Economic Analysis of Availability of Follow-on Protein Products. Background & Purpose


Unlike most conventional drugs, biological products are usually large, complex molecules that are produced by living organisms such as yeast or mammalian cells. These commercially engineered biologics currently account for billions of dollars in health care spending. Starting early last century, Congress has regulated most biologics separately from small molecules under the Biologics Control Act, which was later incorporated into the Public Health Service (PHS) Act. Although some biologics are regulated under the Federal Food, Drug, and Cosmetic Act (FDCA) for historical reasons, and are, therefore, candidates for generic production through section 505(j), an Abbreviated New Drug Application (ANDA), or through 505(b)(2), using data from previously approved innovator biologics to make claims of safety and effectiveness, there is no abbreviated path for replica or closely similar follow-on products for biologics under the PHS Act. While this group of products is known by various names, this report uses the term "follow-on protein products" (FoPPs). Because of their different molecular nature and mode of production compared to small molecule drugs, synthesizing truly identical generic versions of original biologics is regarded as unlikely. However, due to the size of the market, and as more originator (or "branded") products approach expiration of their intellectual property, there is an increased interest in exploring FoPPs and creating a regulatory pathway under the PHS Act that is analogous to 505(b)(2) or 505(j) under the FDCA.

To date, at least six FoPPs have been approved in the US by the FDA, perhaps the most prominent of which is a follow-on of somatropin. Sandoz's Omnitrope® is a biologic intended to replicate the recombinant human growth hormone (hGH), somatropin (Genotropin®, Pfizer), which is regulated under the FDCA. Since hGH products are approved under the FDCA, the abbreviated approval of Omnitrope® does not establish a pathway for follow-on versions of biologics regulated under the PHS. Unlike the US , Europe has created a "biosimilars" program, which uses a case-by-case approach to regulate FoPPs, requiring some clinical efficacy and safety data for market approval. At the time of this report, 13 FoPPs had been approved by the European Medicines Agency (EMEA) through their biosimilars program. Six of these FoPPs are for granulocyte colony-stimulating factor (G-CSF), two are for hGH, and five are for erythropoietins. Although the biosimilars program established a model of a regulatory pathway and has approved its first products, the data on market performance are only emerging.

Due to the potential cost savings that FoPPs could provide in the US market, members of Congress have made various proposals for establishing a regulatory pathway for FoPPs. Five bills were introduced in the 110th Congress and referred to committee; however, none were reported out of committee or received a vote. To date, two bills have been introduced in the 111th Congress related to FoPPs. Controversy surrounds the various approaches proposed in these bills, particularly given the high prices associated with biologics and the likelihood of price discounts with the introduction of FoPPs. Three studies released in early 2007 generated estimates of the cost savings that could result from patent expiration of branded biologics and the emergence of corresponding FoPPs assuming the approval of a regulatory mechanism under the PHS Act. While these analyses started with similar goals, they generated divergent estimates.

The purpose of this report is to provide an unbiased estimate of potential cost savings from the introduction of FoPPs under multiple scenarios for abbreviated regulatory pathways. Findings from this analysis may be useful in the context of ongoing policy deliberations. A better understanding of the potential impact of legislative provisions for the regulatory pathway on cost savings may inform policymakers as such a pathway is considered.

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