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Brand-name drug makers have a lock on manufacturing biologics, a group of lucrative, protein-based drugs made from living cells and used to treat such diseases as cancer and diabetes. But the clock is ticking on many of their patents. And generic manufacturers are anxious to jump into the market as those patents — estimated by industry analysts to be worth about $10 billion — expire over the next few years. Now, it’s up to federal regulators and Congress to decide whether the generic companies have the know-how to safely replicate the science behind biologics, or whether the drugs are best left in the hands of brand-name makers. “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 the Genzyme Corp., biotechnology companies that manufacture biologic drugs. It could “redraw the competitive lines.” Regulators and members of Congress are under pressure to act. In the last few months, 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, which had said it would publish scientific guidelines for manufacturing generic biologics by this summer, has delayed their release. And the Senate Judiciary Committee, chaired by Orrin Hatch, R-Utah, held a hearing on the issue June 23 as a warm-up for future legislation. Some of the top names on both sides of the drug industry are involved, including brand-name companies like Pfizer Inc. and Amgen, the self-described world’s largest biotechnology company, and generic manufacturers like Barr Laboratories Inc. Not surprisingly, they have lined up an impressive array of lawyers and lobbyists. Among the firms are Hogan & Hartson; Ropes & Gray; Sidley Austin Brown & Wood; Foley Hoag; Morgan, Lewis & Bockius; Chicago-based Rakoczy Molino Mazzochi; and Zuckerman Spaeder. In-house lobbyists from the Biotechnology Industry Organization (BIO) and the Generic Pharmaceutical Association (GPhA) are also working on the issue. “Clearly, this is one of the top priorities of the trade association,” says Kathleen Jaeger, chief executive officer of the generics association, which is lobbying FDA officials, state governments, consumer groups, health care providers, insurance companies, and corporate employers on the issue. 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. “There is almost no way for two different manufacturers to make the same [biologic] product,” Glover argues. LIFE-SAVING AND LUCRATIVE Biologics are usually administered by injection at hospitals and doctors’ offices, and are used to treat illnesses ranging from multiple sclerosis to diabetes. Amgen, for instance, produces two of the best-known biologic drugs, Epogen and Neupogen, which are used to treat patients with life-threatening diseases such as kidney disease and cancer. The decision to pull in legal and lobbying talent is a sign of just how much is at stake for the companies. In 2003, biologics was a $33 billion market — a fourfold increase from just 10 years ago. And the value of the drugs is likely to grow as technology advances. Recognizing the potential, the generic industry is hoping for a law similar to 1984′s Hatch-Waxman Act. That law, an amendment to the Food, Drug, and Cosmetic Act, shortened the approval process for the generic manufacturing of what the experts refer to as “small-molecule drugs” — drugs usually administered in tablet form. Under the law, generic drugs are approved by the FDA without the manufacturers having to do their own independent clinical testing on the products. Instead, they can rely on the original data that show the drugs’ safety and effectiveness — saving the generic companies significant time and money. Biologics, however, are regulated by another 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. “The agency ought to be setting up a system to basically tell everyone what is required,” says William Schultz, a Zuckerman Spaeder partner who is counsel for the GPhA. For regulators and Congress, the arguments over biologics seem to mirror those surrounding Hatch-Waxman 20 years ago: Can they support competition by allowing access to products while promoting innovation by protecting the owners’ intellectual property? And can they allow more-affordable versions of drugs on the market and still ensure that the copies are as safe and effective as the originals? 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 some in Congress say they are trying to prevent. At the June 23 hearing on biologics, Hatch said he wanted to avoid what he called “scorched-earth litigation” over the drugs. “Twenty years ago, we faced many challenges in fairly balancing the incentives and various interests when we came together on Hatch-Waxman,” said Hatch, who co-authored that law with Rep. Henry Waxman, D-Calif. Hatch may not get his wish. In February, for example, Sandoz Inc., a subsidiary of Switzerland’s Novartis, filed an application with the FDA to manufacture a generic version of one of Pfizer’s human growth hormone drugs. Pfizer has asked the FDA to reject Sandoz’s product because the FDA would have to rely on Pfizer’s trade secret data to approve the copy. The dispute encapsulates one of the biggest gripes of brand-name companies — that they must submit proprietary data to the agency to prove their drug is safe, while producers of generics do not. Moreover, they complain, the FDA is likely to rely on the secret information provided by brand-name manufacturers to ensure the safety and efficacy of copycat products. “The agency can’t just go to its files and pull out that data, because it belongs to another company,” says Meredith Manning, a food and drug partner at Hogan & Hartson who represents biotechnology company Genentech Inc. Manning says the dispute between Sandoz, the FDA, and Pfizer is likely to escalate. “The logical conclusion from the Pfizer petition is that they’ll sue if the FDA approves [the Sandoz] application,” says Manning. Pfizer spokesman Paul Fitzhenry says that “as a legal matter, the FDA cannot approve the Sandoz product” because of the “formulation and manufacturing differences” between the two drugs. Pfizer plans to file further comments to the FDA in the next several weeks. Brand-name makers like Pfizer, argue that science has not developed to a point that would allow companies to manufacture generic versions that are identical to the originals. Because of that, each generic biologic should require full independent testing for approval — something that isn’t required for small-molecule drugs. “At this point, there is no consistent view about what the scientific hurdles are,” says Jeffrey Kushan, a Sidley Austin partner who is in regular contact with FDA officials and members of Congress on behalf of Genentech. The GPhA’s Jaeger says she agrees that some generic biologics may require independent testing by generic manufacturers, but not to the extent that the brand-name makers want. And at the recent Senate hearing on biologics, FDA Acting Commissioner Lester Crawford said science has progressed enough to identify the similarities between some original and generic products. Along the same lines, Michael Kirschner, a lawyer who worked for Amgen but recently left the company, says protecting the patents is crucial. If the government is going to treat biologics as a kind of “second class intellectual property, then the end result will be in our future there will be less innovation,” notes Kirschner, a cancer survivor who says he used Amgen’s Neupogen in his treatment regimen. Jaeger counters that price and patient access to the drugs are more important. “The prices of innovative biopharmaceuticals are exceedingly high,” Jaeger says. “The only way to ensure access … is to ensure competition.” With so much on the line, many expect a long process, which may even include the enactment of new legislation. In the meantime, the debate is likely to intensify. “We are dealing with products that are worth billions of dollars,” says Alvin Lorman, a food and drug law partner at Mayer, Brown, Rowe & Maw who is closely monitoring the conflict, but not directly involved. “You don’t readily give up on those kinds of battles.”

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