Potential Federal Drug Savings Could Propel Biosimilars Bill

The potential for biosimilars to lower Medicare and Medicaid drug spending could help catalyze support for a follow-on biologics bill this year, a Capitol Hill staffer predicted at the Food and Drug Law Institute's annual conference March 26.

Congress could use lower federal drug expenditures resulting from a biosimilars bill to offset higher spending elsewhere, explained David Schmickel, who currently is on detail from the National Institutes of Health to the Senate Health, Education, Labor and Pensions Committee's Republican staff.

Under "pay-go" rules that the House applies to pending legislation, any new spending under a bill must be matched by a cut elsewhere or by a tax increase. The provision has stymied a number of bills; biosimilar legislation may be one of its less frequent beneficiaries.

Legislators eyeing new projects at FDA or NIH, for example, could "look to a bill like this and have a five-year savings that matches the five-year spending. That's motivation for a lot of members to get these things done," Schmickel said.

Any proposal that might decrease spending "is big news in Congress," agreed Generic Pharmaceuticals Association Associate VP of Government Affairs and Policy Lisa Layman. She joined GPHA earlier this year after 11 years as a Senate staffer.

She highlighted the cost of biologics to federal health programs by noting that in 2006, Medicare spent $2 billion on Amgen's Epogen. "That's $200 million more than FDA's entire departmental budget for that year." The Medicare Payment Advisory Commission recently cited erythropoiesis-stimulating agents as an example of the need for a generic biologics approval mechanism.

Even if savings from follow-on biologics turn out to be far less than some predictions, Layman said, "there are a lot of people for whom the savings are important - legislators who are struggling with the deficit and federal health programs, as well as patients."

Reps. Anna Eshoo, D-Calif., and Joe Barton's, R-Texas, introduction of a biosimilars bill has renewed momentum to tackle the issue.

The question now is whether the Eshoo/Barton legislation, H.R. 5629, is "enough of a consensus bill to move forward," Schmickel said.

The administration's request for legislation in its 2009 budget is another sign of growing support for action, according to Layman.

Schmickel compared H.R. 5629 to S. 1695, approved last year by the HELP panel, and the administration position enunciated by HHS Secretary Michael Leavitt in a letter to that committee, and acknowledged that some challenging issues still need to be resolved.

Exclusivity Period Remains Thorny Issue

For example, both the Senate and House measures would provide 12 years of data exclusivity to brand companies, but H.R. 5629 would add as much as 2.5 years for pediatric and new orphan indications. Ironing out an agreement here will be difficult, Schmickel predicted.

Another major issue is whether to require FDA to issue guidance before it reviews biosimilar products. The House bill would require such guidance in the name of transparency, a tack supported by the administration. S. 1695 would not mandate such guidance, in an effort to avoid more hurdles to product approvals, Schmickel said.

Nonetheless, the various positions are "not so different that you couldn't imagine that with hard work that we couldn't come to some agreement, some consensus to move forward," he concluded.

Elona Baum of Genentech suggested that bill passage is unlikely in 2008 because it is an election year. But Schmickel pointed out that 1984, when small molecule generics legislation was adopted, also was an election year. "We might have a small window in July and August to work on some compromise legislation," he said.

The next key step is whether leaders of the House Energy and Commerce Committee decide to move forward with legislative action.

Layman pointed out that "Since the holidays, it seems that almost everybody is in agreement that there is the ability to come up with a workable pathway for biogenerics and this is the time to do it, whether it's this year or next year."