Senate plan extends exclusivity for makers of biologic drugs

Americans spend more than $60 billion a year on biologic drugs to treat cancer, rheumatoid arthritis, and other illnesses, at a cost of as much as $200,000 per patient, Ernst & Young estimates. Generic copies of these treatments are needed to help cut costs in the overhaul of the nation’s $2.5 trillion healthcare system, according to Obama.

The Senate proposal by Massachusetts Democrat Edward M. Kennedy is a placeholder that may be changed or discarded after amendments are filed by other senators, said a senior Democratic aide to the Senate health committee who asked not to be identified. Insurers, patient groups, and makers of generic drugs have lobbied Congress for more than two years to let the Food and Drug Administration approve so-called biosimilars.

“At a time when policy makers are looking to lower health costs so more Americans can afford care, Senator Kennedy and others want to go in the opposite direction by keeping monopoly pricing,’’ said Katie Huffard, executive director of the Coalition for a Competitive Pharmaceutical Market, a Washington-based organization of employers, insurers, and consumer groups that have lobbied for generic drugs, in an e-mail yesterday.

Biosimilars might be sold 10 percent to 30 percent below the price of the original drugs, allowing for “substantial consumer savings,’’ the Federal Trade Commission said in a June 10 report. Makers of the brand-name therapies would retain as much as 90 percent of their market share, as they cut prices to stay competitive, the agency said.

Biologics are made from natural sources such as sugars, proteins, or tissues, unlike conventional pills manufactured by chemical synthesis. Copies of conventional pills are allowed after five to seven years under a 1984 US law.

Amgen of Thousand Oaks, Calif., is the largest US biotechnology company.

Demand for new products and the promise of higher profit margins have led conventional drugmakers to move into biotechnology. Swiss drugmaker Roche Holding AG bought partner Genentech Inc., maker of the cancer drug Avastin, in March for $46.8 billion.

Brand-name biologic drugs would get at least nine years of exclusivity aside from patent protection, plus as much as four years for new uses and six months for pediatric studies under Kennedy’s plan. Drugmakers led by Amgen have sought 12 to 14 years of sales before biosimilars enter the market.

White House officials proposed seven years in a June 24 letter to Representative Henry Waxman, calling it a “generous compromise’’ with industry. “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, wrote in the letter.