Biotechs nod as senators urge caution on generics
WASHINGTON -- Local biotech powerhouses were comforted by yesterday's congressional testimony that urged federal regulators to take a cautious approach to approving generic versions of biologics, including mandatory human clinical trials.
The testimony came during a Senate Health, Education, Labor, and Pensions committee hearing considering a bill that would permit the Food and Drug Administration to approve generic versions of biologics -- drugs based on living organisms and cells.
Senator Orrin G. Hatch , a critic of the proposal, says it lowers safety standards and could jeopardize patients' safety. Hatch, a Republican of Utah , cosponsored legislation that speeds to market generic versions of conventional drugs that save Americans at least $10 billion per year, but he favors requiring generic-biologic manufacturers to test their drugs in humans before approval. Hatch also supports establishing patient registries to track side effects that may not occur until years after patients use a product.
Senator Hillary Rodham Clinton , Democrat of New York and one of the bill's sponsors, said the proposal empowers the FDA "to require whatever is necessary, including clinical trials."
Tim Hunt, a Biogen Idec Inc. spokesman, called the proposal "highly flawed," but said yesterday's testimony included "several positive" developments, including a focus on patient safety and a desire to use clinical trials to "truly understand" the safety and efficacy of generic biologics.
The "hearing has highlighted the very complex medical and scientific issues involved with this legislation, the importance of protecting patient safety, and the importance of the need for greater innovation through biotechnology," Hunt said. The Cambridge company manufactures brand-name biologics, including treatments for multiple sclerosis.
Senator Edward M. Kennedy , who chairs the committee, called biologic drugs "miracle medicines," but acknowledged that some come at a steep price: tens to hundreds of thousands of dollars per year , per patient . Americans spent an estimated $60 billion on such products last year, according to IMS Health , a healthcare information company, compared with $53 billion in 2005 .
Kennedy, Democrat of Massachusetts , said legislation regulating how generics come to market should be "led by the science " while protecting patient safety and valuing the investments made by innovative companies. He favors the approach taken by European regulators, who have approved generic versions of certain biologics, but only after manufacturers conducted rigorous human clinical trials.
Drug manufacturers who testified yesterday were split on whether to mandate clinical trials, which can cost millions of dollars and take years to complete.
"Absolutely, they need to be required," said Dr. Jay P. Siegel , a biotechnology research and development head at Johnson & Johnson . Experimental drugs with the potential of triggering troubling immune-system responses cannot be spotted without such trials, he said. "You could not take a drug that had never been studied in humans under carefully controlled conditions and start selling it to thousands of people," Siegel said. "It just would present too high a risk."
Ajaz S. Hussain , a vice president at Sandoz , the generic-manufacturing arm of Swiss drug maker Novartis AG , said the legislation "should give the discretion to FDA to ask for appropriate data sets that they think are necessary. Clinical [trials] could be part of it, or may not be part of it."
Hussain said demonstrating that a generic is comparable to the original biologic would always require clinical trials. Sandoz collaborates with Momenta Pharmaceuticals Inc. of Cambridge, using the firm's technology to more fully characterize proteins, reducing the number of human clinical trials required.
A broad coalition of businesses and groups supports giving the FDA legal authority to approve generic biologics, in part, because of its potential to shave billions from skyrocketing healthcare spending.
Sid Banwart , a vice president at Caterpillar Inc. , the world's largest manufacturer of construction and mining equipment, testified that biologic expenses represent the fastest-growing segment of its $600 million in annual US healthcare spending. Caterpillar's spending on biologics has risen 45 percent since 2004 , Banwart testified.
Recognizing the threat generic biologics pose to manufacturers' bottom line, a Friedman Billings Ramsey analyst this week slashed revenue projections for Amgen Inc.'s Epogen , an anemia drug that can cost $10,000 per year. The drug's patent expires in 2013 .
"Even if watered down, legislation sponsored by Representative [Henry] Waxman is threatening to biologics makers with looming patent expirations," FBR analyst Jim Reddoch wrote in a research note. "We calculate that Epogen is worth roughly 25 percent less with generic biologic competition than without."
Diedtra Henderson can be reached at dhenderson@globe.com. 
