Obama plans to reduce market exclusivity to 7 years
President Obama is not giving up when it comes to trying to introduce competition to expensive drugs made by biotechnology, according to a report by the New York Times.
Tucked into the president’s deficit reduction plan was a proposal to reduce the market exclusivity offered to brand-name biologic drugs to seven years, down from the 12 incorporated in the 2010 federal health care legislation.
That would allow so-called generic versions of such drugs to reach the market sooner, saving an estimated $3.5 billion in federal health spending over 10 years, or a little over one-tenth of 1% of the $3 trillion the president’s deficit reduction plan is supposed to save in a decade.
Biologic drugs are proteins made in living cells, like Avastin and Herceptin for cancer and Enbrel and Humira for rheumatoid arthritis. Such drugs can cost tens of thousands of dollars a year and are not subject to the same rapid onset of generic competition as drugs made in chemical factories, like Lipitor and Prozac.
The biotechnology industry argued it needed 12 years of freedom from lower priced competition to recoup research and development costs. Any less, it argued, would retard innovation. The generic industry, as well as many insurers and employers who pay health care bills, said a much shorter period would suffice.
President Obama urged seven years as a “generous compromise.’’ But Congress, with bipartisan support, went with 12 years.
Now the president hopes for another chance. The proposal “is consistent with where the administration has been since Day 1,’’ a senior administration official said at a press briefing.
The FDA has yet to define the procedures for getting such generic biologic drugs, often called “biosimilars,’’ approved. But various generic drug companies and some big pharmaceutical companies are getting ready.