Clarifying the record on generics, biosimilars

Clarifying the record on generics, biosimilars

01.31.13 | By Karl Uhlendorf

Earlier this week, FOX Business ran a segment about the biopharmaceutical marketplace. Unfortunately, the reporting blurred the line between generic versions of innovative small-molecule medicines and the future availability of biosimilar versions of innovative biologic therapies. It's a distinction that warrants clarification.

As we have written in the past, the marketplace for traditional small-molecule medicines in the U.S. is a delicate balance of incentives for innovation and long-term, affordable access. This is unlike any other sector of health care - there are no generic doctors or hospitals - and frankly, it's a system that works well for patients and our health system overall.

Biopharmaceutical innovation is robust - as reflected by the more than 5,000 potential medicines in the biopharmaceutical pipeline - and government and independent data show that spending on prescription medicines has grown at historically low rates for quite some time now.

For example, last January the CMS Office of the Actuary reduced its prior year's estimate of drug spending by more than half, and IMS Health reports that for the past five years, spending on prescription medicines has grown at an average of just 3.3% annually. Looking ahead, IMS projects growth will remain at historically low levels, averaging 1% to 4% per year between 2012 and 2016. And it's important to keep in mind that retail spending on prescription medicines accounts for a small share - about 10% - of overall healthcare spending.

What's more, evidence increasingly shows that appropriate use of prescribed medicines can reduce spending on other medical services. Based on these findings, CBO recently adopted a new approach to scoring that will credit Medicare policies that increase use of medicines with savings on other program costs.

Rx Drug Lifecycle - A Careful Balance

The dynamics that makes these realities possible is reflected in the prescription drug lifecycle, meaning that investment and research into new medicines conducted by biopharmaceutical research companies leads to the availability of generic drugs after a period of time. For a great graphical representation of the lifecycle for non-biologic medicines, check out this animated video.

As we conveyed to FOX Business, for biologics, the Affordable Care Act included a provision that created a pathway for the approval of biosimilars - biologics that are similar to innovative biologics. This provision enjoyed broad bipartisan support in both chambers of Congress.

In simple terms, it created a new lifecycle specific to biologic therapies. The new biosimilars pathway strikes an appropriate balance between promoting increased competition through the development of biosimilars and providing necessary incentives for continued innovation of new therapies through a 12-year period of data protection for innovative biologics.

This isn't to say that the increased competition created by the pathway will have the same effects on costs as traditional generic drugs. The science of biologics, the unique genetic engineering and manufacturing challenges inherent in producing a therapeutic protein, the need for clinical studies to understand the safety and effectiveness of each biologic and biosimilars, create a different set of underlying forces that will yield its own market subtleties. Time will tell, but the tenets of the framework are the same.

Patient Safety Must Come First

In the meantime, as the FDA implements the biosimilars pathway, PhRMA believes the agency must ensure that patients have access to safe and effective biosimilars, which will require clinical data to demonstrate biosimilarity. And given the limits of current scientific knowledge and for reasons of patient safety, we cannot envision a biosimilar product or class of products for which comparative clinical studies would be unnecessary for approval.

Lastly, as states consider legislation specific to biosimilars substitution, we believe it essential that patient safety be the utmost priority.

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