WASHINGTON (AP) – The biotechnology industry’s demand for up to 14 years of competition-free marketing before cheaper copies of their drugs can be launched is unnecessary and would discourage development of new treatments, the Federal Trade Commission told lawmakers Thursday.

As the administration accelerates its push to reform U.S. health care, Congress again is taking up an effort to create generic competition for expensive biotech drugs, which cost the nation $40 billion per year.

Efforts to give the Food and Drug Administration power to approve generic biotech drugs have been delayed for years by disagreements between the biotech and generic drug industries, and their respective allies on Capitol Hill.

The biotech industry, which includes companies like Amgen Inc. and Biogen Idec, has argued that its products must be protected for 12-14 years before competing with cheaper copies from generic companies. Executives say that period is necessary to recoup the costs of developing high-tech biologic medications. Traditional drugs get five years of market exclusivity.

But FTC regulators on Thursday threw their weight behind pro-generic drug lawmakers like Rep. Henry Waxman, D-Calif., who favors the shortest time possible before cheaper biotech drugs can enter the market.

FTC Commissioner Pamela Jones Harbour said biotech companies already have plenty of protection for their products via patents and competitive pricing.

“No additional period of branded exclusivity is needed to spur the development of new drug products,” according to Jones Harbour’s written testimony before the House Energy and Commerce Committee.

The FTC’s report, released Wednesday, concluded that the high-costs of developing biotech drugs will leave fewer generic companies capable of competing.

The agency predicts that only two to three generic biotech copies will compete against each biotech drug, and that the original manufacturer will retain between 70 and 90 percent of the product’s market share. That compares with the current system of traditional drugs, where more than a dozen generic versions can quickly erode 80 percent or more of the market for a branded product.

As a result, generic biotech drugs are likely to cost just 10 to 30 percent less than the original products. That compares with discounts of up to 80 percent for currently available for traditional, chemical-based drugs.

The FTC is tasked with protecting consumers and policing anticompetitive business practices.

Waxman, who chairs the committee, called the commission’s findings “good news for consumers” that will ease the cost of drugs that can cost $1,000 a month.

Waxman has introduced a bill that would give biotech drugs the same five years of market exclusivity as traditional drugs.

The FTC’s 120-page report notes that the exclusivity period granted to traditional drugs is reserved for first-of-a-kind treatments, whereas the 12- to 14-year period proposed by biotech companies would protect all medications, regardless of whether they are new.

The agency says such a system would discourage companies from taking the risks needed to develop innovative therapies, and reward companies for simply tweaking existing products.

Biotech and pharmaceutical industry groups for years have argued almost the exact opposite point: that without a guaranteed period of profitability, companies would not invest in the research needed to develop lifesaving drugs.

The Biotechnology Industry Organization called the FTC’s conclusions “fundamentally flawed” and “highly selective,” after the agency issued its report on Wednesday.

“While the FTC does not have policymaking authority in this area, the Congress does,” BIO Vice President Jeff Joseph, said in a statement. “We urge Congress to take a more balanced approach to biosimilars policy.”

The Washington-based group’s members include biotech giants like Amgen, Roche subsidiary Genentech and Biogen Idec.

BIO spent $1.9 million in the first quarter to lobby the federal government on a host of issues, including generic biotech, according to a recent disclosure form.

By comparison, the Generic Pharmaceutical Association, which represents generic companies like Teva Pharmaceuticals, spent $535,563 lobbying the government during the same period.

Date: June 11, 2009
Source: Associated Press