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Biological Confusion

A sticky concoction of innovation, intellectual property, generic drugs and money is brewing in the biotechnology industry.

The Food and Drug Administration recently announced that it would not issue guidelines it has already written for two drugs that millions of Americans use: Insulin, used to treat diabetes, and human growth hormone, prescribed for growth deficiencies.

The two drugs fall under the class of drugs called biologics, for which there is no attractive way for companies to make a generic form.

Biologics are made using living materials rather than chemicals.

Patents on many brand name drugs will expire in the coming years, but as FDA rules currently exist, companies wishing to obtain approval to market a generic form of a biologic must conduct clinical trials and market the compound as an entirely new drug , not one that could be directly substituted for the brand name version.

The cost discourages companies from making generic forms of biologics, or biogenerics, and keeps drug prices up, say those who support a simplified approval process for biogenerics.

A March article in the journal

Nature Biotechnology

said that within the next five years, drugs with combined annual sales of more than $10 billion will lose patent protection.

But some companies making biologics and the international Biotechnology Industry Organization, or BIO, say there is essentially no such thing as a generic biologic because its complex molecular structures cannot be replicated without the inventor’s trade secret.

The FDA decision not to issue the guidelines was buried in a response to a letter from the authors of the 1984 law that gave America an abbreviated pathway for non-biologic generic drugs.


Political Pressure

U.S. Rep. Henry Waxman, D-Calif., and Sen. Orrin Hatch, R-Utah, continue to pressure the FDA to release the already written guidelines for human growth hormone and insulin, which they wrote are less complex.

“It is our strong belief that Insulin and HGH are two products that should be separated from the development of a larger regulatory framework because they do not raise the same scientific and regulatory issues as biological products,” the pair wrote in a letter to the FDA this year.

In effect, said Bruce Mackler, a San Diego-based recently retired attorney who headed the FDA group at Heller Ehrman LLP, brand name drug patents outlive their legal life because biogenerics are too expensive for companies to pursue.

“The irony is that given the new technology, today’s generic products are probably cleaner and better than the original products,” said Mackler, who oversaw legal work for Swiss pharmaceutical giant Novartis, Inc. on the first biogeneric drug to be approved in Europe, Omnitrope, a human growth hormone.

The FDA has given mixed messages during the last few years as the industry has begun to realize the creative and economic implications biogenerics will have on biotechnology, and ultimately, health care.

In October, the agency announced it would issue the biogeneric guidelines, but in the recent response to Waxman and Hatch, the body said it would only eventually issue more broad guidance about biogenerics.

“The agency has reconsidered issuing (draft guidance documents) for a number of reasons. After re-assessing the product specific documents, the FDA has decided that it would be more appropriate to publish guidances that are more broadly applicable to (biogenerics) in general,” said a partial statement written by Patrick Ronan, the FDA’s associate commissioner for legislation.

Making the issue even fuzzier, a Washington, D.C., judge ordered the FDA on April 10 to make a decision on whether to approve Omnitrope , a generic for Pfizer, Inc.’s Genotropin , in the United States.

Sandoz International, a Germany-based division of Novartis that filed a lawsuit in September against the FDA for dragging its feet, could be the first company to receive approval for a biogeneric in the United States. Its drug application was filed in 2003.

Still, the company would gain approval through a classification known as 505B2, which, Mackler said, is “between a generic and a new drug application.”

San Diego-based Halozyme Therapeutics, Inc.’s Hylenex, a biologic injection used to accentuate the dispersion of other injected drugs, received FDA approval in December under the 505B2 classification.

Halozyme declined to comment for this story.


A Patent Protection Issue

Several experts were not aware of any local companies developing generic biologics, but some companies with local offices working on brand name biologics see the issue as a threat to their patent protection.

Genentech, Inc., which has more than 400 employees in an Oceanside plant where it manufactures the cancer drug Avastin, is one of the oldest and largest biotechs in the country.

“Years of experience have taught us and others in the industry that differing cell lines and manufacturing processes mean different manufacturers will make different protein products,” the company states in its 2005 annual report. “The process defines the product in biotechnology, and Genentech has spent decades optimizing the process to consistently deliver the most reliable product possible.”

San Diego’s Immune Response Corp. is developing at least two biologics , an HIV vaccine, Remune, and an HIV therapy known as IR103.

Dr. Joseph O’Neill, the company’s chief executive officer, said resolving the issues around how and when to create an abbreviated pathway for biogenerics will require a partnership between the FDA and biotech companies.

“These patent protection issues could have a very important role for not only us, but the world,” said O’Neill, who formerly served as the chief medical officer in the Office of the U.S. Global AIDS Coordinator. “I see protection of intellectual property as a major public health issue.”

O’Neill said the company has already put hundreds of millions of dollars into developing Remune and IR103 and worries that an easier route for generic biologics would discourage innovation.

“Obviously, it would be very important for us that our intellectual property be protected because we will have put a lot of investment forward,” he said. “The broader issue is that we have the right incentives in place for drug companies.”


A Cure For Rising Costs?

But proponents of biogenerics say they could be the saving grace for rising health costs, which include prescription drug expenses.

“I question the claim that there is a ‘magic’ to the process of manufacturing biopharmaceutical drugs and that large development programs costing hundreds of millions of dollars are necessary to prove the safety and effectiveness of a generic version,” wrote Carole Ben-Maimon, the CEO of New Jersey-based Barr Pharmaceuticals, in the recent Nature Biotechnology article. “Although it is clear that some biopharmaceutical products might be more complex, the vast majority can be fully characterized. This is a continuum no different from that with drug products.”

Dan Gold, who founded and is the chief scientific officer at San Diego’s Favrille, Inc., said his biotech company has a biologic drug, but likely won’t have to worry about generic competition.

The company’s leading drug candidate, Favid, currently in phase three trials, is a biologic therapy for non-Hodgkin’s lymphoma. Gold said the product is not “genericizable,” because each therapy is personalized for the patient based on genetic information from his or her tumor.

“We have to make each drug one by one, so it would be the ultimate hardest to replicate,” he said. “When you are making a biologic, the mechanism is very specific. If you make a generic, you’d have to know about the exact trade secret of a company.”

Theoretically, he said, without clinical trials, it would be difficult to tell if a biologic had the same potency, safety and effectiveness as the original form.

Still, others say there could be a less extensive, less expensive process for generic versions that would be sufficient.

“What you really have here is a political situation where a lot of the vested interest has really pressured the agency not to take any risk or create any vehicles without any statutory authorization,” said the former FDA attorney Mackler, who now advises banks and investors worldwide on biotech investments. “Over the last 10 years, the FDA has become much more political and more sensitive to drug safety. An agency would probably not try to be creative on its own right when it is clear the political will to support it is not there. There’s nothing compelling them to move this forward.”

Still, in its response letter to Waxman and Hatch, the FDA asserts, “Please be assured that the FDA’s consideration of regulatory requirements for these products has not stalled and that we are moving ahead as quickly as resources allow.”

The FDA declined to provide further comment for the story.

“I don’t think there is an easy answer,” said Immune Response’s O’Neill. “But I don’t think violating intellectual property is the answer. Our history is such that the most successful products have come forward out of the free market, and if we violate it, we do something very bad for public health by pushing companies out of doing something that could help the world.”

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