Biotechnology and the Divine Right of Kings

Today's Wall Street Journal reports on the efforts of Barr Laboratories and its affiliate in Yugoslavia to develop copycat versions of some of the costliest drugs sold in America: biologics like Amgen's Epogen and Neupogen, and Genentech's human growth hormone. Europe has already set up a regulatory framework for allowing generic biologics on the market. Rep. Henry Waxman (D-CA) and Sen. Hillary Clinton (D-NY) are pushing for something similar here.

The story was deficient in several notable aspects.

First, there was no mention of the Food and Drug Administration's role in the process. What do officials at the FDA think it would take certify that a genetically engineered protein that rolled out of one lab was chemically comparable to another one? How would the "good manufacturing practices" certification that the FDA gives to generic manufacturers of small molecule drugs differ from a GMP certification given to a biologics manufacturing plant? When Johnson & Johnson ran into problems with its version of Epogen in Europe, it wasn't caused by differences in the molecule. It was caused by a flaw in the manufacturing process. Catching those flaws should be right up the FDA's alley.

Second, there was no discussion about patent law in the story. In passing, the reporters mention that Amgen's Epogen has patents that last until 2015, suggesting the arrival of a biologic generic is still a far off question. If memory serves me correctly, Amgen's original patent on recombinant human erythropoietin was issued in 1984. That was 23 years ago! Patents are supposed to last for 20 years, and then the work is supposed to enter the public domain. That's the whole point of patenting -- to give inventors incentives, but to make their work eventually free and available to the rest of mankind.

Clearly, the patent system isn't working in this case. What happened? Amgen has surrounded Epo (as the molecule is familiarly called) with various "blocking" patents, effectively giving the drug extended patent life beyond its alloted term. Similar tricks have been played by virtually every drug and biotech company with lucrative franchises they wish to protect.

Sen. Ted Kennedy (D-Mass), whose home state is a major biotech research and manufacturing center, is leading the charge against easy entry for generic biologics. The industry wants every new cell line to be subjected to same safety and efficacy testing that the original molecule went through. If that passes, the price of generics will be almost as high as the original molecule, and the health care system will be burdened with paying high prices for biologics forever.

Generic manufacturers argue that while proteins are larger than traditional chemical drugs, the FDA should be able to test their chemical comparability, just as they're doing in Europe. If Congress, because of the clout of the industry, can't see its way clear to allowing that, then perhaps it should come up with an alternative.

What might that be? First, it should amend patent law to prohibit the kind of games that give any drug, whether small molecule or biologic, exclusivity beyond 20 years. Congress has authorized extensions to patent life to promote pediatric testing and to encourage development of drugs for rare diseases. But these additional grants usually make up for some of the exclusivity lost during the development process. A flat 20-year limitation time will not eliminate these incentives.

Second, once a drug, any drug, reaches its 20th year of exclusivity without a generic version ready to hit the market, insurers -- including the government -- should have the right to negotiate a price with the original manufacturer that reflects the traditional generic mark-up over the cost of production.

If the White House and the Congress refuse to allow science to provide an alternative, and they refuse to give purchasers the right to negotiate generic prices with the original innovator, then the government is essentially granting biotech firms with lucrative products a perpetual monopoly. I thought that went out with the divine right of kings.

Posted by gooznews at March 14, 2007 06:17 AM