Generic manufacturers may not want substitutability for follow-on biologics, Barr CEO Bruce Downey said Sept. 19 at the Generic Pharmaceutical Association Annual Policy Conference in Washington, D.C.

"You could make the argument that we don't want an AB rating," Downey said. "From a business model, you create the sales force, you brand your product, and it's more insulated from competition from other generic companies. It's more costly up front, but probably more profitable long term."

Barr may be inclined to support a branded model for follow-on biologics because the company has expanded its commercial capabilities in recent years with the launches of its first brand products, the extended-cycle oral contraceptives Seasonale and Seasonique (¹ [A#00660110022], p. 21).

While Downey suggested that a branded follow-on biologics model may be best for generic firms, he said that the future of the generic biologics industry will depend on how the substitutability issue develops.

"With generic biologics, it's not clear that that industry, as it forms, is going to form as a quasi-brand industry or as a true generic industry, the whole issue turns on whether or not there will be comparable AB ratings or a comparable concept in generic biologics."

"The percentage of our business in the brand area will get larger over time and ultimately, depending on how the generic biologics turn out, it could be for all of us the principle part of our business," Downey said.

"If there isn't a comparability concept, those products will have to be sold as branded generics are in Europe, with a detail force calling on physicians, urging them to write the prescriptions for the generic equivalent."

"If you have the AB rating, you have the opportunity to see what you do in the pharmaceutical area, where overnight the substitution rates go a very high percentage as the first product hits the market."

Another alternative is that "the first generic biologics in the U.S. are not AB rated, but over time, as people become more comfortable with the products, they will receive that rating," Downey said.

While Barr remains ambivalent about substitutability, Sandoz VP & General Counsel Eric Pomerantz asserted that the generic "industry is based on a substitutability model, and I would advocate that that should be central to any legislation that comes forward on generic biologics."

"I understand what others are saying, and people talk about creating huge sales forces - that's not the model of this industry," he added.

Sandoz, however, is also preparing for contingencies. While the company is seeking substitutability for its recently approved human growth hormone follow-on Omnitrope (somatropin [rDNA origin]), it is also considering whether its parent company Novartis will promote the product (² Also see "Sandoz To Seek Omnitrope Therapeutic Equivalence With Genotropin" - Pink Sheet, 5 June, 2006., p. 6).

Brand biologics companies appear to oppose substitutability of follow-on versions; Amgen is working to ensure that follow-on biologics are marketed under unique trade names and are not subject to automatic substitution policies (³ Also see "Amgen Looks To U.S. Contracting Strategies To Head Off European Biosimilars" - Pink Sheet, 13 February, 2006., p. 13).

While Barr and Sandoz may be of differing opinions regarding substitutability, the firms agree that follow-on biologics regulation should largely be left up to FDA.

"There are less and more complicated biologic products, and it is unnecessary and inappropriate to write detailed statutes to regulate each of them," Sandoz' Pomerantz said. "Instead, what we need to do is delegate to FDA the authority that it has to regulate these medicines, just like its had the authority to regulate all other medicines," he said.

Barr's Downey supported a "product specific" approach. "The guidance system will work best because these products are not as homogeneous as pharmaceutical products," he explained.

During the conference, Rep. Henry Waxman (D-Calif.) said FDA needs to be able to take a "case-by-case" approach to follow-on protein approvals. Waxman plans to introduce a bill this year that would create an approval pathway for follow-on biologics.

The following day the most apt partner on such legislation, Sen. Orrin Hatch (R-Utah), said that it was "premature" to decide yet on an approach; however, he said that he had "a deep interest in doing something legislatively, probably not this year, but hopefully next congress."

Hatch said "the best way to consider this issue is through a balanced approach by working with both [the generic] industry and the brand name manufacturers, and if we don't, no bill will ever pass."

The Senator expressed optimism that FDA Commissioner-nominee Andrew von Eschenbach would accelerate the agency's action on follow-on biologics. "I believe he really wants to work with me and others on Capitol Hill in this regard," Hatch said. Von Eschenbach was approved by the Senate Health Committee the same day, despite the threat of two Republican holds.

Hatch did provide a hint regarding what his position would be on issues of intellectual property, stating that he is seeking a system that would allow for approvals "once the patents for these pharmaceuticals expire."

Noting that "potentially hundreds of patents" cover each biotech product, Pomerantz said that "we need to de-link the approval process from resolving all the patent issues that might get thrown in the way, otherwise we're going to have innumerable and interminable delays."

Closely related to patent issues is the exclusivity period for innovator's data on safety and efficacy, which will likely be a key component of whatever compromise is struck between the two industries.

In an article in the September/October 2006 issue of Health Affairs entitled "The Market For Follow-On Biologics: How Will It Evolve," Henry Grabowski (Duke University), Iain Cockburn (Boston University) and Analysis Group VP Genia Long suggest that a longer exclusivity period could be useful in efforts to balance innovation and access.

Beyond being the focus of much of the GPhA conference, the follow-on biologics debate will likely draw mainstream attention. House Energy & Commerce/Health Subcommittee Chair Nathan Deal (R-Ga.) announced his committee will hold a hearing on the issue during the lame duck session this year.

"I believe there is a great deal to learn on this topic by having an open format....Hopefully, if we all put our heads together, we can decide and come out with a path that will allow us to move in a very appropriate direction on generic biologics," he told the meeting.

- John Rancourt

AB Or Not AB? Barr & Sandoz Ponder The Biogeneric Substitution Question

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