Biotech Industry vs Generic Drugs

As they prepare to leave Boston at the close of the big "BIO International" conference on Wednesday, thousands of biotechnology executives will be looking to the future. One of the issues they'll be thinking about is competition from the less expensive copy-cat drugs.

Until now, it's been the traditional pharmaceutical industry that's had to contend with generics. But Washington is preparing to pass legislation that would pave the way for so-called "follow-on biologics."

WBUR's health and science reporter Allan Coukell has more on the story.TEXT OF STORY

ALLAN COUKELL: When you drive along Soldiers Field Road, you pass through the shadow of the giant Genzyme manufacturing plant.

STEVE KENNEDY: This is our cell culture area... [FADE UNDER]

COUKELL: Inside, Steve Kennedy, the plant general manager, leads a tour.

KENNEDY: ...down in the seed lab is where we store the small ampoules of Chinese hamster ovary cells which have been genetically modified to make Cerezyme, Fabrazyme and Myozyme in this facility...

[FADE HIS WORDS UNDER, TRANSITION TO FACTORY AMBI UNDERNEATH]

COUKELL: Six 500-gallon stainless steel tanks sit at the heart of the plant. Nearly a million gallons of solution and growing cells flow through these "bioreactors" each year. At the end of the process is Cerezyme — a billion dollars' worth of Genzyme's signature product, used to treat Gaucher disease, a rare genetic disorder.

Like many biotech drugs, Cerezyme is a protein.

ALISON LAWTON: These biological products are very, very large complex molecules compared to a typical drug, a small molecule.

COUKELL: Alison Lawton is Genzyme's senior vice president for regulatory affairs. She argues that the complexity of these large molecules means there can be no such thing as a true biotech generic drug.

LAWTON: These biological products are usually manufactured in cell culture or living organisms, so there are many factors that make them very complex. So for a follow-on manufacturer, it is much easier to manufacture a small molecule than it is one of thee biological products.

COUKELL: Lawton opposes federal legislation, introduced by California Democrat Representative Henry Waxman that would create a direct pathway for companies to market these so-called follow-on biotech drugs.

Waxman's proposal - one of several in Washington - would leave it to the FDA to determine what tests are needed before approval of a follow-on drug. Lawton says that's not adequate.

LAWTON: We know from experience that small changes, very small changes that sometimes are actually undetectable, can have significant safety changes, such as immunology in patients. And so, I think we have to make sure that there are clinical studies of these follow-on biologics to make sure they are safe and effective for the patients taking them.

CRAIG WHEELER: We respectfully disagree with them. We think it is possible to make interchangeable biologics.

COUKELL: Craig Wheeler is president and CEO of Cambridge-based Momenta, a company developing four follow-on biologic drugs. He argues that clinical testing of the second product to market won't always be necessary.

WHEELER: The debate today is very similar to what we saw many years ago for small molecules. The technology is here today or evolving and soon will be available to allow you to characterize and understand specifically how these drugs work and make interchangeable copies.

COUKELL: The other major issue in this debate is market exclusivity: should innovator companies be protected from competition to guarantee return on research investment and profitability?

James Greenwood is president of the Biotechnology Industry Organization. He cites a European law that grants new biotech drugs eleven years of protection.

JIM GREENWOOD: Europe has ten plus one. I think that is a starting point. I could make an argument for 14. But this is a negotiating process and it will be hammered out.

COUKELL: A second bill in Congress is viewed as much more industry-friendly. This one, introduced last month by Democratic Congressman Jay Inslee of Washington, contains guaranteed market protection and requires more extensive testing for follow-on biologics.

SENATOR EDWARD KENNEDY: Our committee will soon take up the important question of follow-on biologics...

COUKELL: Senator Edward Kennedy addressed the BIO conference yesterday. As the chairman of the Senate Health Committee, Kennedy will be an important voice on this issue. He's promised that his committee will propose legislation next month.

The senator has yet to take a public position on the issue, but Jim Czaban, an attorney with the firm Wilmer Hale, says a draft proposal from Kennedy's office has been circulating. It seems to strike a middle ground.

JAMES CZABAN: The Kennedy draft seems to be somewhere in between the Waxman and Inslee versions in terms of the overall balance. There is certainly more in the Kennedy bills for innovators to like. There is more for the potential generic biologics industry to like than there is in the industry bill. Where it comes out is something for the political process to decide.

COUKELL: It is easy to understand why legislators want to pave the way for less expensive competing products. Genzyme's Cerezyme, for instance, costs an average of 200 thousand dollars a year for each patient. But Czaban predicts that, regardless of any legislation, the
complexity of biological manufacturing means that follow-on biologics will never slash costs the way traditional generic drugs have.

Craig Wheeler of Momenta Pharmaceuticals hopes his first follow-on product will hit the market this year. And he believes that biotech really isn't that different from traditional pharmaceuticals.

WHEELER: I think there is definitely a chance for significant cost savings in follow-on biologics. It won't be as much as we've seen because of the complexity of manufacturing, but there will be a substantial increase in savings to the consumers.

COUKELL: Just how much may depend on the decisions made in Washington over the next few weeks.

As for Genzyme's drug Cerezyme, manufactured on Soldiers Field Road, it faces imminent competition from other, new drugs for Gaucher's disease, so follow-on drugs may never be an issue.

For WBUR, I'm Allan Coukell.