Title: Follow-On Biologics: Economic, Innovation and Policy Reflections The Fuqua School of Business Duke University
1Follow-On Biologics Economic, Innovation and
Policy Reflections The Fuqua School of
BusinessDuke University
2Charles DiLiberti
- V.P. Global Pharmacokinetics
- and Bioequivalence,
- Barr Laboratories, Inc.
3Commercial Opportunities and Challenges for
Follow-on Biologics
4Presentation Overview
- Generic Biologics
- Commercial Opportunities Savings
- Science Technology Challenges
- Regulatory Intellectual Property Issues
- Summary
5Commercial Opportunities Savings
6Benefits of Generic Competition
- Significant Cost Saving Opportunities
- Savings for consumers and taxpayers
- Generic Competition Will Fuel Innovation
- Brand companies will have the incentive needed to
vigorously pursue new biologics -
7Increasing Significance of Biologic Products
- US Biologic Revenues
- 1997 17.4 Billion
- 2007 65.2 Billion
- 400 Biologics Vaccines Currently in Clinical
Trials Targeting gt200 Diseases - Between 2003 and 2006, biologics represented 24
of all new chemical entities approved by the
US - Sales of biotech products in the US showed an
annual growth rate of 20 between 2001 and 2006
compared with 6 to 8 in the pharmaceutical
market
Ernst Young Biotechnology Industry
Organization Journal of American Medical
Association, October 22, 2008
8High Cost of Brand Biologics
- Annual Cost per Patient
- Enbrel (Arthritis) 20,000
- Cerezyme (Gaucher Disease) 200,000
- Remicade (Arthritis) 35,000-66,000
- Generic Competition Will
- Reduce These Costs
Baltimore Sun January 28, 2007 Bloomberg
January 11, 2007 Philadelphia Inquirer
September 19, 2006
9Significant Cost Savings Opportunity
Generic Biologics Represent Significant Cost
Savings Opportunities and Stimulate Innovation
- Epogen
- Market Before Generic Launch 2.5 Billion
- Brand/Year Today 9,000
- Generic Savings/Year assuming 50 savings 4,500
- Enbrel
- Market Before Generic Launch 2.7 Billion
- Brand/Year Today 20,000
- Generic Savings/Year assuming 50 savings
10,000
ABN AMRO February 2008 National Journal
February 10, 2007 Baltimore Sun January 28,
2007
10Generic Competition
- Price Drops as Number of Manufacturers Increases
11Market Size for Select Biologic Products
Product 2006 Sales ( Millions) Patent Expiration
Aranesp (Darbapotein alfa) 2,790 2016
Enbrel (Etanercept) 2,736 2012
Epogen (Epotein alfa) 2,511 2004
Remicade (Infliximab) 2,355 2013
Rituxan (Rituximab) 2,071 2013
Eprex (Ortho Biotech) 2,064 2004
Avastin (Bevacizumab) 1,746 2019
Rebetron (Ribavirin Interferonalfa-2B) 1,361 2001
Lantus (Insulin glargine) 1,260 2015
Source ABN AMRO February 2008
12Market Size for Select Biologic Products
Product 2006 Sales ( Millions) Patent Expiration
Humira (Adalimumab) 1,176 2013
Avonex (Interferon beta-1a) 1,022 2003
Cerezyme (Imiglucerase) 1,007 2010
Neupogen (Filgrastim) 830 2013
Humalog (Insulin lispro) 811 2013
Ceredase (alglucerase) 537 2001
Rebif (Interferon beta-1a) 493 2005
Neulasta (Pegfilgrastim) 493 2015
Source ABN AMRO February 2008
13PerspectiveHistorical Growth in Substitution
Source IMS Health, Banc of America Securities
LLC estimates
14Generic BiologicsOpportunity
- Generic Pharmaceuticals - A Vital Part in Health
Care System - Approximately 67 of the Prescriptions Dispensed
in the US Are Generics - Biologics
- Worldwide Market Estimated around 75 Billion
- Per Patient Cost for Biologic Products Can Exceed
100,000 Per Year - Generic Biologics
- US Consumers Could Save 43 Billion Between 2011
and 2020 - Estimated Value of Biologics that have already
lost Patent Protection 10 Billion - Estimated Value of Biologics to lose Patent
Protection in the Next Ten Years 20 Billion
IMS Health Citizens Against Government Waste
(CAGW) Release, May 2, 2007 ABN AMRO February
2008
15Science Technology Challenges
16Scientific Challenges for Generic Biologics
- Characterization
- Safety Assessment
- Therapeutic Equivalence
- Manufacturing Controls
17Generic Biologics
- Generic biologics, sometimes called follow-on
biologics (FOBs), are protein products that are
pharmaceutically and therapeutically equivalent - Generic biologics do not utilize the reference
products proprietary process, specifications or
clinical data - For established products, therapeutic equivalence
can be demonstrated using - In vitro studies and/or
- Pharmacokinetics and/or
- Surrogate markers and/or
- Clinical outcomes
- depending on the characteristics of the protein
18Biologics ? Size Does Matter...
19Misinformation Campaign About Generic Biologics
- Myth
- Raw materials of biologic origin are hard to
source and only brand biotechs know where to find
them. - Reality
- Raw materials are available today for many
generic biologics including insulin, G-CSF,
erythropoietin, interferons, etc.
20Misinformation Campaign About Generic Biologics
- Myth
- Biologics are too complicated to be
characterized. - Reality
- Numerous highly sophisticated analytical methods
have been developed, permitting complete
characterization. More advances will be achieved
each year.
21Misinformation Campaign About Generic Biologics
- Myth
- Generic companies lack the medical, scientific,
and technical ability to produce safe and
effective biotech products. - Reality
- Generic companies can and do make safe and
effective biologics. Many safe and effective
biologics currently are made in controlled
environments and marketed by generic companies
outside the U.S.
22Generic Biologics (Biosimilars) in the EU
- The ability to make generic biologics is far from
a theoretical possibility. - In 2004 EU issued EMEA Draft Guidelines for four
classes of generic biologics, referred to as
biosimiliars in the EU. - Since 2004, the EU has approved several
biosimilar products.
23EU Biosimilar Approvals
- DRUG EU MARKET
AUTHORIZATION DATE - Sandozs Omnitrope (somatropin) April 12,
2006 - BioPartners Valtropin (somatropin) April
24, 2006 - Sandozs Binocrit
- Medices Abseamed
- Hexal Biotechs Epoetin alfa Hexal
(recombinant human erythropoietin alfa) August
28, 2007 - Stada Arzneimittels Silapo
- Hospiras Retacrit
- (epoetin zeta) December 18, 2007
- Tevas Tevagrastim
- Ratiopharms Ratiograstim
- Ratiopharms Filgrastim ratiopharm
- CT Arzneimittels Biograstim
- (human G-CSF) September 15, 2008
- current through September 25, 2008
24FDA Approves Sandozs Omnitrope
- There has been some movement in the US to approve
generic biologics. - FDA approved Omnitrope in May 2006.
- FDA stated, however, that this approval does not
create a pathway for all generic biologics.
Omnitrope referenced a brand product (Genotropin)
approved under the FDCA.
25Misinformation Campaign About Generic Biologics
- Myth
- The Product is the Process.
- Reality
- Old models and mantras are inhibiting progress
the product is no longer the process.
(Statement of Mathias Hukkelhoven, Ph.D., Senior
V.P., Global Head, Drug Regulatory Affairs,
Novartis, Sept. 14-15, 2004).
26Misinformation Campaign About Generic Biologics
- Reality (continued)
- Biotech products can be fully characterized and
compared analytically. - Biotech Firms routinely justify their own process
changes via FDA approved comparability protocols.
27Development of Generic Biologics
- Strictly Controlled Process (Validated)
- Extensive Analytical Comparability
(Characterization) - Comparable Biological Activity
(In Vitro/In Vivo) - Non-Clinical Comparability (Safety,
Immunogenicity...) - Comparable pharmacokinetics (blood concentration
profile) - Comparable Clinical Efficacy and Safety
28Development Considerations
- Product Complexity
- From Development To Clinical
- Characterization
- Biosynthesis, In-Process and Finished Product
- Nomenclature
- Lack of Strict Definition, INN Issue
- High Cost of Development
- Marketing Requirements and Cost
- Post-Marketing Safety Surveillance
- IP Strength
29Regulatory Intellectual Property Issues
30Challenges for Generic Biologics
- Regulatory
- Congress needs to create an abbreviated approval
pathway - Intellectual Property
- Brand exclusivity
- Generic exclusivity
- Resolution of patent litigation prior to generic
launch
31Regulatory Issues
- Regulatory Framework Complicated By Existence of
Two Laws For Biologics - FDCA for NDA Products
- PHSA for BLA Products
- NDA Products
- Generic Pathway Exits, But FDA Implementation Is
Unclear - BLA Products
- Three Issues Need To Be Resolved
- Mechanics of Approval Pathway Need To Be Defined
- Brand/Generic Exclusivity
- An Efficient Patent Dispute Resolution Mechanism
32Abbreviated Generic Pathway Under PHSA
- A Generic Pathway Should
- Give FDA Authority To Decide Approval
Requirements For Generic Products - Adopt Exclusivity Provisions No Greater Than
Those Found In Hatch-Waxman - Permit Pre-Launch Adjudication of Certain Patent
Disputes
33Abbreviated Generic Pathway Under PHSA
- FDA should be permitted to decide what tests/data
are necessary for approval as a comparable or
interchangeable generic. - Congress should not impose unnecessary barriers
to generic approvals, e.g., mandatory guidance or
rule-making requirements mandatory clinical
trials requirement that generics seek approval
for all approved brand uses.
34Abbreviated Generic Pathway Under PHSA
- Congress should carefully consider any new,
additional exclusivities awarded to brand
biologics. - Considerable incentives already exist for brand
biotech companies.
35Existing Incentives for Brand Biotech Companies
INCENTIVE
Patent Term Restoration Drug manufacturers get back up to 5 years of time lost to product testing and approval delays.
PTO Patent Restoration If the patent approval is delayed by PTOs fault, patentee gets back each day in excess of 3 years.
Orphan Drug Exclusivity 7 years of exclusivity for drugs treating rare diseases.
General Business RD Tax Credit Allows manufacturers to claim 20 of qualified spending in the U.S. above the base amount.
Puerto Rico Tax Credit Allows U.S. corporations to exempt 40 of income from business operations owned in P.R., U.S.V.I., etc.
Foreign Tax Credit Allows U.S. corporations to claim limited tax credit for taxes paid to foreign governments.
URAA Patent Term Restoration The Uruguay Rounds Agreement Act (URAA) gives drug companies a 20 year patent from the date it was filed (rather than 17 years from issue).
36Abbreviated Generic Pathway Under PHSA
- If Congress decides to give additional
exclusivities to brand companies, Hatch-Waxman
establishes the maximum length and number of
exclusivities that can be justified - - 5 years for truly new, innovative products
- - 3 years for certain improvements to
already-approved brand products
37Abbreviated Generic Pathway Under PHSA
- Unlike the incentives that already exist to
develop new brand biologics, no incentives exist
to develop generic biologics. - Generic biologics legislation should include an
incentive, just as Hatch-Waxman does for small
molecule drugs, for the development of generic
biologics.
38Abbreviated Generic Pathway Under PHSA
- Effective generic biologics legislation will
include a mechanism for expeditious resolution of
patent disputes. - Hatch-Waxman has shown that patent mechanisms can
be abused to delay generic market entry.
39Abbreviated Generic Pathway Under PHSA
- Only those patent disputes that would cause the
generic company to delay launch should be
litigated simultaneously with the FDA approval
process. - Disputes over any other patent that the brand
owns should wait until the generic company
actually launches.
40Abbreviated Generic Pathway Under PHSA
- Such a process ensures that brand companies
cannot use weak or suspect patents to delay
generic market entry. - At the same time, the process protects all
legitimate patent rights it allows litigation
over all patents, but controls when that
litigation can start so that generic marketing
isnt unduly delayed.
41Regulatory IssuesU.S. Proposed Legislation
- Negotiations Are Ongoing
- Much Momentum Gained in Debate
- Optimistic for Ultimate Resolution
42Summary
43Generic Biologics in US
- Significant Momentum in US Congress
- Failed to Pass in 2007-08 Session Likely to Be
On Legislative Agenda in 2009 - Strong Consensus for Generic Biologics Among
Payers, Consumer Groups - Debate Centers On Three Issues
- Mechanics of Pathway
- How to Resolve IP Issues
- Exclusivity Issue
44Broad, Bipartisan Support for a Workable Pathway
for Generic Biologics
Groups in Support Groups in Support Groups in Opposition
Consumer Groups AARP AFL-CIO AFSCME California Public Employees Retirement System (CalPERS) Consumer Federation of America Consumers Union Families USA National Consumers League National Multiple Sclerosis Society (MS) National Research Center for Women Families National Organization for Rare Disorders (NORD) National Women's Health Network Pharmaceutical Care Management Public Citizen Service Employees International Union (SEIU) Spastic Paraplegia Foundation US Public Interest Research Group United Auto Workers (UAW) BIO PhRMA
Business Groups Caterpillar, Inc. DaimlerChrysler Corporation Eastman Kodak Company Ford Motor Company General Motors Corporation
Health Plans Aetna Inc. Americas Health Insurance Plans Blue Cross Blue Shield Association Humana Kaiser Permanente United Health Group Wellpoint
Pharmaceutical Stakeholders Apotex Ben Venue Barr Laboratories Caremark Express Scripts Generic Pharmaceutical Association (GPHA) Hospira Medco Momenta National Association of Chain Drug Stores National Association of Health Underwriters Pharmaceutical Care Management Association (PCMA) Ranbaxy Pharmaceuticals Sandoz Teva Pharmaceuticals USA Watson Pharmaceuticals Walgreens Company
State Governors Vermont Wisconsin Minnesota Kansas Montana Virginia West Virginia Mississippi Washington Nevada
State Governors
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