Biosimilars

Kevin Drum says “this seems like good news,” in and links to this article in the Wall Street Journal:

Makers of generic drugs hailed a proposal in President Barack Obama’s budget to set up a faster pathway for generic versions of biologic drugs, the fastest-growing segment of the pharmaceutical industry.

The budget included other steps friendly to generics makers. The administration said it wants to end “evergreening,” in which brand-name makers reformulate existing products and extend the life of their market exclusivity.

The proposals on generic drugs are part of a series of spending curbs that the president is proposing, all aimed at helping to reduce costs in the health care system overall and to pay for his effort to expand coverage to all Americans.

As it happens, this is something I know quite a bit about, and like Kevin says, “this is a small-bore initiative.” Indeed, CBO projected on version of a bill that cost savings would be roughly $25 billion over 10 years. But kind of more to the point, most analysts expect that biosimilars — there’s no such thing, technically speaking, as a “biogeneric” — will follow the “me too” approach to drug making, especially as more and more smaller biotech firms are gobbled up by larger generics and “big pharma.” From FDA Week (sorry, no link):

Because biologics are so complex, follow-ons or biosimilars won’t be exact copies of their reference products. The question is usually how close they can get — how similar a biosimilar has to be in order to be interchangeable with its precursor. But Williams doesn’t expect brand-name firms to share that goal. As the innovation pipeline has slowed, Williams said, pharmaceutical companies have learned that they can make a lot of money by “exploiting” minor chemical differences through aggressive marketing that positions functionally duplicative products as uniquely effective.[…]

[…]Applying that model to biosimilars would leave few opportunities to control cost, Williams said. He expects benefit managers to negotiate some savings but doubts that follow-on biologics will come anywhere close to matching generics’ impact on pricing. Policymakers looking at an abbreviated pathway through that lens aren’t being realistic, he said. Echoing the comments of some economists who have projected modest savings from a biosimilars pathway, Willians said too many lawmakers are blinded by the savings achieved through Hatch-Waxman.

This issue is far more complicated than I have time for in a quick morning post, but just to give everyone context.

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