits, but at a cost so high, many Americans cannot afford them," he said. But he added that the "prospects for passing a generics biologics bill have improved significantly," and the issue "is one of my highest priorities for the next Congress."
Other lawmakers, including Sens. Hillary Rodham Clinton (D-N.Y.) and Orrin G. Hatch (R-Utah), have signaled interest in such legislation, although it's unclear which, if any, bill they would support in the next term. It's also unclear whether President Bush would sign such a bill.
Even in the rarefied world of the pharmaceutical industry, biotech drugs have grown into a gold-plated breed all their own. Although the sector failed to live up to its long-awaited promise of a "biotech revolution" for years, that's changing. Medications such as Avastin, for colon cancer, and others for arthritis and AIDS have revolutionized the treatment of those diseases.
But it hasn't been cheap. A several-month course of Genentech Inc.'s Avastin costs about $50,000. Enbrel, a drug for rheumatoid arthritis from Amgen Inc. and Wyeth Pharmaceuticals Inc., costs nearly $20,000 for a year's supply.
Biotech's ability to charge high prices is a major reason the sector is growing 16% a year, double the drug industry's average. Sales in the U.S. are expected to top $50 billion by 2010 and account for an estimated 12% of the nation's total drug bill.
Biotech companies say their products are too complicated for generic manufacturers to re-create, and the science isn't advanced enough for safe and effective knockoffs.
The companies contend that generic makers should be required to conduct multiyear clinical trials before selling their own versions of the drugs, a requirement manufacturers couldn't afford while selling generics at steep discounts.
Kelley Davenport, director of corporate communications for Thousand Oaks-based Amgen, said the main threat of biotech generics wouldn't be to profits, but to patient safety.
"Even small differences in these products can cause differences in effectiveness and unexpected side effects, especially in the many seriously ill patients who rely on these medications," she said.
Generic drug manufacturers disagree, countering that the science behind biologics is no longer as complex as top-line drug makers make it out to be. Scientists, they say, are making advances all the time. Several companies say they could create nearly identical copies of several high-priced biotech drugs immediately if they had the regulatory approval.
