Barr, GM Lobbying U.S. to Allow Biotech Drug Copies

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generic drugsJan. 11 (Bloomberg) -- Barr Pharmaceuticals Inc., the second-largest U.S. maker of generic drugs, is lobbying for a U.S. law that for the first time would routinely allow the sale of copies of medicines made from biotechnology.

"It's what we're eating and breathing," said Jake Hansen, Barr's chief lobbyist in Washington. The company is dispatching about a dozen representatives to press Congress for the law, along with lobbyists from other generic-drug makers. "It's definitely our main focus."

The biotech industry, which includes companies such as Amgen Inc. and Genentech Inc., is countering with its own lobbying campaign. The biotech drugmakers say making copies of gene-based medications, which are more complex than traditional treatments, could pose health risks.

The outcome of the fight will determine whether generic makers, including Barr and Israel-based Teva Pharmaceutical Industries Ltd., can sell competing versions of biotech medications when they lose patent protection. Generic biotech drugs may reduce prices by 33 percent, analysts say.

Barr's lobbyist, citing an industry study, says biotech copies could save $14 billion over 10 years for Medicare, the U.S. health plan for the elderly and disabled.

No Similar Process

U.S. law allows the Food and Drug Administration to approve generic versions of conventional drugs, mostly made from chemical synthesis, after their patents expire. There is no similar legal process for most biotech medicines, genetically engineered versions of human proteins such as insulin or growth hormone.

Biotech drugs generated revenue of about $32.8 billion, or 13 percent, of the $251.8 billion in prescription sales to U.S. pharmacies in 2005, according to IMS Health Inc., a research company in Fairfield, Connecticut.

Generic drugs accounted for 56 percent of prescriptions in 2005, up from 20 percent two decades ago, while generating 13 percent of drug sales, according to the Generic Pharmaceutical Association, an Arlington, Virginia-based trade group. Barr's revenue rose 26 percent in the last fiscal year while that of Pfizer Inc., the world's biggest drugmaker, declined 2.3 percent.

Many biotech medicines carry high price tags, and generic versions are likely to lower prices by 20 percent to 30 percent, Elise Wang, an analyst with Citigroup Inc. in New York, said in an interview. One of the most expensive biotech medicines is Genzyme Corp.'s Cerezyme, a treatment for a rare enzyme disorder that can cost $200,000 a year.

Lobbying Support


General Motors Corp., the biggest U.S. purchaser of health care outside the government, and AARP, the largest lobbying group for older Americans, are backing the generic-drug makers' effort.

Barr says in lobbying materials that patents have already expired for some top-selling biotech medications, making them vulnerable to competition if lawmakers act. Among the products listed is an anemia treatment sold in the U.S. by Amgen as Epogen and by Johnson & Johnson as Procrit. U.S. sales of the drugs, sold by both companies under a marketing agreement, totaled $4.71 billion in 2005.

A report from Citigroup says that one of Amgen's patents lapsed in 2004 and others expire in 2012 through 2015.

Barr, based in Woodcliff Lake, New Jersey, may file legal challenges against some patents if generics are allowed, said the company's chief executive officer, Bruce Downey, in an interview. He didn't identify the drugs Barr may target.

Legislation


Legislation to allow biotech generics is backed by senior Democrats, including Representative Henry Waxman of California and Senator Charles Schumer of New York. With Democrats now in the majority in Congress, supporters of generics are pressing leaders to make the measure a priority.

Opposition to the bill is led by the Biotechnology Industry Organization, a Washington-based trade group. Members include Amgen of Thousand Oaks, California, the world's biggest biotech company, South San Francisco-based Genentech and Cambridge, Massachusetts-based Genzyme.

James Greenwood, a former Republican House member from Pennsylvania and head of the trade group, known as BIO, said his lobbying will target freshman lawmakers and members of several committees that may consider the legislation.

"I have a long list of members I need to call," Greenwood said in an interview.

'Safety is Priority'

Amgen won't comment on legislation until the company sees the latest version that lawmakers introduce this year, said spokeswoman Kelley Davenport. "We want to make sure that patient safety is a key priority," Davenport said.

Conventional drugs are small molecules that generic makers can reproduce in versions that are almost identical to the original product, and vary little from batch to batch.

Biotech medications use bacterial cells to produce human proteins, and the final composition can vary somewhat, depending on the techniques used. Biotech companies say it is unlikely generic makers can easily reproduce the drug-making methods.

The European Union and a number of countries, including China and India, already allow some generic versions of biotech medications. Europe last year approved two versions of a growth hormone.

The U.S. legislation would permit the FDA to decide whether generic makers can skip or abbreviate human clinical trials to prove effectiveness and safety. Such studies aren't required for copies of conventional drugs.

'Duplicative Testing'

"You don't want to have duplicative testing," said Kathleen Jaeger, head of the generic-drug group, whose members include Barr and Canonsburg, Pennsylvania-based Mylan Laboratories Inc.

The law should create "criteria that show the biogeneric product is going to have the exact same safety and efficacy" and "contain the same medicine" as the original version, she said.

BIO says generics should be subjected to a full series of trials to determine whether manufacturing differences make them dangerous.

"Doing clinical trials is the only way to ascertain that follow-on biologics are as safe as the original," said Greenwood, BIO's president.

Meanwhile, biotech and generic-drug makers can't even agree on what to call the copies. Proponents of the legislation often use the term "generics." Some brand-name makers say the drugs should be called "follow-on biologics" because the new versions aren't identical. European regulators call them "biosimilars."

Narrow Opening

Existing U.S. law may provide a narrow opening for generic versions of several biotech products, including growth hormone and insulin.

In April a federal judge ordered the FDA to act on a request from the Sandoz unit of Novartis AG for approval of a growth hormone called Omnitrope, which is similar to Pfizer's Genotropin. Sandoz sued the FDA for delaying approval for years, and the agency eventually approved the medication.

Pharmacists can't dispense Omnitrope interchangeably, as they can traditional generic products. Doctors must specifically prescribe the treatment.

source Bloomberg