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The U.S. desperately needs healthcare reform. That we all agree on.
What you might not know is how important generic medicines are to keeping America healthy. Generics allow access to affordable drugs and have saved patients and the U.S. economy $734 billion in the past decade. This has allowed millions of people to have access to lifesaving treatments. In developing countries, generic competition for HIV/AIDS medicines has taken the cost for treatment from $10,000 in 2001 to under $100 today - a savings that has enabled access to previously unaffordable treatment and kept millions alive.
The fastest growing segment of the drug market is comprised of medicines called “biologics.” Unlike most medicines you know - conventional medicines like Tylenol and Prilosec for example - biologics are derived from living cells and include treatments for cancer and multiple sclerosis, as well as most vaccines. These biologic drugs are expected to make up 50% of new drug approvals by 2010. However, these biologics can cost 22 times the price of conventional medicines. For Herceptin, a treatment for breast cancer, prices can be as high as $48,000 while Avastin, a treatment for colon cancer, can go for upwards of $55,000. To make matters worse, right now there is no legal pathway to make generic biologics, also called “biogenerics,” “follow-on biologics,“or “biosimilars.”
We favor legislation that lowers prices by enabling generic biologic drugs. Done right, in the first decade, biogenerics could save patients and our healthcare system as much as $71 billion and would reduce biologic drug prices between 20 and 40%, making lifesaving medicines available to many patients who now have to do without.
Unfortunately, the mechanism built into Senate and House versions of health care reform threatens to effectively block generic competition by granting 12 years of monopoly protection (other medicines get ONLY 5 YEARS!) along with the patent protection that biologic drugs already receive. In addition, companies can tweak their drugs (by changing doses or combining them with other drugs) and extend this protection for another 12 years… over and over again. That’s another additional 12 years of high prices that they can turn into a perpetual monopoly. In other words, this purported generic biologics legislation will actually PREVENT biologic generics for making it to patients.
Not only is this bill expected to block the estimated $71 billion savings enabled by generic biologics, but the U.S. Federal Trade Commission has said that this protection is likely to hurt innovation of new medicines to address unmet medical needs. The Federal Trade Commission recommended ZERO years of data exclusivity for biologics.
In its own 2009 Pharmaceutical Industry Profile, PhRMA notes that the development costs for biologics ($1.2 billion) are actually less than for conventional drugs ($1.318 billion). Similarly, a study by economist Henry Grabowski in 2007 noted little difference in development and approval times (97.7 vs. 90.3 months). Yet proponents of this industry giveaway have called for an unprecedented 12 years of data exclusivity, seven years longer of monopoly protection than conventional drugs. The difference will further distort pharmaceutical innovation, which already fails to prioritize neglected diseases, and will give undue advantage to biologics over traditional drugs.
Currently this “no generic biologics” proposal has found its way into two out of the five versions of the healthcare reform bill, but there is still time to fix this by making a true path for affordable generic biologics. Representative Henry Waxman has proposed a generic biologics bill that grants the same amount of protection given to traditional drugs, 5 years, and prevents abusive practices that allow companies to extend that protection indefinitely. These provisions can be added to health care reform bills, but we need your help.
To learn even more:
Read the Essential Action briefing on follow-on biologics
Read this Essential Action briefing on evergreening.
Join us in taking action today!