On March 23, 2010, President Obama signed into law a comprehensive health care reform bill, the Patient Protection and Affordable Care Act (PPACA; P.L. 111-148 ). PPACA establishes a new regulatory authority within the Food and Drug Administration (FDA) by creating a licensure pathway for follow-on biologics. This pathway is analogous to that which allowed for the approval of generic chemical drugs via passage of the Drug Price Competition and Patent Term Restoration Act of 1984 ( P.L. 98-417 ), often referred to as the Hatch-Waxman Act. This report provides a brief introduction to the relevant law, the regulatory framework at the FDA, the scientific challenges for the FDA in considering the approval of follow-on biologics, and a brief description of the biologics provisions in PPACA. Most biologics require special handling (such as refrigeration) and are usually administered to patients via injection or infused directly into the bloodstream. However, with no equivalent to the generic alternatives for chemical drugs, the cost of therapeutic biologics is often prohibitively high for individual patients. For example, the costs per year (in 2009) of some commonly used biologic drugs: Enbrel for rheumatoid arthritis, $26,000; Herceptin for breast cancer, $37,000; Rebif for multiple sclerosis, $40,000; Humira for Crohn's disease, $51,000; and Cerezyme for Gaucher's disease, $200,000. The generic drug industry achieves these cost savings by avoiding the expense of clinical trials, as well as the initial drug research and development costs that were incurred by the brand-name manufacturer. Economic Studies on Potential Savings

Economic studies on potential savings to the federal government over 10 years due to the use of follow-on biologics have ranged "between nothing and $14 billion." In the ANDA, the generic company establishes that its drug product is chemically the same as the already approved innovator drug, and thereby relies on the FDA's previous finding of safety and effectiveness for the approved drug. The FDA's position is that additional legislation is required to provide such a pathway under the PHS Act. Scientific Challenges

Comparing a follow-on protein with the brand-name product is more scientifically challenging than comparing generic and brand-name chemical drugs. For chemically synthesized drugs, which are relatively small molecules, the equivalence of chemical composition between the generic drug and innovator drug is relatively easy to determine. In many cases, current technology will not allow complete characterization of biological products. Another challenge for the FDA is determining whether the follow-on biologic is sufficiently similar to the brand-name biologic that the two products are interchangeable. Biologics Provisions in PPACA, P.L.
On March 23, 2010, President Obama signed into law a comprehensive health care reform bill, the Patient Protection and Affordable Care Act (PPACA; P.L. 111-148). PPACA establishes a new regulatory authority within the Food and Drug Administration (FDA) by creating a licensure pathway for follow-on biologics, also called biosimilars, and authorizing the agency to collect associated fees.
A biologic is a preparation, such as a drug or a vaccine, that is made from living organisms. A follow-on biologic, or biosimilar, is similar to the brand-name (innovator) product made by the pharmaceutical or biotechnology industry. In contrast to a biologic, most commonly used drugs are synthesized via a chemical process. Biologics often require special handling (such as refrigeration) and are usually administered to patients via injection or infused directly into the bloodstream.
The new regulatory pathway is analogous to the FDA's authority for approving generic chemical drugs under the Drug Price Competition and Patent Term Restoration Act of 1984 (P.L. 98-417). Often referred to as the Hatch-Waxman Act, this law allows the generic company to establish that its drug product is chemically the same as the already approved innovator drug, and thereby relies on the FDA's previous finding of safety and effectiveness for the approved drug. The generic drug industry achieves cost savings by avoiding the expense of clinical trials, as well as the initial drug research and development costs that were incurred by the brand-name manufacturer.
The cost of specialty drug products, such as biologics, is often prohibitively high. For example, the costs per year (in 2009) of some commonly used biologic drugs: Enbrel for rheumatoid arthritis, $26,000; Herceptin for breast cancer, $37,000; Rebif for multiple sclerosis, $40,000; Humira for Crohn's disease, $51,000; and Cerezyme for Gaucher's disease, $200,000. A pathway enabling the FDA approval of follow-on biologics will allow for market competition and reduction in prices, though perhaps not to the same extent as that which occurred with generic chemical drugs under Hatch-Waxman (P.L. 98-417).
In contrast to chemical drugs, which are small molecules and for which the equivalence of chemical composition between the generic drug and innovator drug is relatively easy to determine, a biologic, such as a protein, is much larger in size and much more complex in structure. Therefore, comparing a follow-on protein with the brand-name product is more scientifically challenging than comparing chemical drugs. In many cases, current technology will not allow complete characterization of biological products. Additional clinical trials may be necessary before the FDA would approve a follow-on biologic.
This report provides a brief introduction to the relevant law, the regulatory framework at the FDA, the scientific challenges for the FDA in considering the approval of follow-on biologics, and a brief description of the biologics provisions in PPACA. Economic studies on potential savings to the federal government over 10 years due to the use of follow-on biologics have ranged between nothing and $14 billion.