A Primer for Follow-On Biologics

Generic drugs are chemically identical to their brand-name counterparts. And they cost about 70 percent less. That’s why, with healthcare costs escalating, policymakers want to expand the use of generics.

As part of that effort, the Senate is considering a measure that would allow the generic drug industry to produce copycat or follow-on biologic drugs. Drugs made through biotechnology are today’s most cutting-edge medicines, and can cost patients tens of thousands of dollars each year for treatments. So the production of generic biologics could save millions.

Unfortunately, it’s scientifically impossible to create an identical “generic” biologic. Congressional lawmakers should bone up on their biochemistry before deciding what to do about biologics.

Let’s take a look at conventional drugs.

Produced using chemical reactions, conventional drugs are comprised of small molecules. So it’s possible to make an exact copy, even of a branded drug. For example, there’s no difference between Tylenol and store-brand acetaminophen — both contain the same 20 atoms arranged in the same molecular structure.

Consequently, the approval process for generic drugs is speedy. Generics don’t have to go through their own clinical trials, and can instead rely on the data from the drug being copied.

There are only two catches.

First, generic drug makers are prohibited from accessing the data on the drug they want to copy until five years after its approval by the FDA. In Europe, this “data exclusivity” period is 6 or 10 years, depending on the country.

Second, generic manufacturers can’t enter the market until a drug’s patent has expired. Drug patents expire 20 years after filing, but because research companies submit their applications long before testing even begins, the “shelf life” of a drug patent is generally between seven and 12 years.

Biologics, by contrast, are much more complex. Herceptin, a popular anti-cancer biologic, is comprised of about 25,000 atoms — more than a thousand times as many as Tylenol.

Unsurprisingly, the manufacturing process for biologics is far more complicated. Most are grown in living organisms, and many involve modified DNA. Each molecule of a biologic may have a slightly different structural pattern — even if it has the same chemical formula and is made according to the exact same process.

Thus, it’s impossible to copy biologics perfectly. As best, they’re similar. American scientists call them “follow-on biologics.” In Europe, they’re called “biosimilars.”

Accordingly, government regulators have handled only extremely small biologics — like human-made insulin and human growth hormone — as if they’re conventional generics. The FDA has barred other follow-on biologics from entering the market.

That will likely change soon. But in the interest of safety and continued innovation, Congress must move forward with care.

For starters, lawmakers must recognize that follow-on biologics could cause unexpected physiological reactions. So they should have their own, distinct names to help doctors know exactly what medicine a patient is taking.

Also, follow-on biologics must demonstrate that they’re safe and effective through their own clinical trials. Copycat drug makers shouldn’t be able to piggyback off the testing of the biologics they’re imitating.

Lawmakers must also work to ensure that there’s continued innovation in biotechnology.

A simple patent can easily protect a conventional, chemical drug — the structure of acetaminophen’s 20 atoms is concrete, and the four-step chemical process for making it is simple, once it’s been discovered.

A biologic, on the other hand, can combine several patents — one on the giant molecule itself, and numerous others on the process for creating that molecule. But process patents are highly susceptible to challenge in court. That makes data exclusivity incredibly important for biologics.

It takes $1.2 billion to develop an average biologic, and another $250-$450 million to construct the facilities necessary to produce it. Yet the overall probability of success in clinical trials is only 30 percent. And even if a biologic reaches the market, it may not make money. Of the 30 new biologics introduced between 1982 and 1994, just six accounted for 70 percent of industry sales in 2002.

Consequently, biologics must enjoy a significant period of data exclusivity — far longer than the five years granted for conventional drugs.

According to Duke University economist Henry Grabowski, most biologic companies don’t recoup their research and development costs until their product has been on the market for 12.9 to 16.2 years. Given that, lawmakers should provide at least 14 years of protection. Without such time, there will be little financial incentive to develop the future medical breakthroughs that allow people to live longer and healthier lives.

Conventional generics have proven effective at reducing healthcare costs and increasing medical access. Unfortunately, the same model simply cannot be applied to follow-on biologics. Policymakers should take notice.

Sally C. Pipes is President and CEO of the Pacific Research Institute and author of Miracle Cure: How to Solve America’s Health-Care Crisis and Why Canada Isn’t the Answer. .

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

Scroll to Top