Support for BioGenerics Legislation Is Falling Apart at the Seams

Support for legislation that would create a biogenerics approval path is reportedly crumbling.  Last month, the Senate Health, Education, Labor, and Pensions (“HELP”) Committee passed S. 1695, “the Biologics Price Competition and Innovation Act of 2007.”  Although neither the full Senate, nor the House Energy and Commerce Committee have passed similar legislation, it was widely speculated that S. 1695 (or similar legislation) would be considered in the conference committee established to iron out differences between the House- and Senate-passed versions of FDA reform legislation.  S. 1695 would amend the Public Health Service Act to add § 351(k) to provide for an approval pathway for “biosimilar” and “interchangeable” biologics that rely, in part, on FDA’s previous licensure of an innovator’s product.  In addition, the bill would provide a 12-year period of innovator marketing exclusivity, limited “generic” exclusivity under certain circumstances, and patent resolution provisions. 

Over the past several days, a provision of that legislation providing brand name sponsors with additional exclusivity periods for certain product improvements, such as new indications and structural modifications, has been questioned by the generics industry.  A similar two-tier exclusivity paradigm is currently in place for drug products approved under the FDC Act, where innovators can obtain 5-year new chemical entity exclusivity and 3-year exclusivity for certain product improvements. Generic supporters have reportedly suggested lowering the 12-year exclusivity period in S. 1695 in exchange for providing a period of “new use” exclusivity.  Innovator companies want to stick with the 12-year period agreed to under S. 1695.

In addition, some House Members have signed a letter sent to the chairmen and ranking members of the House Energy and Commerce Committee and the Senate HELP Committee opposing the current consideration of biogenerics legislation.  According to the letter’s signatories:

We believe the establishment of a pathway for biosimilars is appropriate for Congress to consider, but only after consideration of the views of all stakeholders and full deliberation, hearings, and markup by the appropriations committees.  Until such time, we oppose inclusion of biosimilar legislation in the context of unrelated FDA reauthorizations.  We are also deeply concerned that efforts to resolve differences over biosimilars will endanger prompt enactment of legislation which provides necessary funding for vital FDA functions such as drug and medical device approval and safety monitoring. 

Finally, we have learned that the Congressional Budget Office (“CBO”) is drafting a report and a score of biogenerics legislation (that could be published in the next few weeks) that would reportedly place economic savings of biogenerics over the next 10 years at an amount significantly less than the estimates of some biogeneric proponents.  CBO is reportedly taking a hard look at reports by Avalere Health and Duke University Fuqua School of Business Professor Henry Grabowski.  The Avalere report pegs government savings around only $3.6 billion over the next 10 years. 

Because some of the momentum for biogenerics legislation has been the belief that it will create significant economic savings, a CBO report to the contrary, coupled with innovator/generic and House member disagreements, could destroy the fragile support for biogenerics legislation that had led to the Senate HELP Committee’s passage of S. 1695.

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