US biotech drug spending rises while Congress debates 'biogenerics' law

A new report released this week by pharmacy benefit manager Express Scripts estimates that overall biotech drug costs will account for 26 per cent of total drug spending and will reach $99bn (€73bn) in five years, almost twice the $54bn spent on these so-called specialty drugs in 2006. Cancer therapies had the largest increase in spending at 39.5 per cent, which was driven by new treatments including three new drugs introduced in 2006 - Celgene's Revlimid (lenalidomide) for multiple myeloma and Pfizer's Sutent (sunitinib) and Bayer and Onyx' Nexavar (sorafenib), both used for kidney cancer. Spending on biotech drugs climbed 21 per cent in 2006, compared with 6 per cent growth for traditional chemical-based pharmaceuticals The Drug Trend Report suggested that this increase reflects the growing demand for these high-cost medications, once prescribed to treat only rare genetic diseases, and that are now increasingly used to treat more common conditions such as cancer, hepatitis C, rheumatoid arthritis, HIV/AIDS and infertility. "The average cost of a biotech drug can be 10, 15 or 20 times higher than the average cost of a traditional drug,"​ said Dr Steve Miller, Express Scripts chief medical officer. "We must focus our efforts on properly managing the costs of biotech drugs to ensure the pharmacy benefit is protected and preserved for the future."​ And one of the solutions to tackle the issue could lie in clearing the way for follow-on biologics, or biosimilars as they are called in Europe. "Generic versions of biotech drugs can be a vital tool in the future for managing costs,"​ said Miller. An Express Scripts study estimates generic biotech medicines could save US plan sponsors and patients $71bn over 10 years, with $3.5bn of the savings occurring the first year. Currently, no pathways exist for approval of generic biologics in the US. Many regulatory, scientific and legal issues must be resolved before an approval process for these agents can be established, said Miller. US Congress is currently debating legislation that would create a more streamlined FDA approval process for generic biologic drugs, allowing generics to enter the market more quickly, and potentially saving billions of dollars. The FDA recently released a white paper saying it has the ability to approve follow-on biologics without the need to conduct extensive clinical trials, although some studies would be necessary to ensure the new generics are safe and effective. The paper was released as industry players are debating the importance of conducting addition clinical testing for such products and Congress is considering bills to create an approval pathway for follow-on biologics. The FDA has a "scientifically based, case-by-case approach" to approve follow-on biologics and other similar products, according to the paper. The agency said it needed the flexibility to select the appropriate tests to make sure a generic biologic is similar to the original version. But some detractors say that while the FDA should have a role in determining what tests should be required, the agency should not have sole authority and say Congress also should address those standards legislatively. House Energy and Commerce Committee chairman John Dingell is expected to decide this week whether to allow the bill proposed by Senators Hillary Clinton, Charles Schumer, and Rep. Henry Waxman to be attached to the Prescription Drug User Fee Act (PDUFA) which expires on 30 September this year. Concerns have arisen over whether linking the 'biogenerics' legislation to the PDUFA new bill might slow the process of reauthorising it before its expiration. Meanwhile, Sen. Edward Kennedy is reported to be circulating draft legislation to lay out an approval path for follow-on biologics. He made the move after the Senate Help, Education, Labor and Pensions (HELP) Committee he chairs cleared a bill to reauthorise PDUFA earlier this month without a provision for an approval pathway.