Health Business Blog

A bill to allow biogenerics continues working its way through Congress. According to the New York Times (Congress Seeks Compromise on Generic Drugs)

Prospects for the legislation have increased since Democrats took control of Congress this year. Consumer groups, employers and insurers are lobbying for the bill, which they see as a way to hold down health costs.

The article rehashes the usual issues that I’ve outlined repeatedly:

• The budget for traditional pharmaceuticals is kept somewhat under control by the appearance of low-priced generics at the end of a drug’s patent life. To enter the market, generic players have only to show that their drugs are chemically identical. They don’t have to conduct expensive, time-consuming human trials
• Biotech drugs are different. They tend to be a lot more expensive than traditional drugs, and it is much more complex scientifically –some say it’s impossible– to create exact copies. Although patents on biotech drugs are beginning to expire, prices remain high because the products are exempt from generic competition. As biotech drugs become more popular, they are taking up an ever larger slice of health care spending, which is worrying policymakers
• To address this problem, lawmakers have focused the debate on whether the same path that worked for traditional pharmaceuticals –generic competition– can work for biologics. On one side are the biotech industry and its supporters, who argue biogenerics will be unsafe without extensive, expensive testing in humans. On the other are proponents of low prices, who figure there must be a way to do it

In the very last paragraph of the article the Times finally gets around to pointing out that something funny is going on:

The debate over biotech drugs is filled with paradoxes. Brand-name drug companies, which have for years criticized the regulation of drug prices in Europe, now point to Europe’s strict regulation of “follow-on biologics” as a possible model for the United States. Democrats, who have often criticized the F.D.A. as lax in enforcing drug safety laws, now say they trust the agency to decide whether copies of biotech drugs are safe and effective, without the full range of tests required for new products.

The real issue here is the idiocy of the bill’s sponsors and supporters. It’s no surprise that biotech companies like the European “follow-on biologics.” Those products aren’t generics at all, just similar drugs that can’t be substituted for the original product. They take the heat off biotech companies without addressing the underlying problem of high prices.

Although no one seems interested I’ll mention again a simpler, better solution: regulate the prices of biotech drugs once their patents expire.

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