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A Regulatory Approval
Pathway for Biosimilars
April 2009
America’s Biopharmaceutical Companies Have Made
Significant Contributions to the Health of Americans
Companies in the vibrant biopharmaceutical sector choose to
headquarter their operations in the U.S., in part, because favorable
public policies enable their success.
Many federal and state policies help biopharmaceutical companies
achieve a greater level of innovation, including intellectual property
protections and an ability to provide returns to investors.
Emerging health threats and an aging and increasingly sicker
population drives the critical need for further innovation.
New Medicine Development is Lengthy, Costly, and Risky
The R&D process is very risky: For every 5,000 to
10,000 compounds tested, just 5 will make it to
clinical trials and, of those, only 1 will eventually
receive FDA approval.
R&D expenditures for each new biologic averaged
$1.24 billion in 2006.1
Only 2 in 10 approved medicines bring in enough
revenue to recoup the average cost of development.
“
It is virtually impossible to
find other historical examples
[outside of the biotech sector],
at least at the industry level, for
which such a large fraction of
new entrants can be expected
to endure such prolonged periods
of losses and for which the vast
majority may never become
viable economic entities.2
“
New medicine development is a lengthy process:
The average development time has increased to
between 10 and 15 years.1
— Gary Pisano, Harvard Business School
Individual company returns reflect the high risk and
long lead times inherent in drug discovery and
development.
Sources: 1DiMasi, JA and Grabowski, HG. “The Cost of Biopharmaceutical R&D: Is Biotech Different?” Managerial and Decision Economics 469-79 (Jun. 2007); PhRMA.
“Drug Discovery and Development: Understanding the R&D Process.” (2007). 2Pisano, GP. “Science Business – the Promise, the Reality, and the Future of Biotech.”
Biopharmaceutical R&D Creates Economic Growth and
High Value Jobs
Biopharmaceutical research companies are leaders in today’s knowledgebased economy, in which growth and productivity are driven by investments
in innovation and R&D.
“
Expanding GDP by Investing in R&D
Scientific & Engineering Jobs
[T]he pharmaceutical and biotechnology industry,
… expands GDP by at least $27 billion annually,
on a permanent basis, for every one-time R&D
investment of $15 billion.2
“
“
High Value Added per Employee
Pharmaceutical firms generated an average
$425,529 in value added per employee
compared to $130,218 for all manufacturing. 2
In 2004, biopharmaceutical research
companies employed 400,000 people,
and generated economic growth
responsible for employing 2.4 million
additional people in other industries.1
In the pharmaceutical industry, the
number of science and engineering
jobs increased nearly 86% from 2000–
2004, compared to a 16% increase for
all manufacturing industries.1
“
Source: 1DeVol et al., “Biopharmaceutical Industry Contributions to State and U.S. Economies,” Milken Institute, October 2004; 2R. Shapiro, et al., Economic Effects of
Intellectual Property-Intensive Manufacturing in the United States, July 2007.
The Growing Importance of Biotechnology Medicines
Biotechnology medicines have been proven
to be safe and effective with an excellent
record of patient satisfaction and safety.
Biotechnology has produced more than 125
medicines including for some of the most
serious and intractable diseases.
In 2008, there were 633 biotechnology
medicines in development, including 254 for
cancer and related conditions and 162 for
various infectious diseases.
Developing a biologic’s full therapeutic
potential can take time. New treatment
advances are often realized from biologics
that have been on the market for some
time, but which were not known until
additional research was conducted.
Source: Biotechnology Research Continues to Bolster Arsenal Against Disease with 633 Medicines in Development. PhRMA, 2008.
The Complexity of Biologics Leads to Unique Challenges
for Biosimilars
•Development and manufacturing process is more complex than that
for small molecule drugs:
• Requires growing and harvesting the product from living cells
• Can take many months to produce
• Biologics are often dozens to thousands of times larger than
chemical drugs
• Traditional generic drugs must be shown to be the same as the
reference drug; however, with modern science, follow-on biologics or
biosimilars can only be similar to the reference or innovator biologic
In Establishing a Regulatory Pathway for “Biosimilar” Products, It
Is Critical to Appropriately Consider Scientific and Safety Aspects
 Biosimilars will be highly similar to existing, approved biologic
products—not the same as
 Biosimilars must demonstrate safety and efficacy through clinical
trials
America’s biopharmaceutical research companies support
the establishment of a science-based, biosimilars regulatory
approval pathway with substantial incentives for innovation
that ensures patient safety and does not hinder the
development of future medicines.
Points to Consider for Establishing a Regulatory Approval
Pathway for Biosimilars
Biologics are complex molecules with the potential for critical
medical advances.
Research and development for biologics is long, costly and risky.
A regulatory approval pathway for biosimilars must include adequate
measures for assuring patient safety.
At least 14 years of data exclusivity or data protection must be part of
any biosimilars legislation to provide the certainty necessary for
continued R&D investment leading to needed medical advances.
Regulatory Process for “Biosimilars” Should Include Adequate
Measures for Assuring Patient Safety
Because follow-on biologics may be similar but not the same as the
reference product, biosimilars could have different safety and
therapeutic profiles than the innovator product.
Regulatory pathway must:

Require clinical trials to demonstrate safety and efficacy

Require clinical trials for each indication unless otherwise
scientifically justified

Recognize that current science does not permit automatic
substitution of one biologic product for another

Different biologics may have different clinical and therapeutic effects
in patients; switching should be a conscious decision made by
physicians in consultation with their patients
Innovator Products Need At Least 14 Years of Data Exclusivity
• Patent protection in the context of biosimilars is less certain than for
traditional small molecule drugs.
– Competitors may be able to get around patents while relying on the innovator
company’s data for FDA approval
• Economic analysis of the time required for a portfolio of biologics to breakeven on their R&D investment indicates data protection for biologics should
between 12.9 and 16.2 years.1
• Data exclusivity or data protection of at least 14 years is necessary to provide
the certainty to ensure continued R&D investment in this sector based on
economic analysis and the unique aspects of biologics, including the high
costs and time required to build specialized facilities, the higher costs of
capital and dependence on venture capital and other private sources of
capital, and the robust research and development that continues after
approval leading to medical advances in often very different disease areas.
Source: 1 H. Grabowski, Data Exclusivity for New Biological Entities, Duke University Economics Department Working Paper, June 2007,
http://www.econ.duke.edu/Papers/PDF/DataExclusivityWorkingPaper.pdf.
Writing an Effective Letter to Congress on Biosimilar Legislation
Note personal connections
• Check official bios for shared affiliations.
• Mention face-to-face encounters.
• Mutual friends. (Your Government Relations team can help identify
them.)
Explain what this means to you and your community
• Personal testimony lifts official correspondence out of the ordinary.
• It’s not about you, it’s you speaking on behalf of people you care
about (who also happen to be constituents).
• Write as though you’re equipping the official to argue on your
behalf–you never know, he or she just might do it, and start a
persuasion cascade.
America’s biopharmaceutical companies
support health care reform that expands access
to high-quality, affordable health care for all
Americans, preserves patient and provider
choices, fights chronic disease and advances
medical innovation for the benefit of our
nation’s health and economy.
DISCUSSION