Slow, costly process stymies generic biotech drugs

LOS ANGELES (Reuters) - One of the pledges of the Obama administration's healthcare overhaul was to enable cheaper copies of expensive biotech drugs, but the savings may not be as deep or come as quickly as hoped.

Healthcare companies and industry experts say questions over how the market will work and the specter of patent litigation mean robust competition for generic biotech drugs might wait until the end of the decade. The regulatory requirements - which could force drugmakers to spend more money on testing - could mean eventual cost savings for payers of as little as 10 or 20 percent per treatment.

That discount is paltry compared with savings of up to 90 percent for traditional generic medicines sold at U.S. pharmacies once the patents on brand-name pills expire.

U.S. health regulators issued their first draft of guidelines governing that process in February. Drugmakers and industry experts say the proposed rules still fall short of providing a clear understanding of the best way to develop this market.

"It should be the next bolus of growth for the generic drug industry and we need to fight to get a substitutable, interchangeable biogeneric marketplace," said Heather Bresch, chief executive officer at Mylan Inc, the world's third-largest generic drugmaker. "We don't have that today."

The U.S. healthcare law in 2010 stipulated that regulators establish a process for approving lower-cost copies of biotech drugs - often referred to as "biosimilars" because they are not made from the same living cell line as the original drug.

It drew upon a 2008 estimate by the Congressional Budget Office that the United States would save $25 billion from the use of biosimilars over 10 years.

"The CBO anticipated the first biosimilar to come this year in their score of savings impact," said Jonah Houts, senior director of government affairs at pharmacy benefit manager Express Scripts Inc. "That is not likely to happen."

Biologic medicines, such as proteins that treat conditions like cancer and rheumatoid arthritis, are derived from living organisms and tend to be injected. The innovative drugs - first introduced in the 1980s - can cost tens of thousands of dollars a year.

Copying them, while ensuring safety, is much more complicated, and expensive, than making conventional chemical-based compounds.

Go here to read the rest:
Slow, costly process stymies generic biotech drugs