DURHAM -- Earlier this year, as a medical student at Duke University, I saw a patient with Crohn's disease, an inflammatory intestinal disease associated with substantial disability and mortality that affects over 500,000 individuals nationwide. This patient required hospitalization for a flare she attributed to not being able to afford the month's Humira, a biologic medicine used to treat severe, active Crohn's disease.
The drug is priced by Abbott Laboratories at a staggering $22,000 per year. This patient would clearly have benefited from the availability of an affordable, generic version.
In coming weeks, while considering solutions to address accelerating health-care costs and the 40 million uninsured Americans, Congress will be voting on proposals built in to Senate and House versions of health-care reform that are meant to allow cheaper, generic versions of biologic drugs, also known as "biogenerics," to come to market.
Unfortunately, the biogenerics proposal passed by the Senate Committee on Health, Education, Labor and Pensions in July -- co-sponsored by our very own Sen. Kay Hagan -- will do the opposite of what the bill purports to do, by providing significant barriers to price-lowering generic competition. A similarly ineffective proposal can be found in the House Energy & Commerce Committee bill.
Biologics -- a special category of drugs, derived from living organisms -- account for about 1 in 4 new medicines and include all vaccines, the majority of new anticancer agents and many other pharmacotherapies used to treat relatively common diseases like diabetes and multiple sclerosis. These drugs are the fastest-growing segment of the prescription drug market. It is projected that they will account for 50 percent of all new drugs approved by 2014.
Biologics are also among the most expensive medicines in the world, often costing tens of thousands of dollars per patient per year. Examples include Roche-Genentech's Herceptin, a common drug used to treat breast cancer, which costs upwards of $48,000, and Johnson & Johnson's rheumatoid arthritis treatment Remicade, priced at $20,000 annually. These drugs are not getting any cheaper -- within Medicare Part D, the prices of biologic drugs have increased at a rate of 36 percent per year, compared to 22 percent for all drugs.
Generic competition is the single best proven method of bringing drug prices down. For biologics, generic competition is estimated to reduce costs by about 20 to 40 percent and to save Americans $71 billion over the next decade.
Unfortunately, the biogenerics provisions in the Senate and House bills will thwart cost containment objectives and harm patients by giving brand-name pharmaceutical companies an unjustified 12-year marketing monopoly on biologics from the date of FDA approval. During this period, the FDA is precluded from approving cheaper, generic versions. This is in sharp contrast to conventional medicines, which get a 5-year window of data exclusivity, despite having similar costs of research and development.
Even more concerning, companies can make relatively inexpensive and minor modifications to a drug, such as changing dosages or combining the drug with other therapies, and earn another 12 years of protection from generics -- and they can do this repeatedly. This so-called "evergreening" strategy is common and already persistently problematic for chemically based medicines.
Not only will these indefinite monopoly protections deter generic biologic drugs and the cost savings that could result, but these provisions hurt innovation of new therapies. According to the Federal Trade Commission, these protections will likely discourage innovation of new medicines that could address unmet medical needs.
Current biologics proposals, as they stand, will undermine one of the primary objectives of the health-care reform -- to limit costs -- by in many instances creating almost indefinite monopolies. This will cost billions of dollars and more importantly, will leave expensive medicines unaffordable to the vast majority of Americans.
A solution lies in a generic biologics proposal from Rep. Henry Waxman of California that would grant five years of data protection, the same given to conventional drugs, and would close loopholes that allow companies to extend these protections indefinitely. However, these provisions have yet to be added to health-care reform bills.
Unless these meaningful changes are made, Big Pharma has won again, and at a price Americans will not, and in fact cannot, afford to pay.
