The BBB threat to biosimilar drug development
In 2019, longtime pharmaceutical industry critic Peter Bach spoke the Wall Street newspaper to announce that the United States should throw in the towel at copied versions of the country’s most expensive specialty drugs in favor of government price controls. The recommendation has been rightly decried by those who recognize the undeniable role that drug competition plays in reducing drug costs for patients and taxpayers.
Yet two years later, the Democrats in Congress, perhaps unwittingly, seem poised to embody Bach’s proposal.
Democrats have included a number of provisions designed to cut drug prices in the Build Back Better bill, currently being debated in the U.S. Senate after being passed by the House of Representatives on Friday. But having provisions in the current bill that require Medicare to essentially regulate prices and limit any future price increases would come at a high cost.
For starters, it would completely upset our country’s model which has enjoyed great success for decades, of allowing new drugs to benefit from short periods of exclusivity, followed by a period of strong competition from generics and, for large molecule biological drugs, biosimilars.
The inevitable result of such a price regulation regime would be the likely gutting of the biosimilar drug market, leaving us with less drug development, less competition, and reduced progress in the biologic drug market.
Biologics, complex drugs made using living cells, are the fastest growing class of drugs in the United States. In the last decade, almost all of the successful drugs that have been introduced have been biologics.
Biologics have also proven to be very expensive to develop and manufacture. Unlike conventional small molecule drugs, biologics are created within living systems and are very sensitive, which means manufacturers have to control the nature of raw materials and use hundreds of process controls to ensure quality. The cost of research, development and production of these drugs contributes to their high price.
One way the United States has tried to lower the price of biologic drugs has been to encourage the introduction of biosimilar drugs. Biosimilars are related to generics in that they are near-replicas of the original biologics, but creating the therapeutic equivalent of a biologic is a much more complex task than making a biologic. generic equivalent of a small molecule drug: manufacturers of biosimilars do not have access to the DNA used in reference products, and must invest in research and development to create facsimiles that resemble the originals. Thus, if biosimilars are presented as less expensive versions of their reference products, they nevertheless also require significant investments.
However, the United States was slow to approve biosimilar drugs, which lessened their effect on drug prices. For example, the EU approved its first biosimilar drug in 2006, but the first American drug – Zarxio – only reached the market in 2015. Today the EU approved 69 biosimilar drugs and the United States has only 31, many of which were only recently approved and have yet to hit the market.
No one will argue that the huge difference in approvals between the US and the EU has to do with a lax EU regulatory state, given its famous sclerotic and cautious bureaucracy and unconditional adherence to the precautionary principle: it is clear that something is wrong with the US biosimilar market. This is in part because the current system has allowed drug companies to delay competition for biosimilars through the courts and what some interpret as a form of patent abuse, but the long and complex process for the FDA to approve them. biosimilar drugs is a bigger problem. .
A stronger FDA, combined with legislation removing most of the legal barriers and patent abuses that hinder competition from biosimilars, would make it easier for biosimilars to enter the market. This would go a long way in restraining the prices of new drugs in a way that would not adversely affect development.
Instead, many Democrats view bureaucratic and legalistic barriers as an immutable reality rather than a problem to be solved, and embrace government pricing instead.
As such, the current drug provisions in Build Back Better would end the decades-old model of encouraging competition through generics and move towards a centrally regulated market, more than even Europe.
Orrin Hatch, my former employer in the US Senate, recently came out of retirement to publish a statement denouncing the notion of price controls and the possible demise of the Hatch-Waxman Act, the legislation that created the market for generic drugs and, later, biosimilars.
Current members of Congress should heed Senator Hatch’s caution. Even a sham towards such a market for command-and-control drugs would cause investment in biosimilars to plummet: it might be difficult to fully revive such an investment later if the pharmaceutical companies fear that such a drastic measure remains possible with it. the next administration.
The most practical and least damaging way to help reduce prescription drug pricing pressures would be to fix the biosimilars pipeline and let competition drive prices down, just like generics did.