[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
SAFE AND AFFORDABLE BIOTECH DRUGS: THE NEED FOR A GENERIC PATHWAY
=======================================================================
HEARING
before the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
MARCH 26, 2007
__________
Serial No. 110-43
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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COMMITTEE ON OVERSISGHT AND GOVERNMENT REFORM
HENRY A. WAXMAN, California, Chairman
TOM LANTOS, California TOM DAVIS, Virginia
EDOLPHUS TOWNS, New York DAN BURTON, Indiana
PAUL E. KANJORSKI, Pennsylvania CHRISTOPHER SHAYS, Connecticut
CAROLYN B. MALONEY, New York JOHN M. McHUGH, New York
ELIJAH E. CUMMINGS, Maryland JOHN L. MICA, Florida
DENNIS J. KUCINICH, Ohio MARK E. SOUDER, Indiana
DANNY K. DAVIS, Illinois TODD RUSSELL PLATTS, Pennsylvania
JOHN F. TIERNEY, Massachusetts CHRIS CANNON, Utah
WM. LACY CLAY, Missouri JOHN J. DUNCAN, Jr., Tennessee
DIANE E. WATSON, California MICHAEL R. TURNER, Ohio
STEPHEN F. LYNCH, Massachusetts DARRELL E. ISSA, California
BRIAN HIGGINS, New York KENNY MARCHANT, Texas
JOHN A. YARMUTH, Kentucky LYNN A. WESTMORELAND, Georgia
BRUCE L. BRALEY, Iowa PATRICK T. McHENRY, North Carolina
ELEANOR HOLMES NORTON, District of VIRGINIA FOXX, North Carolina
Columbia BRIAN P. BILBRAY, California
BETTY McCOLLUM, Minnesota BILL SALI, Idaho
JIM COOPER, Tennessee ------ ------
CHRIS VAN HOLLEN, Maryland
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
JOHN P. SARBANES, Maryland
PETER WELCH, Vermont
Phil Schiliro, Chief of Staff
Phil Barnett, Staff Director
Earley Green, Chief Clerk
David Marin, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on March 26, 2007................................... 1
Statement of:
Allen, Geoffrey, Ph.D, president, chief executive officer,
chairman of the board, Insmed Inc.; Theresa Lee Gerrard,
Ph.D, president, TLG Consulting, Inc. (Biopharmaceutical
Consultants formerly with Amgen and FDA'S Center for
Biologics); Bill Schwieterman, M.D., president, Tekgenics
Corp. (Biopharmaceutical Consultants formerly with FDA'S
Center for Biologics); Inger Mollerup, vice president for
regulatory affairs, Nova Nordisk A/S; and Ganesh
Venkataraman, Ph.D, senior vice president, research,
Momenta Pharmaceuticals, Inc............................... 57
Allen, Geoffrey.......................................... 57
Gerrard, Theresa Lee..................................... 63
Mollerup, Inger.......................................... 84
Schwieterman, Bill....................................... 72
Venkataraman, Ganesh..................................... 102
Brown, Yvonne, for the National Multiple Sclerosis Society;
Mary Nathan, for the National Organization for Rare
Disorders [NORD]; Nelda Barnett, board member, AARP; Priya
Mathur, vice chair, health benefits-Board of
Administration, California Public Employees' Retirement
System [CALPERS]; Scott D. McKibbin, special advocate for
prescription drugs, State of Illinois; Henry Grabowski,
Ph.D, professor of economics, director, Program in
Pharmaceuticals and Health Economics, Duke University; and
Jonah Houts, senior analyst, Express Scripts, Inc.......... 127
Barnett, Nelda........................................... 137
Brown, Yvonne............................................ 127
Grabowski, Henry......................................... 161
Houts, Jonah............................................. 257
Mathur, Priya............................................ 146
McKibbin, Scott D........................................ 154
Nathan, Mary............................................. 129
Woodcock, Janet, M.D., Deputy Commissioner for Operations and
Chief Medical Officer, Food and Drug Administration........ 19
Letters, statements, etc., submitted for the record by:
Allen, Geoffrey, Ph.D, president, chief executive officer,
chairman of the board, Insmed Inc., prepared statement of.. 60
Barnett, Nelda, board member, AARP, prepared statement of.... 139
Cummings, Hon. Elijah E., a Representative in Congress from
the State of Maryland, prepared statement of............... 268
Davis, Hon. Danny K., a Representative in Congress from the
State of Illinois, information concerning biotech drugs.... 265
Davis, Hon. Tom, a Representative in Congress from the State
of Virginia, prepared statement of......................... 11
Gerrard, Theresa Lee, Ph.D, president, TLG Consulting, Inc.
(Biopharmaceutical Consultants formerly with Amgen and
FDA'S Center for Biologics), prepared statement of......... 65
Grabowski, Henry, Ph.D, professor of economics, director,
Program in Pharmaceuticals and Health Economics, Duke
University, prepared statement of.......................... 163
Houts, Jonah, senior analyst, Express Scripts, Inc., prepared
statement of............................................... 259
Issa, Hon. Darrell E., a Representative in Congress from the
State of California, prepared statement of................. 16
Mathur, Priya, vice chair, health benefits-Board of
Administration, California Public Employees' Retirement
System [CALPERS], prepared statement of.................... 148
McKibbin, Scott D., special advocate for prescription drugs,
State of Illinois, prepared statement of................... 157
Mollerup, Inger, vice president for regulatory affairs, Nova
Nordisk A/S, prepared statement of......................... 86
Nathan, Mary, for the National Organization for Rare
Disorders [NORD], prepared statement of.................... 132
Schwieterman, Bill, M.D., president, Tekgenics Corp.
(Biopharmaceutical Consultants formerly with FDA'S Center
for Biologics), prepared statement of...................... 74
Venkataraman, Ganesh, Ph.D, senior vice president, research,
Momenta Pharmaceuticals, Inc., prepared statement of....... 104
Waxman, Chairman Henry A., a Representative in Congress from
the State of California, prepared statement of............. 4
Woodcock, Janet, M.D., Deputy Commissioner for Operations and
Chief Medical Officer, Food and Drug Administration,
prepared statement of...................................... 22
SAFE AND AFFORDABLE BIOTECH DRUGS: THE NEED FOR A GENERIC PATHWAY
----------
MONDAY, MARCH 26, 2007
House of Representatives,
Committee on Oversight and Government Reform,
Washington, DC.
The committee met, pursuant to notice, at 10 a.m., in room
2154, Rayburn House Office Building, Hon. Henry A. Waxman
(chairman of the committee) presiding.
Present: Representatives Waxman, Kucinich, Davis of
Illinois, Yarmuth, Norton, Van Hollen, Hodes, Welch, Davis of
Virginia, Burton, Issa, Bilbray, and Sali.
Staff present: Phil Barnett, staff director and chief
counsel; Kristin Amerling, general counsel; Karen Nelson,
health policy director; Karen Lightfoot, communications
director and senior policy advisor; Andy Schneider, chief
health counsel; Sarah Despres, senior health counsel; Ann Witt,
health counsel; Robin Appleberry and Rachel Sher, counsels;
Earley Green, chief clerk; Teresa Coufal, deputy clerk; Caren
Auchman, press assistant; Zhongrui ``JR'' Deng, chief
information officer; Leneal Scott, information systems manager;
Robin Pam, staff assistant; David Marin, minority staff
director; Larry Halloran, minority deputy staff director;
Jennifer Safavian, minority chief counsel for oversight and
investigations; Susie Schulte, minority senior professional
staff member; Kristina Husar, minority professional staff
member; Patrick Lyden, minority parliamentarian and member
services coordinator; Brian McNicoll, minority communications
director; and Benjamin Chance, minority clerk.
Chairman Waxman. The meeting of the committee will please
come to order.
More than 20 years ago the Congress enacted the Hatch-
Waxman Act. That law has taught us three things: genetic drugs
are good for patients, both medically and financially; with a
little help, the market works, generic competition lowers drug
prices; and generic competition does not bankrupt the brand
name drug industry or slow innovation.
Maybe some big drug makers still dispute these lessons, but
no one else does. But there is still no generic competition for
one of the fastest-growing and most expensive categories of
drugs, biologicals, those drugs produced from living cell
cultures rather than from chemical synthesis.
Some of these drugs are near miracles for people with
cancer, metabolic diseases, and immune disorders. They can stop
disability and, in some cases, save lives. People need them.
But some of these drugs cost each patient tens of thousands of
dollars a year. Some can cost hundreds of thousands per year.
Many people cannot get access to these near miracles, and even
when people can get them the prices drive up the cost of
Medicare, Medicaid, and health insurance overall.
Why isn't the market helping? It is not because of the
patent system that biologicals are protected from the
competition that might lower prices. Biologicals, like other
drugs, do enjoy patent protection. This allows manufacturers to
enjoy a monopoly period during which they can get a significant
return on their investments. But patents, or many of them, have
already expired, and other patents are just about to expire.
And it is not the science of these drugs that protects them
from competition. The technology is already here to make a safe
and effective copy of some biotech drugs. Moreover, the
technology is getting better every year, and we can make
progress even faster if we allow companies to use it to make
generics.
Instead, the monopoly on each of these drugs is perpetuated
by the lack of a clear pathway for FDA to approve competing
versions.
The Hatch-Waxman Act does not reach most of them. This
costs all of us--taxpayers, insurance premium payers, and
patients--billions of dollars. It also means that some very
sick people simply cannot get the drugs they need.
I know that the science of these drugs is not simple. I
take the questions of research, safety, and efficacy very
seriously. The only way we can succeed in establishing robust
competition for biotech drugs is with drugs the doctors and
patients know they can count on, so we need to be sure that the
FDA has the discretion to require the studies that are needed
to establish that a copy of a biotech drug is equivalent to the
brand name drug in safety and effectiveness. That is one of the
things we hope to learn more about today.
But the big brand name companies have gone beyond
legitimate concern and have thrown up a defensive smoke screen
around biologicals. They say there will be problems of safety,
decreased innovation, and limited savings. When discussing
creating generic competition, they say things like, ``Such
action may also save consumers a few dollars here and there,
although that is by no means assured, but whatever short-term
savings may be achieved will come at an enormous long-term cost
to the public. Focusing solely upon short-term, lower prices, a
cheap drugs policy will inevitably reduce research and hinder
our public health efforts.''
Well, these arguments have a familiar ring to them. That is
because the words I just read were the formal testimony that
the Pharmaceutical Manufacturers Association gave to the House
in 1983 when they were opposing Hatch-Waxman, and now
manufacturers are using these same arguments again. But they
were wrong then. Hatch-Waxman has saved patients billions of
dollars and dramatically improved their access to drugs, and
Hatch-Waxman did not reduce research or hinder public health.
And they are wrong now. A new path for FDA to approve
generic biologicals will save patients billions in the future
and will improve access to treatments and cures, and a new path
will improve competition, while preserving the market's strong
incentive for research.
For the sake of patients, their families, public and
private health insurance, and taxpayers, we must find a way to
introduce competition to this market. When a patent expires, we
owe it to consumers to find a way through competition to lower
prices and still deliver a safe and effective product. When a
patient expires, they no longer need the product, so the price
will make no difference.
I look forward to the testimony of the witnesses today and
learning more about the scope of the problem, the science, and
the potential solutions.
[The prepared statement of Chairman Henry A. Waxman
follows:]
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Chairman Waxman. Mr. Davis.
Mr. Davis of Virginia. Thank you, Mr. Chairman, for holding
today's hearing to consider the implications of creating a
regulatory pathway for approval of follow-on biologics. It is a
very important subject, and certainly your leadership is
appreciated and worthy of this committee's consideration.
Mr. Chairman, you have long been a leader in improving
access to pharmaceutical drugs. Indeed, there is near universal
agreement that the Hatch-Waxman Act has been extremely
effective in allowing generic drugs to come to market and
compete with brand name drugs. This competition has benefited
countless citizens, as well as the Federal Government, by using
natural market economics to bring down the price of
prescription medicine. You are to be commended for your
leadership in improving access to these life-saving
medications.
It is my understanding you have recently introduced
legislation that would, in fact, create a regulatory pathway
for the FDA to approve follow-on biologics. We have been
reviewing the legislation with interest, and we expect it will
inform today's discussion.
I look forward to exploring your proposal further. For now,
let me just offer a few preliminary thoughts on this very
complex subject.
The first principle guiding this effort should be to foster
innovation and the discovery of new cures. After all, there is
no new therapeutic, by definition there can be no follow-on.
Accordingly, we need to protect the intellectual property of
innovative firms. Given the high cost of research, development,
manufacturing, and regulatory approvals, IP protections are
clearly a critical factor for biotech startups when they are
securing venture capital and pursuing partnerships with larger
firms.
Today we will hear from economist Henry Grabowski, who will
explain that increased patent uncertainty and IP litigation
would have a significant negative effect on capital market
decisions for emerging private and public biotech firms. He
will explain that if the Federal Government either weakens
patent protections or increases the chance of litigation there
will likely be a corresponding decrease in investment, and
therefore less research and development of biologics. It would
be tragic if legislation intended to increase access to
medicine would have the unintended result of stifling
innovation, preventing the discovery of cures of presently
terminal diseases.
I hope you would agree with me, Mr. Chairman, about the
importance of fostering a vibrant and innovative culture where
we encourage our brightest minds and daring entrepreneurs to do
the research, provide the investment so that we may some day
discover the cure for cancer or Lou Gehrig's disease.
Reflecting on the Hatch-Waxman Act, you got it right when
you recognized the importance of balancing the twin goals of
bringing generic drugs to market while at the same time leaving
intact the financial incentive for research and development.
One of the keys to this successful balance in that
legislation was the guarantee of 5 years of market exclusivity
for innovative companies. Incidentally, European Union
regulators currently provide 10 years of market exclusivity for
European drugs for innovative drugs. Some amount of market
exclusivity for the innovator is necessary under any regulatory
pathway for follow-on biologics.
The second imperative is to provide a mechanism so the FDA
is able to guarantee the safety and efficacy of follow-on
biologics. To do so we have to recognize the fundamental
differences between biologics and chemical-based
pharmaceuticals. What has proven to be successful in the case
of traditional drugs is not necessary transferrable to the
science of biologics. For instance, it is currently possible to
know the complete character of a small molecule drug. This
knowledge enables the FDA to approve generic drugs with the
same characteristics as the innovator drug without requiring
generic companies to test and prove the drug's efficacy and
safety again. However, current science has not advanced
sufficiently to give us the same confidence that a follow-on
biologic is identical to a previously approved biologic based
on molecular structure, alone.
Unlike traditional drugs, which are chemically based,
biologics are made from living organisms. Even minor variations
in manufacturing processes can have a significant impact on the
final character and consistency of the biologic and its effect
on the human body.
This diagram on the board comparing a biologic used to
treat anemia and a traditional drug that treats peptic ulcers
disease demonstrates the difference between traditional
chemical drugs and biological therapies. As you can see, the
biologic is significantly more complex than a traditional drug,
having a molecular weight of 30,000 versus 351. This is a
critical distinction between traditional generic drugs and
follow-on biologics. Any regulatory pathway must take full
account of this distinction, which for now seems to point to
the inescapable conclusion that clinical trials on some level
will be essential to ensure the safety and efficacy of follow-
on biological products.
Again I want to thank you, Mr. Chairman, for spurring a
discussion on this important subject. I look forward to hearing
from our distinguished panel of witnesses.
[The prepared statement of Hon. Tom Davis follows:]
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Chairman Waxman. Thank you very much, Mr. Davis.
Without objection, all Members will be permitted to enter
an opening statement in the record. Do any Members wish,
however, to make any comments before we hear from our 15
witnesses? Mr. Issa.
Mr. Issa. Thank you, Mr. Chairman. I will be brief. I will
put my formal statement in the record, particularly because it
sounds an awful lot like Mr. Davis'. The view is somewhat the
same, and that is that it is very clear that we know a great
deal about chemical compounds and we can say a chemical is a
chemical, but, for example, Mr. Chairman, would you want to
have these two oranges substituted as though there were no
difference? Would you accept that a Florida orange is the same
as a California orange if you have to peel it, Mr. Chairman?
And, for Mr. Sali who is not here today, do you really think
that any Russett potato is an Idaho potato and should be
interchanged and have no value, no second testing of whether or
not it makes a good french fry?
Now, clearly we know how to make grain alcohol, and if I am
buying grain alcohol, Mr. Chairman, it is very clear that I
know that it is alcohol plus about 3 percent water that just
gets in if you get the air to it. But, Mr. Chairman, do you
really think that a $90 bottle of California wine that says
Merlot is equal to this fine boxed Merlot? And would you want
to go to the dinner table or the hospital and have them
interchanged without your prior approval, or perhaps a little
taste?
This is biologics. These are made by process. Mr. Chairman,
they may both be a Merlot, but as a Californian, I am sure that
you would not want them interchanged without your prior
approval.
With that, I yield back.
[The prepared statement of Hon. Darrell E. Issa follows:]
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Chairman Waxman. Mr. Davis.
Mr. Davis of Illinois. Yes, Mr. Chairman, I would like to
make a brief statement.
Chairman Waxman. Before I recognize you for that purpose, I
would like to inquire if you have any props. [Laughter.]
The gentleman is recognized.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman. I
shall, indeed, be brief. But first of all let me thank you for
calling this hearing.
In 1984 the landmark Hatch-Waxman Act provided a cost-
effective alternative to branded drugs with the creation of a
traditional generic pharmaceutical industry. Today's hearing
marks yet another landmark as we are being called upon to
address escalating biopharmaceutical costs.
This issue is near and dear to me, one, as a former health
administrator, but also because my congressional district has
more hospitals and more hospital beds than any other
congressional district in the country. Illinois has about 200
hospitals, most of them nonprofit. State hospitals are losing
money, and another third are barely breaking even,
notwithstanding cuts in Medicare and Medicaid.
According to Crane's Chicago Business, on February 13,
2006, while the State of Illinois has implemented prescription
drug assistance programs like the Senior Care Pharmaceutical
Program, State Pharmaceutical Assistance Plan, All Kids Program
that provides health insurance coverage and prescription drugs
to children across all socio-economic groups, they help to
buffer costs.
However, the sad reality is that cuts in Federal spending
tend to shift costs to insured patients and their employers. By
definition, health care is eating up a piece of our income,
which is especially bad news for the 26 percent of Chicagoans,
including 164,203 with full-time jobs and 43,876 with at least
a college education who lack health insurance. These data are
particularly disturbing when you take into consideration the
median household income for Chicago is $38,625 a year.
With this in mind, I welcome today's distinguished
panelists and look forward to their insight and recommendations
on how we can buildupon the foundation of generic competition
for our consumers laid some 23 years ago under the Hatch-Waxman
Act toward the attainment of a pathway to safe and affordable
biotech drugs.
I guess if I was to have any kind of prop, I'd just take
this water, which is pretty pure, and be delighted to have it.
Again, thank you, Mr. Chairman, for having this hearing.
Chairman Waxman. Thank you very much, Mr. Davis.
Does any other Member wish to be recognized for an opening
statement? Mr. Yarmuth.
Mr. Yarmuth. Mr. Chairman, two things real briefly. First
of all, I hope that Mr. Issa would accept an amendment to his
list in saying that no self-respecting Kentuckian would accept
Tennessee sour mash whiskey for a Kentucky bourbon.
Mr. Issa. Now that is bipartisan if I ever saw it.
Mr. Yarmuth. Thank you.
Also, I would like to say that I think the chairman and Mr.
Davis have very accurately expressed and illuminated the
conflicting issues that we have to deal with on this topic.
I would also mention the fact that we have to recognize
that much of the research that leads to the development of
these drugs and these medications, both pharmaceutical and also
these biologics, are funded by taxpayer dollars initially, so
that we have an overriding mandate to do what is best for the
taxpayer, who is paying for most of this research at the very
foundational levels.
Thank you, Mr. Chairman.
Chairman Waxman. Thank you very much.
We will now hear from our witnesses today. Our first
witness I am pleased to welcome is Dr. Janet Woodcock. She is
the Deputy Commissioner for Operations and Chief Medical
Officer of the Food and Drug Administration.
Since you are standing, I will have you continue to stand
because it is the practice of this committee to put all
witnesses under oath.
[Witness sworn.]
Chairman Waxman. The record will indicate that you answered
in the affirmative.
We are delighted to have you here. We will put your full
statement in the record. If it is possible, we would like to
ask you to keep to around 5 minutes.
STATEMENT OF JANET WOODCOCK, M.D., DEPUTY COMMISSIONER FOR
OPERATIONS AND CHIEF MEDICAL OFFICER, FOOD AND DRUG
ADMINISTRATION
Dr. Woodcock. Thank you. Mr. Chairman and members of the
committee, I am Janet Woodcock, Deputy Commissioner and Chief
Medical Officer of the Food and Drug Administration. I thank
you for the opportunity to testify about the scientific and
regulatory framework surrounding follow-on biologics.
In considering the complex scientific issues at hand, I
have relied not only on my experience leading the Center for
Drug Evaluation and Research for over a decade, but also on my
8 years of experience working in the Center for Biologics
Evaluation and Research [CBER]. While in CBER I served as
Acting Deputy Center Director and as Director of the Office of
Therapeutics, in which capacity I oversaw the approval of
biotechnology products to treat serious illnesses such as
cancer, multiple sclerosis, and cystic fibrosis.
The success of FDA's generic drugs program has spurred
interest in considering abbreviated application pathways for
more-complex molecules. Currently there are over 9,000 approved
therapeutically equivalent generic drugs on the market. They
constitute about 60 percent of prescriptions written in the
United States. FDA's Office of Generic Drugs currently approves
generics at the rate of more than one per calendar day.
The success of the program has stimulated competition. For
the last decade, the rate of submission to the Office of
Generic Drugs has rapidly increased. Submissions doubled
between 2002 and 2006, to a current rate of about 793
applications per year.
The office has implemented numerous process improvements,
have improved increased efficiency of the review process, and
recently, as part of FDA's initiative on pharmaceutical quality
for the 21st century, OGD instituted the question-based review.
Eventually it is hoped this change will decrease submission of
manufacturing supplements by about 80 percent, and thus free up
more time of the reviewers to deal with this increased
submission rate.
While the generics program has been very successful for
small molecules, scientific challenges remain. We do not have
good bio-equivalents methods for inhaled or many topical
medications, and must require clinical trials to demonstrate
equivalence. This has inhibited consumer access to generic
versions of these types of products.
In addition, a number of drugs are made from complex
molecules. In these cases, it can be difficult to tell whether
a proposed generic version is structurally identical to the
innovator product.
Recently, as part of its critical path initiative, FDA has
been evaluating the science needed to address these issues for
generic drugs and is planning to lay out the scientific
research that is needed to improve the process, as we did a
number of years ago for innovator medical products.
The topic for discussion today is variously referred to as
follow-on proteins, follow-on biologics, generic biologics, as
well as other labels. Many of these terms are very imprecise
and confusing, and I hope we can discuss terminology.
Largely, these terms are intended to refer to biotechnology
produced protein products. In the United States, such products
are regulated either as drugs under the Food, Drug, and
Cosmetic Act, or as biologic products under the Public Health
Service Act. Whether regulated as drugs or biologic products,
proteins fit into the category of complex molecules that can be
difficult to fully characterize.
Copies of protection products that are regulated as drugs
may be considered for the abbreviated applications pathways
that exist under section 505. The very simplest peptide
products may be able to demonstrate that they contain the same
active ingredient as the innovator product, and thus may be
considered under 505(j), what is commonly regarded as the
generic drug pathway.
In contrast, copies of approved protein products that are
drugs would currently be considered for abbreviated
applications under 505(b)(2), and the reason for this is that
scientific techniques are not available to demonstrate sameness
of these types of molecules.
The degree to which any abbreviated pathway could be used
for any given protein depends on many factors, including its
physical complexity, the availability of functional assays to
characterize it, and its clinical use.
An abbreviated pathway does not exist for copies of protein
products approved under the PHS Act. FDA has approved several
follow-on proteins under 505(b)(2), including a recombinant
hyaluronidase and recombinant version of human growth hormone.
We are currently preparing a guidance document on the
general scientific framework for preparation of abbreviated
applications for follow-on proteins under 505(b)(2). We expect
to follow this with guidance on technical issues such as
immunogenicity, dealing with immunogenicity of proteins and
physical characterization methods.
I will be pleased to answer your questions regarding these
complex issues.
[The prepared statement of Dr. Woodcock follows:]
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Chairman Waxman. Thank you very much, Dr. Woodcock.
As you mention in your testimony, for over 10 years FDA has
allowed brand name manufacturers of biotech drugs to make
certain changes in the process by which they manufacture their
products, but without repeating all the original clinical
trials, under something called comparability protocols. I am
interested in understanding the scientific rationale for
allowing brand name manufacturers to make process changes
without new clinical trials. I am also interested in its
applicability to follow-on and biogeneric products.
What was the scientific basis for FDA's conclusion that
clinical outcome trials are not necessary to assess the effects
of certain biological product changes?
Dr. Woodcock. Manufacturing changes and process changes are
undertaken for all pharmaceutical products, whether drugs or
biologics. In each case we have to determine whether or not the
change could result in any clinically significant change in the
product, whether it is a small molecule or whether it is a
large, complex molecule of some kind. FDA has a long history of
quality regulation, putting into place procedures, both
physical characterization of the new product and comparing it
to the old product, functional characterization of a new
product compared to the original product, and sometimes
clinical characterization of a new product. It depends on, as I
said in my oral testimony, how much science we have available
to assess these changes.
If we can be sure, based on a structural characterization,
which we often can for a drug, then that would be sufficient
for a small molecule drug. If that structural characterization
isn't enough to assure that the new version is similar to the
old version, then other types of tests might be necessary. And
in some cases we might even require clinical tests.
For example, with small molecule drugs, when the
formulation is changed we may require new bioequivalent
studies.
Chairman Waxman. So that is completely within your
discretion based on whether you think it is appropriate to have
further evaluations, further studies?
Dr. Woodcock. Yes. There are multiple scientific issues
that come into play in any given manufacturing change.
Chairman Waxman. I know most of these comparability
decisions involving biotech drugs or any other drugs are
confidential, but with the biotech drug Avonex the information
is public. I assume you are familiar with that case?
Dr. Woodcock. Yes.
Chairman Waxman. What kinds of process changes did FDA
permit in that case without repeating the original safety and
effectiveness trials?
Dr. Woodcock. In that case the original cell line that had
been used to manufacture the product that was used in the
clinical trials was no longer available, so the manufacturer
had to go back and redo all of that and duplicate the
manufacturing process that had been used for the original
product. That is well described publicly. They made some
original attempts. Those weren't successful.
They made some subsequent attempts and then an extensive
number of comparisons were made between the original product
and the second version of the product, both the kinds I just
described, both physical/chemical comparisons, functional
comparisons, and so forth, so that at the end of the day it was
decided that the products were similar enough that FDA could
extrapolate from the clinical data that was derived for the
first product to the new product.
Chairman Waxman. Were the changes between the two products
significant?
Dr. Woodcock. The products were very similar, ended up
being very similar.
Chairman Waxman. I meant the process changes. Were they
significant?
Dr. Woodcock. The manufacturer attempted to duplicate the
similar process that was originally done with the first
product, but it was in a different site, in a different scale,
and so forth, so there were differences. It was not the
identical cell line. It wasn't the identical product that had
been made, and so forth.
Chairman Waxman. Are these changes similar to the kinds of
changes that might be required to manufacture a follow-on
product?
Dr. Woodcock. The difference between that example and the
instance where a new manufacturer would attempt to manufacture
a follow-on product would be that in the Avonex case. The
manufacturer had access to all the information about the
process of manufacturing the first product. That is very
important information, because it has information on all the
intermediate steps and what happens during the manufacturing
and purification process, and so on.
Chairman Waxman. Thank you.
Mr. Davis.
Mr. Davis of Virginia. We will start with Mr. Issa.
Chairman Waxman. Mr. Issa.
Mr. Issa. Thank you. Thank you, Mr. Chairman, and thank
you, Ranking Member Davis.
Avonex appears to be an example sort of--I will use a
different wine than the one here, but you are talking if the
Rothschilds trying to duplicate after they have had to clear
their grapes away and put a new crop in. You have the same
maker with the same wine masters--in this case scientists--
trying to duplicate what they had already made. Is that roughly
correct? You may not be a California wine drinker, so I know it
can be challenging.
Dr. Woodcock. I love California wine.
Mr. Issa. You won't love the one here in this box. Trust
me.
Dr. Woodcock. Yes. As an analogy, that is quite reasonable.
Mr. Issa. OK. So the next step that the chairman's
legislation or the legislation we are hearing here today would
attempt to do is to say that, even though you had to sort of
teach or go through a process, a re-learning process, even with
the original designer, you are going to try and transfer this
to a different winery, and they are going to try to set up, but
they are not going to have the right to every trade secret, if
you will. Not every nuance of the process is, in fact, in the
public domain. Is that correct?
Dr. Woodcock. That is correct. We face that now with our
generic drug program.
Mr. Issa. OK. And you mentioned earlier that you have had
chemical equivalents that didn't work out so well when they
went generic, so to speak, even among name manufacturers. When
an insurance company does a formulary and says this is equal to
this, that is not always right, is it? There are side effects
that are unanticipated often?
Dr. Woodcock. The generic drugs that we approve are fully
interchangeable with the innovator drugs. They are
therapeutically equivalent.
Mr. Issa. You have never had a side effect?
Dr. Woodcock. We have numerous reports of side effects;
however, we investigate those and we have extraordinarily
rarely found any instance where there would be therapeutic
inequivalence between a generic drug and an innovator drug.
Mr. Issa. Now, when we get to biological and follow-on
immune problems that occur, that is a different problem that
you are not presently seeing as much in small cells but you do
see it in biologics, don't you?
Dr. Woodcock. Yes. Proteins are what is called immunogenic.
They produce often an immune response in people when they are
administered.
Mr. Issa. So if there are two otherwise the same biologies,
the original and the follow-on, one could very much have a
different immune response that would lead somebody who had
successfully fought a disease to somehow develop a resistance;
is that correct?
Dr. Woodcock. The immune response to a protein can cause
many things. It can cause what you just said, which is
neutralizing the effect, the beneficial effect of the protein.
Mr. Issa. And then you could find yourself unable to deal
with either drug. In other words, you could make that change
and find yourself opted out of the cure or the treatment?
Dr. Woodcock. That is true, and there are difficulties, for
example, with insulin sometimes.
Mr. Issa. So, given that you have this history, wouldn't,
in the case of follow-on biologics, at least until this problem
can be quantified, wouldn't you have a bias, an almost
exclusive bias toward clinical trials, even if we gave you the
jurisdiction and the right to shortcut those, limit those,
eliminate them? From a standpoint of unsettled science,
wouldn't it be proper to have clinical trials to ensure that is
not happening when, in fact, it can take someone who is
surviving and put them in a position where they can no longer
survive?
Dr. Woodcock. Currently--and, of course, I can only address
the proteins that we are looking at under the 505, under the
FD&C Act.
Mr. Issa. Right, and you admit those are, by definition,
less likely to be unknowns than the ones we are going toward;
is that right?
Dr. Woodcock. No. That is where the terminology I think is
very confusing. We have approved proteins under the Food, Drug
and Cosmetic Act provisions under 505(b)(2), and in those
cases, for those recombinant proteins we have looked at the
immunogenicity in people.
Mr. Issa. OK, but you have looked at them?
Dr. Woodcock. Yes.
Mr. Issa. So, again, my one final exit question here in
this short time: clinical trials are the only way to know
whether substantially similar, substantially identical follow-
on biologics are, in fact, going to have differences in the
immune response, or whatever term is appropriate; is that
right?
Dr. Woodcock. Yes. We have a very limited understanding of
the basis of an immune response, and we are not able to fully
predict immunogenicity in humans right now from non-clinical
data.
Mr. Issa. And this could be dangerous?
Dr. Woodcock. The immunogenicity must be evaluated.
Mr. Issa. Thank you, Mr. Chairman.
Chairman Waxman. Thank you, Mr. Issa.
Mr. Yarmuth.
Mr. Yarmuth. Thank you, Mr. Chairman.
Dr. Woodcock, some in the brand name industry argue that
any process for approving copies of biologics should follow the
European Union model. The EU's governing directive, which is
comparable to a statute, is extremely flexible and gives
regulators great discretion to set procedures and standards and
so forth.
The drug regulatory body there, the EMEA, has also
established very particular procedures and approval standards
to implement those directives. You are nodding, so you are
obviously familiar with that process or that model?
Dr. Woodcock. Yes.
Mr. Yarmuth. And the biotech industry seems to like that
public process that is used there for establishing and setting
guidelines that contain the data requirements for biosimilars
because the data gathering process allows those companies to
help dictate what data their competitors must produce, and, of
course, that would take a lengthy period of time.
Is the FDA required to undertake a public process for
establishing data requirements?
Dr. Woodcock. No. We are not required to.
Mr. Yarmuth. Do you think it is scientifically necessary
for FDA to engage in a public guideline process to establish
the data requirements for a follow-on protein product?
Dr. Woodcock. What FDA does currently is engage with the
manufacturer in discussions--of course, those are not public--
to provide advice on any manufacturer interested in pursuing a
follow-on under the 505(b)(2) process. But we often write
scientific guidance for manufacturers because it provides
better predictability and it provides, as you said,
transparency.
We are in the process of writing overall guidance on the
process of scientific approach to follow-on proteins under
505(b)(2).
Mr. Yarmuth. Do you think that the process the European
Union uses, if we adopted that system here, would have the
effect of freezing science at all? Is that a risk in doing
that?
Dr. Woodcock. I am really not able to comment on that.
Mr. Yarmuth. Thank you, Mr. Chairman. I yield back.
Chairman Waxman. The gentleman has a couple minutes, would
you yield your time to me?
Mr. Yarmuth. I would be happy to yield my time to the
distinguished chairman.
Chairman Waxman. Thank you.
I just wanted to point out that the questioning by my
colleague, Mr. Issa, about how you might need to have clinical
trials to understand possible concerns, that is legitimate. FDA
does now at the present time allow some changes in the process
without requiring clinical trials, but I do want to point out
that the legislation that I have introduced would allow FDA to
decide, when they think clinical trials are appropriate, to
require clinical trials.
I do want to ask you this. In the use of comparability
protocols limited to simple proteins, can the manufactures of
more complex proteins make changes in their products without
repeating the original clinical trials?
Dr. Woodcock. Yes, they can, if the science is there. It is
very desirable for manufacturers of pharmaceuticals of any kind
to make continuous improvements in their manufacturing process
to maintain the quality of the pharmaceuticals as soon as
possible and the efficiency of the process as good as
scientifically possible. So FDA has adopted procedures, as I
said, that allow manufacturers to make changes to their
manufacturing process or perhaps open up new plants, say, if
there is a demand for the product, and the amount of data that
has to be generated really depends on the complexity of the
product, how well we can physically characterize the product,
and how confident we are that physical characterization will
extrapolate to the same performance. But we may require many
additional steps, up to and including clinical studies now,
particularly of immunogenicity.
Chairman Waxman. Well, do you and other FDA scientists feel
confident that comparability assessments provide adequate
protection to patients from unsafe or ineffective biotech
drugs?
Dr. Woodcock. The comparability assessment puts the burden
on the manufacturer. The manufacturer must show to FDA's
satisfaction that the change has not introduced anything that
would be detrimental to the clinical performance of the drug.
So how much evidence is needed after a manufacturing change
depends on how well the manufacturer can demonstrate that
product is going to perform the exact same way as the original
product did in the clinical testing.
Chairman Waxman. And as science evolves, you will know
better whether the comparability requires clinical tests or
not; is that correct?
Dr. Woodcock. The ability to physically characterize
protein molecules and other complex substances has evolved and
is continuing to evolve, and so over time we are going to be
able to do a better and better job of controlling the quality
of these products and allowing for continuous improvement.
Chairman Waxman. Thank you very much.
Mr. Davis.
Mr. Davis of Virginia. I finally have my comparison up
there. We talked before about how complex these are. This
diagram up there, as you see, compares a biologic used to treat
anemia and a traditional drug that treats peptic ulcers. It
demonstrates the difference between the traditional chemical
drugs and biological therapies.
Dr. Woodcock. Yes.
Mr. Davis of Virginia. As you can note on this, the
biologic is significantly more complex than a traditional drug.
Dr. Woodcock, you highlight in your testimony the
importance of ensuring that facilitating the development of
follow-on products through abbreviated pathways doesn't
discourage innovation and the development of new biological
products, and you refer to Hatch-Waxman as a balanced approach.
Do you think an extended period of data exclusivity as well as
certain patent protections like Hatch-Waxman would help
encourage innovation and development with biological products?
Dr. Woodcock. Sir, I am a doctor and a scientist, and that
is really outside of my area of expertise.
Mr. Davis of Virginia. OK, so you don't want to make the
economic or policy determinations on that?
Dr. Woodcock. No.
Mr. Davis of Virginia. OK. You also state in your testimony
that demonstrating the similarity of a follow-on protein
product to a reference product is more complex and would
require new data. Does this mean FDA would require clinical
safety data for follow-on biologics?
Dr. Woodcock. There is a very large range of complexity.
All right? The erythropoietin molecule that you have here is a
pretty complex example. There are very, very small biologic
drugs of different kinds. So the amount of assurance and the
amount of data that would be needed is really based on how
complex something is and how well it can be characterized in
different ways.
Mr. Davis of Virginia. But a slight alteration could have,
you know, significant clinical manifestations, wouldn't it?
Dr. Woodcock. FDA would not approve a follow-on product or
a generic drug that we were not confident would have the same
performance as the innovator drug.
Mr. Davis of Virginia. What level of clinical safety data
would be necessary for approval, ball park?
Dr. Woodcock. Well, to talk about this we have to get into
terminology a little bit. Please bear with me.
The abbreviated application process for 505(b)(2), for
example, may rely on some fact of the approval of a prior
product. All right?
Mr. Davis of Virginia. Yes.
Dr. Woodcock. But we may approve a product using an
abbreviated application where some of the data, maybe some of
the clinical trials or animal studies do not have to be
repeated. However, that resulting of proof product is not
considered substitutable for the other product. In other words,
each of them stand alone and they can't be switched at the
pharmacy, or it is not recommended they would be. That is one
level.
Another level would be for a manufacturer to seek
interchangeability, full interchangeability. So far the
proteins that we have approved all stand on their own. They
have had abbreviated applications but they are not considered
interchangeable with any of the other proteins in that class.
For example, human growth hormone or hyaluronidase.
Mr. Davis of Virginia. You testified that the science and
technology isn't sufficiently advanced to allow for comparison
of complex protein products. How close are we to discovering
those technology methods; 5 years; 10 years?
Dr. Woodcock. It is going to be a continuum, and right now
we are very short peptides, which are as small as the ranidine
molecule you are showing there, for example, or in the same
ball park. We can do it now, but those are very, very small
compared to the erythropoietin molecule, so it is going to be a
step-wise progression over a decade or so.
Mr. Davis of Virginia. Are there any non-clinical tests or
technology that could fully substitute for studying the safety
of biotech products in humans?
Dr. Woodcock. As I said, right now we do not have the
science around the immune system to adequately predict the
human immune response fully to any given product.
Mr. Davis of Virginia. You listed two examples, omnitrope
and--I can't pronounce the other one. Hyaluronidase?
Dr. Woodcock. That is pretty good.
Mr. Davis of Virginia. Neither was rated by FDA as
therapeutically equivalent or substitutes for other biologics
on the market. Many believe interchangeability or substitution
is where the most cost savings would occur. Of course, the
balance here is safety versus efficiency and speed to market.
When do you think the FDA will be able to rate a biologic
product as interchangeable? And do you think the FDA needs this
authority if the science isn't developed yet?
Dr. Woodcock. For the 505(b)(2) drugs, which is what I can
comment on, manufacturers would need to do additional clinical
studies that would demonstrate interchangeability, and that is
a further step. That is a higher bar than simply getting on the
market, an abbreviated application. Does that make sense to
you?
Chairman Waxman. Thank you, Mr. Davis.
Mr. Welch.
Mr. Welch. Thank you, Mr. Chairman.
Some of the drug companies have said that when a biotech
product is derived from a specific cell line, any copy of the
product will have to begin with a different cell line. They are
arguing, as I understand it, that this change is so significant
that all the clinical trials, all the clinical trials must be
repeated to ensure that the change has not altered safety and
effectiveness. Obviously, we are concerned about safety, but we
also want to get the benefit and not have this argument about
safety be used to deny us the benefit.
My question to you is: is it true that a change in a cell
line will always necessitate repeating the original clinical
trials?
Dr. Woodcock. No. We do not believe that. Again, any
manufacturing change, whether the cell line, the DNA construct,
the manufacturing process, the way the drug is purified, any of
these could affect safety and effectiveness, and therefore data
has to be submitted and a very careful look has to be taken to
make sure that it hasn't. The amount of data that we would need
or that anyone would need to make that evaluation depends,
again, on the complexity of the product.
Mr. Welch. All right. So the bottom line here is that you
believe that you do not need, for safety, to repeat the entire
clinical trial?
Dr. Woodcock. In some instances the manufacturer may not be
able to show enough similarity and they may have to repeat much
of the clinical program. In other instances they may be able to
show an extreme amount of similarity, a very great similarity
to prior product, and therefore would have very much smaller
clinical trials needed, perhaps of immunogenicity.
Mr. Welch. And that is an evaluation that you would feel
confident, based on the information that you had at hand, that
you could make?
Dr. Woodcock. Yes. FDA has a long history, as I said, of
controlling the access to market after manufacturing changes
for a very wide number of products for all pharmaceuticals on
the market, and this is another example of that.
Mr. Welch. I was going to ask another question, but you are
starting to answer it. What scientific developments have
allowed FDA to feel that confidence you are describing, that
manufacturers of existing biologics can change cell lines,
manufacturing facilities, and/or the fermentation processes
without having it conduct those clinical trials?
Dr. Woodcock. Yes. And, as I said, sometimes they do and
sometimes they don't. It really depends. The burden is on them,
the manufacturer, to show through scientific data that the
performance of the product after the change process is going to
be the same as the performance of the product before the
change.
Mr. Welch. And are clinical trials always the most
sensitive studies for detecting changes in safety or
effectiveness due to process changes?
Dr. Woodcock. No. No, I think that is a common
misconception. Clinical trials may be insensitive to certain
types of changes, adverse effects, for example, that are rare
or uncommon.
Mr. Welch. Yes.
Dr. Woodcock. And we really need to use the scientific tool
to assess the change in the product that is appropriate. It
might be physical characterization or it might be a functional
test. It might be evaluation of the purity of the product.
Mr. Welch. Thank you. I yield the balance of my time.
Chairman Waxman. Thank you for yielding. You have another
minute left on your time, so if the gentleman would permit I
will take that minute if he will yield to me.
Dr. Woodcock, if FDA were given broad authority to require
any studies necessary for approval of follow-on versions of PHS
Act approved protein products, are you comfortable that the
agency could use its discretion to ensure that only safe and
effective products were made available to patients? I think you
have answered that question several times, but let me just put
it very clearly.
Dr. Woodcock. I think that FDA must do that. All right? We
do not currently approve generic products unless they have
absolutely met our standards and were follow-on products under
505(b)(2). We must maintain the confidence in our program and
also our own scientific integrity.
Chairman Waxman. Based on your experience with the
comparability guidance, can you give the committee a
perspective on how often companies must do clinical outcome
trials, not just PK or PD studies, to support a product or
process change after approval of its BLA? Are large clinical
outcome studies scientifically essential to support the
approval 1 out of 10 post-approval product changes, 1 out of 20
post-approval changes, or 1 out of 50 changes?
Dr. Woodcock. I would say that the factor that is most
important here is the magnitude of the change; however, it is
probably more in the 1 in 50 range than the 1 in 10, or
whatever. But don't forget there are many different types of
changes that occur all the time to manufacturing processes. If
you included all of those, then requiring clinical studies of
outcomes would probably be quite rare.
Chairman Waxman. Thank you.
Mr. Bilbray.
Mr. Bilbray. Mr. Chairman, I would like to yield my time to
the gentleman from the Northwest Territory, but I would first
like to clarify that, as a native Californian as opposed to Mr.
Issa who is an immigrant, I was outraged at the concept of
bringing a bottle of Merlot to this table and having it
chilled. [Laughter.]
The only thing worse than that is to take it from the table
and take it back to his office after he presented it.
But at this time I would like to yield to Mr. Burton.
Mr. Burton. I thank the gentleman for yielding. I am from
the Midwest, not the northwest.
Mr. Bilbray. Well, the Northwest Territory.
Mr. Burton. Ohio, the Northwest Territory. You are going
back a long way.
First of all, let me preface my remarks by saying the
pharmaceutical industry and FDA working together has created
probably the highest quality of life in the history of mankind,
and I appreciate that and I think everybody in America does.
There are some questions, though, that I have to ask about the
process.
You said it is a judgment call on whether or not this
product comes to market. Who makes the judgment? Who makes the
call?
Dr. Woodcock. The FDA.
Mr. Burton. Don't they have advisory committees that review
the process, review the product, review the results, and then
they make a recommendation to the FDA?
Dr. Woodcock. Yes. Advisory committees are frequently
utilized, particularly on clinical decisions. Here we are
talking about scientific characterization of the product in a
wide variety of ways. Most often, that is something that the
FDA scientists do.
Mr. Burton. But the FDA does have advisory committees for
almost all of the products?
Dr. Woodcock. Yes.
Mr. Burton. When I was chairman I asked--I don't believe it
was you, but I asked one of your coworkers who was a leader at
the FDA how many times has an advisory committee recommendation
been turned down by the FDA.
Dr. Woodcock. You are asking me?
Mr. Burton. Yes.
Dr. Woodcock. I don't know the answer to that.
Mr. Burton. I will tell you what it was before. It was
never. The advisory committee, I was told by the people who
were doing the investigation for my committee when I was
chairman, was that the advisory committee recommendations were
always accepted.
Now, the other thing I would like to know is: the people on
the advisory committee, do they file financial disclosure
reports?
Dr. Woodcock. Yes, they do.
Mr. Burton. We looked at some of the financial disclosure
reports when I was holding hearings on this when I was chairman
and we found that many of the people in the advisory committees
did not file financial disclosure reports. And we found that
some on the advisory committees had a conflict of interest. The
RotoShield virus was one of those. The head of the advisory
committee had an interest in a company that was going to make a
RotoShield virus vaccine, which was put on the market at his
advisory committee's recommendation, and FDA approved it based
upon the recommendation. One or two children died and several
people were injured and they pulled it off the market within 12
months.
I bring this up because this is a very important issue we
are talking about today, and I would just like to ask that
these advisory committees, when they make recommendation, that
there is a thorough judgment made after the advisory committee
makes its determination, and that the FDA does not always
accept their results or their recommendations, and that there
are complete financial disclosure reports.
The reason for that is pretty obvious. If a person is on an
advisory committee and their recommendation is accepted and
they have a financial interest in a pharmaceutical company that
is going to manufacture a product like that or a like product,
they are liable to have their judgment tainted just a little
bit. It has happened in the past and I hope it doesn't happen
in the future.
The cost of biotech drugs increased 17 percent from 2005 to
2006, and that was compared to 5.4 percent increase for
traditional pharmaceuticals, which are much more expensive here
than in some other countries, in most cases. Why was that
increase so much? Do you know?
Dr. Woodcock. My understanding is that some of the new
biotech products on the market that are very highly effective,
you know, are very expensive to purchase, as some of the
members already alluded to. But I don't have any complete
analysis of this.
Mr. Burton. I have a couple more questions, but I will
wait.
Chairman Waxman. We will have another round.
Mr. Burton. I will catch it next time.
Dr. Woodcock. May I?
Chairman Waxman. Yes.
Dr. Woodcock. The FDA has recently published new guidance
on advisory committee conflicts of interest, and it lays out
very explicit and transparent guidance on how people will be
evaluated for their conflicts of interest.
Mr. Burton. That is very good news. I appreciate hearing
that. That is a great step in the right direction. Thank you.
Chairman Waxman. Thank you, Mr. Burton.
Mr. Davis.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
Dr. Woodcock, I have always tried to understand--and if you
could enlighten me it would be very helpful to me--the real
difference between generic drugs and the brand name drugs. If
they do essentially the same thing or if the level of
effectiveness is essentially the same, why do we pay so much
more for one as opposed to the other? I have never been able
to, in my own mind, feel that I had a real understanding of
that.
Dr. Woodcock. Well, if I may, if you look at the diagram--
it is gone now, but there was a diagram of the molecule up
there, a small molecule. We know exactly everything how that
molecule is structured. We know everything about it. And so
what we do in the generic drug program is we require an exact
copy of that molecule to be the generic drug and then we make
sure that molecule gets into the body the exact same way that
the innovator molecule gets into the body. So then we say if it
does that it is going to have the same effect on the body
because it is circulating around in the body the same way as
the innovator drug. So that is what a generic drug is.
The problem with the proteins is it is very difficult to
say we have the exact same molecule because it is such a
complicated molecule.
Mr. Davis of Illinois. The effectiveness or the impact, are
we saying that we would expect a different level of impact or
effectiveness using one as opposed to the other?
Dr. Woodcock. For the generic drugs that FDA approves we
expect the exact same performance. Now, that means the exact
same good effects and the exact same side effects as the drug
it is a copy of.
Mr. Davis of Illinois. Do you know then how the price or
cost differential emerges or is determined?
Dr. Woodcock. Well, while the innovator drug is patent
protected or protected by exclusivity, there are no other
copies available to be prescribed. During that time the price
is quite high. Once generic versions get in the market, the
price of the various generic copies becomes only a fraction of
what was charged by the innovator.
Mr. Davis of Illinois. Are you aware or familiar with any
consumer studies that would indicate whether or not consumers
have a greater level of confidence, for example, in the more
popular pharmaceuticals than the generics?
Dr. Woodcock. Certainly the generics are not advertised and
certainly there is some brand name loyalty that I have heard
of. I have certainly talked to many, many consumers over my
lifetime about this issue. There is some residual concern still
about the generics and whether are they as good because they
are not the brand name product; however, I think in the last 10
or 12 years of our generic drug program, confidence, both by
the health professionals--the pharmacists, the doctors--as well
as the consumers has really risen, and most people in this
country are used to taking generic versions.
Mr. Davis of Illinois. And so then one could probably
reasonably assume that marketing plays a great role in shaping
our attitudes and thoughts about the drugs that we would most
likely prefer using?
Dr. Woodcock. I can't comment on that directly, but that is
one of the purposes of advertising.
Mr. Davis of Illinois. And so I would assume that it
probably works fairly well and that it does, in fact, skew
one's thinking. And if we are talking about having the most
cost-effective health care, then it just seems to me that the
more enlightened consumers become, that will probably have as
much impact on cost effectiveness in health care as anything
that we are going to regulate or anything that we are going to
do.
I thank you very much for your answers.
Dr. Woodcock. At the request of Congress, we had an
education program, outreach program, on the generic drug
program. It has been very effective.
Mr. Davis of Illinois. Thank you. Thank you very much.
And thank you, Mr. Chairman. I yield back.
Chairman Waxman. Thank you, Mr. Davis.
Mr. Burton was using Mr. Bilbray's time, and he said he had
a few more questions, so before we go to a second round I yield
to you your first-round 5 minutes.
Mr. Burton. Thank you. I just have a few more questions.
Dr. Woodcock, I think you have been very helpful, some of
your answers today. I really appreciate that.
The pharmaceutical industry deserves to get some of their
money back or all of their money back when they spend a lot of
money on research and development, and that is why the patents
are there, and then when it expires, of course, it can be a
generic drug and they should have recovered their investment.
Are other countries working to develop these biotech drugs?
Dr. Woodcock. Yes. As was alluded to earlier, the European
Union has published a directive and is implementing a program
on what they call biosimilars. By that generally they mean
biotech drugs.
Mr. Burton. If they produce a biotech drug and there is a
similar biotech drug that has been produced here in the United
States, because of the differences, the scientific differences
that you were talking about when we saw the slide a while ago,
the FDA probably would not allow that drug to be imported into
the United States until it was approved by the FDA, even though
it did the same thing or pretty much the same thing?
Dr. Woodcock. Yes. The law doesn't allow drugs to be
imported in the United States unless they are approved.
Mr. Burton. Let me ask you one more question. If we had
reimportation or importation of the pharmaceuticals that are
approved by the FDA, would the prices of those pharmaceuticals
be lower?
Dr. Woodcock. Again, this is beyond my area of expertise. I
apologize.
Mr. Burton. I will just followup by saying that everybody
wants free enterprise to succeed and they want the
pharmaceutical industry to make a lot of money so that they can
do continued research, but when my first wife had cancer--and I
have talked about this before--we went to have her chemotherapy
and the tamoxifen that one woman was taking, she was
complaining about the cost being about $300 a month, and
another lady said I'm getting the same thing from Canada for
$50 a month, so it was six times less.
There are a number of us in Congress that would like to see
the FDA working with their counterparts in other countries and
the pharmaceutical companies working with their counterparts in
other countries and the governments of other countries to find
out some way to level the playing field so that Americans are
paying a comparable price for their pharmaceutical products as
they do in other countries. It just doesn't seem fair to go to
Germany or France or Spain or Canada and find that the very
same product is being sold for much less, and Americans are
paying actually a great deal more for the research and
development and the advertising than is being paid elsewhere.
That is just a suggestion. I appreciate very much your
candid answers.
I yield to the chairman.
Chairman Waxman. Thank you very much for yielding. The
gentleman has a minute and a half, so I will be glad to take
it.
If a statute were passed giving FDA broad authority to
review abbreviated applications for follow-on proteins, and if
companies were ready to begin submitting applications as soon
as the statute became law, is it reasonable to assume that FDA
would be able to begin reviewing those applications as soon as
they were submitted, assuming, for the purpose of this
question, that the statute did not require FDA to issue
regulations or guidance as a prerequisite to the review of
applications?
Dr. Woodcock. FDA is currently, as I said, reviewing
applications and also inquiries from companies and so forth,
providing guidance for drugs under the 505(b)(2) regimen. So we
have the technical expertise to perform these functions.
Chairman Waxman. Thank you.
Mr. Hodes.
Mr. Hodes. Thank you, Mr. Chairman.
Dr. Woodcock, I want to focus for a moment on the issue of
comparability.
Dr. Woodcock. Yes.
Mr. Hodes. It is my understanding that biologics as a group
are so diverse and in some cases so incompletely understood
that there is today no one-size-fits-all set of studies that
can demonstrate comparability. Is that true?
Dr. Woodcock. Absolutely. Biologics, as opposed to biotech
proteins, range from everything from gene therapy to cells,
living cells of different types, to tissues--a huge range of
different kind of products.
Mr. Hodes. And am I correct that biopharmaceutical products
often undergo changes after approval and that pre-change and
post-change products will be comparable, as opposed to
identical?
Dr. Woodcock. Yes. As we were discussing before,
manufacturers need to continue to improve their process or they
may need to open up new plants or increase the level of
production, the scale of production. There are a lot of changes
that have to be made. After each one of those changes, we must
assess whether or not the performance of the product has
changed.
Mr. Hodes. And the FDA establishes boundaries and batches.
Different batches have to fall within established boundaries
for that product?
Dr. Woodcock. Yes. Any product, whether it is a small
molecule or drug, has slight variations lot to lot in any kind
of testing parameter that you would put on it, so the
traditional approach is to establish boundaries within which a
product can vary, but it can't go outside of those limits.
Mr. Hodes. Now, just as the science is evolving on the
manufacturing side--certainly from the FDA's standpoint
techniques for assessing the structure and activity of
biologics are evolving rapidly--and our understanding of
biological structure and activity is improving all the time; is
that correct?
Dr. Woodcock. That is correct.
Mr. Hodes. If Congress were to tell the FDA what specific
types of clinical data must always be required for approval of
follow-on biologics based on today's science, could such
clinical data requirements become obsolete?
Dr. Woodcock. Certainly, from my point of view, flexibility
in enabling us to incorporate the new science into the
regulatory process as that science evolves and becomes
available is in the best interest of the public as well as the
agency and the industry.
Mr. Hodes. And if a follow-on statute required a clinical
trial in every case, could it end up requiring perhaps
unnecessary and therefore potentially unethical trials in the
future?
Dr. Woodcock. Where trials aren't needed, it is, you know,
of questionable ethics to repeat them. So use of human subjects
for trials that are not needed or done simply to check a box on
a regulatory requirement are not desirable.
Mr. Hodes. Let me ask you a question about the EU system.
The EU regulations, as I understand them--imperfectly, I might
add--require post-market surveillance; is that correct?
Dr. Woodcock. I can't speak exactly. The Europeans have the
ability to require post-marketing surveillance for any approved
pharmaceutical.
Mr. Hodes. Does the FDA currently have any requirements for
post-market surveillance?
Dr. Woodcock. We very frequently request post-marketing
studies be performed at the time of approval, and those are
agreed to by the firms.
Mr. Hodes. So it is the manufacturers who are conducting
the post-market surveillance?
Dr. Woodcock. Yes.
Mr. Hodes. The FDA relies on the manufacturers for that
post-market surveillance; the FDA doesn't do any of its own?
Dr. Woodcock. Right. The FDA conducts the adverse event
reporting system, which is an adverse event reports from
doctors and companies, and we do some limited studies, but in
general we do not have the capacity to do post-marketing
surveillance as you are describing.
Mr. Hodes. Do you believe with biogenerics developing as
rapidly as the field is developing, there should be expanded
requirements for post-market surveillance?
Dr. Woodcock. All pharmaceuticals when they are approved
for the first time have a fair amount of uncertainty still
surrounding them about their performance, and particularly, as
we have discussed already, any protein product that would be
approved would continue to have questions about immunogenicity
and perhaps other side effects that would probably need to
continue to be looked at in the post-marketing period.
Mr. Hodes. Can the FDA require post-marketing studies?
Dr. Woodcock. What we do is say to the company: you need to
agree to conduct this study, and if you do then that is part of
the approval the company agrees to do.
Mr. Hodes. So, if I understand your answer, the answer is
yes, the FDA does have the authority to require post-market
studies?
Dr. Woodcock. At the time of approval.
Mr. Hodes. And what proportion of post-market studies that
you require are completed?
Dr. Woodcock. That is a complicated question. There are
many different types of studies that are requested, and some of
them go on a long time, so there isn't a really high
proportion. I don't know the exact number, because it depends
on what analysis you are doing, but many of these studies are
not completed.
Mr. Hodes. And if you were the last word on this, thinking
about where the science is going with biogenerics, do you see a
need for increased requirements for post-market studies of
these biogenerics, none of which will ever be identical, either
in batch or in actual structure, to the original?
Dr. Woodcock. I believe it would be likely in many cases,
but, as I said, this is going to be case-by-case because of all
the differences in the different products. In many cases FDA
would need to have post-marketing surveillance or post-
marketing studies done to resolve remaining uncertainties.
Mr. Hodes. And, last question, does the FDA have an
enforcement mechanism to require completion of any post-
marketing studies that you have required of the manufacturers?
Dr. Woodcock. We can publicize the fact that the studies
have not been done, and we could take the drug off the market.
Mr. Hodes. So the enforcement mechanism is the possible
removal of the drug from the market for lack of completion?
Dr. Woodcock. Yes.
Mr. Hodes. Has that ever been done?
Dr. Woodcock. Not to my knowledge.
Mr. Hodes. Thank you.
I yield back. Thank you, Mr. Chairman.
Chairman Waxman. Thank you. That is called the guillotine,
except it is never used.
Dr. Woodcock, I understand that it is quite a bit more
complicated to establish interchangeability of two protein
products than to establish their comparable safety and
effectiveness. Would it be possible to demonstrate that a copy
of a well-understood protein is interchangeable with the brand
name drug if there are no limits on what studies can be
required?
Dr. Woodcock. We believe so. The situation in health care
right now is that products that are interchangeable, they may
be repeatedly switched back and forth. All right? And where you
have a situation where you have a number of similar products on
the market, the same indication, and they are very similar, it
might be that they can be switched back and forth among one
another multiple times for a given patient, depending on the
plan and who they contract with and so on. In that situation
either the innovator product could cause antibodies to the
follow-on product or vice versa. We think we would have to test
that in people to make sure, but we think it would be feasible
to do those tests.
Chairman Waxman. Is our understanding of protein structure
and activity likely to evolve in a way that will make it
possible to establish interchangeability in the foreseeable
future, at least for some of these proteins, that may not be
obvious at the present time?
Dr. Woodcock. It may not be the protein, itself, that
causes the immune response, but it could be different
contaminants that are co-purified from the cell line or during
the manufacturing process, or it can be changes that happen
late in manufacturing or during storage or so forth, so it is
really a very complicated situation.
Chairman Waxman. For very simple, well-understood proteins,
what kinds of studies might be required to establish
interchangeability?
Dr. Woodcock. Well, a study that actually performs that
activity, which changes the patient back and forth from one
version of the product to the next and follows the immune
response.
Chairman Waxman. Would that be a difficult study?
Dr. Woodcock. No. In some cases there might be ethical
issues that we would have to address very carefully. We would
not want to set any patient up for harm.
Chairman Waxman. Might the study requirements lessen over
time as the molecules are better understood?
Dr. Woodcock. Yes.
Chairman Waxman. Do you think that the FDA would ever
declare a copy of a biotech drug regulated under Hatch-Waxman
to be interchangeable if the agency had doubts about whether it
could be safely substituted for the brand name product?
Dr. Woodcock. No. I mean, we believe that our finding of an
A rating of interchangeability is our word. We are saying that
scientifically we believe those products would be
interchangeable, and we would not do that unless we believed
that were the case and it was substantiated with scientific
data.
Chairman Waxman. Do you think that the FDA could be trusted
to make appropriate interchangeability determinations for
protein products if the agency were given statutory authority
to approve copies of biologics under the PHS Act?
Dr. Woodcock. I believe that the FDA can be trusted to
carry out its mandate from Congress, whatever that might be.
Chairman Waxman. And if we gave you an additional mandate,
you feel you would be able to live up to it?
Dr. Woodcock. Yes. I believe we have scientific expertise.
As we have already discussed, we have been managing
manufacturing changes for all pharmaceuticals on the market for
a very long time.
Chairman Waxman. Thank you.
Let me see if any Member wishes additional time for
questions?
[No response.]
Chairman Waxman. If not, let me thank you very much for
your presentation and your willingness to answer these
questions. I think it has been very helpful for us in our
understanding of this issue. Thank you very much.
Dr. Woodcock. Thank you.
Chairman Waxman. The Chair would like to now call forward
our second panel.
Dr. Geoffrey Allan is the president, CEO, and chairman of
the Board of Insmed Incorporated located in Richmond, VA.
Insmed is a biopharmaceutical company focused on the
development and commercialization of drugs for the treatment of
metabolic diseases and endocrine disorders with unmet medical
needs.
Dr. Theresa L. Gerrard is now the president of TLG
Consulting, Inc., where she assists pharmaceutical and
biotechnology companies in product development and regulatory
strategy. Prior to that she spent 11 years as a Division
Director in FDA's Center for Biologics Evaluation and Research,
and she has also previously served as director of development
for Amgen.
Dr. Bill Schwieterman is a physician and scientist by
training who now acts as an industry consultant to major
biotech pharmaceutical companies on product clinical
development issues. Dr. Schwieterman started his career at NIH
and subsequently moved to FDA, where he worked for 10 years and
served as the Chief of Immunology and Infectious Disease Branch
within FDA's Center for Biologics Evaluation and Research.
Inger Mollerup has been the vice president for regulatory
affairs at Nova Nordisk A/S since 2004. Nova Nordisk is a
pharmaceutical company which focuses on diabetes care, as well
as hemostasis management, growth hormone therapy, and hormone
replacement therapy.
Dr. Ganesh Venkataraman is co-founder and senior vice
president of research at Momenta Pharmaceuticals. Momenta
Pharmaceuticals, Inc., is a biotechnology company located in
Cambridge, MA focused on the treatment of disease through an
understanding of sugars and complex biomolecules.
We are pleased to welcome all of you to our hearing today.
We appreciate your being here.
It is the custom of this committee to put all witnesses
under oath. You are not being singled out. I would like to ask
you to please stand and raise your right hands.
[Witnesses sworn.]
Chairman Waxman. The record will reflect that each member
answered in the affirmative.
We will make your prepared statements part of the record in
its entirety. We would like to ask, if you would, to try to
limit the oral presentation to around 5 minutes.
Why don't we start with Dr. Allan, and then we will move
right down the line. You see we do have a timer. Dr. Allen.
STATEMENTS OF GEOFFREY ALLEN, PH.D, PRESIDENT, CHIEF EXECUTIVE
OFFICER, CHAIRMAN OF THE BOARD, INSMED INC.; THERESA LEE
GERRARD, PH.D, PRESIDENT, TLG CONSULTING, INC.
(BIOPHARMACEUTICAL CONSULTANTS FORMERLY WITH AMGEN AND FDA'S
CENTER FOR BIOLOGICS); BILL SCHWIETERMAN, M.D., PRESIDENT,
TEKGENICS CORP. (BIOPHARMACEUTICAL CONSULTANTS FORMERLY WITH
FDA'S CENTER FOR BIOLOGICS); INGER MOLLERUP, VICE PRESIDENT FOR
REGULATORY AFFAIRS, NOVA NORDISK A/S; AND GANESH VENKATARAMAN,
PH.D, SENIOR VICE PRESIDENT, RESEARCH, MOMENTA PHARMACEUTICALS,
INC.
STATEMENT OF GEOFFREY ALLAN
Mr. Allan. Good morning, Chairman Waxman, Ranking Member
Davis, and members of the Oversight and Government Reform
Committee. I am delighted to have the opportunity to testify
before your committee. The focus of my discussion will be the
role of small, innovative biotechnology companies in the
current debate regarding the development of a regulatory
pathway for approving biogeneric drugs.
My name is Geoffrey Allan, and I currently serve as the
chief executive officer of Insmed, Inc. Insmed is a small
biotechnology company focused on the development and
commercialization of drugs for the treatment of metabolic and
endocrine disorders where there are clear unmet medical needs.
We received FDA approval for our lead product, IPLEX, at
the end of 2005. IPLEX is a therapeutic protein which is
approved for the treatment of children suffering from a rare
growth disorder. We are currently continuing to develop IPLEX
for several major medical illnesses such as myotonic muscular
dystrophy and medical complications associated with HIV
infection.
I am here today to talk about biogeneric drug development
and the regulatory path forward. I believe our experience with
IPLEX is very illustrative of the scientific and technical
issues confronting biogeneric drug developers, issues such as
comparability testing and the nature and extent of clinical
trials needed to support characterization of a generic
biologic. Our experience tells us that these issues can be
addressed using sound, readily available scientific approach.
Insmed has developed significant intellectual capital
focused toward protein characterization and purification. We
have invested in building a facility required to manufacture
quality proteins. The biogenerics business is a business in
which we would like to specialize. The combination of our
proprietary protein platform with a biogeneric protein platform
meets our goal to sustain innovation, along with the ability to
provide safe and affordable drugs to address a growing economic
issue.
It is my belief that there are a number of my colleagues in
similar-sized companies that are also interested in providing
the scientific expertise to meet the challenges of producing
biogenerics. I believe that I am representing the interests of
many smaller biotechnology companies and large contract
manufacturing companies. I believe H.R. 1038 provides for a
fair balance between reward and innovation in creating a timely
approval pathway in commercialization of biogenerics in the
marketplace; therefore, passing this bill would be a positive
step for the biotech industry and continue to fuel the cycle of
innovation.
As the chief executive officer of a small biotechnology
company, I hope my testimony will provide a different
perspective on this important issue and bring to light some of
the important reasons why this bill is the correct model to
create a robust, competitive, and innovation biopharmaceutical
marketplace.
IPLEX is a recombinant protein product. In fact, it is a
combination of two different recombinant protein molecules. It
is a relatively large molecule, larger than insulin, growth
hormone, the interferons, and Epogen, and certainly no less
complex in its structural characteristics. As a new drug, along
with the demonstration of safety and efficacy in the target
population, structural characterization of the protein and the
development of a quality manufacturing process was our central
focus during the development of the product.
During the course of the development of this product, we
modified the manufacturing process several times. We changed
cell lines. We changed purification procedures. We changed raw
material sources. And on more than one occasion we changed the
facilities where this product was manufactured. At all times,
good analytical methodology was the bedrock of our
comparability testing to ensure that we produced a consistent,
highly purified protein.
Analytical methodology to allow structural characterization
of proteins has evolved enormously over the years. It is
sophisticated and has exquisite sensitivity. For example, we
use a battery of sensitive and analytical tests. More than 10
of these tests are used, one of which is a technology called
mass spectroscopy. This technique has such high resolution that
on certain molecules we can detect changes as small as a single
proton within the molecule. This is essentially not a crude
science.
During the development of IPLEX we worked closely with the
FDA. They clearly used their discretion to decide what tests we
needed to support our scientific approach as we made changes to
our manufacturing processes. Their recommendations were
rational and certainly not onerous. On the occasion that we
changed the site of manufacture of the drug, moving our process
from a U.K. facility to our own facility in Colorado, we
conducted a simple pharmacokinetic study in human volunteers to
establish the equivalence of the products after the facility
change. We established very quickly, within 1 month, that the
amount of drug in the bloodstream was consistent, regardless of
where the drug was manufactured.
IPLEX was being developed for use in children, and as such
both we and the FDA knew that safety at all times was paramount
and was certainly never jeopardized. For example, FDA was
concerned that immunogenicity of the product could vary as we
changed the process. We established surveillance procedures to
address this issue, and we continue to monitor for signs of
immunogenicity today.
I have only given you a very brief overview of the type of
scientific and technical issues we had to address in the
development of this product, IPLEX; however, these issues are
at the heart of what a biogeneric manufacturer would have to
confront. The science has reached a level of sophistication to
make this endeavor entirely possible. All we need now is the
regulatory go-ahead.
The proposal introduced by Chairman Waxman is extremely
appealing as a next step in stimulating competition in order to
address an ever-increasing economic problem facing our health
care system. Based on our company's experience with the FDA
during the approval process of IPLEX, I am confident that this
legislation is based on sound science and progressive insight
into where the market should be in the coming years.
Once again, thank you for this unique and important
opportunity to share my experience and views. I look forward to
your questions.
[The prepared statement of Mr. Allan follows:]
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Chairman Waxman. Thank you very much, Dr. Allan.
Dr. Gerrard.
STATEMENT OF THERESA GERRARD
Ms. Gerrard. Good morning, Chairman Waxman, Ranking Member
Davis, and members of the committee. My name is Theresa
Gerrard. Thank you for allowing me the opportunity to testify
this morning on the importance of establishing a science-based,
abbreviated approval pathway for biogenerics.
From 1984 to 1995 I was with the FDA and was a Division
Director with responsibility for IND and BLA review of hundreds
of biotech products. I chaired licensing committees for Amgen's
Neupogen, Genentech's Actimmune, and was involved in the review
of beta Interferon from Chiron and Biogen.
After leaving FDA, I was director of development for Amgen
in Boulder, CO, where I had oversight of development of several
biotech products. For the past 9 years I have worked as a
consultant, where I have worked with many companies, primarily
brand biotech companies.
The purity of biotech products and the sophistication of
analytical testing that exists today allowed the production of
safe biotech drugs. Analytical testing consists of multiple
sophisticated tests that are used to assess the physical,
chemical, and biological characteristics of the product. Many
more tests are used to assess a biologic than are typically
used to assess a drug, because biotech products are more
complex than drugs.
These tests set the product specifications or goalposts, if
you will, for every batch of biotech product that must fall
between these goalposts. This is because no two batches of
biotech products are identical. There are always minor
variations.
The advances in analytical characterization for well-
characterized biologics allowed FDA to develop scientific
policy officers on comparability in the early 1990's. This gave
brand manufacturers the ability to change the manufacturing
processes without the need for redoing the original clinical
outcome trials if the product generated by the new process was
shown to be comparable to product made by the old process.
Now, when we speak of biologic, the focus is on
comparability. Why? Because no two batches of biologic product,
whether brand name or generic, will ever be identical.
Therefore, biologics are and should always be discussed in the
context of comparability. Yes, small changes in manufacturing
could have an impact on the final product, but we have known
this for more than a decade and can detect these changes.
For the past 15 years, FDA has gained substantial
experience and expertise in assessing manufacturing changes and
comparability data for a large number of protein products. The
underlying scientific principles that guided comparability
policy are still valid and can and should be adopted for
generic biopharmaceuticals. Why? Because the types of post-
approval brand product changes are reflective of the issues
biotech and generic companies will face in bringing generic
biotech products to the market.
The primary premise of comparability is that analytical
testing is the most sensitive method to detect differences
between two products. Clinical trials are rather insensitive in
detecting product differences because the variation among
people and their responses to a biopharmaceutical do not allow
one to detect subtle product differences. Analytical testing,
by itself, will not be sufficient in every case to demonstrate
that a generic will have the same safety and efficacy as the
brand name biotech product. In those cases, FDA can require
additional data such as animal studies, human pharmacokinetic
studies, or even clinical trials. There is not a one-size-fits-
all model, but FDA can determine the amount of data needed
based on the complexity of the product, the history of the
clinical use, and the extent of analytical characterization to
determine its comparability with the brand name product.
Before concluding, the question of immunogenicity has been
raised in the discussion of both brand name and generic
biopharmaceuticals, and I would like to take a moment to just
briefly touch on this topic.
Immunogenicity means the body generates antibodies to a
specific foreign substance, such as bacteria, and it is a
normal response in keeping people healthy. People routinely
make antibodies to many different substances and experience no
negative effects. Some biologics can cause people to generate
antibodies which are specific to that product, but most will
not have any affect on safety or efficacy. For some to imply
that immunogenicity reactions are always harmful is just plain
incorrect.
FDA can assess the risk for immunogenicity when it reviews
the products for purity, safety, and overall quality and can
request additional clinical data when necessary. While
immunogenicity is an important consideration for biogenerics,
it is certainly not a hurdle to their development.
Mr. Chairman, the science exists for a creation of a clear,
efficient, abbreviated biogeneric approval pathway. Analytical
tests, combined with additional data when needed, would ensure
the safety and efficacy of generic biopharmaceuticals.
Thank you.
[The prepared statement of Ms. Gerrard follows:]
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Chairman Waxman. Thank you very much, Dr. Gerrard.
Dr. Schwieterman.
STATEMENT OF WILLIAM SCHWIETERMAN
Dr. Schwieterman. Good morning, Chairman Waxman and members
of the Committee on Oversight and Government Reform.
My name is Dr. William Schwieterman. I thank you for the
opportunity to appear before the committee today and present
the scientific and clinical perspective on the issue of
biogenerics.
One of the most disturbing experiences for a physician is
to know that a treatment is available to help your patient, but
the cost may simply be beyond what your patient can afford. For
this reason, I deeply share your goal, Congressman Waxman, of
creating a sound, scientifically based approval pathway for
biogenerics. And, given that I also had the privilege of
working at FDA in the area of biotechnology for 10 years, I
know that your goal can and should be achieved.
I come before you today wearing three hats: as a physician,
as a scientist, and as a former FDA reviewer. From this vantage
point I would like to make the following critical points to the
committee.
First, with today's scientific advancements and
technologies, we can assure the safety and efficacy of
biogenerics.
Second, the supporting science for this is not new. It has
existed for over a decade.
Third, the issues raised in post-approval brand changes are
reflective of the issues that are raised in the field of
biogenerics. As such, the same science that determines
comparability for the brand tech industry can also be adopted
to ensure the safety and efficacy of complaint and
interchangeable biogenerics.
Having worked extensively with agency physicians and
scientists, it is clear to me that there is just one agency
safety standard, and that standard has been and will continue
to be applied in the review and approval of each and every
biologic, whether it be a brand name or a generic.
The standards and science used for current
biopharmaceuticals are informative to us with respect to
biogenerics. A critical but not often publicized fact in the
biopharmaceutical industry is that FDA does not require brand
name companies to perform large clinical outcome studies to
retest the product generated by new manufacturing processes.
This is because such an approach would not only be infeasible,
but, more importantly, would ignore the utility of existing
sophisticated scientific analytic tools and techniques for this
purpose.
Let me briefly summarize what happens in these instances.
FDA starts with an assessment of extensive analytical
comparability data. With these data, and keeping in mind the
nature of the drug, the tests used, and the disease being
studied, FDA decides how to proceed. The agency can give a
thumbs-up or a thumbs-down regarding each post-approval brand
manufacture change and, if thumbs-up, have that change be
supported by the analytic data, alone. The analytic data,
coupled with pharmacokinetic and/or pharmacodynamic studies or
the analytic data--the studies just mentioned--plus data from a
large clinical outcome study.
As you already have heard, the vast majority of brand name
manufacturing changes need no further studies when data from
analytic tests show the products to be comparable. For a small
number of brand name products that show small differences in
these analytic tests following manufacturing changes, FDA may
require additional analytic tests and pharmacokinetic or
pharmacodynamic tests to be conducted in animals or humans.
These later studies, PKBPD studies, are clinical studies in
the sense that they are conducted in patients in the clinic,
but they are not the large clinical outcome studies commonly
used to determine the product's ultimate clinical effects.
These pharmacokinetic and pharmacodynamic studies almost
always involve fewer than 100 patients, and in general last
weeks, not many months.
Rarely after a brand name manufacturing change does the FDA
require that a brand name company take the last step, repeating
a full-scale clinical outcome study. Such studies are not
usually necessary because the variability and ``noise''
involved in most clinical outcome studies make them inefficient
for determining comparability between agents. In fact, of all
the hundreds of brand name biologic product changes, the vast
majority were approved without large clinical outcome trials.
In sum, FDA's scientists and physicians routinely make
comparability determinations, since manufacturing changes occur
throughout the brand name biologic product development and life
cycle. The comparability algorithm has existed for over a
decade to allow brand name biologic manufacturers to change and
improve their manufacturing processes.
In closing, I want to emphasize to the committee again that
the science of comparability is not a new one, but rather an
old one used by the agency and the brand name industry for more
than a decade to determine comparability.
Chairman Waxman, the Access to Life-Saving Medicines Act
will give FDA the authority and the flexibility it needs to
ensure the safety and efficacy of biogenerics. I commend you
for adopting the same scientific principles, processes, and
procedures that exist for the brand name biologic industry when
making post-approval manufacturing product changes to the
biogeneric sector.
My mission as a physician reviewer at FDA, and that of all
my colleagues, then and now, is to protect the public by
ensuring the safety of the supply of biopharmaceuticals. No
one's interests is served if safety is not viewed as paramount.
Thank you very much.
[The prepared statement of Dr. Schwieterman follows:]
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Chairman Waxman. Thank you very much, Dr. Schwieterman.
Ms. Mollerup.
STATEMENT OF INGER MOLLERUP
Ms. Mollerup. Chairman Waxman, Ranking Member Davis,
members of the committee, thank you for inviting me to testify
today. My name is Inger Mollerup. I am vice president for
regulatory affairs of Nova Nordisk, a company with an 80-year
history of producing insulin and other proteins.
I am a scientist, not a lawyer, and as such have for the
last 30 years been engaged in the design of manufacturing
processes and development programs for numerous recombinant
proteins. In 2005 I represented the drug before the European
Medicines Agency [EMEA], discussing the insulin follow-on
guidance, and I also presented to the World Health
Organization's INN Committee on issues related to naming of all
therapeutic proteins, including follow-ons.
Nova Nordisk believes that any pathway for follow-on
biologics must be, first and foremost, constructed to protect
patient safety, be rooted in the best science, preserve
innovation, and respect proprietary information.
Three major points from my testimony today are: first, that
characterization does not tell the whole story; second, that
pre-clinical and laboratory tests are not sufficient to
determine immunogenicity and other important safety parameters;
and, third, that current science does not support
interchangeability.
First, characterization does not tell the whole story. Any
pathway must fully address the patient safety considerations of
medicines that are similar to or comparable to instead of the
same as the reference product. Given that proposals currently
before Congress go far beyond the science in an effort to deem
products having minor differences in immuno-acid sequence as
highly similar, I share with you an experience we had at Nova
Nordisk as we were developing a fast-acting insulin analog
wherein two potential candidates with one amino acid difference
were tested.
All candidates were put into an extensive chemical
preclinical and clinical program. The candidate taken to market
had only one change to the immuno acid sequence from human
insulin, resulting in an analog with significantly shorter
timing of action than human insulin and a unique safety
profile.
An earlier candidate, which had also one amino acid
substitution, showed a positive effect on the timing of action,
but in full preclinical animal toxicology studies this dark
candidate significantly elevated tumor potential in rats.
Development of this candidate was immediately discontinued.
Even though both analogs were fully characterized, an
animal study was required to demonstrate that this seemingly
minor difference had enormous consequences for important safety
characteristics. Minor differences can have major safety
consequences.
Second, pre-clinical and laboratory tests are not
sufficient to determine immunogenicity and other important
safety parameters. Human clinical immunogenicity data must be
required, and we have numerous examples illustrating its vital
importance.
While developing a complete new process for our insulin
analog, we discussed this program with the FDA. FDA stated the
no general safety threshold could be applied for new
impurities. Even one as low as 0.1 percent was not acceptable
because proteins can be immunogenic at very low concentrations,
and it is not known when low is low enough. Immunogenicity data
from an appropriate clinical study was, therefore, necessary
and included in our submission.
Third, current science does not support interchangeability.
Based on today's science, a follow-on biologic cannot be
determined to be the same as a innovator drug. For this reason
and because of the potential difference in immunogenicity and
other drug-specific adverse events, follow-on biologic products
must not be allowed to be interchangeable. The treating
physician must at all times be involved in the decision to
change from one product to another.
Interchangeability is also not part of the EMEA approval,
and Europe has the further requirement that these products are
clearly identified to support post-market monitoring.
Nova Nordisk believes that any pathway for follow-on
biologics must be, first and foremost, constructed to protect
patient safety, be rooted in the best science, preserve
innovation, and respect proprietary information.
Thank you for the opportunity to speak here today. Nova
Nordisk is ready to assist Congress as this issue moves
forward.
[The prepared statement of Ms. Mollerup follows:]
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Chairman Waxman. Thank you very much, Ms. Mollerup.
Dr. Venkataraman, we are pleased to have you with us.
STATEMENT OF GANESH VENKATARAMAN
Mr. Venkataraman. Good morning, Chairman Waxman and members
of the committee. I want to thank you for the invitation and
opportunity to present to you this morning on this very
important topic to our industry and for the general public.
I am Ganesh Venkataraman, co-founder and senior vice
president of research at Momenta Pharmaceuticals. I am pleased
to come before you today to discuss the scientific issues
behind the need to create an abbreviated regulatory approval
process for generic biologics, which are defined as follow-on
protein products in Dr. Woodcock's testimony.
The terms that I use are also defined in the written
testimony that we are submitting for the record.
Mr. Chairman, I am a chemical engineer by training, with
specific expertise in bioprocess engineering, protein structure
characterization, and analytic and quantitative methods for
categorizing complex mixtures. While at MIT I, with Dr.
Sasisekharan and Dr. Langer developed novel analytic technology
that enables characterization of complex mixtures. With this
platform and co-science and leadership at MIT, we founded
Momenta. We develop novel drugs and generic versions of complex
products. We use cutting edge science to develop affordable and
safe generic versions of these products.
Momenta has a strong interest in ensuring that Congress
acts this year. We believe our company's experience
demonstrates that the science is available today and continues
to evolve to enable generic versions of complex mixture drugs.
In my written testimony I focused on five major issues that
I will briefly discuss today.
First point, complex biologics can be totally
characterized. Not all biologic products are the same, so when
we discuss the characterization challenges we must keep in mind
the continuum of complexity. Analytic technologies are here
today to characterize the less-complex biologics, and
approaches like ours and others are actively being developed
for those that are more complex.
In my testimony I highlight how our testimony is applied to
heparins. While heparins are not biologics, it validates how
complex mixtures can be characterized.
The second point is: with such product characterization,
generic companies will be able to design and control the
manufacturing process to reproducibly make biologic drugs with
the same quality as the branded companies. The manufacturing
process for biologic drugs does not occur in a random or
uncontrolled system. The living cells are highly specialized
systems which, in a very careful and controlled manner, produce
a final product.
Scientific advances in analytical technologies available to
the generic as well as the branded industries allow one to link
process parameters to the final product. It is possible and
absolutely critical that generic companies build and maintain
the same level of process knowledge.
Point three: clinical studies, ranging from small-scale PK
to clinical outcome studies, should be used to address any
residual uncertainty answering relevant scientific questions.
Traditional empirical or full-scale clinical trials must not be
a requirement for approval in all cases. While the FDA may
require full-scale trials for approval of some biologics,
others that have an increased level of characterization data
should require significantly reduced clinical testing.
We believe FDA is well equipped to work with applicants to
determine the degree of testing necessary and define the
characterization and trial requirements.
Point four: biologic drugs can be designed to be
interchangeable. Interchangeability is an important public
health objective and products need to be designed and proved to
be interchangeable. It is well within the reach in the near
term for a number of products. This can be done through total
characterization and/or through a proper combination of
characterization and clinical trials.
Point five: patient safety and product quality will not be
jeopardized. We should hold the entire industry, branded and
generic, alike, to the highest scientific standards, and allow
the expertise of FDA's scientific staff, which will approve and
oversee the marketing of innovator and generic biologics.
In closing, Mr. Chairman, there is an opportunity to drive
continued scientific innovation by creating a forward-looking,
regulated system which balances the respective roles that
characterization and clinical data should play. FDA has to be
given the opportunity to make the decisions on comparability,
which is interchangeability based, on the science presented to
them. If legislation does not allow for such a pathway today,
scientific innovation from technology companies like ours and
many others will be stifled, and access to more-affordable
choices would be denied.
I hope that my perspectives will be instructive to this
debate. I am confident that these efforts under your leadership
will be a key contributor to increasing access to safe,
effective, and affordable medications to patients in need.
I thank you again for the opportunity to submit testimony.
I look forward to answering any questions.
[The prepared statement of Mr. Venkataraman follows:]
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Chairman Waxman. Thank you very much, Dr. Venkataraman.
To begin the questioning, the Chair recognizes Mr. Burton.
Mr. Burton. I thank the Chair for recognizing me. I have to
go put a pharmaceutical in my eye at the hospital, so I can
attest to the necessity for those products.
Mr. Chairman, I am not sure this question should be
directed to the panel. It may be directed at you. From
everything I have seen, there can be a minor difference in a
biological product, and if the pharmaceutical company that
created the product in the first place has to give a generic
company the information before their patent expires, it seems
to me, because of the minor difference that could be created by
the generic company, they could apply for a license well before
the patent runs out from the original producer. If that were
the case, the scientific research being paid for by the
original company, the pharmaceutical company that developed the
product, could lose its investment after they have created
something that is going to be beneficial to everybody.
So my question is: has that been checked out legally and
whether or not the originating company can be protected for the
duration of their patent?
Chairman Waxman. Perhaps we can let one of the panelists
answer it, but it seems to me it becomes a patent question. If
the originator of the product has a patent over that product, a
minor variation, as you seem to describe it, would not be
permitted as a competitor, if it is basically the same product.
Mr. Burton. I think the bill has a great deal of merit.
Chairman Waxman. This is, of course, by the way, what we do
right now with generics and brand name drugs. We allow generics
to compete after the patent is over. If there is a new
innovation in it or a minor difference, then the FDA would have
to decide if it is, in fact, a generic.
Mr. Burton. I understand that. I like the bill. That is one
thing I would like to check out. Thank you, and thank you for
yielding.
Chairman Waxman. Thank you very much.
The Chair recognizes himself.
Let me address this question to Dr. Gerrard and Dr.
Schwieterman. As you testified, for over 10 years the FDA has
allowed brand name manufactures of biotech drugs to make
changes in the process by which they manufacture their
products, but without repeating the original safety and
effectiveness trials. This policy seems to me to undercut the
brand name industry argument that changes in manufacturing
processes can affect safety and effectiveness in ways that
could only be assessed through clinical trials. In your
judgment and experience, does permitting companies to make
significant manufacturing changes under a comparability
protocol, but without repeating clinical trials, adequately
protect patients from unsafe or ineffective products?
Ms. Gerrard. I think, as both Dr. Woodcock and Dr.
Schwieterman have said, FDA only has one standard for safety
and efficacy, so when FDA makes the decision that, after a
manufacturing change, that the product is comparable, they have
decided that it is going to have the same safety and efficacy
as the brand name product. What we are saying is some of those
same principles apply to the development of generic biotech
products.
Chairman Waxman. Yes.
Mr. Schwieterman. Yes, let me just add to that. The FDA is
a science-based organization. It is filled with scientists. It
is filled with physician reviewers. It is filled with people
who are expert in data analysis and interpretation. Your
question really is adking if the science there to allow in some
cases for the absence of clinical trials, and I would say yes,
it is there, but you would have to look at the data, you would
have to look at the techniques, you would have to look at the
actual agent under discussion. You take things on a case-by-
case basis, based upon the science and the data, and then make
that determination.
Chairman Waxman. Are there many examples of products
approved under comparability protocols that turned out to have
unpredicted safety or effectiveness problems that were only
discovered after marketing?
Mr. Schwieterman. There are none in the United States where
there were major changes in post-marketing that caused this. We
all know the example of Eprex, which occurred post-marketing in
Europe. The patients developed PRCA. But the agency and the
biotechnology industry and biopharmaceutical industry in this
country has been amazingly good at protecting the public this
way.
Chairman Waxman. Does the scientific rationale underlying
comparability protocols and FDA's 10 years of experience
implementing it provide evidence that an abbreviated
application process for follow-on proteins and biogenerics
based on established comparability principles could adequately
protect patients from unsafe or ineffective products? Dr.
Gerrard.
Ms. Gerrard. I think the comparability policies have been
enormously successful from FDA's point, and the American public
has benefited, as well. Brand name companies have been able to
make manufacturing changes and improve their product without
the need to redo clinical trials.
I think we can apply some of those same principles in
extending it one step further to generic biotech products.
Mr. Schwieterman. I would just like to add that I think the
rationale is, in fact, one that can be used, coupled with the
data, coupled with the case-by-case to develop a safe and
effective biogeneric use of the principles we outlined.
Chairman Waxman. Dr. Schwieterman, Ms. Mollerup testified
that immunogenicity can arise so unpredictably from changes in
biologics that a follow-on biologic will always require a
clinical trial to assess immunogenicity. When a brand name
company uses the FDA's comparability guidance to make changes
to its existing biologic products, are clinical trials always
required to demonstrate that no new immunogenicity concerns
have arisen?
Mr. Schwieterman. Always is an absolute, and absolutes are
only things that can be supported by the data. FDA is a
scientific organization, and I would say no. In every instance
ought there be a clinical trial for immunogenicity? No. It
would depend upon the nature of the case. It would depend on
the data that are there. And I think there are ways and methods
for sure beyond clinical trials to determine immunogenicity. In
fact, clinical trials, themselves, have limitations in this
regard, as they do with other infrequent safety AEs.
Chairman Waxman. Should there be more concern about
immunogenicity for follow-on proteins than for brand name
proteins?
Mr. Schwieterman. I don't think there should be more or
less concern about immunogenicity. I think that the safety of
all agents, particularly biogenerics and biopharmaceuticals in
this country is a critical issue for the FDA. I think that the
same standards, the same kinds of oversight, the same
considerations for biogenerics ought to apply for them as they
do for present-day biopharmaceuticals.
Chairman Waxman. Let me ask a question of Dr. Venkataraman
and Dr. Allan. A number of companies have expressed doubts
about whether copies of biotech drugs can be made safely. They
have suggested that the manufacturing process for producing
these drugs is so complex that new companies will not
understand biologics manufacturing well enough to produce safe
versions of these products. Isn't it true that there are a
number of companies who already make brand name biotech drugs,
either for themselves or on contract for other companies, who
would be likely to want to make copies for biotech drugs if
there were a legal pathway?
Mr. Allan. I believe there are contract manufacturing
organizations that do make branded products, either at the
research level, the development stage level, or even at the
commercial level.
Chairman Waxman. Yes.
Mr. Venkataraman. I would like to add I think the brand
name manufacturers sometimes have made the process to be a
black box. I think the science is there now to be able to go
back and decouple product and relationship to the process so
that you could use a different cell line and come up with a
different process that would ultimately provide you the same
end product. Provided you couple that with the characterization
of looking at process-related impurities and end product, you
could get there to the same level of being in a brand name
manufacturer.
Chairman Waxman. Thank you very much.
Mr. Davis.
Mr. Davis of Virginia. Thank you, Mr. Waxman.
Ms. Mollerup, let me start with you. The generic system we
created for pharmaceutical drugs in 1984, which bears Mr.
Waxman's name, balanced and abbreviated approval systems for
generic drugs with patent restoration and new exclusivity for
innovators. Doesn't such a critical balance continue to
stimulate the development of new cures for drugs, having that
balance?
Ms. Mollerup. In my mind it is important that we keep the
balance that will still foster innovation, and as this process
goes forward toward defining a legislative and regulatory
system, that is acknowledged, because you would still want new
drugs to come on the market in this country.
Mr. Davis of Virginia. What kind of impact would a system
that fails to assure safety or sustain innovator intellectual
property rights have on innovation?
Ms. Mollerup. A system that would fail to protect safety I
think would be detrimental for both innovation and follow-on
manufactures, and obviously first and foremost for public
health. I think it is very important, as Congress moves
forward, that the pathway you are moving toward is really
constructed to protect patient safety and be rooted in the best
science, and there is a lot of strong and good science
available for this.
Mr. Davis of Virginia. The FDA stated in its testimony that
demonstrating the similarity of a follow-on protein product to
a reference product is more complex and would require new data.
I guess my question is: does this mean FDA should require
clinical safety data for follow-on biologics, or do you think
there are cases where they could make the determination it
wouldn't?
Ms. Mollerup. Based on my experience with those complete
second-generation processes that we have developed and are
developing at Nova Nordisk, these require immunogenicity data
in all cases for the simpler ones like insulin, described in my
testimony. Besides that, PKPD was required to assess both
pharmacokinetics and efficacy for a more complex one like a co-
correlation factor, substantial clinical data will be required,
as well as immunogenicity.
So, based on the experience that we have with processes
that have less substantial changes than follow-ons, from my
standpoint, where the science is today, immunogenicity trials
will always be required.
Mr. Davis of Virginia. Thank you.
Let me ask Dr. Venkataraman and Dr. Allan, you are both
from small biotech companies. FDA stated in their testimony
that technology today is not yet sufficient to allow for
comparisons of complex protein products. Do you agree with
that?
Mr. Allan. Well, it has to be viewed on a case-by-case
basis. I think for the product we developed the analytical
methodology that we used, which was fairly extensive, was very
adequate to demonstrate the structural characterization of the
property.
Mr. Davis of Virginia. DO you think it depends?
Mr. Allan. It will depend on the products. There are some
proteins that are fairly simple, relatively speaking, and you
can characterize them extremely well.
Mr. Venkataraman. I agree. I think on a case-by-case basis
there are several proteins that can be characterized well
today, and science continues to evolve. Academic groups and
other companies I know are working very actively toward
creating novel technologies to be able to do this for more
complicated products. And I think a regulatory and a legal
legislative incentive is going to propel that technology
forward much faster to be able to do this much more
sophisticatedly.
Mr. Davis of Virginia. How close are we, do you think? It
is hard to say, I know, but a couple years, 10 years?
Mr. Venkataraman. It is difficult to say, but 4 years ago,
when we started working on our program, people thought it was
impossible to do. We were discouraged extremely. Today we have
an application, we have talked to the FDA. It has been
completely solved. I think similar situations have been
reported by other people. So it is a matter of providing the
right incentives for the scientists to be able to take it on.
Mr. Davis of Virginia. OK. Are there any non-clinical tests
or technologies that could fully substitute for studying the
safety of biotech products in humans?
Mr. Venkataraman. I would say that the safety, per se, so
the comparability of the two products, characterization becomes
a very important aspect of knowing how close you are to the
innovator product. I think there are multiple analytical
techniques that provide you very rigorous estimation of the
product quality and product attributes, so yes.
Mr. Davis of Virginia. All right.
Let me ask Dr. Schwieterman and Ms. Gerrard, the FDA
highlighted in its testimony the importance of ensuring that
facilitating the development of follow-on product through
abbreviated pathways doesn't discourage innovation and the
development of new biological products. They also refer to the
Hatch-Waxman Act as a balanced approach. Do you think an
extension of data exclusivity period and certain patent
protections would help encourage innovation and development
with biological products?
Ms. Gerrard. I am not a lawyer. I am a scientist. I guess I
have confidence in the innovation of biotech companies that I
work with to continually come up with new and better products.
Mr. Davis of Virginia. All right. From a scientific point
of view it is achievable, but from a policy point of view you
are going to take a pass on it?
Ms. Gerrard. I am not a lawyer. I am a scientist.
Mr. Davis of Virginia. That is fine.
Mr. Schwieterman. I will take a pass, as well. I am a
physician scientist. From a scientific point of view I agree
with what Dr. Gerrard said.
Mr. Davis of Virginia. Well, Henry and I are both lawyers.
Thank you.
Chairman Waxman. Thank you, Mr. Davis.
Mr. Yarmuth.
Mr. Yarmuth. Thank you, Mr. Chairman.
As a child I was left way behind on science, so I am going
to pass on the science questions for a minute and ask something
I know a little bit more about, and that is the business side
of this, and I am asking business questions of a panel of
scientists. I understand that.
Am I correct in assuming--and anyone can answer this--I
take it, just reading between the lines, we have several
representatives from generic manufacturing companies and one
from a brand name company. Judging from what we have heard
about the complexity of these biologic drugs as opposed to
chemical-based drugs, and we all know the stories about how
chemical-based drugs cost pennies apiece to produce and they
are sold for whatever, but it seems to me that the economics of
biologics are significantly different and more complex and
therefore dramatically more expensive. If I am correct in that
assumption and the process is inherently expensive, how much
money can we save by producing them on the generic basis or
follow-on basis as opposed to the brand name?
I guess a premise, we know that for Claritin and for Zantac
and all these other products, and many of the drugs that are
actually still by prescription, that we have a significant
amount spent for advertising and marketing. I assume marketing,
anyway, is still a big component of the biologics business. But
what are we talking about, either from a historical perspective
that you know about or potentially that we are talking about
saving by allowing these drugs to be produced generically?
Mr. Allan. I can give that a shot. Actually, I don't think
anybody around this table is from the generic industry. Some of
us are from the innovation biotechnology industry.
With regard to price, it is going to be a case-by-case
basis. There is no doubt to make a complex protein is more
expensive to make than a small molecule. The manufacturing
facilities that are needed, the overhead, so to speak, that
goes into the whole program is probably larger than the
financial commitment you would want to make for a small
molecule plant. So I think intrinsically it is a more expensive
business, but I believe that, you know, certainly none of us
would be sitting around this table if we felt that we couldn't
make these types of products at a significant price reduction
to the innovator product. It will be case-by-case. What would
be the percentage reduction I don't think we could--I certainly
would not comment on that right now, but, as I said, it will be
less expensive.
Mr. Yarmuth. Go ahead.
Mr. Venkataraman. I was just going to add one comment. I
don't know if I can give you any numbers, but what I do know is
that the margin between the cost to manufacture and the actual
price is significant. I don't have exact numbers, but it is
quite significant, and I assume that could translate into cost
savings in the long run.
Mr. Yarmuth. Again, I understand I am asking business
questions of scientists, but would the savings result, assuming
that we allow an easier pathway to producing generics, would
the savings result more from the competitive aspect, or would
they result from the fact that, just because we have protected
the brand name manufacturer, that we have allowed that price to
be very, very high, and that just by eliminating the
exclusivity we bring the price down? Would the savings be
inherent? Would they be related to competition, or is it just
because we are allowing exorbitant profits now, understanding
that those profits are being allowed to allow the company to
recover some of its investment?
Mr. Allan. I think it will be the introduction of
competition, to a certain extent.
Ms. Gerrard. And my economic knowledge might be right
behind my legal knowledge, but I think what we have to
understand is that, while biologics might be more expensive to
make than drugs, that there is still a huge margin there, and
that, while the cost savings, even conservative estimates that
say 25 percent, which we have seen, when you consider that the
cost of a biologic is so high that a 25 percent savings is a
huge amount.
Mr. Yarmuth. You look like you want to answer.
Mr. Venkataraman. The pricing for a drug that a company
like Momenta would launch as a generic would be lower by at
least 20, 25, 15 percent, depends on the dynamics, but because
the lower prices of the drug I think the cost saving would be
achieved.
Mr. Yarmuth. Ms. Mollerup, did you want to comment?
Ms. Mollerup. Yes. I mean, cost is an important
consideration and I think that a lower cost of drugs is good,
as long as it is not at the expense of patient safety. I guess,
again, back to the need for clinical trials, I would like to
share with you, an example which I guess indicates somewhat
where the borderline may be. In Europe we have not only had two
approvals of follow-ons, but also one rejection. That was on an
Interferon Alpha that did not show comparability in its
clinical trial in that more patients had relapse of their
disease after the treatment with Alferon was stopped, compared
to the reference product, and there were also more side effects
in the Alferon group. Again, I am not an economist. I am a
scientist, but it just goes back to the equation of cost
savings, that some cost savings can be realized but the
products are expensive to produce, and as this example from
Europe shows, care really has to be exercised as to make sure
that the appropriate comparable clinical data, not a copy of
the original data set that was handed in, but appropriate
comparable data ensuring comparable efficacy and safety is
included.
Mr. Yarmuth. Thank you.
Chairman Waxman. Thank you, Mr. Yarmuth.
Mr. Welch.
Mr. Welch. Thank you, Mr. Chairman.
Dr. Gerrard, Dr. Mollerup argued that the risk of
immunogenicity from a follow-on product must always be
evaluated with clinical trials. That is my understanding of her
testimony. In your view, are clinical trials the best or the
most sensitive method of detecting this?
Ms. Gerrard. Not always. I think we have to keep in mind
that immunogenicity, as I stated, a product having greater
immunogenicity really is not an issue; it is when there are
clinical consequences. Immunogenicity just means you make
antibodies to the product. Most of the time they are not
neutralizing. Many times they are temporary. Patients continue
to be treated. So it is not always an issue.
Second, is clinical trial the best way to determine
immunogenicity differences between two products? It may not
always be the case. Sometimes more rigorous analytical
comparisons, either an assessment of the product and product
instability are really a much more sensitive way of determining
whether that product is going to cause problems.
Mr. Welch. Thank you.
Dr. Schwieterman, would you agree with that?
Mr. Schwieterman. Yes, I would. I think the concept of
immunogenicity is one that has been talked about a lot, but, in
fact, it is a quite complex subject. There are certain kinds of
immunogenicities, then there are other kinds. We have had many
day-long conferences about this. The ability of clinical trials
to detect immunogenicity depends on what you are talking about.
For most of the things that have been bandied about, actually
clinical trials are rather poor measures for picking up the
kinds of outcomes that you have heard.
Mr. Welch. Thank you.
I would ask this question to both of you, as well.
Opponents of the generic biological pathway, as you know,
always raise the example of Eprex, Johnson & Johnson's European
version of Epogen. Can you explain a little bit about what
happened with Eprex? I will start, I guess, with you, Dr.
Schwieterman.
Mr. Schwieterman. I don't know, of course, the data on the
manufacturing changes that were made, nor was I privy to the
investigations made. I know that Johnson & Johnson underwent a
great deal of investigations. I mean, just to tell the story as
I know from my standpoint, Eprex, which was one of the
erythropoietin--ESAs, they are called, in general,
erythropoietic stimulating agents--was marketed and approved
overseas, and then cases of autoimmune disease or a very bad
autoimmune immunogenic reaction to the drug, itself, ensued. In
other words, the body started reacting to its own protein based
upon that.
The thing about this particular case that is different is
that, No. 1, it occurred overseas, so, you know, there was no
real knowledge of whether the analytic tests that were
performed there were adequate or complete and whether they
would have been picked up at the FDA.
No. 2, the ultimate investigation into this product, as I
understand it from Dr. Segal's testimony several weeks ago,
picked up on impurities that are actually determined with
analytic tests after the fact, and most of the investigation
ensued upon that; that is to say, the actual analysis of the
product, itself.
From my vantage point, it is clearly an important issue,
because we need to understand it, but it doesn't visciate, it
doesn't make the arguments about analytic tests weaker, in my
estimation. In some ways it makes them stronger.
Mr. Welch. Go ahead, Dr. Gerrard.
Ms. Gerrard. I was just going to add to that. Pure red cell
plasma is a very serious disease, but it occurred in 1 in
10,000 patients. So could this have been detected in a typical
clinical trial of, say, several hundred people? No, it could
not. What actually did resolve the issue for Johnson &
Johnson's Eprex was a more rigorous analytical characterization
to resolve that problem.
Mr. Welch. Thank you. How large a clinical trial would have
been required to identify that side effect?
Ms. Mollerup. I think that everyone agrees it would have
taken an extremely large clinical trial, and, from my
perspective, the purpose of doing these comparative
immunogenicity trials where you can, from the blood samples,
isolate antibodies, characterize them, find out whether they
are benign or not, and I fully agree with Dr. Gerrard that not
all antibody responses are a safety issue.
But with the case of these comparable clinical trials to
test immunogenicity, the real important point here is that such
trials can tell us if there is a major problem. For innovator
products, as well as for follow-ons, it is the long-term safety
monitoring that is also needed in order to pick up on minor
problems like this.
Mr. Welch. How large a clinical trial would have been
required, then, Ms. Mollerup?
Ms. Mollerup. I don't have the clinical for Eprex because I
don't have that statistic, but, back to Dr. Segal's testimony,
it would take a study of about 50,000 patients to have a good
chance of detecting a serious effect in a patient, 1 patient
out of 1,000. But I don't have the statistics on Eprex.
Mr. Welch. And my understanding--anybody can answer this--
is that Johnson & Johnson, itself, doesn't argue that the Eprex
problem would have been avoided, in fact, had they conducted a
clinical trial before marketing the change product. Dr.
Gerrard?
Ms. Gerrard. No, they would not have detected it in a
clinical trial. Every product is subject to post-marketing
surveillance.
Mr. Welch. Right.
Ms. Gerrard. So a very rigorous post-marketing surveillance
program is also important for every product.
Mr. Welch. Dr. Schwieterman.
Mr. Schwieterman. One point I want to make is you don't
conduct clinical trials for no reason. You are exposing
patients to agents and putting them through a protocol and data
collection and blood drawing and so forth to collect scientific
data for scientific reasons that are pre-established in
hypotheses, and so to argue that clinical trials should be
conducted all the time is really to negate the basic premise of
a clinical trial, which is the study of question.
In the case of Eprex, it would have been an impossibly
large study to have studied that particular issue; therefore, a
clinical trial not only would have been undetected, insensitive
to that particular change; it wouldn't have offered any
information at all.
Mr. Welch. Just following on your point, would it make
scientific sense to argue that the expressed example supports a
clinical trial requirement for follow-on products but does not
support that same requirement for brand name products?
Ms. Mollerup. I think, from looking at what is required for
the brand name industry, I mean, the trials that we undertake,
both phase two and phase three trials, immunogenicity is an
obvious part of that program, because we are working with
proteins and the immunogenetic profile of our products are also
not established as we take them through the clinical program,
so that is certainly part of the testing we do, as well.
Mr. Welch. I'm not sure I understand you. You are saying
that you have to have those clinical tests for the follow-on
products but you don't have to have them for the brand name
products?
Ms. Mollerup. No. I am saying the exact opposite. I am
saying that we, in the brand name products clinical trials that
we use to take these to the market, immunogenicity studies are
an integrated component, and what we find reasonable to
establish clinical comparability for the follow-ons is to also
study immunogenicity in an appropriately sized comparative
trial, and that will be a lot smaller than the innovator phase
three studies.
Mr. Welch. Dr. Schwieterman, go ahead.
Mr. Schwieterman. I guess I would disagree with that.
Mandated clinical trials to study immunogenicity is not
something that is scientific, but rather political. In this
particular case, if the science is there, depending upon the
drug, depending upon the question, the patient, and the test,
you could do a clinical study in certain instances where you
believed that information would be useful from that clinical
study. But to mandate it for all studies would be to also
perform it for those cases where it wouldn't be useful.
I think that what ought to happen is that the FDA, like
they do now, be able to have the flexibility and the authority
to use their assessments of the data and the context of that
data to make judgments about the need for further clinical
studies.
Mr. Welch. Thank you.
Dr. Gerrard, last word?
Ms. Gerrard. I will just add to that. I think FDA does need
that flexibility. You look at the history of the product, have
there been any clinical consequences to the immunogenicity?
What about the analytical characterization? You look at the
whole picture. If there are remaining questions, of course
safety is paramount. We want FDA to have the ability to request
any additional data that they need to make sure that product is
safe.
Mr. Welch. Thank you. I yield the balance of my time.
Chairman Waxman. Thank you very much, Mr. Welch.
Dr. Mollerup, would you support giving FDA the ability to
require and enforce post-market studies for both the generic
and for the brand name drugs?
Ms. Mollerup. I am from Europe, so I have a fair amount of
knowledge of the regulatory system here in the United States,
but may not be accurate on all the details. From my
perspective, the FDA should be able to put the same
requirements to both innovators and follow-ons, because the
same safety issues are involved.
Chairman Waxman. Right. In the United States the
manufacturer agrees, when the product is licensed, to do
followup tests for post-marketing, but they may not do it
because there is not a sanction except to take them off the
market, which has never been used. Do you think FDA should have
the power to require post-marketing safety studies? You say it
should be for both or either when it is necessary. Do you think
FDA ought to have that power?
Ms. Mollerup. The power not only to ask for the data, but
also actually to get it?
Chairman Waxman. And to insist it be done?
Ms. Mollerup. Yes, I think they should.
Chairman Waxman. Thank you.
Well, I thank all of you very much. You have been very
helpful, and I appreciate your testimony. This may be self-
serving, but the bill does allow FDA to require clinical
trials. It allows FDA to do whatever is necessary to determine
that the science indicates a generic version is safe and
effective.
Thank you very much.
I want to call forward the witnesses for our third panel.
Yvonne Brown is an individual living with multiple
sclerosis and is speaking today on behalf of the National
Multiple Sclerosis Society.
Mary Nathan is an individual living with a rare disease
called Gaucher disease, and is speaking today on behalf of the
National Organization for Rare Disorders.
Nelda Barnett is a Board Member for AARP.
Priya Mathur is the vice chair of health benefits, Board of
Administration, at the California Public Employees' Retirement
System [CalPERS].
Scott McKibbin is the special advocate for prescription
drugs for the State of Illinois.
Dr. Henry Grabowski is a professor of economics and the
director of the program in Pharmaceuticals and Health Economics
at Duke University.
Jonah Houts is a senior analyst at Express Scripts, Inc., a
pharmacy benefit management company [PBM], representing 1,600
clients, including large, self-insured employers, government
payers, unions, and health insurance companies, and covering
more than 50 million people.
We welcome you all to this hearing today. Your prepared
statements will be in the record in full. We would like to ask
each of you to limit the oral presentation to around 5 minutes.
It is the custom of this committee, as you have already
observed, having sat through the earlier panels, to ask all of
the witnesses to be sworn in, so I would like to ask each of
you to rise and raise your right hands.
[Witnesses sworn.]
Chairman Waxman. The record will indicate that each of the
witnesses answered in the affirmative.
Ms. Brown, why don't we start with you, if you have the mic
passed over.
The timer, by the way, will be green, and then it will turn
to yellow for the last full minute, and then red when that last
minute is up.
Thank you so much for being here.
STATEMENTS OF YVONNE BROWN, FOR THE NATIONAL MULTIPLE SCLEROSIS
SOCIETY; MARY NATHAN, FOR THE NATIONAL ORGANIZATION FOR RARE
DISORDERS [NORD]; NELDA BARNETT, BOARD MEMBER, AARP; PRIYA
MATHUR, VICE CHAIR, HEALTH BENEFITS-BOARD OF ADMINISTRATION,
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM [CALPERS]; SCOTT
D. MCKIBBIN, SPECIAL ADVOCATE FOR PRESCRIPTION DRUGS, STATE OF
ILLINOIS; HENRY GRABOWSKI, PH.D, PROFESSOR OF ECONOMICS,
DIRECTOR, PROGRAM IN PHARMACEUTICALS AND HEALTH ECONOMICS, DUKE
UNIVERSITY; AND JONAH HOUTS, SENIOR ANALYST, EXPRESS SCRIPTS,
INC.
STATEMENT OF YVONNE BROWN
Ms. Brown. Thank you, Chairman Waxman and distinguished
members of the committee, for inviting me to provide testimony
at this hearing, and thank you, Chairman Waxman, for your
leadership on this issue.
My name is Yvonne Brown. I live in Waldorf, MD. I have
multiple sclerosis [MS]. I am not a pharmaceutical company. I
am not a lobbyist. I am simply a 44-year-old woman who
struggles every day with the devastating effects of MS and the
unaffordable cost of treatment.
MS is chronic, it is unpredictable, an often disabling
disease of the central nervous system. It basically stops
people from moving in one way or another. There is no cure. MS
causes loss of coordination, memory, extreme fatigue,
paralysis, blindness, and many other symptoms. These problems
can be permanent or they can come and go.
More than 400,000 Americans have MS, and every hour someone
is newly diagnosed. The National Multiple Sclerosis Society
recommends treatment with one of the FDA approved disease
modifying drugs to lessen the frequency and severity of attacks
and to help slow the progression of disability. Unfortunately,
the cost is often financially devastating. I know this
personally.
Four of the six FDA approved disease modifying drugs are
considered biological drugs. They range from $16,000 to $25,000
a year. That is about twice the amount of Social Security
disability I receive annually. For me, sometimes the financial
struggle to get my treatment can be troubling, more troubling
than this incurable disease.
I am here today to appeal to the committee. My personal
story is an example of the immediate need for this legislation
that Chairman Waxman has introduced.
In the past I have struggled a lot with my MS and with
trying to get the prescriptions I need to feel a little better.
I was diagnosed with MS in April 2000 at 37 years old. In
August 2000, I was prescribed Avonex, a biological drug from
Biogen. The cost of Avonex is high, and I did whatever I could
to afford my prescribed therapy. I sold my computer, I
disconnected my phone, I skipped paying a lot of my bills.
Despite this, I lost my home before the end of 2001 and I was
living in my car. From 2001 to 2005 I was homeless.
I struggled for years to get approval from Social Security
and I tried for over 3 years to be approved for subsidized
housing. I was even turned down for help at shelters because of
my MS. The staff there felt that I was a health liability due
to my problems with balance and frequent falls. I became
accustomed to begging, borrowing, and pleading for any help so
I could get treatment.
Unfortunately, access to my treatment was sporadic and I
paid the consequences with increased symptoms and more frequent
attacks. It was a terrible cycle. As a result of not having
access to Avonex for an extended period of time in 2004 I was
hospitalized. The cost of my 24 hour hospital stay was nearly
$1,000. I am still trying to pay that bill.
Today, after finally being approved for Social Security
disability, I receive $1,100 a month, and I am covered under
Medicare. I have coverage for my medications, but my co-payment
is $220 a month just for Avonex. When you only have $1,100 a
month to live on, $220 might as well be $220 million.
I don't want to be homeless or live in my car again, so I
cannot miss rent. I don't want to risk my health, so I cannot
skip too many meals. I often skip paying bills, but I cannot
get too far behind or risk losing my electricity or other vital
services. And I do my best to pay my share to those who provide
my treatments. Even today I must miss my treatments
occasionally. There is simply nothing I can do sometimes.
It is a misconception that help is readily available.
Existing programs are often difficult to navigate, have varying
criteria, take a long time, and sometimes run out of money. For
example, last year I was finally approved for assistance by the
National Organization for Rare Disorders. Before I received my
assistance they ran out of funding. It was also possible to get
assistance sometimes from Biogeniodec. After asking them for
help over a year ago, I think I am close to getting help with
coverage during the Medicare part D donut hole, which I will
already enter in April. I learned my lesson, though. This time
I know not to count my chickens before they hatch.
As a person with MS, I take other prescription drugs for
hypertension, depression, and several supplements. The
difference is that the generics are available. This keeps my
co-payments low and manageable. Most importantly, I do not have
to miss these treatments because I cannot afford them. But this
is not true for my MS therapies and never will be unless
something changes.
Hopefully you can help with a solution. I am a person with
a chronic, life-long, costly disease, but I want to stay out of
a wheelchair, I want to stay out of the hospital, I want to
contribute my talents to the community, I want to pay my taxes,
I want to be healthy so I am able to help others who have MS. I
want to stay on my treatment. If I don't have access to
treatments, my health will decline.
The stress from the story I have told you, which I live
with, has caused me to begin to lose my hair. Frankly, I don't
really care. I just want to battle this beast that is trying to
take away my movement.
My story is not unique. Millions rely on biologic drugs.
Millions struggle terribly with the cost. If I can leave this
committee with one thought, it is that no matter how good a
drug is supposed to be, it has no chance of being effective if
it is not affordable to those who need it.
For a long time no treatments were available for MS. Now
there are. The sad thing is it doesn't matter. Some people just
can't afford them. The cost is too much. We have to change
that. This legislation has the power to move us a little
closer. We all know that providing more affordable medications
for all Americans is a serious priority. For biologic MS
therapies, we will never, ever reach that goal if we don't
start by simply providing the pathway. It is a necessary first
step.
Thank you again for your invitation and attention. I hope
you remember me, and people like me, as you consider this
legislation. Please help provide more affordable biological
drugs for those who desperately need them. Help establish a
regulatory pathway for the FDA to review and approve follow-on
biological therapies.
Thank you.
Chairman Waxman. Thank you very much, Ms. Brown.
Ms. Nathan.
STATEMENT OF MARY NATHAN
Ms. Nathan. Mr. Chairman and distinguished members of the
committee, I want to thank you for the opportunity to testify
before you today. My name is Mary Nathan, and I am affected by
Gaucher disease.
As one of 4,800 people being treated worldwide with
Cerezyem, I understand, in a very practical way, what it means
to be alive because of a recombinant biological medicine. I
also understand what happens when the cost of a life-saving
drug is unaffordable.
Gaucher disease is a rare genetic disorder classified into
three categories and characterized by the deficiency of an
enzyme necessary to break down fats called glycolipids. Because
the enzyme is in short supply, lipids collect in the spleen,
liver, bone marrow, and other organs. Left unchecked, the
accumulation of lipids causes problems such as anemia,
bleeding, organ dysfunction, abdominal enlargement,
deterioration of the joints and bones, breathing problems,
fatigue, and reduced ability to fight common infections. Type I
is the most common. It strikes 1 in 40,000 people in the
general population, and 1 in 600 Jews of Eastern European
origin.
When I was diagnosed in 1966 at the age of 11, very little
was known about Gaucher disease. Given the increased size of my
spleen and my low blood count, doctors scheduled me for a
splenectomy within weeks of my diagnosis. Shortly after that I
was hospitalized with a high fever, excruciating pain, and an
inability to walk. We learned later that lipids had migrated
quickly to my bones, since the doctors had removed my spleen.
We also learned that I had experienced a Gaucher bone crisis, a
painful episode that would repeat often as my disease
progressed.
By the time I entered college there was little doubt that I
had a severe form of what is known as Type I Gaucher disease.
At the age of 23 I underwent orthopedic surgery to straighten
my leg and replace my destroyed hip. After a long recovery I
was able to walk without pain for the first time in years. This
respite lasted until 1988, when the implanted prosthesis became
painful and unstable, so again I underwent surgery and began to
experience complications that left me fighting for my life.
My red blood cell count was dangerously low due to a
reaction, depriving my bones of oxygen. I then began to
experience an ongoing cascade of bone infarcts, vertebrae
fractures, and a serious fracture of my other hip.
To head off further damage, my doctor suggested a surgery
of last resort known as a girdlestone procedure to repair my
hip. Few patients ever walk again after this procedure.
What happened next marked a historic medical breakthrough
that would change the course of my life and my disease. After
30 years of intensive scientific research, scientists at the
National Institutes of Health discovered a treatment for
Gaucher disease, and in April 1991, the Food and Drug
Administration approved a commercial version called Ceredase.
After 3 years of enzyme replacement therapy, my overall
health improved to a point where reconstructive hip surgery was
possible. In November 1994, after 7 years in a wheelchair, I
took my first real steps.
There is no question in my mind that I am alive today
because of the orphan drug Ceredase. What concerns many of us,
however, is that the miracle drug is priced out of the reach of
individuals, and thus poses unprecedented challenges for
patients who need the drug, for the doctors who treat us, for
employers struggling with the high cost of health insurance,
and for insurers and government programs helping to pay our
medical bills.
In 1994 most patients were converted to Cerezyme, the
Genzyme Corp.'s newly approved orphan drug, to replace
Ceredase. The cost of Cerezyme differs from patient to patient
because dosages are based on body weight. My dosing regimen is
60 units per kilogram of body weight for infusion. At 130
pounds, my treatment runs about $12,600 per administration, or
about $300,000 a year for 24 doses. An additional $25,000 in
cost is added for administering the drug and testing and
monitoring my response and overall health. This brings the cost
for all charges related to my treatment to over $328,000 a
year. Now, over a 16-year period since its approval in 1991, I
estimate that the payments for my drug have reached well over
$4.5 million.
In conclusion, the wave of the future in medicine is
biotechnology to treat rare diseases like mine and those
diseases affecting wider populations. There is no reason why
biogenerics cannot take their rightful place in America's
marketplace alongside generic drugs.
Based on some estimates, it is said that biogenerics could
save between 10 percent and 20 percent. If that holds true,
millions of dollars could be saved annually just for the 4,800
patients currently on Cerezyme.
Mr. Chairman, I want to thank you personally for
introducing your legislation. It is time to make safe and
effective life-saving biotech therapies accessible and
affordable to the millions who need them.
The Access to Life-Saving Medicines Act will create
competition in the marketplace and, in turn, foster innovation.
Hopefully a balance will be struck that encourages innovation
yet allows more affordable follow-on biologics to come to the
marketplace.
Thank you for your time and attention to my testimony.
[The prepared statement of Ms. Nathan follows:]
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Chairman Waxman. Thank you very much, Ms. Nathan.
Ms. Barnett.
Ms. Nathan. You are welcome.
STATEMENT OF NELDA BARNETT
Ms. Barnett. Mr. Chairman and members of the committee, I
am Nelda Barnett of AARP's Board of Directors. AARP appreciates
the opportunity to testify in support of creating a pathway for
generic biologics.
AARP has endorsed the Access to Life-Saving Medicine Act
because we believe this legislation will enable the FDA to
establish a process for the approval of safe, comparable, and
interchangeable versions of biologics. We call on Congress to
pass the legislation this year.
Biologics are used every day to treat serious diseases such
as cancer, multiple sclerosis, anemia, and rheumatoid
arthritis. While biologics hold great promise for treating some
of the most serious diseases, these treatments can be
expensive, costing tens and hundreds of thousands of dollars.
Some people are fortunate enough to have insurance coverage or
the means to be able to afford these medications, but many are
not so lucky.
Nothing illustrates how important it is that we have a
pathway to lower-cost generic versions than the stories of
millions of Americans who currently cannot afford high-priced
biologic drugs, such as we have just heard.
My colleague on AARP's board of directors, Bonnie Cramer,
could not be here today, but she has asked that I share with
you one particular story. Bonnie suffers from severe rheumatoid
arthritis, and over the years has undergone a variety of
treatment options, including a biologic drug, Enbrel, which has
helped her. Bonnie has encountered many people who suffer from
her condition who are not able to afford medication. One
particular woman was so affected by the disease that her
fingers were gnarled and she had difficulty walking and used
all of her energy just to get through the day. This woman
recounted how she was trying to find a way to get access to
Enbrel but could not due to the high cost of the drug.
Bonnie tells it best in her own words. She says, ``Having
lived with this disease for 40 years, I know how incapacitating
it can be and how the pain can be unbearable. I know what hope
biologics can give to someone whose life is affected. To know
that it cannot be obtained by other people with deadly diseases
is brutal. How do you tell someone that they cannot have a
treatment that may alter their lives significantly?''
The astronomical cost of these drugs not only impacts
consumers, but also health care payers such as employers,
private health care plans, public programs such as Medicare and
Medicaid. One way to control these costs is to provide a
pathway for the approval of generic versions of these drugs.
Any prescription drug therapy treatment must be affordable and
safe in order to be effective for individuals. H.R. 1038 leaves
the scientific determinations up to those who are best equipped
to address them, the FDA. Common sense, alone, tells us that
the agency that has the scientific knowledge to approve the
brand name biologics, surely has the ability to provide a
pathway for generic approval of the same biologic.
The Hatch-Waxman Act created a pathway for FDA to approve
generic prescription drugs. Twenty-three years later the time
has come for generic approval of biologics. H.R. 1038 provides
FDA the authority to produce the safe, comparable, or
interchangeable version of the biologic. Our members and all
Americans need Congress to enact this bipartisan legislation
this year. We are pleased to see this committee and Members
from both Houses of Congress and both sides of the aisle moving
forward on this issue.
Thank you again for inviting us here. I am happy to answer
any questions.
[The prepared statement of Ms. Barnett follows:]
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Chairman Waxman. Thank you very much, Ms. Barnett.
Ms. Mathur.
STATEMENT OF PRIYA MATHUR
Ms. Mathur. Good afternoon. Mr. Chairman and members of the
committee, I commend you for convening today's hearing and for
the introduction of bipartisan legislation to enable consumer
participation in the biopharmaceutical marketplace.
On behalf of the California Public Employees' Retirement
System [CalPERS], I welcome the opportunity to testify about
this issue of importance to our members, to our State, and to
our Nation.
Let me begin by introducing myself and CalPERS. My name is
Priya Mathur, and I was elected by 400,000 public sector
employees to serve on the board of CalPERS, to invest their
$230 billion of retirement assets, and to manage their multi-
billion-dollar health care program.
CalPERS' health program covers 1.2 million active and
retired public employees and their families. Notably, CalPERS
is the third-largest purchaser of employee benefits in the
Nation, behind only the Federal Government and General Motors,
and it is the largest purchaser of health benefits in
California.
This year CalPERS will spend almost $5 billion on health
benefits, or $13.4 million per day. Of that amount, CalPERS,
for the first time, will spend over $1 billion on members'
prescription drugs. At a time when our State is trying to
expand health insurance coverage to more Californians, slow the
rate of growth in health care costs, and make our health care
system more efficient, the high cost of biopharmaceutical
products presents an unsustainable challenge to calPERS and to
our entire health care system.
CalPERS has long been a leader in implementing cost
effective health care programs. Among many strategies, we have
instituted innovative prescription drug benefit cost-sharing
designs to maximize the use of generics and therapeutically
appropriate brand name drugs. CalPERS has actually achieved
tremendous success in controlling prescription drug costs
through the use of generics. This has been possible thanks to
the chairman, whose efforts two decades ago led to the
enactment of the Drug Price Competition and Patent Term
Restoration Act of 1984, what we call Waxman-Hatch.
As you well know, Waxman-Hatch gave the FDA the authority
to provide an abbreviated approval process for those products
deemed equivalent to an innovator product after patent
expiration. Without generic substitution, we estimate that our
costs would be about 60 percent higher than they are today.
Generics save our enrollees and our State taxpayers hundreds of
millions of dollars every year.
In spite of all of our cost containment efforts, CalPERS
has seen an average annual increase of about 13.5 percent for
our HMO and PPO products since 2002.
Mr. Chairman, CalPERS' spending for biotech products is
distressingly substantial and rising at a rate that is
significantly higher than traditional pharmaceuticals. Because
of the complex delivery requirements of many
biopharmaceuticals, it is exceedingly difficult to break out a
stand-alone spending line for these products. However, we
believe that our spending on so-called specialty drugs is a
good proxy, because biotech products make up the great majority
of spending in the specialty drug category.
Total spending for specialty drugs was $83.7 million in
2006, a 1-year increase of 16.9 percent, compared to a 5.4
percent increase in traditional prescription drugs. On average,
spending for biotech products was at least $55 per day,
compared to traditional drugs at only $2 per day.
CalPERS supports a competitive health care marketplace that
leads to innovation and life-saving medicines; however,
competition does not exist today because the FDA asserts that
it does not have the authority to approve biogeneric products.
As a result, today's biotech companies are benefiting long
after patents expire and are profiting at the expense of all
Americans.
CalPERS supports giving the FDA explicit authority to
approve biogeneric products that are safe. Without the ability
to access less-expensive comparable and interchangeable
biopharmaceuticals, CalPERS ultimately will be forced to raise
prescription drug co-pays or raise premiums, shifting the
increasingly unaffordable costs onto the individuals who can
least afford them.
Mr. Chairman, before I conclude I need to address one
important issue. The opponents of this legislation--as you
point out, they are limited to the biotech industry--are
claiming that those who support your legislation are ignoring
the safety threat of bringing biogenerics to the marketplace. I
want to be perfectly clear. The safety and health of our
members comes first in any decision we make on any health care
policy. Therefore, we strongly support providing FDA with full
discretion to make the ultimate decision about whether and when
any prescription drug product, be it brand name or generic,
comes to market. Your legislation does just that.
Mr. Chairman, CalPERS is proud to add our support to the
growing and diverse list of stakeholders who support your
legislation to open the door to biogeneric competition. Thank
you for giving us this opportunity.
I would be happy to answer any questions.
[The prepared statement of Ms. Mathur follows:]
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Chairman Waxman. Thank you very much for your testimony.
We are going to ask questions after everybody is finished.
Mr. McKibbin.
STATEMENT OF SCOTT MCKIBBIN
Mr. McKibbin. Thank you, Mr. Chairman, and thank you for
the opportunity to speak on behalf of Illinois Governor Rod R.
Blagojevich in support of establishing a pathway for generic
biopharmaceuticals.
I want to applaud Chairman Waxman for his vision,
recognizing that escalating cost of biopharmaceuticals to
States and consumers is creating an economic burden on
Illinoisans and State budgets nationwide. These costs will
continue to make it more difficult to balance cost control and
access for patients to affordable, life-saving
biopharmaceuticals, both in Illinois and in the Nation as a
whole.
Further, I would like to recognize Illinois Congressman
Emmanuel for his cosponsorship of H.R. 1038, the Access to
Life-Savings Medicine Act, and for supporting these important
measures.
In my present role as a Special Advocate for Prescription
Drugs, I have functional accountability for overseeing
prescription drug spending for the State of Illinois. I am also
a two-time kidney cancer survivor, and can speak personally
from experience on both the value and the cost of therapies
that treat such dreaded diseases as cancer.
I want to make it clear that I have a dual role as Special
Advocate. The State of Illinois, as every State, has a
responsibility to ensure that prescription drug pharmaceuticals
available to consumers are safe and effective, so I would like
to dispense with the issue of safety as a given for the
discussion of generic legislation.
While some in this debate are seeking to obscure the real
issue with inflammatory rhetoric about the potential lack of
safety of generic biopharmaceuticals, it is my position that
this legislation authorizes FDA to take those scientifically
sound steps that are appropriate to ensure the safety of
generic biopharmaceuticals.
I want to focus the bulk of my testimony on the reality of
biopharmaceutical costs and the value of generic competition in
this arena.
Illinois is a partner with the Federal Government in
providing and paying for prescription drugs. We are also
responsible for providing and nurturing a sound economy in our
State, one that does not allow health care costs to bankrupt
our State or to negatively impact employers or the overall
business climate of our State. To this end, Governor
Blagojevich has introduced a comprehensive program to expand
coverage to the 1.4 million uninsured between the ages of 19
and 64, and to offer relief to many of our residents who
struggle every day to pay for health care costs covered under
the existing insurance plans.
There is some debate as to whether the annual increase of
the cost of biopharmaceuticals is 15, 17, or 20 percent, but
the difference is, in fact, not material. If, as I believe and
my data will show, these expenditures for products are rising
at an average of slightly larger than 15 percent annually, then
within 5 years what Illinois spends on these drugs today will
double. That would have a dramatic negative effect. We would
not be able to afford these medications.
Many States probably don't realize the depth of what they
are spending now on biopharmaceuticals. According to IMS,
biopharmaceutical sales in 2006 grew to $40.3 billion. While
the spending has escalated, a debate over potential for generic
biopharmaceuticals has spanned four FDA Commissioners, all with
a variety of prioritization on how to establish a
biopharmaceutical generic approval process.
States need more than continued discussion on this issue.
We need action. Chairman Waxman's bill is a great first step in
actually getting us on the road to creating a framework to
permit generic competition and the savings it will create.
To understand the breadth and impact of spending on
biopharmaceuticals for Illinois, we examined the leading
products and what the State of Illinois spends on these
products. The results were staggering.
For our 227,500 member employee retiree group, the State of
Illinois spent $33.2 million on a select list of approximately
100 biopharmaceuticals during the fiscal year that just ended
July 2006. With that trend, this represents over 12 percent of
our entire cost for drugs, and is growing at an astronomical
rate both on the price and the utilization side of the ledger.
The ingredient cost increase was 49.9 percent, and the plan
cost per member was 50.3 percent.
The number of prescriptions for this select list of
biopharmaceuticals also rose significantly, a nearly 29 percent
increase. For programs administered under the State Medicaid
Agency, we have seen similar cost and utilization increases,
but on a much larger scale. For the most recent year in which
data is available, the cost of 61 biopharmaceuticals was
$1,662,000, paid for under the pharmacy benefit side, and an
estimated $75 million paid for under the medical and the Part D
wrap-around program. The grand total exceeded $200 million a
year, without trend.
Now, much has been said about the potential cost savings of
generic competition. Opponents to creating a pathway for
generic competition argue that the cost savings may be only 10
or 20 percent. But let's look at the worst case scenario, a 10
percent savings. If Illinois was able to reduce its 15 percent,
16 percent annual increase in spending on biopharmaceuticals by
even 10 percent, then we not only extend our ability to pay for
these drugs, but we also extend our ability to continue, under
State programs, to provide increased access to them.
The other issue to consider about savings is this--it
appears an obvious one from my perspective, but seems lost in
this debate. In the past year, biopharmaceutical expenditures
have increased at double digit rates. If we do nothing for the
rest of 2007, we will end the year even higher expenditures
associated with those biopharmaceuticals. Every day that we
delay in creating a pathway for generic competition is a day of
potential lost cost savings to States, to taxpayers, and to
consumers. We can not afford to wait any longer to begin the
savings, even if, as opponents predict, the savings would
initially only be modest.
Chairman Waxman. Thank you very much, Mr. McKibbin. Are you
just about to conclude?
Mr. McKibbin. I have just a few more words, Mr. Chairman.
Chairman Waxman. OK.
Mr. McKibbin. I appreciate it.
I would just like to urge Congress to approve this
legislation to authorize the FDA to apply sound scientific
regulatory criteria that would give Illinois and other States
and every consumer and taxpayer lower biopharmaceutical
products and increased access, the result from the cost
savings.
Thank you, Mr. Chairman.
[The prepared statement of Mr. McKibbin follows:]
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Chairman Waxman. Thank you very much for your testimony.
Dr. Grabowski.
STATEMENT OF HENRY GRABOWSKI
Mr. Grabowski. Thank you, Mr. Chairman and members of the
committee. I am Henry Grabowski, professor of economics at Duke
University.
My comments will focus on the differences between generic
drugs and follow-on biologics and how these differences affect
the expected budgetary savings. I also will discuss the
importance of data exclusivity for innovation incentives. With
my colleagues, I have examined these issues in two recent peer
reviewed studies. I will make these studies available for the
record, along with my statement.
Based on our analysis, we conclude that the cost of entry
will be significantly higher for follow-on biologics than
generic drugs. We expect fewer firms will enter, and average
prices will decline less for follow-on biologics. Consequently,
conservative budgetary scoring is appropriate in terms of
expected savings to the Government and to other payers.
Second, in designing a pathway for follow-on biologics it
is also very important that Congress balance price competition
and innovation incentives. In this regard, it is important to
include in the legislation a data exclusivity period that takes
account of the high cost and risk of developing new entities.
My statement provides data from a new study that is peer
reviewed and co-authored with Joe DiMasi in this regard. The
cost of R&D for a representative new biologic is now over $1
billion when one takes account of preclinical and clinical
expenditures, the cost of failures, the cost of capital, and
process engineering, which is higher for biologics than
pharmaceuticals.
So let me now briefly summarize some of the key differences
between follow-on biologics and pharmaceuticals that will
affect cost savings in scoring procedures.
The first is clinical trial cost. As we have heard earlier
today, some clinical trial data is going to be necessary to
demonstrate comparable safety and efficacy, at least for the
foreseeable future. In the case of European filings, the
estimates range from $10 to $40 million for preclinical
studies. This contrasts with $1 to $2 million costs for
bioequivalents for generic drugs.
Second is development times. Estimates from generic firms
indicate development times for a follow-on biologic are likely
to range from five to 8 years. By comparison, generic drugs
seldom require more than a few years to do required tests and
gain regulatory approval.
Third is manufacturing cost and risk. The required capital
investment in property, plant, and equipment and the cost of
manufacture are also likely to be significantly higher for
follow-on biologics.
Fourth, there are important differences on the demand side.
It is unlikely that most follow-on drugs will be designated as
interchangeable by the FDA, at least not for the foreseeable
future and without extensive clinical trials. As a result, we
expect the physicians will initially be cautious with respect
to the substitution of follow-on products. Health care
providers and patients are likely to be wary until clinical
experience has accumulated and shown that a follow-on product
is a satisfactory therapeutic alternative to the original
innovator products.
These costs and demand side differences have important
implications for entry and price competition. In our research,
we find the number of entrants and the priced discounts of a
follow-on biologic are highly sensitive to fixed cost. As a
consequence, even very large-selling biologics are likely to
have only a few entrants. For markets with only one to three
entrants, we project price discounts will be in the range of 10
to 25 percent. This is in accordance with European experience
to date.
These differences also have important implications for
scoring cost savings. In particular, cost saving estimates
based on the experiences of generic drug utilization and
pricing are subject to strong upward biases. A correct
accounting of this and all other relevant factors would
substantially lower the savings estimates in studies such as
that by Express Scripts and the PCMA.
A recent analysis by Avalier Health has very different
assumptions in some important dimensions, find much lower cost
savings.
The remainder of my statement covers R&D costs and
innovation incentives. I understand the bills under
consideration have no data exclusivity provisions or patent
restoration features for innovators. The fact that there is no
data exclusivity provision would allow generic firms to
challenge innovators' patents from the date of first marketing
approval and to enter the market soon thereafter. The resulting
uncertainty in IP litigation would have significant negative
incentive effects on capital market decisions for private and
public biotech firms with pipelines. Many of these firms are
entrepreneurial in nature and have few if any profitable
products.
The exclusivity period for pharmaceuticals under Hatch-
Waxman is 5 years. R&D costs have increased substantially since
Hatch-Waxman was enacted 20 years ago. Five years does not
provide enough time for firms to recoup the high cost of
discovering and developing a new medicine. Break-even returns
on R&D for the average new drug and biological product now
exceed more than a decade.
Since this legislation will essentially define the terms of
competition between innovators and imitators for decades to
come, it is critical that it maintains strong incentives for
R&D investment in new biopharmaceuticals, as well as provide
incentives for price competition.
A data exclusivity period of at least 10 years in length
would recognize the high cost and risk of developing new
biological entities and deter patent challengers from occurring
and entering until a more mature phase of the product life
cycle. This would also preserve incentives for the development
of new indications for existing drugs and harmonize U.S. law
with that of the European Union.
Thank you.
[The prepared statement of Mr. Grabowski follows:]
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Chairman Waxman. Thank you very much, Dr. Grabowski.
Mr. Houts.
STATEMENT OF JONAH HOUTS
Mr. Houts. Good afternoon, Chairman Waxman and fellow
committee members. My name is Jonah Houts. I am a senior
analyst with Express Scripts. I am pleased to be here today to
discuss the issue of biogenerics from the perspective of a
leading pharmacy benefit management company. Express Scripts
would like to thank the chairman for his leadership in
introducing this legislation, which we believe will
fundamentally improve health outcomes by giving patients access
to lower-cost biological alternatives.
Express Scripts monitors prescription drug trends and
expenditures for 1,600 clients, including large self-insured
employers, government payers, unions, and health insurance
companies. I would like to talk about three basic issues today.
First, I would like to speak about the trend of specialty drug
spending, especially biologic agents. Second, I would like to
describe the tools used by the PBM industry to control the
increase in cost of prescription drugs. Third, I would like to
describe how we would apply these tools to biogenerics and the
potential benefit to patients, plan sponsors, and the
Government.
Spending on pharmaceuticals now represents 11 percent of
total health care spending. Within the pharmaceuticals are
specialty drugs. These are the most high-priced biologic
agents, which we are discussing here today.
I brought an exhibit which may demonstrate the increased
growth here. In 2006, spending on specialty drugs was $54
billion, representing 20 percent of pharmaceutical spending.
The rate for specialty drugs will almost double by 2010 to $99
billion. This rate of increase is the second highest in all of
the health care field, exceeded only by diagnostic imaging
tests.
In total, Express Scripts manages the pharmacy benefit for
over 50 million individuals in this country. Our mission is to
make the use of prescription drugs safer and more affordable.
To this end, we have developed sophisticated tools, such as
formularies, tiered co-payments, step therapies, and drug
utilization management programs, just to name a few. These
tools promote the most clinically sound and cost effective use
of pharmaceuticals.
One of the most potent tools that we have is the promotion
of generic medications. These therapies are time tested and
thus are clinically effective. They also have well
characterized safety profiles. The additional advantage is that
they are the most affordable for both patients and plan
sponsors. For these reasons, patients achieve higher compliance
rates with these therapies. Utilizing programs like I
previously described, our company has an industry leading
generic fill rate of 60 percent.
But it is important to recognize that all of our programs
for promoting the use of generics or less expensive branded
medications are reviewed by our external pharmacy and
therapeutics committee. This committee is made up of both
specialty and general medicine doctors, and pharmacists who are
not employees of Express Scripts. Safety has and always will be
of primary concern to Express Scripts.
As we have stated, spending on biologic agents is
increasing at an alarming rate. This legislation will allow for
a pathway at the FDA for companies to bring to market generic
versions of these important medications.
The PBMs have the tools to assist patients in switching to
the most cost-effective biogenerics. In fact, our switching
tools will be even more effective in this market because of the
limited number of patients, the limited number of
prescriptions, the limited prescribing community, and the
potential for enormous savings. Our plan sponsors will be very
motivated to have us pursue each and every savings opportunity.
We are pleased to hear the FDA today not rule out
interchangeability in the future, but, regardless, if the FDA
deems a product is interchangeable or just comparable, will be
quite effective at working with the prescribing physician to
aid patients in receiving the most cost-effective and
clinically appropriate therapy.
In the realm of branded pharmaceuticals, drugs compete on
their research and development and marketing. It would be
irrational for branded drugs to compete on price, as they are
competing within a finite group of patients, and price
reductions would result in reduced revenues for all
manufacturers in the class. Generic drugs, however, can only
compete on price. Without this extensive research and
development, the only way for a generic to capture market share
is on price. This price competition benefits payers, plans, and
the Government.
This historic legislation would allow patients, payers,
physicians, and PBMs to work together to make these wonderful
therapies more available, with improved health outcomes and
tremendous savings.
[The prepared statement of Mr. Houts follows:]
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Chairman Waxman. Thank you very much, Mr. Houts.
I want to thank all of you for your testimony, especially
Ms. Brown and Ms. Nathan. Your very moving testimony is what
this legislation is all about. When drugs are miracles, but the
miracles are too expensive for people, they are not going to be
there for them, and that is why we need to figure out a way to
hold down costs. Providing generics is certainly, to me, one of
the best ways to hold down costs. Others have suggested other
ideas, but competition, market forces I think do work and have
worked in the past.
Ms. Mathur, I find it stunning that in California spending
on biologics or specialty drugs in 2006 was $83.7 million, and
that is at a cost of $55 per day, compared to $2 per day for
traditional drugs. If those kinds of spending trends are
maintained, what will be the impact on CalPERS and your members
in the future?
Ms. Mathur. I think we really are at unsustainable levels,
and what we fear is that in the future we will have to shift
more of the cost on to the member, either through increases in
co-pays or by raising premiums. We have already heard stories
from some of our members that, as the cost of health care
increases overall, they are less and less able to afford health
care, even through our program. I would hate to see some of our
members drop health care coverage that is available to them
simply because they cannot afford it.
Chairman Waxman. Dr. Grabowski asserts that the savings
from generic competition in the biologics context will be
modest, in the range of 10 to 25 percent. What would even those
modest savings mean for CalPERS? And let me ask this also of
Mr. McKibbin for Illinois.
Ms. Mathur. I'm sorry, Mr. Chairman. I thought you were
directing that to Mr. Grabowski.
Chairman Waxman. The 10 to 25 percent savings, Dr.
Grabowski says those are modest.
Ms. Mathur. Yes.
Chairman Waxman. What will that mean, however?
Ms. Mathur. I think it would be extremely significant. I
mean, the cost for some members, $300,000 a year, 10 to 15
percent or 10 to 25 percent is a significant savings. So even
though on a percentage basis the savings for biotech drugs or
biogenerics might be less than for synthetic drugs, it is
certainly, on an aggregate total cost basis, going to be a very
large number.
Chairman Waxman. Mr. McKibbin.
Mr. McKibbin. For Illinois, Mr. Chairman, we are talking
about $20 to $50 million, depending on when we start it, if we
start it this year. And those are numbers that come out of the
base, so, as you know, if this trend continues at 15 percent
plus, we, too, like California, will reach this point where it
is not sustainable, so we will either have to make those tough
choices of trying to pass more costs or to limit access, which
is untenable.
Chairman Waxman. Thank you.
Mr. Houts, one of the frequent assertions we hear from BIO,
the trade association for the brand name biotech drugs, is that
when a generic pathway for biologics is established we are not
going to see much in the way of savings because generic
biologics won't be interchangeable like they are with
traditional generic drugs. Obviously, we might disagree on the
number of biologics that will end up being interchangeable, but
assuming BIO is correct that a high number of biologics will be
just comparable instead of interchangeable, what kind of impact
will that have on spending on biologics?
Mr. Houts. There is still a significant savings
opportunity, even if interchangeability is not granted by the
FDA. Managed care plans and the PBMs, a recent example would be
in the statin market, where there was a high-priced, effective
statin, Statin A, and then a lower-priced and still effective
Statin B. While they were different chemical entities, we were
able to move market share to the cost-effective product.
We were actually able to move 49 percent of the market
share when they weren't interchangeable, as you will. And so
there is still a significant opportunity in the area of
biologics to move patients to the preferred safe, effective,
cost-effective products.
Chairman Waxman. Well, you said it would be safe. When
therapeutic switches are made, what process is in place to
protect patient safety?
Mr. Houts. All of those decisions are reviewed by our
pharmacy and therapeutics committee that I referred to in my
testimony, and this is composed of specialist physicians, and
other physicians to ensure that drugs in those classes will
have no adverse effects on patients.
Chairman Waxman. Thank you very much.
Mr. Danny Davis.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
Once again, let me thank you for calling and conducting
this hearing. It has, indeed, been informative, and I want to
thank all of the witnesses for their testimony. I especially
want to echo the sentiments that you expressed, Mr. Chairman,
relative to the impact of the testimony of Ms. Brown and Ms.
Nathan, consumers for whom all of us work. Hopefully, as a
result of their experiences and their testimony, the hearing
heightens the recognition that we must do something, and do it
as quickly as possible, to try and make sure that we have
available the very best and the most cost effective medical
care that the country can provide. So I certainly want to again
thank both Ms. Brown and Ms. Nathan for being here and for
their testimony.
Mr. McKibbin, let me just commend the Governor for the
State of Illinois. When I see the kind of interest that Rod
Blagojevich has shown relative to health care, and especially
the effort to try and make sure that pharmaceuticals are
available to all of our residents at a cost for which they can
pay, it makes me proud to live in the State of Illinois and
proud to know that he is, indeed, our Governor. Please convey
that to him.
Mr. McKibbin. I will.
Mr. Davis of Illinois. If I could direct your attention to
the chart located over here, which shows the five largest
Medicare Part B drug expenditures in 2005--and you may not be
able to see, but listed are all of the medicines listed of
biotech drugs that are regulated as biologics. Spending on
Epogen, an anemia treatment, alone, was over $1.7 billion, but
it was actually even higher than that, because those numbers on
the chart do not include spending on the end-stage renal
disease, ESRD program. Three of the other drugs are also anemia
treatments, and they collectively represent over $2.1 billion
in Medicare spending. Remicade, an arthritis medicine,
accounted for $541 million.
My question is: are we seeing those same kind of trends in
the State of Illinois? And in terms of State spending, what are
the five top biologics in the State of Illinois?
[The information referred to follows:]
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Mr. McKibbin. Well, Congressman, we are seeing those
similar type of numbers, and anyone who has a television will
recognize those drugs because they are fairly heavily
advertised, but those five drugs on your screen, I did a quick
analysis and we are talking about $23 million a year, a little
over $23 million for those five drugs on your particular chart.
For us, I took a look at the top five for just our State
employee retiree group, and those top five were Enbrel, Humira,
Avonex--which was talked about earlier--Lantus, and Forteo.
Those were the top five drugs from a total dollar amount. On a
per patient basis they are slightly different, but those five
drugs are our top five, and not dissimilar to your chart. In
some cases the difference may be because of Medicare and where
Medicare may cover, versus an employee group, but we are seeing
those similar types of trends.
Mr. Davis of Illinois. I know that all of us throughout the
country moan and groan and talk about the speculation of
Medicare and Medicaid and whether or not there are going to be
increases or decreases. Many of the hospitals kind of operate
on shaky ground every year. They are wondering whether or not
they are going to experience severe cuts.
Are they going to have to close departments or, in some
instances, actually go out of business? Should we continue to
see increases in pharmaceutical drug costs, what impact do you
think that would have on the hospitals, for example, in the
State of Illinois, as well as throughout the Nation?
Mr. McKibbin. Certainly, Congressman, it could be the
tipping point, and that is something that we are very concerned
about. I know yourself and others in the delegation are
concerned, and we would urge that this legislation be passed
sooner rather than later. As I said earlier, you know, every
day that goes by is a day that is a lost opportunity, and it
may be, in fact, a tipping point for hospitals in the Illinois,
metro Chicago, and the rest of the United States.
Mr. Davis of Illinois. Mr. Chairman, I see that the light
is on, but could I ask Mr. Houts if he could respond to that
same question relative to the continued escalation of
pharmaceutical costs without relief, how this will affect the
Medicare/Medicaid programs, and certainly their impact on our
hospital infrastructures?
Mr. Houts. It is not really a field of expertise for me as
far as government payers. What I can say is that there is an
exceptional opportunity for the Government in terms of Part B
and end-stage renal disease, especially looking at those top
drugs listed there, to save a pronounced amount of money. And
so, as you consider this legislation, you may want to find ways
to make Part B and the ESRD program more comparable to the
commercially insured market and adopt some of the tools we use
to manage trend.
Mr. Davis of Illinois. Well thank you very much.
Mr. Chairman, again, I just simply want to commend you for
your insight in introducing this legislation, the leadership
that you continue to provide. I have always known of your
strong interest in health care. You probably would not remember
it, but way back in a different life when I used to come to
D.C. to lobby on behalf of the National Association of
Community Health Centers, you were always the person that we
felt that we could come to and get some understanding. I mean,
Senator Kennedy over in the Senate and Representative Waxman
here in the House, you were our guys. I want to thank you
again.
Chairman Waxman. Thank you. Now you are one of our guys,
too. Thank you for your kind comments.
I very much appreciate all of our witnesses in this panel,
as in the previous panels.
I would like to ask unanimous consent that all Members have
5 days to submit additional questions for the record to the
witnesses that have appeared before us today.
That concludes our hearing, and our meeting is adjourned.
Thank you very much.
[Whereupon, at 1:29 p.m., the committee was adjourned.]
[The prepared statement of Hon. Elijah E. Cummings and
additional information submitted for the hearing record
follow:]
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