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[Senate Hearing 110-375]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 110-375

                          FOLLOW-ON BIOLOGICS

=======================================================================

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                   ON

 EXAMINING FOOD AND DRUG ADMINISTRATION FOLLOW-ON BIOLOGICS, GENERALLY 
REFERRED TO AS A BIOTECHNOLOGY-DERIVED PROTEIN DRUG (OR BIOLOGIC) THAT 
  IS COMPARABLE TO A NOVEL, PREVIOUSLY APPROVED BIOLOGIC AND THAT IS 
     APPROVED WITH LESS SUPPORTING DATA THAN THE INNOVATOR BIOLOGIC

                               __________

                             MARCH 8, 2007

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                                 senate

                     U.S. GOVERNMENT PRINTING OFFICE

34-053 PDF                 WASHINGTON DC:  2008
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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

               EDWARD M. KENNEDY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut     MICHAEL B. ENZI, Wyoming,
TOM HARKIN, Iowa                     JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland        LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico            RICHARD BURR, North Carolina
PATTY MURRAY, Washington             JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island              LISA MURKOWSKI, Alaska
HILLARY RODHAM CLINTON, New York     ORRIN G. HATCH, Utah
BARACK OBAMA, Illinois               PAT ROBERTS, Kansas
BERNARD SANDERS (I), Vermont         WAYNE ALLARD, Colorado
SHERROD BROWN, Ohio                  TOM COBURN, M.D., Oklahoma
           J. Michael Myers, Staff Director and Chief Counsel
           Katherine Brunett McGuire, Minority Staff Director

                                  (ii)

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                        THURSDAY, MARCH 8, 2007

                                                                   Page
Kennedy, Hon. Edward M., Chairman, Committee on Health, 
  Education, Labor, and Pensions, opening statement..............     1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming, 
  opening statement..............................................     2
Clinton, Hon. Hillary Rodham, a U.S. Senator from the State of 
  New York, opening statement....................................     4
Hatch, Hon. Orrin G., a U.S. Senator form the State of Utah, 
  opening statement..............................................     4
Schumer, Hon. Charles E., a U.S. Senator from the State of New 
  York, opening statement........................................     5
    Prepared statement...........................................     8
Banwart, Sid, Vice President of Human Services, Caterpillar, 
  Peoria, Illinois...............................................    10
    Prepared statement...........................................    12
Siegel, M.D., Jay P., Group President, Biotechnology, Immunology 
  and Oncology, Research and Development, Johnson & Johnson, 
  Radnor, Pennsylvania...........................................    14
    Prepared statement...........................................    16
Rossignol, Nicholas, Administrator, European Commission 
  Pharmaceuticals Unit, Brussels, Belgium........................    26
    Prepared statement...........................................    28
Hussain, Ph.D., Ajaz S., Vice President and Global Head of 
  Biopharmaceutical Development, Novartis, Princeton, New Jersey.    32
    Prepared statement...........................................    33

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Prepared statements of:
        AARP.....................................................    56
        Coalition of State Rheumatology Organizations............    57
    Letters from:
        Interamerican College of Physicians & Surgeons...........    59
        Amyotrophic Lateral Sclerosis Association................    59
        Society for Women's Health Research......................    60
        Biotechnology Industry Organization (BIO)................    61
    Response to questions of Senator Kennedy by:
        Jay P. Siegel, M.D.......................................    62
        Nicolas Rossignol........................................    70
        Ajaz S. Hussain, Ph.D....................................    73
    Response to questions of Senator Enzi by:
        Jay P. Siegel, M.D.......................................    64
        Nicolas Rossignol........................................    71
        Ajaz S. Hussain, Ph.D....................................    74
        Sid Banwart..............................................    77

                                 (iii)

    Response to questions of Senator Bingaman by:
        Jay P. Siegel, M.D.......................................    66
        Nicolas Rossignol........................................    71
    Response to questions of Senator Burr by:
        Jay P. Siegel, M.D.......................................    67
        Nicolas Rossignol........................................    72
        Ajaz S. Hussain, Ph.D....................................    76
        Sid Banwart..............................................    78

 
                          FOLLOW-ON BIOLOGICS

                              ----------                              

                        THURSDAY, MARCH 8, 2007

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in Room 
SD-430, Dirksen Senate Office Building, Hon. Edward Kennedy, 
chairman of the committee, presiding.
    Present: Senators Kennedy, Reed, Clinton, Brown, Enzi, 
Gregg, Alexander, Burr, Hatch, Allard, and Coburn.

                  Opening Statement of Senator Kennedy

    The Chairman. We'll come to order. Whoever that wonderful 
person is--Dr. Rossignol from Brussels. Thank you very much. We 
want to thank our distinguished witnesses for joining today's 
hearing on the important question of whether Congress should 
give FDA the authority to approve follow-on versions of 
biologic medicines.
    We are in a remarkable period of discovery in the life 
sciences. Unprecedented advances are taking place and patients 
have already begun to see the benefits of this new era through 
new wonder drugs that can make the difference between life and 
death for patients afflicted with serious illnesses.
    Patients with leukemia once faced a bleak future now have 
new hopes, thanks to an extraordinary new medicine that can 
slow or even halt the progression of the disease.
    Until recently, a diagnosis of Gaucher's Disease meant a 
shorter life, full of disability and pain for the people it 
afflicted. Now, a remarkable breakthrough has produced drugs to 
treat this grave illness and extend life and reduce disability. 
Similarly, a drug to stimulate the production of new blood 
cells is helping patients counteract the severe anemia caused 
by chemotherapy or renal disease.
    These miracle medicines, called biologics, are complex 
molecules whose healing power has been brought to patients by 
dynamic biotech companies. Such drugs were once a rarity in the 
medical arsenal but each day seems to bring new hope from new 
breakthrough biologics.
    With this extraordinary progress comes a challenge to 
public policy. Due to the cost of developing and manufacturing 
new biologics, their price is often steep. They can cost 
patients tens or even hundreds of thousands of dollars a year, 
putting an extraordinary strain on the budgets of those who 
must pay the bills--patients, insurers and companies or 
government programs.
    Congress has faced similar challenges before. In the early 
1980's, the cost of prescription drugs was spiraling upward. In 
response, Congress enacted legislation that balanced the need 
to reduce costs for consumers through increased competition 
with the requirement to promote innovation. That legislation is 
known universally by the names of its sponsors, Senator Orrin 
Hatch and Representative Henry Waxman. Our committee is honored 
that Senator Hatch is helping guide our deliberations. Congress 
and the American people are indebted to his leadership on these 
important issues.
    When the Hatch-Waxman law was enacted, Congress did not 
include biologics because at the time, such drugs were not 
providing the major innovations and advances in the biological 
sciences have brought over the past 20 years.
    Now Congress must consider whether to authorize FDA to 
accept applications for follow-on versions of these path-
breaking medicines. The stakes riding on the answer to this 
question are enormous, both for patients and our economy and 
the interest among our committee colleagues in this question is 
intense.
    One of our colleagues, Senator Clinton, has a proposal to 
allow FDA to approve follow-on biologics. I look forward to 
hearing her views on this question and receiving the testimony 
of the legislation's cosponsor, Senator Schumer.
    Many have recommended that the committee's legislation on 
drug safety and user fees should include a proposal to allow 
follow-on biologics. Today's hearings will help provide the 
information the committee needs to make the right decision on 
that important question.
    Our committee should be guided by three basic principles. 
First, we must be led by the science. Acceptable legislation on 
follow-on biologics must not pre-judge science but should 
enable the FDA to make the best decisions based on the most 
complete science reasonably available.
    Second, protecting patient safety is essential. Congress 
must make certain that any drug given to patients, whether a 
conventional drug, an innovative biologic or a follow-on-
product is safe and effective.
    Third, innovation must be valued and promoted. Just as it 
is essential to help patients afford the medicines of today, so 
too it is vital to provide incentives for the innovations that 
will bring the medical miracles of tomorrow.
    I look forward to the recommendations and insights of our 
distinguished witnesses to provide guidance to our committee as 
we undertake these important deliberations.
    Senator Enzi.

                   Opening Statement of Senator Enzi

    Senator Enzi. Thank you, Mr. Chairman, for holding this 
important hearing and beginning an important discussion 
regarding follow-on biologics. Part of the reason we need to 
have this hearing today is for us to understand the complex 
issues surrounding follow-on biologics. It's also a good 
opportunity to educate the public about the critical and 
complex nature of the issue.
    Some will say that it is easy to think about providing a 
generic version of biologics, just like we provide generic 
versions of drugs. However, that assumes that all drugs are 
just like biologics. They aren't. Biologics are very complex 
molecules modeled after key processes occurring daily within 
the human body. If a drug was a 3-bedroom, 2-bath starter home, 
a biologic would be a skyscraper. The size and complexity of 
the items are just that different.
    Unlike drugs, which we can describe the structure with a 
high degree of precision, follow-on biologics elude similar 
scientific description.
    So, if I was to try to build a skyscraper of a biologic 
without the blueprints, as any generic company would have to do 
to create a follow-on biologic, I would have to ensure that 
every copy was identical to the last or there could be fatal 
results. Thus, we must ensure that the science drives any sort 
of safety standard. One girder out of place could cause the 
entire structure to fall.
    For all of their complexity, we can only imagine the 
potential of some of these potential miracle biologics, such as 
AIDs vaccine or cell therapy to cure diabetes. Today, some 
biologics are making it possible for thousands of Americans to 
live productive lives while others are changing the way we 
treat deadly diseases like cancer and infectious diseases. In 
the last 20 years, complex diseases such as multiple sclerosis 
and heart disease have been converted from virtual death 
sentences to manageable chronic conditions with the help of 
biologic drugs.
    Over 20 years ago, Congress enacted legislation that 
provided a framework for the creation of generic drugs, generic 
versions of small molecules. In creating that initial 
framework, Senator Hatch and others crafted the watershed 
Hatch-Waxman legislation, which balanced innovation, safety, 
and incentives to create an abbreviated pathway for the 
approval for small molecule drugs. However, that legislation 
intentionally did not directly address follow-on biologics 
because they were too new and too complex to fit within that 
framework.
    Now we're being asked to find an appropriate framework for 
the approval of follow-on biologics. In doing so, however, we 
must acknowledge the differences between drugs and biologics. 
In addition, any framework must acknowledge safety and preserve 
the fast pace of innovation.
    I urge my colleagues to consider the ramifications of the 
legislation. If we get this wrong, then we face two potential 
undesirable outcomes--either new biologics will not be 
available to provide the next cure for life-threatening 
diseases or individuals die as we rush products to market 
without considering the safety implications.
    We shouldn't rush a solution through Congress. We must take 
the time to fully consider other framework options, such as the 
European model for follow-on biologics. Any time we start 
legislating on complex scientific issues and don't know all the 
facts, we risk endangering lives.
    Again, I thank the Chairman for holding this hearing and 
the witnesses for agreeing to participate. I look forward to 
learning a lot today. Thank you.
    The Chairman. Thank you very much, Senator Enzi. I'm going 
to ask if Senator Clinton, prior to--she and Senator Schumer 
work very closely. She is a member of this committee and then 
perhaps if Senator Hatch, who's got a long--wants to say a 
word. We want to keep the hearing moving along but Senator 
Clinton, obviously, has been a leader in the Nation on 
healthcare, very much devoted not only to the broad healthcare 
policy issues but also healthcare in regard to children and is 
interested in the quality issues. We work with her on the 
issues on information technology and this area of biologics as 
well and if she'd be good enough to say a word and then I'll 
introduce our first witness.

                      Statement of Senator Clinton

    Senator Clinton. Thank you very much, Mr. Chairman and I 
want to thank you and Ranking Member Enzi for holding this 
hearing and I want to welcome my friend and colleague on this 
important issue, Senator Schumer. We have recently introduced 
the Waxman-Schumer-Clinton legislation to create a legal 
pathway for the approval of safe and effective follow-on 
biologics. And I would certainly underscore the concerns that 
Senator Enzi just enumerated. This obviously has to be done 
with great care and thoughtfulness but as I read the testimony 
last evening, I was struck by how far the discussion has come. 
There is finally acknowledgement that the science supports an 
abbreviated pathway for follow-on biologics, something many 
experts have asserted for years.
    So, Mr. Chairman, we are finally at a place where we are 
debating how, not if and it will be up to this committee to 
decide when. Certainly the stakes are very high because the 
cost of biologics are a major and increasing proportion of our 
healthcare costs in America.
    I'm not suggesting that this will be easy but we know from 
the previous efforts of this committee, certainly the Hatch-
Waxman effort, where many of the same concerns and complaints 
were raised that if we work together and we do follow the 
science, we can devise appropriate legislation.
    Our challenge is to sort through concerns with the Schumer-
Clinton legislation, to separate those that are legitimate from 
those that are designed to erect barriers to the approval of 
safe and effective follow-on biologics.
    So Mr. Chairman, this hearing starts that process. 
Certainly Senator Schumer and I believe we can cut costs, cut 
red tape, cut down barriers between people and safe, life-
saving medicines and we are determined to work with everyone on 
both sides of the isle to accomplish this critical goal.
    So I look forward to the hearing and I thank the Chairman 
and Ranking Member for holding it.
    The Chairman. Thank you very much, Senator Clinton. If it 
is agreeable with our colleagues, Senator Hatch has been a 
particular leader in this complex area that affects families to 
such a great degree and we appreciate both his presence here 
and his involvement on this issue. If he wanted to say a word, 
that would be great.

                       Statement of Senator Hatch

    Senator Hatch. Thank you, Mr. Chairman and also Senator 
Enzi. I appreciate being here. Senator Schumer, we appreciate 
the work you're trying to do on this. This is a very important 
area. As you know--as everybody knows, Hatch-Waxman, Waxman-
Hatch--whatever you want to call it----
    The Chairman. How do you call it?
    [Laughter.]
    Senator Hatch. I usually call it Hatch-Waxman. I noticed 
that Hillary calls it Waxman-Hatch but to make a long story 
short, it's been a very important bill because it's saved at 
least $10 billion for consumers every year since 1984 and 
today, scientists tell me it is saving much more than $10 
billion a year.
    But we have do it right because follow-on biologics are a 
much more difficult thing to duplicate. And I think it is going 
to be very important--this hearing is a very important hearing 
to me and I think it is important to all of us. I personally 
appreciate the work that my friend, Henry Waxman and Senator 
Schumer and Senator Clinton have done. I don't quite agree with 
what they've done so I haven't agreed to sign on to that 
particular bill but I think they have brought everybody's 
attention to how important this really is.
    I'm also very interested, Mr. Chairman, as you've made 
arrangements to talk about the European Union approach towards 
these issues. I think they have some very, very substantial 
ideas that we should certainly give every consideration to and 
we are giving consideration to and I, in particular, Mr. 
Chairman, and the Ranking Member, Senator Enzi, I am in 
particularly in your debt for taking this seriously and in 
meeting with you regularly, we're finding that I think we can 
maybe do some things here that are going to be very important 
in pushing biologic work forward, especially follow-on 
biologics. So I'm grateful to you, I'm grateful for this 
hearing and I look forward to hearing our witnesses.
    The Chairman. Thank you very much. We welcome Senator 
Schumer, a long time champion of helping make breakthrough 
medicines more affordable for families, use the principle 
democratic sponsor of the Schumer-McCain legislation on generic 
drugs that was approved by this committee in the 107th 
Congress, today appears before the committee to speak on 
follow-on biologics. He and Senator Clinton and a bipartisan 
group of Senate colleagues have introduced legislation on this 
subject that is being studied closely by our committee. So we 
welcome him to our committee and thank him for taking the time 
to appear. We understand he's got pressing business, so we can 
submit questions if we have questions to him. Wouldn't you like 
to be able to question.
    [Laughter.]
    Senator Schumer. Why not? Everyone else does.
    The Chairman. Everybody else does. Senator Schumer, we're 
delighted. This is very, very important and I know how 
interested you've been on this subject and we look forward to 
hearing from you.

STATEMENT OF CHARLES E. SCHUMER, A U.S. SENATOR FROM THE STATE 
                          OF NEW YORK

    Senator Schumer. Well, thank you, Mr. Chairman and I want 
to thank you for not only being gracious as always in allowing 
me to testify here today but for holding a hearing on this 
issue. I thank the whole committee for your work, just for my 
colleagues on the Republican side. Senator Clinton, I believe, 
was there but in one of our caucuses, Senator Kennedy was 
outlining the work that is just ahead in this committee over 
the next month or two and it seemed like about three quarters 
of the agenda that America faces. So I very much appreciate the 
work that the committee has done under your and Senator Enzi's 
leadership, Mr. Chairman.
    I also want to, of course, thank my colleague, Senator 
Clinton. This is another issue where we're working together and 
her intelligence and caring on so many issues in healthcare and 
across the spectrum once again, come through in this area and I 
thank you. And my good friend, particularly, Senator Hatch, who 
along with Senator Waxman in the Hatch-Waxman Act--I think it 
is probably one of the most important pieces of legislation 
passed in the last 25 years of the previous century for the 
good it has done. It has saved countless lives because people 
could afford drugs that they might not have been able to.
    Anyway, just thinking back to Hatch-Waxman, if you look at 
the record, I was in the Congress then but not involved at all. 
I was a new Congress member but you look at all the objections 
that people raised when Senator Hatch and Congressman Waxman 
started their legislation. They were told the science wasn't 
there. They were told generic drugs would put the safety of 
consumers at risk and other issues. But their opponents were 
wrong and are wrong today when they make the same arguments 
about follow-on biologics.
    As Senator Clinton has correctly outlined just a minute 
ago, the science is there now. We know how to do this. We can 
have discussions about when to do it and the way to do it but 
we know how to do it and we should. Biologics, of course, are a 
large and growing sector of the pharmaceutical market, provide 
treatments for devastating diseases, cancer and its 
complications. It provided some of the most important 
innovations in medicine in the last 100 years. But the 
innovations are only useful if there is competition in the 
market that lowers the price and makes them available to 
average folks, just as Hatch-Waxman did for chemical drugs.
    Treating the patient with a biologic drug can cost $100,000 
a year, total cost to the nation, $32 billion. If introducing 
competition in this market lowers the price of biologics even 
by only 10 to 25 percent, the savings are astronomical. Studies 
have estimated the potential savings for Waxman-Schumer-Clinton 
bill are tens of billions of dollars every year, similar to the 
savings that Hatch-Waxman now give us.
    And obviously the science, as Senator Enzi has mentioned, 
is complicated. Biologics are not chemical drugs. It's much 
more complicated. We agree completely, we're not going to see 
all the savings at once but currently, the FDA's hands are 
tied. They don't have statutory authority to approve a lower-
cost biologic product even if all the evidence is there to show 
the product is just as safe, pure and potent as the innovator's 
product.
    So to get the process started, we believe we must provide 
the FDA with authority to act and this is the first step long 
overdue and it's what our bill does. Now there is a great deal 
of debate generated by our legislation. That's good. Certainly 
none of us wants a new law that doesn't adequately protect 
either the consumer or the health of the patient and we don't 
want a law that stifles innovation by making biologic drugs 
unprofitable. That would make no sense whatsoever. So there is 
a lot of balancing that has to be done here.
    Now my time is brief so I just want to make two points, one 
on the EU system and the other on patents. I want to welcome 
Mr. Rossignol from the EU to this hearing because the EU has 
already moved forward on approving what they refer to as 
biosimilars and I think their experience is valuable but I 
would urge the committee to consider this experience carefully. 
There may be valuable lessons to be learned from a system that 
is already in place but we must fully understand how that model 
might work in our own market. First, we should understand how 
the EU system came to be and how it worked in practice. As it 
stands today, the EU has a highly regulated process in place 
that has arguably, at least and unnecessarily burdensome to 
competitors and here's the interesting fact. It has only 
resulted in two approvals to date. This process was not 
established by legislation that was passed by the European 
equivalent of Congress, however. The statute that created a 
pathway to biosimilars in the EU was written in broad language, 
which gave Europe's equivalent of the FDA discretion to flesh 
out the details. So when I think about the EU model, I agree we 
should pass legislation that would give the FDA the discretion 
but why would the United States want to deprive the FDA of the 
ability to draft its own regulations and force them to swallow 
a complex set of regulations that has been created by another 
government, a system of government that has a different way 
than ours. It has price controls and the EU's generic market is 
not as robust as the market that Senator Hatch and Congressman 
Waxman created.
    Finally, on patents--just for a moment. As I mentioned 
earlier, we have to strike a balance between rewarding 
innovation and increasing access to lower cost pharmaceuticals. 
Many people inside this room, outside this room have ideas 
about how that would happen. The only thing I want to point out 
before I conclude is that when Hatch-Waxman was passed, it 
struck a bit of balance between the innovators and the generics 
for traditional chemical changes but created an imbalance for 
biologics. It gave the biologic manufacturers the same 5-year 
patent extensions that chemical manufacturers received and gave 
them the same access to 7 years of exclusivity under the Orphan 
Drug Act but did not set up an abbreviated pathway for the 
approval of biologic competitors.
    Therefore, I would argue that Waxman-Schumer-Clinton is not 
imbalanced but rather is restoring a balance in a sector of the 
pharmaceutical market that has never faced competition. So I 
know that some colleagues think we're moving too quickly. I 
think those of us on our bill think we haven't moved quickly 
enough. We've waited years for the FDA to issue White Paper or 
guidelines. The science is there. The groundwork has been laid 
and of course, every day we deny the FDA this authority, it 
means more delay in savings on vital medicines and again, I 
thank the Chairman and would be happy to answer any questions 
in writing.
    [The prepared statement of Senator Schumer follows:]

                 Prepared Statement of Senator Schumer

    Thank you, Mr. Chairman, for allowing me to testify before 
the committee today, and for holding a hearing on this very 
important issue.
    I am the sponsor, along with my friend Senator Clinton here 
in this committee and with Congressman Waxman in the House, of 
the Access to Life-Saving Medicine Act, which would establish a 
pathway for competition in the market for biologic products.
    As I sit here today, I'm reminded of the laudable work of 
my colleague Senator Hatch here and of Congressman Waxman to 
establish the first pathway for competition in the chemical 
drug market over 20 years ago.
    Back then, they were told that the science wasn't there. 
Back then, they were told that generic drugs would put the 
safety of consumers at risk. But their opponents were wrong 
then, and are still wrong today when they make the same 
arguments about follow-on biologics.
    Mr. Chairman, biologics are a large and growing sector of 
the pharmaceutical market. They provide treatments for 
devastating diseases such as cancer and its complications, and 
have provided some of the most important innovations in 
medicine in the last 100 years. But these innovations are only 
useful to the public if there is competition in the market that 
lowers the price and makes the drugs available to everyday 
people.
    Treating a patient with a biologic drug can cost $100,000 
per year, at a total cost to the Nation of $32 billion per 
year. Even if introducing competition to this market only 
lowers prices of biologic drugs by 10 percent to 25 percent, 
the savings on products this expensive will still be 
astronomical. Studies have estimated the potential savings of 
the Waxman-Schumer-Clinton bill at tens of billions of dollars 
every year.
    We know that this field of science is complicated. We know 
that we won't see the savings all at once. But currently, FDA's 
hands are tied, and they have no statutory authority to approve 
a lower-cost biologic product even if all the evidence is there 
to show that the product is just as safe, pure, and potent as 
the innovator's product. To get this process started, we must 
provide FDA with the authority to act, and this first step is 
long overdue.
    That's exactly what our bill does. The Access to Life-
Saving Medicine Act gives FDA the authority to approve follow-
on biologics and the discretion to determine what kind of 
information is needed to ensure that they are safe and 
effective.
    I understand that a great deal of debate has been generated 
by this piece of legislation, and I welcome it. Certainly none 
of us wants a new law that does not adequately protect the 
consumer, or a law that stifles innovation by making biologic 
drugs unprofitable for the brand industry.
    So as we move forward with this debate, I would like to 
make two points, one on the EU system, and the other on 
patents.
    I'd like to welcome Mr. Rossignol from the European Union 
to this hearing, and since the EU has already moved forward on 
approving what they refer to as ``biosimilars,'' I think their 
experience is valuable.
    But I would urge the committee to consider this experience 
carefully. There may be valuable lessons to be learned from a 
system that is already in place, but we must fully understand 
how that model might work in our own market.
    As it stands today, the EU has a highly-regulated process 
in place that has arguably been unnecessarily burdensome to 
competitors and has only resulted in two approvals to date. 
This process was not established by the legislation that was 
passed by the European equivalent of Congress, however. The 
statute that created a pathway to biosimilars in the EU was 
written in broad language which gave Europe's equivalent of the 
FDA discretion to flesh out the details.
    So when we think about this model, I agree that we should 
pass legislation that would give the FDA the discretion to 
establish a scientific approval process as they see fit. But 
why would the United States of America deprive the FDA of the 
ability to draft its own regulations, and force them to swallow 
a complex set of regulations that has been created by another 
system of government? A system of government, I might add, that 
has price controls and a generic drug market that is not as 
robust as our own.
    And finally, I'll spend a moment on patents. As I mentioned 
earlier, we need to strike a balance between rewarding 
innovation and increasing access to lower-cost pharmaceuticals.
    I'm sure many people in and out of this room have ideas on 
how they'd like that to happen.
    But let me just point out that in 1984, when the Hatch-
Waxman law was passed, it struck a balance between the 
innovators and the generics for traditional chemical drugs, but 
also created an imbalance for biologic drugs.
    It gave biologic manufacturers the same 5-year patent 
extension that chemical manufacturers received, and also gave 
them the same access to 7 years of exclusivity under the Orphan 
Drug Act, but did not set up an abbreviated pathway for 
approval of biologic competitors.
    Therefore, I would argue that the Waxman-Schumer-Clinton 
bill is not imbalanced, but rather is restoring balance in a 
sector of the pharmaceutical market that has never faced 
competition.
    I know that some of my colleagues are concerned that we are 
moving too quickly. I am concerned that we have not moved 
quickly enough. We have already waited for years for the FDA to 
issue a white paper on follow-on biologics. The science is 
there, the groundwork has been laid, and every day that we deny 
the FDA this authority means more delay in savings on vital 
medicines for consumers.
    Thank you, Mr. Chairman.
    The Chairman. Seriously, we thank you for a very thoughtful 
presentation on a complex issue but one of enormous importance 
to people. We thank you very much.
    Senator Schumer. Thank you.
    The Chairman. We'll have a panel now and ask Mr. Sid 
Banwart, Vice President of Human Services for Caterpillar and 
is responsible for the compensation benefit for Caterpillar's 
95,000 employees worldwide. Mr. Banwart joined Caterpillar in 
1968, served in numerous positions throughout the organization. 
Mr. Banwart also chairs a National Coalition for the Human 
Resource Policy Association to create a new, transparent model 
for purchasing pharmaceutical drugs.
    Dr. Nicolas Rossignol is a Senior Administrator of the 
European Commission Unit responsible for the implementation of 
the EU pharmaceutical legislation. He is in charge of all 
issues related to the biological medicines and since 2003, has 
been responsible for the implementation of an EU regulatory 
framework on follow-on biologics. He also represents the 
European Commission in technical discussions on follow-on 
biologics held by the World Health Organization. We thank you 
very much for joining us from Brussels this morning.
    Dr. Jay Siegel is a Group President of Research and 
Development at Johnson and Johnson Pharmaceutical. He is 
responsible for the oversight of research and development in 
biotechnology, immunology and oncology. Prior to joining J&J in 
2003, Dr. Siegel was at FDA Center for Biologics, the 
evaluation of research for 20 years. Dr. Siegel also has a 
special connection to the Kennedy Office. He is married to Dr. 
Mona Safroty, who worked on my health staff for many, many, 
many years and is now serving with the station on the faculty 
of the George Washington University of Public Health. So we 
welcome Dr. Siegel once again to our committee room.
    Dr. Ajaz Hussain is Vice President and Global Head of 
Biopharmaceutical Development at Novartis with a responsibility 
for the development of follow-on biologics. Before joining 
Novartis, Dr. Hussain served as the Deputy Director of the 
Office of Pharmaceutical Science in FDA Center for drug 
evaluation and research, where he had oversight responsibility 
for the development of science-based regulatory policies. I'm 
very grateful to you.
    So Mr. Banwart, we'd be glad if you'd be good enough to 
start off. We welcome the opportunity--we thank all of you for 
joining with us.

  STATEMENT OF SID BANWART, VICE PRESIDENT OF HUMAN SERVICES, 
                 CATERPILLAR, PEORIA, ILLINOIS

    Mr. Banwart. Thank you, Chairman Kennedy, Senator Enzi and 
other members of the committee. I'm pleased to present 
testimony on behalf of Caterpillar regarding the need to 
establish an abbreviated science-based regulatory pathway for 
approval of biogeneric products within the FDA.
    We commend you for your swift action in holding this 
important hearing to begin the process to apply balance and 
competition in the biotechnology market. My name is Sid Banwart 
and I'm the Vice President at Caterpillar responsible for the 
Global Human Services Division, which does include compensation 
and benefits.
    As the world's largest manufacturer of construction and 
mining equipment, engines and related services, Caterpillar has 
95,000 employees worldwide, is a major U.S. manufacturer and is 
a leading exporter, with some $10.5 billion worth of U.S. built 
products shipped around the world in 2006. Caterpillar's 
ability to maintain our position of market leadership depends 
on our success in attracting and retaining top talent and we 
use our benefits package to recruit the best and brightest from 
some of the top schools in the country, to assure the future of 
Team Caterpillar.
    We are continuing to take positive measures, many positive 
measures to keep our employees and retirees healthy while 
managing cost. Last year alone, we spent more than $600 million 
in the United States for comprehensive healthcare benefits for 
Team Caterpillar. We strongly encourage a vigorous and 
competitive prescription drug market, one in which innovation 
leads to new lifesaving medicines. We recognize that one 
important element of innovation is patent protection but at the 
end of the patent term, we welcome competition in the 
marketplace.
    Currently, there is no opportunity for competition once a 
patent has expired on brand biotech drugs because the FDA does 
not have clear authority to approve biogeneric products and--
let me be clear here--by biogeneric, I mean a lower cost 
alternative, whether the industry parlances comparable or 
interchangeable or therapeutic equivalent or generic, we want 
an abbreviated process that results in biogenerics.
    So I appear before you today to urge this committee to find 
a bipartisan solution to create an appropriate regulatory route 
for FDA review of biogenerics. We believe any solution should 
grant the FDA authority to use its discretion and scientific 
expertise to evaluate interchangeable and comparable biogeneric 
products while ensuring patient safety. One of the most 
important healthcare laws enacted over the past 30 years was 
the Hatch-Waxman Act. This law saves patients, employees and 
payers billions of dollars every year and we thank you, Senator 
Hatch, for your leadership.
    Now it's time for an important next step, to create a 
similar process to spur competition within the biotechnology 
market. In 2006, Caterpillar's prescription drug costs were in 
excess of $151 million, accounting for more than 25 percent of 
our total healthcare spending and while biologics currently 
account only for 3 percent of the total drugs utilized, they 
account for 12 percent in terms of the dollars spent and these 
biologics have increased in cost 45 percent just since 2004. 
This is our single fastest growing category of health cost and 
the trend is simply not sustainable.
    Caterpillar encourages the committee to consider five key 
principles, which I've expanded upon in my written testimony, 
as you begin to develop legislation. Protect and promote fair 
and open competition. Two, provide a definitive pathway for the 
approval of biogenerics. Three, encourage consistent and 
uniform terminology. Four and this is very important in my 
mind, increase the resources for the FDA. Five, include new 
legal authority for a biogeneric pathway in your must-pass 
legislation this year.
    In conclusion, I'm pleased that the Senate HELP Committee 
is considering issues like biogenerics that can make a positive 
impact on our health care system and would provide public and 
private benefits in terms of additional certainty in 
forecasting for healthcare spending and as already has been 
said, overall cost savings. So thank you to the members of the 
committee who have taken an active interest in understanding 
the important role of the FDA to use its scientific judgment to 
approve biogeneric products.
    Chairman Kennedy, Senator Enzi, we appreciate your 
leadership and that of others on the committee who have been 
out front on this issue. More Americans should be given access 
to these important innovations and we encourage you to support 
a marketplace that has fair and open competition. Thank you for 
this opportunity to testify today.
    [The prepared statement of Mr. Banwart follows:]
                   Prepared Statement of Sid Banwart
                              introduction
    Chairman Kennedy, Senator Enzi and other members of the committee, 
I am pleased to present testimony on behalf of Caterpillar regarding 
the need to establish an abbreviated, science-based regulatory pathway 
for the approval of biogeneric products within the Food and Drug 
Administration. We commend you for your swift action in holding this 
important hearing to begin the process, launched by the bipartisan 
efforts of Senators Schumer, Clinton, Stabenow, Leahy, Vitter, and 
Collins, to apply balance and competition within the biotechnology 
market.
                         caterpillar background
    My name is Sid Banwart. I'm vice president at Caterpillar where I 
have responsibility for the company's Human Services Division, which 
includes Compensation and Benefits.
    As the world's leading manufacturer of construction and mining 
equipment, diesel, natural gas and turbine engines, and related 
services, Caterpillar employs nearly 95,000 employees worldwide, is a 
major U.S. manufacturer and leading exporter with some $10.5 billion of 
U.S.-sourced product shipped around the world in 2006.
    Caterpillar is able to be a leader in the global marketplace 
utilizing its strong U.S. manufacturing base because we make 
competitive products that are known for their quality and durability. 
But our ability to remain a market leader depends on our success in 
attracting and retaining top talent. We use our benefits package to 
recruit the best and brightest from some of the top schools in the 
country and consider those new grads to be the future of Team 
Caterpillar.
                           health care story
    To ensure our company is well positioned in that future, we are 
continuing to take aggressive measures to keep our employees and 
retirees healthy, while managing cost. As you know, the escalation of 
health care costs is a top concern for U.S. business executives, and we 
at Caterpillar are no exception. Last year alone, we spent more than 
$600 million in the United States for comprehensive medical, dental, 
vision, and prescription benefits.
    To manage our costs, we've taken action on both the wellness and 
cost sides of the equation. On the wellness front, Caterpillar has in 
place an award winning health promotion program, disease management 
systems, and our Work.Life.Solutions program to promote a balanced 
lifestyle. On the cost side, we've established preferred hospital 
groups, physician networks and a pharmacy benefit management 
arrangement to ensure the best possible rates and enhanced transparency 
in pricing.
                 view on prescription drug marketplace
    Caterpillar strongly supports a vigorous and competitive 
prescription drug market, one in which innovation leads to new life-
saving medicines. Currently there is no opportunity for competition in 
the marketplace once a patent has expired on brand biotech drug 
products because the Food and Drug Administration (FDA) does not have 
clear authority to approve biogeneric products. I appear before you 
today to urge this committee to find a bipartisan solution to create an 
appropriate regulatory route for FDA review of biogenerics. We believe 
the solution should grant the FDA the authority to use its discretion 
and scientific expertise to evaluate interchangeable and comparable 
biogeneric products while ensuring patient safety.
                            hatch-waxman law
    One of the most important health care laws enacted over the past 30 
years was the ``Drug Price Competition and Patent Term Restoration Act 
of 1984,'' commonly known as the ``Hatch-Waxman'' law. As Senator Hatch 
knows so well, this landmark legislation broke important new ground in 
granting FDA the authority to approve generic versions of prescription 
products. Hatch-Waxman also gave FDA express authority to provide an 
abbreviated approval process for those products deemed equivalent to 
the prior approved product. It is estimated that this law saves 
patients and payers billions per year--and we thank you, Senator Hatch, 
for your leadership in this important area, as well as your recent 
commitment to work to pass legislation this year to spur competition 
within the biotechnology market.
     consumers and purchasers will benefit with greater innovation 
                        and greater competition
    Total spending on prescription drugs in 2006 is estimated at $213.7 
billion and rising to $497.5 billion by 2016.\1\ The use of 
biopharmaceuticals is increasing at almost twice the rate of 
traditional medicines--accounting last year for approximately $30 
billion in U.S. sales and 12 percent of total pharmaceutical usage.\2\ 
These medicines can and do improve the lives of millions of patients--
but without generic versions, the costs may keep needed treatments out 
of the hands of consumers.
---------------------------------------------------------------------------
    \1\ Poisal, J.A., et al., ``Health Spending Projections Through 
2016: Modest Changes Obscure Part D's Impact,'' Health Affairs 26, no. 
2 (2007) Exhibit 6.
    \2\ MedAdNews, November 2006.
---------------------------------------------------------------------------
    Caterpillar is focused on drug issues because we expect 
prescription drug expenses to be among the most significant health care 
cost drivers for our company in the years ahead due to an aging 
workforce and increased rates of utilization. For 2006, Caterpillar's 
prescription drug cost were in excess of $151 million, accounting for 
more than 25 percent of our health care total spent. For our company, 
biologics currently account for 2.9 percent of the total drugs utilized 
but account for 12 percent in terms of spending. Most concerning is the 
financial trend Caterpillar has documented with biologic products . . . 
costs have increased 45 percent since 2004. This is our single fastest 
growing category of health cost, and the trend is simply not 
sustainable.
                               certainty
    Caterpillar, like other U.S. manufacturers, is very concerned about 
the implications of our health care expenses. For business planning 
purposes, it is critical for us to have certainty when forecasting 
spending . . . be it for commodities such as steel or for health care 
benefits like prescription drugs. Currently there is no certainty in 
our pharmaceutical spending because we do not know when or if there 
will be lower cost alternatives for biopharmaceuticals. Many of the 
biopharmaceuticals on the market today are ``off-patent'' and more than 
$10 billion worth of biopharmaceuticals are expected to come off patent 
by 2010.\3\ When exploring avenues to introduce competition into the 
marketplace, I ask Congress to clearly outline a reasonable process for 
early resolution of patent disputes to avoid any unintended loopholes 
and ensure certainty for the biogeneric marketplace.
---------------------------------------------------------------------------
    \3\ Engel & Novitt, LLP, ``Potential Savings That Might Be Realized 
by the Medicare Program From Enactment of Legislation Such as The 
Access to Life-Savings Medicine Act (H.R. 6257/S. 4016) That 
Establishes A New CBLA Pathway For Follow-On Biologics. Table 4a, 
January 2, 2007.
---------------------------------------------------------------------------
             guiding principles for bipartisan legislation
    Caterpillar encourages the committee to consider five key 
principles as you begin to consider legislation:

    1. Protect and promote fair and open competition. As innovators, we 
respect and understand the development of innovation and need for 
patent protections. However, once a patent expires or is successfully 
challenged, biogeneric competition should be able to enter the market.
    2. Provide a definitive pathway for the approval of biogenerics. We 
believe there must be certainty in both timing and method of the 
biogeneric approval process. FDA needs the authority--to approve both 
comparable and interchangeable biogeneric products. Congressional 
deference to the FDA's expert scientific judgment is appropriate. In 
addition, any action should permit prescribers to substitute one 
biologic for another when appropriate.
    3. Encourage consistent and uniform terminology. Whether the terms 
are ``comparable,'' ``interchangeable,'' ``therapeutic equivalent,'' or 
``generic''--we want an abbreviated process that results in a 
``biogeneric,'' meaning a lower cost alternative to biologic 
pharmaceuticals.
    4. Increase resources for the Food and Drug Administration. In 
order to adequately assume these new responsibilities, the FDA will 
need adequate resources. We support additional resources for FDA to 
secure more staff to ensure the timely review of biogeneric 
applications and the safety of biogenerics for consumers.
    5. Include the new legal authority for a biogeneric pathway in 
must-pass legislation this year. We encourage Congress to move quickly 
to establish a regulatory pathway for the approval of biogenerics. We 
are confident that this hearing will affirm that the science for 
comparable and interchangeable products has arrived. Once the FDA has 
the discretionary authority to begin this process, it will drive 
innovation that will assist in the identification of similar and 
substitutable methods for these off-patent products. Each day that 
passes without biogenerics is another day of limited options. No payer, 
whether individual or employer, public or private, can afford unlimited 
monopoly pricing. Caterpillar, therefore, is encouraged to hear reports 
that members are committed to including a workable pathway into the 
prescription drug reauthorization legislation--called PDUFA--and 
strongly supports you in this endeavor.
                               conclusion
    In conclusion, I'm pleased that the Senate HELP Committee is 
considering issues like biogenerics that can make a positive impact on 
our health care system. Thank you to all the members of this committee 
who have taken an active interest in understanding the important role 
of the FDA to use its scientific judgment to approve biogeneric 
products. Chairman Kennedy and Senator Enzi, I appreciate your 
leadership and also that of others on the committee who understand and 
have taken leadership on these issues. A bipartisan bill that empowers 
the FDA to use the best science to encourage innovation and biogeneric 
competition should be passed this year. More Americans should be given 
access to these important innovations--we encourage you to support a 
marketplace that has fair and open competition. Thank you for this 
opportunity to testify today.

    The Chairman. Thank you very much.
    Dr. Siegel.

      STATEMENT OF JAY P. SIEGEL, M.D., GROUP PRESIDENT, 
     BIOTECHNOLOGY, IMMUNOLOGY AND ONCOLOGY, RESEARCH AND 
      DEVELOPMENT, JOHNSON & JOHNSON, RADNOR, PENNSYLVANIA

    Dr. Siegel. Good morning, Mr. Chairman and members of the 
committee. Thank you for your introduction. I'll skip over my 
employment but I would like to note in the context of today's 
hearing that in my 20 years in the public health service, I was 
responsible, entirely over that 20 years for regulation of 
biologics, over the final 7 years for the review and approval 
of all biological therapeutics and led the review and approval 
of about 50 such products and particularly relevant to today's 
hearing, played an essential role in setting scientific 
standards for ensuring the comparability of biological products 
after manufacturing changes. I am speaking on behalf of Johnson 
& Johnson and I thank you for the opportunity to be here today.
    My company and I appreciate and share the concern shown by 
Senators Clinton and Schumer and others here for expanding 
access to biologic therapies. I also appreciate the concern 
this committee and other members have repeatedly demonstrated 
for protection of patient safety and welfare.
    A concern we all share and that must guide us as we develop 
a statutory pathway for follow-on biologics. To that end, I 
will discuss several science-based principles that are 
critically important to address in any regulatory paradigm for 
follow-on biologics.
    First, there will always be a need for appropriate pre-
marketing testing in humans to ensure that a follow-on biologic 
is safe and effective. In contrast to typical non-biologic 
drugs, biologics are often 100 to 1,000 fold larger or more 
complex. They are produced by living cells in tissues and 
organisms and they are highly susceptible to changes.
    As is detailed in my written testimony, recent history is 
replete with examples of how seemingly minor manufacturing 
changes for biologics have led to inadvertent changes in the 
biologic product. Due to the complexity of biologics, these 
changes often are not detectable by laboratory testing but they 
can present significant risks for patients.
    The production of follow-on biologics will necessarily 
involve substantial changes in the manufacturing process and 
laboratory testing of follow-on biologics will be even more 
limited in its ability to detect resultant product differences 
because the manufacturers have incomplete access to knowledge 
and materials necessary for optimal testing.
    To ensure safety and efficacy, testing in humans will be 
needed. The types and extent of clinical testing required for 
follow-on biologics' approval will need to be determined on a 
case by case basis, considering factors about the product, its 
laboratory testing and its potential effects in patients.
    The second principle is this: there need not and should not 
be allowance for determinations of comparability for products 
that are so different in structure that they should be 
considered different products entirely. While generic drugs 
have identical active ingredients, it is essentially impossible 
to make a follow-on biologic with an identical active 
ingredient. Thus, if we are to move forward with an abbreviated 
biologics application for follow-on biologics, they need to be 
based on biologics being highly similar rather than identical.
    But there is no need nor scientific basis to allow 
abbreviated applications despite differences so substantial 
they could readily be avoided by the manufacturer and that they 
present the significant likelihood of differences in the safety 
and efficacy of the biologic.
    Third, a follow-on biologic should not be considered 
interchangeable with its reference product. Within the 
limitations of science today and in the foreseeable future, 
there is no realistic potential for scientifically valid 
determination of interchangeability. Follow-on biologics can be 
shown to be similar but never identical to an innovator 
biologic. Application of interchangeability status to a follow-
on could lead to inappropriate assumptions of sameness and 
substitution of one for the other. Such substitution could not 
only have potentially serious health consequences but could 
seriously impair the ability of post-marketing surveillance 
systems to detect new safety problems and to determine which 
biologic was responsible. Indeed, follow-on biologics policy 
should discourage inadvertent substitution.
    Fourth, FDA must be empowered to require post-marketing 
clinical studies and post-marketing safety surveillance needed 
to ensure safety.
    Fifth, any proposed pathway for follow-on biologics should 
not constrain the FDA's ability to request data and studies in 
support of sound scientific decisions.
    In conclusion, it is my hope and that of Johnson & Johnson 
that a scientifically-based public process will provide a 
framework and pathway for follow-on biologics in the United 
States, a pathway which reflects an overriding concern for 
patient safety and well being. It is also critical that this 
pathway provides appropriate incentives for innovation so that 
the promise of new and innovative biological therapies can 
continue to be realized for patients for generations to come.
    I thank you again for the opportunity to speak here today 
and look forward to answering questions you may have.
    [The prepared statement of Dr. Siegel follows:]
               Prepared Statement of Jay P. Siegel, M.D.
    Good morning, Mr. Chairman and members of the committee. My name is 
Dr. Jay Siegel, and I am pleased to come before you today to offer a 
scientific perspective on the issues relevant to any proposed framework 
for the abbreviated approval of follow-on biologics. I will provide 
examples from my experience to illustrate the significance of these 
issues. I hope you will find my contribution to this discussion 
constructive and useful as you seek out a sound, science-based path 
forward for follow-on biologics. I particularly appreciate the concern 
shown by Senators Clinton and Schumer, the sponsors of S. 623, the 
Access to Life Saving Medicine Act, for patient access to biologic 
therapies. It is a concern that I share--as does my company, Johnson & 
Johnson.
    By way of introduction, I studied biology at the California 
Institute of Technology and received my medical degree from Stanford 
University. My post-doctoral training was in Internal Medicine at the 
University of California San Francisco and in Infectious Diseases and 
Immunology at Stanford. As a scientist with specific expertise in the 
fields of biotechnology, immunology, and clinical trial design, I have 
dedicated much of my life and career to public health, working 20 years 
regulating biologics at the Food and Drug Administration (FDA), 
including as the founding Director of the Division of Clinical Trial 
Design and Analysis and then as Director of the Office of Therapeutics 
Research and Review within the Center for Biologics Evaluation and 
Research (CBER, 1996-2002).
    In this role, I supervised the medical and scientific team 
responsible for the evaluation and approval of all biological 
therapeutics, including monoclonal antibodies, cytokines, growth 
factors, enzymes, cellular and gene therapies. I have led the review 
and approval of more than 50 new therapies. Particularly relevant to 
today's hearing, I also led efforts to develop FDA policy regarding 
scientific standards for demonstrating the comparability of biological 
products after a manufacturing change.
    In the course of ensuring appropriate regulation of biologics, my 
associates at FDA and I worked closely with Members of Congress and 
testified before committees such as this one to communicate the 
complexities of biological therapeutics, their promise, and, at all 
times, our concern that they be as safe as possible for patients. I 
know that patient safety is a concern that we share and that it will be 
the guiding concern for you as you develop a statutory pathway for 
follow-on biologics.
    Presently, I am Group President of Research and Development for 
Biotechnology, Immunology, and Oncology for the Johnson & Johnson 
family of companies, one of the world's largest producers of 
biotechnology-derived biologics, and today I am speaking on behalf of 
Johnson & Johnson. Having devoted decades of my life as a regulator and 
scientist working on biologics, I sincerely hope my experience will 
help you in the task ahead.
    While legislation on follow-on biologics has the potential to 
improve access to life-saving medicines, that legislation should be 
well-founded in science and ensure that the lifesaving medicines to 
which access is provided are no less life-saving or safe than medicines 
already on the market. I believe that through the proper process, those 
critical ends can be met.
    There are many important examples from the recent past that should 
give rise to caution about the possibility that follow-on biologics 
could have important differences from their reference products. This 
concern results from the complexity of biologic products and the 
inability to fully characterize them. Experience has taught us that 
there is significant likelihood that differences in a product will 
result when it is made by a different manufacturer; that such 
differences cannot always be detected except through clinical testing; 
and that such differences can have potentially serious ramifications 
for the health and safety of the patients that we all serve.
    I would now like to focus my remarks on five principles that I feel 
are critical to address carefully in any follow-on biologics 
legislation:

     First, there will always be a need for appropriate pre-
marketing clinical data to ensure that a follow-on biologic is safe and 
effective.
     Second, there cannot be allowance for determinations of 
``comparability'' for products that are so different in structure that 
they should be considered different products entirely.
     Third, a follow-on biologic product should not be 
considered interchangeable with its reference product.
     Fourth, FDA must be empowered to require post-marketing 
clinical studies and post-marketing safety surveillance to ensure 
safety.
     Fifth, there should be no constraints placed on the FDA 
for ensuring the safety of follow-on products.
    I would now like to share with you my scientific perspectives on 
these key areas in more detail.
   1. any pathway for follow-on biologics should require pre-market 
         clinical data for demonstration of safety and efficacy
    To understand why we should always expect some need for pre-market 
clinical testing of follow-on biologics, it is important to understand 
the nature of biologics in general and how they differ from small 
molecule therapies.
    With small molecule drugs--for example, the conventional pills you 
see on pharmacy shelves and in medicine cabinets--you are working with 
substances that are relatively small, relatively simple in structure, 
and relatively easy to replicate using carefully controlled processes. 
Most importantly, their relatively small size and simple structure 
allow precise characterization and detection of even minor changes in 
the product.
    Biologics are vastly different from small molecules in all these 
aspects. In contrast to small molecules, biologics are very large--
typically several hundred- or thousand-fold larger. They are produced 
not by well-controlled chemical processes but by complex living cells 
and organisms.
    Minor differences in production conditions in these living 
``factories'' can lead to important differences in their product. To a 
far greater extent than small molecules, biologics frequently can bind 
to themselves to form pairs or aggregates, can change their shape over 
time or with minor changes in conditions, and can interact with 
materials in their containers and packaging. They are relatively 
unstable and are sensitive to how they are handled, processed and 
stored as they have the ability to assume many forms and variants. They 
are typically not homogeneous in chemical structure; rather, they are a 
large family of molecules with related, but not identical, structures. 
They cannot be fully characterized, so not only are differences common, 
they can be extremely difficult to detect, and their effects on the 
product's safety and efficacy are extremely difficult to predict.
    As a result, the regulation of biologics is strongly based upon 
strict control of the manufacturing process to minimize the likelihood 
of changes to safety and efficacy. And additional clinical testing is 
often required when substantial changes to the manufacturing process 
occur.
    It is true that the ability to characterize biological products 
using physical, chemical, and biological testing has improved as 
science has advanced. However, such laboratory testing, without testing 
in patients, is still very far from being able to ensure that a follow-
on biologic is without differences from a reference product--
differences that could adversely affect its safety or efficacy.
    When a biologics manufacturer makes a substantial change to its 
process (e.g., new cell line), given the incomplete ability of 
laboratory testing to identify or predict differences, FDA requires 
substantial testing in humans (clinical testing) to validate the 
comparability of the product. This was the case when I was at FDA and 
remains the case now. And that clinical testing not infrequently 
reveals differences (see some of the examples below). The manufacture 
of a follow-on will by definition involve very substantial changes--a 
new cell line, a new facility, and, to varying extents, a new process--
raising the relatively high likelihood of clinically important 
differences.
    The manufacturer of a new follow-on biologic also faces several 
limitations in its ability to identify clinically important differences 
short of clinical testing. When a manufacturer makes substantial 
changes in its manufacturing process, that manufacturer is able to 
compare not only final product but also various components and 
intermediates that are produced during various stages of the new and 
old manufacturing process. For example, depending on the changes made, 
comparisons might be made of the unpurified biologic (made by the old 
and new processes), and/or of purified product prior to formulation. 
Such comparisons may detect important differences that remain in the 
final product, but at levels that make them undetectable in the final 
product. Manufacturers of follow-on biologics will not have these 
materials for testing and will only have access to final, marketed 
reference product.
    Additionally, optimal comparisons of ``before change'' and ``after 
change'' materials require an understanding of which parameters are key 
to ensuring the safety and efficacy of the molecule and what the best 
approaches to assessing them are. This understanding comes from years 
of working with the reference product and is not available to 
manufacturers of follow-on biologics. Further, when differences are 
detected, the key question becomes whether the difference is clinically 
important. While manufacturers of innovator products have extensive 
experience which sometimes helps address this question, the 
manufacturer of a new follow-on biologic will have limited experience 
with the molecule.
    Thus, a manufacturer of a follow-on biologic will face 
significantly more limitations in demonstrating comparability than a 
manufacturer modifying its own process. At Centocor, a Johnson & 
Johnson company that develops biological therapies, when we make 
changes that might affect the clinical effects of a product, while we 
do extensive laboratory testing, we nonetheless also face an 
appropriate requirement for clinical studies to ensure safety and 
efficacy. How can we accept a lesser standard of evidence from the 
manufacturers of follow-on biologics, who face even greater limitations 
in laboratory testing, without significant concerns for safety?
    In light of these limitations, and based on my experience, I firmly 
believe that there will always be a need (in the foreseeable future) 
for some amount of clinical testing of a follow-on biologic to provide 
adequate assessment of potential changes. The amount and type of 
testing will depend on the specifics of the products and assessment of 
potential risks. While clinical trials may be abbreviated compared to 
those required of a new nonfollow-on product, clinical studies to 
address questions such as immunogenicity, pharmacokinetics, and common 
adverse events under controlled conditions will always be important 
before a product is marketed. I would never take a biologic that had 
not been tested in humans; the risks are too high. New legislation 
should not cause others, who may be less informed, to do so. Congress 
should not create two standards of medicine--those appropriately tested 
for safety and efficacy and those that are not.
Examples
    There are many examples of how seemingly minor changes in a 
biologic's manufacturing process have resulted in significant changes 
in the product. And while these changes sometimes are undetectable in 
laboratory testing or are ``minor'' enough to qualify under S. 623 as 
preserving ``highly similar principal molecular features,'' they can 
often trigger clinically important changes in the product's safety and 
efficacy--changes that, at times, can be detected only through clinical 
testing.
    I would like to use some specific examples to ensure that this 
committee's members understand that my concerns are not theoretical or 
alarmist in nature, but are in fact very real issues that need to be 
considered.
    In recent years, at Johnson & Johnson, we changed the cell line 
used to make an experimental biologic called CNT095. By physical and 
laboratory testing, the product made by the new cell line looked quite 
similar to the old product, so it would have passed a comparability 
determination were clinical testing not needed. But clinical testing 
revealed that the new product had different pharmacokinetics: that is, 
the drug levels in the body over time were different from those seen 
when the old cell line was used. This sort of change in 
pharmacokinetics, revealed only in clinical studies, was an extremely 
common occurrence observed during my time at the FDA.
    In my experience at the FDA, even seemingly innocuous manufacturing 
changes for a biologic product often led to significant differences--
sometimes detected only through clinical testing. In another example, a 
manufacturer opened a new facility in Japan to treat patients in Japan. 
The process used at the new facility was made as similar as possible to 
that of the pre-existing facility. Laboratory testing of the physical 
and chemical properties and bioassays showed no differences between 
products made at the new and pre-existing facilities. But in clinical 
testing, blood levels of the biologic were 40 percent lower in patients 
taking the product manufactured in the new facility versus the old. 
Although it was initially suspected that this reflected a difference in 
the patient population, further studies indicated the difference was 
indeed in the drug itself.
    Sometimes, changes that seem not only innocuous but beneficial can 
create problems. Proleukin is a biologic for treatment of cancer that 
contains a detergent used in manufacturing. Prior to licensure, the 
manufacturer lowered the detergent levels in an attempt to make the 
product more pure. Product made by this new process passed routine 
testing. Highly specialized additional testing later found that the new 
product had increased microscopic clumping. This microscopic clumping 
resulted in rapid clearance of the drug from the circulation. In yet 
other examples, a change as seemingly minor as placing a product in a 
pre-filled syringe instead of a vial has led to clinically meaningful 
changes to several biologic products: One interacted with silicone in 
the syringe, one interacted with trace metals in the needle, and, as 
discussed below, one interacted with the rubber stopper on the syringe 
plunger.
Immunogenicity
    Special attention should be given to the problem of immunogenicity: 
i.e., the ability of most or all biologic products to stimulate an 
immune system response in the body, prompting the formation of 
antibodies. Immunogenicity is particularly important in the context of 
manufacturing changes for a biologics because (1) product differences 
that are difficult or impossible to detect can lead to changes in 
immunogenicity; (2) changes in immunogenicity can impact on safety and 
efficacy in many ways and (3) immunogenicity can be assessed only 
through clinical testing. The immune system evolved to distinguish 
foreign proteins (e.g., bacteria, viruses, proteins from other people) 
from its own proteins as a means of survival. This means that our 
immune systems can be exquisitely sensitive to differences in proteins.
    Thus, there is great potential for seemingly minor changes in 
therapeutic protein products, even those not detected by physical, 
chemical, and biological testing, to result in clinically significant 
changes in immunogenicity.
    Most biologic products have some degree of immunogenicity; that is, 
they will cause formation of antibodies in some patients. For vaccines, 
this is desirable. For therapeutic proteins, these antibodies can 
inactivate the protein or cause it to be cleared from the body, 
resulting in a loss of efficacy and the progression of the disease. 
Patients with hairy cell leukemia treated with interferon alfa, for 
example, have been reported to experience a relapse of disease when 
antibodies develop. Similarly, some patients receiving insulin and 
blood clotting Factors VIII and IX have been reported to lose 
responsiveness after developing antibodies.
    In addition to inactivating or clearing a drug, antibodies bound to 
a drug can also play a direct role in causing various adverse effects. 
Patients who have developed antibodies to experimental biologics have 
experienced consequences including joint swelling, fever, and 
encephalitis. Even for approved biologics, it is not uncommon that the 
development of antibodies during treatment increases the likelihood of 
having adverse reactions, sometimes even severe, at the site of 
subsequent injections or following subsequent infusion into the blood 
stream.
    In addition to these effects, and more serious still, for certain 
drugs, antibodies can also inactivate the body's naturally occurring 
protein, resulting in adverse and even life-threatening side effects. 
Patients who received an experimental biologic version of 
thrombopoietin, a protein that stimulates production of platelets 
critical for blood clotting, developed antibodies which neutralized not 
only the biologic, but also their own naturally produced 
thrombopoietin, resulting in problems with bleeding.
    Avonex is an interferon beta product used to treat multiple 
sclerosis. After clinical testing proved that interferon beta was safe 
and effective for this use, the manufacturer needed to develop a new 
cell line to make the biologic and manufactured it in a new facility. 
While the Agency would normally be quite reluctant to permit a change 
in cell lines at this late stage of development, there was a public 
health need for this treatment which had been shown in clinical studies 
to be effective in treating multiple sclerosis. However, the original 
cell line used to make the drug for clinical studies was no longer 
available to the manufacturer and it was necessary to use another cell 
line in order to bring this product to patients.
    Only after a couple of years of work using the new cell line was 
the manufacturer able to make an interferon beta product, Avonex, that 
appeared highly similar to the material used in the clinical trials 
that showed safety and efficacy. While the manufacturer was not 
required to repeat multi-year clinical testing, substantial clinical 
study was done before approval. Thereafter, post-marketing clinical 
experience showed that Avonex did indeed have clinically relevant 
differences from the earlier, clinically tested material. Fortunately 
for all, Avonex differed in that it had less immunogenicity. This 
example contributed to heightened awareness of the potential for 
manufacturing changes to lead to immunogenicity changes and of the 
importance of immunogenicity testing after many types of manufacturing 
changes.
    The case of EPREX, a biologic product sold in Europe by Johnson & 
Johnson companies, illustrates how even a seemingly minor change can 
increase a product's immunogenicity and cause harm to patients. In 
1998, our company changed the stabilizer in its EPREX formulation at 
the request of European authorities because of concern in Europe that 
the human serum albumin stabilizer could theoretically transmit Mad Cow 
Disease. The switch from the old stabilizer to another well-established 
one seemed simple enough and relatively benign. Indeed, it was intended 
to improve the safety profile. It was applied to a variety of product 
presentations, including single-use vials and pre-filled syringes with 
both Teflon-coated and uncoated rubber stoppers.
    However, shortly after this seemingly minor change, there was an 
increase in the incidence of antibody-mediated pure red cell aplasia 
(PRCA) among patients taking EPREX. Pure red cell aplasia is a serious 
condition in which the bone marrow ceases to produce red blood cells. 
It took 4 years of extensive investigations involving more than 100 
experts from clinical, pre-clinical, manufacturing, process sciences, 
logistics, quality, analytical, and regulatory fields and in excess of 
$100 million to identify the cause. The conclusion was something no one 
had expected: Uncoated rubber stoppers, when exposed to the new 
stabilizer, released substances called leachates into the EPREX 
formulation and that these substances were most likely responsible for 
the increase in the product's immunogenicity and the resulting increase 
in patients developing pure red cell aplasia.
    It's important to note that the several examples I have given are 
just some of the many cases in which immunogenicity concerns have 
arisen. Most biologics have some degree of immunogenicity; their 
immunogenicity levels can change with even slight changes in their 
manufacturing process, the consequences of which can be clinically 
important. And as stated above, immunogenicity can be detected only 
through clinical testing.
Clinical Studies May Be Needed for New Uses Despite Same Mechanism of 
        Action
    One significant concern about S. 623 is that it contains a 
provision stating, ``If the applicant has demonstrated comparability 
for a single condition of use . . . the Secretary shall issue a 
comparable biological product license for all conditions of use of the 
reference product sharing the same mechanism or mechanisms of action.'' 
This provision presumes that if the drug has the same mechanism in two 
conditions, evidence of safety in one condition can be used to 
establish comparable safety in the other. It is important to understand 
that this presumption is not scientifically correct and could lead to 
approvals of use in indications in which the follow-on biologic is not 
safe. While the mechanism of action may be the same for two 
indications, the patients, their co-morbidities and concomitant 
therapies may differ.
    Once again, the EPREX example is instructive: EPREX is used to 
correct anemia in patients with cancer and in patients with renal 
failure. In both patient populations, EPREX and other erythropoietins 
work to correct anemia through the same mechanism of action: by 
stimulating more blood cell production in the blood marrow. But PRCA is 
seen only in patients with renal failure and not in patients with 
cancer. So if a follow-on version of EPREX were studied only in 
patients with cancer and found to be ``comparable'' with an approved 
erythropoietin, this proposed legislation would allow its use in 
patients with kidney failure, notwithstanding the possibility that it 
might have unacceptable immunogenicity in those patients. A similar 
situation is observed with granulocyte-monocyte colony stimulating 
factor or GM-CSF, a biologic that stimulates some bone marrow and blood 
cells. Like EPREX, GM-CSF is immunogenic when used in some diseases and 
not in others.
    These two examples call into serious question the wisdom of 
approval for all indications with the same mechanism of action after 
demonstration of comparability in just one indication. Simply stated, 
if a follow-on biologic is to be used in patients capable of having an 
adverse immune response to it, it should not be sufficient to study the 
follow-on biologic only in an indication in which the patients are less 
capable or incapable of having an adverse immune response to it.
    In summary, extensive experience confirms that manufacturing 
differences such as those between the processes of an innovator and 
follow-on are likely to lead to differences in product safety or 
efficacy; not infrequently, these will be detected best or only in 
clinical testing. That is not to say that a full clinical testing 
program must be required for follow-on biologic products. On a product-
by-product basis, and particularly where there exist good measures of 
desired effects (so called pharmacodynamic measures) and where a high 
degree of similarity is demonstrable, abbreviated clinical testing will 
sufficiently address key areas of uncertainty regarding safety and 
efficacy. But experience has made clear that clinical studies must be 
considered a necessary and mandatory part of properly evaluating any 
and all biologic products and must be a fundamental piece of any 
proposed regulatory pathway for the approval of follow-on biologics.
       2. any pathway for follow-on biologics must not allow for 
   determinations of ``comparability'' for products so different in 
  structure that major safety and efficacy concerns necessarily arise
    Since it is not possible to make two biologic products identical, 
follow-on biologics policy will, by definition, allow abbreviated 
applications for molecules that are highly similar to a reference, 
despite known or potential differences. However, one must draw a line 
as to how much of a difference should be allowed as there is no 
scientific basis for allowing abbreviated testing of a new biologic on 
the basis of it being only distantly related to an existing one. Some 
differences are so substantial that the biologics should be considered 
different products entirely. Some types of known differences are so 
substantial and so likely to result in clinically meaningful 
differences, there is no reason not to treat such different drugs as if 
they are different drugs.
Differences in Amino Acid Sequence
    One such difference is ``minor differences in amino acid 
sequence,'' a difference that, according to S. 623, would still allow a 
molecule to be considered ``to contain highly similar principal 
structural features.'' The amino acid sequence defines a protein. Even 
a minor difference creates a different (mutant) protein, and a product 
containing such a mutant protein is a different product from the non-
mutant form. Given the enormous potential for such a product to have 
different effects, any such product should be subject to all the 
standard safety and efficacy testing to which you would subject any 
innovator drug.
    Differences in even just one amino acid can have devastating 
effects on the function of a protein. Single amino acid mutations in a 
person can be lethal or result in serious diseases such as sickle cell 
anemia and cystic fibrosis. Single amino acid mutations in a virus can 
change it from benign to deadly or from treatable to resistant to 
treatment. And single amino acid changes in therapeutic biologics, 
sometimes made in an attempt to improve potency, durability, or other 
desirable traits, often have adverse effects on the molecule, with the 
potential to pose great danger to patients.
    The AspB10 insulin analogue is a prime example. This was a 
biological product that had only one amino acid difference from the 
insulin amino acid sequence. At the time it was being studied, it 
seemed reasonable to think that this insulin analogue would be safe. 
However, to the great surprise and concern of all involved, when AspB10 
was given to laboratory rats, it triggered the development of breast 
cancers.
    In marketed protein products, FDA has never, to my knowledge, 
allowed a change in even a single amino acid. When a change in an amino 
acid has occurred during pre-market development, FDA has required 
extensive testing of the new molecule rather than assuming the 
properties of the former molecule were retained. To allow marketing of 
new mutant protein therapeutics with anything short of the testing 
required of any new protein therapeutic potentially exposes patients to 
very real risks.
    As noted above, the need to tolerate some differences in a follow-
on biologic from its reference product arises from technical 
limitations on the inability to exclude, or in some cases to identify, 
some differences. But there is no technical limitation preventing a 
manufacturer of a follow-on biologic from producing one with an amino 
acid sequence identical to that of a reference.
Differences in Post-Translational Events
    As a scientist, I also find it troubling that S. 623 would allow 
products with differences ``due solely to post-translational events'' 
to be considered ``highly similar'' and eligible for demonstration of 
comparability within the broad statutory definition set forward for 
abbreviated applications.
    ``Post-translational modification'' refers to the important 
processes that occur after the backbone of a protein has been 
synthesized. It can result in major chemical modifications of the 
protein, such as attaching additional chemicals, modifying the chemical 
structure, cross-linking, and removing large parts of the protein. 
Post-translational modifications can, and often do, have a major impact 
on the activity, half-life in circulation, and immunogenicity of a 
protein. Many types of post-translational modifications leave no 
scientific basis for a determination of comparability and submission of 
abbreviated applications.
    Any difference in post-translational modification will require 
significant clinical testing to determine what difference it makes 
clinically. But many are so profound, they should simply be considered 
to make the biologic a different biologic, requiring a full 
application.
Complex Biological Products Including Live Viral Products
    Particularly concerning is the provision in S. 623 that ``closely 
related, complex, partly definable biological products with similar 
therapeutic intent'' (for example, two live viral products for the same 
indication) also be considered ``highly similar.'' This provision 
allows abbreviated applications for living cells and organisms and 
other biologic products far more complex and difficult to define than 
proteins.
    The legislation acknowledges that these biologic products are only 
partly definable and complex. Therefore, by definition, one cannot know 
just how different they are. If one cannot know how different the 
products are, and the possibility exists that they are vastly 
different, then there can be no scientifically valid basis for 
determination that they are comparable. The inability to define these 
highly complex products ought to exclude the possibility that an 
abbreviated application lacking full clinical testing would provide 
sufficient protection of safety or efficacy--yet this proposed 
legislation would allow for that possibility.
    Of note in this regard, the legislation cites as an example of 
closely related products ``two live viral products for the same 
indication.'' However, anyone familiar with recent concerns about 
potential differences in different preparations of smallpox vaccines, 
of influenza vaccines, and of live polio vaccines will surely 
appreciate that comparability determinations should not replace full 
clinical testing for such complex, partly definable products.
No Limitations Placed
    Finally, I would draw your attention to the fact that after drawing 
extremely broad boundaries around what types of differences (and what 
types of products) would fall within the scope of comparability 
determinations and abbreviated applications, S. 623 undermines even 
those boundaries. It gives the Secretary leeway to determine any two 
biological products ``to contain highly similar principal molecular 
structure'' regardless of known or indeterminate differences. So in 
essence, S. 623 places no limit on the types of physical and chemical 
differences that might be considered minor enough to permit a 
demonstration of comparability and an abbreviated application.
Language From Orphan Biologics Regulations
    The language in S. 623 describing what differences still leave 
products ``highly similar''--and therefore eligible for demonstrations 
of comparability (or interchangeability) and for submission of an 
abbreviated application--appear identical to the language in the orphan 
drug regulations for biologics, regulations I helped write and 
implement. While, on the surface, that might appear to make the 
language a reasonable standard for follow-on biologics, in fact the 
objectives of the determinations of similarity in the Orphan Drug Act 
are very different from those for follow-on biologics. Whereas 
different but related products (for example, those with ``minor amino 
acid differences'') might have similar effects, in orphan regulations, 
we established a broad regulatory definition ensuring that orphan drug 
exclusivity would block the marketing of similar molecules even if 
there were full clinical studies supporting the safety and 
effectiveness of those molecules. But the fact that two related 
products with such differences may treat the same condition does not 
make them the same drug; nor does it provide any significant assurance 
of a similar safety and efficacy profile. So there is no basis for 
taking the definitions that FDA developed to preclude approval of 
products supported by complete data and using them to identify products 
that can be approved through an abbreviated application with partial 
data.
 3. no follow-on biologic product should be considered interchangeable 
                       with its reference product
    Given the complexity of biologics, the high potential for process 
differences to result in product differences, the limited ability to 
detect differences between a follow-on and reference biologic, and the 
very real potential for these differences to be clinically meaningful, 
a determination even of comparability for a follow-on product is 
particularly challenging. The provisions in S. 623 calling for a 
determination of ``interchangeability''--specifically, that the product 
``can be expected to produce the same clinical result as the reference 
product in any given patient''--are very concerning from a scientific 
perspective.
    Ensuring comparability of a follow-on biologic to a reference 
biologic with an acceptable degree of assurance will be quite 
challenging, made much more so by the follow-on manufacturer's limited 
access to information about, and lack of experience with, the 
innovator's process as well as their lack of access to intermediate, 
in-process materials. Ensuring interchangeability is essentially 
impossible.
    No amount of non-clinical testing of a biologic product can ensure 
or predict it will have identical effects to another product. Although 
clinical testing can place limitations on the possible extent of 
differences, for most products, only extremely extensive comparison 
studies could rule out clinically significant differences. For example, 
if a reference biologic caused a serious or fatal effect in 1 patient 
in 1,000, and a new drug had twice the risk, it would take a study of 
about 50,000 patients to have a good chance of detecting this important 
difference. Thus, there is no realistic potential for a scientifically 
valid determination of interchangeability.
    With the risk of clinically important differences always at play, 
with the possibility that substituting products would increase the risk 
of clinically important antigenicity, and in the absence of scientific 
data to establish a follow-on and an innovator biologic product as 
identical, it would be dangerous to allow the follow-on biologic to be 
considered ``interchangeable'' with its reference product.
    The European Union rightly acknowledged in its own process of 
developing a pathway for follow-on biologics that follow-ons can be 
similar, but never identical to an innovator biologic. After very 
careful review of the data, the EU recognized the danger of applying 
``interchangeability'' status to follow-ons, a misnomer that could lead 
physicians and patients to inappropriately assume sameness and 
substitute one for the other, with potentially serious adverse health 
consequences. Just 2 weeks ago (Feb. 18), the French parliament, for 
example, adopted legislation to prevent follow-on biologics from being 
treated in the same way as traditional generics and banned the 
automatic substitution of one biologic medicine for another.
    A determination of interchangeability likely would encourage 
substitution of one product for another. The FDA itself expressed 
concerns about substitution of one biologic medicine for another in a 
statement last September: ``Different large protein products, with 
similar molecular composition may behave differently in people and 
substitution of one for another may result in serious health outcomes, 
e.g., generation of a pathologic immune response'' (http://www.fda.gov/
cder/news/biosimilars 
.htm, September 2006). Even if products have a determination of 
comparability but not interchangeability, substitution could occur, 
potentially unbeknownst to the prescribing physician or patient and 
potentially with adverse health outcomes. Policy should attempt to 
limit that possibility as it addresses issues such as labeling and 
naming.
    Furthermore, if aspects of a follow-on biologics approach such as 
the designation of interchangeability led to substantial numbers of 
patients switching between therapies, it could severely impair the 
ability of pharmacovigilance systems to deal with emerging safety 
problems. When a new adverse event emerges or a known one increases in 
frequency, it may be impossible to attribute the adverse event to a 
specific product if patients experiencing the event have received 
multiple products. This is especially the case for some types of 
adverse events, such as those due to immunogenicity, that tend to arise 
in patients well after receiving the causative product. Should a 
particular follow-on biologic be associated with such a safety problem, 
the impact of being unable to determine which ``interchangeable'' 
biologic was responsible could be devastating. The ability to detect 
that a new follow-on biologic has a significantly higher risk would be 
highly impaired and the difference in risk could go unnoticed. When new 
risks are noticed, it could well be impossible to determine to which 
``interchangeable'' biologic it was attributable, and appropriate use 
of the entire group of therapies might be severely impaired because of 
a safety problem with one.
    From the standpoints of science, clear communication, and public 
safety, interchangeability is not an appropriate designation for 
follow-on biologics.
    Unfortunately, not only is interchangeability for follow-on 
biologics included in S. 623, the statutory test for interchangeability 
is completely open-ended. As written, this statutory test could be used 
to determine that two drugs are interchangeable even if they do not 
contain the same active ingredient. This is entirely at odds with the 
concept of ``therapeutic equivalence'' that has been applied to small 
molecule drugs and which requires a finding of the same active 
ingredient, same dosage form and dose, and bioequivalence. If used as 
the basis for switching patients back and forth between biologics for 
chronic therapy, then this statutory test poses especially grave 
clinical implications as patients unwittingly switch between biologics 
whose safety and efficacy have not been shown to be the same.
    4. post-marketing safety surveillance will always be required, 
       and post-marketing clinical studies may also be warranted
    All approved follow-on biologics will inevitably be associated with 
some risk that new safety problems will become apparent only in the 
post-marketing period because (1) not all differences between a follow-
on and reference product will be detectable in pre-market testing, (2) 
one cannot predict with certainty which differences may have adverse 
impacts on safety and efficacy, and (3) some risks of any 
pharmaceutical become apparent only after extensive use. To optimize 
patient safety and to control such risks, it is critically important 
that FDA not be limited in its ability to request post-marketing 
clinical studies when appropriate. Follow-on manufacturers should also 
be required to monitor a product for safety problems through a robust 
post-marketing safety surveillance program.
    Post-marketing clinical studies, post-marketing safety surveillance 
programs, and drug safety in general have been topics of major 
discussion on this committee and in these halls. Just last month, 
Chairman Kennedy and Ranking Member Enzi re-introduced legislation that 
has as core principles post-approval clinical trials ``to assess 
signals of serious adverse events,'' post-approval epidemiological 
studies to help ``screen for serious adverse events in expanded 
populations,'' and post-marketing safety surveillance programs ``to 
assess known serious risks and to identify unexpected serious risks.'' 
Many of you have endorsed this safety bill and applauded these tenets 
of it.
    After all of the support and attention this committee has given to 
the issue of drug safety, it would be a major setback if this committee 
were to pass any legislation which does not put forth specific 
provisions enabling regulatory requirements for post-marketing safety 
surveillance programs and clinical studies of follow-on biologics, or 
if it limits the ability of expert reviewers to negotiate for post-
marketing clinical studies that could protect public safety.
    For instance, S. 623 is silent on the matter of post-marketing 
safety surveillance, a tool essential to ensuring the safety of all 
biologics, including follow-on biologics or any pharmaceutical. This 
should concern all of us. Also disturbing are the specific limits the 
bill would place on the FDA's ability to require post-market clinical 
studies from a follow-on manufacturer. Follow-on biologics will raise 
safety concerns--such as differences in immunogenicity profile or 
emergence of unexpected toxici-
ties--that will require studies beyond the scope that pre-marketing 
studies can reasonably address. We should not prevent the FDA from 
requiring whatever studies are deemed necessary based on science.
    Restricting the FDA in its efforts to carry out its explicit 
mission of protecting the public health in the post-marketing period 
would be particularly difficult to explain to the American public given 
that such protections are already received by the European public. The 
EU recognized the importance of requiring appropriate safety measures 
as it developed guidelines for approval of follow-on biologic products. 
The EU further acknowledged in its guidelines the importance of post-
marketing testing for the specific danger of immunogenicity.
    Any legislation that fails to articulate the need for post-
marketing studies, and instead places limits on the FDA's ability to 
seek post-marketing commitments, could lead conscientious regulators 
concerned about patient safety to require far more extensive pre-
marketing testing, thereby significantly undermining the ability of a 
follow-on approval pathway to address access. Safety would nonetheless 
suffer anyway. Some safety concerns can be identified only after broad, 
large-scale or prolonged exposure such as can best be studied in the 
post-marketing period.
5. the fda should not be subject to undue constraints in its ability to 
           ensure safety and efficacy of follow-on biologics
    Finally, legislation should not limit the FDA's flexibility and 
discretion in making sound scientific judgments to ensure the safety 
and efficacy of follow-on biologics. I have several concerns about S. 
623 in this regard.
    For instance, S. 623 provides that, when asked, the FDA should meet 
with follow-on sponsors to ``reach agreement regarding the parameters 
of design and size of the studies'' necessary for approval of the 
application. I applaud this provision but have pressing reservations 
regarding the binding nature of those agreements in the follow-on 
context. It is important that agreements not constrain FDA from 
requiring additional data beyond those pre-specified in advance of the 
application process. It is to be expected that it will be quite common 
for the FDA to identify needs for additional testing after initial 
advice is given for two reasons. First, there are many tests within the 
general categories of physical, chemical, biological, and clinical 
testing. To some extent, these tests need to be performed sequentially 
as the results of earlier tests often identify needs for further 
testing. The FDA cannot and should not be expected to identify all 
testing needs up front before early test results are available.
    Second, given the lack of FDA experience in reviewing follow-on 
biologics, reviewers would have no basis for anticipating new data 
needs that may arise. For these two reasons, it likely will be common 
that additional testing requirements, important to ensure comparability 
and thus safety and efficacy, will be identified after initial 
guidance. While the legislation provides a process whereby the FDA can 
request additional testing where a substantial scientific issue 
essential to approval has been identified and agreed to by the head of 
the reviewing division, the need to use such a process runs the 
significant risk of suppressing appropriate testing requests, thus 
diminishing assurance that the follow-on biologic is comparable.
    The provisions under discussion are similar to current provisions 
regarding binding agreements on clinical trials and on bioavailability 
and bioequivalence testing (also types of clinical testing) of drugs 
but differ in a very important respect given the context. Currently 
existing provisions apply only to clinical testing, and, when the FDA 
gives guidance on this testing, it already has before it both the 
results of chemical, physical, and biological testing and it has vast 
experience in determining appropriate clinical studies. In contrast, 
the proposed legislation here allows companies to seek binding guidance 
on all types of testing (e.g., all ``studies of a biological product'' 
under these provisions) before any testing results are available, and 
in an area in which there is no prior regulatory experience.
    The FDA should indeed provide industry with extensive guidance as 
to what testing will be expected in an application and consideration 
should be given to establishing a transparent process for this to 
occur. But as we enter this new field with new safety risks, the FDA 
should be unhampered in its ability to request and receive additional 
data from a manufacturer as the need becomes apparent. To do otherwise 
could jeopardize safety.
    Another worrisome constraint on the FDA comes in the mandate in S. 
623 to the FDA to complete its final review and take final action on a 
follow-on biologic product application within just 8 months of the 
manufacturer's submission of the application. This would be an 
unprecedented move that places inappropriately high priority on the 
review of follow-on biologics. Most new drugs and biologics are 
reviewed with a 10-month deadline to complete review, potentially much 
longer to reach final action. Even priority drugs and biologics have a 
6-month review, and potentially take much longer to final action. The 
timeline of 8 months from submission to final action is a more 
accelerated timeline than that for most new drugs and biologics and, in 
some senses, more than for those given priority drugs. In other words, 
this legislation gives review of a follow-on biologic priority higher 
than that for most new drugs and comparable to that for a new and 
promising AIDS or cancer therapy. This kind of provision 
inappropriately limits FDA's ability to allocate its severely limited 
resources to address the greatest public health priorities. It also 
runs the risk of giving FDA inadequate time to do its job.
    There are other aspects of this legislation with the potential to 
inhibit appropriate regulatory activity. For example, the proposed 
legislation specifies that studies to establish comparability should be 
designed ``to avoid duplicative and unethical clinical testing.'' The 
meaning of ``duplicative'' is unclear; but whereas replication of 
results is a basic scientific approach to ensure validity, admonition 
to avoid duplicative testing, depending on how the term is interpreted, 
could lead to inadequate testing. Regarding unethical testing, the 
language is unnecessary and could, depending on how it is interpreted, 
discourage appropriate testing requirements.
                     the eu approach to biosimilars
    We are fortunate that the EU has already made substantial progress 
in developing and implementing a policy based in good science and 
public health and consistent with their unique regulatory and 
healthcare framework. We should be able to leverage that work to have a 
frank, transparent and scientific debate here in the United States, and 
thereby develop a model which will be compatible with our own 
regulatory and healthcare environment.
    The key features of the EU process stem from the recognition of the 
unique characteristics of biotechnology derived proteins. Several years 
ago, EU legislation clearly distinguished a ``biosimilar'' (the term 
they use for follow-on biologics) from a ``generic'' because of the 
manufacturing principles for biologics that are discussed above. The EU 
legislation did not attempt to define the scientific standards for 
approval of biosimilars. The EMEA, the science-based body responsible 
for approving the marketing of drugs in the EU, was trusted with that 
task. Furthermore, the EU legislation did not seek to constrain the 
ability of the EMEA to require data to ensure the safety and efficacy 
of biologics. The EU legislation clearly distinguished a ``biosimilar'' 
from a ``generic'' due to the many scientific concerns discussed above; 
the EU also recognized the dangers of interchangeability.
    The EMEA provided a broad regulatory framework with guidances for 
approval of these products. They pursued a science-based, transparent 
and open process to establish concept papers and draft guidances, 
starting first with basic principles for all biosimilars. This was 
followed by more specific guidances with testing requirements for 
product classes. This transparent process included public scientific 
workshops in which all parties were invited to offer input. The EU 
testing requirements do allow for abbreviations in testing where 
science and safety permit. But clinical testing, immunogenicity 
testing, and post-marketing safety surveillance are critical parts of 
those requirements. In fact, those requirements were deemed essential 
to minimize the risk to patients. The EU pathway strives to achieve 
follow-on biologics that are truly highly similar to a reference 
product while acknowledging that important clinical differences may 
still exist upon market approval, making post-marketing clinical 
studies and safety surveillance important.
                               conclusion
    In conclusion, I sincerely hope that the experiences and principles 
I have discussed have informed this debate. It is my hope that as you 
examine S. 623 and any other proposed legislative pathways for follow-
on biologics, you will seek out and pursue scientifically driven public 
debate to ensure that public policy is well-founded in science and 
supports the development of follow-on biologics that are safe and 
effective. We must ensure that we pay the appropriate attention to the 
principles of patient safety that are being discussed in this country 
and in these halls right now.
    It is my hope and that of Johnson & Johnson that a scientifically 
based public process leveraging known scientific considerations will 
provide a framework and pathway for follow-on biologics in the United 
States--a pathway that has an overriding concern for patient safety and 
well-being. It is also critical that such a framework appropriately 
provide incentives for innovation so that the promise of new and 
innovative biologic therapies can continue to be realized for patients 
for generations to come.
    I thank you again for the opportunity to submit testimony for this 
hearing, and I look forward to answering any questions you may have.

    The Chairman. Thank you very much. We might call on Dr. 
Rossignol, if you'd be good enough. We appreciate very much 
your taking the time and working with us and this presentation. 
We look forward to hearing from you.

    STATEMENT OF NICOLAS ROSSIGNOL, ADMINISTRATOR, EUROPEAN 
       COMMISSION PHARMACEUTICALS UNIT, BRUSSELS, BELGIUM

    Mr. Rossignol. Senator Kennedy, can you hear me now?
    The Chairman. Yes, I can. Yes. You're on.
    Mr. Rossignol. Okay. Chairman Kennedy, Ranking Member Enzi 
and all of the members of the committee, thank you for giving 
me the opportunity to testify today.
    My name is Nicolas Rossignol and I am in charge within the 
European Commission of the implementation of the framework in 
Europe on follow-on biologics, which we call in Europe, 
biosimilars.
    If you allow me, Mr. Chairman and without playing with 
words, I will use the terms follow-on biologic and biosimilars 
as if they are interchangeable.
    It is indeed an honor to appear before you today to share 
the EU experience in an area which holds great hopes for 
patients but at the same time, raises new challenges. I will 
focus today on the key controversial questions around follow-on 
biologics, which the EU has faced already, which the United 
States is facing now, hence we are sharing knowledge we've 
gained that is most useful.
    I will not repeat my written testimony but solely focus on 
three key issues. First is patient safety or to put it bluntly, 
is it true that follow-on biologics are less safe?
    The second question is the question of sameness. Is it true 
that biologics are so complex that you in any way cannot make 
copies? And thirdly, interchangeability. Are biosimilars 
interchangeable?
    So let's address first safety. The essential goal of our 
legislation is to safeguard public health, to ensure that all 
medicines, whatever their legal status, meet the same EU high 
standards of quality, safety and efficacy. Our framework on 
biosimilars is no exception. Its primary objective is not to 
facilitate introduction of new products on the market. It is 
not to lower standards. The primary objective is to apply equal 
standards to ensure that biosimilars are equally safe and 
efficacious, as any other biologics.
    Indeed, it is the European Commission which approves all 
new biotech medicines and we do not approve biosimilars if they 
do not comply with our standards. Actually, one biosimilar 
application was already rejected because of non-compliance.
    But conversely, those follow-on biologics which do get an 
authorization, how by definition products for which European 
regulators are confident to say that they are as safe, as 
efficacious, as their counterparts.
    The second point is the sameness, i.e., can you make copies 
of biologics? If it's clear that these biologics were no 
different from chemical drugs, then we would not be using a 
specific framework on biosimilars in the EU. The current 
scientific consensus in Europe is that biosimilars are not 
generics and not biogenetics and cannot be approved as 
generics. Because these products are complex, we need an 
abbreviated yet robust set of pre-clinical and clinical data to 
demonstrate that the biosimilar product is comparable to its 
reference.
    However, it is important, in my opinion, not to over-
emphasize the molecular complexity of biosimilars. Yes, these 
are complex products. Yes, they are usually difficult to 
characterize but there is a range of complexity. We cannot 
treat them the same way we treat simple molecules like insulin, 
for example and far more complex biologics like vaccines. There 
is no one size fits all approach in this field.
    And also and this is the report of my team--molecular 
complexity is a scientific notion. It does not depend on the 
leader status of the product. In other words and that may be a 
myth--we have faith in the past in Europe, biosimilar products, 
the follow-on biologics are not new products in scientific 
terms. Biosimilar is just a new legal pathway to authorize 
their use.
    So in other words, biosimilars are just as complex in 
molecular terms, as their counterparts. They are just as 
difficult to fully characterize--not more, not less.
    The third and last point is interchangeability. Because 
biosimilars are not generics, medical practices which are 
standard for generics are not necessarily repeatable here. Like 
any other biology, biosimilars can carry safety risks which 
might not be fully detected at the approval stage. I have to 
say that the framework on biosimilars in Europe does not lead 
to a scientific conclusion on interchangeability. It doesn't 
say if a biosimilar product is interchangeable or if it is not 
interchangeable. Simply because of the construction of the 
European Union, interchangeability is not a point that our 
unitization currently addresses. It is addressed to member 
state schools, not European communities.
    However, I want to stress that interchangeability may 
already occur today in Europe between a number of these 
products, one innovative product and another one, for example, 
pharmaceuticals that care professionals may, in some countries 
in Europe, substitute one for another one, for example, because 
they have the same international long comparable name, like 
insulin again.
    Interchangeability is therefore a different notion from 
comparability that needs to be handled with great caution for 
all biologics.
    Mr. Chairman, I would like to conclude by summarizing what 
the EU experience tells us in this field. Our experience tells 
us that a framework on follow-on biologics is not only feasible 
but is also desirable, to make sure that products on the market 
are equally safe and efficacious. It also tells us that this 
framework should allow applications based on a reduced, 
abbreviated data package to be submitted. That for the very 
benefit of biosimilar manufacturers, the framework should also 
be sufficiently robust, science-based and stringent to avoid 
lowering standards of quality, safety and efficacy.
    Our experience tells us that what is at stake here, really, 
is in fact, the long-time trust and confidence of patients of 
care professionals in the regulatory system, in follow-on 
biologics in particular but more worldly by your technology. 
And we are, of course, prepared to collaborate further with the 
United States in this emerging, challenging but promising area. 
Thank you again for this opportunity to testify and I look 
forward to the questions.
    [The prepared statement of Mr. Rossignol follows:]
                Prepared Statement of Nicolas Rossignol
    Mr. Chairman, honorable members of the HELP committee, thank you 
for giving me the opportunity to testify today. My name is Nicolas 
Rossignol. Since 2003 I have been working as an Administrator within 
the European Commission, in the division in charge of the European 
Community pharmaceutical legislation. The European Commission has three 
main roles in the area of pharmaceuticals: it proposes new legislation; 
it implements existing legislation; and it authorises and monitors the 
placing on the EU market of certain types of medicines, including all 
biotech products produced by recombinant DNA technology (e.g., insulin, 
growth hormones, etc.). The granting of this ``marketing 
authorisation'' is done on the basis of a scientific evaluation of the 
product, which is carried out by the European Medicines Agency (EMEA).
    Since 2003 I have been responsible within the European Commission 
for the implementation of the EU Pharmaceutical legislation in the 
specific field of ``follow-on biologics,'' which we call in Europe 
``similar biological medicinal products,'' or ``biosimilars.'' I have 
been involved in the legal, regulatory and scientific aspects of this 
topic. It is arguably one of the most complex issues that the European 
Community has faced in the area of pharmaceuticals in the last 5 years.
    My testimony today will focus on how the European Union reviews and 
approves ``follow-on biologics'' or biosimilar products. I will address 
the following issues:

     How and on which principles is the EU legal framework for 
biosimilars established?
     What regulatory and scientific work has been achieved in 
the EU since the establishment of this framework?
     What has been the EU practical experience so far with the 
regulatory environment on biosimilars, and what are the challenges?
 how and on which principles is the eu legal framework for biosimilars 
                              established?
    The notion of ``biosimilar product'' or ``biosimilarity'' has been 
introduced in EU legislation in June 2003,\1\ and further elaborated 
with the adoption of the EU ``Pharmaceutical Review'' in April 2004.\2\ 
This notion allows a manufacturer to submit an application and get an 
authorisation for a product claimed to be similar to another biological 
medicine--the ``reference product.'' The rationale for creating this 
new licensing route is that biologics similar to a reference product 
``do not usually meet all the conditions to be considered as a 
generic.'' \3\ Although the EU ``generic'' route remains legally open 
to biologics (the word ``usually'' implies that in some cases, generic 
provisions might be sufficient), this is more a theoretical possibility 
than a practical way forward given the current state of science. It is 
clear for EU regulators today that the complexity of biological 
molecules, the fact that they are produced in living organisms and 
their sensitivity to changes in the manufacturing process make it 
virtually impossible for applicants to produce an identical copy of a 
reference biological product. In other words, the licensing route for 
biosimilars is based on the principles that:
---------------------------------------------------------------------------
    \1\ Section 4, Part II, Annex I to Directive 2001/83/EC of the 
European Parliament and of the Council on the Community code relating 
to medicinal products for human use, as amended by Commission Directive 
2003/63/EC of 25 June 2003, Official Journal of the European Union L 
159, 27/6/2003. P. 0046-0094.
    \2\ Directive 2004/27/EC of the European Parliament and of the 
Council of 31 March 2004 amending Directive 2001/83/EC on the Community 
code relating to medicinal products for human use, Official Journal of 
the European Union L 136, 30/4/2004. P. 0034-0057.
    \3\ Recital (15) of Directive 2004/27/EC, see above.

     biologics are not chemical drugs; and
     the generic approach is, in the quasi-totality of cases 
today, very unlikely to be applicable to biologics: biosimilars are not 
``biogenerics.''

    The regulatory framework for biosimilars is therefore the only one 
licensing route to be applied to biologics claimed to be similar to a 
reference product. Three main eligibility criteria can be spelled out:

     First, the product must, obviously, be a biological 
medicine. In legal terms, this means that any type of biologic could be 
licensed as a biosimilar, including complex biologics such as blood-
derived products, vaccines, gene/cell therapy products, etc. However, 
the approach is for scientific reasons more likely to be successful 
today for products which can be thoroughly characterised, such as 
proteins produced by recombinant DNA technology (e.g., insulin, growth 
hormones). Conversely, it is more difficult to apply to other types of 
biologics which by their nature are more complex (e.g., vaccines), or 
to those for which little regulatory experience has been gained so far 
(e.g., gene therapy).
     Second, the reference product must have been authorised 
within the European Community. Importantly, it is not legally required 
that the reference product is still authorised at the time the 
biosimilar application is filed.
     Third, the application has to be submitted after the 
expiry of data exclusivity. In the EU, innovative products benefit from 
a data exclusivity period, which currently varies from 6 to 10 years 
for old products, and which has been recently harmonised to the so-
called ``8+2+1'' period. This means that an authorised product will get 
a data exclusivity period of 8 years, after, and only after which a 
company will be allowed to submit a biosimilar application. However, 
the actual placing on the market of the biosimilar will not be 
permitted until 10 years (i.e., 8+2) have elapsed from the initial 
authorisation of the reference product. In addition, the period will be 
extended to a maximum of 11 years (i.e., 8+2+1) if, during the first 8 
years of data exclusivity, the holder of the reference product obtains 
an authorisation for new therapeutic indication(s) which bring(s) 
significant clinical benefit in comparison with existing therapies. 
This balanced approach has been favoured in order to reward companies 
who develop innovative products, without impairing the development of 
the generics and biosimilar industry.

    As regards the kind of data required to file a biosimilar 
application, the EU legislation is based on the principle that a ``one-
size-fits-all'' approach is unworkable in this area. The type and 
amount of pre-clinical and clinical data are not predefined in 
legislation but are determined on a case-by-case basis, on the basis of 
the relevant scientific guidelines. This approach reflects the wide 
spectrum of molecular complexity among the various products concerned, 
ranging from relatively simple molecules such as insulin to far more 
complex ones. Thus, the requirements to demonstrate safety and efficacy 
of a biosimilar are essentially product class-specific. In theory, a 
biosimilar application could therefore range from being almost ``as 
abridged'' as a generic application (with very limited non-clinical/
clinical studies), to being nearly as complete as a full, stand-alone 
application. The task to determine this range as precisely as possible, 
concretely and on a scientific basis, i.e., by taking in consideration 
the characteristics of the concerned products, has been put in the 
hands of the European Medicines Agency (EMEA), to which the EU 
legislators have given a mandate to issue scientific guidance.
 what regulatory and scientific work has been achieved in the eu since 
                  the establishment of this framework?
    The first EMEA guideline on biosimilars was released for 
consultation in November 2004. This was a general, ``overarching'' 
guideline designed to introduce the concept of biosimilarity in 
scientific terms. Since then, a number of guidelines have been 
issued,\4\ most notably on:
---------------------------------------------------------------------------
    \4\ http://www.emea.europa.eu; in addition, a guideline on pre-
clinical and clinical issues related to a biological substance of 
extractive origin (Low Molecular Weight Heparins) is also in 
preparation.

     general quality aspects;
     general pre-clinical and clinical aspects;
     product-class-specific pre-clinical and clinical aspects 
on insulins, growth hormones, erythropoietins and granulocyte-colony 
stimulating factors;
     immunogenicity of biotechnology-derived therapeutic 
proteins.

    All these guidelines relate to molecules which can be thoroughly 
characterised with state-of-the-art analytical methods and for which 
extensive regulatory experience is available.
    From a legal perspective, it is not necessary that EMEA issues 
guidance in one area to enable manufacturers to submit applications. 
Besides, EMEA guidelines are usually not legally binding--alternative 
approaches which depart from available guidelines, if properly 
justified by the manufacturer, may also be accepted. In the case of 
biosimilars, however, the legislation makes explicit reference to 
compliance with the detailed guidelines to be issued by the EMEA.
    Without going into the scientific details of these guidelines, one 
important underlying principle is worth being mentioned: to 
substantiate its claim of biosimilarity, a manufacturer must conduct a 
direct and extensive comparability exercise between its product and the 
reference product, in order to demonstrate that the two products have a 
similar profile in terms of quality, safety and efficacy. Only one 
reference product is allowed throughout this exercise. Approaches using 
indirect comparisons (i.e., through other products) are unlikely to be 
successful from a scientific viewpoint.
    The EMEA guidelines make it clear that it is not expected that the 
quality attributes (e.g., the molecular structure) in the biosimilar 
and the reference product should be identical. Actually, minor 
structural differences are reasonably expected given the very nature of 
biologics and the inherent variability in the way they are produced. 
However, those differences should in any event be justified on 
scientific grounds and would be considered on a case-by-case basis, in 
relation to their potential impact on safety and efficacy. The 
underlying scientific assumption is that differences between the 
biosimilar and the reference product are, a priori, regarded as having 
a potential impact on the safety/efficacy profile of the product. They 
will therefore influence the type and amount of data required by the 
regulators in order to make a satisfactory judgment of compliance with 
EU standards. For example, changes in glycosylation patterns are well 
known for having potential effects on the safety/efficacy profile of 
glycosylated proteins.
    In case the reference product has more than one therapeutic 
indication, the efficacy and safety of the medicinal product claimed to 
be similar has to be justified or, if necessary, demonstrated 
separately for each of the claimed indications. In certain cases it may 
be possible to extrapolate therapeutic similarity shown in one 
indication to other indications of the reference medicinal product, but 
this is not automatic (it may also be that the biosimilar applicant 
does not claim all the therapeutic indications of the reference 
product). Justification will depend on a number of factors, such as 
clinical experience, available literature data, etc. In essence, 
regulators' judgment to approve therapeutic extrapolation is again 
product-specific.
 what has been the eu practical experience so far with the regulatory 
        environment on biosimilars, and what are the challenges?
    The EU framework on biosimilars is relatively new. Two products 
have been authorised so far under this framework\5\: the first is the 
growth hormone Omnitrope, which was authorised by the European 
Commission in April 2006. A second growth hormone, Valtropin, was also 
authorised in April 2006. One product (Alpheon, an interferon) was 
given a negative scientific opinion by the EMEA in June 2006.\6\ One of 
the main reasons for this is that the EMEA had major concerns regarding 
the comparability of Alpheon and its reference product (Roferon-A), 
because of differences identified between the two medicines, such as 
impurities. The EMEA was hence of the opinion that Alpheon could not be 
considered as a biosimilar.
---------------------------------------------------------------------------
    \5\ The register of medicinal products for human use authorised by 
the Commission is available at http://ec.europa.eu/enterprise/
pharmaceuticals/register/alfregister.htm.
    \6\ http://www.emea.europa.eu/pdfs/human/opinion/19089606en.pdf.
---------------------------------------------------------------------------
    A number of additional applications are already in the pipeline at 
the EMEA. They mainly concern erythropoietins (EPOs), interferons, 
insulins and granulocyte-colony stimulating factors (G-CSFs). An early 
dialogue between the manufacturers, the EMEA and the European 
Commission has proven critical to sort out the various regulatory and 
scientific issues that applicants may face.
    Open debate with all stakeholders has proven extremely useful to 
gather input, compare experience and build consensus, in particular 
when drafting guidance documents. As science evolves, our ability to 
better characterize biologics should increase, as well as our 
regulatory experience with these products. One can therefore expect, in 
the long term, that the ``range of possibilities'' (types of biologics 
for which the biosimilar approach is scientifically acceptable, amount 
of clinical data required to demonstrate biosimilarity, etc.) will 
become more and more precise.
    The ``legal construction'' of the European Community assigns 
certain competences to the European Commission, while some others are 
for the Member States. The issue of pricing and reimbursement, in 
particular, is basically of national competence in Europe. Therefore 
the EU harmonised regulatory framework on biosimilars does not address 
this issue. Given the limited number of products authorised so far and 
the fact that this framework is quite new, it is probably too premature 
to assess the actual impact of the introduction of biosimilar products 
on the price of biologics in Europe. However, this is a parameter the 
European Commission is likely to monitor with particular attention in 
the coming years.
    Some new issues have fueled the EU debate on biosimilars in the 
recent past. One of them relates to interchangeability between 
biosimilars and innovative products. It is important to bear in mind 
that the EU regulatory framework on biosimilars is designed to achieve 
one objective: to assess the quality, safety and efficacy of 
biosimilars so that these products comply with the same EU health 
standards as any other medicine. This framework, however, is not 
legally designed to evaluate whether a biosimilar is actually 
interchangeable in medical practice with the reference product, i.e., 
whether one product can be safely substituted for the other and have 
the same biologic response without triggering adverse reactions. 
Interchangeability is also beyond the scope of the existing EMEA 
guidelines on biosimilars.
    Finally, one last point in discussion today relates to the naming 
of biosimilars. Medicines usually have an International Non-proprietary 
Name (INN) (e.g., ``insulin'') which is defined by the World Health 
Organisation. Generics usually have the same INN as the reference 
product, and healthcare professionals often prescribe by INN. The 
biosimilar industry has been advocating that a biosimilar product, once 
proved biosimilar, should be entitled to have the same INN as its 
reference product. On the other hand, the innovative industry has 
claimed that a distinct INN should be assigned to biosimilars, in 
particular for the sake of traceability and pharmacovigilance. Our 
understanding within the European Commission and EMEA is that the rules 
of the INN naming system should remain international, science-based 
rules. The same scientific rules should apply to all products, be they 
innovative products or biosimilars. The INN nomenclature should not be 
used as a way to distinguish between biosimilars and other types of 
products.
                               conclusion
    Overall, I believe it is fair to say that the flexibility of the EU 
regulatory framework on biosimilars has been positively welcomed by 
both sides of the pharmaceutical industry. The fact that the legal 
basis is relatively concise and focuses on the key legislative elements 
of this framework, while technical aspects are addressed through 
guidelines, has enabled us to undertake a cautious and balanced, ``not 
too stringent, not too loose'' approach to allow biosimilar 
manufacturers to get streamlined access to market, without compromising 
public health. The defining principles which have guided us so far in 
regulating biosimilars will remain crucial to address the challenges 
still ahead of us. Our primary objective should remain to protect 
public health: biosimilars should meet the same standards of quality, 
safety and efficacy as any other biological product in the EU. Our 
regulatory framework should remain based on science: it should fully 
take account of the fact that biologics are, in the vast majority of 
cases, not simple molecules. And finally, our experience over the past 
few years demonstrates, I believe, that transparent and open dialogue 
with all sides of the industry is key to put in place a robust and 
adapted regulatory framework in this emerging field.
    Thank you.

    The Chairman. Good. Thank you very much, Doctor. We 
appreciate your staying with us here for the question period. 
Thank you.
    Dr. Hussain, we thank you very much for your presence and 
look forward to hearing from you.

STATEMENT OF AJAZ S. HUSSAIN, PH.D., VICE PRESIDENT AND GLOBAL 
HEAD OF BIOPHARMACEUTICAL DEVELOPMENT, NOVARTIS, PRINCETON, NEW 
                             JERSEY

    Mr. Hussain. Good morning. I am Dr. Ajaz Hussain, Vice 
President and Global Head for Biopharmaceutical Development at 
Sandoz. I want to thank Chairman Kennedy, Senator Enzi and 
other distinguished members of the Senate HELP Committee for 
giving me this opportunity to represent Novartis Group of 
Companies.
    As a former research scientist, as a regulator at FDA, 
which dealt with interchangeability in these issues on a daily 
basis for about 10 years and as an American, who has at various 
points in my life also been a patient, I believe in the Gold 
Standards of the FDA approval process and want to see only safe 
and effective medicines made available to patients. I believe 
this is achievable for follow-on biologics as it is for all the 
drugs and biologics.
    Novartis supports--strongly supports a balanced position 
which advocates that the same standards of high quality and 
science be applied to all medicines and that there be 
respectful, legitimate intellectual property. We recognize a 
role that generic drugs play today and follow-on biologics will 
play tomorrow in our healthcare system.
    We believe the following are critical in any follow-on 
biologics regime. One, follow-on products can be made or 
designed to be used interchangeably with the original product. 
That's what is meant by interchangeability. Science shows that 
the same product can be made in different ways. That is what we 
mean when we say a product is not the process and this is what 
we mean by comparable products.
    Three, every clinical step necessary to bring in new 
biologic market is not needed to show that a follow-on is as 
safe and as effective.
    Four, here is the good news, Senators. You don't need to 
choose what specific steps are required. FDA already has the 
expertise to do this as shown by their approval of innovative 
products. What you need to do is to empower them to act and 
that was one of the frustrations I had with the policy 
development team, is to get stuck with not being empowered to 
do this.
    In the debate so far, you have been hearing essentially two 
opposite ends of the spectrum on the issue of follow-on 
biologics. Some say follow-on biologics are impossible and 
inherently dangerous and you can see the shift in bad direction 
already occurring but that position has moved to yes, it's 
possible now.
    Others have argued that you should simply apply the generic 
drugs model. Novartis believes that there is a viable and 
responsible solution compatible with the current state of 
science, a middle ground. We believe it is time for an explicit 
regulatory pathway. The science is here and has been for at 
least a decade. With all due respect to my colleagues who don't 
share this perspective, the evidence that the science is here 
is the existence of the reference products themselves. Clearly, 
these products can and are being made and indeed, we have 
marketable versions of many biologics already on the market, 
independently developed, independently approved but also 
successfully in use for the same indications.
    Comparability is not a new concept, especially for the 
biopharmaceutical industry. Our ability to make and 
characterize biosimilar products and other complex biologics 
has progressed rapidly in the last few decades. Comparability 
itself is not new. It has enabled manufacturing changes without 
complete clinical trials for over a decade. It is a signs-based 
regulatory success story. It also proves that product is not 
the process.
    Some suggest that products have to be the same. However, 
batch to batch variation is inevitable for all biologics and as 
long as manufacturers ensure that subsequent batches stay 
within the same goal post of acceptable variation when the 
product is made available to patients.
    Comparability principles can likewise be enforced on 
follow-on biologics and unintended consequence of protectionism 
disguised as sameness is that it raises the hurdles for 
innovators and makes products for unmet medical needs 
increasingly unavailable to patients.
    Interchangeability is an important public health goal and a 
natural next step. All that is needed is a small step, a 
natural progression. Using public prior knowledge, a follow-on 
sponsor submits data comparing their candidate to an approved 
product. FDA already uses comparability data for manufacturing 
changes and there, interchangeability is presumed.
    The small step is allowing it for follow-on products by a 
different sponsor. Everything else follows. No access to 
innovative data is required.
    In conclusion, Novartis applauds the leadership of the 
Senators of this committee on this issue. We support a 
thoughtful, balanced approach based on established signs of 
comparability that makes safe and effective follow-on biologics 
available. Ultimately what matters is a safe and successful 
outcome for the patient. Thank you.
    [The prepared statement of Mr. Hussain follows:]
              Prepared Statement of Ajaz S. Hussain, Ph.D.
    Good morning, I am Dr. Ajaz S. Hussain, Vice President & Global 
Head of Biopharmaceutical Development at Sandoz. I want to thank 
Chairman Kennedy, Senator Enzi and the other distinguished members of 
the Senate HELP Committee for giving me the opportunity to represent 
the Novartis Group of companies (``Novartis'') at this hearing. As a 
former research scientist, as a regulator with 10 years of experience 
at the FDA--where I was Deputy Director of the Office of Pharmaceutical 
Sciences until October 2005--and as an American who has at various 
points in my life also been a patient, I believe in the ``Gold 
Standard'' of the FDA approval process and want to see only safe and 
effective medicines made available to patients. I believe that this is 
as achievable for follow-on biologics as it is for all other drugs, 
generic and innovator, including biologics.
    Novartis is a world leader in the research and development of 
products to protect and improve health and well-being both by 
developing innovator drugs and biologics, and also by making generics 
available once patents have expired. Novartis is unique among 
pharmaceutical companies because it has made large investments in both 
branded and generic drugs. Given this, our position on follow-on 
biologics is not based on the commercial interests of one particular 
product. Instead, Novartis strongly supports a balanced position, which 
advocates that the same standard of high quality and science be applied 
to all medicines, and that there be respect for legitimate intellectual 
property, while recognizing the role that both generic drugs and 
follow-on biologics can play in the health care system. Novartis' 
success as a global leader of the innovator biopharmaceutical industry 
is demonstrated by the approval and launch of 15 new molecular entities 
in the United States since 2000--more than any other company. Novartis' 
global research base, the Novartis Institutes for Biomedical Research, 
is located in Boston, Massachusetts where 1,300 researchers work 
towards developing the next generation of therapies. We also are 
relocating our Novartis Vaccines and Diagnostics Division Global 
Leadership to Commonwealth of Massachusetts in the third quarter of 
this year, and will be bringing together hundreds of additional 
researchers to develop the next generation of vaccines.\1\ We are 
committed to a future of innovation and new medicines, but we also 
believe in free markets and competition, and we are not afraid of them.
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    \1\ Note that the Novartis Corporate Headquarters are in New York, 
and Novartis has facilities in Arkansas, California, Colorado, Georgia, 
Massachusetts, Michigan, Nebraska, New Jersey, New York, North 
Carolina, and Wisconsin with total U.S. employees numbering 29,000.
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    In the debate so far, you have been hearing essentially two 
opposite ends of the spectrum on the issue of follow-on biologics. At 
one end of the spectrum, some have argued that follow-on biologics are 
impossible and inherently dangerous, while others suggest that this is 
just a re-run of the 1984 debate when generic drugs were said to be 
impossible too and that everything we need to develop such products can 
already be done today. And the former, those adverse to follow-on 
biologics, do not accept that interchangeable products can ever be 
produced by other than the original manufacturer. In such a polarized 
context, Novartis appreciates this opportunity to share an alternative 
perspective; one that we believe encompasses a viable and responsible 
solution compatible with the current state of the science.
    In considering this public health issue, we start from the premise 
that follow-on biologics are essential to the future economics of 
health care both in order to stimulate innovation, and, as important, 
to ensure that patients have access to the medicines they need at 
affordable prices. That a fair solution can enable both the innovator 
industry and the generic industry to prosper such that patients can 
benefit across the board, is a concept too often lost in this debate as 
both extremes try to pursue their respective ``wish lists.'' For its 
part, Novartis believes that a balanced solution is possible, one that 
will provide greater access to safe and effective medicines through the 
availability of competitively-priced biologics when patents expire. 
Toward this end, Novartis believes it is time for an explicit 
regulatory pathway that encourages the development and approval of 
follow-on biologics, including interchangeable products.
    We define follow-on biologics broadly to include comparable 
versions of already-approved biologics and also improved versions of 
current therapies that depend on the same mechanism of action are used 
in the same indications as the originator product, and are developed 
based upon an extensive and sound set of data generated by the 
subsequent sponsor, which includes stand-alone product and process 
development and the demonstration of comparability with the reference 
product on all relevant levels, that is, chemical, pre-clinical, and 
clinical (including immunological) and appropriately qualifying 
differences.
   the success of the biopharmaceutical industry deserves comparable 
                          regulatory progress
    The biopharmaceutical industry has made phenomenal progress since 
the first biotechnology-based medicine was licensed in the United 
States in 1982. Technologies to make and characterize protein products 
and other complex biologics have progressed rapidly in the last two 
decades, and the use of comparability to facilitate manufacturing 
changes has become established by innovator companies and regulators 
around the world since FDA led and then first formalized the concept in 
the United States in 1996 with the Comparability Guidance. 
Comparability allows for flexibility in the development of products 
that is essential to their optimal manufacture and iterative 
improvement. It is a science-based regulatory success story, with very 
few exceptions.
    Significant and continual advancements in scientific disciplines 
such as analytical characterization, product and process design, 
process control, and clinical assessment based on underlying mechanisms 
of action provide a sound scientific basis to utilize the fundamental 
principles and procedures of comparability evaluation for follow-on 
biologics. We are confident that this science-based approach will 
enable the industry to progress to the greater availability of 
affordable biologics to which we all aspire.
    In supporting a new regulatory pathway based on comparability such 
as that described in the ``Access to Life-Saving Medicines Act,'' 
Novartis is merely recognizing the next logical step in the evolution 
of the biopharmaceutical industry. The biotech industry is a success 
story with multiple blockbuster products and well-capitalized 
companies, as well as those small and emerging companies that hopefully 
will contribute to its future. Its very success, creativity, and 
growth, since insulin was approved as the first biotechnology product 
back in 1982, is what makes this next step possible. With key patents 
expired and expiring, the time is appropriate to enable greater access 
to these medicines.
    In proposing that the development and approval of follow-on 
biologics be enabled, Novartis is drawing on its own decades of 
experience as well as its current capabilities and portfolio across the 
full breadth of the biotechnology and pharmaceutical industry. While 
care must be taken and standards maintained, the dramatic progress in 
biotechnology has already enabled development of the first follow-on 
biologic products. Indeed, some would say the entire industry is 
already a follow-on industry because most of the first-generation 
biotechnology products themselves were follow-ons to their naturally-
sourced counterparts. We believe that this great success achieved by 
the biopharmaceutical industry working with the FDA regulatory experts 
should be the bridge to an even greater future. We envision the 
advancement of public health through the increased therapeutic options 
that become available and are accessible when follow-on biologics are 
approved through the appropriate application of the new regulatory 
pathway. Just as we trust the FDA to judge the appropriateness of 
comparability for innovators, so we can trust them to apply the same 
principles carefully and responsibly to all other sponsors.
         interchangeability is an important public health need
    A regulatory pathway that encourages the integration of appropriate 
public prior knowledge, as well as one that enables a subsequent 
sponsor to submit data comparing their candidate to a previously 
approved product, are natural progressions in enabling the safest and 
most effective products to be made available to patients. Moreover, 
just as comparability for innovators' products pre- and post- any 
manufacturing change has presumed interchangeability to their final 
product, so the potential for interchangeability of a product from a 
subsequent sponsor, who has demonstrated comparability to an existing 
product, must be a legitimate consideration if not a foregone 
conclusion.
    The industry and FDA accept that batch-to-batch variation is 
inevitable for biologics, and, as long as manufacturers ensure that 
subsequent batches stay within the same ``goal posts'' of that accepted 
variation, then the product is made available to patients. 
Comparability principles ensure that, for biologics, the same rules 
apply for after-approval manufacturing changes, and they can likewise 
be imposed on follow-on biologics. In none of these cases is 
``sameness'' a useful or scientifically-valid concept, any more than it 
has been at any time for any biologic. To argue otherwise (for example 
insisting on ``sameness'' requirements that are not the current 
regulatory standard) creates hurdles to follow-on biologics that are 
greater than those required for innovator products and counter-
intuitive. Similarly, an unintended consequence of such protectionism 
disguised as ``sameness'' raises the hurdles for innovator products, 
and makes products for unmet medical needs increasingly unavailable to 
patients. What we need are consistent and appropriate regulatory 
standards applied to all biologics independent of their sponsor.
    In addition, a regulatory pathway that allows any sponsor to 
further innovate and develop a new second-generation product that is 
expressly different from but related to the first-generation product, 
and that represents an improvement in the medical options for patients, 
can be enabled by a pathway based on principles of comparability. This 
element encourages second-generation biologics but is precluded in the 
European approach and yet may represent significant opportunities in 
the ``Access to Life-Saving Medicines Act.''
       biotechnology medicines have the confidence of the public
    It is essential that the high standards for safety and efficacy 
that patients expect and that the biopharmaceutical industry has 
provided in collaboration with FDA are maintained through appropriate 
and consistent regulatory requirements for all biologics. These 
standards have been achieved through the application of rigorous, 
science-based regulatory requirements by experts for over a century 
under the PHS Act. The current statute reinforces the requirements for 
safety, purity and potency. However, just as we trust the FDA to assess 
the unknown (new) biologic about which we necessarily have the least 
experience, (namely the innovator products), using these criteria, so 
too we can entrust the Agency to evaluate follow-on biologics which 
refer to products for which we now have decades of experience. We 
believe Congress should confer on FDA the flexibility to accommodate 
progress in science, and help enable the regulatory requirements to 
evolve appropriately as well. As such, FDA can, through public notice-
and-comment rulemaking, and guidance as appropriate, implement a 
comparability-based pathway for follow-on biologics without requiring 
arbitrary, unnecessary or unethical duplication of pre-approval studies 
or clinical trials, and by allowing appropriate extrapolation between 
indications based on mechanism of action. We can also allow FDA to use 
their experience with comparability to evaluate a follow-on biologic 
sponsor's data, and judge the appropriateness of the products being 
designated as interchangeable--all while recognizing that FDA does not 
regulate the practice of medicine. The EU may have chosen to defer to 
member States on interchangeability (the EMEA has not rejected 
interchangeability for biosimilars as some have misrepresented), but 
the history of generic drugs in the United States makes it much more 
fitting that FDA recommend the designation--they have the skill and the 
public health responsibility that make this appropriate. It should also 
be noted that, throughout this process, no access to the innovator's 
data is required--the approval of the follow-on biologic can rest 
solely and surely on the shoulders of the subsequent sponsor's 
comparative data which it obtains by running side-by-studies of the 
innovator reference product and its own follow-on biologic.
   protection of intellectual property is the lifeblood of innovation
    Strong intellectual property protection, including patents, trade 
secrets, and confidential information, is essential to promoting 
innovation that results in new therapies to meet patient needs. 
However, Novartis believes that, by having a regulatory pathway that 
allows more rapid and efficient realization of this innovation through 
greater use of comparability and prior knowledge for second-generation 
products as well, these IP rights are enhanced not undermined by a 
follow-on biologics pathway. Moreover, with each follow-on sponsor 
developing its own independent data package, and not relying on the 
innovator's data, we believe these property rights are respected even 
for those products on which the patents have expired and competition 
appears imminent. Historically, the biotech industry has established 
robust patent estates. However, when these patents expire (including 
patents claiming those PHS Act products for which up to 5 years of 
patent-term restoration already has been granted under existing Hatch-
Waxman), increased competition and access to safe and effective 
medicines should proceed in the free market. Litigation over patents 
will still occur, but those litigation proceedings should, and in fact 
do not need to be coupled to the regulatory approval process. 
Nonetheless, Novartis is prepared to work with the committee and its 
staff to develop appropriate legislative provisions that would apply at 
the conclusion of the FDA approval process. Such a process for follow-
on biologics could include a 45-day notification of an issued approval, 
during which time the innovator would be alerted to an approval 
referencing its product, and the innovator could institute litigation 
if it believed that its patent or other intellectual property rights 
have been violated.
    Novartis believes that, if follow-on biologics are to become 
available to patients in a timely manner, it is essential to 
``decouple'' patent litigation from the approval of new products using 
a comparability-based regulatory pathway. The complexity of 
biotechnology product patent estates is such that we do not believe 
waiting for resolution of biotech patent litigation in the Courts will 
be other than a barrier to the timely availability of follow-on 
biologics. Consequently, we believe companies should be able to decide 
how best to approach the market if they believe there are not 
outstanding patents, or that any patents still in force are invalid or 
not infringed just as they can for any PHS Act biologic today.
    In legislating this ``decoupling,'' it may be appropriate for 
Congress to consider other mechanisms by which to make the exclusive 
marketing window more predictable for innovators. Novartis supports a 
non-patent research incentive such as may be achieved through modeling 
on EU data exclusivity provisions, more appropriately called market-
exclusivity provisions, for innovator biologics approved after 
enactment of any new legislation, as a way to enhance regulatory 
certainty for all sponsors (which would be independent of the patent 
estates). Such an approach would prevent diversion of excess resources 
being used by either innovators or the sponsors of follow-on biologics 
on slow and expensive patent litigation, and enable those resources to 
be dedicated to the development and new and more efficient 
manufacturing of biologics. However, beyond harmonizing this one 
discrete component of the EU system, in general, the EU approaches on 
follow-on biologics per se, their so-called ``biosimilars,'' suit an EU 
environment of 27 distinct countries with different legislative and 
regulatory histories as well as very different health care and 
reimbursement systems. The United States needs a solution that suits 
U.S. needs and statutory environment as it has been evolving here for 
over 200 years following adoption of the U.S. Constitution.
  the development of new regulatory requirements must be transparent 
                           and the rules fair
    For any new regulatory pathway, the FDA will need to go through a 
process of developing regulations. While promulgation of regulations 
need not be blocking applications in the meantime, their development 
can be expected to facilitate the choices for those sponsors and 
patients who can afford to wait a little longer. The FDA has a mission 
to enhance the public health, and follow-on biologics will be part of 
that as a result of enhanced patient access and competition. Novartis 
supports such an open process, while 'not accepting that it should ever 
serve to block follow-on biologics while the regulatory implementation 
process proceeds. Unlike the EU, the United States has a long 
established and very accessible public participatory process, in which 
submissions to dockets are available to the public. It will be through 
this notice-and-comment rulemaking, as well as the development of 
guidance, to which the experienced innovator industry and others will 
be able to contribute and ensure that only safe and effective follow-on 
biologics are approved.
                               conclusion
    Novartis envisions a win:win public health and public policy 
solution whereby a follow-on biologics industry is enabled, patients 
get greater access to high-quality and improved biotechnology products 
at competitive prices, and that provides innovators relief from 
outdated requirements and a less burdensome pathway to improve existing 
products. As recognized by the FDA leadership, it is not appropriate to 
use outdated regulatory requirements just because those parameters were 
considered historically useful. In this and other important regards, 
the opportunities to innovators through the creation of a new 
regulatory pathway based on comparability such as, for example, in the 
``Access to Life-Saving Medicines Act,'' should be at least as great as 
any available to generics, especially with respect to second-generation 
products. We do not believe that this is a zero-sum game. PHRMA's own 
numbers say 418 biotechnology medicines are in development, and yet, 
only 4 recombinant PHS Act applications were approved in 2006. It is 
time for all of us to work with FDA to improve the review for all 
biologics such that every patient can get access to safe and effective 
medicines that will compete in the market place and be more affordable, 
while also encouraging the development of the new therapies which are 
so desperately needed.

    The Chairman. Thank you, thank you very much. We try to do 
5-minute rounds, if you would, please.
    Let me ask the whole panel a question to get your reaction. 
Recently, I had the good opportunity to meet with a number of 
the major biotech industries in my own State and I was 
interested in the coming together after a good deal of debate 
and discussion, around the idea that there was a pathway to 
move on this, as long as it was basically driven by the 
science, protect safety and also promoted the innovation and 
that it was feasible. Let me ask each of you, what are the 
specific recommendations that you'd have for us to achieve that 
pathway? If you'd be good enough.
    Mr. Banwart. Chairman Kennedy, from our point of view, we 
reiterated the five principles in my testimony and we think it 
is important that the FDA be authorized to use their innovation 
and their scientific knowledge to pursue the pathway to follow-
ons. So we think the most important aspect there is the 
enabling legislation that would allow the FDA to do this job 
and in addition, to provide them the resources to do the job. 
So it's--in our view, it's a matter of the what and the 
enabling legislation to create the what.
    The Chairman. Dr. Siegel.
    Dr. Siegel. Well, I'd say that the considerations are--the 
most important considerations are largely those I mentioned in 
my address. I think we really do need to have good public 
debate to bring the science out. I think this hearing is a 
terrific step in that direction. I commend the European model 
and approach in that regard. I think it is important that we 
not go beyond the science. You can't just take a molecule that 
has never been in people and that you can't be sure what it is 
and all of a sudden, market it to thousands of people. It's too 
risky. You need to identify what the risks are, you need to do 
the appropriate clinical trials. You need to ensure that the 
FDA is fully empowered to ask for the data and the types of 
studies it needs. You can build a policy based on high degrees 
of similarity but you should not apply that policy to products 
that are not highly similar, to products that are so complex 
that you couldn't determine if they are highly similar and you 
should not say that similar things tell you that they are the 
same. It's an important difference and it's an important 
difference in how we practice medicine. Legislation and 
policies should take that into account.
    The Chairman. You believe that FDA has the knowledge and 
the know-how and the ability to do that, at the present time?
    Dr. Siegel. I think the FDA does. I think it will be a 
learning process. I think there are certain--in the legislation 
before this committee at the present time, there are certain 
constraints on the FDA's ability to ask for studies that it 
needs, both post-marketing and pre-marketing. There are 
timelines for the FDA to reach complete decisions whereas 
typically in legislation, there are timelines for FDA to have 
complete reviews and if more data is needed, to ask for it. In 
this legislation, it constrains the ability to ask for data. 
There are certain types of studies that can't be asked for. So 
I think the FDA has developed to the type of expertise. I think 
it will learn as it goes. I think it needs to be given the 
opportunity to set appropriate standards and to do this the 
right way.
    The Chairman. Good. Dr. Rossignol, Senator Schumer 
indicated earlier in his presentation, there are different 
marketing techniques obviously in Europe and exclusivity is 11 
years. They have effectively about half the profit in terms of 
innovation that American companies have. Would you comment on 
whether you think we should look at 5 years, if they have 11 
years? Is there a relationship there? If you would make just an 
additional comment on that. And then I'll ask Dr. Hussain to 
make a final comment and my time will be up.
    Mr. Rossignol. Thank you, Mr. Chairman. In response to the 
first question, I would simply name three criteria. First I 
think, from our experience in the Union, I would have to say is 
a short experience. I mean, the framework on biosimilars or 
follow-on biologics was created really in 2003 so its only 4 
years but I would say first that we had to be cautious and not 
to create something that would be too flexible or not stringent 
enough and that could then spread suspicion on the actual 
safety and efficacy standards of all biotech products. First 
start cautious, I think is one key point. The second key point 
is that the framework should be flexible and adapted to the 
type of products. When you talk about pilots, this is a big 
world and you have to separate and distinguish between those 
biological products that can today characterize relatively 
well, like small proteins, like insulin, growth hormones and 
you have to distinguish these from more complex products. In 
Europe today, take vaccines for example, we don't believe 
scientifically that a biosimilar approach would be appropriate 
for these products, simply because its very difficult to 
characterize them.
    The third point is really more a point of procedure and 
constant dialogue with all the stakeholders. I think this has 
been instrumental and key now in our context, in the European 
context to discuss both sides of industry and to actually 
gather expertise which primarily lies in the companies today 
because this is a relatively new field.
    Regarding the exclusivity provisions, i.e., your second 
question, Mr. Chairman, I think I will respond in a general 
way. We do have specific provisions for data exclusivity in 
Europe to protect innovation, to reward innovation and I have 
put some information together in my written testimony and I 
will be more than happy to provide further information on this. 
But I have to say that this is one context, which is the 
European context, which is very specific, especially in terms 
of pricing and reimbursement. So as a general comment, I would 
say that this context has to be taken into account when 
reflecting on applying our framework somewhere else in the 
world.
    I think that you have to distinguish between the science 
and rewarding innovation, idea rights, et cetera. The science 
is presenting everywhere and there is no reason why, in 
principle, scientific requirements should be different on one 
side of the Atlantic than on the other. And in this respect, on 
science, we already have ongoing collaboration with the FDA. We 
believe they have the appropriate expertise to assess these 
types of products and we are absolutely prepared to continue 
collaboration and to extend our collaboration in this respect. 
But this is all science and science should be the same 
everywhere.
    But protection of innovation, rewarding innovation and the 
balance between innovation and access to affordable medicines 
is something, in our opinion, that has to be seen in the 
context, in a specific national context, which is different in 
Europe than in the United States.
    The Chairman. Thank you. Very helpful response. My time is 
up but I want to ask Dr. Hussain, if you'd maybe just respond 
to the first issue.
    Mr. Hussain. Mr. Chairman, I'll be brief. I just want to 
make two points before I sort of give you the answer. One is, I 
think as a quote/unquote General Company Sandoz is a new era 
company also at the same time. We want to bring innovative 
solutions to making interchangeable biosimilar products, 
follow-on biologics. In that regard, we have invested, as an 
example, in MIT technology to really seek and discover 
hybrids--that's just one piece of the puzzle. The reason I say 
that is, the solution to this challenge is, you have to empower 
FDA because FDA has to judge the science on which our 
applications will be based on. This is proprietary science and 
technology and you can hear my perspective and my colleague's 
perspective but the solution will be with FDA. So FDA has to 
judge the science. FDA has to ensure the safety and FDA has to 
recognize innovation because we bring innovative science and 
technology to be interchangeable. And I think the only solution 
is to empower FDA. So from that perspective, I think, as one of 
the frustrations I had--I led the policy development for 3 
years on follow-ons myself and the frustration was lack of 
involvement.
    The Chairman. Thank you very much.
    Senator Enzi.
    Senator Enzi. Thank you, Mr. Chairman and I've really 
learned a lot today and I have a lot of questions as a result 
of probably misunderstandings and I will submit many of those 
in writing and I hope that you will respond to them as promptly 
as possible. Is Mr. Rossignol still with us?
    The Chairman. Yes, I hope he is still on. We have to thank 
our technicians here. This is a wonderful opportunity to hear 
from--it was a wonderful opportunity.
    [Laughter.]
    The Chairman. It is and we thank you.
    Dr. Rossignol. I can still hear you.
    Senator Enzi. I thank you for rejoining us. I do like the 
term, biosimilars and I notice that it is not bio-sames. I 
understand that vaccines and plasma proteins are excluded from 
the biosimilar law in Europe. Could you discuss why it was 
decided that they should be excluded from the European 
Commission law?
    Mr. Rossignol. Thank you, Senator Enzi. Well, actually they 
are not excluded. I think that there is a difference in Europe 
between the actual legal framework and the current scientific 
consensus and I want to stress three words--current scientific 
consensus. If you talk only about the legal system, actually 
our legal system first does not preclude the theoretical legal 
possibility that the biologic--any biologic--could be 
authorized as a generic. So that legal possibility is foreseen 
in EU education. However, when biological product does not meet 
the conditions of the generic, then you have the biosimilar 
framework. So that's the legal construction.
    If you talk about science now and the current scientific 
consensus in Europe--the current scientific consensus is that 
realistically, this framework on biosimilars can only be 
applied to products which can be thoroughly characterized and I 
should also add for products for which we have already in-depth 
regulatory and clinical experience. So to give you some 
concrete examples, the small proteins I named already--insulin, 
growth hormones, interferon, to a certain extent, alpha 
proteins--these types of products which are relatively simple 
molecules can be already today relatively solely characterized, 
and are considered in Europe, as being eligible scientifically 
to the biosimilars. For the others, although legally they are 
eligible scientifically, the consensus is that they are 
basically so complex that it's not apporpriate today, given the 
current state of science, to approve them under this legal 
pathway. Is that clear?
    Senator Enzi. Very helpful, thank you. Dr. Siegel, I 
appreciate your testimony. I did note that you do not support 
the Clinton-Schumer bill as it would put unsafe products on the 
market. I think I got that right. Others have indicated that no 
clinical trials are required when innovative manufacturers 
initiate a new manufacturing process. And therefore, there 
should be no clinical trials for follow-on biologics. Can you 
explain the differences between changes in the manufacturing 
process for an innovator and the creation of a manufacturing 
process required for a generic to create follow-on biologics?
    Dr. Siegel. Yes. First let me say the premise of that 
question really--others have said that but it's based on a 
misunderstanding. When innovators make manufacturing changes 
that come anywhere close to the types of the changes that would 
be implicit in having a new manufacturer, they are required to 
do clinical trials. They often, in fact, avoid making such 
changes. I can speak now from the innovator side of the 
equation as well as from the regulator side of the question 
because they recognize that those major changes in how a 
product is made do potentially change the product and it means 
that they will need to do studies and there will be a 
significant likelihood that those studies will show that the 
product isn't the same. So that's driven by the science. The 
types of changes you see, for example, an innovator--you'll see 
with the follow-on biologic is the use of a different master 
cell line, a master cell bank and cell line and that is 
something an innovator would almost never do and regulators 
would only permit, with substantial testing and often 
discouraged, changing the manufacturing facility, changing the 
process. These are major changes.
    There are also important differences between how an 
innovator changes their process because there can be important 
changes in a final product that can't be detected in the final 
product. If you have a new contaminant or a new variant of a 
product, you may see it in large amounts in what is initially 
made by the cells, even less so once that's been purified and 
even less so once that's been formulated because formulation 
can interfere with certain testing. But the purification 
process can bring contaminants and variance down to levels that 
are below detectability but are still important. So an 
innovator will look at every stage of process for what's 
changed or different, understands the process, knows what's 
important in the process, knows what needs to be controlled, 
what variations in a protein are critical and what are not. So 
there is a tremendous knowledge base. There is access to 
materials. There is understanding the testing but there is also 
just an extent of changes that will go on with the follow-on 
that are large and that, in fact, do require innovators to do 
clinical testing as well.
    Senator Enzi. Thank you. This is extremely complex and my 
time has expired. I do have several questions for each of you 
and I will submit those. Thank you, Mr. Chairman.
    The Chairman. Senator Clinton.
    Senator Clinton. Thank you very much and I want to thank 
all of the witnesses, those who are present here and Dr. 
Rossignol, thank you for being with us by long distance. This 
has been very impressive and important testimony.
    I think we all agree that safety is paramount. That is the 
bottom line and what the testimony today highlights is the need 
for greater FDA post-market authority across the board. The 
Waxman-Schumer-Clinton legislation was written to reflect the 
current reality with regard to post-market studies on the brand 
side. There are no post-market studies because the FDA does not 
have the authority. So if the reality does not provide great 
enough safety assurances, then we should raise the standard 
across the board and provide FDA with an enforceable authority 
to require post-market studies on both brands and follow-on 
biologics. Clearly, when changes are made in the existing 
manufacturing process or facility, as Dr. Siegel said, that 
raises questions, which is one of the reasons why the 
innovators don't do it. Well, that seems to me to be somewhat 
backwards because if there are needs to make such changes, the 
FDA should be empowered to act in a more expeditious manner in 
order to facilitate such changes.
    So in effect, we have tied the hands of the FDA, both with 
what could very well be legitimate changes in the innovators 
processes and facilities or cell banks or lines or whatever 
else has to be changed in the opinion of the innovator to bring 
a safe and efficacious product to market and we don't have the 
authority for the follow-on biologics.
    So I think, Mr. Chairman, as we look at this, I would go 
back to Mr. Banwart's very strong emphasis on let's empower the 
FDA to do what we want the FDA to do. I think there has been 
significant concern by this committee and the Congress over the 
last several years about some of the problems at the FDA, some 
of the inadequate authority that the FDA has, some of the 
morale problems as well. So to me, this goes to a central issue 
here as to how we empower the FDA to do the job we expect it to 
do in order to remain the Gold Standard globally, when it comes 
to drug and biologic approvals and marketing.
    I also would like to say that our piece of legislation is 
intended to catalyze this conversation. What we are interested 
in is moving in a thorough and very careful way but 
expeditiously because the amount of money that is being spent 
is just extraordinary and I appreciate Mr. Banwart coming 
forward because with biologic products alone, costs, as I 
understand it, have increased 45 percent in 3 years. We all 
know we've got to do a lot to get costs under control in our 
healthcare system. This is an area that--if we don't address 
everything else we want to do in healthcare--will not be 
sufficient because we will not be able to keep up.
    So I very much appreciate the thoughtful testimony today, 
Mr. Chairman and look forward to working with our colleagues on 
both sides of the isle and frankly, with the industry--both the 
innovator industry, the brand name industry as well as the 
generics and the biotech industry because what we're trying to 
do is in the best interests of safety, science, patient health 
and the cost of healthcare. I think that is the bottom line for 
all of us. So I appreciate it. We'll have some follow-up 
written questions because of the complexity of some of these 
concerns. But thank you again for testifying and thank our 
witness from the EU because it's wonderful to have cooperative, 
friendly relations with our neighbors across the Atlantic. So, 
thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Hatch.
    Senator Hatch. Well, thank you, Mr. Chairman. I want to 
thank each of you for being here. Mr. Rossignol, for you to 
take this time from Europe. It means a lot to us.
    In all honesty, let me just start with you, Mr. Banwart. I 
understand how important it is to have low-cost healthcare for 
employees and to try and keep the costs within reason and of 
course, that's what Hatch-Waxman was really designed to do in a 
lot of ways, plus a lot of other things that we designed in 
that particular bill.
    While I admire Congressman Henry Waxman and Senator 
Clinton's work on this bill, I can't support it because I don't 
think it does provide the safety that we should have. Frankly, 
the safety provisions that we wrote into the original Hatch-
Waxman bill back in 1984, indicated that we were deeply 
concerned about patient safety. I'm not convinced that if a 
follow-on biologic is approved the way that Congressman 
Waxman's bill dictates, patient safety, it seems to me, would 
be a problem because the legislation does not require any 
clinical trials on these products as they move through the 
pipeline. Now I would be interested, first in your thoughts, 
Mr. Banwart and then yours, Dr. Siegel and then yours, Dr. 
Hussain, on that particular issue. And if you could be short--
I've got a number of other questions I really feel I have to 
get to.
    Mr. Banwart. Thank you, Senator Hatch. Obviously safety is 
our number one concern as well and whatever process, whatever 
enabling legislation this committee would bring forward, we 
would assume that it would put safety at the top of the list.
    Senator Hatch. This particular bill does not, in my 
opinion. It's innovative and very thoughtful and I think it's a 
good start. But you would agree that we should have clinical 
trials?
    Mr. Banwart. We need to make sure that we empower the FDA 
to do the job safely.
    Senator Hatch. Now, Dr. Siegel, I would appreciate your 
opinion in particular. I understand you have some ideas on how 
we might be able to reach biosimilar approaches.
    Dr. Siegel. Well, in the interest of not taking up too much 
time because these are complicated questions, I'll be glad to 
answer in more detail and I've addressed some of these----
    Senator Hatch. If you would, I would appreciate you getting 
with us and letting us know.
    Dr. Siegel. I would simply say there are a lot of critical 
issues. The pharmacokinetics, whether a drug gives rise to an 
immune response, which most biologics do.
    Senator Hatch. But you would agree clinical trials are 
improving?
    Dr. Siegel. Absolutely. Both before and after approval, 
absolutely essential. It will depend on the nature of the 
product, how much and the nature of the disease and other 
factors but absolutely critical.
    Senator Hatch. Well, thank you. Dr. Hussain?
    Mr. Hussain. Senator, I think we have the first approval 
from Europe as well as from the United States on this and I 
think clinical trials are part of the compatibility exercise 
and I think are often necessary. I don't see the interpretation 
of the proposed bill as not requiring clinical trials. So I 
don't envision that this will proceed without clinical trials. 
But I do want to sort of share with you a perspective that 
there are different aspects and different study designs that 
allow you to bring a rationale and a very designed approach to 
what clinical trials would be needed. So these are not exactly 
the same clinical trials you would have for the unknown 
original trial.
    Senator Hatch. Mr. Rossignol--is it Dr. Rossignol or Mr. 
Rossignol?
    Mr. Rossignol. Mr. Rossignol.
    Senator Hatch. Okay. Now as I understand it, your basic 
provisions took effect in 2003 on biosimilars and that includes 
10 to 11 years of protection against follow-on products. There 
is a combination of primary and secondary legislation and you 
use a guidance system to be able to make sure that these 
products are safe and efficacious, to use your terms and ours 
as well. As I understand it, the guidance will be issued 
through open public procedures with participation by expert 
committees, national authority, scientific community and 
industry approaches as well, which I find to be very, very 
interesting. I don't know quite how you put it together. I'd 
like you to write to us and let us know how you accomplish that 
goal. With product specific requirements established, pre-
clinical and clinical testing required for all products, how--I 
hope I'm summarizing it well enough and special attention to 
immunogenicity and post-marketing testing and surveillance. Is 
that fair? Is that a fair description so far? And then I want 
to ask you these questions. I want to ask you some questions on 
that. If this is fair, tell me if it isn't, tell me as well. 
But could you please explain how substitution for medicinal 
products work in France. Are other EU countries following 
similar practices? And why isn't substitution appropriate for 
biosimilar medicines? If you could answer those four questions, 
that would be helpful.
    Mr. Rossignol. First I have a concern that your description 
of the EU system is indeed the correct one. I would simply add 
in relation also to the comment made by Senator Clinton, that 
in Europe we have the legal basis for post-authorization safety 
studies and actually the Vice President of the Commission 
announced last week that this will be strengthened further in 
Europe to make sure that all products are safe and even post-
authorization, post-marketing.
    It is true that in Europe we have a system based on 
watching legislation which is relatively concise and flexible 
and supplemented, if you like, by guidance. I believe it is 
quite helpful to have this system in place. Why? Simply because 
this is an emerging field with respect to those products you're 
talking about and therefore it is very difficult to have one--
monolithic if you like--system to address all these types of 
problems.
    We do require clinical trials, pre-approval. We do require 
a comparable exercise, which is not restricted to clinical 
studies. It actually spans across the quality aspects, the pre-
clinical aspects and the clinical aspects. So the comparability 
package is actually quite an extensive one.
    I have to say also that in response to your last question 
on substitution, to be very concise. As I said in my statement, 
substitution or interchangeability is not assessed value in 
this station, so it is really a member state practice in Europe 
and it differs from one country to the other. So it's very 
difficult to give you an answer here. But I want to stress that 
today, we have examples of substitution, i.e., practice 
pharmacies for one product instead of the other, which are two 
products which are actually another two products. So in other 
words, what I'm trying to say is that the substitution 
problem--interchangeability problem is maybe specifically 
applying--policy, when it is actually not specific to 
biosimilars. The problem already occurs today with other 
products at least in Europe, in certain countries where 
pharmacies are actually instructed, in some countries to 
substitute and to use, for example, the internationally known 
proprietary name. You find out that the majority of--and change 
one product with another without necessarily having the 
scientific background behind it. So we need to bear in mind 
that this issue of substitution is a key issue in the field of 
biotech products in general.
    Senator Hatch. I want to thank you, Mr. Rossignol. Mr. 
Chairman, I think one of the big issues where we really could 
use help and I understand that you two doctors can help us with 
this--is just how we can really provide an element of 
protection here and without making the process so stringent 
that we can never get any products approved. We really need 
some help up here because we all know that it's almost 
impossible to have biologic implications--these are large 
molecule individual therapy-type situations. But that's where 
the future is, and we want to be helpful and have a similar 
drug price competition patent term restoration, which is the 
real name of Hatch-Waxman, approach towards these problems. And 
we could really use some extra help and from scientists all 
over the country. We would appreciate hearing from you on the 
best way of doing this and providing the most efficacious and 
safe way of doing it as well.
    Thank you, Mr. Chairman for giving me that extra time.
    Mr. Hussain. Mr. Chairman, if I could just--sorry. You want 
to go first?
    Mr. Banwart. Go ahead.
    Mr. Hussain. Mr. Chairman and Senator, this has been a 
significant talk process. Personally--I'll speak on my personal 
scientific aspect in this instance. I was personally not very 
comfortable with the generic substitution type of approach for 
follow-on proteins and the word follow-on was deliberately 
chosen to sort of illustrate some of the challenges here. But 
at the same time, I think in practice, you can achieve 
interchangeability through a science-based assessment in either 
one step or in a two-step processes that could be labeled as 
indications that this product has shown to be substituted--
interchangeable to this and that is the reason I use the word 
interchangeable to distinguish from substitution. So label 
indication could be a mechanism to really--that is based on 
hard scientific data and even switching clinical studies that 
you might want to provide. If there is a risk-based approach 
that says the immunogenicity aspect of this is so critical, 
then there might be a two-step process that you might not get 
an interchangeability status unless you have additional post-
marketing data that you collect because you really cannot do a 
clinical study. So that is a way forward here, in sort of my 
opinion and I think both my former FDA colleagues have been 
thinking about that for a long time.
    Dr. Siegel. On the question of substitution, I think the 
only scientifically valid way forward is through some 
combination of naming, labeling and education to ensure that 
inadvertent substitution doesn't occur, to ensure that people 
realize that these products are not identical or the same. One 
cannot know that they are the same. To look at say, a major 
safety risk that could be due to a trace contaminant--it would 
take tens of thousands of people studied to tell if that risk 
went from 1 to 2 percent, a doubling of the risk. If you look 
at immunogenicity concerns, which are big concerns, many of 
these products have immunogenicity in 5 or 10 percent of the 
patients. You could do a study of 500 to 1,000 patients and 
still not know if immunogenicity had doubled with the new 
product and exposing a patient alternatively, to one or both, 
could be exposing them to double the risk or could create 
immunogenicity risks that neither one alone exposure would 
bring around. So I think the science is a long way from 
addressing substitution but if your question is more broadly 
about a path forward to have abbreviated applications with 
abbreviated testing, I firmly do believe that with products 
that are sufficiently close in terms of their chemical, 
physical characteristics, that with appropriate testing, 
including clinical testing, that there can be a science-driven 
and product specific abbreviated testing approach to an 
abbreviated application.
    Senator Hatch. Mr. Chairman, my time is up but on this 
particular point, could I have a follow-up question--since he's 
really gone into some immunogenicity problem. And I think it is 
really important. I appreciate your remarks about the problem 
of immunogenicity or the ability of most or all biologic 
products to stimulate an immune system response in the body but 
is it not true, just for our benefit here, since we're not 
scientists--we're just trying to do the best we can with your 
help--is it not true that an immune system response could occur 
immediately or it might not occur until years after patients 
start using a follow-on biologic. Is that true?
    Dr. Siegel. Typically, immune responses will occur some 
weeks or months after somebody is first exposed to a new 
protein.
    Senator Hatch. It can occur years later, too.
    Dr. Siegel. Yes, it can, especially if there is a change in 
the product that they are exposed to.
    Senator Hatch. Well then, don't you think that FDA should 
be given the authority to track some of these patients? Or at 
least have companies track patients in these clinical trials 
and allow the FDA to determine which follow-on biologics should 
be tracked in the future?
    Dr. Siegel. I think that's essential. I think we're already 
seeing in some parts of the world where adverse events occur 
and you cannot determine which product the patient took and 
it's difficult or impossible to know whether those events, 
immunogenicity or otherwise, which products are attributable 
to. You can lose the value of a whole class of products if you 
can't tell which of its members are potentially problematic.
    Senator Hatch. Well, this has been very helpful to us here 
today, the three of you have been very helpful and I have a 
number of other questions I'll submit in writing. Mr. Chairman, 
I apologize for taking a little longer than I should have.
    Mr. Hussain. Mr. Chairman, if I could just give my aspect, 
if I may. Immunogenicity is not just a protein issue. It also 
happens with small molecules and I think we really need a 
rational science-based discussion on this and I think the best 
place to do that is at FDA.
    Senator Clinton. Mr. Chairman, if I could just have a point 
of clarification? I appreciate greatly the line of questioning 
that Senator Hatch puts forth and I don't think there is 
anybody in the Congress who has more expertise on this. Our 
legislation provides the FDA with the authority to require 
clinical testing. That is in our legislation. So that some of 
the issues that we were talking about were based on the 
assertion that we did not do so and in fact, our legislation 
does give the FDA the authority and what we are trying to do is 
enhance the FDA's authority to deal with this whole range of 
issues. There is a differentiation between the post-marketing 
and the pre-approval and with respect to post-marketing, I 
agree completely with what Senator Hatch said. We should have 
follow-on testing by the companies and I think that should 
apply to both brand name and generics, both with drugs and with 
biologics because I think we're in a world now that is very 
different, even from the days of Hatch-Waxman, to try to figure 
out how we best can understand the complexity, the drug and 
biologic interactions, the immunoeffects. So I just wanted to 
clarify that our legislation does provide that authority to the 
FDA.
    Senator Hatch. Well, if I could just clarify--it's not 
clear but I'm sure that's what you intend. What we need to do 
is keep working to get the very best legislation we possibly 
can. I'm sure under the leadership of the Chairman, we'll be 
able to do that.
    Senator Clinton. Yes. Well, we would love to have another 
Hatch-Waxman or Waxman-Hatch, whichever you prefer.
    Senator Hatch. I want Clinton in there, too.
    [Laughter.]
    Senator Hatch. I want our Chairman and Vice Chairman in as 
well.
    The Chairman. We have, if Senator Reed would permit, 
Senator Coburn told me that he has to go to an important 
Intelligence briefing in just a few minutes. So if I could 
recognize Senator Coburn.
    Senator Coburn. You know, one of the things I think--just 
to kind of summarize, my reading of the testimonies. We're 
dealing with a completely different set of compounds than the 
FDA has ever dealt with before. And when you say biologic, you 
can talk about a very small protein. You can talk about a 
complex protein that has carbohydrates associated with it or 
you can talk about very giant chemical molecules. What I hear 
being discussed in both my readings and from talking to people, 
is I think the approach of this--and we don't know where we're 
going on this yet--is we're trying to write a law or to devise 
regulations based on where we don't want to go. I would suggest 
to the members of this committee is that what we ought to do is 
try to devise a stepped process based on what the FDA is going 
to learn and what we're going to learn in science. I'm not 
going to get into the battles of follow-on testing and clinical 
trials and everything else. I think a lot of that has to do 
with IP protection, investments in this, and appropriate 
competition.
    But the question I have is when we don't know answers to 
questions, the one thing we want to make sure we do with our 
legislation is to make sure we don't impede an opportunity for 
greater development and faster responses to new products coming 
to the market. We don't want to totally impede somebody's 
investment effort and IP and then take it away--so there has to 
be some protection for that. But at the same time, we ought to 
create a system where some of the intellectual property isn't 
taking advantage of the American people to the extent it is.
    I think with the Clinton-Schumer bill, we ought to design 
provisional changes, step-by-step changes that allow the FDA to 
look at this and categorize this. We're not going to need the 
same law for all biologics. I think we need a different law for 
different groups of biologics, and I don't think we can know 
right now what that is. I'd love to have each of your comments 
on that. I think you're kind of seeing that's where the EU is 
going as well. Any comments on that?
    Dr. Siegel. First let me say, I would agree entirely that 
there are things we can do with small molecules, for example, 
in terms of understanding the differences and making those 
differences so small that we can infer certain things about one 
based on its similarity to another that you can't do, for 
example, with live viruses.
    Biologics law, however, is pretty flexible in terms of 
allowing one to determine safety, purity and potency as 
appropriate for the situation. So I wouldn't say necessarily we 
need new law for viruses. For example, each year there is a 
different strain of influenza. Each year, there is a new 
influenza vaccine for that. They are appropriately tested but 
it would be inconceivable to do large-scale efficacy tests each 
year against that strain because you wouldn't have the data in 
time. So I'm simply saying----
    Senator Coburn. My point is this--you can have very large 
proteins that could come through a very simple manufacturing 
process, in the future, which we don't have today, that could 
be very pure, very low in immunogenicity and we're going to 
apply a law now that we don't have for that and we're going to 
have to come back and change it and maybe in a very short 
period of time. So my point is, we don't know what we're going 
to need. So anything we do in this area ought to have 
tremendous flexibility to build in what the science is going to 
show us in the future and I will bet you right now, I'm right. 
You will have complex molecules that you will produce very 
simply and with very low immunogenicity in the future and where 
a lot of these questions as far as interchangeability won't 
even apply. And yet we're making all our decisions today on the 
basis of what we know today, not what we think may come about 
in the future. So that was my point.
    Dr. Siegel. Well let me just then say, I certainly agree 
that we should be careful to leave scientific discretion to the 
agency because each product is different because the science 
changes. But to Senator Clinton's point, I do want to say that 
yes, there is not any question that this bill authorizes the 
agency to require testing but I would note, for example, that 
in the approval of new drugs and biologics, the bill doesn't 
simply authorize the agency to approve clinical testing. It 
states there needs to be adequate and well controlled tests. It 
sets the floor--that floor is dictated by science and the 
presence in legislation of that floor gives guidance to 
industry, which is useful, gives guidance to the agency, which 
is useful, gives guidance to court systems, which is useful. 
There is a scientific basis for a floor here. That's the point 
I'm making.
    Senator Coburn. Thank you, Mr. Chairman.
    Mr. Hussain. Senator, I think you raise an important point 
and I think legislation should really look forward and be set 
in a way that allows innovation and then new technology, 
science to really move quickly. But I think that the question 
I'm struggling with, the thing of this discussion is, I think 
we are specifically focused on follow-on. So these are products 
based on science and technology that are here now. So I think 
there is an aspect of the follow-on part for that and there is 
an aspect of getting more and more innovative medicines 
together. So I think there are aspects built into the proposed 
legislation which actually goes in that direction, like the 
second generation products, which European biosimilars 
regulations do not address. I think that's an important point 
and I really applaud that sort of thinking, to promote science 
and innovation with industry.
    Senator Coburn. Thank you. Thank you, Senator Reed.
    The Chairman. Senator Reed.
    Senator Reed. Well, thanks very much Mr. Chairman and 
gentlemen, thank you for your testimony today. I'm just 
wondering and I'd like to ask all the panelists, how do drugs 
and biologics compare in terms of intellectual property 
protection? Do these differences have any significance as we 
consider creating a pathway to approval of follow-on biologics? 
That's a topic I don't think has been addressed.
    Mr. Banwart. Thank you, Senator. Representing Caterpillar, 
we certainly appreciate protection of intellectual property and 
we respect and honor patents of others and we expect others to 
respect and honor our patents. So intellectual property 
protection is important but we believe that after an 
appropriate period, that the marketplace should be subject to 
competition and that's been well proven in other fields and 
while there are technical differences, we believe that a 
positive spirit and approach here could result in a workable 
solution as well.
    Senator Reed. Okay.
    Dr. Siegel.
    Dr. Siegel. I would encourage you to and would welcome 
having others with greater expertise in my company speak to 
this issue but I would note that there are important 
differences--small molecules, since they are easier to define 
exactly what they are and how patents protect that. Large 
molecules, because they are enormous by comparison, often 
thousands of fold and because patents are increasingly more 
limited in what they cover, it's relatively easy to engineer 
around those patents through minor changes to different parts 
of the product that can break that sort of IP protection and 
that really does need to be taken into account in any 
legislation.
    Senator Reed. Thank you.
    Mr. Hussain. Senator, I'll just share with you, I think, 
that in the Novartis Corporation position on this, I think 
strong intellectual property protection, including patents, 
trade secrets and confidential information is essential to 
promoting innovation that results in new therapies to treat 
patients. With respect to each follow-on response, developing 
their own independent data packages and not relying on 
innovator's data, we believe this protection can be respected 
while also allowing the new product to proceed.
    Senator Reed. Thank you. Director Rossignol, do you have a 
comment?
    Mr. Rossignol. Well, as I said, I think the EU experience 
is going to be very interesting from a scientific point of view 
and we actually already discussed that international level with 
WHO and our experience in science, i.e., a set of data 
basically, that we require to approve these products and that, 
I think, can be easily shared and discussed. When it comes to 
the protection of product rights regarding innovation, et 
cetera, I think at least from my personal perspective, it needs 
to be a bit careful in extrapolating the EU model because the 
EU model is--without offending anybody in Europe, is quite 
complex and it is not, let's say, fully optimized across all 
member states in Europe and therefore, yes, we have a 
harmonized system now for data to pursue the same things. We 
don't have what seems to be in the draft bill on market 
exclusivity for follow-on biologics that would be 
interchangeable. We don't have that market exclusivity and 
Europe is restricted to--but in general, I would simply say 
that our system is very specific to yours when it comes to 
rewarding innovation and striking the right balance between 
rewarding innovation and smoothening the access to a further 
dimension.
    Senator Reed. Well, thank you very much. I guess my 
conclusion from hearing the responses and maybe I want to test 
this again is that there are significant differences, at least, 
to suggest that we have to look carefully at not adopting the 
same regime for intellectual property protections that we have 
for drugs or for--is that a fair summary of the----
    Dr. Siegel. I believe so, yes.
    Mr. Hussain. I think so, yes.
    Senator Reed. Thanks very much. Again, this is a field that 
I'm a novice at, I'll confess. But I might not be alone. Does 
such a thing as a generic vaccine presently exist and would a 
generic vaccine be possible if a pathway to approve follow-on 
biologics were to be created and what might be some of the 
safety implications of generic vaccines?
    Mr. Banwart. I'll defer to my colleagues.
    Senator Reed. Thank you.
    Dr. Siegel.
    Dr. Siegel. Well, vaccines are regulated under the Public 
Health Service Act where there are no provisions for generics 
at the present time. But vaccines--you know, if biologics are a 
skyscraper to the starter house that small molecules are, then 
vaccines are megalopolises full of skyscrapers and stadiums and 
all sorts of other enormous buildings. I think recent history 
has shown us that for a lot of vaccines--you know, small pox 
vaccine, influenza vaccine that two vaccines that are the same 
virus can have very different effects and that's something that 
needs to be paid really close attention to.
    Senator Reed. Doctor.
    Mr. Hussain. I think I'll just reflect back on the FDA 
knowledge and since I think FDA has done a tremendous job in 
approving vaccines and actually using brand knowledge to define 
what the appropriate pathway should be for vaccines. I think 
there are wonderful examples in the history on that.
    Senator Reed. Thank you very much. I note that----
    Senator Clinton. Senator Allard is here.
    Senator Reed [continuing]. Is here and Senator Kennedy is 
not so I think, Senator Allard, you should probably ask some 
questions.
    Senator Allard. Thank you. I'm trying to get so I 
understand what follow-on biologics are. It seems to me that if 
you have a vaccine, for example or if you have a medication 
that has a source, different sources, I think sometimes the 
source and how that is collected and everything is as important 
as what the chemical makeup is. We have some products, I think 
that are extracted for animals. I think a pituitary extract, 
comes from animals and it seems to me that--I don't know how on 
follow-on biologics--if you're dealing with a pituitary 
extract--I mean, how can you assure safety? I think a source 
and how it's handled from that very source is as important as 
anything on that extract. I wondered if you could comment on 
that.
    Mr. Hussain. Well, I think from two perspectives. One, I 
think--just reflecting back on the name follow-on protein 
products at FDA was--this was being discussed and they were 
very specific that this should be the common protein product 
and not address and get into that aspect of that.
    Senator Allard. Okay.
    Mr. Hussain. So that----
    Senator Allard. So you're excluding those kind of products?
    Mr. Hussain. No, I'm just sort of sharing with you the 
concern that you raise with respect to source material. It is 
important but at the same time, I think there are technologies 
and there are approaches to address those challenges and I 
think we actually have a wonderful example of that currently 
under review with the technology, the collaboration, the 
momentum on--so I think yes, there are aspects to that but I 
think there are ways to address that approach, too.
    Senator Allard. Well, you know, on vaccines for example, I 
know a lot of technology is changing on vaccines. You've got to 
kill virus. You might have a lot of protein in it, hormone or 
whatever and then you've got a modified live virus and then you 
have these other modifications where you take just the 
immunogenic aspect of the bacteria or the virus, which is a 
purer form with less reaction. And how do you treat those with 
a follow--in terms of--what's a follow-on biologic for 
something like that? How do you define that?
    Dr. Siegel. First, let me second that for many biologics, 
especially those that are not made by DMA technology but even 
those, the source is critically important as is the process 
because of the limitations of testing. All of those things need 
to be controlled. But what is critical is probably for the 
purposes we're discussing here is less whether it is used as a 
vaccine than--although that can be factor in terms--it 
certainly is a factor in terms of what testing is needed, but 
the nature of the product itself. So as you referred to, there 
are some component vaccines that are just a highly purified 
protein made by recombinant and DNA technology whose 
characterization is of the same order as some of the protein 
products that we're talking about that are therapeutics. Many 
vaccines, however, are far more complex, are live organisms, 
killed organisms, whatever, where the issues of determined 
comparability would be far less readily addressable. Even in 
the simpler vaccines though, they present the same issues as 
therapeutics do, of possible differences and of course, often 
in the setting of being given to thousands or millions of 
healthy children. So that--how the product is used is also 
going to influence what the appropriate testing is.
    Mr. Hussain. I agree with that.
    Senator Allard. Pardon? You agree with that, okay. Well I 
just think that this is--it is a complex issue. I think what--
not having some biological training, I think it's hard for 
people to understand. I've had some biological training and 
this is kind of a new concept, follow-on biologics, so I'm 
trying to understand it myself on how you're going to apply it 
with the testing that we currently require and the safety 
required for consumption. Those of you that are here, do you 
think that's a possible regulatory regime that we can 
implement?
    Mr. Hussain. What I would suggest is, I think, as there is 
possibly an example, I think the legislation could sort of 
recognize that this could be possible. It may not be possible 
fully at this time but I think this is what I think the 
European system has explicitly not excluded that and at the 
same time, I think with that level of complexity, getting into 
cells and getting into viruses and getting into those, may 
change over time.
    Senator Allard. Yes?
    Dr. Siegel. Is your question specifically about viruses, 
vaccines? Or is it sort of general?
    Senator Allard. Well, I mean, we've got a generic term--
follow-on biologics.
    Dr. Siegel. Right.
    Senator Allard. And I think it kind of makes our discussion 
kind of complicated because there is a lot of things that 
follow in under that and I'm trying to figure out how you----
    Dr. Siegel. I think and Johnson & Johnson thinks that we 
can move forward in a careful way with those products that we 
can characterize the best and understand the best and with 
appropriate testing, that there is a path forward, that there 
are some classes of products, there are some uses of products--
whatever, that will present substantially more challenges, some 
of which with science does not yet allow a path for new 
approaches to regulation.
    Senator Allard. Dr. Rossignol, did you want to comment on 
that question?
    Mr. Rossignol. Yes, thank you. Just again to share the EU 
experience in this field, I think it was mentioned by Dr. 
Hussain that indeed, legally we do not exclude the possibility 
today to have follow-on biologics or biosimilars approved, even 
if they would be vaccines or even more complex products. So 
that's not really excluded but I have to say that today, we are 
realistically on scientific grounds, the approach is really 
applicable to products which can be fully characterized and 
also products which have a good track record of--and clinical 
expertise and clinical experience. And if you talk about 
generic vaccines, specifically, we don't have that in the 
pipeline and the current consensus is really that we would not 
see that unless under very exceptional circumstances, we would 
not see these types of products as being approved as 
biosimilars in Europe. Actually, the products we have in the 
pipeline are relatively simple biologics which are still far--
let's say relatively more complex than chemicals but you're 
talking here about insulin growth hormones--maybe globally the 
way heparin is but not really products like vaccines or more 
complex products.
    Senator Allard. So we're talking--the follow-on biologics 
would be things--be hormones of various types, basically, is 
that what we're looking at?
    Mr. Rossignol. No, not specifically. I have to stress, no 
product in theory is excluded. I'm just trying to describe the 
scientific consensus today and really, the scientific consensus 
today is that you can have an abbreviated data package only if 
you are able to fully characterize your product to the best 
extent you have, even the current analytical terms you have. 
And that is, for the moment at least, applicable only to those 
products which are relatively simply in molecular terms.
    Senator Allard. My problem is that this is such a broad 
term. And how do we narrow it down to what we're talking about?
    Dr. Siegel. I think you're on the right track. It's not 
just hormones but the products that Mr. Rossignol are speaking 
of, for example, have molecular weights of 15, 20,000 
typically. A typical aspirin might be--I think it's under 200. 
A typical small molecule may be in a few hundred. Some 
biological proteins are well over 100,000. Antibodies typically 
are 150,000 or more and then you get into genes and cells and 
viruses that raise other orders of complexity. So what he is 
saying and what I'm saying as well is that there are areas 
where there is a lot more scientific basis for characterizing 
the product and for using similarity as part of a regulatory 
paradigm.
    Senator Allard. Yes. I mean, like our human growth hormone 
is, I think, traditionally at least in this country, is 
produced with cell culture. Am I right? I think it is cell 
culture. I visited an operation in Argentina. They've got cows, 
cattle that they have genetically modified to produce human 
growth hormone in the milk and they are extracting it out of 
the milk. And so I guess the source of that, in my mind, 
creates potential problems and that's one of the points that I 
wanted to make. I think the source can be a real concern, even 
though you're dealing with the same chemical.
    Dr. Siegel. Absolutely.
    Mr. Hussain. May I?
    Senator Allard. Yes.
    Mr. Hussain. I think really the source is as critical and I 
think it does have to be addressed and it creates challenges to 
be addressed in different ways. But I think if you could 
consider from the progressive signs and technology, not only 
from the range of the source material, the characterization, 
the analytics, the manufacturing process but also consider the 
progress we are making in the science of understanding the 
biochemical--as well as understanding the mechanism for 
actions. It opens up a whole host of opportunities to design 
your clinical trials in different ways. FDA has a wonderful 
initiative called the Critical Path Initiative where they are 
looking at biomarkers and so forth. So if one looks at all the 
opportunities that are out there, you may have challenges in 
terms of characterization but you have opportunities for better 
ways of defining safety and efficacy and so forth. So I think--
I really believe you have an opportunity to really share this 
legislation that is open to the opportunities that we can bring 
to our patients.
    Senator Allard. Thank you.
    Senator Clinton. Well, thank you very much and one thing 
I'm taking away from the hearing this morning is that there 
seems to be agreement that we can and should approach a pathway 
for follow-on biologics being very conscious of all of the 
difficulties that such a pathway presents.
    I know that in some of the back and forth with Senator 
Hatch, we were talking about some of the markers on that 
pathway and we're speaking about the pre-approval clinical 
testing and I think Dr. Siegel said that he didn't think the 
legislation we've introduced has adequate safeguards for the 
pre-clinical approval testing. Is that a fair characterization 
of what you said, Dr. Siegel?
    Dr. Siegel. I think one could better protect patients with 
legislation that made clear the need for clinical testing.
    Senator Clinton. So that's really--we agree that we have to 
have clinical testing and we obviously are looking for a way to 
make that part of the pathway. But I wanted to ask Dr. Hussain, 
who didn't have a chance to respond to Senator Hatch on this, 
how do you assess scientifically the provisions in the 
legislation with respect to potential safety issues and the 
clinical testing approval process?
    Mr. Hussain. Senator, I think from my perspective, aspects 
of comparability with the science-based includes aspects of 
clinical trials and so forth. So those are inherent in the 
proposed legislation. So that was my interpretation of that 
reading. Clearly I think there is possibly a need for a bit of 
a clarification because Dr. Siegel comes from CBER and I come 
from CDER and his office got moved into my office so that's how 
we have interacted. I think from the CDER perspective, a far 
more kinetic study, a pharmacokinetic study, a pharmacodynamic 
study is not called a clinical study whereas I think it is 
called a clinical study. So I think there are different types 
of clinical studies and different aspects of clinical testing 
so I think clearly what we're seeing is clinical assessment. 
There is the pharmacokinetic assessment or a pharmacodynamic 
assessment or a comparative clinical trial. I think which 
clinical trial is appropriate really depends on how well you 
have characterized the product and then determine what clinical 
trials uncertainty should be managed and what commitment would 
be necessary. So the best situation for that is FDA has the 
ability and for example, each applicant will provide the data 
that justifies what clinical pathway should be taken. So I 
think that flexibility needs to be there and I think nobody has 
said that there is no clinical trial. I think everybody is 
doing clinical trials.
    Dr. Siegel. I would add, though--I don't think there is 
confusion around that term. Pharmacokinetic and pharmacodynamic 
testing--pharmacokinetic testing, at least, is going to be 
critical but I think not sufficient. One needs to look at 
immunogenicity, one needs to have some safety experience, one 
needs--and this will be most possible where there are good 
pharmacodynamic measures so you can be sure that you have the 
same effects of the same drugs at the same dose, which is true 
for some biologics but not for all.
    Senator Clinton. Well, I want to thank again all of our 
witnesses. The record will remain open for 10 days. A number of 
our members who wanted to get here could not make it. I want to 
thank Director Rossignol for being with us today. You've been 
extremely helpful in explaining the European Union approach and 
I also appreciate the way you characterized the legal authority 
versus the scientific consensus because I think that is 
something important to keep in mind, that we need to give the 
FDA authority and we need to empower them with adequate 
resources to begin to design this pathway and obviously, not 
everything is going to be ready or should go down together. 
We're going to have be more discriminating but we should leave 
that to the scientists and to the structure that we try to 
establish.
    So again, I want to thank all the witnesses and we look 
forward to a very useful collaboration as we try to deal with 
some of these difficult issues confronting us. Thank you very 
much. The hearing is adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

                       Prepared Statement of AARP
    AARP appreciates the opportunity to present its views on the issue 
of follow-on biologics. AARP has endorsed the Access to Life-Saving 
Medicine Act (S. 623) because we believe this legislation will create a 
much needed pathway for the approval of safe, comparable, and 
interchangeable versions of biologics. We call on Congress to pass the 
legislation this year.
    The Drug Price Competition and Patent Restoration Act of 1984 
(commonly known as Hatch-Waxman) provided for the approval of generic 
versions of brand name prescription drugs. As a result, today, generic 
prescription drugs save consumers and health care payers billions of 
dollars each year.\1\ Further, research has shown that billions more 
could be saved annually if the use of existing generics were 
optimized.\2\ Popularity of these lower cost alternatives continue to 
rise, to the point where approximately 56 percent of all prescriptions 
filled in the United States, more than one billion prescriptions every 
year, are lower cost generic prescription drugs.\3\
---------------------------------------------------------------------------
    \1\ CBO, ``How Increased Competition from Generic Drugs Has 
Affected Prices and Returns in the Pharmaceutical Industry,'' July 
1998.
    \2\ Emily Cox, Andy Behm, and Doug Mager, ``2005 Generic Drug Usage 
Report,'' Express Scripts, June 2006. Available online at http://
www.express-scripts.com/ourcompany/news/outcomesresearch/
onlinepublications/study/genericDrugUsageReport2005.pdf.
    \3\ Statistics from the Generic Pharmaceutical Association 
(Available online at: http://www.gphaonline.org/Content/NavigationMenu/
AboutGenerics/Statistics/default.htm).
---------------------------------------------------------------------------
    At the time Hatch-Waxman was enacted some critics claimed that the 
legislation would harm research and development of new prescription 
drugs and consumers would suffer because companies would no longer 
invest resources to find new cures. History has shown these critics 
wrong. The pharmaceutical industry hasn't suffered--it is now the fifth 
most profitable industry in the country.\4\
---------------------------------------------------------------------------
    \4\ Fortune 500 2006, ``Most Profitable Industries: Return on 
Revenue,'' April 17, 2006.
---------------------------------------------------------------------------
    Hatch-Waxman created an abbreviated pathway for the approval of 
generic drug applications and consumer and health care payors 
benefited. Now Congress has the opportunity to pass the Access to Life-
Saving Medicines Act, which gives the Food and Drug Administration 
(FDA) the authority to approve generic versions of biologics. Once this 
legislation has been enacted, consumers and health care payers can 
begin to see savings on these life-saving medications.
      the cost of biologics hurt consumers and health care payors
    Biologics are used every day to treat diseases and conditions such 
as cancer, multiple sclerosis, anemia, and rheumatoid arthritis. These 
treatment therapies are, in many cases, truly cutting edge technology. 
Use of biologic drugs is increasing every year.\5\ Research and 
development into this vital field is growing--there are currently 
hundreds of applications in the pipeline. For example, for someone with 
rheumatoid arthritis it can make the difference between having the 
ability to walk and having to live with debilitating constant pain.
---------------------------------------------------------------------------
    \5\ Biotech Drugs Come of Age; Policymakers Take Note, Health 
Affairs, Sept./Oct. 2006 (reporting that in 2005 revenues for 
biological drugs totaled $50.7 billion, an increase of 15.8 percent 
over 2004).
---------------------------------------------------------------------------
    While biologics hold great promise for treating some of the most 
serious diseases, these treatment regimens can be very expensive. Some 
treatments can cost tens of thousands of dollars per month or hundreds 
of thousands of dollars per year. For example, Epogen, a drug used to 
treat anemia, can cost as much as $10,000 per year. Cerezyne, used to 
treat Gaucher disease, can cost as much as $200,000 per year--which is 
almost as much as the average price of a home in January 2007.\6\ 
Similarly, a person diagnosed with colon cancer may have to use 
Avastin, which can cost $100,000 per year, which is more than the 
average cost of a 4-year college education.\7\
---------------------------------------------------------------------------
    \6\ National Association of Realtors data, available at http://
www.realtor.orq/research/index.html (reporting the existing home median 
price was $210,000 in January 2007).
    \7\ College Board, Trends in College Pricing 2006, available at 
http://www.collegeboard.com/proddownloads/press/cost06/
trendscollegepricing06.pdf (reporting that average total tuition and 
fees at a 4-year private college or university for the 2006-2007 
academic year was $22,218).
---------------------------------------------------------------------------
    Some individuals are fortunate enough to have insurance and the 
means to be able to afford these medications. However many are not so 
lucky. For example, a few of the choices for an individual managing 
rheumatoid arthritis are biologics such as Embrel, Remicade, and 
Humira. These drugs are among the top 20 largest sales in the biologics 
industry. For an individual with no access to prescription drug 
coverage, they could choose between Embrel at $1,384.42 per month, 
Remicade at $598.97 per use, and Humira at $2,831.76 per month.\8\
---------------------------------------------------------------------------
    \8\ Sales figures obtained from Lamerie Business Intelligence.
---------------------------------------------------------------------------
    The astronomical cost of these drugs not only impact consumers, but 
also health care payers, such as employers, private health care plans, 
and public programs such as Medicare and Medicaid. Indeed, spending on 
biologic drugs continues to outpace even that of traditional brand name 
prescription drugs,\9\ whose cost increases--at twice the level of 
inflation--are also too high.\10\ For instance, according to a recent 
study commissioned by the Pharmaceutical Care Management Association 
(PCMA), approximately 30 percent of Medicare's Part B prescription drug 
spending is for only five biologic drugs.\11\ Sales for existing 
biologics continue to rise.\12\ One way to control these costs is to 
provide a pathway for the approval of generic versions of these 
products.
---------------------------------------------------------------------------
    \9\ Elise Wang, et al., A Global ``Generic Biologics'' Guidebook, 
Citigroup, Nov. 6, 2006, pg. 30.
    \10\ David J. Gross, Leigh Gross Purvis, and Stephen W. 
Schondelmeyer, Trends in Manufacturer Prices of Brand Name Prescription 
Drugs Used by Older Americans, 2006 Year-End Update, AARP Public Policy 
Institute Data Digest #DD154 (Washington, DC: AARP), March 2007 
(finding that on average, pharmaceutical manufacturer prices for the 
193 brand name drugs most widely used by older Americans rose at nearly 
twice the rate of general inflation in 2006).
    \11\ PCMA, Potential Savings That Might Be Realized by the Medicare 
Program from the Enactment of Legislation such as the Access to Life-
Savinq Medicines Act (H.R. 6257/S. 4016) That Establishes a New cBLA 
Pathway for Follow-on Biologics, available at http://www.theright 
prescription.org/learn/rx-resources.html, page 7.
    \12\ In 1999 the global pharmaceutical market was approximately 
$331 billion, of which biologics represented less than 3 percent. In 
2005, total pharmaceutical sales were roughly $602 billion, of which 
biologics represented 7.6 percent. Id. at 4.
---------------------------------------------------------------------------
                 legislation ensures safety and access
    When brand name prescription drugs go off patent, a generic 
manufacturer can begin marketing its lower cost alternative after being 
approved by the FDA. However, no such pathway currently exists for 
biologics. Once these drugs go off patent, the manufacturers continue 
to reap the rewards of their patent long after its expiration and 
consumers continue to pay high prices.
    Although biologics are more complex than prescription drugs, this 
complexity is not a valid reason for preventing the development of 
generic versions. Technology has progressed to the point where 
biologics are better understood and characterized. As a result, it is 
now possible to create generic versions of these treatment therapies.
    The Access to Life-Saving Medicines Act grants FDA the authority to 
create a pathway for the generic approval of biologics. The legislation 
does not mandate that the FDA approve a certain number of 
applications--only that FDA provide for the pathway of approval. And 
the legislation leaves the scientific determinations up to those who 
are best equipped to address them.
    As the science advances, we can continue to expect prescription 
drugs to become an increasingly important component of health care, and 
for biologic drugs to become a larger component of drug spending. It is 
critical not only for individuals, but for all health payers--including 
Federal and State governments, employers and insurers--that we begin to 
take steps to lower the cost of these drugs. Use of generic 
alternatives is an important element towards the goal of holding down 
health care spending over time. Creating an FDA pathway to generic 
alternatives for biologics has become a necessary part of the equation 
as well.
                               conclusion
    The Access to Life-Saving Medicines Act provides FDA the authority 
to produce a safe, comparable or interchangeable version of a biologic. 
The Hatch-Waxman Act created a similar pathway for prescription drugs. 
Twenty-three years later, the time has come for generic approval of 
biologics. Our members, and all Americans, need Congress to enact this 
bi-partisan 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.
Prepared Statement of the Coalition of State Rheumatology Organizations
               biologic agent generics (``bio-similars'')
    The Coalition of State Rheumatology Organizations is a national 
organization composed of 26 State and regional professional 
rheumatology societies formed in order to advocate for excellence in 
rheumatologic care and to ensure access to the highest quality care for 
patients with rheumatologic and musculoskeletal disease. 
Rheumatologists are entrusted with the safe care of patients with 
rheumatoid arthritis and other autoimmune diseases that require the 
careful choice of safe and effective medications.
    Rheumatologists are keenly aware of the dramatic long-term, life 
changing clinical improvements that biological agents have on some of 
the most crippling and disabling conditions that affect Americans. 
These biologic response modifying agents are available for the 
treatment of rheumatoid arthritis and other autoimmune diseases and 
have a significant impact on improving our patients' quality of life, 
preventing disability, decreasing morbidity and lowering mortality.
    We are writing regarding H.R. 1038/S. 623 known as the Access to 
Life-Savings Medicine Act introduced by Senator Schumer, Senator 
Clinton, Congressman Waxman and others. This act attempts to establish 
a process by which the FDA will allow approval of lower cost copies 
(``follow-ons'') of biological treatments in the United States. We are 
particularly concerned with language in this legislation that would 
allow ``. . . data demonstrating that the biologic product is 
COMPARABLE to the reference product'' and allows ``. . . data 
demonstrating that the biologic product and reference product contain 
SIMILAR principal molecular structural features notwithstanding MINOR 
DIFFERENCES in heterogeneity profile, impurities or degradation 
patterns.'' We are concerned that this language does not recognize the 
unique complexities and difficulties inherent in the production of 
these biological medicines and the potential immunologic consequences 
of untested biologic agents that are not entirely similar.
    These powerful agents have significant effects on the body's 
homeostatic immune function and can themselves be antigenic (can cause 
an immune response unique to the specific and unique structure). The 
immune response may vary with only minor differences between two very 
similar molecules. Even minor differences can cause a dramatic change 
in a molecules' secondary and tertiary structure resulting in a protein 
with vastly different immune mediated reactions. Each patient's 
response is unique and immune system dependent. These facts need to be 
considered in the approval process for generic biologic agents that are 
composed of complex proteins. There may be differences in effectiveness 
and a differential propensity to adverse reactions with even the 
subtlest alterations in primary, secondary or tertiary molecular 
structure. Adverse effects can include immunologic reactions to the 
medication, as well as potential long-term effects on the patient's 
ability to fight infection and ability to maintain malignancy 
surveillance.
    The biologic protein molecules are produced by very complex 
manufacturing processes involving genetic engineering and living cell 
cultures that are currently required to meet precise and fastidious 
quality standards. Because of their protein nature, these agents are 
immunogenic requiring purity and consistency without a great degree of 
heterogeneity. Rheumatologists are just as familiar with the use of 
generic medications as other medical specialists. Generic medications 
are produced by organic chemistry processes and are currently required 
to comply with FDA reviewed efficacy and safety standards before 
marketing. The complexity of biologic medications and their effects 
demands that these standards are ever more important to maintain.
    We recognize that follow-on biologic products are a natural 
evolution of biotechnology and we welcome the introduction of these 
medications. However, we must insist that safety standards of these 
drugs be even more rigorous than those for standard oral small molecule 
medications. There must be a scientifically based and logical 
application of an open and rational review process in order to assure 
the safety of our patients while generating the greatest possible 
benefit.
    Unfortunately, the proposed legislation short-circuits the rational 
scientific process already in place and creates major concerns 
regarding safety and potential for immunogenic reactions as well as 
decreased efficacy. Abrogating the normal regulatory process that 
functions as a protective patient barrier will put all patients at risk 
of decreased efficacy, decreased quality and decreased safety.
    The development and use of biological response modifiers in the 
rheumatologic therapeutics is relatively young. Significant unknowns 
and issues remain in using agents affecting the immune system. The 
current legislation could have unintended consequences with resultant 
increased patient risk. A process for evaluation of follow-on biologics 
should not deem minor the significant potential clinical problems 
related to increased heterogeneity, impurities, degradation patterns, 
amino acid sequences and immunogenicity related to secondary and 
tertiary molecular structure in the realm of ``comparable biologics.'' 
These agents must be subject to careful scrutiny and scientific 
investigation before approval. A responsible regulatory process needs 
to examine all of the structural and functional features of the protein 
product with particular emphasis on differences relative to those 
currently manufactured and currently approved. Product safety must be 
comprehensively examined before exposing patients to these very 
powerful immunologic agents.
    Several examples of problems currently exist that illustrate 
potential problems. Products have been withdrawn from the market due to 
subtle differences in protein structure such as L-tryptophan, 
thrombopoetin and colony stimulating factors. Pure red blood cell 
aplasia has been linked to an erythropoietin ``biosimilar'' medication 
after it was introduced in over 90 countries. One case occurred in 
every 5,000 patients exposed and required a great deal of investigation 
before the cause was ultimately defined. In rheumatology, we have seen 
a variety of patient adverse reactions to the three different TNF alpha 
blockers currently available. There can also be significant differences 
in individual clinical responsiveness to one anti TNF agent as opposed 
to another.
    Sponsors of the current legislation point to the European Union as 
having established a regulatory pathway for the approval of follow-on 
biologics. However, the regulations instituted by the European 
Medicines Evaluation Agency (EMEA) are proceeding with a clear, proper 
and cautious regard for patient safety and we applaud this approach.
    We welcome the introduction of a responsible regulatory process for 
the development of safe follow-on biologics. We support their 
development, as it will improve the access to care for more patients 
with most serious rheumatic diseases. However, this pathway must assure 
the safety and efficacy of these agents before their widespread or even 
limited use. We would be more than happy to work with you or 
participate in the development of a logical, open and rational process.
                                 ______
                                 
    Interamerican College of Physicians & Surgeons,
                                     Washington, DC. 20006,
                                                 February 20, 2007.
    Dear Congressman: The Interamerican College of Physicians and 
Surgeons was founded in 1979 to promote cooperation among U.S. Hispanic 
physicians and to advance their professional and educational needs. The 
ICPS reaches a vast majority of the Hispanic medical community in the 
United States and Puerto Rico--over 39,000 physicians--and a growing 
number of health professionals in Mexico, the Caribbean, Central and 
South American and Spain. The ICPS is the largest association of 
Hispanic physicians in the Nation.
    The ICPS has serious concerns about the Waxman/Clinton ``Access to 
Life-Savings Medicines Act'' introduced on February 14, 2007. As 
physicians, we rely on the FDA gold standard to ensure the safety of 
the treatments we prescribe for out patients. This legislation ties 
FDA's hands in being able to provide physicians and patients with 
assurance that ``follow-on'' biologic medicines have been tested in 
order for us to know the safety profile of these treatments. All 
patients are not the same, and minority populations do not always 
respond to treatments in the same manner as other patients. Without 
mandatory testing, we, as physicians would be putting our patients at 
risk. In this environment of heightened discussion of drug safety, this 
legislation is, in our estimation, all risk and no benefit.
    We would welcome the opportunity to further discuss our concerns 
and work toward legislation which accomplishes safety and savings for 
all patients.
    Thank you.
            Sincerely,
                                         Rene F. Rodriguez,
                                                         President.
                                 ______
                                 
     The Amyotrophic Lateral Sclerosis Association,
                                     Washington, DC. 20004,
                                                 February 23, 2007.
Hon. Henry Waxman,
U.S. House of Representatives,
Washington, DC. 20515.

    Dear Chairman Waxman: The ALS Association appreciates your efforts 
to reduce the cost of biologics and to increase access to these 
potentially life-saving treatments. As you may know, biologics show 
great promise in the treatment of ALS, or Lou Gehrig's disease, and we 
strongly believe that patients must have timely access to treatment 
options that can save lives and improve quality of life. However, we 
are concerned about the potential impact of the ``Access to Life-Saving 
Medicine Act.'' While we are in the process of evaluating the full 
implications of the legislation for people with ALS, we are strongly 
opposed to any effort that attempts to attach the legislation to the 
reauthorization of the Prescription Drug User Fee Act (PDUFA).
    The ALS Association is the only national voluntary health 
organization dedicated solely to finding a treatment and cure for 
amyotrophic lateral sclerosis (ALS). More commonly known as Lou 
Gehrig's disease, ALS is a progressive neurodegenerative disease that 
erodes a person's ability to control muscle movement. As the disease 
advances, people lose the ability to walk, move their arms, talk and 
even breathe, yet their minds remain sharp; aware of the limitations 
ALS has imposed on their lives, but powerless to do anything about it. 
They become trapped inside a body they no longer can control.
    There is no cure for ALS. In fact, it is fatal within an average of 
2 to 5 years from the time of diagnosis. Moreover, there currently is 
only one drug available to treat the disease. Unfortunately, that drug, 
Rilutek, originally approved by the FDA in 1995 has shown only limited 
effects, prolonging life in some patients by just a few months.
    The hopes of people with ALS--those living today and those yet to 
be diagnosed--are that medical science will develop and make available 
new treatments for the disease; treatments that will improve and save 
their lives. Advances in biotechnology and the development of biologics 
present the ALS community with new opportunities to bring treatments 
from the lab to the bedside. While reducing the cost of biologics and 
other drugs is an important goal, policymakers must be mindful of 
potential unintended consequences. As we continue our evaluation of the 
Access to Life-Saving Medicine Act, we will share with you our views on 
the legislation. In the meantime, we urge you and your colleagues not 
to include the legislation as part of the reauthorization of PDUFA.
    It is absolutely critical that Congress act promptly to reauthorize 
PDUFA and provide the FDA with the resources it needs to facilitate the 
development and availability of treatments for diseases like ALS. We 
fear that attempts to add issues such as the Access to Life-Saving 
Medicine Act will only delay PDUFA reauthorization to the detriment of 
patients.
    The ALS Association appreciates your attention to our concerns and 
for your previous strong support of our cause and your constituents 
living with ALS. We look forward to working with you and your staff on 
these and other issues as the 110th Congress moves forward.
            Sincerely,
                                              Steve Gibson,
                                                    Vice President,
                           Government Relations and Public Affairs.
                                 ______
                                 
               Society For Women's Health Research,
                                                     March 2, 2007.
Hon. Henry Waxman,
House of Representatives,
Washington, DC. 20515.

    Dear Mr. Waxman: On behalf of the Society for Women's Health 
Research, we are writing to you to express our thoughts and concerns 
regarding your recently introduced legislation H.R. 1038, ``Access to 
Life-Saving Medicine Act.'' While we commend the legislation's 
intentions to increase access to and reduce biological medicine costs 
through encouraged development of ``follow-on'' biological drugs (also 
known as biotech drugs or biopharmaceuticals), we are concerned about 
patient safety and feel it is important that such products meet 
appropriate ``equivalency'' standards. Since biological products are 
considered unique and any slight difference from the original product 
could have significant consequences for different populations, the 
Society believes that additional clinical testing should be required 
where appropriate.
    The Society for Women's Health Research is the Nation's only non-
profit organization whose mission is to improve the health of all women 
through research, education and advocacy. Founded in 1990, the Society 
brought to national attention the need for the appropriate inclusion of 
women in major medical research studies and the need for more 
information about conditions affecting women disproportionately, 
predominately, or differently than men.
    The Society has long advocated for increased funding for research 
on women's health and encourages the study of sex differences that may 
affect the prevention, diagnosis and treatment of disease. Differences 
between the sexes exist, and whether a person is male or female matters 
in the prevalence and severity of a broad range of diseases, disorders, 
and conditions. It matters at every stage of life--from the very 
beginning to the very end. It matters at every level--from the single 
cell to the entire body.
    Science has shown us that even small differences can have enormous 
impacts on different populations, such as women and minorities. Such 
differences will exist in biologic products and therefore, follow-on 
biologics. It is imperative that these differences be studied and known 
through clinical testing as it is the only means to assure the safety 
profile of each product.
    The Society recommends greater discussion of these issues as well 
as consideration and open discussion on what determinations the 
Europeans made in establishing their requirements for follow-on 
biologics. Only through an open forum with the input from scientists, 
physicians and those of us who represent the concerns of patients can 
we appropriately address this important issue.
            Sincerely,
                                       Phyllis Greenberger,
                                                         President.

                                              Martha Nolan,
                                   Vice President of Public Policy.
                                 ______
                                 
         Biotechnology Industry Organization (BIO),
                                           Washington, DC.,
                                                     March 8, 2007.
Hon. Edward M. Kennedy,
Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC. 20510.

Hon. Michael B. Enzi,
Ranking Member,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC. 20510.

    Dear Chairman Kennedy and Ranking Member Enzi: The Biotechnology 
Industry Organization requests the submission of this letter to the 
record of your March 8, 2007 hearing, to highlight our concerns about 
pending legislation to establish a mechanism for FDA approval of so-
called ``comparable'' biological products. In particular, we urge that 
the committee not rush to complete action on legislation in this area 
to meet a compressed deadline that does not allow Senators to give this 
important and complex topic the deliberative consideration it deserves.
    The members of the Biotechnology Industry Organization work on the 
forefront of medical advancement, developing innovative biological 
products that have revolutionized the treatment of diseases, including 
cancer, heart disease, infections, arthritis, and multiple sclerosis. 
In order to ensure a future of continued innovation by the 
biotechnology industry, it is essential that your discussions on 
developing an approval process for follow-on biological products be 
driven by responsible science, with a focus on protecting patient 
safety and preserving incentives to innovate.
    BIO agrees with and supports the written testimony provided by Dr. 
Jay Siegel, Group President of Research and Development for 
Biotechnology, Immunology, and Oncology for Johnson & Johnson--a member 
company of BIO. The safety issues alone raised by this testimony argue 
for careful, deliberate consideration of any follow-on biologics 
pathway by the Congress.
    In addition to ensuring patient safety, any follow-on biologics 
pathway created by the Congress must preserve incentives for research 
and innovation by ensuring protections for intellectual property and 
providing data exclusivity for innovative therapies and cures.
    Unfortunately, the Access to Life-Saving Medicines Act (S. 623), 
which proposes to create such a pathway, is deeply flawed in all three 
respects. As Dr. Siegel's testimony powerfully explains, this bill 
would jeopardize patient safety in numerous ways.
    Further, contrary to its title, the bill would eviscerate 
incentives to develop life-saving new medicines through its one-sided 
alteration of long-standing patent law in ways that favor follow-on 
biologics manufacturers, who would be able to restrict and infringe the 
intellectual property rights of various parties including innovative 
biotechnology companies. S. 623 also should be opposed for its lack of 
data exclusivity for innovative biologics. Data exclusivity provisions 
have served as an incentive for innovation under Hatch-Waxman and are 
part of the European system for regulating ``biosimilars'' (i.e., 
follow-on biologics). The legislation contains no prohibition on the 
FDA approving a follow-on product relying on innovator data immediately 
following approval of the reference product. Devaluing property rights 
and the absence of data exclusivity disincentivizes the necessary 
investment for a strong, vibrant pioneer biologic industry, upon which 
any follow-on market wholly depends.
    In addition, we urge Congress to consider action relating to 
establishing a statutory pathway for approving follow-on biologics 
independent of the reauthorization of the Prescription Drug User Fee 
Act (PDUFA). Before a framework for follow-on biologics can be 
established, Congress must carefully consider and resolve complex 
scientific, legal, and economic issues. Meanwhile, it is important that 
Congress complete the PDUFA reauthorization in a timely manner and as a 
top priority. Although PDUFA formally expires on September 30, 2007, 
reauthorization needs to occur earlier this year to avoid potential 
delays in review of innovative new medicines. Attaching follow-on 
biologics legislation to PDUFA would potentially jeopardize 
reauthorization of the user fee program to the detriment of patients 
waiting for new therapies, FDA's internal scientific capabilities, and 
biomedical innovation.
    BIO represents more than 1,100 biotechnology companies, academic 
institutions, State biotechnology centers and related organizations 
across the United States and 31 other nations. On behalf of our 
members, we appreciate your consideration of our views and look forward 
to a continuing dialogue on this important topic.
            Sincerely,
                                        James C. Greenwood,
                                                 President and CEO.
                                 ______
                                 
  Response to Questions of Senators Kennedy, Enzi, Bingaman, and Burr 
                         by Jay P. Siegel, M.D.
                      questions of senator kennedy
    Question 1. Dr. Siegel, do you think it is possible for a 
manufacturer to present a data package that would justify FDA saying a 
follow-on product is interchangeable?
    Answer 1. Given the limits of technology, it is not possible for a 
manufacturer to present a data package capable of scientifically 
justifying any claim or determination of a follow-on product to be 
interchangeable with its reference product. Laboratory testing has the 
potential, in some cases, to demonstrate a high degree of similarity. 
Such a demonstration could, in some cases, allow a determination of the 
safety and efficacy of a follow-on biologic based on a more limited 
clinical data set than would be required of an entirely novel molecule. 
I believe, however, there is no technically or practically feasible 
data package that could support a claim of interchangeability while 
ensuring patient safety.
    Follow-on biologics are, by definition, different products, and the 
potential for clinically important differences from the reference 
product exist. As I testified, it would take testing in several 
thousands of patients to ensure that the serious adverse events rate 
had not doubled from 1 percent to 2 percent. Testing simply cannot 
establish that clinical effects will be identical; inadvertent 
switching of a patient doing well on one medication to a different, 
though similar medication will run the risk of an adverse change with 
regard to clinical response.
    Even if the testing profiles of two products appeared essentially 
identical, inadvertent substitution pursuant to a designation of 
interchangeability could subject patients to additional risks. For 
example, if the risk of immunogenicity for patients exposed to a 
reference product is 5 percent, and for patients exposed to a 
follow-on biologic is also 5 percent, given the various factors that 
can lead to immunogenicity, the risk of immunogenicity in patients 
switched between the products could well be 10 percent, even if the two 
drugs were established to have equal efficacy profiles.
    A designation of interchangeability for products with potential 
differences, and the resultant switching of patients, could 
significantly impair the ability of pharmacovigilance (i.e., drug 
safety and surveillance) systems to limit the risks associated with 
emerging safety problems. If an adverse event occurred, it could be 
difficult or impossible to determine which ``interchangeable'' product 
was responsible. This could both delay detection of a new problem and 
impair ability to correctly identify the source of the problem.
    As with any other biologic with activities similar to those of 
another product, e.g., the various interferons alfa, antibodies to 
tumor necrosis factor, and erythropoietins, follow-on biologics that 
have been found to be safe and effective should be administered only 
with the full knowledge and consent of the patient and the treating 
physician regarding which product is being given. Follow-on biologics 
policy should both limit the possibility of substitution without a 
physician's knowledge and support good pharmacovigilance through 
labeling and naming.

    Question 2. Dr. Siegel, doesn't the FDA already make a finding of 
interchangeability every time it approves a manufacturing change? For 
instance, if a manufacturer were to change a cell line the FDA does not 
require that the manufacturer change the label or inform consumers that 
such a change has taken place.
    Answer 2. Manufacturing changes for an existing product do not pose 
the same risks I discussed above with regard to interchangeability for 
follow-on biologics. There are two reasons this is the case:

     First, in the case of manufacturing changes, the risk of 
being unable to track which product is accountable for an adverse event 
and the risk of patients being exposed to additional dangers by being 
switched between two products are both minimized because there is a 
limited period in which the pre- and post-change product co-exist on 
the market. Indeed, in my experience, when there is a change that 
raises concerns about a possible change in profile, FDA will ask that 
the period of overlap in the market be minimized. In contrast, follow-
on biologics would often co-exist in the market with the reference 
product and possibly other follow-ons for extended periods.
     Second, the extent of changes, and therefore the risks of 
undetectable but meaningful differences, with a follow-on biologic are 
quite high compared with those typical of a biologic undergoing a 
manufacturing change. The manufacture of a follow-on biologic will 
typically entail simultaneous, substantial changes to many key aspects 
of manufacturing--including changes in cell line, many aspects of the 
manufacturing process, and facility. While these changes are 
unavoidable for follow-on manufacturers, manufacturers of an approved 
product, understanding the risks of comparability determinations, are 
extremely cautious about attempting any of these changes and would be 
extremely ill-advised to propose multiple simultaneous changes this 
radical.

    The risk of clinical differences inherent in such extensive changes 
is further substantially increased in the case of follow-on biologics 
since the follow-on manufacturer, unlike the innovator, has limited or 
no access to intermediaries and to the extensive knowledge of the 
product and its manufacturing process that make it possible for 
innovator companies to assess and avoid the risk of clinically 
important changes to their products.
    Let me explain this point further: When a manufacturer of a 
biologic that has already been marketed and/or extensively studied, 
makes substantial changes in its manufacturing process, that 
manufacturer is able to compare not only final product but also various 
components and intermediates that are produced during various stages of 
both the new and old manufacturing process. For example, depending on 
the changes made, comparisons might be made of the unpurified biologic 
(made by the old and new processes), and/or of purified product prior 
to formulation. This testing is very important because it may detect 
the presence of new variants or contaminants that, after purification 
and/or formulation, may be reduced or masked such that they are still 
present but undetectable in final product.
    Manufacturers of follow-on biologics will not have any of the 
components and intermediate materials for testing and will have access 
only to the final, marketed reference product.
    Additionally, optimal comparisons of ``before change'' and ``after 
change'' materials require an understanding of which parameters are key 
to ensuring the safety and efficacy of the molecule and what the best 
approaches to assessing them are. This understanding comes from years 
of working with the reference product and is not available to 
manufacturers of follow-on biologics. Further, when differences are 
detected, the key question becomes whether the difference is clinically 
important. While manufacturers of innovative products have extensive 
experience that sometimes helps address this question, the manufacturer 
of a newly developed follow-on biologic will have limited experience 
with the molecule.
    Because the manufacture of a follow-on product will necessarily 
entail drastic changes to the process absent in-process materials, 
comparative testing capabilities and knowledge, it is inapposite to 
attempt to equate FDA standards for changes to the manufacture of an 
innovator product--as stringent as those standards are--with what can 
or should be the standards for follow-on biologics.
                       questions of senator enzi
    Question 1. The Intellectual Property provisions in the Clinton-
Schumer bill have been described as unbalanced by some. Do you think 
this is a fair criticism? If this law was in place, how would it change 
your investments that you make in research and development?
    Answer 1. As I stated in my testimony, it is critical that any 
pathway for follow-on biologics provide appropriate incentives for 
innovation so that the promise of new and innovative biologic therapies 
can continue to be realized for patients for generations to come.
    In my current position as Group President of Research & Development 
for Biotechnology, Immunology and Oncology for the Johnson & Johnson 
Family of Companies, I experience first hand the issues presented by 
the enormous effort and investment it takes to bring a new biological 
entity to the market through the regulatory approval process. Only a 
small portion of potential drug candidates reach human trial phase and 
only a small portion of those drugs actually reach the market. And it 
has been demonstrated that well over $1 billion in research and 
development is spent for each new drug brought to market (Source: Tufts 
Center for the Study of Drug Development Impact Report, Vol. 8, No. 6 
November/December 2006).
    Thus, the high cost of drug development and the uncertainty 
associated with the outcome of pre-clinical and clinical trials 
necessary for marketing approval makes investment in this area an 
extremely costly and risky business. While we are committed and 
dedicated to developing new therapies to address unmet medical needs, 
this risky and costly drug development can occur only when there is 
both a sound scientific case and a sound business case to support the 
programs.
    In the face of this, S. 623 would provide a pathway for the 
abbreviated approval of follow-on biologics that relies heavily on the 
investment made by the innovator company, with no provisions to ensure 
that the innovator of a biological product will be able to recoup the 
enormous investment made before facing competition from follow-on 
manufacturers. Unlike the 1984 Hatch-Waxman Act, which sought to 
balance the goal of facilitating the rapid introduction of lower-cost 
generic drugs with the goal of promoting innovation in the 
pharmaceutical industry, S. 623 includes little or nothing to promote 
innovation in the industry.
    It may be asserted that no such provisions protecting innovation 
are necessary because the innovator can rely on its patents to protect 
the product from competition for a sufficient period of time to recoup 
the investment and promote innovation. However, as we have seen from 
the patent litigation that has ensued as a result of the 1984 Hatch-
Waxman Act, patents alone are an imperfect and highly uncertain system 
upon which to rely for market exclusivity for pharmaceuticals.
    The ability to rely on patents for protection of innovation will be 
even more limited for biologics. The patent system governing the 
acquisition and enforceability of biological patents is generally 
moving towards the issuance of patents with increasingly narrow claims. 
Additionally, many biologics are imperfectly protected only by process 
patents that may be ``designed-around'' by an alteration of the process 
that avoids infringement. But proposed follow-on biologics legislation, 
including S. 623, will allow for approval of follow-on biologics that 
are ``similar'' but not ``identical'' to the innovator product. 
Particularly with the broad range of differences allowed under the 
definitions of ``highly similar'' in S. 623 (e.g., even allowing the 
follow-on biologic to have a different amino acid sequence of the 
product), there will be ample opportunities for follow-on biologics to 
``design-around'' the typical patents protecting a biologic.
    Thus, under a statutory scheme such as that outlined in S. 623, a 
follow-on version could be similar enough to an innovator product for 
the purposes of regulatory approval, but different enough to avoid 
patent infringement. The combined effect of these forces could reduce 
effective market protection for innovator products that, in turn, could 
stifle the environment for investment in the development of new 
biologic medicines. There is no doubt that this would impact 
development decisions.
    While I do not claim to be an expert in pharmaceutical intellectual 
property litigation, experts in Johnson & Johnson inform me that S. 623 
contains a number of provisions which would actually weaken the ability 
of innovators to enforce what patents they are able to obtain. For 
instance, the bill would restrict the innovator's ability to bring a 
patent infringement suit against an infringer unless they identify all 
of their patents in a timely manner, and then the suit may be brought 
only in the judicial district in which the infringer consents, thus 
depriving the innovator the ability to bring suit in the judicial forum 
of its choosing. Further, unlike the 1984 Hatch-Waxman Act, there is no 
stay of the regulatory approval of the follow-on biologic when a patent 
infringement suit is filed. Finally, if certain conditions are not met 
by the innovator, in some cases the innovator may only recover a 
``reasonable royalty'' in a patent infringement action, a provision 
which amounts to a compulsory license for the follow-on biologic; in 
other cases, the innovator is prevented from bringing an infringement 
suit at all.
    We would be pleased to offer input as you consider the important 
question of incentives for innovation as you examine legislative 
approaches to follow-on biologics.

    Question 2. Johnson & Johnson operates in Europe. Are you satisfied 
with the process that the Europeans have created to license follow-on 
products?
    Answer 2. We are fortunate that the EU has already made substantial 
progress in developing and implementing a policy based on science and 
public health. While the United States should have a policy that is 
designed for our own regulatory, legal, and healthcare environment, 
there are many aspects of the EU process and policy that are admirable.
    EU legislation clearly distinguished a ``biosimilar'' (the term 
they use for a follow-on biologic) from a ``generic,'' acknowledging 
the differences between products containing small synthetic molecules 
and those based on biotechnology-derived proteins produced by living 
cells. The quote below from the EMEA guideline on biosimilar products 
(CHMP/437/04) provides a good summary of the philosophy underlying the 
EMEA's position on biosimilars (follow-on biologics).

          ``It should be recognised that, by definition, similar 
        biological medicinal products are not generic medicinal 
        products, since it could be expected that there may be subtle 
        differences between similar biological medicinal products from 
        different manufacturers or compared with reference products, 
        which may not be fully apparent until greater experience in 
        their use has been established. Therefore, in order to support 
        pharmacovigilance monitoring, the specific medicinal product 
        given to the patient should be clearly identified.''

    The EU legislation did not attempt to define the scientific 
standards for approval of biosimilars; it entrusted that task to the 
EMEA, the science-based body responsible for approving the marketing of 
drugs in the EU. The EMEA pursued a science-based, transparent and open 
process in which all parties were invited to offer input to establish 
concept papers and draft guidances, starting with basic principles for 
all biosimilars. This was followed by more specific guidances with 
testing requirements by product groups. The EU requirements allow for 
abbreviations in testing where science and safety permit, but clinical 
testing, immunogenicity testing, and post-marketing safety surveillance 
are recognized as important to minimize the risk to patients and are 
critical parts of the EU approach.
    The European Union rightly acknowledged in its own process of 
developing a pathway for follow-on biologics that follow-ons can be 
similar, but never identical to an innovator biologic.
    Specific legislation with regard to interchangeability has been 
left to Member States and several weeks ago (Feb. 18), the French 
parliament adopted legislation to prevent follow-on biologics from 
being treated in the same way as traditional generics and banned the 
automatic substitution of one biologic medicine for another.
    Johnson & Johnson is pleased with, and participated in, the open 
and transparent process used in Europe to determine the testing 
standards for follow-on biologics that are truly highly similar to a 
reference product. We should be able to leverage that work to have a 
frank, transparent and scientific debate here in the United States, and 
thereby develop a model that will be compatible with our own regulatory 
and healthcare environment.

    Question 3. If there is general agreement that an abbreviated 
pathway for biologics is appropriate, why shouldn't we just modify the 
Clinton-Schumer bill to address the identified concerns instead of 
creating new legislation?
    Answer 3. Johnson & Johnson fully supports efforts to identify a 
pathway for follow-on biologics. As I indicated in my testimony at the 
Senate HELP hearing on March 8, this pathway should be science-based, 
with paramount attention to patient safety and well-being. To that end, 
there are a number of principles critical to address in any abbreviated 
system for follow-on products. Four of these principles are: (1) There 
will always be a need for appropriate pre-marketing testing in humans 
to ensure that a follow-on biologic is safe and effective; (2) A 
follow-on product should be highly similar to its reference product and 
as similar as is achievable--there need not and should not be allowance 
for determinations of ``comparability'' for products that are 
unnecessarily different or so different in structure that they should 
be considered different products entirely; (3) A follow-on product 
should not be considered interchangeable with its reference product; 
(4) FDA must be fully empowered to require effective post-marketing 
safety surveillance, to seek commitments for post-marketing clinical 
studies, and to request data and studies in support of sound scientific 
decisions without constraints.
    In addition to reflecting an overriding concern for patient safety 
and well-being, any legislation for follow-on biologics should ensure a 
science-based, open and transparent process allowing broad-based expert 
input into the establishment of testing standards. Importantly, it 
should also provide incentives for innovation so the promise of new and 
innovative biologic therapies can continue to be realized for patients.
    The principles enumerated above, the need for incentives for 
innovation, and the establishment of an open and transparent process 
for the creation of testing standards should be critical elements of 
the foundation and starting place for any proposed legislation for 
follow-on biologic products. S. 623 is not based on these principles, 
provides no incentives for innovation, and does not encourage or even 
suggest an open process. Therefore, S. 623 should not be used as a 
starting place for follow-on biologic legislation.
                     questions of senator bingaman
    Question 1. To address the issues around substitution of one 
biologic for another, how would you recommend that data be obtained in 
the post-market period to assure safety of both the innovator compound 
and the follow-on (or biosimilar)? Please discuss pros and cons of each 
potential stakeholder contributing to the data gathering process: 
manufacturer, third party payer, prescribing health professional, 
patient, regulatory agency.
    Answer 1. Because a follow-on biologic cannot be established to be 
identical to the reference innovator product, interchangeability should 
not be permitted. This has been recognized in the European Union. 
Unless there are clinically important reasons for making a deliberate 
choice to substitute one biologic for another, substitution as we 
generally understand it should be avoided.
    Appropriate pharmacovigilance (post-marketing safety surveillance) 
requires that the causative product for an adverse event be 
identifiable to the greatest extent possible. To achieve this end, 
patients and prescribing health professionals should be aware of 
precisely which biologic the patient is taking. Switching between 
therapies should be carried out only when there are clinically 
important reasons and with full knowledge of the patient and physician. 
Follow-on biologic policy should optimize the ability to identify the 
product actually received through approaches such as naming, labeling, 
and physician and patient education.
    As part of reviewing the application for a follow-on biologic, just 
as for any other biologic, FDA should determine what studies should be 
performed in the post-marketing period to address outstanding 
questions. This determination will depend on the information provided 
about the molecule and its clinical effects in the application, upon 
knowledge about other molecules in the class, and upon a determination 
of what information should be required pre-marketing.
    It is important to recognize that the prohibition in S. 623 against 
FDA requesting any post-marketing studies of the follow-on biologic 
other than those requested of the innovator is scientifically 
problematic. Data in the follow-on application (e.g., presence of a 
trace contaminant, weak signals of a possible toxicity based on lab 
findings, suboptimal clinical data addressing a safety concern) may 
point toward the importance of specific post-marketing studies for the 
follow-on product. Knowledge emerging since the approval of the 
innovator may raise key questions already addressed by years of 
experience with the innovator that need to be addressed for the follow-
on biologic.
    To ensure good pharmacovigilance for any biologic, patients should 
be encouraged to report possible adverse events to their healthcare 
provider and physicians should be encouraged to report appropriately to 
the FDA and manufacturer. In addition, all manufacturers should be 
required to have in place systems for the ongoing collection and 
evaluation of post-marketing data as a method for detecting risks 
across the product lifecycle. The specific range of programs for the 
collection of post-marketing data can range from prospective trials, 
epidemiologic studies, registries, or simply post-marketing 
surveillance.

    Question 2. Can you propose a possible mechanism for communicating 
to stakeholders (above) during the process of post-market surveillance? 
Would different information go to different stakeholders at different 
times, or would all the information be equally accessible to all 
stakeholders?
    Answer 2. Health care professionals and others who become aware of 
possible new safety concerns should report new safety information to 
the FDA and drug sponsors/manufacturers in a timely manner. In most 
cases, post-marketing safety information will not result in the need to 
urgently communicate new safety information, and in these cases, 
periodic reporting of specific data from surveillance programs and 
appropriate studies should occur in a timely fashion at a frequency 
agreed between the manufacturer and FDA prior to approval. This ``raw'' 
data should be subject to expert evaluation before further 
dissemination. Dissemination of such raw data to recipients not 
equipped to evaluate its significance and place it in context could 
inadvertently cause unwarranted concern or result in inappropriate 
cessation of life-saving or enhancing therapy.
    After evaluation, new information that adds significantly to 
understanding the expected effects of a drug should be further 
distributed to all stakeholders, including patients. However, it is 
critical that information to patients be balanced and delivered in the 
context of the needs of and alternatives for the individual patient. 
This is typically best done by the informed health care professional.
                       questions of senator burr
    Question 1. Do you support the Clinton-Schumer bill in its 
entirety?
    Answer 1. As I indicated in my testimony at the Senate HELP hearing 
on March 8, Johnson & Johnson does not support S. 623--not in its 
entirety and not as a starting place for follow-on biologics 
legislation. Any legislation for follow-on biologics should be based on 
well-grounded science, with paramount attention to patient safety and 
well-being. In addition to an overriding concern for patient safety, 
any legislation for follow-on biologics should provide incentives for 
innovation so that the promise of new and innovative biologic therapies 
can continue to be realized for patients for generations to come, and 
should encourage an open and transparent process to establish testing 
standards that ensure the safety and effectiveness for this new 
category of products. Unfortunately, S. 623 does not reflect these 
principles.
    What follows is a brief outline of areas I consider most 
problematic:

     S. 623 fails to provide important clarity pertaining to a 
requirement for pre-marketing clinical data to ensure that a follow-on 
biologic is safe and effective.

          Extensive experience confirms that manufacturing 
        differences such as those between the manufacturing processes 
        for a reference innovator product and those for a follow-on 
        biologic are likely to lead to differences in product safety or 
        efficacy. Not infrequently, these will be detected best or only 
        in clinical testing.
          As a rule, and as experience has made clear, clinical 
        studies must be considered a necessary and mandatory part of 
        properly evaluating any and all biologic products and should be 
        a fundamental piece of any proposed regulatory pathway for the 
        approval of follow-on biologics.
          FDA requires that innovators conduct clinical testing 
        after major manufacturing changes before marketing product made 
        by the new process. American consumers have been protected from 
        major clinical risks to date as a result and will continue to 
        be so protected only if follow-on biologics are required to 
        undergo appropriate clinical testing.

     S. 623 allows for determinations of ``comparability'' for 
products that are so different in structure that they should be 
considered different products entirely.

          There is no scientific basis for allowing abbreviated 
        testing of a new biologic on the basis of it being only 
        distantly related to an existing one. Some differences are so 
        substantial that the biologics should be considered different 
        products entirely.
          S. 623 allows a molecule to be considered ``to 
        contain highly similar principal structural features'' even if 
        it contains ``minor differences in amino acid sequence'' or 
        differences ``due solely to post-translational modifications.'' 
        Differences in even just one amino acid and many types of 
        differences due to post-translational modifications can have 
        devastating effects on the function of a protein. Such 
        differences scientifically define the product as a different 
        product and provide no scientific basis for abbreviating the 
        data requirements to demonstrate safety and efficacy.
          Due to the inability to make an identical biologic, 
        follow-on policy will necessarily go beyond generics policy in 
        allowing abbreviated testing for products whose active 
        ingredients are highly similar (as opposed to equivalent as 
        with generics). S. 623 unnecessarily goes much further allowing 
        abbreviated applications for products that are intentionally 
        and/or avoidably different from a reference. There is no need 
        justifying the risks incumbent in such a policy.
          S. 623 would also allow ``closely related, complex, 
        partly definable biological products with similar therapeutic 
        intent'' (for example, two live viral products for the same 
        indication) to be considered ``highly similar.'' This provision 
        inappropriately allows abbreviated applications for living 
        cells and organisms and other biologic products far more 
        complex and difficult to define than proteins.
          Even after drawing extremely broad boundaries around 
        what types of differences (and what types of products) would 
        fall within the scope of comparability determinations and 
        abbreviated applications, S. 623 undermines even those 
        boundaries. It gives the Secretary leeway to determine any two 
        biological products ``to contain highly similar principal 
        molecular structure'' regardless of known or indeterminate 
        differences. So in essence, S. 623 places no limit on the types 
        of physical and chemical differences that might be considered 
        minor enough to permit a demonstration of comparability and an 
        abbreviated application.
          Allowing products with avoidable structural 
        differences from a reference to be deemed comparable is not 
        only unnecessary (as the differences are avoidable), and risky 
        (the presence of such differences leaves little or no basis for 
        abbreviated testing), it also discourages innovation by 
        allowing follow-ons to design around patents and undermine the 
        incentives for innovation.

     S. 623 allows a follow-on product to receive a 
determination of interchangeability with its reference product, a 
scientifically unsound proposition that presents serious challenges to 
pharmacovigilance systems and patient safety.

          From the standpoints of science, clear communication, 
        and public safety, interchangeability is not an appropriate 
        designation for follow-on biologics.
          Unfortunately, not only is interchangeability for 
        follow-on biologics included in S. 623, the statutory test for 
        interchangeability is completely open-ended. As written, this 
        statutory test could be used to determine that two drugs are 
        interchangeable even if they do not contain the same active 
        ingredient. This is entirely at odds with the concept of 
        ``therapeutic equivalence'' that has been applied to small 
        molecule drugs and which requires a finding of the same active 
        ingredient, same dosage form and dose, and bioequivalence.
          If the designation of interchangeability leads to 
        substantial numbers of patients switching between therapies, it 
        could severely impair the ability of pharmacovigilance systems 
        to deal with emerging safety problems. When a new adverse event 
        emerges or a known one increases in frequency, it may be 
        impossible to attribute the adverse event to a specific product 
        if patients experiencing the event have received multiple 
        products. This is especially the case for some types of adverse 
        events, such as those due to immunogenicity, that tend to arise 
        in patients well after receiving the causative product.

     S. 623 places limitations on FDA's ability to require 
post-marketing studies that might be critical to ensuring safety, and 
is silent on post-marketing surveillance.

          Follow-on biologics will raise safety concerns--such 
        as differences in immunogenicity profile or emergence of 
        unexpected toxicities--that will require studies beyond the 
        scope that pre-marketing studies can reasonably address.
          S. 623 places specific limits on the FDA's ability to 
        request commitments for post-market clinical studies from a 
        follow-on manufacturer. It specifically would not allow FDA to 
        request studies specifically targeted to address residual 
        concerns raised by the limited testing done by the follow-on 
        biologic application.
          In addition, S. 623 is silent on the matter of post-
        marketing safety surveillance, a tool essential to ensuring the 
        safety of all biologics, including follow-on biologics or any 
        pharmaceutical.

     S. 623 subjects the FDA to undue constraints in its 
ability to ensure safety and efficacy of follow-on biologics.

          As we enter this new field with new safety risks, the 
        FDA should be unhampered in its ability to request and receive 
        additional data from a manufacturer as the need becomes 
        apparent. To do otherwise could jeopardize patient safety.
          The bill provides that, when asked, the FDA should 
        meet with follow-on sponsors to ``reach agreement regarding the 
        parameters of design and size of the studies'' necessary for 
        approval of the application. The binding nature of these 
        agreements presents a troubling departure from requirements 
        pertaining to new drugs and traditional generic drugs: Whereas 
        binding agreements in those contexts are limited to pivotal 
        studies (i.e., clinical trials and bioavailability and 
        bioequivalence studies) and made after review of extensive 
        preliminary data, here, the binding agreements are not so 
        limited and could be requested prior to generation of any data. 
        The FDA cannot and should not be expected to identify all 
        testing needs up front before early test results are available. 
        Also, existing provisions apply to determinations FDA has made 
        many times over many years (i.e., drug, biologic and generic 
        approvals), so FDA has a vast experiential basis for 
        determining what tests are required. By contrast, FDA has never 
        made a comparability determination for a follow-on biologic 
        such as proposed in S. 623. It is therefore unreasonable to 
        require the FDA to anticipate all testing needs in advance and 
        potentially dangerous to limit FDA ability to request 
        additional data.
          Another worrisome constraint on the FDA comes in S. 
        623's mandate to the FDA to complete its final review and take 
        final action on a follow-on biologic product application within 
        just 8 months of the manufacturer's submission of the 
        application. This would be an unprecedented move that places 
        inappropriately high priority on the review of follow-on 
        biologics: Most new drugs and biologics are reviewed with a 10-
        month deadline to complete review, potentially much longer to 
        reach final action. Even priority drugs and biologics have a 6-
        month review, and potentially take much longer to final action. 
        Also, timelines for new drugs and biologics address the time 
        for a complete review of an application. After complete review, 
        FDA may request any data not found in the application. In 
        contrast to the approach for innovator products, S. 623 sets an 
        aggressive timeline not for a complete review, but for a final 
        action. At the end of the 10-months review period, the FDA is 
        not allowed to request additional important data; it must make 
        a final decision. Given complexities of a comparability 
        determination and the potential associated risk, legislation 
        should promote, not limit, requests for important data.
          S. 623 also specifies that studies to establish 
        comparability should be designed ``to avoid duplicative and 
        unethical clinical testing.'' The meaning of ``duplicative'' is 
        unclear; but whereas replication of results is a basic 
        scientific approach to ensure validity, admonition to avoid 
        duplicative testing, depending on how the term is interpreted, 
        could lead to inadequate testing. Regarding unethical testing, 
        the language is unnecessary and could, depending on how it is 
        interpreted, discourage appropriate testing requirements.
     S. 623 provides no data exclusivity provision for 
innovators and thus does not provide adequate incentive for 
exclusivity.
     S. 623 does not ensure an open and transparent process for 
setting scientific standards.

    Question 2. I am sorry to see that we do not have a witness 
testifying on the impact of the Clinton-Schumer bill on the financial 
viability of innovator biotech companies. If we did have such a 
witness, I think the witness would say that venture capital for biotech 
companies would dry up because this bill guts any drive for biotech 
companies to innovate. Why should a biotech company go through huge 
clinical trials, manufacturing challenges, studies, etc. to get a 
biologic approved when the day after approval a follow-on biologic 
company can send them a letter asking for a list of every single patent 
that is a part of making that biologic. And after providing that list, 
the innovator can only sit back and wait for the follow-on biologic 
company to submit an application at the FDA saying that their product 
is comparable to the innovator's product--not the same--but comparable. 
This bill has no data exclusivity for the innovator. There is no patent 
protection for the innovator. And there is no marketing exclusivity for 
the innovator. Why should venture capital firms invest in biotech 
companies if the companies have no guarantee of recouping their 
research investment? Dr. Segal, I would appreciate your comments on 
this concern.
    Answer 2. The majority of biotechnology companies are small, 
privately held companies with no product revenue stream. Relatively few 
are currently profitable. These small companies have been the source of 
many innovative ideas and products. Raising sufficient venture capital 
is both a necessity and a great challenge for many of these small, 
innovative biotech companies.
    A bill like S. 623 that provides no marketing exclusivity for the 
innovator and contains provisions that weaken patent protections could 
very well have the effect of driving away venture capital money upon 
which the small start-up companies in the industry depend. Of course, 
this would decrease the amount of research and development being done 
by the industry on innovative biotech therapies.
  Response to Questions of Senators Kennedy, Enzi, Bingaman, and Burr 
                          by Nicolas Rossignol
                      questions of senator kennedy
    Question 1. Are EU requirements for clinical testing of follow-ons 
specified in statute or in regulation and guidance?
    Answer 1. The EU legislation on ``biosimilar'' products (the EU 
equivalent of follow-on biologics) lays down that the type and amount 
of data (i.e. toxicological and other non-clinical and appropriate 
clinical data) shall be determined on a case-by-case basis in 
accordance with relevant scientific guidelines. Requirements for 
clinical testing are specified in guidelines established by the 
European Medicines Agency (EMEA) (www.emea.europa.eu).

    Question 2. Could you explain the function of product class 
guidelines in the European Union?
    Answer 2. There are currently four ``biosimilar'' product-class 
guidelines in the EU, which address product-class-specific pre-clinical 
and clinical aspects on insulins, growth hormones, erythropoietins and 
granulocyte-colony stimulating factors. In addition, one on low-
molecular weight heparins is also in preparation.
    The purpose of EU product-class guidelines is to outline the 
general non-clinical and clinical requirements. The guidelines present 
the current view of the EMEA on how comparability of two products 
(biosimilar and reference) of the relevant class should be 
demonstrated.
    The non-clinical section of the product-class guidelines addresses 
the pharmaco-toxicological assessment. The clinical section addresses 
the requirements for pharmacokinetic, pharmacodynamic, efficacy and 
safety studies as well as the risk management plan. Criteria for 
extrapolation of clinical data to other indications approved for the 
reference medicinal product are also discussed.
    The guidelines are by definition rather general, since no two cases 
are likely to be the same and the biosimilarity is assessed essentially 
on a case-by-case basis (see response to Question 1).

    Question 3. Is an applicant able to submit an application for 
approval of a biosimilar for a reference product for which a product 
class guideline has not yet been issued?
    Answer 3. Yes. The type and amount of pre-clinical and clinical 
data required will be determined on a case-by-case basis.

    Question 4. Isn't it the case that applications for biosimilar 
products in Europe have been filed before the development and issuance 
of product class guidelines for those products?
    Answer 4. Two products have been authorised so far under the EU 
framework on biosimilars\1\: The first is the growth hormone Omnitrope 
(somatropin), whose application was received by the EMEA on July 1, 
2004 and which was authorised by the European Commission in April 2006. 
The second is the growth hormone Valtropin (somatropin), whose 
application was received by the EMEA on June 3, 2004 and which was also 
authorised in April 2006.
---------------------------------------------------------------------------
    \1\ The register of medicinal products for human use authorised by 
the European Commission is available at http://ec.europa.eu/enterprise/
pharmaceuticals/register/alfregister.htm.
---------------------------------------------------------------------------
    These two applications have indeed been filed before the product-
class guideline on non-clinical and clinical issues for biosimilar 
products containing somatropin was developed (work on this guideline 
started in the beginning of 2005).

    Question 5. Is an applicant able to consult with the EMEA if a 
product class guideline has not been issued or if the applicant has an 
approach that differs from that in the guideline?
    Answer 5. Yes, the applicant can indeed contact the EMEA to discuss 
these matters.

    Question 6. Isn't it the case that an applicant may deviate from a 
guideline so long as the applicant justifies the deviation?
    Answer 6. In general, EU guidelines are not legally-binding, so an 
applicant may deviate from a guideline as long as he justifies the 
deviation. In the specific case of biosimilars, nevertheless, the EU 
legislation lays down that the type and quantity of supplementary data 
to be provided must comply with the related detailed guidelines. In 
other words, if the guideline is very prescriptive on one particular 
requirement, the applicant must comply with this requirement. However, 
existing EU guidelines on biosimilars are usually general in nature and 
do not lay down highly prescriptive requirements, but rather 
recommendations (``the applicant should . . .'').
                       questions of senator enzi
    Question 1. Thank you for your testimony and joining us today. As 
you know we are considering adopting similar legislation. As you have 
already implemented it, how long would you imagine it would take the 
FDA to implement similar legislation?
    Answer 1. It is extremely difficult to predict how long it would 
take the FDA to implement similar legislation. This depends on a number 
of factors such as the type of products included within the scope of 
the regulation, the involvement of stakeholders, etc. I can only say 
that the scientific work necessary to put in place the current EU 
regulatory framework on biosimilars took the European Medicines Agency 
and the European Commission about 2-3 years.

    Question 2. You mention in your testimony that the EMEA has 
rejected one application. Understanding that some of the information is 
confidential; could you describe why that was rejected?
    Answer 2. One biosimilar application (Alpheon, an interferon) was 
indeed reviewed and given a negative scientific opinion by the EMEA in 
June 2006. One of the main reasons for this is that the EMEA had major 
concerns regarding the comparability of Alpheon and its reference 
product (Roferon-A), because of differences identified between the two 
medicines, such as impurities. The EMEA was hence of the opinion that 
Alpheon could not be considered as a biosimilar. The EMEA also had 
concerns that there was not enough data on the stability of the active 
substance and of the medicine that was going to be marketed. Also, the 
process used for making the finished medicine had not been adequately 
validated.
    More scientific information on the evaluation of Alpheon is 
available on the EMEA website: http://www.emea.europa.eu/pdfs/human/
opinion/19089606 en.pdf.

    Question 3. You indicated that your process of developing your law 
was an open process that included active participation of industry. 
Could you describe the benefit you saw in involving industry from the 
earliest point of developing the European legislation? Could you 
suggest any way to insure that legitimate scientific issues are 
considered but dilatory tactics do not derail the process?
    Answer 3. Involving the industry, but also other interested parties 
such patients associations or healthcare professionals, enabled us to 
gather as much expertise in the field as possible (which, depending on 
the type of product concerned, may be limited). This allowed regulators 
and scientific experts at the EMEA/European Commission to confront 
their vision with the practical experience of manufacturers, doctors, 
etc. It also helped us to better understand which therapeutic areas and 
product classes are likely to emerge first in the field of biosimilars 
(e.g., insulins, growth hormones . . .).
    Last but not least, involving both sides of the industry enabled a 
constructive exchange of contradictory views and facilitated the 
development of a balanced, unbiased regulatory framework. Transparent 
involvement of both the generics/biosimilar and the innovative 
industry, together with strong assurance of the independency of the 
scientific experts involved in the establishment and implementation of 
the regulatory framework, are in my opinion key factors to ensure that 
legitimate scientific issues are considered but dilatory tactics do not 
derail the process.
                     questions of senator bingaman
    Question 1. To address the issues around substitution of one 
biologic for another, how would you recommend that data be obtained in 
the post market period to assure safety of both the innovator compound 
and the follow-on (or biosimilar)? Please discuss pros and cons of each 
potential stakeholder contributing to the data gathering process: 
manufacturer, third party payer, prescribing health professional, 
patient, regulatory agency.
    Answer 1. Within the European Community, all products (innovative 
or biosimilar) made of recombinant DNA molecules--i.e., the vast 
majority of follow-on biologics today--are scientifically evaluated by 
the European Medicines Agency (EMEA) and authorized by the European 
Commission. The EMEA acts in close cooperation with the national 
authorities of the EU Member States and receives all relevant post-
marketing information, e.g., suspected adverse reactions. The 
scientific analysis of the received information can affect the status 
of the product and lead to an amendment, suspension or revocation of 
the marketing authorization. It is therefore a fully centralized system 
where the European regulatory Agency has a prominent role.
    The holder of the marketing authorisation is legally responsible to 
ensure that all relevant post-marketing information is brought to the 
attention of the Agency. Patients are also encouraged to communicate 
any adverse reaction to health-care professionals. However, as the EU 
system for pharmacovigilance is currently under revision,\2\ it is 
difficult to provide further details at this stage.
---------------------------------------------------------------------------
    \2\ http://ec.europa.eu/enterprise/pharmaceuticals/index.html.
---------------------------------------------------------------------------
    In my opinion, the issue of substitution is not specific to follow-
on biologics, but is rather an issue for all biologics. It is expected 
that the likelihood of substitution, in practice, will be higher for 
biosimilars, but substitution can also happen (as it does currently in 
the EU) between innovative products. One key aspect to be considered 
when addressing post-marketing monitoring is traceability, which can 
easily be lost if suitable products' naming and prescription systems 
are not in place. In this regard, the data gathering process at the 
stage of the patient/health professional prescribing the product is 
particularly crucial to ensure not only that information is indeed 
gathered, but also that this information is accurate, usable and can be 
transformed into scientific knowledge on the concerned product.

    Question 2. Can you propose a possible mechanism for communicating 
to stakeholders (above) during the process of post-market surveillance? 
Would different information go to different stakeholders at different 
times, or would all the information be equally accessible to all 
stakeholders?
    Answer 2. The EU system is based on two levels: the first level 
concerns regulatory agencies, the second level affects the general 
public and healthcare professionals.
    At the first level, it is essential that information is shared as 
fast as possible, with all regulatory agencies concerned. The European 
Medicines Agency acts as a focal point that gathers all post-market 
information and ensures information sharing and networking between 
Member States regulatory authorities.
    At the second level, the information is usually released by the 
EMEA in a public manner, so it is equally accessible to all 
stakeholders. Typically, this second step is triggered only once the 
first level of information sharing between regulatory authorities has 
been completed and a way forward has been agreed. Information publicly 
released should be understandable for the whole public. In certain 
cases, it makes sense that two separate sets of information are 
released: one for specialists (healthcare professionals, prescribers), 
and one for the general public.
                       questions of senator burr
    Question 1. Do you support the Clinton-Schumer bill in its 
entirety?
    Answer 1. I am afraid that I am not in a position to answer this 
question. I can only underline the EU experience, which in my opinion 
demonstrates that the development of a regulatory framework and adapted 
scientific criteria to approve biosimilar products that are safe, of 
good quality and efficacious, is something feasible. As mentioned in my 
testimony, there is no reason in principle why the science should be 
different on the other side of the Atlantic.

    Question 2. I am sorry to see that we do not have a witness 
testifying on the impact of the Clinton-Schumer bill on the financial 
viability of innovator biotech companies. If we did have such a 
witness, I think the witness would say that venture capital for biotech 
companies would dry up because this bill guts any drive for biotech 
companies to innovate. Why should a biotech company go through huge 
clinical trials, manufacturing challenges, studies, etc. to get a 
biologic approved when the day after approval a follow-on biologic 
company can send them a letter asking for a list of every single patent 
that is a part of making that biologic. And after providing that list, 
the innovator can only sit back and wait for the follow-on biologic 
company to submit an application at the FDA saying that their product 
is comparable to the innovator's product--not the same--but comparable. 
This bill has no data exclusivity for the innovator. There is no patent 
protection for the innovator. And there is no marketing exclusivity for 
the innovator. Why should venture capital firms invest in biotech 
companies if the companies have no guarantee of recouping their 
research investment? Mr. Rossignol, I would appreciate your comments on 
this concern.
    Answer 2. The EU experience suggests that a regulatory framework 
that strikes the right balance between rewarding innovation, on the one 
hand, and allowing generic/biosimilar competition, on the other hand, 
is feasible and can effectively support the development of the 
biotechnology industry. It is also likely that the entry of biosimilar 
products on the market will further stimulate innovators to develop new 
products or new versions of existing products.
    The EU regulatory framework on biosimilars does not contain 
specific market exclusivity, data exclusivity or patent protection 
provisions for the innovator. Rather, it relies on existing, general 
provisions which apply in principle to all pharmaceuticals. I am not 
aware of any EU evidence demonstrating that the EU framework on 
biosimilars has deterred venture capital investment in the biotech 
sector.
    It should also be stressed that one of the key goals--if not the 
most important--of any framework on biosimilars of follow-on biologics 
should be to protect patients' safety. In this regard, the EU 
innovative industry in Europe was rather supportive of putting in place 
a suitable framework on biosimilars, precisely to avoid double 
standards and make sure that biosimilars do not put patients' safety at 
risk.
       Response to Questions of Senators Kennedy, Enzi, and Burr 
                       by Ajaz S. Hussain, Ph.D.
                      questions of senator kennedy
    Question 1. Dr. Hussain, do you think it is possible for a 
manufacturer to present a data package that would justify FDA saying a 
follow-on product is interchangeable?
    Answer 1. A complete data package on a follow-on product that 
demonstrates comparability at every level--structural, functional and 
clinical--with an innovator product, should be considered suitable for 
such a designation by the FDA. Such judgments are made every day by the 
Agency, when the sponsors of innovator products provide data to 
substantiate that their products are the ``same'' pre- and post- 
manufacturing changes, and the same regulatory standard can be applied 
by the Agency to follow-on products. In such instances with innovator 
products an achievement of comparability pre-supposes 
interchangeability. While in some cases the FDA will require 
analytical, preclinical and clinical date, this may not always be the 
case (especially as science and technology continue to improve), but in 
all instances it is a data-driven process in which the Agency already 
has extensive experience. Such comparability assessments have been used 
very successfully, with very few incidences of failure resulting in any 
loss of safety of efficacy in products reaching patients, and they have 
been critical to upgrading manufacturing capabilities for many existing 
biologics (both those regulated as drugs under FD&CA and those 
regulated as biologics under PHSA).

    Question 2. Dr. Hussain, doesn't the FDA already make a finding of 
interchangeability every time it approves a manufacturing change? For 
instance, if a manufacturer were to change a cell line the FDA does not 
require that the manufacturer change the label or inform consumers that 
such a change has taken place.
    Answer 2. If an innovator product uses a comparability protocol to 
make a manufacturing change, and the FDA is satisfied with the data 
provided on the pre-change and post-change material then the product is 
presumed interchangeable and there is no change in the label. The only 
indication that the batches are different will be the lot number so the 
material is fully traceable, but it will be invisible to the patient 
that any manufacturing change has occurred. And indeed, once 
comparability has been demonstrated, the patient can have confidence 
that the product will provide them with the same clinical outcome--that 
is the whole point of comparability and why it has been so successful 
for the manufacturers and the regulators for well over 10 years.

    Question 3. Dr. Hussain, looking at the EU guidelines on different 
biosimilar products, we see that what the EU expects varies by product. 
For example, for insulin, the EU suggests only pharmacokinetic and 
pharmacodynamic studies to show efficacy. For growth hormone, the EU 
expects an adequately powered comparative effectiveness trial. Doesn't 
this variation show that, when we legislate, we need to give FDA the 
flexibility and discretion to ask for what it needs, and not write 
unnecessary requirements into law?
    Answer 3. Just as FDA evaluates and approves innovator products, it 
is entirely appropriate that FDA be given the flexibility to require 
the data that they as experts believe to be necessary to fulfill the 
statutory criteria of safety and efficacy (for FD&C Act approved 
products) or safety, purity and potency (for PHS Act licensed 
products). The complexity of the products will determine the extent of 
the data required of a subsequent sponsor to establish comparability, 
and the European guidelines reflect this. However, we do not need to 
wait for FDA to promulgate guidances, albeit they may choose to over 
time, as there is enough publicly available information with those 
biologics on which the patents are expiring for subsequent sponsors to 
be able to propose follow-on candidates. It will be up to those 
sponsors to work with the Agency to assure them that their products are 
comparable. And indeed, as Mr. Rossignol, from the EU testified during 
the hearing, the science is global and so what has been learnt and 
discussed in Europe on the science, can also be employed here. Giving 
FDA the flexibility to adjust their requirements as the science 
evolves, but to leave the burden with the sponsors to assure that their 
products meet the appropriate regulatory criteria is entirely 
appropriate for follow-on biologics, just as it is for innovator 
biologics.

    Question 4. Dr. Hussain, we all understand the importance of 
protecting innovation. Do you believe that allowing follow-on biologics 
is consistent with promoting innovation? Can allowing follow-on 
competition actually stimulate innovation in biologics?
    Answer 4. I believe that there is nothing like competition to 
stimulate innovation, and nothing like perpetual monopolies to stultify 
it. Just as the Hatch-Waxman Drug Price Competition and Patent Term 
Restoration Act of 1984 led to an era of high productivity for both 
generic and innovator pharmaceutical companies, so I believe that the 
new regulatory pathway such as contained in S. 623 will stimulate 
innovation in both sectors too, not least because in addition to the 
competitive comparable/interchangeable pathways it explicitly contains 
a second generation pathway for innovators to facilitate their 
improvements to their own and each others already-licensed biologic 
products. A pathway based on established regulatory principals but that 
encourages the use of prior scientific knowledge by all sponsors is an 
ideal way to reduce inappropriate regulatory requirements and to 
stimulate innovation to the ultimate benefit of patients as well as the 
industries that serve them.
                       questions of senator enzi
    Question 1. Thank you for your testimony. You note that you support 
the Clinton-Schumer bill as it will provide follow-on biologics to the 
market quickly. Would you support changes in the legislation that would 
address some of the concerns that you have heard today as long as they 
do not significantly delay competition in the pharmaceutical 
marketplace?
    Answer 1. As long as the regulatory standards proposed in the 
legislation apply consistent and appropriately high regulatory 
standards to all biologics I would anticipate being supportive. 
However, I think the pathway proposed in the Clinton-Schumer bill is 
sufficiently specific to be reassuring to all sponsors that the FDA can 
apply its established regulatory experience, but flexible enough in its 
burden of proof remaining with the sponsor such that they are able to 
be creative and achieve the regulatory requirements with any data that 
they believe suitable--this basic conceptual approach will be hard to 
improve. Indeed it is the basis of the current PHS Act under which most 
biologics are currently licensed by the FDA, which has also proven 
remarkably accommodating to the massive progress in the technology.
    Clearly, in addition to the pathway, it will always be important to 
respect legitimate intellectual property, but Novartis believes that 
patent issues can best be handled by the Courts, as is the case today 
for innovator PHS Act biologics, and should not be made a 
responsibility of the FDA who are neither qualified nor resourced to 
handle them. Thus, these patent issues should be ``decoupled'' from the 
pathway. Novartis would support some form of exclusivity for the 
sponsor of innovator products approved in the future, and used as the 
reference product for a follow-on biologic, whereby they would not face 
market competition for a set period post-
approval. This could recognize the market uncertainties for these 
products, and as in the original Hatch-Waxman statute, enable the 
development of products with limited or no patent protection. Such an 
exclusivity would encourage the further creation of innovator products. 
However, data exclusivity is not a term we have used in our testimony 
because the follow-on product will not have access to, nor need, any of 
the data provided by the innovator to the FDA as part of their original 
approval.
    What I would find questionable would be continued general debate 
that simply delays the recognition, which I am not sure anyone 
disputes, that ultimately the decision of the FDA must be on the 
individual application submitted to the Agency, and that this 
application by the follow-on sponsor will be confidential, just as that 
of an innovator sponsor. All that is needed is for FDA to have the 
requisite authority and the discretion to use it as warranted by the 
individual submissions they receive, irrespective of whether the 
sponsor is a traditional innovator company, generic company or some 
other equally competent sponsor. The quality of the application is what 
matters, and its evaluation by the FDA, not the general business model 
of the sponsor.

    Question 2. Would you support other legislation that would bring 
follow-on biologics to the market quickly?
    Answer 2. As long as the regulatory standards proposed in the 
legislation apply consistent and appropriately high regulatory 
standards to all biologics, and as long as intellectual property is 
appropriately respected, I would anticipate being supportive of a new 
pathway that enabled the FDA to approve interchangeable follow-on 
biologics. The timing, however, will be determined by when the sponsors 
of follow-on products submit their applications and the outcome of the 
subsequent review by the FDA. That is what will govern how quickly 
these products can be made available after FDA has been granted the 
necessary authority to review them.

    Question 3. Novartis as a corporation operates in the European 
Union. You suggest that the data exclusivity of the European law should 
be inserted into the U.S. version of follow-on legislation. Could you 
discuss why you think expanded data exclusivity is preferable to patent 
extensions that are present in the Hatch-Waxman law?
    Answer 3. The European Union has certain useful parallels in their 
Biosimilars Pathway (which was enacted into legislation in 2003), and 
through which Novartis obtained the first European approval of a 
biosimilars--Omnitrope, a recombinant Human Growth Hormone in April 
2006. While, the market conditions in Europe are very different to 
those of the United States, and probably, as Mr. Rossignol indicated, 
have less relevance to the United States, than the pathway provisions, 
Novartis is a strong advocate for the protection of legitimate 
intellectual property worldwide. Part of intellectual property is 
patent protection, and part of this are the various forms of 
exclusivity, such as the European so called 8+2+1, whereby the 
regulatory authorities do not accept an application for 8 years, 
approve it for 10, and can grant a 1-year extension if a new indication 
is added. The system is not dissimilar to the Hatch-Waxman 
exclusivities of 4 and 5 years.
    Biologics, licensed under the PHA Act are already entitled to and 
have received the patent-term extensions for which they became eligible 
under Hatch-Waxman. There are no distinctions in the patent term 
restoration provisions for drugs or biologics, or for FD&C Act products 
and PHS Act products. However, biologics cannot benefit from the 
exclusivity provisions on Hatch-Waxman as these do not apply to PHS Act 
products.
    Further, I want to reiterate that I do not believe that any sponsor 
of a follow-on biologic will use the actual data of an innovator 
product, although they will need to refer to the already public prior 
finding of safety, purity and potency of the FDA, namely, the label of 
the innovator biologic product that they are referencing for 
comparability purposes. Thus, the rationale for data exclusivity is not 
protection against a subsequent sponsors' use of the data itself, but a 
term that refers to a preclusion on the FDA approving another product 
as interchangeable with a future innovator product for a certain 
period--and as such has been more accurately called market exclusivity. 
That is why I used the term market exclusivity throughout my testimony, 
and indeed it has value to the innovator as it is a greater assurance 
than patents which may be disputed and declared invalid or 
unenforceable in court (but prior to such litigation, their status 
cannot be guaranteed). Clearly the potential for patents extend for a 
longer period, and as such both patents and market exclusivities are 
valuable to the sponsors of biologic products, and as an incentive for 
further innovation.

    Question 4. I understand that FDA recently approved Omnitrope as a 
``comparable'' biotech drug, and that your application included 
clinical trials. In that application how many patients were enrolled? 
Could you describe the key differences in the approval in the United 
States and EU?
    Answer 4. I am happy to address what is reflected in the public 
record. FDA-
approved Omnitrope as a 505(b)(2) NDA under FD&C Act in May 2006. As 
such it was no different from other biologic drugs that have been 
approved by the Agency using this pathway, although we were the first 
case of a recombinant product that referenced a previously approved 
recombinant product. In our NDA we referred to the prior approval of an 
existing product and then we provided data, including clinical trials, 
to show that we were comparable (albeit this is not a term that is used 
in the Hatch-Waxman statute when 505(b)(2) was created). The same 
product, and the same set of data, that included analytical, 
preclinical and clinical data was approved in Europe under their 
Biosimilars pathway prior to the U.S. approval by FDA. The European 
pathway is based on comparability (CHMP/437/04: GUIDELINE ON SIMILAR 
BIOLOGICAL MEDICINAL PRODUCTS. London, 30 October 2005).
    To the extent reflected in the Summary Basis for Approval (SBA), 
and with the caveat that the studies continued for longer periods 
relative to the U.S. approval than would have otherwise been the case 
because of the delay in the approval, thus generating much more 
extensive data than the FDA or Sandoz anticipated.

    Question 5. Currently the Clinton-Schumer bill has a few IP 
provisions that seem to tip the balance established in current law 
towards the generic companies. As Novartis is part generic part 
innovator, could you discuss the balance that is established in this 
bill?
    Answer 5. As discussed above, in my answer to Question 3, we do 
believe that a balance of incentives for innovators will be important, 
as we create the new pathway that enables competing, interchangeable 
follow-on biologics. Indefinite monopolies for innovator products, even 
when all patents have expired, is not appropriate for biologics, any 
more than it was for drugs back in 1984 when Hatch-Waxman was enacted. 
Novartis believes in respect for intellectual property and competition, 
and believe that both will ultimately benefit patients through the 
greater availability of more and better medicines. Competition is the 
best way to ensure access to cost-effective drugs after patents expire, 
and we believe that the time has come for the authority to be granted 
to the FDA to approve Follow-on Biologics. These Follow-on Biologics 
will compete in the free-market, and newer and better ones will 
continue to be created, as long as it is to the same consistent, 
appropriately-high, science-based regulatory standards that apply to 
innovator products, and as long as legitimate intellectual property is 
respected. To the extent that market exclusivity can be provided to 
innovator biologics approved subsequent to enactment of any proposed 
legislation, we would anticipate being supportive, as we believe this 
gives a greater certainty to innovators, and as such will be a stimulus 
to their continued innovation.
                       questions of senator burr
    Question 1. Do you support the Clinton-Schumer bill in its 
entirety?
    Answer 1. Novartis does not support the bill in its entirety, 
however, as discussed in our testimony, we support the principles of 
the regulatory pathway proposed. Novartis supports the pathway proposed 
in the Clinton-Schumer bill because we believe that the FDA has proven 
their ability to use the comparability process for evaluating 
differences between biologic products in a manner that encouraged 
upgrading manufacturing and the increased availability of biologics 
without putting any patients at undue risk. We believe that they can be 
granted the authority to apply these same regulatory principles to the 
evaluation and approval of follow-on biologics, including 
interchangeable ones.
    Novartis has not endorsed the intellectual property provisions in 
the bill. We do not believe that such provisions need to be in any way 
linked to the regulatory approval process--they can be as we say 
``decoupled'' with the courts continuing to supervise patent disputes 
and FDA getting on with their job of reviewing and approving regulatory 
filings. Further, we think market exclusivity for the sponsors of 
future innovator biologic products should be included in the 
legislation.

    Question 2. Under the Clinton-Schumer bill, the FDA has to lay out 
exactly what is wrong with a follow-on biologic application and tell 
the company what they have to do to fix the application. The FDA does 
not do that for any other company submitting an application for product 
approval (innovator biologic, generic, brand, animal drug, etc.). Do 
any of you support that language?
    Answer 2. The regulatory criteria included in the Clinton-Schumer 
bill that form the basis for the rejection by the FDA of an application 
for a comparable product are derived from the Food, Drug, and Cosmetic 
Act Section 505 approval provisions for new drug approvals, albeit with 
tighter standards and more predictable operation and applying strict 
criteria and time lines. This will be to the benefit of all applicants 
for both comparable, interchangeable and second generation biologic 
products.

    Question 3. Under current law, a company cannot choose the court 
they want to be sued in. In the Clinton-Schumer bill a follow-on 
biologic company can decide where they want to be sued. Do any of you 
support that language?
    Answer 3. As a scientist and former regulator, I am not qualified 
by training or experience to address such a technical question of law 
and legal policy. Following receipt of the committee's questions, I 
have in these responses been consulting with my legal colleagues, and, 
upon receiving their input, could submit the views of the Novartis 
Group of Companies on this issue at a later date if that would be 
useful.

    Question 4. The Clinton-Schumer bill permits the FDA to look at and 
use ``any other information available to the Secretary'' to determine 
whether a follow-on biologic is comparable to the innovator biologic. 
So the FDA could look at the innovator's biologics licensing 
application for the data it needs to approve the follow-on. The fifth 
amendment to the U.S. Constitution protects trade secret data from use 
by the government without compensation. With the FDA's current budget, 
do you think that the FDA has the funds to compensate the innovator 
company for using its data to approve another company's application?
    Answer 4. I am not a lawyer but it does not appear to me that 
anything in the Clinton-Schumer bill can or even aspires to override 
the trade secret restrictions that affect all applications to the FDA, 
innovator or generic, today. I think the reference to any other 
information to the secretary is any other public information, or any 
other information to which he already has access under the PHS Act, not 
any information that is protected and the property of another company, 
and simply in the possession of the FDA for the purposes of a 
regulatory review.
    As discussed in my answers above, the innovators data is neither 
needed nor of interest to the subsequent sponsor of a Follow-on 
Biologic. At the point at which the legitimate IP has expired, the 
innovator product has been on the market for many years, if not 
decades, and it is certain that the technology available to produce the 
Follow-on Biologic will be vastly superior to that which was state-of-
the-art at the time the innovator product was licensed. All the 
necessary data comparing the innovator product with that of the 
subsequent sponsor will have been developed by that subsequent sponsor 
in their own analyses and tests of commercially purchased innovator 
product compared head-to-head with their own candidate. The innovators 
own data would not be helpful as those tests would not have been 
conducted with the samples of the follow-on biologic, and the tests 
themselves, as well as the reagents will often also be proprietary to 
the original sponsor. As such the data to support the subsequent 
sponsors application will either be publicly available or the property 
of the subsequent sponsor. The FDA will not need any funds to 
compensate the innovator as they will not be using their data.
     Response to Questions of Senators Enzi and Burr by Sid Banwart
                       questions of senator enzi
    Question 1. Thank you for your testimony. You note that you support 
the Clinton-Schumer bill as it will provide follow-on biologics to the 
market quickly. I assume that you would support changes in the 
legislation that would address some of the concerns that you have heard 
today as long as they do not significantly delay competition in the 
pharmaceutical marketplace?
    Answer 1. Caterpillar supports legislation that would create an 
appropriate regulatory route for FDA review in a timely manner of 
biogenerics that are safe and effective. The Clinton-Schumer bill is 
the first measure in the 110th Congress to address this important 
issue.

    Question 2. Would you support other legislation that would bring 
follow-on biologics to the market quickly?
    Answer 2. Caterpillar welcomes the debate on this important issue 
and will review other legislative proposals as introduced.

    Question 3. In your written testimony you have focused on the cost 
of the medicines without discussing the value of these medicines to 
your workforce. Do you measure employees satisfaction with the health 
plans? And how do you measure the value you are getting for your 
medical purchases?
    Answer 3. Employees have an opportunity to provide feedback about 
our self-
insured benefits plan on the value survey we conduct on a regular 
basis. Caterpillar does extensive benchmarking with comparator 
companies and our benefits packages consistently rank among the top 
quartile. We conduct rigorous analysis of the value of medical 
purchasing through the 6 Sigma process.

    Question 4. Caterpillar is an innovative company and files for 
patents, presumably to prevent competitors from free riding on your 
Research and Development. I would assume you would be opposed to a law 
that would devalue your patents even if in doing so that would make 
mining equipment decrease in price. How would you distinguish that 
situation from this one?
    Answer 4. Caterpillar supports a competitive marketplace and, upon 
expiration of its patent, Caterpillar expects and welcomes competition 
in the marketplace by others using the previously protected Caterpillar 
inventions. Such post-expiration use of the patented invention is part 
of the bargain made by the patentee for the limited period of 
exclusivity provided by the patent laws.
    In the area of patented biologicals, no competition exists using 
the patented invention after the patent expires because the FDA 
currently has no authority to approve biogeneric products in an 
abbreviated fashion. Caterpillar urges Congress to pass a bipartisan 
solution to create an appropriate regulatory pathway for FDA review of 
safe and effective biogenerics once a patent has expired or been held 
invalid.
                       questions of senator burr
    Question 1. Do you support the Clinton-Schumer bill in its 
entirety?
    Answer 1. Caterpillar supports legislation that would create an 
appropriate regulatory route for FDA review of biogenerics in a safe 
and timely manner. The Clinton-Schumer bill is the first measure in the 
110th Congress to address this important issue.

    Question 2. Under the Clinton-Schumer bill, the FDA has to lay out 
exactly what is wrong with a follow-on biologic application and tell 
the company what they have to do to fix the application. The FDA does 
not do that for any other company submitting an application for product 
approval (innovator biologic, generic, brand, animal drug, etc.). Do 
any of you support that language?
    Answer 2. Caterpillar believes that the FDA should be given the 
authority to approve biogeneric drugs that are safe, effective, and 
provide additional value to the health of our employees.

    Question 3. Under current law, a company cannot choose the court 
they want to be sued in. In the Clinton-Schumer bill a follow-on 
biologic company can decide where they want to be sued. Do any of you 
support that language?
    Answer 3. Caterpillar does not have a formal position on this 
particular provision of the legislation.

    Question 4. The Clinton-Schumer bill permits the FDA to look at and 
use ``any other information available to the Secretary'' to determine 
whether a follow-on biologic is comparable to the innovator biologic. 
So the FDA could look at the innovator's biologics licensing 
application for the data it needs to approve the follow-on. The fifth 
amendment to the U.S. Constitution protects trade secret data from use 
by the Government without compensation. With the FDA's current budget, 
do you think that the FDA has the funds to compensate the innovator 
company for using its data to approve another company's application?
    Answer 4. The Clinton-Schumer bill reflects language used in 
current law for new drug applications containing active ingredients 
(i.e., Hatch-Waxman and the Food, Drug, and Cosmetic Act) to create a 
parallel system for generic biologics.
    Regarding the FDA's budget, Caterpillar acknowledged in both its 
written and oral testimony the need for additional funding for the FDA 
to assume additional responsibilities associated with generic 
biologics. Excerpt from Caterpillar's written testimony, page 6:

        4. Increase resources for the Food and Drug Administration.

          In order to adequately assume these new responsibilities, the 
        FDA will need adequate resources. We support additional 
        resources for FDA to secure more staff to ensure the timely 
        review of biogeneric applications and the safety of biogenerics 
        for consumers.

    [Whereupon, at 11:50 a.m., the hearing was adjourned.]

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