By
Donald Zuhn —

President
Obama Wants to Speed Up Introduction of Generic Drugs

In
a health care town hall meeting held in Portsmouth, NH last week, President
Obama told attendees
that he wanted to speed up the introduction of generic drugs into the
marketplace.  His comment came
during an exchange with a man who complained about being forced to try two
different generic versions of Lipitor after taking the brand drug for ten
years.  After noting that "in
nine out of 10 cases, the generic might work as well or better than the brand
name," the President stated that "it makes sense for us to make sure
that we're getting the best deal possible and not just giving drug makers or
insurers more money than they should be getting."  Before calling on the next questioner,
the President added:

[O]ne
of the things I want to do is to speed up generics getting introduced to the
marketplace, because right now drug companies — right now drug companies are
fighting so that they can keep essentially their patents on their brand-name
drugs a lot longer.  And if we can
make those patents a little bit shorter, generics get on the market sooner,
ultimately you as consumers will save money.

According
to a report in The New York Times, President
Obama's comment about speeding up the introduction of generic drugs was met
with applause from those in attendance. 
Given the new Administration's support for a 7-year data exclusivity
period, the President's comment about speeding up generic drug entry was not too
surprising (see "White House
Recommends 7-Year Data Exclusivity Period for Follow-on Biologics")
— although the President seemed to be confusing patent term for data
exclusivity.

Biosimilars
Pose "Limited Threat"

A
recent Dow Jones article ("European
Biosimilars Market May Hint At Limited US Threat")
suggests that Europe's experience with biosimilars "may reveal that their
effects [in the U.S.] will be limited."  The article states that biosimilars (also known as follow-on
biologics or biogenerics) "haven't gained traction in Europe because of
limited cost savings and worries that they aren't exact copies."  Both explanations call to mind the report
on follow-on biologics issued by the Federal Trade Commission in June (see "No One Seems Happy with
Follow-on Biologics According to the FTC").  With regard to cost savings, the Dow
Jones article contends that the "struggles [faced by biosimilars] in the
more cost-conscious European market hints that lucrative U.S. biologic drugs
may be able to defend their turf." 
The article notes that while some European biosimilars have been on the
market for 18 months, these drugs have managed to capture only 5-10% of the market, while small molecule generics frequently
capture 80% of the market.

Amgen
CEO Says Biologic Manufacturers Will Likely Retain Market Share

A
Thomson Reuters article ("Amgen
CEO says threat from biosimilars not absolute") last
May noted that Amgen CEO Kevin Sharer (at right) believed that "smart" biotech
companies would be able to retain half of their biologic sales even after market
entry of follow-on biologics.  During
Deutsche Bank AG's annual healthcare conference, Mr. Sharer told attendees that
some biotech companies would be able to "sustain 30 percent to 50 percent
of cash flow from products if they're smart competitors."  The FTC's follow-on biologics report,
which was released one month later, suggested that biologic drug manufacturers
would likely retain 70-90% of their market share following biosimilar market
entry.  While the FTC's and
Mr. Sharer's ranges differ, both are much higher than typically seen for small
molecule drugs.

PhRMA
VP Says 12 Years of Exclusivity Is Needed

In
a USA Today op-ed piece
last week, Pharmaceutical Research and Manufacturers of America (PhRMA) senior
vice president Ken Johnson stated that "America's biopharmaceutical
research companies support an approval pathway for biosimilars that balances
patient safety and competition with strong incentives for the investment needed
to develop new, life-saving medicines."  However, Mr. Johnson argued that "if an approval
pathway for biosimilars fails to provide at least 12 years of data protection,
much of U.S.-based research and development (R&D) will be stymied, drying
up investment needed to develop new medicines and create jobs."

Noting
that the development of a biologic drug can take more than 15 years and cost
more than $1.2 billion, Mr. Johnson contended that "patents provide an
unclear level of certainty to biologics innovators, which means that all [of a
innovator's] work and investment could be unprotected."  According to Mr. Johnson, this
uncertainty is the result of the very nature of biosimilars, which "will
be similar — not identical — to innovator biologics," and therefore,
will allow generic drug manufacturers to "make biosimilars [that] could
potentially circumvent an innovator's patents, rendering its
rightful patent protection ineffective."  He concluded that "robust data and patent protection
are complementary and essential to help protect and drive innovation in the
U.S., where the vast majority of biologic research is conducted."