Biogen is understood to be drafting a position statement on generic biologics on behalf of the Massachusetts Biotechnology Council.

Biogen CEO James Mullen presented the industry's concerns with the concept to Commissioner McClellan during a Feb. 14 visit by the commissioner to MBC. The group's position statement is understood to include a firm declaration that any follow-on biologic approval would need to be "supported by a full complement of clinical trials."

The Feb. 14 meeting, arranged by Sen. Edward Kennedy (D-Mass.), included a discussion of a broad array of regulatory topics (see ¹ Also see "Commissioner McClellan Visits Mass Bio: Phase IV, Orphan Drugs On Agenda" - Pink Sheet, 24 February, 2003.).

The potential for a generic biologics approval system is probably the highest profile regulatory issue for biotech firms.

McClellan is understood to have delivered a clear message during the meeting: the biotech industry needs to accept the inevitability that there will one day be a system for interchangeable biologics.

The message is in keeping with prior public statements by McClellan on the topic. With his background in health economics, the commissioner appears to be more open to the line of argument that without a system to allow for approval of lower cost alternatives, spending on biomedical innovations would become unsustainable (² Also see "FDA Generic Biologics Policy May Be One Change Under McClellan" - Pink Sheet, 14 October, 2002., p. 7).

Briefing materials prepared by MBC for the meeting stress that biologicals are inherently more complex than chemical entities, and thus not appropriate for a Waxman/Hatch style generic system.

"The primary reason" why Waxman/Hatch cannot apply to generic biologicals "is that most biologicals are complex molecules that by today's scientific standards cannot be identically reproduced by different companies," the MBC documents state.

"Therefore, a generic version of a biological would pose a significant risk to patients unless a full set of pre-clinical and clinical data were provided."

The Generic Pharmaceutical Association has acknowledged that generic biologicals would require a different regulatory structure than Waxman/Hatch. The association is advocating a case-by-case approach (³ Also see "Generic Biologics: Xigris Approval Suggests Precedent For FDA, GPhA Says" - Pink Sheet, 16 December, 2002., p. 32).

While formal positions by biotech associations tend to emphasize the obstacles to generics, the attendee list at the MBC meeting with McClellan illustrates the complexity of building a consensus.

Companies like Biogen can be expected to stake out a position firmly against generics. However, MBC member Transkaryotic Therapies, which is trying to market a gene-activated version of EPO, may have a different perspective.

Novartis, with a large new R&D campus in Cambridge, also attended the meeting. The company has a huge generic division in the U.S., and is one of a number of firms pressing FDA to approve a "generic" human growth hormone (⁴ Also see "Novartis Pursuing Generic Biologics; Says Brand And Generic Lines Co-Exist" - Pink Sheet, 3 February, 2003., p. 23).

McClellan appears to have made a favorable impression on the MBC group despite his position on generics. He acknowledged the importance of appropriate clinical and scientific standards, and pledged that the agency would review any proposals from industry.

The MBC group also wanted reassurance that McClellan does not intend to make cost-effectiveness an approval requirement. The group noted that McClellan has held meetings with Centers for Medicare & Medicaid Services Administrator Tom Scully about a possible FDA/CMS liaison office to guide federal payment decisions for drugs and devices (⁵ Also see "FDA/CMS Discussing Liaison Office To Improve Coverage Decisions" - Pink Sheet, 16 December, 2002., p. 12).

There are concerns within industry that CMS is "undermining" the statutory authority of FDA "in order to make economically driven determinations within the Medicare program," the MBC meeting documents state. The group specifically cited CMS' determination that Amgen's Aranesp and Ortho's Procrit are "functionally equivalent" for purposes of reimbursement under the Hospital Outpatient Prospective Payment System (⁶ Also see "Medicare Rx Payment Method Deters Hospital Use Of High-Cost Drugs – BIO" - Pink Sheet, 3 February, 2003., p. 26).

McClellan stressed that his interest in cost-effectiveness will be focused on the cost-effectiveness of drug development and regulation - not of regulated products.

Generic Biologics Are Coming, Commissioner McClellan Tells MBC

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