Correspondence
Correction
Market Exclusivity for Biologics
N Engl J Med 2010; 362:661-662February 18, 2010
- Article
To the Editor:
With regard to the Perspective article by Engelberg et al. (Nov. 12 issue)1: the record should be set straight. First, manufacturers of biosimilar products have strong incentives to enter the market — they will be able to support their application for Food and Drug Administration (FDA) approval with the innovator's data, and their development costs will be $10 million to $40 million, as compared with more than $1.2 billion for innovators.2 Second, because biosimilar products will need to be only similar to (rather than the same as) the innovators' products, patent protection will be less certain, making data protection critical. Inadequate data protection could diminish investment in products that are more challenging to develop and shift research and development overseas.3,4 Third, data protection does not mean that there is no competition. Biologics compete with other medicines. A manufacturer of biosimilar products can generate its own data to provide support for approval. Fourth, under the health care reform bills, changes to an innovator biologic that do not affect the product's safety, purity, or potency would not qualify for a new data-protection period. Finally, focusing on revenues associated with a select few biologics is misleading: in 2008, the developers of less than one third of biologics had recouped their research and development costs from 2003 through 2008 (unpublished data).
David E. Wheadon, M.D.
Pharmaceutical Research and Manufacturers of America, Washington, DC
dwheadon@phrma.org Dr. Wheadon reports being employed by several pharmaceutical companies and holding stock in Abbott Laboratories and GlaxoSmithKline.
No other potential conflict of interest relevant to this letter was reported.
4 References1
Engelberg AB ,Kesselheim AS ,Avorn J . Balancing innovation, access, and profits -- market exclusivity for biologics. N Engl J Med 2009;361:1917-1919
Full Text | Web of Science | Medline2
Grabowski H ,Cockburn I ,Long G . The market for follow-on biologics: how will it evolve? Health Aff (Millwood) 2006;25:1291-1301
CrossRef | Web of Science | Medline3
Cockburn I, Lerner J. The cost of capital for early-stage biotechnology ventures. In: Pisano G. Science business: the promise, the reality and the future of biotech. Cambridge, MA: Harvard Business School Press, 2006:115.
4
Avoiding no man's land: potential unintended consequences of follow-on biologics. Deloitte white paper, March 2009. (Accessed January 28, 2010, at http://www.pharmamanufacturing.com/Media/1001/Deloitte_Biosimilars.pdf.)
To the Editor:
Engelberg et al. incorrectly state that the annualized cost of epoetin alfa therapy for anemia of chronic renal disease is $84,467 per patient. The actual average annual cost of epoetin alfa for patients with end-stage renal disease who are undergoing maintenance hemodialysis is $8,767 per patient, of which the Centers for Medicare and Medicaid Services (CMS) pays 80%.1,2 This cost was calculated on the basis of the most recent publicly posted data from the U.S. Renal Data System (USRDS) and corresponding data from the CMS. For the second half of 2007, the mean epoetin alfa dose of 18,566 units per patient per week was reported in the 2009 USRDS Annual Data Report, which reflects 2007 data, and the CMS reimbursement rate for epoetin alfa was $9.081 per 1000 units, based on the average sales price reported by the Healthcare Common Procedure Coding System.1,3,4
4 ReferencesAllan Pollock, M.D.
Martin Zagari, M.D.
Amgen, Thousand Oaks, CA
apollock@amgen.com 1
United States Renal Data System. USRDS 2009 annual data report — atlas of end-stage renal disease. Vol. 2. Figure 5.3. (Accessed January 28, 2010, at http://www.usrds.org/slides.htm.)
2
Medicare claims processing manual: chapter 8 — outpatient ESRD hospital, independent facility, and physician/supplier claims. (Accessed January 28, 2010, at http://www.cms.hhs.gov/Manuals/downloads/clm104c08.pdf.)
3
Centers for Medicare and Medicaid Services. Medicare Part B drug average sales price: healthcare common procedure coding system, July 2007 (ASP HCPCS J0886 — epoetin alfa, ESRD on dialysis). (Accessed January 28, 2010, at http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01b_2007aspfiles.asp#TopOfPage.)
4
Idem. Medicare Part B drug average sales price: healthcare common procedure coding system, October 2007 (ASP HCPCS J0886 — epoetin alfa, ESRD on dialysis). (Accessed January 28, 2010, at http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01b_2007aspfiles.asp#TopOfPage.)
Author/Editor Response
Wheadon does not challenge our central contention that the pending biosimilar legislation will produce less competition and perpetuate higher prices for biologic drugs. Rather, he attempts to justify that outcome with a number of common arguments. His $1.2 billion estimate for new drug development has been widely disputed, and the amount may be lower for biologics.1,2 In the case of alglucerase (Ceredase) for Gaucher's disease, for example, the manufacturer reported spending less than $58 million for development.3 There is no evidence suggesting that the research leading to approval of a biosimilar product will cost only $10 million to $40 million, given that, according to the FDA, clinical-trial requirements for biosimilars may not be substantially different from those for new products.4 Threats that pharmaceutical research would migrate overseas unless long-term monopolies for new drugs were put in place were first made during the discussion preceding passage of the Waxman–Hatch Act in 1984. However, the United States will remain the most lucrative market for drugs, as well as an invaluable source of basic academic research on which the pharmaceutical industry relies heavily. Though commercial success cannot be ensured, biologics remain the fastest-growing component of the drug market in terms of expenditures and can provide extraordinary profits for manufacturers. In 2008, for example, U.S. sales of epoetin alfa (Epogen) were $2.5 billion, nearly two decades since it first was approved in 1989.5
The patent system was intended to reward innovation. The proposed biosimilar legislation will grant a 12-year monopoly without any innovation requirement and offers additional 12-year periods of exclusivity for minimal changes to the original product. A more reasonably constrained exclusivity period would more effectively limit returns on noninnovative products and thus better encourage development of the next generation of important therapeutic agents.
Pollock and Zagari have brought our attention to an arithmetic error in transcription relating to the table in our article. The annual average cost for epoetin alfa that we calculated should have been $8,447. We regret the error.
Since our article was published, the proposed entitlements for manufacturers of biologics have become integral parts of the health care reform bills. If legislation is ultimately passed with such policies in place, U.S. patients and insurers will continue to pay unnecessarily high prices for these products for decades to come.
Alfred B. Engelberg, J.D.
Engelberg Foundation, Palm Beach, FLAaron S. Kesselheim, M.D., J.D.
Brigham and Women's Hospital, Boston, MASince publication of their article, the authors report no further potential conflict of interest.
5 References1
Brill AM. Proper duration of data exclusivity for generic biologics: a critique. November 2008. (Accessed January 28, 2010, at http://www.tevadc.com/Brill_Exclusivity_in_Biogenerics.pdf.)
2
Goozner M. The $800 million pill: the truth behind the cost of new drugs. Berkeley: University of California Press, 2004.
3
Goldman DP ,Clarke AE ,Garber AM . Creating the costliest orphan: the Orphan Drug Act in the development of Ceredase. Int J Technol Assess Health Care 1992;8:583-597
CrossRef | Medline4
Torti FM. Letter to Frank Pallone, Jr., Chairman, Subcommittee on Health, Committee on Energy and Commerce, House of Representatives. September 18, 2008. (Accessed January 28, 2010, at http://energycommerce.house.gov/Press_110/fdabiosimilarrespons20080918.pdf.)
5
Amgen 2008 annual report and financial summary. February 6, 2009. (Accessed January 28, 2010, at http://www.amgen.com/pdfs/investors/Investors_2008_AnnualReport.pdf.)
- Citing Articles (3)
Citing Articles
1
AARON S. KESSELHEIM. (2011) An Empirical Review of Major Legislation Affecting Drug Development: Past Experiences, Effects, and Unintended Consequences. Milbank Quarterly 89:3, 450-502
CrossRef2
Maria D.F.S. Barbosa. (2011) Immunogenicity of biotherapeutics in the context of developing biosimilars and biobetters. Drug Discovery Today 16:7-8, 345-353
CrossRef3
Kesselheim, Aaron S., . (2010) Using Market-Exclusivity Incentives to Promote Pharmaceutical Innovation. New England Journal of Medicine 363:19, 1855-1862
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