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Brand-name drugmakers have a lock on manufacturing biologics, a lucrative group of drugs made from living cells and used to treat such diseases as cancer and diabetes. But the clock is running out on their patents, estimated by industry analysts to be worth about $10 billion. And generic manufacturers are anxious to jump into the market. “This is one of those epochal moments,” says Paul Kim, food and drug counsel at Foley Hoag in Washington, D.C., who represents Amgen Inc. and Genzyme Corporation, which manufacture biologic drugs. The next step is up to regulators and Congress, and the pressure is on. The Food and Drug Administration has been bombarded with petitions from brand-name companies trying to prevent generic versions of their drugs. In response, the FDA has delayed release of scientific guidelines for manufacturing generic biologics. The Senate Judiciary Committee, chaired by Orrin Hatch (R-Utah), held a hearing on the issue on June 23 as a warm-up for future legislation. Some of the top names on both sides are involved, including brand-name producers Pfizer Inc. and Amgen, as well as manufacturers of generics, like Barr Laboratories Inc. They have lined up an impressive array of lawyers as well as lobbyists from the Biotechnology Industry Organization (BIO) and the Generic Pharmaceutical Association (GPhA). “This is one of the top priorities of the trade association,” says Kathleen Jaeger, CEO of the GPhA, which is lobbying FDA officials, state governments, consumer groups, doctors, and insurance companies. The activity is just as intense on the other side. BIO was one of the first to lobby the FDA to dissuade it from approving generic, or what BIO calls “follow-on,” biologics. And in the last year, Gregory Glover, a D.C. — based Ropes & Gray partner who represents brand-name pharmaceutical companies, has given talks at several conferences attended by FDA representatives and congressional staffers, telling them that generic biologics will not be suitable for the market. The decision to pull in high-priced legal and lobbying talent indicates just how much is at stake. In 2003 biologics were a $33 billion market — a fourfold increase from just ten years ago. And the value of the drugs is likely to grow as technology advances. Recognizing this potential, the generic industry is hoping for a law similar to the Hatch-Waxman Act of 1984. It shortened the approval process for the generic manufacture of what the experts refer to as “small-molecule drugs.” Under the law, generic drugs are approved by the FDA without the manufacturers having to conduct independent clinical product tests. Instead, they can rely on the original data on the drugs’ safety and effectiveness, which saves significant time and money. Biologics, however, are regulated by a different law, the Public Health Service Act, which does not explicitly authorize generic versions. Many industry insiders say that Congress would have to enact a law authorizing the FDA to approve these types of follow-on drugs. For regulators and Congress, the arguments over biologics seem to mirror those surrounding Hatch-Waxman 20 years ago: Can they support competition and also promote innovation? And can they allow more affordable versions of drugs on the market and still ensure that the copies are safe and effective? Many agree that the current law does not provide a straightforward guide to making copies of biologics. “We want the legislation to give the FDA specific authority to approve [generic biologics],” says the GPhA’s Jaeger. “Without [it], we anticipate litigation.” Courtroom battles are something that some in Congress say they are trying to prevent. At the June 23 hearing, Hatch said he wanted to avoid “scorched- earth litigation.” He may not get his wish. In February, for example, Sandoz Inc., a subsidiary of Switzerland’s Novartis, filed an application with the FDA to make a generic version of one of Pfizer’s human growth hormone drugs. Pfizer has asked the FDA to reject Sandoz’s product because the agency would have to rely on Pfizer’s trade-secret data to approve the copy. The dispute encapsulates the biggest gripes of brand-name companies — that they must submit proprietary data to the FDA to prove their drugs are safe, while producers of generics do not. Moreover, they complain, the FDA is likely to rely on this proprietary information to ensure the safety and effectiveness of copycat products. Given that identical copies are technologically impossible to make, at least for the moment, brand-name makers contend that generic biologics should all be tested from scratch. The GPhA’s Jaeger says she agrees that some generic biologics may require independent testing, but not to the extent that brand-name makers want. Michael Kirschner, a lawyer who recently left Amgen, says protecting the patents is crucial. If the government is going to treat biologics as “second-class intellectual property, then the end result will be . . . less innovation,” says Kirschner, a cancer survivor who was treated with Amgen’s Neupogen. Jaeger counters that price and patient access to the drugs are more important. “The only way to ensure access,” she says, “is to ensure competition.” A version of this story originally appeared in Legal Times, a sibling publication of Corporate Counsel.

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