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Driven by escalating drug costs, Congress late last year modified the laws governing the approval and marketing of lower-cost generic drugs. However, the rules for generics still cover only traditional chemistry-based medications. There is no abbreviated approval process for generic “biologics”-therapeutic products derived through biotechnology. The lack of a specific approval mechanism for generic biologics persists at a time when a number of leading biologic products will soon lose their patent protection. An intense regulatory and legal battle is now taking shape between innovator biotech companies and those who seek to sell lower-priced generic versions. APPROVING GENERICS The Federal Food, Drug, and Cosmetic Act provides for an abbreviated new drug application (ANDA) process for generic equivalents of traditional drug products, which were originally approved under new drug applications (NDAs). The generic applicant is required simply to show that its product is the “same” as an approved innovator drug in terms of active ingredients, dosage strength, dosage form, and route of administration, and that it is “bioequivalent” to the innovator product. If those conditions are met, the generic applicant need not conduct costly clinical studies to re-prove that the drug is safe and effective. Once on the market, generic versions of drugs can be automatically substituted at the pharmacy for the prescribed brand-name product. Unlike traditional drugs, most biologics are approved via biologics license applications (BLAs) under the Public Health Service Act. The act defines “biologics” to include “any virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, or analogous product, or arsphenamine or its derivatives applicable to the prevention, treatment or cure of diseases or injuries of man.” Therapeutic biologics are typically large-molecule protein-based products that are far more complex than standard drugs in terms of manufacture, storage, and use. Indeed, the manufacturing process can have a very strong influence on the purity, potency, safety, and efficacy of biologics. Changing the process for an approved product, or attempting to create an equivalent product using a different process, can result in potentially serious differences in clinical effects. Since biologics are generally not approved via NDAs, the ANDA mechanism cannot be used to gain approval of generic biologics. Nor does the Public Health Service Act provide for approval of generic biologics. For historical reasons, however, there are a limited number of biologic products that have been approved under NDAs. These include products not expressly included in the statutory definition of biologics, such as recombinant human growth hormone and insulin. Similar products whose regulatory jurisdiction is not clearly delineated in the Public Health Service Act may find themselves regulated under the Federal Food, Drug, and Cosmetic Act in the future. But given the scientific difficulties in demonstrating identicality of the active molecule, and safety concerns arising from seemingly minor molecular differences, the FDA will not accept or approve ANDAs for such products. The FDA is willing, however, to consider approving generic versions of NDA-approved biologics under the §505(b)(2) NDA approval pathway. While this mechanism operates in most ways like an ANDA, it allows the FDA to require additional clinical data from the sponsor (unlike ANDAs, for which the FDA may not require any independent clinical safety or efficacy data). THE FDA’S INITIATIVE The convergence of economic pressure and scientific advances in developing generic versions of innovator biologics is now pushing the FDA to produce a guidance document that will set scientific approval standards for certain generic biologic products. Acting Commissioner Lester Crawford recently confirmed in congressional testimony that the FDA is getting ready to release such guidance. Most likely, this document will specifically address approval standards for generic human growth hormone products. The guidance is also expected to draw on the FDA’s September 2003 draft guidance concerning comparability protocols for “chemistry, manufacturing, and control” changes to protein drug and biological products. Comparability protocols have historically been used where a product’s manufacturing methods have changed after FDA approval. In the case of a biologic product, such changes might create an entirely new product. The comparability protocols have allowed companies to gain approval for these changes without having to repeat clinical studies-and thus set an attractive regulatory precedent for the potential approval of generic biologics. INDUSTRY BITES BACK The FDA’s interest in developing mechanisms to support approval of generic biologics has garnered the attention of the biotech industry and individual companies, which have already launched direct attacks on the FDA’s authority to pursue such policies. In 2003, the Biotechnology Industry Organization filed a citizen petition challenging the FDA’s legal authority to approve, as well as the scientific feasibility of the agency approving, generic biologics under §505(b)(2). The FDA affirmed its previously asserted general authorities, but deferred a response on BIO’s scientific arguments to a later date. More recently, on April 8, Genentech filed a petition directly aimed at preventing the FDA from even issuing the expected guidance. Genentech’s position is that any FDA guidance document would inherently and unlawfully reflect the agency’s “use” of Genentech’s proprietary data previously submitted to the FDA for the sole and limited purpose of seeking approval of the company’s own products. More specifically, Genentech attacks the FDA’s ability lawfully to approve generic versions of Genentech products under a comparability guidance, because to do so would require the FDA to refer to and compare Genentech’s proprietary manufacturing processes to the generic company’s processes. Significantly, since the filing of the Genentech petition, Acting Commissioner Crawford has stated that the forthcoming guidance will focus only on use of public domain data. CONGRESSIONAL INTEREST As the FDA pursues its pending guidance and addresses the mounting legal challenges thereto, key members of Congress-including Senate Judiciary Committee Chairman Orrin Hatch (R-Utah) — are expressing growing interest in facilitating approval of generic biologics. While specific proposals have not been widely circulated, a legislative approach would not be expected to address detailed scientific questions, but rather to establish a general pathway, giving the FDA authority to consider appropriate information as necessary to approve specific products. New congressional authorization would blunt many, but perhaps not all, of BIO’s and Genentech’s legal objections in ways that agency action alone could not. As in the case of past legislative reforms, the agency and Congress appear to be pursuing the issue of generic biologics in parallel. At some point in the perhaps not-too-distant future, those paths will converge and lead to concrete legislation. As BIO and its larger members continue to battle the FDA over generic biologics, the political power of the rising-drug-cost issue will loom large. In a sense, BIO risks winning a battle that could cost it the war. To the extent that BIO, Genentech, and others succeed in thwarting the FDA’s own generic biologics initiatives, the pressure for a legislative response will grow, perhaps leading to broader generic biologics opportunities than would otherwise arise from a more limited FDA initiative. Moreover, the very complexity of biologics development and manufacturing may also give rise to a future schism within the biotech industry. Even with a generic biologics approval mechanism, most current generic drug companies are neither equipped, nor expected, to seriously pursue biologics as a business model. But there are many small to midsize biotech companies that are capable of producing, and may be eagerly awaiting an approval pathway for, generic biologics. Thus, for the innovator biologics industry, their future competitors are likely already in their midst. James N. Czaban is a shareholder and Natasha Leskovsek is an associate in the FDA practice group of Heller Ehrman White & McAuliffe, based in the firm’s D.C. office. Czaban is also a member of the firm’s life sciences and intellectual property litigation groups. They can be reached at [email protected] and [email protected], respectively.

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