House vote a victory for biotechs in biosimilars battle

A House panel has approved a provision in legislation that would give biosimilar drugs 12 years of protection from competing medicines.

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WASHINGTON – A House panel has passed a provision in legislation to overhaul the nation's healthcare system that would give biologics drugs 12 years of protection from competing medicines.
The Energy and Commerce Committee, in a 47 to 11 vote on July 31 to reject the Obama administration's call to limit exclusivity to seven years for drugs derived from living cells.

Both chambers of Congress must agree to final language in their overhaul measures.

The vote by the House Committee, which added the amendment as it finished work on the health reform legislation - America's Affordable Health Choices Act (HR 3200) - before the start of the August recess, follows a similar vote on July 13 by the Senate Health, Education, Labor and Pensions (HELP) Committee, which also rejected the administration's call for branded firms to have just seven years market freedom before biosimilars can come to market.

"This amendment sets forth a straightforward, scientific process for approval,'' said Representative Anna Eshoo, the California Democrat who sponsored the proposal. A 12-year window will promote competition, lower prices, and assure "that patients are given safe and effective treatments."

Rep. Henry Waxman, D-Calif., chairman of the Energy and Commerce Committee, said after the vote that "this amendment is exactly the wrong way to increase competition and reduce prices."

Waxman had proposed five years, arguing that cheaper versions of potentially life-saving drugs should be made available to patients sooner. The Obama administration's proposal for a seven-year window was a compromise.

The biotech industry lobbied hard for at least 12 years, saying they needed that long to recoup their investment and continue their work. They were supported by the National Venture Capital Association, which said private investment in biotechs would shrink without at least the prospect of significant returns.

Without the 12-year protection, "the whole fuel to keep this innovative industry going could collapse," Scott E. Koenig, CEO and president of MacroGenics of Rockville, said earlier. MacroGenics is working on a treatment for juvenile diabetes, now in phase 3 clinical trials, among other biologic products.

The committee also voted on Friday to ban deals in which drug companies pay generic firms to delay bringing out a cheaper, copycat version of a drug.

In the wake of the vote, the pharmaceutical industry continues to sort out just what it could mean.

Eli Lilly & Co. spokesman Ed Sagebiel told the Indianapolis Star the change "protects patients, promotes competition and preserves innovation, which is essential to finding new cures and treatments." He also said it would "preserve and create quality jobs."

Based in Indianapolis, Lilly is the nation's fifth-largest biologic drug maker. The company has nine biologic drugs on the market, including insulin and drugs to treat osteoporosis and sepsis. Lilly's biologic drugs account for about 30 percent of the company's sales, and about half of the drugs in Lilly's late-stage development pipeline are biologic.

Matt Gardner, president of BayBio, a trade organization representing about 500 biotech firms in the San Francisco region, said the House and Senate committees made the right call with 12 years.

"This removes some of the uncertainty at a time when the financial system is in turmoil," he said. "We look at the period after product approval as recovering the 15 years of development that goes into creating biotech medicines."

"The strong bipartisan support in the Energy and Commerce Committee for a fair and balanced pathway for the approval of biosimilars is a decisive win for the patients of today and tomorrow," said Jim Greenwood, president and CEO of the 1,200-member Biotechnology Industry Organization, in a statement. "The approved amendment … strikes the appropriate balance among ensuring patient safety, expanding competition, reducing costs and providing necessary and fair incentives that will provide for continued biomedical innovation.

"(This) action also is an important vote for our nation's economy and our global leadership in innovation," Greenwood said. "Biotechnology helps drive more than 7.5 million high-wage, high value jobs across the nation, many of which have been created by small, highly innovative companies. More than 90 percent of BIO's research and development member companies have less than $25 million in annual revenue and the vast majority of our member companies have less than 50 employees."

Meanwhile, Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson said in a statement that his group applauds members on the House Energy & Commerce Committee for passing a bipartisan biosimilars amendment that "strikes an appropriate balance between the desire for enhanced competition and preserving incentives for innovation."

"Unfortunately, the totality of the efforts in the U.S. House of Representatives, while well-intentioned, represents a step in the wrong direction in the health care reform debate," he said.  "PhRMA opposes the House Tri-Committee bill because it undercuts the main goal of health care reform which is to help all Americans access needed healthcare coverage and services."

Johnson says the bill would effectively act as a tax increase by raising premiums for seniors in the popular Medicare prescription drug program, severely restrict patient access and choice and hurt an innovative sector that currently employs hundreds of thousands of workers.

"The result could mean significant job losses in the middle of a recession. In addition, the legislation allows broad override of protections for Medicare and Medicaid beneficiaries by unelected officials, with no chance for review," he adds.

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