The proposed pathway would see the US catch up with Europe, where 'generic' versions of some biologic drugs have already been approved since last year. Meanwhile, Indian firms are waiting with bated breath. A draft bill has been released that finally reaches a compromise between warring factions within the US senate over three main bones of contention regarding the new legislation, first proposed in February, which would be an amendment to the Public Health Service Act. The prickly debate between the biotech and generic industries regarding how follow-on biologics should be considered under legislation has been going on for years. Big biotech firms argue that their biopharmaceuticals cannot be reproduced exactly while 'biogeneric' companies, unsurprisingly, say they are able to duplicate them. The US Biotechnology Industry Organisation (BIO), along with industry innovator firms will greet any new pathway with intrepidation as it will hit them hard in the pocket. They have also long argued that follow-on versions of biologics can only be comparable and not identical. In May the organisation released a white paper that stressed that. According to the paper, biologics have very different physical structure and characteristics from drugs that are based on small molecules which makes it impossible for follow-on versions of biopharmaceuticals to be duplicates of their original version. So firstly, under the proposed compromise bill, all follow-on biologics will be required to undergo appropriate animal studies along with one clinical trial in humans in order to demonstrate adequate comparability with the innovator drug, although the FDA will retain the discretionary power to deal with companies on an individual basis on the extent of testing actually required. Secondly, on the thorny issue of whether or not to give the green light to interchangeability between a branded biologic and its follow-on counterpart, the bill will allow for this in certain cases where the FDA deems it appropriate. Thirdly, in order to placate the industry who are fuming over the lack of incentive to innovation that allowing follow-on biologics may cause, the length of time a branded biologic would be protected under patent has been guaranteed at 12 years under the proposed compromise bill. "It's taken a lot of effort, but we've achieved a good balance in this bill," Republican Senator Orrin Hatch said in a statement. Termed the "Biologics price competition and innovation act of 2007," the draft bill will be voted on by the Senate health committee tomorrow and pending its approval, which is tipped to be likely, it would then need to be passed by the full Senate and the House upon which point the final say rests with President George Bush. "It's crucial that Congress get this right because biologics are the future of medicine,'' said Hatch. Indeed, biologic drugs, which are produced from living cell cultures rather than synthesized chemically, are providing innovative treatments for a number of diseases such as cancer and multiple sclerosis and the US market for these medicines is currently growing at an impressive annual rate of 20 per cent, to the tune of around $40bn (€29.8bn) last year. They are also among most expensive items on the nation's drug bill, costing patients anything from $10,000 to $200,000 a year, so with the average cost of a biotech drug up to 20 times higher than the average cost of a traditional drug, generic versions of biotech drugs are seen by many as a potential tool in the future for managing costs. Many biologics have already come off patent, with no generic alternatives able to take advantage of the fact. However, with the implementation of the new legislation generics manufacturers will be able to benefit from the $10bn worth of biopharmaceutical drugs that are due to come off patent by 2010. Generics firms such as Barr Pharmaceuticals, Teva Pharmaceutical and Sandoz are eagerly anticipating the go-ahead for follow-ons in the US - the world's biggest pharma market - having already invested billions of dollars in acquisitions and facilities outside the US in order to develop these drugs for the European market as well as in anticipation of the US market opening up. Indian firms, who are notorious on the generics scene, are also licking their lips. Only last week it was revealed by Dr. Reddy's Laboratories - India's largest drug maker, that it has eight 'generic' biologic drugs in development, with one expected to be ready for the market by the end of the year. Once the US has an approval path in place for follow-on biologics, it will open the floodgates for international competition.