14 Aug In the rush to control health-care costs, don't chill biotech drug innovation
MADISON – It’s not the stuff of a town hall shouting match, but one of the most far-reaching elements of the national debate over health care is the question of how long to protect breakthrough drugs produced by biotechnology from copycat generics.
One side argues that five years of exclusive marketing rights is enough of a head start for expensive biotech drugs, called “biologics.” Members of this camp believe the sooner generic biotech drugs – called “biosimilars” – can hit the market, the better for consumers.
Others contend that research into life-saving biologics could screech to a halt if scientists and biotech companies, such as many emerging firms in Wisconsin, can’t count on more time to recoup their research, testing and development costs. They want a 12-to-14 year period in which innovative biologics are protected from competition by knock-off drugs.
As the issue moves to the Senate, lawmakers such as Wisconsin’s Herb Kohl and Russ Feingold should vote to grant at least 12 years of biologic protection. Anything less could crimp innovation in an industry in which American ingenuity is the world’s gold standard – and it might expose consumers to generic drugs that aren’t really generic.
Biologics are medicines made from complex proteins in controlled containers of living cells. They’re different from traditional pharmaceuticals, which are the product of chemicals organized in comparatively simple molecules. In fact, the term of art for biologics is often “large-molecule” pharmaceuticals, while traditional drugs are called “small-molecule” pharmaceuticals.
The problem with large-molecule drugs is that they usually come with equally large price tags. Some of the most successful biologics for cancer, anemia and multiple sclerosis can cost $20,000 to $50,000 per year; biologics from some rare diseases can top $200,000 per year because the markets are so small.
That’s why some health-care reformers are pushing for five-year protection periods. They point to generic small-molecule drugs, which can cut costs by up to 60 percent compared with the original patented drug, and with little or no risk to the users.
There are some important differences between generic drugs and biosimilars. It is difficult to verify that a copy of a biologic is exactly the same as the original. In fact, biosimilars are called biosimilars for good reason: They may be close to the real McCoy, but they’re not likely to be identical.
That poses important safety questions for patients and medical professionals. Biologics only reach the market after extensive review by the U.S. Food and Drug Administration and rounds of clinical tests. Generic small-molecule drugs don’t undergo FDA review because they’re exact knock-offs. Biosimilars may require some clinical trials and review before getting the FDA’s stamp of approval – and before medical professionals feel confident in prescribing them.
Another danger associated with a short protection period for biologics is the threat to innovation. The development of biologic drugs is a riskier investment proposition than traditional small-molecule drugs. Development times are longer. Manufacturing is often more complex and expensive. The failure rate during clinical trials is high, which means investors often spread their bets over a number of drugs in the hope one will hit the jackpot and pay for all the rest.
Tell those investors they only have five years to recoup their costs versus 12, and they might not invest at all – which means promising new drugs never hit the market.
The rush to a one-size-fits-all approach to drug development may appeal to some federal policymakers, but it’s not consistent with a core American strength – innovation. To the extent the law fails to protect innovators, our nation will simply have fewer of them.
Controlling health-care costs is vital, and the existing system appears unsustainable in many ways. But protecting innovation and rewarding risk is just as important as cost for those millions of patients who are awaiting a breakthrough cure. Striking a proper balance is best for health care in America.
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