Biogenerics get an unlikely ally — the Bush administration

The push to create a regulatory framework for generic versions of biotech drugs fizzled last year in Congress, as legislators seemed to lose interest after failing to attach the measure to a major FDA reform bill. But now it’s back, and has gained some unlikely friends in the Bush administration.

The FY2009 federal budget, compiled by the administration’s Office of Management and Budget, for the first time explicitly proposes giving the FDA authority to regulate biogenerics. To recap for those joining us already in progress, biotech drugs — formally known as “biologics” because they’re composed of organic material produced by living cells — currently face no threat of competition in the U.S. even if their underlying patents have expired. The FDA has until now declined to even accept applications for generic biologics, arguing that it lacks the legal authority to do so. (The framework that regulates ordinary generic drugs was required passage of the 1984 Hatch-Waxman Act.)

I’ve written about the subject on several previous occasions. For a general overview, see here. I critiqued the biotech industry’s double standard on biogenerics here, and took on another shoddy argument advanced by a prominent VC here.

In the FY2009 budget, however, the administration proposes a “new authority” for the FDA to approve “follow-on protein products” — yet another buzzword for biogenerics. It’s only a single line in the budget — those inclined to see for themselves can find it in the HHS section of the budget on page 425; the PDF link is here — yet it could be a major turning point in this particular battle.

Of course, the budget doesn’t provide any details, which will have to be worked out in Congress. And there are still plenty of potential pitfalls ahead, as the biotech industry has pushed hard for an explicit term of “market exclusivity” that would fence out biogeneric competition for as long as 14 years (see the Biotechnology Industry Organization’s stand here) even if underlying patents have expired. How all that falls out is largely up to Congress. Still, for anyone who thinks biotech-drug monopolies ought to end the same way they do for ordinary drugs, the administration’s decision is a heartening first step.

(Hat tip to this Chicago Tribune article, which happened to be the first one I saw on the subject, although the budget came out almost ten days ago.)

UPDATE: OK, this makes more sense now — apparently the biotech industry itself is pushing for a biogenerics bill this year, according to this AP story, which suggests that the Bush administration is simply taking industry’s cue. Again. Apparently political momentum for biogenerics has grown to the point that it can’t simply be stonewalled, and the biotech and pharma industries think they’ll get a better deal if they can establish fundamental rules under a Republican administration than they would if a Democrat moves into the White House next year. My prediction: The industry will push hard for a regime that throws up as many roadblocks as possible — not just the market exclusivity issue, although that’s a big one, but also in terms of requiring as much onerous testing of would-be biogenerics as they can get away with.