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Congress is moving to allow generic versions of expensive biologic drugs, but fierce, multimillion-dollar lobbying fights have erupted over just how long it will take to bring the less expensive drugs to market.

Biologic drugs—used by a number of Medicare patients for chronic conditions such as cancer and rheumatoid arthritis—are cutting-edge medicines created from living cells, instead of the chemicals that are used to develop traditional pharmaceuticals. They can be vastly more expensive than their chemical cousins. Currently, there are no generic equivalents of biologic drugs on the market. But, less expensive generics could save consumers billions of dollars over the years.

The yearly cost of the arthritis drug Humira, for example, is about $22,000; the breast cancer drug Herceptin runs about $48,000; and several multiple sclerosis drugs cost about $24,000.

The industry had asked for 14 years of exclusive sales of any biologic medicine before a generic version would be allowed. And Congress is now weighing measures that range from five to 12 years, with even Democrats pushing different time frames.

The Senate Health, Education, Labor and Pensions Committee voted 16-7 Monday to allow generics after 12 years, adding the measure to its massive high-profile health care reform bill. Among those voting in favor was Chairman Edward Kennedy, D-Mass., whose state is one of the world's largest biotech research centers. The senator was absent from the debate because of cancer treatment but voted by proxy.

The House health care reform package, released this week, had no specific generic measure because of the high stakes conflict over timing, but one is expected to be added, probably with a shorter time frame. The pharmaceutical industry has spent over $300 million to lobby Congress in the past two years.

Despite several years of work on the issue by lawmakers, the generic bills languished in committees. But this year the issue has caught the tail wind of the huge overhaul of the nation’s health care system.

Proponents of biologic generics—or biosimilars—say they could reduce health care costs for consumers, insurers and government programs like Medicare. Biologic drugs are a growing market and cost consumers more than $70 billion a year, according to the Biotechnology Industry Organization (BIO).

With traditional pharmaceuticals, drugmakers have five years of exclusivity and can apply for a three-year extension if they make improvements to the drug or discover new uses. Until now, no system has been set up for the Food and Drug Administration to approve generic competition for biologic drugs.

The drug industry backs the Senate health committee’s measure to allow 12 years of exclusivity for biologics, arguing that any shorter time period could threaten innovation and cost thousands of jobs. The period of exclusivity allows drug inventors to protect their clinical trial data from competitors, including generic drugmakers.

“Robust data protection allows our companies to make the extensive investment necessary to develop cutting-edge medicines that allow American patients to live longer, healthier and more productive lives,” said Ken Johnson, senior vice president of the trade group Pharmaceutical Research and Manufacturers of America.

The average clinical trial costs $1.2 billion, according to lawyer Jeffrey Kushan, who testified earlier this week before the House Judiciary Committee on behalf of the BIO trade group. Kushan contended that the 12-year period of exclusivity would create incentives for research and development.

But a recent Federal Trade Commission report argued that 12 years of exclusivity actually inhibits incentives for creating new drugs by reducing the need to find new profit streams. And a shorter period could make drugs less expensive for consumers as competition drives down prices, the FTC noted.

President Obama, in his budget, said a seven-year limit on exclusivity would save $10 billion over 10 years.

Sen. Sherrod Brown, D-Ohio, said health reform’s goal of controlling skyrocketing medical spending will be harder without cutting drug costs. Brown had proposed a seven-year monopoly window for name-brand biologic drugs before generics could enter the market, an amendment backed by AARP. He lost that vote but says he will keep working on the issue.

“Drug companies should be able to recoup their research and development costs, but they are not entitled to open-ended monopolies and unlimited windfall profits,” Brown said. “The millions of people who depend on biologic drugs, and the millions more stuck paying ever higher insurance premiums, deserve better.”

A timely pathway for biologic drug competitors is a high priority for AARP. “Our members use more prescription drugs than any other part of the population, and also have the highest prevalence of the chronic conditions that can be treated using biologic drugs,” said A. Barry Rand, AARP’s chief executive. “In fact, spending on biologic drugs is growing nearly twice as quickly as spending on traditionally developed ‘small molecule’ drugs, and our members are looking to Congress for relief.”

But Ed Haislmaier, senior research fellow at the Center for Health Policy Studies at the Heritage Foundation, says consumers may be too optimistic about how much they will save with biosimilar drugs. Biologic drugs can’t be copied exactly—as chemical drugs can—because they involve living organisms. So fewer doctors and patients may switch from a name-brand drug than is the case with traditional pharmaceuticals. Although generic drugs made with chemicals have brought the price of medicines down about 80 percent, cost savings from generic biologics “won’t be anywhere near as dramatic,” he says.

Congress will continue debating the timetable in the next few weeks. The final decision, Haislmaier predicts, will come when the House and Senate work out their differences on health care reform in a conference committee later this year.

How seriously the pharmaceutical industry takes the debate is reflected in the amount of money it has spent both on campaign contributions to the two political parties and on lobbying, according to Dave Levinthal, spokesman for the nonprofit Center for Responsive Politics, which tracks political donations and spending.

During the first quarter of this year alone, the industry spent $50 million lobbying on issues including biologic drugs. That’s the same amount they spent for the entire year in 1998, Levinthal says. And, he adds, they donated more than $15 million to political candidates last year, compared with less than $10 million in 2004.

“Today the stakes are higher for the industry,” he says.

Tamara Lytle covers politics and Congress for the AARP Bulletin.