Rx America: Drug companies want patent protection in health care overhaul

As Congress debates a health-care insurance overhaul, the pharmaceutical industry is lobbying heavily for expanded patent protections that its lobbyists say are necessary to protect the industry’s investments and encourage future developments.

The question is how long a period a drug developer will have exclusive rights to a certain kind of drug – called biologics – before competitors can be allowed into the market with generic versions.

Biologics are costly drugs produced from living organisms, not from chemicals as the more common small molecule drugs are composed. Americans spend an estimated $40 billion per year on the drugs, which comprise almost a third of Medicare Part B spending.

PhRMA – the lobbying arm of the industry headed by former Louisiana Congressman Billy Tauzin – wants at least 12 years of protection from competition, saying that’s about what it would take, on average, to recoup the initial research and development investment of getting a drug to the marketplace.

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Generic versions of biologic medications are coming Companies most likely to produce biogenerics

The days of market exclusivity could soon come to an end for the biotech industry if Congress moves forward with plans to finally allow generic biologics on the U.S. market.

Because of their eye-popping price tags, pressure to rein in the cost of biologics has been mounting on Capitol Hill for some time. A process for approving generic versions of traditional chemical medications has been in place for more than a decade, but Congress has yet to establish a similar legal pathway for biologics.

But all that could change in the next few months. Currently, almost all of the leading healthcare reform bills circulating on the Hill call for allowing the Food and Drug Administration to establish an approval process for generic biologics, also known as biogenerics or biosimilars.

Unlike traditional drugs, which are comprised of chemicals, biologics use living cells to treat diseases and disorders. The drug category includes some of the most popular therapies on the market: Cancer treatments such as Roche's /quotes/comstock/11i!rhhby (RHHB.Y 39.12, -0.72, -1.81%) Avastin and Herceptin; rheumatoid arthritis drugs such as Amgen Inc.'s /quotes/comstock/15*!amgn/quotes/nls/amgn (AMGN 58.98, -0.80, -1.34%) and Wyeth's /quotes/comstock/13*!wye/quotes/nls/wye (WYE 47.79, -0.06, -0.13%) Enbrel, Johnson & Johnson's /quotes/comstock/13*!jnj/quotes/nls/jnj (JNJ 59.94, -0.50, -0.83%) and Schering-Plough Corp.'s /quotes/comstock/13*!sgp/quotes/nls/sgp (SGP 27.79, -0.39, -1.38%) Remicade, and Abbott Laboratories' /quotes/comstock/13*!abt/quotes/nls/abt (ABT 45.12, -0.11, -0.24%) Humira; and multiple sclerosis therapies such as Biogen Idec's /quotes/comstock/15*!biib/quotes/nls/biib (BIIB 49.24, -0.96, -1.91%) Avonex.

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Obama & McCain Agree On One Thing: Generics

You’re not surprised, are you? In any event, expanding the use of low-cost generics, including versions of biologics, would be near the top of their health care agendas, according to their advisers, who were speaking at a conference for the generic industry.

“We know that expanding the use of generics and eliminating barriers to that goal must be a centerpoint of any health reform effort,” Dora Hughes, a health care adviser for Obama, according to the Associated Press. And McCain adviser Douglas Holtz-Eakin echoed the sentiment: “Controlling health care costs has to be the imperative of any effective health care reform.”

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