Another silly bio-generics bill

Two Congressional Reps have introduced a bill to create a pathway for generic biopharmaceuticals. It seems to me like a big waste of time.

The bill has the following key provisions, according to Kaiser Daily Health Policy Report:

  • 12-14.5 years of market exclusivity for the original product before generics can appear
  • Clinical trial requirements for follow-on products, which could be waived by FDA (I don’t have more details on this yet)
  • Exempting “select agents and toxins” like Botox from competition, for “national security” reasons. (Maybe it will keep the enemy wrinkly-faced?)
  • Granting the FDA the authority to declare medications as interchangeable

I can’t imagine how this bill would have any significant impact on drug costs. It seems likely to severely limit the number of biotech drugs facing serious competition, which will keep prices up. The only beneficiaries will be brand name biotech companies and a few generic biotech companies who get drugs approved and enter into an oligopolistic market environment.

As I’ve said before, a better idea would be to simply regulate the prices of biotech drugs once they’re off patent (or have been on the market for a certain number of years). Advantages of this approach include:

  • Guaranteed, predictable savings
  • Elimination of risky and expensive clinical trials of follow-on products, with their potential to harm patients
  • Limitation on the breadth of FDA oversight. Fewer new manufacturing facilities makes it easier for FDA to keep up
  • Higher manufacturing capacity utilization for brand name companies, who will retain 100 percent of the market

The only losers will be generic biotech companies. Since that industry doesn’t really exist yet, I don’t think it’s such a problem.

March 17, 2008

4 thoughts on “Another silly bio-generics bill”

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  3. Interesting proposal, but I’m not sure the innovative biopharma industry would embrace a policy for any limited system of government price controls of biologic therapies because of slippery slope and camel’s nose under the tent concerns.

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