A Regulatory Approval Pathway for Biosimilars

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A Regulatory Approval Pathway for Biosimilars
April 2009
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Americas Biopharmaceutical Companies Have Made
Significant Contributions to the Health of
Americans
Companies in the vibrant biopharmaceutical sector
choose to headquarter their operations in the
U.S., in part, because favorable public policies
enable their success. Many federal and state
policies help biopharmaceutical companies achieve
a greater level of innovation, including
intellectual property protections and an ability
to provide returns to investors.
Emerging health threats and an aging and
increasingly sicker population drives the
critical need for further innovation.
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New Medicine Development is Lengthy, Costly, and
Risky
New medicine development is a lengthy process
The average development time has increased to
between 10 and 15 years.1

It is virtually impossible to find
other historical examples outside of the
biotech sector, at least at the industry
level, for which such a large fraction of new
entrants can be expected to endure such
prolonged periods of losses and for which the
vast majority may never become viable economic
entities.2 Gary Pisano, Harvard Business School
The RD process is very risky For every 5,000 to
10,000 compounds tested, just 5 will make it to
clinical trials and, of those, only 1 will
eventually receive FDA approval.
RD expenditures for each new biologic averaged
1.24 billion in 2006.1

Only 2 in 10 approved medicines bring in enough
revenue to recoup the average cost of development.
Individual company returns reflect the high risk
and long lead times inherent in drug discovery
and development.
Sources 1DiMasi, JA and Grabowski, HG. The Cost
of Biopharmaceutical RD Is Biotech Different?
Managerial and Decision Economics 469-79 (Jun.
2007) PhRMA. Drug Discovery and Development
Understanding the RD Process. (2007). 2Pisano,
GP. Science Business the Promise, the Reality,
and the Future of Biotech.
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Biopharmaceutical RD Creates Economic Growth and
High Value Jobs
Biopharmaceutical research companies are leaders
in todays knowledge-based economy, in which
growth and productivity are driven by investments
in innovation and RD.

Expanding GDP by Investing in RD The
pharmaceutical and biotechnology industry,
expands GDP by at least 27 billion annually, on
a permanent basis, for every one-time RD
investment of 15 billion.2
Scientific Engineering Jobs In 2004,
biopharmaceutical research companies employed
400,000 people, and generated economic growth
responsible for employing 2.4 million additional
people in other industries.1 In the
pharmaceutical industry, the number of science
and engineering jobs increased nearly 86 from
20002004, compared to a 16 increase for all
manufacturing industries.1


High Value Added per Employee Pharmaceutical
firms generated an average 425,529 in value
added per employee compared to 130,218 for all
manufacturing. 2

Source 1DeVol et al., Biopharmaceutical
Industry Contributions to State and U.S.
Economies, Milken Institute, October 2004 2R.
Shapiro, et al., Economic Effects of Intellectual
Property-Intensive Manufacturing in the United
States, July 2007.
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The Growing Importance of Biotechnology Medicines
Biotechnology medicines have been proven to be
safe and effective with an excellent record of
patient satisfaction and safety.
Biotechnology has produced more than 125
medicines including for some of the most serious
and intractable diseases.
In 2008, there were 633 biotechnology medicines
in development, including 254 for cancer and
related conditions and 162 for various infectious
diseases.
Developing a biologics full therapeutic
potential can take time. New treatment advances
are often realized from biologics that have been
on the market for some time, but which were not
known until additional research was conducted.
Source Biotechnology Research Continues to
Bolster Arsenal Against Disease with 633
Medicines in Development. PhRMA, 2008.
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The Complexity of Biologics Leads to Unique
Challenges for Biosimilars

• Development and manufacturing process is more
  complex than that for small molecule drugs
• Requires growing and harvesting the product from
  living cells
• Can take many months to produce
• Biologics are often dozens to thousands of times
  larger than
• chemical drugs
• Traditional generic drugs must be shown to be the
  same as the reference drug however, with modern
  science, follow-on biologics or biosimilars can
  only be similar to the reference or innovator
  biologic

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In Establishing a Regulatory Pathway for
Biosimilar Products, It Is Critical to
Appropriately Consider Scientific and Safety
Aspects

• Biosimilars will be highly similar to existing,
  approved biologic productsnot the same as
• Biosimilars must demonstrate safety and efficacy
  through clinical trials

Americas biopharmaceutical research companies
support the establishment of a science-based,
biosimilars regulatory approval pathway with
substantial incentives for innovation that
ensures patient safety and does not hinder the
development of future medicines.
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Points to Consider for Establishing a Regulatory
Approval Pathway for Biosimilars
Biologics are complex molecules with the
potential for critical medical advances.
Research and development for biologics is long,
costly and risky.
A regulatory approval pathway for biosimilars
must include adequate measures for assuring
patient safety.
At least 14 years of data exclusivity or data
protection must be part of any biosimilars
legislation to provide the certainty necessary
for continued RD investment leading to needed
medical advances.
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Regulatory Process for Biosimilars Should
Include Adequate Measures for Assuring Patient
Safety

• Because follow-on biologics may be similar but
  not the same as the reference product,
  biosimilars could have different safety and
  therapeutic profiles than the innovator product.
• Regulatory pathway must
• Require clinical trials to demonstrate safety and
  efficacy
• Require clinical trials for each indication
  unless otherwise scientifically justified
• Recognize that current science does not permit
  automatic substitution of one biologic product
  for another
• Different biologics may have different clinical
  and therapeutic effects in patients switching
  should be a conscious decision made by physicians
  in consultation with their patients

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Innovator Products Need At Least 14 Years of Data
Exclusivity

• Patent protection in the context of biosimilars
  is less certain than for traditional small
  molecule drugs.
• Competitors may be able to get around patents
  while relying on the innovator companys data for
  FDA approval
• Economic analysis of the time required for a
  portfolio of biologics to break-even on their RD
  investment indicates data protection for
  biologics should between 12.9 and 16.2 years.1
• Data exclusivity or data protection of at least
  14 years is necessary to provide the certainty to
  ensure continued RD investment in this sector
  based on economic analysis and the unique aspects
  of biologics, including the high costs and time
  required to build specialized facilities, the
  higher costs of capital and dependence on venture
  capital and other private sources of capital, and
  the robust research and development that
  continues after approval leading to medical
  advances in often very different disease areas.

Source 1 H. Grabowski, Data Exclusivity for New
Biological Entities, Duke University Economics
Department Working Paper, June 2007,
http//www.econ.duke.edu/Papers/PDF/DataExclusivit
yWorkingPaper.pdf.
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Writing an Effective Letter to Congress on
Biosimilar Legislation
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Americas biopharmaceutical companies support
health care reform that expands access to
high-quality, affordable health care for all
Americans, preserves patient and provider
choices, fights chronic disease and advances
medical innovation for the benefit of our
nations health and economy.
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DISCUSSION