Biologic Monographs Could Hinder Follow-On Products – USP CEO Williams

Published monographs for biologics could hinder the development of follow-on products, United States Pharmacopeia CEO Roger Williams, MD, said.

"I would say that if a biotech manufacturer sees a generic coming, one of the good things they should do is give us the monograph because that would start setting the public standard and, I'll say it bluntly, make life difficult for the follow-on generic," Williams stated during a Food & Drug Law Institute conference on "Issues Raised by Follow-On Versions of Biologics" July 15 in Washington, D.C.

Published monographs traditionally have been viewed as an asset by those interested in the development of follow-ons. However, biologic monographs could be a double-edged sword, Williams indicated.

For follow-on biologics to be approved, there has to be a standard to which FDA can compare the generic. A standard based on biologic monographs, which are highly specific, could set quite a high bar for producing a follow-on.

Few biologics have monographs listed with USP, Williams said. For example, of 90 rDNA products approved by FDA, 11 have listed monographs with USP. In total, 121 biologics have filed official monographs.

The CEO noted that there is precedent for government to require submissions. "I would remind everybody that the government did do it with antibiotic monographs," he said. "They put the antibiotic monographs in the [Code of Federal Regulations] and it was extremely cumbersome and time consuming and difficult to update."

In contrast Williams said USP is looking to provide incentives to biotech in order to encourage more monograph submissions.

"One of the nice things about USP is that it can roll into the science of it better over time with updating in a way that affects all manufacturers hopefully in a good way."

USP is interested in playing a role in advancing the science of follow-on biologics. At its 2000 Quinquennium, the agency adopted a resolution to explore "the feasibility and advisability" of developing guidances for follow-on biologics (¹ (Also see "Bioequivalence Methods For Modified-Release Drugs To Be Examined By USP" - Pink Sheet, 1 May, 2000.), p. 31).

FDA Principle Associate Commissioner Murray Lumpkin, MD, has stated that the science of follow-on biologics must be established before regulations can be created, noting that FDA would be the fulcrum of such debate and the enforcer of any regulation on follow-on biologics (² (Also see "Generic Biologic Science Must Evolve Before Legislative Debate – Lumpkin" - Pink Sheet, 31 Mar, 2003.), p. 14).

Congress' next step on follow-on biologics will be hearings, an aide to Sen. Orin Hatch (R-Utah) said.

"I think it's likely that there will be a lot more discussion before there's a bill. I think all the questions that have been raised today point out its premature for anyone to introduce legislation. So I would guess that hearings would be probably in order," Sen. Hatch's Chief of Staff Patricia Knight said.

Knight indicated that Congress is likely to enact legislation because of the potential cost savings associated with follow-on biologics.

However, the probable extent of such savings is still being questioned. "It's less than clear that you can expect the same type of price reductions from a generic on a follow-on biologic than with a" generic drug, Hatch's Legislative Assistant Bruce Artim said.

The high cost of biologics makes any savings worth pursuing, Knight said. "If you're working with extremely relatively large cost products, even a small percentage reduction would be a lot of money."

Lehman Brothers analyst Craig Parker disagreed. "The objective on Capitol Hill seems to be...a desire to offset the cost of Medicare Drug Benefit. And yes, when people see drug costs of $167,000 per year, that seems really high, and it probably is really high. But I would caution you not to rely on this intuition that small reductions in big numbers make a huge difference," Parker said.

Annual total biologics sales is between $20 and $25 bil., Parker explained. Follow-on biologics could provide a 20% reduction in cost for any products that go off patent. If the follow-ons gained between 10% and 20% of the market share, cost savings of $1 bil. to $2 bil could be achieved, a far smaller amount than switches to generic drugs accomplishes.

"I would suggest that if you switch patients for whom it was appropriate in Medicare or for any other managed care plan on to a generic nifedipine and generic pravastatin, you would probably save something like $7 to $10 bil. per year," Parker stated.

Parker and other conference participants seemed to agree that some follow-on biologics are inevitable. However, Parker suggested that high barriers to entry in manufacturing, among other factors, will weed out many potential follow-on biologic firms.

He also speculated that developing biotech companies could be the ones mostly likely to lead the production of follow-ons.

"If you are a development-stage biotech company, this is a wonderful opportunity. Most development stage biotech companies are looking for new product opportunities to in-license. They'll in-license products with $50, $60, $70 mil. sales potential," Parker said.

"So what I would say to them is, 'why not build a small manufacturing facility and be the third, fourth alpha-interferon out on the market'" with a potential for $100 mil. in sales.

The conference included an update on the progress of follow-on biologics in the EU, where regulators are focusing on trying to construct a workable definition for the products.

Amsterdam-based NautaDutilh attorney Maarten Meulenbelt described a new definition of "generic medicinal product" introduced in the EU on June 16. The definition states that a generic is "essentially similar" and bioequivalent, and has the "same qualitative and quantitative composition" and the "same form," Meulenbelt said.

EU regulators acknowledge that standard generic rules may not be sufficient for follow-on biologics, and that additional data requirements might be determined on a case-by-case basis, Meulenbelt indicated.