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ASSESSING THE IMPACT OF A SAFE AND

EQUITABLE BIOSIMILAR POLICY IN THE

UNITED STATES

HEARING

BEFORE THE

SUBCOMMITTEE ON HEALTH

OF THE

COMMITTEE ON ENERGY AND

COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MAY 2, 2007

Serial No. 110–40

(

Printed for the use of the Committee on Energy and Commerce

energycommerce.house.gov

COMMITTEE ON ENERGY AND COMMERCE

JOHN D. DINGELL, Michigan, Chairman

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, JR., New Jersey

BART GORDON, Tennessee

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

DIANA DEGETTE, Colorado

Vice Chairman

LOIS CAPPS, California

MIKE DOYLE, Pennsylvania

JANE HARMAN, California

TOM ALLEN, Maine

JAN SCHAKOWSKY, Illinois

HILDA L. SOLIS, California

CHARLES A. GONZALEZ, Texas

JAY INSLEE, Washington

TAMMY BALDWIN, Wisconsin

MIKE ROSS, Arkansas

DARLENE HOOLEY, Oregon

ANTHONY D. WEINER, New York

JIM MATHESON, Utah

G.K. BUTTERFIELD, North Carolina

CHARLIE MELANCON, Louisiana

JOHN BARROW, Georgia

BARON P. HILL, Indiana

JOE BARTON, Texas

Ranking Member

RALPH M. HALL, Texas

J. DENNIS HASTERT, Illinois

FRED UPTON, Michigan

CLIFF STEARNS, Florida

NATHAN DEAL, Georgia

ED WHITFIELD, Kentucky

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

STEVE BUYER, Indiana

GEORGE RADANOVICH, California

JOSEPH R. PITTS, Pennsylvania

MARY BONO, California

GREG WALDEN, Oregon

LEE TERRY, Nebraska

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

SUE WILKINS MYRICK, North Carolina

JOHN SULLIVAN, Oklahoma

TIM MURPHY, Pennsylvania

MICHAEL C. BURGESS, Texas

MARSHA BLACKBURN, Tennessee

PROFESSIONAL STAFF

DENNIS B. FITZGIBBONS, Chief of Staff

GREGG A. ROTHSCHILD, Chief Counsel

SHARON E. DAVIS, Chief Clerk

BUD ALBRIGHT, Minority Staff Director

(II)

(III)

SUBCOMMITTEE ON HEALTH

FRANK PALLONE, JR., New Jersey, Chairman

HENRY A. WAXMAN, California

EDOLPHUS TOWNS, New York

BART GORDON, Tennessee

ANNA G. ESHOO, California

GENE GREEN, Texas

Vice Chairman

DIANA DEGETTE, Colorado

LOIS CAPPS, California

TOM ALLEN, Maine

TAMMY BALDWIN, Wisconsin

ELIOT L. ENGEL, New York

JAN SCHAKOWSKY, Illinois

HILDA L. SOLIS, California

MIKE ROSS, Arkansas

DARLENE HOOLEY, Oregon

ANTHONY D. WEINER, New York

JIM MATHESON, Utah

JOHN D. DINGELL, Michigan (ex officio)

NATHAN DEAL, Georgia,

Ranking Member

RALPH M. HALL, Texas

BARBARA CUBIN, Wyoming

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

STEVE BUYER, Indiana

JOSEPH R. PITTS, Pennsylvania

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

SUE WILKINS MYRICK, North Carolina

JOHN SULLIVAN, Oklahoma

TIM MURPHY, Pennsylvania

MICHAEL C. BURGESS, Texas

MARSHA BLACKBURN, Tennessee

JOE BARTON, Texas (ex officio)

PROFESSIONAL STAFF

JOHN FORD, Senior Counsel

JACK MANIKO, Counsel

ROBERT CLARK, Policy Coordinator

RYAN LONG, Minority Chief Counsel for Health

MELISSA SIDMAN, Clerk

(V)

C O N T E N T S

Page

Hon. Frank Pallone, Jr., a Representative in Congress from the State of

New Jersey, opening statement .......................................................................... 1

Hon. Mike Rogers, a Representative in Congress from the State of Michigan,

opening statement ................................................................................................ 3

Hon. Henry A. Waxman, a Representative in Congress from the State of

California, opening statement ............................................................................. 3

Hon. Nathan Deal, a Representative in Congress from the State of Georgia,

opening statement ................................................................................................ 5

Hon. Gene Green, a Representative in Congress from the State of Texas,

opening statement ................................................................................................ 6

Hon. Mike Ferguson, a Representative in Congress from the State of New

Jersey, opening statement ................................................................................... 7

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 8

Hon. Tim Murphy, a Representative in Congress from the Commonwealth

of Pennsylvania, opening statement ................................................................... 8

Hon. Marsha Blackburn, a Representative in Congress from the State of

Tennessee, opening statement ............................................................................ 9

Hon. Lois Capps, a Representative in Congress from the State of California,

opening statement ................................................................................................ 10

Hon. Hilda L. Solis, a Representative in Congress from the State of California, opening statement ........................................................................................ 11

Hon. Heather Wilson, a Representative in Congress from the State of New

Mexico, opening statement .................................................................................. 11

Hon. Jim Matheson, a Representative in Congress from the State of Utah,

opening statement ................................................................................................ 12

Hon. Joe Barton, a Representative in Congress from the State of Texas,

prepared statement .............................................................................................. 12

Hon. Tammy Baldwin, a Representative in Congress from the State of Wisconsin, opening statement ................................................................................... 14

Hon. Darlene Hooley, a Representative in Congress from the State of Oregon,

opening statement ................................................................................................ 14

Hon. Anna G. Eshoo, a Representative in Congress from the State of California, opening statement ........................................................................................ 15

Prepared statement .......................................................................................... 16

Hon. Jan Schakowsky, a Representative in Congress from the State of Illinois, opening statement ....................................................................................... 17

Hon. Bart Gordon, a Representative in Congress from the State of Tennessee,

prepared statement .............................................................................................. 18

Hon. Edolphus Towns, a Representative in Congress from the State of New

York, prepared statement .................................................................................... 18

WITNESSES

Janet Woodcock, M.D., Deputy Commissioner, Chief Medical Officer, Food

and Drug Administration .................................................................................... 20

Prepared statement .......................................................................................... 22

Answers to submitted questions ...................................................................... 176

William Schwieterman, M.D. .................................................................................. 63

Prepared statement .......................................................................................... 66

David Schenkein, M.D., vice president, clinical hematology/oncology,

Genentech, Incorporated ...................................................................................... 77

Prepared statement .......................................................................................... 78

Answers to submitted questions ...................................................................... 182

Page

VI

Geoffrey Allan, president, chief executive officer, chairman of the board,

Insmed, Incorporated ........................................................................................... 87

Prepared statement .......................................................................................... 89

Answers to submitted questions ...................................................................... 157

Richard F. Kingham, partner, Covington & Burling ............................................ 91

Prepared statement .......................................................................................... 94

Bruce Downey, chairman of the board, Generic Pharmaceutical Association,

chairman and chief executive officer, Barr Pharmaceuticals, Incorporated .... 115

Prepared statement .......................................................................................... 116

Answers to submitted questions ...................................................................... 161

Ruth Hoffman, executive director, the Candlelighters Childhood Cancer Foundation .................................................................................................................... 121

Prepared statement .......................................................................................... 123

Ed Weisbart, M.D., chief medical officer, medical affairs, Express Scripts,

Incorporated .......................................................................................................... 125

Prepared statement .......................................................................................... 127

Answers to submitted questions ...................................................................... 168

SUBMITTED MATERIAL

AARP, statement ..................................................................................................... 145

William Samuel, director, Department of Legislation, AFL-CIO, statement ..... 152

Scott McKibbin, special advocate for prescription drugs, State of Illinois .......... 153

Priya Mathur, vice-chair, health benefits-board of administration, California

Public Employees’ Retirement System, statement ............................................ 140

Coalition for a Competitive Pharmaceutical Market, statement ......................... 142

(1)

ASSESSING THE IMPACT OF A SAFE AND EQUITABLE BIOSIMILAR POLICY IN THE

UNITED STATES

WEDNESDAY, MAY 2, 2007

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON HEALTH,

COMMITTEE ON ENERGY AND COMMERCE,

Washington, DC.

The subcommittee met, pursuant to call, at 10:05 a.m., in room

2123 of the Rayburn House Office Building, Hon. Frank Pallone,

Jr. (chairman) presiding.

Members present: Representatives Pallone, Waxman, Gordon,

Eshoo, Green, DeGette, Capps, Allen, Baldwin, Schakowsky, Solis,

Hooley, Matheson, Dingell, Deal, Wilson, Pitts, Ferguson, Rogers,

Myrick, Sullivan, Murphy, Burgess, Blackburn, and Barton.

Also present: Representative Inslee.

Staff present: Jack Maniko, John Ford, Bobby Clark, Virgil Miller, Lauren Bloomberg, Melissa Sidman, Jesse Levine, Nandan

Kenkermath, Chad Grant, and Ryan Long.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. PALLONE. This hearing is called to order. Today the subcommittee is meeting to hear about assessing the impact of a safe

and equitable biosimilar policy in the United States. Needless to

say, the topic of today’s hearing is of great importance and has generated a lot of interest over the past few months. Recent advancements in science have resulted in a new class of innovative medicines commonly referred to as biologics. These biotech drugs are

complex molecules that are typically derived from living organisms

which are designed to treat a number of chronic and often debilitating diseases. While older versions of these products have existed

for many years, manufacturers have made great strides in developing a broader range of biologic products that treat a greater number of conditions and illnesses. Diabetes, cancer, heart disease,

multiple sclerosis are among a range of devastating illnesses for

which there are now new treatments because of improvements in

the research and development of biologics. As a result, these lifesaving and life-enhancing therapies have given patients and their

families a renewed sense of hope for a longer and better life.

Because of the great promise biologics hold, they are one of the

fastest-growing components of the pharmaceutical market. UnforVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
2

tunately, however, they are one of the most expensive. The price

of a biologic can be substantial as well as prohibitive. Take insulin,

for example. It was noted in a recent New York Times article that

the drug cost State Medicaid programs $500 million in 2005. Furthermore, people who suffer from diabetes in this country, as well

as Government and private insurers, spend a combined $3.3 billion

a year on insulin. Researchers have suggested, however that the

price of insulin might drop 25 percent if generic or follow-on versions were made available. The savings would accrue to many, including patients, employers, and insurers. Competition from generic versions of chemical drugs have proven to be an effective way

to help lower healthcare costs. As we all know, a generic drug can

cost 30 percent to 80 percent less than its equivalent brand-name

drug. In 2005, the average prescription filled with a brand-name

product cost $95.54. The average cost for a generic filled with a generic drug was $28.71, and that is a savings of nearly $70 on the

average prescription.

We need to apply what we learn from generic versions of chemical drugs and biologic products so that we can produce measurable

savings. That is what I believe that Mr. Waxman has attempted to,

with introduction of his legislation. He has introduced a bill called

the ‘‘Access to Lifesaving Medicine Act’’ of which I am a co-sponsor.

In 1984, you all know that Mr. Waxman paved the way for safe

and affordable generic drugs to enter the market easily, and we

were still preserving incentives for brand-name companies to develop new and innovative therapies. As we search for a way to

lower costs and preserve innovation with biologics, Mr. Waxman is

once again an authoritative voice in this debate, and I thank him

for directing our attention to this important issue. Thank you,

Henry.

Congress, I believe, needs to approve a pathway for generic biologics to be brought to the market, and this will be a priority for

our subcommittee. I know many of my other committee members,

and I will mention Mr. Inslee, Mr. Green, Ms. Baldwin, Ms. Eshoo,

and others have also indicated their eagerness to address this important issue; and I am looking forward to gathering their input as

we move forward as well.

While I am a co-sponsor of the Access to Lifesaving Medicine Act,

I will be the first to admit that the legislation is not without controversy. Over the course of the past few months, I have heard

from numerous stakeholders on this issue and believe that each

side has its own merits. Several questions continue to arise. What

level of science will be used to determine comparability standards

for these new products? What amount of science should be used to

determine interchangeability? Who should make such determinations? Should it be Congress or the expert agency that we have

typically charged with the regulation of drugs and biologics? How

do we preserve innovation while achieving price competition? And

how do we strike a balance between protecting intellectual property

but ensure that generic versions of biologics are approved and

enter the market in a timely manner. These are some of the questions whose answers will shape the debate and help us determine

how the FDA approves safe and effective generic or follow-on versions of biologic products.

3

I just want to thank all of our witnesses for being here today.

You represent the experts in the field and will tell you that the

members of the subcommittee are eager to hear what you have to

say and ask questions of you, so thank you for being here and I

am certain that today’s hearing will be extremely informative for

all of us.

Mr. Deal will be here soon, so I will now introduce the gentleman

from Michigan, Mr. Rogers.

OPENING STATEMENT OF HON. MIKE ROGERS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Mr. ROGERS. Thank you, Mr. Chairman. I will be brief. I am

looking forward to the testimony.

I do get concerned about the direction we take. The average bio- logic takes about 15 years in development, $1.2 billion to develop.

And the harder we make it for people to go through that process,

or at least some degree of certainty to recoup their losses and their

investment, it concerns me greatly. I am not sure that we are going

to insert any great innovation to cheaper and better and quality

drugs.

My other great concern in the bill is that we haven’t really addressed the security issue. A lot of these biologics now are using

twin-strand therapeutic issues. Bryson, abrin, viscumin, things

that were highly regulated by the FDA; and if we had to throw this

open, I get very, very concerned about how we keep and maintain

the safety and security of those particular agents when developing

these biologics.

So I have a lot of questions today, and I look forward to the debate and I know all our intentions are good; and hopefully at the

end of the day, we will do no harm before we seek to do any good.

Thank you, Mr. Chairman. I yield back.

Mr. PALLONE. Thank you, and I recognize Mr. Waxman.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. WAXMAN. Thank you, Mr. Chairman, for calling this hearing

today.

Biotech drugs, also known as biologics, have emerged as one of

the fastest-growing categories of drugs. Some of these medicines

are literally lifesavers for people with a host of serious diseases,

but these products are also among the most expensive medications

for U.S. consumers. Patients who need these drugs often have to

pay hundreds of thousands of dollars a year for them. Although it

is true many people have insurance to cover the cost of these

drugs, those who have 20 percent co-pays still owe thousands of

dollars a year, and it is obviously a very serious problem for the

47 million uninsured. They have to pay the whole price. More likely than not, they go without the lifesaving drugs.

The rapidly escalating cost of biotech drugs will have drastic consequences for the healthcare system. These medicines are steadily

driving up the cost of Medicare, Medicaid, and health insurance

overall. This is a burden that cannot be sustained. The Federal

4

Government will be hard pressed to afford it. The private sector is

already pleading for relief.

I have long believed that marketplace competition is the best

way to bring down drug prices, but unless the FDA is given the

clear, legal authority to approve copies of biologics, there will be no

generic competition for biotech drugs, leaving employers, insurers,

and the Federal Government to pay the staggering monopoly prices

we have today.

Earlier this year, Mr. Chairman, you and I and some of our colleagues introduced the Access to Lifesaving Medicines Act. This bill

ensures only safe and effective biologics will be approved. It gives

FDA complete discretion to require a full complement of testing, including clinical testing on the product, if FDA believes that is necessary to require tests. If FDA does not believe it is necessary is

only another way to delay generic competition.

There are a lot of issues to be discussed here, patient safety, intellectual property rights, the incentives for innovation to name a

few; but I would like to note that since we first introduced this bill

the debate on these issues has dramatically changed. At first the

opposition claimed there should not be an abbreviated pathway for

generic biologics at all. Now, the question that everyone is asking,

even the opposition, is not if but how to establish a pathway. It is

important to note there is a very broad base of support for this legislation. There is currently a wide-ranging coalition of over 40 consumer groups, health plans, and businesses who have endorsed the

bill. With so many supporters of the bill, we had some hard decisions about our witnesses today and we obviously could not have

all of them present. So I would like to ask unanimous consent to

add to the printed record the written statements of some of these

groups that could not be here today. I have statements from the

AARP, the Coalition for Competitive Pharmaceutical Marketplace,

the California Public Employees Retirement System, and the AFLCIO.

These and many other groups all recognize that the time to move

forward with establishing an abbreviated pathway is now. Opponents have attempted to attack the bill by arguing competition will

only lower prices by a small amount. Well, even a small amount

could bring in billions of dollars of savings. We have to find a way

to introduce competition into this market. We need that balance

that we tried to achieve in 1984, and we were successful at doing

it, giving incentives for development of new products but bringing

about the benefits of competition in the marketplace. Too often we

hear now, as we heard in the mid–1980’s, we need all the incentives. Give us a permanent monopoly. Don’t provide competition,

these competitors are not as good, they can’t be as safe. Well, let

us look a little bit more skeptically because those were the arguments we heard then. They were wrong then and they are wrong

now. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you, Mr. Waxman. Without objection we

will introduce those statements into the record.

Mr. DEAL. Mr. Chairman, could I ask unanimous consent that

others might introduce similar-type comments on this, any other

member of the committee?

Mr. PALLONE. Absolutely.

5

I will recognize the ranking member.

OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA

Mr. DEAL. Thank you, Mr. Chairman. This morning’s hearing addresses an exciting and changing realm of the pharmaceutical industry. The biologic pharmaceutical market has grown dramatically in recent years, and the FDA has steadily approved new biologic medications. Growth in this market is only forecast to increase in the future. I am sure most members at this point understand that biologics have a greater complexity than traditional

drugs, and there is not an appropriate pathway at the FDA for follow-on protein products. I would hope this hearing would help

guide the committee to inform us about what framework would be

suitable for the approval of follow-on products in a manner that

assures patient safety because for me, that is the heart of this

issue.

I realize there are varying opinions along this line. Some contend

legislation ought to mandate clinical trials while others feel this determination should be left to the FDA. Certainly we must ensure

the FDA has the tools to approve safe and effective medications

and allow them to use their discretion and expertise when evaluating follow-on product applications.

We also ought to act in a way that will adapt to the changes and

signs in the field of biotechnology in the coming years. While the

Hatch-Waxman Act was passed over 20 years ago, legislation has

largely stood the test of time and provided a workable solution to

get low-cost generic products to consumers. As the biologic drug

market continues to grow and the science advances, legislation

should be able to accommodate those changes, not hinder them,

recognizing that while the science may not be there today, it could

be tomorrow.

One of the most difficult aspects of this issue is to provide a balance between incentives for innovation while allowing similar

lower-cost products to come to market. Hatch-Waxman provides

these incentives for innovation in the form of market exclusivity

and patent term restoration. As we strike this balance, I believe we

do need to provide some period of market exclusivity as an incentive for innovation while ensuring that the judicial process and patent litigation can be resolved in a fair and timely manner. Other

countries are already acting on this issue, and the Congress needs

to provide a pathway for the approval of follow-on biologics in this

country. We have an opportunity to provide patients access to a

lower cost alternative for their needed medications. While the fund

is unclear, the degree of savings that could be achieved with a follow-on protein product for status quo is no longer acceptable and

ignores the possibilities presented by generic biologics. By no

means does the committee face an easy task. This is a complex subject, and we must wrestle with a number of scientific, regulatory,

intellectual property, and safety issues. However, I do believe we

can resolve and balance these issues in order to provide patients’

access to safe, lower-cost medications.

Thank you, Mr. Chairman. I will yield back my time.

Mr. PALLONE. Thank you. I recognize our vice chair, Mr. Green.

6

OPENING STATEMENT OF HON. GENE GREEN, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. GREEN. Thank you, Mr. Chairman, for holding the hearing

on follow-up biologics and the issues we must consider for developing a pathway for regulatory approval of biosimilars. This extremely complex issue and whatever way we resolve it will have

significant implications for employers, innovators, generic industry,

and most importantly, the patients who depend on these life-improving and lifesaving therapies. There is no question we have to

get this right, and this hearing represents a good first step toward

the goal by giving Members a chance to dig deeper into this issue

and weigh the risk and benefits of any movement forward on

biosimilars.

I think we can agree that there needs to be the regulatory pathway in this country to follow-on biologics. Canada, the European

Union, and Australia each put in place pathways for the approval

of follow-on biologics.

We have also recognized the undeniable fact that biologics are

very different from small molecule drugs and present unique concerns about safety and effectiveness. Unlike small molecule drugs,

biologics are created using living cells that are intended to imitate

proteins that will naturally occur in the body if the patient were

healthy. The time and expense that goes into making biologics is

much greater than the process of manufacturing a small molecule

drug. So it is no surprise that these therapies are quite expensive

for consumers and purchasers. I share the goal of lowering patients’ cost of a follow-on pathway but not at the expense of those

same patients’ safety and not if it results in stifling the innovation

that would produce new, more effective therapies and potentially a

cure for the incurable diseases we see too many of our family members and neighbors fight day in and day out.

The issue of drug safety is at the heart of this debate and the

primary reason why I co-sponsored the legislation sponsored by my

colleague from Washington, Jay Inslee. We all seem to come to the

same conclusion that an exact replica of a biologic product cannot

be made. The questions remain what effect does a small change in

the amino acid sequence produce and is that effect large enough

and concerning enough to warrant additional clinical trials before

the follow-on biologic is available to the public? Can we in good

conscience consider these follow-on drugs safe if they have never

been tested on a human population? Several of my colleagues will

certainly reply that the FDA is equipped to make that decision on

a case-by-case basis and that we shouldn’t be legislating science. I

have no doubt the FDA has top-rate scientists on its payroll and

are more than capable of making these decisions. But it would be

disingenuous for us to point to the Vioxx and Ketek and why we

need drug safety reform at FDA and in the next breath give FDA

carte blanche authority to approve any follow-in biologic without

some sort of clinical trials for safety and effectiveness.

We also need to make sure we don’t cut off our nose to spite our

face in this debate. Biologics offer tremendous promise in the treatment of disease, but there are too many patients out there waiting

for the improved treatment or cure that can only be achieved

through innovation. My concern is we will rush to facilitate copies

7

of old therapies at the expense of new therapies. Any action by this

committee is to balance the desire to lower the cost of biologics

with the need to preserve the incentives for innovation so that

more Americans can benefit from the therapeutic promise of biologic products.

Mr. Chairman, I hope the committee will keep this delicate policy

balance at the forefront of the debate as we move forward, and

again, I would like to thank our witnesses for appearing today; and

I yield back my time.

Mr. PALLONE. Thank you. I recognize my colleague from New

Jersey, Mr. Ferguson.

OPENING STATEMENT OF HON. MIKE FERGUSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. FERGUSON. Thank you, Mr. Chairman, and thank you for

holding this hearing.

The creation of a pathway for the approval of follow-on biologics

is really a tremendous opportunity, and it has to be done with a

great deal of thought and with thorough consideration for all of the

potential risks and benefits that might come with such a pathway;

and it has to be done with obviously a great deal of scrutiny and

a great deal of thoughtfulness.

It is a great opportunity but is one that has to provide the framework to ensure that the public is not placed in danger by being exposed to replicas of these complex biologics that haven’t been thoroughly vetted for safety. We must ensure that the approval of follow-on biologics is based on the same rigorous standards of safety

and purity and potency that is applied by the FDA for the approval

of the original biological product. I think common sense would dictate that.

Clinical trial data and evidence are vital for establishing the

safety and efficacy of highly complex biologic products. Testing has

to be done to avoid putting patients at risk for effects of an adverse

immune system response. In addition to safety, we also have to

handle this opportunity correctly so as not to risk the development

of future lifesaving therapies. We must include proper protections

to foster innovation and further secure our position as the world’s

medicine chest, leading the world of lifesaving therapies to humanity’s most horrific diseases. The creation of a pathway for approval

to follow-on biologics is laudable, but we should not rush to create

a pathway while being blinded by potential savings from followons. We shouldn’t rush to save a buck and put people’s lives in

danger.

A recent analysis from the healthcare research firm, Avalare,

finds that follow-on biologics will save about $3.6 billion over 10

years. Now, $3.6 billion is a lot of money. It is considerable, but

we have to ask the question of what is the cost of those savings?

Mr. Chairman, we have a great opportunity but also a tremendous responsibility. Today is the first step toward taking on that

responsibility and taking advantage of this opportunity. I look forward to working with you and the others on this committee to

make sure that we get this right. And I yield back.

8

Mr. PALLONE. Thank you. I now recognize the chairman of our

full committee, Mr. Dingell.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Chairman DINGELL. Thank you for holding this hearing. It is important. We are here to discuss the anticipated impact of a safe

and equitable biosimilar policy in the United States. When the

Congress granted the Food and Drug Administration the authority

to approve generic versions of pharmaceuticals in 1984, we could

not have foreseen the need for a similar pathway for generic biologics. Since then, the biotechnology industry has grown tremendously, and a number of biological products are on the market,

treating a variety of medical conditions including life-threatening

illnesses such as cancer, multiple sclerosis, diabetes, and HIV/

AIDS. In some instances, these biological products are the only

available therapy. In others, biotechnology represents a clear clinical advantage over all other available therapies. As this industry

continues to discover potentially lifesaving therapies, more patients

will depend on these products. Unfortunately, not all patients can

afford these needed therapies and must therefore forego needed

treatments. We must find a way to ensure greater access as this

science progresses. There is broad agreement that we should create

a pathway for biosimilars.

As we explore this idea, it is necessary that our solutions are

grounded in science and fair to consumers. Innovators as well need

financial stability to sustain their research into groundbreaking

therapies. One issue that confronts us now as policymakers is the

science behind biosimilars. What standards will ensure that the generic biologics are as safe as the original products? How will they

function in the human body? Should clinical trials be required for

approval of biosimilars? Can a generic product be created that is

genuinely interchangeable? Can and should a manufacturer of a

biosimilar product duplicate the innovator’s manufacturing process

to avoid potentially adverse reactions? Patients’ safety must be our

guiding principle in searching for an appropriate pathway.

I am pleased that this hearing is being held today. I look forward

to the testimony of our witnesses as well as the input of our members. It is my intention to work with my colleagues on the committee to craft a sensible and fair biosimilar policy and to work with

my colleagues to achieve this goal in the 110th Congress. Your efforts this morning, Mr. Chairman, and this hearing is a very important part of our effort in that regard. Thank you.

Mr. PALLONE. Thank you, Chairman Dingell. Mr. Murphy.

OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

Mr. MURPHY. Thank you, Mr. Chairman. This hearing again

points out the cycle of the issues Congress must deal with. We

want medications that will save our lives, enhance our lives, and

also treat disease. In order to do that, we need research and development work which costs billions of dollars. Clinical trials must be

9

undertaken in a scientifically balanced and reliable fashion, that

we want Government agencies such as the FDA to review them

carefully to test the products while they are trying to balance the

pressure to get drugs to the public and the market in order to save

lives and treat disease but at the same time having pressure on

them to make sure they test them for all the safety factors. All this

comes in the context of the public’s call for affordable drugs because what good is a drug to treat a disease if you can only window-shop that medication and cannot really use it.

And so we are here dealing with the issue of generic or

biosimilars, to cut costs to provide some market competition, to

drive costs down, but make sure that the companies have enough

money left at the end for their research and development which,

of course, takes us back to the beginning of this whole cycle. It is

a matter that Congress constantly must deal with that is an important part of our role here. The issues that we must deal with in

any of these bills that deal with biosimilar drugs is to make sure

that we do have portions in them that drugs do not get to market

unless thorough testing is part of that and to make sure throughout this whole process that we are dealing with safety, affordability, and continuing on ways that maintain the research track

which has given us so many medications which have saved our

lives.

In all of this, I hope we continue to focus on patients as we move

through healthcare issues such as these that emphasize patient

quality, patient safety, and patient choice. These biosimilar drugs

would provide all three of those if we do this right. So I am looking

forward to the comments from the panelists today.

Thank you, Mr. Chairman. I yield back.

Mr. PALLONE. Thank you. And now I recognize the gentlewoman

from Colorado.

Ms. DEGETTE. Mr. Chairman, I think we all have the same goals

of finding the balance, and I am looking forward to hearing the testimony so I will waive my opening statement.

Mr. PALLONE. Thank you. The gentlewoman from Tennessee.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE

Mrs. BLACKBURN. Thank you, Mr. Chairman. I do want to thank

you for holding the hearing and to our witnesses that will be with

us today.

We have all talked about the complex issue that follow-on biologic medications present because they are similar, because they

are not identical like a generic drug; and so we do have to carefully

consider the standards for approval, the potential of risk that are

in that approval pathway.

When the healthcare costs are skyrocketing, and we hear this

every time we come in for a committee hearing, we know that people are looking for new options for lowering drug costs; and we do

know that patient safety has to be a priority. And Mr. Chairman,

I hope that we will continue our discussion on this issue at another

time and look at the intellectual property protections and infringeVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
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ments that may be there and the need for recognition of that as

we view what is going to be a follow-on process.

We had the hearing a few weeks back with the FDA Commissioner von Eschenbach, and Ketek, the drug that is there to fight

the bacterial infections, the side-effects that were there with the

clinical trials, the problems that existed. So I think it is interesting

that we are looking at a follow-on biologic approval pathway that

would not require further safety testing.

So I am looking forward to the discussion today. I am looking forward to what we set as a pathway and hearing from our witnesses

and having a discussion not only on the issue of safety which is before us today but also the scientific liability and legal consequences

that may be a part of this process, and I yield back.

Mr. PALLONE. Thank you. The gentlewoman from California,

Mrs. Capps.

OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mrs. CAPPS. Thank you, Mr. Chairman. In 1984, Congress passed

a bill that created a pathway for generic versions of traditional

chemical drugs. It was a difficult and contentious time. But we

have seen over the past 23 years how effective this has been on accessibility to medications and lowering drug prices, most importantly, providing continued incentives for drug innovation without

compromising public safety.

So here we are in 2007 looking at a way to create a pathway for

generic versions of biologic drugs, and we are now tasked with preserving the same goals of innovation and safety. Supporting innovative research into new lifesaving medications is vitally important. I know this especially because my State of California is such

a world leader in biotechnology. I have been impressed with how

important it is that we make sure to address patient protection and

market exclusivity. However, it is extremely important also that we

improve patients’ ability to afford lifesaving medications. Quite

frankly, with no competition on the markets, biologics remain out

of economic reach for most of the people who need them.

I hope to hear today from witnesses on how we can balance innovation with patients’ needs for cheaper, more accessible drugs. Just

as for generic chemical drugs, generic biologics have the potential

to reduce costs for consumers. But we also have to ensure that as

we reduce drug prices, we maintain safety and effectiveness. Recent drug recalls highlight the importance of FDA’s role in ensuring the safety of our drug supply. We can’t stress this point

enough. So I look forward to hearing about FDA’s ability to assess

follow-on biologic safety. Also, I hope to hear more about the FDA’s

capability to determine whether clinical trials may be necessary to

determine if the drug is safe for the public and in what way they

can be conducted. Scientific discovery has been moving at an astronomical pace, and we in Congress need to encourage it as much as

possible. However, we also need to ensure that these discoveries

reach those who would benefit from them and that the treatments

are safe and effective.

I look forward to listening to today’s witnesses as we explore this

very important topic. And I yield back the balance of my time.

11

Mr. PALLONE. Thank you. Dr. Burgess.

Mr. BURGESS. Thank you, Mr. Chairman. I will waive my opening statement and reserve time for questions.

Mr. PALLONE. Next we have Ms. Solis.

OPENING STATEMENT OF HON. HILDA L. SOLIS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Ms. SOLIS. Thank you, Mr. Chairman. Thank you for holding this

hearing today as we begin the discussion on whether FDA has the

authority to approve similar versions of biologic medicines. I would

like to thank my colleagues, Representatives Waxman, Inslee,

Baldwin, and Green for their leadership on follow-on biologics or

biosimilars. Recent scientific and technological advances have led

to the development of biologic medicines which have great potential

to address numerous diseases, including diabetes, cancers, HIV and

AIDS, all of which affect many underserved communities, including

the one which I represent.

The strides we have made in science are exciting. The manufacture of biologic medicines has the potential to save millions of lives,

and biologics account for approximately $30 billion in sales. However, the cost of developing and manufacturing these biologics are

extremely high; and the average cost of a 1-day supply of biologic

medicines is $45. As a result, the cost for patients, insurers, private

companies, and Government payers are quickly growing. And I am

very concerned about the high cost of these medicines, especially

the cost of those treatments for many who lack healthcare insurance or who are underinsured. We must strike a critical balance

between patient safety and patient access to lifesaving medications.

I am committed to ensuring that all people have access to affordable medicines that are safe and effective. Despite the differences

between chemical drugs and biologics, I believe that there is a way

to provide patients with generic biologic medicines without compromising safety. The scientific experts at FDA should be allowed

to have flexibility to determine what clinical tests are required, and

we must find a balance to make sure that new medicines continue

to be developed.

I look forward to hearing from our witnesses. I yield back the

balance of my time.

Mr. PALLONE. Thank you. I now recognize the gentlewoman from

New Mexico.

OPENING STATEMENT OF HON. HEATHER WILSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW MEXICO

Mrs. WILSON. Thank you, Mr. Chairman, and thank you for having this hearing. I think we all recognize that there are some very

difficult balances here. We all want a path or some kind of pathway for generic biologics. We are all concerned about safety, and

of course we need to protect intellectual property rights and give

predictability to investors so that we will allow and encourage continued innovation in the future.

And I think there is probably also general agreement that the

certification process for saying that something is essentially idenVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
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tical is much more difficult in this case because we are talking

about living organisms. We are not talking about a chemical compound. Products made from living tissue use proteins to change the

course of a condition and have a therapeutic effect on a disease.

This is very different from dealing with chemical compounds, and

I think all of us recognize the very difficult balances we are going

to have to strike here and what was difficult with the generic drug

law, as my colleague from California mentioned, what was very difficult at that time will be multiplied tenfold in getting this right

because the compounds are quite different and the legislation that

addresses this will be a very difficult balance to strike.

Nonetheless, I commend the chairman and members of his committee for their determination to tackle this issue to see whether

there is something we can do so that we create a pathway for

generics that might be at less cost for a new class and a new kind

of therapy in the area of medicine.

Thank you, Mr. Chairman.

Mr. PALLONE. Thank you. I recognize the gentleman from Utah.

OPENING STATEMENT OF HON. JIM MATHESON, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH

Mr. MATHESON. Thank you, Mr. Chairman. I think it is very important that we are talking on this issue, and I am pleased, Mr.

Chairman, that you are conducting this hearing. I think this is a

great opportunity for the legislative process to produce a good result because this is a complicated issue. There are some different

pieces of legislation that have been introduced now that kind of lay

down some different points of view on the issue. But my sense,

having met with a number of stakeholders over the last few weeks

about this, is that there is a reasonable solution; and if we work

in a comprehensive and bipartisan way, I think that that reasonable solution will be attained and I think we can build consensus.

I look forward to participating in this hearing today and in the

future hearings and being part of driving towards a reasonable solution.

With that, Mr. Chairman, I yield back the balance of my time.

Mr. PALLONE. Thank you and I now recognize our ranking member of the full committee, Mr. Barton.

Mr. BARTON. Thank you, Mr. Chairman. I will put my full statement into the record. I think this is an important hearing. It is a

new subject and something that we need to get right, we need to

get right on a bipartisan basis, and I look forward to the testimony

and the work product that follows.

[The prepared statement of Mr. Barton follows:]

PREPARED STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF TEXAS

Mr. Chairman thank you for holding this hearing. The issue of follow-on biologic

products has been the source of great debate.

This is an important, but very complex issue. Some have suggested rushing the

legislative process and include follow-on biologic legislation on the reauthorization

of the Prescription Drug User Fee Act. I think that this is an imprudent course of

action and does a disservice to the deliberative nature of our committee. To do so

will result in policy that is not fully vetted and the unintended consequences of our

actions in this case could risk lives.

13

I believe it is important that the terminology we use this debate be accurate and

precise. Generic biologics are not on the immediate horizon; the science just isn’t

there. Some have coined that term for use in this debate, but it not accurate and

muddies the waters of our discussions. Generic denotes that the products are the

same and can be freely substituted. Follow-on products are not the same and can

have different characteristics that could result in different safety and efficacy profiles.

No one should have a patent in perpetuity. As we have seen with the Hatch-Waxman law of 1984, competition in pharmaceuticals can lead to lower prices without

jeopardizing research and development into new products. follow-on biologic competition could be a good thing if done right. I believe we can and should create a

pathway for follow-on biologic products to be approved without having to undergo

the full blown biologics license application process. However, any abbreviated pathway must have two important elements.

First, we should not short-change safety in the interest of brevity. These are fundamentally different products. We will have two witnesses today who will testify to

the science of these biologic products. The development of living organisms into a

therapeutic treatment safe for humans is not an easy task and it is difficult top replicate. Most importantly, however, is that any minor modification to the sequencing

of the properties of the product could have a profound effect on the safety profile

of the product. For generic drug applications under section 505(j) of the Food, Drug,

and Cosmetic Act, applicants are not required to undergo clinical tests to be granted

approval. This can be done because the generic applicant is producing essentially

the same product that is bioequivalent. Some have suggested that concept be translated to the approval of follow-on biologic products. Chemical and biologic products

are truly apples and oranges, and we should not minimize these differences or complexities of the issues before us today.

I am looking forward to the testimony today that can shine some light on the true

scientific and safety issues this committee should consider when drafting legislation

to approve follow-on biologic products.

Ensuring safety is our utmost priority, but we must also consider the consequences our actions will have on the development of new drugs and cures that

have yet to be discovered. Two weeks ago, we heard the testimony of Jim Thew,

who suffers from Lou Gehrig’s disease. Only one drug is available to treat this devastating disease, and that drug is over 10 years old. We cannot close the door to

innovation because by doing so we will be closing the door to hope for the millions

of Americans who want and need the next breakthrough therapy that will treat Lou

Gehrig’s, cancer, and a host of other diseases.

To protect innovation and medical progress we must protect the incentives necessary to induce investment in these areas. Allowing a follow-on to be approved a

few short years after the innovator product may reap some short-term savings, but

it will have a devastating impact on American companies’ ability to produce new

therapies. We can not be short-sighted in this debate. Like every other industry, intellectual property must be respected and protected. If it is not, we will see a dismantling of the biotechnology industry in this country, capital will find its way into

other industries, and sick Americans will get sicker.

Again, it is important to note that we are not talking about products that are the

same as we have for chemical drugs approved under the Food, Drug, and Cosmetic

Act. These therapies are different and thus the paradigm established under HatchWaxman of a short exclusivity period followed by patent restoration may not be appropriate. We must recognize this fundamental difference and build a regulatory

scheme that accounts for it. If a follow-on manufacturers only has to develop a product that is comparable and not the same it may be easier to engineer around patents. I look forward to hearing from our witnesses on what should be the appropriate incentives for continued innovation.

Again, Mr. Chairman, thank you for holding this hearing. We have a distinguished panel of witnesses. I urge all Members wto take an active, engaged role

today because these are complicated issues. This committee has a history of being

deliberative busy, we should develop policy based off the facts at hand. This is especially true when we are talking about products that are so important to the well

being of millions of Americans.

Mr. PALLONE. Thank you. I recognize the gentlewoman from Wisconsin.

14

OPENING STATEMENT OF HON. TAMMY BALDWIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN

Ms. BALDWIN. Thank you, Mr. Chairman, and thank you to the

witnesses for joining us today. I am really pleased that this subcommittee is taking up the issue of creating a pathway at the FDA

for approval of biosimilars, and as many have noted this is a complicated issue full of highly technical, scientific terms and procedures. The fact that we have so many ways to refer to this issue,

biosimilars, biogenerics, generic biologics, follow-on biologics, illustrates just how complicated the issue is and how it clearly warrants thoughtful and thorough discussion. So I appreciate the opportunity to delve into some of the details.

Mr. Chairman, I believe that we should have an established process by which the FDA can approve biosimilar products. Biologics

have shown great promise in fighting a variety of diseases and conditions, and I believe that we must ensure that patients have access to affordable treatment. That said, I think we also need to remember those patients who are still waiting for their miracle treatment to be discovered. I do not think that we should compromise

future innovation so that we can save a finite amount of money

today. There is a balance that can and actually must be struck between mere term cost savings and future innovation. I was proud

to join my colleagues, Mr. Inslee and Mr. Green, in introducing a

bill that seeks to strike this balance. The bill establishes a pathway, ensures that patient safety protections are in place, yet gives

the FDA flexibility in this area and provides incentives for scientists to continue innovating and developing potentially lifesaving

treatments.

Mr. Chairman, I think one final thing for us to remember is that

the majority of biotechnology companies are not mega-corporations

or even profitable businesses. The majority of biotech companies

are small, private startups who are years away sometimes from

even having a commercial product. They are made up of a few

highly talented scientists who have made a discovery and who

want to continue to explore and refine this discovery in hopes of

one day curing cancer or finding a treatment for Alzheimer’s or

growing new skin for burn victims or responding to a host of genetic disorders for which there is no treatment or cure or creating

a better treatment for a disease that already has a treatment, like

diabetes. We should encourage this innovation so that future patients can have access to needed treatments just as we should ensure that current patients have access to affordable treatments

today.

Thank you, Mr. Chairman.

Mr. PALLONE. Thank you. I recognize the gentlewoman from Oregon.

OPENING STATEMENT OF HON. DARLENE HOOLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON

Ms. HOOLEY. Thank you, Mr. Chairman. The Drug Price Competition and Patent Term Restoration Act of 1984, better known as

the Hatch-Waxman, was instrumental in expanding access to pharmaceuticals by instituting competition and thus lowering prices. I

15

believe it is important for Congress to examine the creation of a

pathway to allow the Food and Drug Administration to approve follow-on biologics. Creating a pathway for follow-on biologics are generally much more complex than the small-moleculed generic drugs

that have been approved under the process established by HatchWaxman.

First and foremost, as we discuss the creation of a follow-on biologics pathway, safety must obviously be our No. 1 concern.

Second, Congress must ensure science and scientists guide the

approval process. Hatch-Waxman struck an appropriate balance between expanding access to affordable generic medications while

still encouraging innovation. Biologics have provided some extraordinary pharmaceutical breakthroughs that have made a real difference in the lives of people. However, in part because of that complexity and the very high cost of bringing biologics to market, they

are often extraordinarily expensive. It is not uncommon to see

treatment cost in the thousands and sometimes tens of thousands

of dollars a year per patients in some biologics. The savings that

a follow-on biologic pathway may provide to consumers and the increased access that would result would be an important step forward. However, it is also imperative that innovators be allowed to

recoup their investment. If we do not include reasonable protection

for innovators, we may discourage the development of new products

in the future; and that would be even worse for consumers in the

current situation.

America is a leader in pharmaceutical innovation, and I am committed to ensuring that we continue that legacy. I look forward to

a discussion of intellectual property and patent law issues raised

by biosimilars, and I look forward to our witnesses.

Thank you.

Mr. PALLONE. The gentleman from Oklahoma.

Mr. SULLIVAN. I waive my opening statement.

Mr. PALLONE. Ms. Eshoo.

OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Ms. ESHOO. Mr. Chairman, thank you for having this hearing. I

am going to place my printed statement in the record. I just want

to say a couple of things and that is in this hearing that you have

called, which is a very important one, Assessing the Impact of a

Safe and Equitable Biosimilar Policy, I think the two words that

are really the operative words are safe and equitable. And we are

going to explore that today. I am troubled by different parts of Mr.

Waxman’s bill. He has always been thoughtful when it comes to

issues relating to the FDA. The quarrel here is not pathway. Everybody is for a pathway. I think everyone that has spoken has

used that word in their opening statement. We agree on that. Do

we all want lifesaving drugs and processes to continue to help save

people’s lives and improve their lives? Everybody wants that. So

there isn’t any disagreement about that. How this is done is really

the rub of the whole debate, and that is what we have to explore.

I have really never seen in legislation that has come before this

Health Subcommittee, since I have been on it since 1994, when a

16

legislation actually defined structural characteristics. I mean, I

thought that was the job of the FDA.

So I am looking forward to this debate. I think we need to have

bipartisan legislation in this area. Why? Because that is what the

American people will ultimately have confidence in. We have to

build that consensus. So I look forward to it. I am eager to hear

from the witnesses and question them and thank you for having

this very important hearing.

[The prepared statement of Ms. Eshoo follows:]

PREPARED STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF CALIFORNIA

Thank you Mr. Chairman for holding what I expect will be an enlightening hearing about a very important issue.

The greatest advances in medicine in recent decades has been the development

of powerful treatments and therapies for disease that not only treat their symptoms,

but also attack them at the molecular level. This is made possible by biotechnology.

We’ve mapped our own genome and are developing an understanding of how deadly diseases like cancer, diabetes, HIV, and heart disease actually attack the body

and its organs.

Biotech researchers are able to analyze the mechanisms of a disease, understand

how it functions, and create countermeasures that can cause the disease to stop reproducing, attack itself, or starve it for nutrients. Other biologics help the human

body develop an effective response or, in some cases, repress an overactive immune

response.

This research is cutting edge, it’s risky, and it’s expensive. The biotech industry

spends billions on research into new biologic treatments, but only a few hundred

new biologics are currently in clinical trial, and only a handful of ‘‘blockbuster’’

treatments have emerged.

An example is Genentech, which is considered a founder of the biotech industry

over 30 years ago, and remains one of the largest companies in the industry. Today

it has only 14 products on the market. The vast majority of biotech firms have only

a single product approved or a small handful in development, and it costs upwards

of a billion dollars to bring a single biologic to market.

I think it’s imperative to consider this framework as we evaluate any proposal to

allow ‘‘copycat’’ versions of these life-saving products to take advantage of the research and investment made in biotech.

A lot of the discussion in the debate over follow-on biologics has focused on increasing ‘‘access’’ to life-saving medicine. Certainly the high cost of biologics can

stress patients and families, insurance companies and health care providers. We

should look at ways to make biologic products more cost-effective. However, simply

making copies of products already on the market will not increase the number of

biologic products options available to patients. There will be nothing to copy if we

don;t ensure sufficient incentives exist to develop these already life-saving medicines

in the first place.

Finally, we can’t lose sight of what I believe is our most fundamental responsibility, and that of the FDA—protecting the American public.

Whatever else we do, patient safety has to remain our foremost objective and we

shouldn’t limit the FDA’s authority to establish mechanisms to ensure the safety

and efficacy of any medicines introduced in the market.

I agree with those who have said that a pathway for new versions of biologic products whose patents have expired is necessary. We also should rely on sound science

and develop a system that preserves incentives for the development of new therapies and cures, protects patients, and allows for competition.

I look forward to the witnesses’ testimony and their responses to our questions.

Mr. PALLONE. Thank you. The gentlewoman from Illinois, Ms.

Schakowsky.

17

OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

Ms. SCHAKOWSKY. Thank you, Mr. Speaker. Let met take a second to express my thanks for your leadership in bringing this extremely important legislation before our subcommittee.

Biopharmaceuticals are growing at an astonishing rate in the

United States, almost twice that of traditional medicines. So as our

country, this Congress, and this committee take on the challenge

of finding cost savings in our healthcare system, this certainly

seems like a good place to start. While opinions vary about the

level of the savings patients and the Federal Government could

gain from a pathway for generic biologics, no one seems to dispute

that the potential for savings exists; and I think it is important to

recognize that this discussion is taking place at the State level, too.

In my own State of Illinois, for example, a compilation of approximately 100 biopharmaceuticals cost $33.2 million last year and the

number of prescriptions for these drugs rose nearly 30 percent. In

1984, the need to bring affordable prescription drugs to those who

need them was recognized with the passage of the Hatch-Waxman

Act which now brings generic versions of drugs to consumers at

about one-third of the cost. Ensuring that this kind of access to lifesaving medicines is expanded to biologics is a critical goal. I think

that above and beyond the potential for cost savings lies an obligation, one that I think no one would dispute, to provide Americans

with effective and safe medications in a timely way.

Scott McKibbin, a special advocate for prescription drugs for the

State of Illinois, is an expert on issues relating to access to safe

prescription drugs. He has prepared testimony for the subcommittee’s hearing today. I would ask unanimous consent, Mr. Chairman, to submit his remarks into the record.

Mr. PALLONE. Thank you.

Ms. SCHAKOWSKY. No, I wanted to submit remarks into the

record from Scott McKibbin.

Mr. PALLONE. Absolutely. So ordered and I indicated earlier that

we would allow members on both sides to submit additional statements.

[The information appears at the conclusion of the hearing.]

Ms. SCHAKOWSKY. Let me just finish. Mr. McKibben’s testimony

is an account of how State budgets are being stretched to the limit

as they struggle to maintain access to often lifesaving biologics.

I look forward to hearing from each of our witnesses today as

well as working on the issue in the near future. Thank you, Mr.

Chairman.

Mr. PALLONE. Thank you. The gentleman from Tennessee, Mr.

Gordon.

Mr. GORDON. Thank you, Mr. Chairman. I have a splendid opening statement that I am going to submit for the record. I think it

is time to hear from our witnesses, so let me just quickly say that

healthcare costs are rising at 7 percent a year, much outpacing economic growth in this country. It is certainly the fastest-growing

part of the Federal budget. Probably for most families and businesses, it is probably the fastest-growing part of their budget. So

we need to look for savingswhere we can, and I think generic drugs

is certainly one area.

18

However, I am concerned that follow-on biologics at this point

cannot be safely put in that same category; but I compliment Mr.

Waxman for putting this issue in play, and I agree with Mr.

Matheson that after a thorough review of this that we can come up

with a good solution here. And so I am anxious to hear from our

witnesses. Thank you.

[The prepared statement of Mr. Gordon follows:]

PREPARED STATEMENT OF HON. BART GORDON, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF TENNESSEE

Each year, health care consumes a larger portion of the Nation’s gross domestic

product. Health care spending is growing at 7 percent a year—far outpacing our economic growth.

Clearly, we must find ways to bring down the cost of health care. The broader

use of generic drugs will surely help. But, sound science must support the decisions

we make to ensure patient safety is protected.

I have serious concerns about the assertion that biologics can be treated the same

as chemical pharmaceuticals. Biologics are very different from traditional chemical

drugs both in their structural complexity and the way they are manufactured. Any

process for review and approval of generic biologics or bio-similars must recognize

these differences.

Generic chemical drugs can be examined in a laboratory with a simple test to

show that the compound is identical to the brand name drug. Biologics can not be

tested in the same way. Currently, there is no simple battery of tests to ensure that

a generic biologic is not only comparable to the original biologic but can be safely

substituted for the original biologic. We need a process of characterization of the biologics to ensure that the medication is what we believe it should be.

The Food and Drug Administration has told Congress that it could be a decade

or more before the science is available to safely approve generic versions of biologic

drugs. I hope it will take less than a decade to develop reliable tests for biologic

drugs. And, we should look closely at the European model that relies heavily on

clinical testing before deployment.

Mr. Chairman, I thank you for holding this hearing and look forward to learning

more from the witnesses on these issues.

Mr. PALLONE. Thank you. I think that concludes our opening

statements. Any other statements for the record will be accepted at

this time.

[The prepared statement of Mr. Towns follows:]

PREPARED STATEMENT OF HON. EDOLPHUS TOWNS, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF NEW YORK

Thank you, Mr. Chairman, for holding this important hearing today on what is

truly a very complex issue.

Advances in science during the past 25 years have resulted in tremendous breakthroughs in how diseases are treated today. Biotechnology has been at the forefront

of these advances and holds the greatest hope for patients who suffer from devastating diseases such as cancer, multiple sclerosis, and diabetes. These biotech treatments, called biologics, are highly complex proteins made from living cells—they are

fragile molecules which are thousands of times larger than the simple, small molecule chemical pills that we find in our medicine cabinets. This molecular complexity requires a costly research and development process that results in a high price

for healthcare payers.

I thank the chairman of this committee for bringing forth the debate on how to

lower these costs and provide greater access to these life-saving drugs for our constituents. I believe that Congress should act this year to establish an abbreviated

process for follow-on-biologics, just as we did in 1984 for chemical pills through

Hatch-Waxman. However, the science is different and far more advanced than in

1984 and we need to take that into account as we craft a new pathway for followons. While a generic company can take a chemical pill and replicate its structure

to make an exact copy, I understand the same may not be true for biologics.

Since follow-on products will be made from different cell lines and produced

through different processes than the original innovator products, it seems that there

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will inevitably be variability in any attempted copies. Given these differences, the

traditional generic drug approval pathway seems inappropriate. It is imperative

that the FDA know how any differences between biological products and processes

will affect a patient before we allow shortcuts to be taken in the approval process,

and I believe that clinical trials are crucial to ensuring patient safety. Dr. Janet

Woodcock testified in front of the Oversight and Government Reform Committee last

month that it will likely be a matter of 10 years before the science is available to

fully classify and compare these drugs. In our rush to save dollars, we must not ignore that there is a great deal that we do not know, and I look forward to learning

more from Dr. Woodcock this morning.

The issue of follow-on biologics is a very complex one and it would be irresponsible

of this Congress to act in this area without knowing all of the scientific facts. We

need to be sure that we understand the science before we rush into legislating. I

urge the committee to do just that—take the time and not rush the learning process

and not stick a bill onto the first moving vehicle.

To balance the concerns over cost, patient safety, and protection of U.S. innovation, I became a co-sponsor of H.R. 1956, the Patient Protection and Innovative Biologics Medicines Act. This bill was introduced by our colleagues, Representatives

Inslee, Baldwin, and Green and takes a balanced approach to the issue. Any legislation we move out of this committee must strike the appropriate balance in getting

follow-on biologic medicines approved and on the market, while at the same time

providing incentives for innovation so that America retains its lead in the field of

biotechnology and the next-generation of life-saving medicines continue to be developed.

We are all aware of the critical problem of rising health costs, and the havoc it

is wreaking on budgets. There is probably nothing more welcome in these halls than

a chance to save taxpayers money on healthcare. Visions of dollars saved are a powerful motivator. My concern is that we don’t stampede common sense in the rush

to save money. Let’s not, for example, create a bill that eliminates rewards for creating the latest, most ground-breaking medicines. Let’s be sure to include clear safety

requirements that are appropriate for the level of complexity of the different drugs.

Let’s allow doctors, not insurers, to decide which of these drugs are appropriate for

patients. This is a new scientific arena that Congress is entering. Dr. Jane

Woodcock testified in front of the Government Oversight Committee last month that

it will likely be a matter of 10 years before the science is available to fully classify

and compare these drugs. In our rush to save dollars, we must not ignore that there

is a great deal that we do not know. In situations where we don’t know, I feel we

must err on the side of protecting patients from undue harm, and protecting their

futures by not squelching the pipeline for new treatments.

Any legislation we move out of this committee must strike the appropriate balance in getting follow-on biologic medicines approved and on the market, while at

the same time providing incentives for innovation so that America retains its lead

in the field of biotechnology and the next-generation of life-saving medicines continue to be developed.

Thank you Mr. Chairman, for holding this hearing today so that we all may learn

more about this issue. I yield back.

Mr. PALLONE. I did want to mention without objection that Mr.

Inslee will be joining us. He is not on this subcommittee but is on

the full committee, so he will be joining us for questions of the witnesses.

So let me move onto our first panel which just consists of one

witness. Dr. Woodcock, if you want to come forward? Welcome. Dr.

Janet Woodcock is Deputy Commissioner and Chief Medical Officer

for the Food and Drug Administration. You have 5 minutes for an

opening statement which becomes part of the hearing record, and

you may in the discretion of the committee, submit additional brief

statements in writing for inclusion in the record. Right now I recognize you for 5 minutes. Thank you for joining us.

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STATEMENT OF JANET WOODCOCK, M.D., DEPUTY COMMISSIONER AND CHIEF MEDICAL OFFICER, FOOD AND DRUG

ADMINISTRATION

Dr. WOODCOCK. Mr. Chairman and members of the subcommittee, thank you for the opportunity to testify about the scientific and

regulatory framework surrounding follow-on biologics. In considering the complex scientific issues at hand, I have not only relied on

my experience in leading the Center for Drug Evaluation and Research for over a decade, but also in my 8 years of experience in

working for the Center for Biologics Evaluation and Research, or

CBER. While in CBER, I served as Acting Deputy Center Director

and Director of the Office of Therapeutics in which capacity I

oversaw the approval of biotechnology products to treat serious illnesses such as cancer, multiple sclerosis, and cystic fibrosis.

The success of FDA’s current generic drug program has spurred

interest in considering abbreviated application pathways for more

complex molecules. Currently there are over 9,000 approved therapeutically equivalent generic drugs on the market that constitute

more than 60 percent of prescriptions written in the United States.

FDA’s office of generic drugs currently approves generics at the

rate of more than one per calendar day. These generics provide affordable medicines for millions of Americans.

The topic for discussion today is variously referred to as followon proteins, follow-on biologics, generic biologics, biosimilars, and

so forth. Many of these terms are very imprecise and confusing.

Largely what the interest is is in copies of biotechnology-produced

protein products that FDA calls follow-on proteins. In the U.S., proteins are regulated either as drugs under the Food, Drug, and Cosmetic Act or as biological products under the Public Health Service

Act. Whether regulated as drugs or biological products, proteins fit

into the category of complex molecules that can be difficult to fully

characterize. Copies of protein products that are regulated as drugs

may be considered for abbreviated application pathways that exist

under section 505 of that Act. For the very simplest peptide products, manufacturers may be able to demonstrate that they contain

the same active ingredient as the innovator product and thus may

be considered under 505(j) which is what is commonly regarded as

the generic drug pathway.

In contrast, copies of approved protein products that are regulated as drugs would currently be considered for abbreviated applications under 505(b)(2), as scientific techniques are not available to

demonstrate sameness of these types of molecules.

Now, as already hasbeen said, an abbreviated pathway, though,

does not exist for copies of protein products that are approved

under the Public Health Service Act. FDA has approved several follow-on proteins under 505(b)(2) including a recombinant, hyaluronidase and a recombinant version of human growth hormone.

We are currently preparing a guidance document on the general

scientific framework for preparing abbreviated applications for follow-on proteins under 505(b)(2), and we expect to follow this with

guidance on technical issues such as immunogenicity and physical

characterization methods.

FDA is frequently asked how difficult or feasible it is to approve

a copy of an existing protein using an abbreviated pathway such

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as 505(b)(2). Simple proteins that can be extensively characterized

by analytical and functional tests can often be shown to be very

similar to an approved protein, and thus the manufacturer might

not have to perform extensive clinical testing. However, the clinical

tests needed, even for simple proteins, would still be more than

what is ordinarily done for a small-molecule generic drug. In contrast, very complex proteins, especially those that are difficult to

characterize functionally are more challenging. Using today’s

science, it would not be possible by using analytical and functional

tests alone to be sure that a complex follow-on product was very

similar to an innovator product. Therefore, more extensive clinical

testing would probably be needed. However, this clinical testing

might still fall short of what would be needed for stand-alone new

drug application.

Protein products vary in their physical complexity and how well

their mechanism of action is understood and the relevance of functional tests as adequate surrogates for their effects, the complexity

of their clinical indications, and many other factors. These all must

be taken into account in determining how much additional data

would be needed to be submitted in an application for a follow-on

protein under 505(b)(2). These determinations require a significant

amount of scientific and medical expertise. However, FDA is wellprepared to undertake these evaluations given our over 20-year

history of regulating recombinant products.

I will be very pleased to answer your questions.

[The prepared statement of Dr. Woodcock follows:]

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Mr. PALLONE. Thank you, Dr. Woodcock. I am going to recognize

myself for 5 minutes for questions, and then we will go around the

committee; and each member will have some questions.

Many people have focused on your previous testimony before the

Oversight and Government Reform Committee which you reiterated in your written testimony today. Specifically you state, and I

quote, that

the amount and type of new data that will be needed to demonstrate the safety

and effectiveness of a follow-on protein product will be influenced by the extent to

which the follow-on protein product can be demonstrated to be sufficiently similar

to an approved protein product to permit some degree of reliance on the findings

of safety and effectiveness for the approved product.

Now, you went on to discuss the clinical trial should not be conducted simply for checking a box as part of the regulatory procedure for FDA approval, and I am hoping that you can expand on

these statements today. But specifically, can you tell me whether

or not you think clinical trials should be required or mandatory for

every follow-on protein as you used the term and that applies for

FDA approval or do you think that it makes more sense to allow

the FDA to have the authority to determine what types of studies

or level of science is required to determine approval which is basically what Mr. Waxman has proposed in his legislation.

Dr. WOODCOCK. With the science we have today, we are not able

to determine everything about a protein product based on tests in

the test tube so to speak, in the laboratory, and in animals. And

we would foresee right now, with the science we have today for protein products, we would be looking at additional clinical trials. Depending on the situation, those might be very limited. They might

really have to do with the safety issue called immunogenicity, the

ability or the propensity of the protein to cause an immune response in people. That is something we really have great difficulty

predicting just from laboratory tests, and it is influenced to a great

extent by the kind of contaminants that are in the product which

has to do with how the product is produced.

Mr. PALLONE. So you want the flexibility as to whether to have

the clinical trials, depending on the circumstance?

Dr. WOODCOCK. I think it needs to be considered that the science

will advance over time. As many of the members have alluded to,

science is advancing very rapidly. What we can do today is somewhat limited, but analytical and functional technologies are advancing rapidly and we may be able to make more exact comparisons in the future.

Mr. PALLONE. OK. I wanted to ask about the issue of interchangeability. You stated in your testimony today, and I quote,

from many follow-on protein products, in particular the more complex proteins,

there is a significant potential for repeated switches between products to have a

negative impact on the safety and/or effectiveness. Therefore, the ability to make

determinations of substitutability for follow-up protein products may be limited.

That is your quote.

Now, has the FDA ever approved a follow-on protein product as

interchangeable with a reference product and if so, can you characterize these products in your ability to determine interchangeability? In other words, were these products simple or more comVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
42

plex molecules and depending on the level of complexity what levels of studies were used to determine interchangeability?

Dr. WOODCOCK. We have not approved protein products as interchangeable. We have not. We have ideas, as I said. We are considering issuing a guidance on immunogenicity, and that would include this issue of switching. Immunogenicity does not really enter

in so much with small molecules. Some small molecules actually do

cause an immune response, but under the generic program that we

have, they are identical. We know that generic copies are identical

to the original copies and would be expected to have the same immune response. However, with proteins, proteins themselves, even

one product, an innovator product, will vary slightly from batch to

batch because they are very complex. So we don’t know if you were

taking one and if you were switching to another and you switch

back and so forth if this might set up an immune response that

wouldn’t occur if you had just stayed on the same product all along.

And that could be very dangerous in some circumstances.

Mr. PALLONE. OK. And then lastly I wondered if you could comment on whether or not you think it would be appropriate to have

open and public procedures for all stakeholders to participate in

the development of criteria for the approval of follow-on products,

as well as what types of post-markings, surveillance, or studies

should be required of follow-on protein products? Should the market for pre-market approval and requirements for post-marketing

differ from follow-on protein products than reference or products or

should they be the same?

Dr. WOODCOCK. That is a lot of questions.

Mr. PALLONE. I know.

Dr. WOODCOCK. We attempt to always have an open and public

process for the scientific and technical standards that are used to

approve products, and actually we work internationally with the

other international regulatory bodies on standards so that different

trials don’t have to be repeated in different countries and so forth.

So it is very important to have an open and public process. We

have had multiple scientific meetings, some with various scientific

bodies at the New York Academy of Sciences on various aspects of

characterization of proteins and so forth and so on. So yes, it is

very important that we have continuing, high-level scientific input

and dialogue on all of this, including the clinical parts of it.

Mr. PALLONE. OK. Thank you. Mr. Deal.

Mr. DEAL. Thank you, Dr. Woodcock, for being here today. We

are dealing here with two statutes, and you referenced the Food,

Drug, and Cosmetic Act, specifically 505(b)(2) as a certain pathway

and then of course the section 351 of the Public Health Service Act

that I believe you say is where the biologics have generally been

registered, is that correct?

Dr. WOODCOCK. That is correct.

Mr. DEAL. Would the pathway for follow-on biologics need to be

addressed in both of those statutes?

Dr. WOODCOCK. As I said, we have already approved several follow-on proteins under 505(b)(2). There is a pathway already there.

We have approved human growth hormone which is a recombinant

product and hyaluronidase which is actually a very complicated

protein. So that pathway is currently available. However, the proVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
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tein products approved under 505 are typically only the hormones

and the enzyme products. Most of the others are under the Public

Health Service Act which does not have a pathway.

Mr. DEAL. So specifically as to the Public Health Service Act,

there would need to be a pathway of some sort. One of the issues

that we have all been concerned about is the safety and effectiveness of a follow-on or any product, and I believe you said FDA has

the capacity to make those determinations. Am I correct that the

current law does not mandate the way that you determine that in

terms of mandating clinical trials, that that is simply something

you have done under the auspices of legislation, that you have set

out those kind of protocols?

Dr. WOODCOCK. Under the Public Health Service Act?

Mr. DEAL. Yes.

Dr. WOODCOCK. The Public Health Service Act requires that the

products be pure, potent, and so forth and safe. It does not require

specifically clinical trials or any given——

Mr. DEAL. But you have the ability to do those trials because you

are charged with the safety and efficacy issue?

Dr. WOODCOCK. Right, and obviously the products have to be safe

and effective.

Mr. DEAL. Right. I want to get into a little bit of a detailed discussion about an area that I still don’t fully understand. We have

had private conversations and in trying to make an analogy to the

current generic drugs, the discussion dealt with what FDA can do

with the data from the licensed or patented product. And there was

a distinction that you made between having access to the data and

being able to rely on the data for follow-ons or for generics.

As I understand it Hatch-Waxman allows you to rely on the data

for abbreviated new drug applications, is that correct?

Dr. WOODCOCK. That is correct.

Mr. DEAL. OK. Would you elaborate on what you need in this

area of follow-on biologics as it relates to this already-accumulated

data? What are your restrictions and what do you foresee as reasonable expansions of your current right to either rely on or have

access to the data?

Dr. WOODCOCK. To explain this to the members who may not

be—this is pretty arcane, I think. Our legal interpretation of the

current statute that we rely on says that we rely on the fact of the

approval of the innovator product. We are not going in and comparing the data that is in the application of the innovator product to

the data that is submitted by the generic manufacturer, all right?

So we are relying on the fact that it was approved, safe, and effective and we can bridge back to that approval by the fact that the

generic small molecule is the same small molecule and it also is the

same dosage for them and so forth and it is bio-equivalent, all

right? So then we say if you meet those criteria, then the fact that

we approved that product pertains to the generic product.

With follow-ons, it is a little more complicated for the 505(b)(2)

world. We are also still relying upon the fact of the approval of an

innovator product, but the follow-on protein may not be an exact

copy. But again, we are not going in and looking at the data in the

innovator application and applying it to the follow-on.

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For future products that we would look at, this of course, is

somewhat limiting to the FDA in the fact that we can’t make direct

comparisons of perhaps the pharmacokinetics of one product to the

pharmacokinetics of the follow-on product unless that is in the literature somehow or somehow otherwise available. So the extent to

which we can approve complicated follow-on products is somewhat

governed by the ability to which we can refer to and look at data

about an innovator product. We cannot do that now.

Mr. DEAL. Thank you. My time has expired.

Mr. PALLONE. Thank you. Mr. Waxman?.

Mr. WAXMAN. Thank you, Mr. Chairman. Dr. Woodcock, as I understand what you are saying is that it is a lot easier to approve

the generics under the Hatch-Waxman Act because you are showing that it’s the same drug in effect. Now we have something a little bit more complicated, but we shouldn’t throw up our hands and

say it is impossible because under a quirk in the FDA law now, you

are able to approve a follow-on drug for some proteins that would

be in that category of these biogeneric drugs, is that correct?

Dr. WOODCOCK. That is correct. We have approved some.

Mr. WAXMAN. You have approved some? So you have some experience. You have said to us that some of these others are going to

be more complicated and therefore more difficult because the

science hasn’t caught up with it. The biotech industry argues in

their testimony today that any legislation authorizing approval of

follow-on biologics must require substantial pre-clinical testing and

clinical studies including comparative clinical trials to determine

whether there are significant differences between follow-ons and

reference products in terms of safety and effectiveness. Do you believe good science will always into the future require that substantial pre-clinical and clinical studies include comparative clinical

studies and effective are going to be required? Is that micromanaging FDA too much?

Dr. WOODCOCK. I believe that there will always be substantial

non-clinical, in other words, laboratory and to some extent there

will be animal studies in the foreseeable future comparing two

products or characterizing the follow-on product. That is just a routine standard for any drug that we get onto the market, as it would

have very extensive testing before it would be put on the market.

For 505(b)(2)’s, the extent to which clinical trials would be required depends on all the factors I went over in my oral testimony.

There are a great many factors that have to be brought into play,

and there is a spectrum of——

Mr. WAXMAN. Well, science is going to evolve. Right now you

would probably agree that there ought to be clinical trials for some

of the biologic generics, in other cases you might not. I guess the

question is would it be mandated that under every circumstance

there would be a clinical trial and wouldn’t that end up requiring

unnecessary and therefore unethical trials in the future if we required it by statute rather than leaving it to FDA’s discretion?

Dr. WOODCOCK. Well, as we said in the testimony, requiring

trials simply to require trials is not usually considered a fair use

or ethical use of human subjects. We should do trials in people if

we need information in people. Right now as I said for proteins, we

believe we will need immunogenicity trials in people because we

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cannot predict the immunogenicity answers without doing human

trials.

Mr. WAXMAN. Do you believe it is better to have a statute that

freezes the science as of the date of enactment or that gives FDA

the flexibility to tailor requirements as science evolves?

Dr. WOODCOCK. Because the science is so dynamic and none of

us can predict where the science is going to go over the next decade, it is evolving unbelievably fast, obviously we all need to be

humble before that and have a scheme that I think allows the

science to operate.

Mr. WAXMAN. You responded to Mr. Pallone that public process

is important for establishing standards for drug approval. I understand you to mean general standards applicable to all drugs or biologics, is that correct?

Dr. WOODCOCK. It depends on the question. I think it is very important in this area, follow-ons, that we stay up to date with the

science; and therefore, we have a dynamic public process that

keeps giving us the scientific input that we need.

Mr. WAXMAN. Well, do you think it appropriate to always have

a public process to establish the correct approval standards for

each new product before FDA can take any action or would that

cause unnecessary delays?

Dr. WOODCOCK. We have not done that. For example, with the

hyaluronidase product that we approved and so forth. So it is going

to depend on the situation. In some cases, it might be desirable to

have a public process because of so many open questions. In other

cases, obviously the path will be very clear.

Mr. WAXMAN. Well, I guess it comes down to in my mind these

are some tough decisions. Who ought to make them, politicians

here in Washington with Congress saying this is how you must decide the science or should we give you the flexibility with the

standards and ask you to make sure the product meets those

standards? That is what we have done with all other drugs, both

the new drugs especially and other generics or simple or only has

to be a copy. In this case, it is not just a copy, but the decision has

to be made; and I would trust the FDA to make that decision, not

Members of Congress spelling it all out.

Thank you, Mr. Chairman.

Mr. PALLONE. Thank you, Mr. Waxman. Our ranking member,

Mr. Barton.

Mr. BARTON. Thank you, Mr. Chairman. Dr. Woodcock, if currently I am a manufacturer of a biologic drug and I am making it

in batches, is each batch identical?

Dr. WOODCOCK. Not to the state that you would use for identical

for chemical drug because we can’t tell. For most of the complex

proteins, they have a range of forms within the product. It isn’t

just one protein. There are minor variations in most products that

are part of the product. Second, the extent of those variations will

change a little bit from batch to batch.

Mr. BARTON. When you say a little bit, what percentage terms?

Half a percent, a thousandth of a percent?

Dr. WOODCOCK. Maybe half a percent or so.

Mr. BARTON. Now, will each batch have the same efficacy, the

same result?

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Dr. WOODCOCK. What we do is we control variability to the point

that the product, whether it is a drug or a biologic, should have the

same clinical effect time after time. That does not mean though

that that product is identical time after time. And that is true with

any manufacturing process. You have to control variability down to

the point where it doesn’t make an impact on the customer.

Mr. BARTON. Well, if the patent expires on a biologic and the

same manufacturer in the same location using the same equipment

and the same process and the same ingredients made the same

product after the patent expired, would that be the same as a generic drug for a biologic drug?

Dr. WOODCOCK. The innovators continue often to make their

products after the patent expires. They continue to market their

products under their brand. That is still considered the innovator

drug.

Mr. BARTON. It would not be considered generic-similar drug?

Dr. WOODCOCK. No. Now, sometimes manufacturers take that

product and they give it a different name and they market it.

Mr. BARTON. We understand what a generic is for a normal drug.

We understand that for biologics, you really can’t call it a generic

but is it fair to say that it is similar to a generic?

Dr. WOODCOCK. It would be similar to a generic because the doctors and patients could use it and expect to have the same effect

as the innovator drug.

Mr. BARTON. Your standard is going to be the same clinical effect, then you are going to label it as a biologic-similar generic, generic-similar?

Dr. WOODCOCK. That would be one scheme, all right? However,

we wouldn’t label as interchangeable as we already discussed, that

one could be switched for the other unless that had been proven

that that was safe to do.

Mr. BARTON. We are kind of going around each other here. What

I am trying to get at, when the pharmaceutical reps come in to see

me and I assume everybody else on this committee, they don’t come

right out and say, oh, no, we don’t want the generic for biologics.

They are not fighting that. They are just saying make sure you do

the clinical trials, make sure that it has the effect, depending on

the standard that the FDA establishes. You could make it almost

impossible, you, the FDA, to have an equivalent to a generic drug

for biologics. Do you understand what I am saying?

Dr. WOODCOCK. I do. First of all, let me say we have approved

several follow-on recombinant proteins under the Food, Drug, and

Cosmetic Act already. They have very similar indications to all the

other products that they are similar to——

Mr. BARTON. What I am trying to get at, and I am not doing it

in a very efficacious fashion, but I want to hear somebody like

yourself, the FDA, says it makes good policy sense to set up a

scheme to do biologic follow-ons because we think it is possible and

we think it would save consumers money if we do it, instead of

these are too large and too complex protein molecules and we just

don’t think it makes sense because they are so dissimilar to regular

drugs.

Dr. WOODCOCK. Yes. Well, as I have said, we feel it is possible

and we are doing it under the pathway, where we have a legal

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pathway. We have done these approvals already, No. 1. Number 2,

however difficult it might be now for some proteins, it can be expected in the future as science evolves, we will be able to make

these comparisons more readily and we will be able to do this more

easily.

Back in 1984 after the first of the generic drug amendments

were passed, there was a period where there was great difficulty

in establishing the standards and so forth. But as I said, we now

have 9,000 generic drugs.

Mr. BARTON. What do we need to do as a Congress and this subcommittee to make it easier to facilitate the review and approval

of biologic follow-ons?

Dr. WOODCOCK. There is no pathway under the Public Health

Service Act. So although there is a pathway under 505(b)(2) of the

Food, Drug, and Cosmetic Act, and we are using that pathway,

there is no similar pathway under the Public Health Service Act.

Mr. BARTON. Do you think it is possible legislatively to create

such a pathway?

Dr. WOODCOCK. We would look forward to working with the Congress on these discussions.

Mr. BARTON. Thank you, Mr. Chairman. That is the answer I

wanted.

Mr. PALLONE. Thank you. Our vice chairman, Mr. Green?

Mr. GREEN. Thank you, Mr. Chairman. Dr. Woodcock, since biologics are derived from living cells and there is always the chance

the patient would develop an undesirable immune system response

to a follow-on biologic, the safety issues concerned to me and many

patients on biologic therapies already have vulnerable immune systems, is it correct to say that we do not currently have laboratory

animal models that can correctly and reliably predict unwanted immune responses for humans?

Dr. WOODCOCK. That is correct.

Mr. GREEN. Within the large group of biologic products, I understand we know a great deal about insulin and human growth hormone but considerably less about other newer therapies. However,

human insulin and human growth hormones, so-called simple proteins, the following example in Europe has suggested that testing

for a negative immunity response is critical. For example, and this

is a very long question that I will run out of time just going

through it, but Novo Nordisk worked to develop the second generation of insulin, one that would be fast acting to help control mealtime rise in blood glucose for individuals with diabetes. Two of

their next generation drug candidates were fully characterized and

both included only one different amino acid. During pre-clinical

studies in Europe, Novo Nordisk pulled one candidate because of

increased tumor potential found in rats. The other candidate,

which hadonly one amino acid, NovoLog, which during trials was

determined to have a safety level on par with human insulin.

We have a second example of the European system, Omnitrope,

a second-generation human growth. Because Europe requires clinical trial data for biosimilar applications, the manufacturer conducted a clinical trial and again, I could go on.

Is there any instance in which you think a clinical trial to determine immune system response is unnecessary?

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Dr. WOODCOCK. For very short peptides which are not really proteins. They are very, very short, small protein-like molecules. That

would probably be the case. However, at this time, as I said, for

proteins we feel we would need a human trial for immunogenicity

at the minimum because we cannot predict immunogenicity from

the lab and animal tests. However, I also would like to say that

a change in even a single amino acid is not a trivial change whatsoever. That is a very big change and it is easily detectible and we

would know all about it. That wouldn’t be identical to an innovator

product because it would be an obvious change. We refer to that

as a second-generation product because it has been changed for

some reason.

Mr. GREEN. OK. So to answer the question, you think clinical

trial, even those for second generation are needed?

Dr. WOODCOCK. Currently for immunogenicity. Clinical trials

might also be needed to answer other questions if there are remaining uncertainties. I think it is important to understand that

there is a wide range of clinical trials. An immunogenicity trial can

be fairly straightforward. You expose people to the product and you

see what happens to the immune response.

Mr. GREEN. In response to Chairman Pallone’s questions about

interchangeability, you touched on dangers that result in patients

from switching biologic products. Given your answer to the question, would you have concerns with Congress allowing, for example,

a pharmacist to dispense a follow-on product outside a physician’s

orders?

Dr. WOODCOCK. The system we have right now, the States regulate of course the practice of pharmacy, but FDA provides a rating,

an interchangeability rating, for products that we approve. And if

they get that rating, that means that FDA thinks they are interchangeable, and often then the States will follow that and allow

the switching at the pharmacy level.

Mr. GREEN. OK.

Dr. WOODCOCK. So at this point in time for proteins, none of

those have been granted interchangeability.

Mr. GREEN. And I guess our concern, we want to make sure the

tests are done particularly on the second generation.

Thank you, Mr. Chairman. I yield back my time.

Mr. PALLONE. Thank you. The gentleman from Michigan, Mr.

Rogers.

Mr. ROGERS. Thank you, Mr. Chairman. I am just going to go

down just a little bit of a different path if I may here. The CDC

and the Department of Agriculture have deemed 44 particularly

dangerous pathogens and toxin, they call them select agents, like

ricin or anthrax, smallpox, others I mentioned in my opening statement. You are aware that some of these biopharmaceutical companies are using some of these select agents in the development of

their product, is that correct?

Dr. WOODCOCK. Yes. Obviously the Government would be aware

any time a select agent is being used in manufacturing.

Mr. ROGERS. But that is not something you regulate through the

FDA? It is regulated through Agriculture, CDC, if they are going

to get access and use these particularly dangerous select agents. Do

I understand that correctly?

49

Dr. WOODCOCK. If for research or experiments that don’t involve

humans, the FDA may not be involved, similar to what research

goes on at universities or companies. Once manufacturing is leading to human trials, then the FDA is involved, including the manufacturing.

Mr. ROGERS. So the manufacturing side but if I am going

through the process of developing a product, would you have anything to do with them gaining access?

Dr. WOODCOCK. No, as I said, similar to universities or other

sites, this is regulated by the entities you referred to.

Mr. ROGERS. And I only bring this up, I was in Libya recently

and was at a factory where they were making, and have subsequently cooperated with the United States and have turned it over,

but they were making mustard gas and they were using one of

these 44 particularly dangerous agents to try to weaponize this

particular agent. So it is pretty dangerous stuff which is why we

regulate it, and you would agree that we need to continue to regulate that pretty closely, do you not?

Dr. WOODCOCK. Certainly.

Mr. ROGERS. If we are going to expand this, I am concerned, how

do we make sure—we go through a pretty select process now for

these companies which following the regulation costs money, right,

and adds to this $1.2 billion in their development. How is the FDA

going to ensure that we do not allow these select agents from these

products widespread use and increase the number of entities acquiring and using select agents?

Dr. WOODCOCK. Well, first of all, let me say that the vast majority of biological products are not made from select agents or have

nothing to do with select agents. What you are talking about is

some of the vaccines and perhaps certain cancer therapies that

may have various toxins linked to them.

Mr. ROGERS. And pain care, as well, is it not? It is my understanding that there are those that who working to—when they are

talking about some pain treatments?

Dr. WOODCOCK. That is possible, however——

Mr. ROGERS. Anatoxins, tetrotoxins.

Dr. WOODCOCK. Right. The types of biotech products that are

being talked about here today, the vast majority of them do not involve any of that, OK? That is a very small universe that I would

think everyone would agree requires very good oversight.

Mr. ROGERS. But it is important that we keep an eye on those,

don’t you think?

Dr. WOODCOCK. Absolutely.

Mr. ROGERS. And so if we are going to get into this, don’t you

think that we ought to be very careful about how we look at who

has access to these types of select agents? It is very important that

these biopharmaceutical companies have access for research on

these kind of things. They can have some certainly medicinal effects. I guess the venom from an Australian marine cone snail is

even used in some of these developments. We should encourage

that but my fear is that we throw open the door. Is this something

that the FDA has thought about if we go to this next generational

research entities using these dangerous toxins?

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Dr. WOODCOCK. Well, let me reiterate, generally the firms doing

follow-ons will not be engaged in R&D of that type. They are not

going to be engaged in basic research and so forth. They are going

to be focused on making copies of these existing products.

Mr. ROGERS. But in order to do that you would have to have

these select toxins if that in fact is a component——

Dr. WOODCOCK. If it is a component, yes, and that can exist. It

is a very small universe and requires and has very special controls

on it.

Mr. ROGERS. It is a small universe now but if we go to generics

just by definition, won’t it be a larger universe?

Dr. WOODCOCK. Yes, I can’t predict where the market—it depends on how attractive the particular agents are for copying.

Mr. ROGERS. In the average time of that 15 years and $1.2 billion, how much of that was FDA or Government money, on the average in the development of a biotech drug? Does the FDA give

them money?

Dr. WOODCOCK. No.

Mr. ROGERS. So pretty much all of that money is private-industry

generated, and wouldn’t you think it is important that when we go

through this we should try to find some answer here but shouldn’t

we protect that private investment of $1.2 billion? There’s not

enough money in the world for us to come up with that $1.2 billion?

Dr. WOODCOCK. Right. I think that is one of the tasks before

Congress.

Mr. ROGERS. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you. The gentlewoman from Wisconsin.

Ms. BALDWIN. Thank you, Mr. Chairman. Dr. Woodcock, we have

certainly heard from some innovators that because they make manufacturing changes to their products, sometimes without clinical

trials, sometimes with, that perhaps the logical next step is that

we could allow generic companies to make biosimilars without requiring clinical trials. But I wonder if there is an equivalency here

because sometimes the simple manufacturing changes by brand

manufacturers, like changing a filter, for example, are these the

same as the type of changes that can be anticipated and I think

expected of a follow-on biologic company that does not have access

to the original cell line or the original manufacturing process? I

wish you would speak to that.

Dr. WOODCOCK. There is obviously a great spectrum of changes

that could be made to a product, and manufacturers frequently

make small changes to their production process. They often have

to do extensive testing, but it is usually not to human testing but

it might be very extensive laboratory and sometimes, say, animal

pharmacokinetic tests. And even sometimes change of filter has resulted in a dramatic change. It is very interesting.

So change of a whole manufacturing site, a new cell line, and so

forth is of much greater magnitude and would require even much

more extensive testing, whether it was the innovator manufacturer

or there was a follow-on. Change to a whole new manufacturer

with a whole new process in cell line and so forth is the largest

kind of change you can imagine and would require obviously more

testing and so forth than any of these other kinds of changes.

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So there is a spectrum. FDA has a lot of experience regulating

these manufacturing changes within the innovator industry, and

we also bring that experience to bear in looking at a much bigger

change which is a whole new manufacturer of the product.

Ms. BALDWIN. Just one other question. As you approach this

topic and of course, we are delving into it more deeply and learning

a lot about a very complex issue, but it seems to me that when you

start out regulating something that there is very little experience

with, one wants to start erring on the side of caution by going slow

and engaging in strong safety studies. And I just would ask very

generally, would the safety assessments that you spoke of during

your testimony be as strict as those for the original biologic? Is that

what you would contemplate at this point?

Dr. WOODCOCK. As I said, there is a spectrum. In some cases,

very extensive safety testing in humans may really not be necessary because we know enough about the product from long time

clinical experience as you said, for example, insulin. There are

many, many varieties of insulin on the market right now. In other

cases, we might need extensive clinical safety testing. In some

cases we may need human pharmacokinetic studies and

pharmacodynamic studies and pardon me if I am getting into too

much jargon here, but there is an ever-widening spectrum of clinical testing that could be done depending on how much certainty remains. After you look at all the pre-clinical testing that has been

done and you compare the two products and you say how uncertain

are we? Well, if we are very, very uncertain still, it is going to require a lot more human testing. If we are pretty certain and we

have a lot of confidence, then it will maybe require immunogenicity

testing, perhaps not much more.

Ms. BALDWIN. Thank you.

Mr. PALLONE. Mr. Ferguson.

Mr. FERGUSON. Thank you, Mr. Chairman. Dr. Woodcock, thank

you for being with us today. I want to read a quotation, something

you said last week. I quote, ‘‘Unlike small molecule drugs whose

chemical composition can easily be determined to be the same as

an approved product, the very nature of protein products makes

comparison of one protein to another, including to establishing

safety and efficacy, more scientifically challenging.’’ I thought that

was important and particularly in light of several questions that I

have. I have several and I want to get through them as quickly as

I can, so I would appreciate your brevity as well.

Do the safety concerns with biologic products dictate the need for

pre-market and post-market clinical studies and post-market surveillance for follow-on biologic products as well?

Dr. WOODCOCK. As I have said, there is a spectrum. Ordinarily

we would expect some pre-market clinical studies. I think we may

well expect some post-market clinical observations at least to confirm what we have found pre-market.

Mr. FERGUSON. Other countries obviously do this already. The

U.S. in your opinion would not want to be the first country that

leaves the door open to follow-on biologics without clinical trials, is

that correct?

52

Dr. WOODCOCK. We have approved several follow-on biologics already. They have had clinical trials. We regard that most proteins

now would require some degree of clinical testing.

Mr. FERGUSON. Should we do it without clinical trials?

Dr. WOODCOCK. We shouldn’t do anything that leaves us with too

much uncertainty about the results. We need to know that the

products would be safe and effective.

Mr. FERGUSON. Do you think a lack of clinical trials leaves uncertainty?

Dr. WOODCOCK. Currently it would because we can’t predict

immunogenicity.

Mr. FERGUSON. OK. Under what circumstances could the FDA

anticipate that no clinical data would be needed to approve a follow-on? Is there any circumstance that you can think of currently?

Dr. WOODCOCK. As I said, right now for peptides, which are related to proteins, very simple peptides are of the same magnitude,

of size, and complexity of certain small molecules; and we can approve very short peptides as generic drugs without anything but a

bioequivalence trial. Don’t forget, even generic drugs ordinarily

have a human trial of bioequivalence.

Mr. FERGUSON. But of course that sounds pretty dissimilar from

most follow-on biologics which of course as you have said and others have said are incredibly complex?

Dr. WOODCOCK. That is correct.

Mr. FERGUSON. Are there situations where the FDA would not

find clinical investigation of immunogenicity warranted?

Dr. WOODCOCK. We feel that for proteins right now we would

need clinical testing for immunogenicity.

Mr. FERGUSON. In the absence of any accurate or reliable laboratory or animal model to predict unwanted immunogenicity in humans, how can we be sure that a follow-on protein product which

has never been administered to a human being before won’t induce

some unwanted immune response?

Dr. WOODCOCK. We can’t be sure and that is why we need to do

testing.

Mr. FERGUSON. OK. In looking at Mr. Waxman’s bill, I see a listing of differences between follow-on biologic and innovator that

would be required to be deemed to be, quote, highly similar by the

FDA. Do you believe that Congress should be telling the FDA in

statute how to make these comparability determinations right now

given the technology or the information that we have right now?

Dr. WOODCOCK. I think this is a very complicated area that requires some extensive discussion because of the complexity of proteins.

Mr. FERGUSON. Would you be satisfied or comfortable if Congress

decided at this moment, given what we know right now, for the

Congress to tell the FDA how and when to make these decisions?

Dr. WOODCOCK. I think that——

Mr. FERGUSON. That is a yes or no if you can do it. I am almost

out of time.

Dr. WOODCOCK. I can’t do it. Thank you.

Mr. FERGUSON. It sounds like you would not be comfortable right

now, is that accurate? Would you have other questions, concerns?

Dr. WOODCOCK. We look forward to working with the Congress.

53

Mr. FERGUSON. She is good, you got to give it to her. She is good.

It seems to me there is a major disconnect between the standards

that FDA imposes on innovator products and the one that some are

espousing that we use on follow-on biologics. There is a big disconnect there. And if we give the FDA authority to approve followons, what agency initiative will be necessary to reconcile these very

two different sets of standards if we were to approve something say

in Mr. Waxman’s bill?

Dr. WOODCOCK. Now, I can’t comment directly on the pending

legislation. I do believe as I said earlier that the science is going

to continue to evolve, and as the Congress contemplates this, they

should make room for evolving science because it will change over

the decade in a dramatic way; and what we are capable of doing

now, which is a lot but somewhat limited in making comparisons,

is going to change over time.

Mr. FERGUSON. Thank you very much. I appreciate it.

Mr. PALLONE. I think, Dr. Woodcock, we are going to have to let

you catch your breath or something here as we move on. Next is

the gentlewoman from California, Ms. Eshoo.

Ms. ESHOO. Thank you, Mr. Chairman. Thank you, Dr.

Woodcock, for your testimony. It is instructive and enlightening,

and if I am hearing correctly what you have presented both in your

opening statement and in your response to the questions that members have posed is, well, several things, but that when it comes to

safety and efficacy, it is either in the clinical trial or in the trials

that the FDA conducts. Is that correct?

Dr. WOODCOCK. We don’t conduct any trials, OK?

Ms. ESHOO. But you require them?

Dr. WOODCOCK. Yes.

Ms. ESHOO. But you require them. Now, my understanding is

from what you have said is that there can be an immune response

to biologics, and it seems to me that this is a key hurdle because

when it comes to biologics that the cure can be worse than the disease, I mean, in the complexity of it.

Dr. WOODCOCK. The proteins are much more prone than the

small molecules to cause various types of immune responses.

Ms. ESHOO. Now, if a biotech company notified the FDA that it

was making changes to its cell line or its manufacturing process,

altering the manufacturing process, what would be the response of

the FDA today?

Dr. WOODCOCK. Manufacturers are very well aware before they

make any changes to a marketed product, or even a product within

the investigational process, they have to get approval from the

FDA to make those changes before those products would be used

in people.

Ms. ESHOO. All right. Now, if we move to the follow-on biologics

that are obviously being proposed with all of the laudable outcomes

of broader and more affordable access to them, what do you prescribe as being the process for that? I think that is where the disagreement comes. I really do. I think it is not whether it should

happen or not but how to do it, and I think that is the rub of the

debate.

Dr. WOODCOCK. Well, I think I can describe what we are doing

under 505(b)(2) right, under the Food, Drug, and Cosmetic Act.

54

And what we do there is the follow-on product is required to submit very, very extensive physical and functional characterization,

in other words, laboratory testing comparisons to the innovator

product, animal testing of different kinds, and then you have to decide how much clinical testing is needed, depending on how certain

you are from all that other work that——

Ms. ESHOO. But you don’t believe that there should be a shortcut

where the FDA is prohibited from requiring what you just described, if in fact the FDA believes that it should take place?

Dr. WOODCOCK. Many of these products will require additional

clinical testing to give you the level of certainty.

Ms. ESHOO. Yes. Let me ask you this. There is a provision that

requires the FDA to find a biologic follow-on and the referenced

biologic to contain, ‘‘highly similar, principle molecular structural

features if they are’’, and I am going to read this because I am not

a scientist but I have to rely on the exact language in the proposed

legislation, two protein biological products with, ‘‘minor differences

in amino acid sequence.’’ You have talked about amino acids and

what they represent which to me is kind of scary if you fool around

with them. Two polysaccharide biological products with differences

in post-polymerization modifications, two glycosated protein products with differences in structure between them solely due to posttranslational events, infidelity of translation or minor differences in

amino acid sequence. This is statutory language. Have you ever

seen this before in legislation? Statutory language that is that specific?

Dr. WOODCOCK. It is very specific.

Ms. ESHOO. Well, it is highly specific. Well, you are not going to

answer this. I am just going to put this out to my colleagues that

are still here. I don’t know if you understand this and I don’t know

if you could all stand by this, but I don’t think this is the role of

the Congress. I really don’t. I think it is up to the FDA to make

the call on defining this particular—we shouldn’t get into statutory

language and be prescribing this.

Mr. PALLONE. Will the gentlelady yield?

Ms. ESHOO. No, because I don’t have that much time. I would

like to but I can’t. I would like to ask you, Doctor——

Mr. PALLONE. Actually, your time has run out.

Ms. ESHOO. Did you include the minute and 2 seconds I didn’t

use in my opening statement?

Mr. PALLONE. No.

Ms. ESHOO. No? Can I have that?

Mr. PALLONE. It would be better if you did it as a written question. We are going to allow written questions because she is——

Ms. ESHOO. It is just in the European model and maybe someone

else will ask that and what——

Mr. WAXMAN. Mr. Chairman, I would like to ask unanimous consent the gentlelady be given 2 additional minutes if she would yield

me one of them.

Mr. PALLONE. Is there objection?

Ms. ESHOO. If there isn’t, then I will just yield that time to Mr.

Waxman because I think Mr. Gordon is going to raise the question

about how the FDA views the European model in the follow-on biologic areas. So I will yield the time to you.

55

Mr. WAXMAN. Thank you very much. Just on that one point

where we spell out in my bill this language about deeming certain

molecules, that is from an FDA reg and it is not spelling out a

broad universe, it is narrowing the universe of possible followthrough drugs, and then once you narrow it, then they have to

meet the second standard in the legislation which is that it is just

clinically significant—no clinically significant differences in terms

of safety. So it is not deeming something to be a generic, it is narrowing all the different fields to make sure it is a good candidate

to be a follow-on biologic but we still require FDA to use that very

strict test in your scientific judgment whether it

Ms. ESHOO. Yes, can I just jump in here since I yielded you?

Mr. WAXMAN. She is shaking her head yes.

Ms. ESHOO. You are still saying it is a regulation, though?

Mr. WAXMAN. Are you saying yes for the record? Am I correct?

Dr. WOODCOCK. That is correct. See, in the original Hatch-Waxman, you used the term same active ingredient. That doesn’t apply

here because as we have discussed extensively, they are not exactly

the same. So the question arises, what actually would be a candidate for being considered under some scheme? How close does it

have to be? That is the question.

Mr. PALLONE. OK. Time is expired, and we move to the gentlewoman from Tennessee.

Mrs. BLACKBURN. Thank you, Mr. Chairman. Dr. Woodcock, you

have been so patient and as you can tell, we are not scientists and

researchers but we all want to be certain that new protocols and

new therapies have the ability to make it to our patients, and we

want to be certain that there is a fairness applied to this entire

process as we look at the follow-on process.

Let me come at this from a different angle. In my opening statement I mentioned to you intellectual property concerns, and I have

thought, reading your testimony and we appreciate that coming

forward to us and then I also have a May 5 report from CRS on

the follow-on biologics that I have done a little bit of reading on.

So let us take it this way. You have got the applications for approval of biologics, and these contain trade secrets, correct?

Dr. WOODCOCK. Yes.

Mrs. BLACKBURN. OK. And when you render a finding that a biologic is safe, pure, potent, you are relying in part on that trade secret data, correct?

Dr. WOODCOCK. Yes.

Mrs. BLACKBURN. OK. So explain to me how you think you can

rely on the finding of one biologic to approve a second or similar

biologic without using that trade secret data and without compromising that intellectual property which I see as a private property right.

Dr. WOODCOCK. We don’t have that ability now under the PHS

Act and so we do not approve follow-on proteins under the PHS

Act. Under the Food, Drug, and Cosmetic Act, the scheme that was

set up under Hatch-Waxman allows FDA to rely on the fact of approval of prior products, and that is how we do it. We do not rely,

we don’t go in and look at the data when we approve all these generic drugs.

56

Mrs. BLACKBURN. So then you feel as if you are doing that without exposure to the person that is the creator or the intellectual

property holder of a specific trade secret?

Dr. WOODCOCK. Well, obviously I probably don’t understand your

question fully. To my understanding, Hatch-Waxman set up kind

of the balance between the protection of the innovator for a certain

amount of time, patent extensions and so forth, and then the ability at the end of that for copies to come in and the FDA to have

the ability to approve copies.

Mrs. BLACKBURN. OK. I thank you for that. I think that for some

of us that represent so many individuals that work in the innovative and creative community if you will, and in our State of Tennessee as we see a biotech industry that is beginning to grow, we

look at lessons learned and places that we can go for lessons

learned. Much of that is through our creative community, through

our songwriters, through our auto engineers, people who have seen

copyright infringement, who have seen intellectual property violations. And it raises a specific concern and a guard, and they highlight that with us that there is concern there that it is a very fine

line, it is a very complex issue, and that we have to step very, very

carefully.

Following on with that, would you say yes or no, are we jumping

the gun to try to create a follow-on pathway? Are we trying to get

ahead of ourselves as Congress, as legislators?

Dr. WOODCOCK. Well, I have said, FDA has approved some follow-on products where we have a pathway available. So obviously

FDA believes that this is possible. It is possible to approve certain

follow-on products. A pathway is not available under Public Health

Service Act, so that balancing that you refer to, the innovation and

need for innovation and the need for affordable treatments is something only I think the Congress can deal with.

Mrs. BLACKBURN. OK. Thank you. I yield back.

Mr. PALLONE. Thank you. The gentlewoman from Illinois, Ms.

Schakowsky.

Ms. SCHAKOWSKY. Thank you, Dr. Woodcock. This is not an area

where I have any sort of expertise, so let me ask some very basic

questions.

Recently you testified at a House Oversight and Government Reform hearing that the negative immunogenicity’s response from

Eprex may have only been discovered in a 50,000-person clinical

trial. Has a pharmaceutical manufacturer ever submitted a safety

study of this size?

Dr. WOODCOCK. That is a good question. Possibly of that magnitude. That is a very, very large study and so would be very unprecedented.

Ms. SCHAKOWSKY. So it is not common?

Dr. WOODCOCK. No.

Ms. SCHAKOWSKY. So if not, then what types of tests could have

been conducted to provide FDA with relevant safety information for

this drug or others like it?

Dr. WOODCOCK. There is a wide-variety of laboratory tests that

can be done and animal tests to look at things like immunogenicity,

and limited human studies can be done. However, with most rare

drug side-effects, which would require 50,000, 100,000, 1 million

57

people to be exposed, to find them we use post-marketing to evaluate that because all drugs have rare side-effects sometimes that are

serious and to require them before the drug would be put on the

market would mean we basically wouldn’t have any drugs available

to people. So we need a robust post-marketing safety system to find

these things so that we can learn about them.

Ms. SCHAKOWSKY. So you again have to figure out the balance of

what you do pre-marketing and then if it is a cost benefit sort of

thing?

Dr. WOODCOCK. Yes, however, let me say that that is not the

only kind of immune response that can be negative. You can have

a very common immune response to a protein that can have an adverse affect, and that could be picked up in a small trial. So it really depends on what you are looking for.

Ms. SCHAKOWSKY. OK. I know that the ranking member asked

about different batches and whether they could be the same but I

wanted—but most comparability decisions are confidential, there is

one involving the biotech drug Avonex, that is public, and I am

wondering if you could tell us a little bit more about what kind of

changes the FDA permitted in that case without repeating—and

this is a follow-on used to treat relapses of MS and it is made by

Biogen which is a generic company as you know—what kind of

changes the FDA permitted in that case without repeating the

original safety and effectiveness trials?

Dr. WOODCOCK. Right. Those changes included manufacturing

site, the cell line, and they were very, very extensive changes that

were done; but very extensive characterization was done to assure

comparability of those two molecules.

Ms. SCHAKOWSKY. But it did not require the repeating of the

original safety and effectiveness trials?

Dr. WOODCOCK. That is correct. Now, the second manufacturer

had access to quite a bit of the data about the manufacturing process and so forth that was originally done.

Ms. SCHAKOWSKY. There are several biologics that are regulated

under the Food, Drug, and Cosmetic Act that have been approved

based on abbreviated data; and I believe the FDA provided a letter

to Chairman Stupak and Chairman Dingell in February citing

these examples. And in some cases low complexity products, that

is what you have been talking about, the short, have been rated

interchangeable. So the FDA has already demonstrated that it is

possible to approve at least some biologics based on abbreviated

data and even make interchangeable decisions. Am I just basically

repeating what you have already said?

Dr. WOODCOCK. Yes, the interchangeable decisions were for

peptides, and they were very, very small versions of protein that

are more like a small molecule drug. We have not approved any

proteins really under the (j) process, any recombinant proteins.

Ms. SCHAKOWSKY. And I also have a question that I am curious

what the FDA views as the appropriate level of discretion in this

decision-making process. I guess you get back to you want to work

with us?

Dr. WOODCOCK. Yes.

Ms. SCHAKOWSKY. I thank you. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you. Dr. Burgess.

58

Mr. BURGESS. I guess that statement is the key point, and we do

clearly need to work together on this. Let me just ask you on some

of the stuff we have heard this morning and your written testimony, the parts you make about the hyaluronidase that required

the additional testing because of allergic reactions because of its recovery from the tissue, if you end up having to do all of that, are

we still going to see price savings in the product when it is delivered?

Dr. WOODCOCK. Well, obviously there is a debate about that.

However, it is the large-scale clinical safety and efficacy studies

that are the very expensive part of development, as well as the

R&D that goes into producing the innovation in the first place. So

there would be reduced costs to producing a follow-on because you

wouldn’t have to do the original research and you may not have to

do the clinical efficacy studies. However, it wouldn’t be of the same

magnitude of reduction of cost of development that you would have

for a small molecule.

Mr. BURGESS. But in doing so, and I think Mrs. Blackburn already addressed this, said in doing so, do you not out of necessity

have to use some of the proprietary information from the original

manufacturer?

Dr. WOODCOCK. Under the 505(b)(2) process we do not go into the

originator application and look at anything, but we know we approved it so we are relying upon the fact of the approval.

Mr. BURGESS. So the fact of approval, is it the public domain and

not proprietary information?

Dr. WOODCOCK. Right. Yes.

Mr. BURGESS. Do you have any thoughts with all of the questions

you have been asked this morning in your extensive testimony

which we all appreciate, have you any thoughts about how we go

about minimizing uncertainty for the FDA in this rather complicated new world that we find ourselves in?

Dr. WOODCOCK. Well, I agree that there need to be extensive discussions and we look forward to working with the members.

Mr. BURGESS. Do you have any thoughts as to how we on this

side of the table, not this side of the aisle, but how we can give

you the flexibility that you are going to require in order to make

room for this evolving science?

Dr. WOODCOCK. Well, for example, we feel probably that under

505(b)(2) we do have a great deal of flexibility the way that program has been implemented over the years, and we will have approved follow-ons that have had extensive clinical trials and we approved, for example, the hyaluronidase that simply had a

immunogenicity trial. Although hyaluronidase is a very complicated protein. It shows the spectrum of things that can be done

under that scheme, under that pathway.

Mr. BURGESS. Now, have there been products that you thought

initially this shows a lot of promise for follow-up biologic that you

have had to pull back and require additional testing? Some of the

things that you mentioned earlier, the change of the filter, the

change of the atmospheric pressure outside when you filter the

compound, the change of a stopper composition that would perhaps

be different from one lab to another?

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Dr. WOODCOCK. Right. Well, for the more complicated proteins,

those issues pertain to manufacturing. Say if the manufacturer

wants to change sites which happens sometimes, or open up a new

site. Then all those factors from environmental factors all the way

to how the production process is done have to be looked at very

carefully to make sure they are making the same product, and that

is the same manufacturer.

Mr. BURGESS. Even under the original manufacturer?

Dr. WOODCOCK. Yes.

Mr. BURGESS. That is even before you get into a follow-on situation?

Dr. WOODCOCK. Yes, we have a lot of experience in regulating all

these manufacturing changes because some of these products, for

example, become very successful and additional production capacity, scale up, new plants and so forth have to be opened. And in

those cases, the manufacturer has the burden of showing that the

molecule they are making in there will perform the same as the

original one.

Mr. BURGESS. Let me ask you, if we do this legislation, are the

people who work at the FDA, the people who are tasked with ensuring that our Nation’s drug supply is safe and effective, do you

detect any concern on the part of the staff of the FDA that they

are going to be under any pressure to deliver these products before

the testing is actually complete? Mr. Green referenced Ketek and

the Vioxx situations. Are we setting ourselves up because this is inherently more complicated than a Ketek or a Vioxx? Are we setting

ourselves up for that? Let me just ask you it this way. Do you detect concern among the staff, the career people at the FDA, that

we are tasking them with something that is virtually impossible?

Dr. WOODCOCK. I think as I said we have the technical, scientific,

and medical expertise necessary to make these decisions. We require adequate resources to do that, and obviously if a new statute

were passed, it would have to be sensible. It would have to take

all the parameters that have been discussed today into consideration so that it could be implemented properly.

Mr. BURGESS. But again, are you detecting any undercurrent

from the staff that there is going to be—we are the ones that are

going to have oversight over that. You see the level of expertise

that we present today. You guys are the experts. Are you detecting

concern from the experts within the FDA itself about how this is

going to be regulated?

Dr. WOODCOCK. I think the experts’ concern only is that we need

to have access to resources in the ongoing scientific expertise that

would enable them to make these decisions.

Mr. BURGESS. Mr. Chairman, you have been very kind, and I realize that means we have a vote. I mean, I think it is so important

that we give you the flexibility and you look back to the days when

Sir Alexander Fleming discovered penicillin, it was more of a parlor

trick that he was able to inhibit bacterial growth in a Petri dish,

and it wasn’t until somebody figured out the manufacturing process

that made it clinically useful. The same could be said for cortisol,

that after it was derived it was very, very difficult to come up with

amounts that would be clinically useful until that manufacturing

process came about. So we are kind of on the cusp of that type of

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change in medicine right now. It is so important that we get it

right. I think we were read a passage from the bill, and the part

about the two similar saccharide repeating units, even if the number of units differences, and there are differences of the post-polymerization modification, saccharide being sure and basically we are

talking about the difference between cane syrup or cellulose or a

celery stock and you can see you could end up with a completely

different product that will have a completely different intent. We

have to be so careful as we go through this, Mr. Chairman.

Mr. WAXMAN. OK. Let me yield.

Mr. BURGESS. I would be happy to yield to my friend.

Mr. WAXMAN. I think your line of questioning is very thoughtful

and got right to the nub of it. Dr. Woodcock, you do have this

505(b)(2) authority now which gives you all the flexibility. If we

had the same kind of provision giving the FDA the same level of

flexibility to require whatever you need without any deadline to approve a drug, not approve it at all until you reach that conclusion

that it is just as safe and effective, would that be sufficient authority for you?

Dr. WOODCOCK. I——

Mr. WAXMAN. You already worked with that.

Dr. WOODCOCK. I really can’t comment. I can say that we are approving drugs under that pathway right now, and that has flexibility. It doesn’t have some of the issues that pertain to all the biological products that are now approved and have not been under

this scheme.

Mr. PALLONE. There is no time left, and I have got to figure out

what we are doing here. We have 11 minutes before the first vote.

This is a 15-minute vote followed by two 5-minute votes. I wouldn’t

be that long, so I am hoping you can wait for us to come back because we have another three or four members that would like to

ask questions, OK?

Dr. WOODCOCK. I would happy to do so.

Mr. PALLONE. Thank you. But maybe we will get in—let me—

there is a 15-minute vote of which there is 11 minutes left and

then two fives. If you would like to ask your questions, Mr. Gordon,

we can do that now? I just want the Members to know after Mr.

Gordon we will vote and come back.

Mr. GORDON. Dr. Woodcock, you are doing a good job. If you were

my chemistry teacher, I think I might have amounted to something.

Let me ask you one question. It is my understanding that the

Europeans have already started a process for follow-on biologics.

Could you tell us what they are doing, what you think are the pros

and cons, and how it is similar, dissimilar to what is happening

here?

Dr. WOODCOCK. I think we have to realize that Europe has a

somewhat different setup and scheme than the United States, so

it is not really strictly extrapolatable to here. However, in Europe

the plan is that the EMEA, the medicines regulatory agency will

make these decisions. They did not have the distinction between a

Public Health Service Act and a Food, Drug, and Cosmetic Act.

These products were all under their ordinary scheme already.

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They have a program called Biosimilars, and for Biosimilars the

Medicines Agency will construct a guidance for each product area

and will put that guidance out and then submissions can come in

that conform with the guidance. We work very closely with the Europeans, the EMEA, and we are quite aware of what they are

doing. And their approach to Omnitrope for example is very similar

to the approach that we took subsequently.

Mr. GORDON. Do you have an opinion as to the pros and cons of

what they are doing?

Dr. WOODCOCK. I don’t know that their approach is, as I said, directly applicable to here in the United States. However, I think

they are using good science and a public process to move forward.

Mr. GORDON. Thank you. You represent your agency very well.

Dr. WOODCOCK. Thank you.

Mr. PALLONE. Thank you. So we will now be in recess until after

these three votes, and then we will come back and you will wait.

Thank you, Doctor.

[Recess.]

Mr. PALLONE. We are back in business. The gentleman is recognized.

Mr. INSLEE. Thank you. Dr. Woodcock, I wanted to focus on the

issue of clinical trials, the advisability of that. It is important. My

mother was an insulin-dependent diabetic, my brother is an insulin-dependent diabetic, I am going to be in a race with 5,000 insulin-dependent diabetics here in a couple of weeks and I would like

to tell them if we come up with a biologic that it is going to be safe

and we can have confidence about that. I want to make sure I understand. You are of the belief at this time given the present state

of scientific knowledge that it is important to have some level of

clinical trials for follow-on biologics to prevent unwanted

immunogenicity.

Dr. WOODCOCK. That is correct, and in some cases we may need

additional clinical trials, if there are additional things that we

aren’t certain about.

Mr. INSLEE. Now, you have also alluded to the potential that

there might be scientific advances to obviate the necessity of clinical trials. You made some reference to that. So I just wanted to ask

you about that. Can you give us with a reasonable degree of certainty that in fact that will happen for all of these drugs?

Dr. WOODCOCK. No. I believe that the science of characterization

will advance over time, and therefore we will be able to do better

and better comparisons in the laboratory and functional comparisons and so forth so that we will have less uncertainty about how

similar they are. We will be much more sure about how similar

they are. That doesn’t mean though that we will be able to completely rule out clinical trials.

Mr. INSLEE. Could you say that in the next 5 years most followon biologics scientific knowledge would advance so that you would

not require clinical trials for most incidents?

Dr. WOODCOCK. No, I think the opposite is true. Over the next

5 years, we would need clinical trials of some sort for most proteins, follow-on proteins.

Mr. INSLEE. I and others have introduced a bill that would have

a statutory requirement for some level of clinical trials, and frankly

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for the reason it is sort of like seatbelts. We have requirements for

seatbelts. There may be science developed some day that we get

arround airbags or some other, but the best science we have right

now we require seatbelts and that is an appropriate legislative decision. So I am asking, I guess is there any reason why we should

be the first country to not require clinical trials in these contexts?

Dr. WOODCOCK. I think from the FDA standpoint, we would require clinical trials, say, under the 505(b)(2) whenever they are

necessary, and right now they are going to be necessary for almost

every protein. In the future, they may not be necessary for some

category of proteins. Right now, for example, for very short

peptides which are very tiny versions of proteins, we don’t think we

need clinical trials other than perhaps the bioequivalence type of

studies, it would be done for a generic drug.

Mr. INSLEE. If Congress does require clinical trials on a bill similar to mine or others, would there be any damage to the pace of

scientific inquiry by doing that? Is there any downside in that regard?

Dr. WOODCOCK. I think it would depend on how specific you were

or how proscriptive you were. There are many kinds of clinical

trials, everything from bioequivalence trials that mainly look at the

pharmacokinetics of a drug to a codynamic trial, safety trials, efficacy trials. Each of those have different ramifications. So we think

right now that we would probably need in most cases

immunogenicity trials as well as probably human pharmacokinetic

trials.

Mr. INSLEE. And I think if you ran by your opening statement,

you would find that you pretty much described the bill that I had

introduced as far as giving you that level of flexibility to determine

which ones that would require some clinical trials. And I for one

believe it is appropriate for Congress to set some level of protection. We have done this in various contexts in the Food Quality

Protection Act. We established actually numerical requirements for

pesticide residues. In the 1996 Safe Water Drinking Act they had

numerical standards for lead, mercury residues and we thought

that that was appropriate. Could you tell us with any more degree

of certainty at all to characterize when you think science probably

will obviate the necessity of clinical trials? Can you give us any

greater certainty as to time, this decade, the following decade?

Dr. WOODCOCK. As I said in the last hearing, I think within this

decade we will be able to characterize some of the very, very simple

proteins well enough that we probably will be able to decide that

they are similar enough to an innovative product. That is within

this decade. But there are many other complicated products that

are very important products that I think we would still not be able

to do them in the next 10 years.

Mr. INSLEE. So I guess what you are saying we are dealing in

probabilities here. You think there is some probability that within

this decade some of the simpler proteins may be categorized without this, but the bulk of them and the more complex ones would

not in this decade, is that a fair assessment?

Dr. WOODCOCK. That is my prediction but I don’t have a crystal

ball.

Mr. INSLEE. Well, I thank you very much. Take care.

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Mr. PALLONE. Thank you. I think we are out of questions. Thank

you, Doctor. I really appreciate your testimony and bearing with us

through the votes and all that.

Dr. WOODCOCK. I am happy to do so.

Mr. PALLONE. And we may send written questions to you within

the next 10 days or so for you to respond to.

Dr. WOODCOCK. We would be pleased to do that.

Dr. WOODCOCK. Thank you.

Mr. PALLONE. And now we will have the second panel come forward.

Welcome. Thank you for being with us today. I am just going to

introduce everybody with their titles here. First is Dr. William

Schwieterman who is from Tekgenics in Mobile, Alabama. Next is

Dr. David Schenkein, vice president, clinical hematology/oncology

at Genentech from south San Francisco; Dr. Geoffrey Allen, president, CEO, chairman of Insmed Incorporated from Richmond; Mr.

Richard Kingham who is a partner in Covington & Burling here in

DC; Mr. Bruce Downey who is chairman of the board of the Generic Pharmaceutical Association, actually from Woodcliff Lake,

New Jersey; and then we have Ruth Hoffman, executive director of

the Candlelighters Childhood Cancer Foundation from Kensington,

Maryland; and Dr. Ed Weisbart who is the chief medical officer for

Express Scripts from Maryland Heights, Missouri.

Thank you for being here today. We have 5 minutes’ opening

statements, and if you would like to submit some additional information for the record that is pertinent, we will also allow that and

we will start with Dr. Schwieterman.

STATEMENT OF WILLIAM SCHWIETERMAN, M.D., TEKGENICS,

INC., MOBILE, AL

Dr. SCHWIETERMAN. Thank you very much, Chairman Pallone,

and good morning members of the Subcommittee on Health, Energy and Commerce.

My name is Dr. William Schwieterman, and I thank you for the

opportunity to appear before the committee today and present a

scientific and clinical perspective on the issue of biogenerics.

One of the most disturbing experiences for a physician is to know

that a treatment is available to help your patient but the cost may

simply be beyond what your patient can afford. Sadly, this is what

many patients who need treatment with brand biopharmaceuticals

are facing in today’s world. For this reason, I strongly believe that

Congress must give FDA the authority it needs to create a workable, scientifically based abbreviated approval pathway for

biogenerics and given that I also had the privilege of working at

FDA in the area of biotechnology for 10 years, I know that this can

and should be achieved.

I was heartened to hear during the House Oversight and Government Reform Committee in hearing that the FDA Deputy Commissioner Janet Woodcock also believed that this goal could be

achieved, stating that the FDA can be trusted to carry out its mandate from Congress, whatever that might be and the long-anticipated FDA white paper recently released by FDA also validates

their ability to prove biogenerics for efficacy and safety.

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I come before you today wearing three hats, as a physician, as

a scientist, and as a former FDA reviewer. From this vantage

point, I would like to make the following critical points. First, with

today’s scientific advancements in technologies, FDA can assure

the safety and efficacy of biogenerics. Second, the supporting

science for this is not new. It has existed for over a decade. The

FDA white paper confirms that FDA has already been using a

science-based approach case by case to approve biopharmaceuticals

and more importantly changes in biopharmaceuticals. Third, the

issues raised in post-approval brand product changes are reflective

of the issues that are raised with biogenerics. In other words, the

same science that determines comparability for the brand to

biotech industry can also be adopted to ensure the safety and efficacy of comparable and interchangeable biogenerics. This point is

particularly important when it comes to the issue of conducting

clinical trials.

As Dr. Woodcock noted at another House hearing, it is a common

misperception that clinical trials are always the most sensitive

studies for detecting changes in safety or effectiveness due to process changes. I agreed with her when she went on to state, ‘‘Where

trials aren’t needed, it is of questionable ethics to repeat them, so

use of human subjects for trials that are not needed that are simply to check a box on a regulatory requirement are not desirable.’’

The necessity and type of clinical trials required for biogenerics

should be determined based only upon a scientific standard established by FDA on a case-by-case approach. Having worked extensively at FDA with many physicians and scientists and listening to

the words of Dr. Woodcock and other FDA officials these past few

months, I also want to emphasize there is just one safety standard

at FDA and that standard has been and will continue to be applying the review and approval of each and every biologic, whether it

be brand or generic. It is relevant to note that the standards and

science used for current biopharmaceuticals are informative for us

with respect to generics. A critical but not often publicized fact

about the biopharmaceutical industry is that FDA does not require

brand companies to perform large clinical outcome studies to retest

the product generated by new manufacturing processes. This is because such an approach would not only be infeasible but more importantly would ignore the utility of existing sophisticated scientific

analytic tools and techniques for this purpose.

Let me briefly summarize what happens in these instances. FDA

starts with an assessment of extensive analytic comparability data.

With these data, and keeping in mind the nature of the drug, the

test used, and the disease being studied, FDA decides how to proceed. The agency can give a thumbs up and a thumbs down regarding each post-approval brand manufacturer change and if thumbs

up, have that change be supported by analytic data coupled with

pharmacokinetic or pharmacodynamic studies or the studies just

mentioned, plus data from a large clinical outcome study.

It should also be noted the vast majority of brand manufacturer

changes need no further studies when data from analytic tests

show the product to be comparable. For a small number of brand

products that show small differences in analytic tests for following

manufacturer change, FDA may require additional analytic and

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pharmacokinetic or pharmacodynamic tests to be conducted in animals or humans.

The latter studies are clinical studies in the sense that they are

conducted in patients in the clinic but they are not the large outcome studies commonly used to determine the product’s ultimate

clinical effects. These pharmacokinetic and pharmacodynamic studies almost always involve fewer than 100 patients and last weeks,

not months. Rarely after a brand manufacturing changes the FDA

required that a brand company take the last step, repeating a fullscale clinical outcome study. In fact, of all the hundreds of brands

of biologic products changes, the vast majority were approved without large clinical outcome studies.

In sum, FDA scientists and physicians routinely make comparability determinations between similar biologic products since

manufacturing changes occur throughout the brand biologic product development life cycle. The scientific essence and basis of comparability determinations used by FDA is therefore not new but

rather has existed for over a decade to allow brand biologic manufacturers to change and improve their manufacturing processes.

The Access to Lifesaving Medicines Act will give the FDA the authority and flexibility it needs to ensure the safety and efficacy of

biogenerics. It adopts the same scientific principles, processes, and

procedures that exist for the brand biologic industry when making

post-approval manufacturing product changes in the biogeneric sector.

I would like to emphasize the need for science——

Mr. PALLONE. Doctor, if you could summarize because you are

over the 5 minutes.

Dr. SCHWIETERMAN. Thank you. A truly workable pathway for

biogenerics is one that that is fully scientifically based, consistent

with regulatory experience, and brings safe and effective

biogenerics to patients in a timely manner. Thank you so much.

[The prepared statement of Dr. Schwieterman follows:]

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Mr. PALLONE. Thank you. Dr. Schenkein.

STATEMENT OF DAVID SCHENKEIN, M.D., VICE PRESIDENT,

CLINICAL HEMATOLOGY/ONCOLOGY, GENENTECH, INC.

Dr. SCHENKEIN. Good afternoon, Mr. Chairman, and members of

the committee. My name is Dr. David Schenkein, and I am vice

president of Clinical Hematology and Oncology of Genentech. I

have been a practicing oncologist for the past 20 years, and I am

pleased to come before you today on behalf of the Biotechnology Industry Organization.

Genentech is considered the founder of the biotechnology industry. We began 31 years ago with the goal of developing a new generation of therapeutics created from genetically engineered copies

of naturally occurring molecules important in health and disease.

Our mission is to end the death sentence that cancer currently represents by creating medicines that will transform cancer into either

a curable illness or a chronic condition.

In order to ensure that innovative biotechnology products continue to reach patients and physicians, it is essential that Congress

adopt six key principles in creating any regulatory pathway for follow-on biologics. First and foremost, legislation must ensure patient safety. Patients should not have to accept greater risks or uncertainties in using a follow-on product and an innovator’s product.

In addition, legislation must recognize that biologics are far more

complex than small-molecule chemical drugs. It must maintain the

physician-patient relationship and allow only treating physicians to

determine whether a follow-on product is interchangeable for the

innovator product. It must preserve incentives for innovation, must

ensure a transparent regulatory process, and must continue to

prioritize the FDA’s review of new therapies and cures.

In oncology we treat life-threatening illnesses. For many patients

the first therapy is the chance for a cure that evaporates if the disease recurs, making it incurable. It is a critical window of opportunity. Take for example the situation that women with Her2 positive breast cancer face every day. At diagnosis, women are treated

with a balance of chemotherapy and biologic Herceptin, along with

surgery and radiation. For the majority of these women, in part because of the effectiveness of Herceptin, their cancer will not return.

Imagine a situation where a woman is treated with a follow-on biologic in this setting that has even a slightly different profile which

allows her cancer to return years later. The disease has now spread

and her chances of survival are reduced significantly. What do we

tell that woman and her family, that we never tested that followon biologic in humans but we thought it was similar enough to

Herceptin and relied on those data to support its approval and to

advocate for its use?

I firmly believe there will always be a need for clinical testing

of a follow-on biologic. The amount and type of testing will depend

on the specifics of the product and assessment of potential risks,

and those determinations should be left to the FDA. Clinical trials

will always be important to address questions such as

immunogenicity. I would never take a biologic that had not been

tested in humans. The risks are too high. New legislation should

not court the others who may be less informed to do so.

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In addition to scientific considerations, I would also like to address the importance of incentives. As an oncologist, I am extremely concerned about the potential that limited or no data exclusivity would have on agavent or early stage cancer drug development. It is in this setting that we hope to translate breakthrough

discoveries into cures. Insufficient data exclusivity could strangle

the incentives to continue investing in trials beyond the advanced

or metastatic setting. Agavent studies are typically started only

after positive phase three trials in metastatic cancer and are afterreturn data late in the patent life of the product. Trials of agavent

therapy are intended to catch the cancer at the time before it

spreads where our therapies could have the greatest impact for patients.

The approval for Herceptin in the agavent setting occurred 8

years after the original approval in the metastatic setting and involved more than 3,500 women in multiple randomized clinical

trials. These trials can take easily more than 5 years from inception to completion at huge cost without any assurance of clinical

success. Herceptin in the agavent setting reduced the risk of cancer

occurrence by 50 percent, and if the cancer doesn’t recur, these

women cannot die from it.

This is our mission, to beat cancer through science, but without

a substantial period of data exclusivity, it would be difficult for

Genentech and others to invest in this critical but costly research.

I am excited every day when I look at the pipeline we have at

Genentech. We are developing biologics that starve tumors, cause

cancer cells to self-destruct, and program them to behave differently in the body. It is my hope and that of BIO and Genentech

that a transparent public process that leverages known scientific

considerations will provide a framework and pathway for the approval of follow-on biologics. The stakes are simply too high to risk

patient safety and potential cures by moving too quickly and not

following the science.

Again, I thank you for the opportunity to testify before you today

and look forward to answering any questions you may have.

[The prepared statement of Dr. Schenkein follows:]

STATEMENT OF DAVID SCHENKEIN, M.D.

Good morning, Mr. Chairman and Members of the Committee. My name is Dr.

David Schenkein and I am vice president of Clinical Hematology and Oncology at

Genentech, a leading biotech company headquartered in South San Francisco, California. I am pleased to come before you today on behalf of the Biotechnology Industry Organization (BIO) to offer my perspective on the issues relevant to any proposed framework for the abbreviated approval of follow-on biologics.

BIO represents more than 1,100 biotechnology companies, academic institutions,

state biotechnology centers and related organizations across the United States and

31 other nations. BIO members are involved in the research and development of

health care, agricultural, industrial and environmental biotechnology products.

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 while preserving patient safety and incentives for biomedical innovation.

By way of introduction, I have been a medical oncologist and hematologist for over

20 years. I have spent most of my career caring for patients with life threatening

illnesses. It’s been my job to sit with patients and their families and make decisions

on the most appropriate therapy to choose—- many times a choice of risk benefit

that has life and death implications. Prior to joining Genentech, I spent 17 years

in academic and clinical medicine as an attending physician in Hematology OncolVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00084 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
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ogy at the Tufts-New England Medical Center in Boston, where I was an associate

professor and held the position of director of the Cancer Center. I will soon be on

the oncology faculty at the Stanford Cancer Center.

I previously served as the senior vice president of Clinical Research at Millennium

Pharmaceuticals in Cambridge, where I oversaw the clinical development of

Velcade, a first-in class cancer therapy now approved to treat multiple myeloma and

non-Hodgkins lymphoma. In my current role at Genentech, I am responsible for

leading the medical and scientific strategies for our BioOncology portfolio, including

overseeing the development of a robust pipeline of novel cancer therapies and marketed products, including Avastin, Herceptin, Rituxan and Tarceva.

My company, Genentech, is considered the founder of the biotechnology industry.

Genentech was founded 31 years ago with the goal of developing a new generation

of therapeutics created from genetically engineered copies of naturally occurring

molecules important in human health and disease. Within a few short years,

Genentech scientists proved it was possible to make medicines by splicing genes into

fast-growing bacteria that produced therapeutic proteins.

Today, Genentech continues to use genetic engineering techniques and advanced

technologies to develop medicines that address significant unmet needs. Genentech

is among the world’s leading biotechnology companies, with 14 products on the market for serious or life-threatening medical conditions, over 50 projects in the pipeline

and more than 10,000 employees.

The researchers and clinicians at Genentech are working to fundamentally change

the way cancer is treated by developing a broad portfolio of innovative targeted

therapies designed to improve and extend the lives of cancer patients. Put simply,

we are trying to end the death sentence that cancer currently represents by creating

medicines that will transform cancer into either a curable illness or a chronic condition. We strive for the time when a diagnosis of cancer leads to a discussion similar

to the one that occurs today around high blood pressure or diabetes.

I would like to begin by noting that I appreciate the concern Congress has shown

for patient access to biologic therapies. It is a concern that I share—as does

Genentech, and as does BIO. While legislation on follow-on biologics has the potential to increase access to some medicines, that legislation must be well-founded in

science and ensure that the medicines to which access is provided are no less effective or safe than medicines already on the market. I believe that through the proper

process, those critical goals can be met.

In order to ensure that new pioneer biotechnology products continue to reach patients and physicians, it is essential that Congress adopt six key principles as it explores the creation of any regulatory pathway for follow-on biologics. I will touch on

these principles in my testimony, but will focus principally on the first three since

my expertise is as a physician and a scientist.

• Ensure Patient Safety. Patients should not have to accept greater risks or uncertainties in using a follow-on product than an innovator’s product.

• Recognize Scientific Differences Between Drugs and Biologics. Biologics are

much more complex than small molecule chemical drugs.

• Maintain the Physician-Patient Relationship. The current state of science is not

sufficient to establish interchangeability for complex follow-on biologics. Accordingly,

Congress should ensure that patients are not given follow-on biologics unless expressly prescribed by a physician.

• Preserve Incentives for Innovation. Any statutory pathway for follow-on biologics

must include a substantial data exclusivity period; must respect our intellectual

property rights; and must provide adequate notice and process rights.

• Ensure Transparent Regulatory Processes. Any legislation must require FDA to

follow a transparent and public process in determining data requirements for the

approval of specific follow-on biologics.

• Continue to Prioritize FDA Review and Approval of New Therapies and Cures.

Congress must ensure that workload associated with follow-on applications does not

harm the FDA’s ability to efficiently review new drugs and biologics.

First and foremost, patient safety must be assured. I trust that patient safety is

a concern that we all share and that it will be a guiding concern for Congress as

you consider a statutory pathway for follow-on biologics.

If follow-on biologics are to achieve the same standards of safety and efficacy as

pioneer biotechnology products, then clinical trial evidence and data must be a fundamental requirement, and must be conducted on a product-by-product basis. The

safety and effectiveness of a follow-on biologic simply cannot be assured without

clinical testing, and in particular, immunogenicity testing, which is necessary to

avoid putting patients at risk of adverse effects from immune reactions.

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The stakes are too high to take the risk of moving too quickly and not following

the science. In oncology, like in other therapeutic areas, we make our decisions on

therapy selection based on clinical data and a deep understanding of both safety and

efficacy: the risk to benefit ratio. Somewhat unique to oncology is the life-threatening nature of the illnesses we treat and the consequences of a wrong choice. For

many patients, the first therapy is a chance for a cure that evaporates if the disease

recurs, making it incurable.

Take for example the situation that women with Her2 positive breast cancer face

every day. At diagnosis, women are treated with a balance of chemotherapy, including the biologic Herceptin, directed at the cancer protein along with surgery and radiation. For the majority of these women, their cancer will not return. Imagine a

situation where a woman is treated with a follow-on biologic in this setting that has

even a slightly different risk-to-benefit ratio, which allows her cancer to return

years later. The disease has now spread and her chances of survival are reduced

significantly. What do we tell that woman and her family? That we never tested

that follow-on biologic in humans, but we thought it was similar enough to

Herceptin and relied on Herceptin’s data to support its approval and to advocate for

its use?

To understand why we should always expect some need for pre-market clinical

testing and immunogenicity testing of follow-on biologics, it is important to understand the nature of biologics in general and how they differ from small molecule

therapies.

DIFFERENCES BETWEEN BIOLOGICS AND DRUGS

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 thousandfold larger. They are produced not by well-controlled chemical processes but by complex living cells and organisms through extremely complicated and sensitive manufacturing processes.

As innovator companies’ experience with respect to pioneer biotechnology products

has shown, and as FDA has long emphasized through its regulation and guidance,

small product or manufacturing differences in biologics can result in significant

safety and/or effectiveness differences. 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 largely based upon strict control of the

manufacturing process to minimize the likelihood of changes to safety and efficacy.

Additional clinical testing is often required when substantial changes to the manufacturing process occur, and certainly the type of changes and differences in manufacturing necessary to producing a follow-on product would meet such a threshold.

While the ability to characterize biological products using physical, chemical, and

biological testing has improved as science has advanced, current laboratory testing—without testing in patients—is still very far from sufficient to ensure that a

follow-on biologic is without differences from a reference product. These differences

could adversely affect its safety or efficacy.

Furthermore, the methods used by innovators to demonstrate continued safety

and effectiveness after a manufacturing process change are insufficient to demonstrate safety and effectiveness of a follow-on biologic made by a different manufacturer using a different process. 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. And clinical

testing often reveals differences. This is important because by definition, the manufacture of a follow-on will necessarily involve very substantial manufacturing

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changes—a new cell line, a new facility, and a new process. These changes will result in a different product, and vastly increase the likelihood of clinically important

differences, which can only be understood through clinical testing in humans.

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 the 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 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 are to assessing them. This

understanding comes from years of working with the reference product, which 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 that sometimes helps address this question, the manufacturer of a new follow-on biologic will

have limited experience with the molecule.

Thus, the ability of an innovator to make changes to its own manufacturing process, subject to the FDA’s comparability guidelines, is simply not analogous to a follow-on company proving ‘‘comparability’’ when entirely different manufacturing

processes are used. A manufacturer of a follow-on biologic will face significantly

more limitations in demonstrating ‘‘comparability’’ than a manufacturer modifying

its own process. When we make changes that might affect the clinical effects of a

product, we 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?

Clinical trial evidence and data are fundamental for evaluating and demonstrating the safety and effectiveness of a follow-on biologic

In light of the limitations described above, and based on my experience, I firmly

believe that there will always be a need for 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,

and those determinations should be left to the FDA. Clinical trials will always be

important to address questions such as immunogenicity, pharmacokinetics, and

common adverse events under controlled conditions 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 for these products—those appropriately

tested for safety and efficacy and those that are not.

There are many examples of how seemingly minor changes in a biologic’s manufacturing process have resulted in significant changes in the product—changes that

could only be detected 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 our case, Genentech was working with a business partner, Xoma, to develop

a product for psoriasis. When it came time to transfer the technology from Xoma’s

facility to our own state-of-the-art manufacturing plant, we were unable to produce

material that met the pre-defined statistical definition for comparability. During

Phase III testing, minor manufacturing modifications were made to allow for largescale material production. The pharmacokinetic (PK) studies we conducted suggested that the Genentech material achieved a slightly higher serum concentration

than the Xoma material. Because we could not be sure that the product we produced

at Genentech, which was different than that produced at Xoma, was safe, we agreed

to do additional clinical testing. Fortunately, Genentech was able to prove to the

FDA that the new material was safe, but FDA approval of the product was delayed

by more than a year.

While this is a good example of a manufacturing change resulting in differences

that, once re-tested, proved to be acceptable, there are plenty of examples where

seemingly minor differences have had catastrophic consequences. Irrespective, we

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agreed with the FDA’s decision that we must re-test our product to ensure its safety

and effectiveness.

IMMUNOGENICITY TESTING IS NECESSARY TO AVOID PUTTING PATIENTS AT RISK OF

ADVERSE EFFECTS FROM IMMUNE REACTIONS

Special attention should be given to the problem of immunogenicity: 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 biologics because (I) 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, 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.

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, J&J 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 singleuse 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. Patients suffering this adverse event must undergo

blood transfusions weekly for the remainder of their life. It took four 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 one hundred million dollars to identify the cause. The conclusion was that

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 examples I have given are just some of the cases

in which immunogenicity concerns have arisen. Most biologics have some degree of

immunogenicity. Immunogenicity levels can change with even slight changes in

their manufacturing process and can have clinically important consequences. Scientifically, the only way to detect immunogenicity is through clinical testing.

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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, which will be detected best or only through

clinical testing. That is not to say that a full clinical testing program must be required for follow- on biologic products. Abbreviated clinical testing will sufficiently

address key areas of uncertainty regarding safety and efficacy on a product-by-product basis, particularly where there exist good measures of desired effects (so called

pharmacodynamic measures) and where a high degree of similarity is demonstrable.

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 foundation upon which any proposed regulatory pathway for the

approval of follow-on biologics is created.

In addition, we believe that a follow-on product should be approved only for conditions for which the reference product is approved. For all the reasons discussed earlier, the safety, purity, and potency of the follow-on product for each indication must

be supported independently, and attention must be paid to special safety risks (including possible immunogenicity) in different patient populations.

Interchangeability and substitutability: Congress should ensure that patients are

not given follow-on biologics unless expressly prescribed by a physician

Given the complexity of biologics, the high potential for process differences to result in clinically meaningful product differences, and the limited ability to detect differences between a follow-on and reference biologic, a determination of comparability for a follow-on product is particularly challenging. Ensuring comparability of a

follow-on biologic to a reference biologic with an acceptable degree of assurance will

be made much more challenging 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. As a result, we believe

that establishing the interchangeability of different products is not feasible, and

therefore, is a decision that is only appropriately made by a treating physician.

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 extensive comparison studies could rule out clinically significant differences. For example, if a reference biologic caused a serious or fatal effect in one patient in 1000, 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.

Given the risk of clinically important differences always at play and the possibility that substituting products would increase the risk of clinically important antigenicity, it is imprudent and potentially dangerous to allow the follow-on biologic

to be considered ‘‘interchangeable’’ with its reference product.

The European Union (EU) 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

a few months ago, 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.

Given the current paradigm allowing for the substitutability of generic drugs with

the innovator products they copy, a determination of interchangeability in this context would likely encourage the 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.html, 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.

In addition, it will be important for Congress to ensure that follow-on biologics

are assigned a unique name—one that has not be adopted for any protein manufactured by a different person—so that it is readily distinguishable from that of the

innovator’s version of the product. Assigning the same name to a product that is

not the same would be confusing and misleading to patients, physicians, and pharmacists, could result in inadvertent substitution of the products, and would make

it difficult to quickly trace and address adverse events that may be attributable to

either the innovator or follow-on product.

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Furthermore, if aspects of a follow-on biologic’s 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 concern with

one. Such a class effect is not in the best interest of patients or the industry generally, as overall confidence in biologics would be damaged.

Follow-on biologics should be properly evaluated through post-marketing surveillance and post-marketing clinical studies

All approved follow-on biologics will inevitably be associated with some risk that

potential 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 may

become apparent only after extensive use. To optimize patient safety and to control

such risks, it is critical that the FDA not be limited in its ability to require postmarketing 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.

After all of the attention Congress has given to the issue of drug safety evaluation, it would be intellectually inconsistent for this Committee to pass legislation

that does not put forth specific provisions enabling adequate regulatory requirements for post-marketing safety surveillance programs and clinical studies of followon biologics. It would be equally problematic for any follow-on legislation to limit

the ability of expert reviewers to negotiate for post-marketing clinical studies that

could protect public safety.

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, a followon product must be as similar to the reference product on which it relies as can be

achieved, in view of current scientific knowledge and technological capabilities. It

must have the same route of administration, dosage form, and strength as the reference product.

In addition, 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.

DIFFERENCES IN AMINO ACID SEQUENCE

The amino acid sequence defines a protein. Even a minor difference creates a different (mutant) protein, and a product containing a mutant protein is a different

product from the non-mutant form. Given the 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 AspB 10 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,

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when AspB 10 was given to laboratory rats, it triggered the development of breast

cancers.

When a change in an amino acid has occurred during premarket 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

‘‘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. Posttranslational modifications can, and often do, have a major impact on the activity,

half-life in circulation, and immunogenicity of a protein. Many types of posttranslational 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.

PRESERVE INCENTIVES FOR INNOVATION

In order to preserve incentives to research, develop and manufacture new innovative therapies and cures, as well as new indications for such products, any statutory

pathway for follow-on biologics must also provide a substantial period of data exclusivity; must respect intellectual property and other legal rights; must provide adequate notice and process rights; must ensure a transparent statutory and regulatory

process; and must continue to prioritize the review and approval of new therapies

and cures. The importance of these measures is explained below.

Include substantial non-patent data exclusivity, during which time follow-on manufacturers could not rely on the FDA’s prior approval of pioneer biologics to support

approval of their own products. Such data exclusivity is necessary because a followon biologic may be similar enough to a pioneer biologic for regulatory approval purposes, but different enough to avoid infringing the innovator’s patents. Thus, nonpatent exclusivity is necessary to maintain effective market protection. Further, the

fledgling nature of the biologics industry, its heavy dependence on access to significant amounts of high-cost public and private investment capital, and the high risks

and costs involved in the development of new biologic medicines all warrant a substantial period of exclusivity.

Respect intellectual property and other legal rights. Follow-on biologic products

should not be approved until after all statutory protections, including data exclusivity and patent protections, are no longer available for the approved pioneer product.

Any follow-on biologics pathway should fully respect existing protections for trade

secret and confidential commercial information, and not permit the use of such protected data for the purpose of approving follow on products. It also must not abrogate or limit constitutional or statutory rights of patent holders to protect against

infringement.

Provide adequate notice and process rights. Any follow-on biologics regulatory

pathway should ensure that patent challenges are litigated or otherwise resolved

prior to marketing approval of the follow-on product, in order to protect the

innovator’s intellectual property rights and avoid confusion in the medical, patient,

and payer communities. Further, any follow-on biologics regulatory pathway should

not create special patent litigation rules that favor follow-on biologics manufacturers.

Ensure transparent statutory and regulatory processes. Manufacturers of innovator products should be provided full and fair opportunities to engage Congress and

other stakeholders in a meaningful public process. Establishing a balanced and rigorous statutory pathway for follow-on biologics requires deliberative evaluation of

numerous complex scientific, legal, intellectual property and economic issues. Further, any such pathway must require that FDA follow a transparent and public

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process in determining data requirements for the approval of specific follow-on biologics.

Continue to prioritize FDA review and approval of new therapies and cures. Any

applications for approval of follow-on biologics will raise novel and complex questions of science and law, requiring substantial time and additional resources to ensure a thorough regulatory review for safety, purity, and potency. In order to avoid

slowing down the FDA’s review and approval of new therapies and cures, many for

currently untreatable and serious diseases, Congress must ensure that workload associated with these new applications does not harm the FDA’s ability to efficiently

review new drugs and biologics, and that new treatments continue to have the highest review priority.

As an oncologist and leader of a comprehensive oncology clinical development program, I am extremely concerned about the potential that limited or no data exclusivity would have on adjuvant—or early-stage—cancer drug development. It is in

the adjuvant setting that we hope to translate the breakthrough discoveries into

cures for many of the incurable cancers that face us all. Limited data exclusivity

in a follow-on biologics bill will lessen or eliminate the incentive successful cancer

innovators have to continue investing in trials beyond the metastatic—or advanced

stage - disease setting, since successful adjuvant trials are apt to return data suitable for an FDA submission late in the patent life of the product.

This is a significant issue because it could hinder research and development in

the adjuvant setting. These studies are typically started only after positive Phase

III trials in metastatic cancer and could take too long to be valuable and allow us

to re-invest further in developing innovative therapies. Trials of adjuvant therapy

are intended to catch the cancer at the time before it spreads, where our therapies

could have the greatest impact for patients. Therefore, the need for randomized controlled trials is at its strongest in the adjuvant setting and requires a significant

investment of time, money and human resources, as these trials are much larger

in size. I will provide a couple of examples to help explain just how important this

is to patients and our ability to potentially end the death sentence that cancer now

represents.

In the case of our drug for HER2 positive breast cancer, Herceptin, we were only

able to show that the drug could cut the recurrence of breast cancer in half in

women with adjuvant HER2 positive disease years after completing a rigorous clinical trial and submission program in metastatic HER2 positive breast cancer. Prior

to completing additional clinical studies of Herceptin, a diagnosis of HER2 positive

breast cancer was among the most deadly a woman could receive. The approval for

Herceptin in the adjuvant setting occurred 8 years after the original approval in the

metastatic setting, and involved more than 3,500 women in multiple randomized

clinical trials. These trials can take easily take more than 5 years from inception

to completion at the cost of hundreds of million dollars each, without any assurance

of clinical success.

The Herceptin adjuvant program marked a first step in a major initiative to conduct studies of Genentech’s targeted therapies in earlier stages of disease. This is

again a critical issue when I think about the potential Avastin may have to treat

patients with early-stage cancer. There are currently more than 300 clinical trials

of Avastin underway today in more than 20 tumor types—including ovarian, brain

and adjuvant colon cancer. Our investment in the robust Avastin development program is based on what we learned about the safety and efficacy of Avastin in metastatic colon, lung and breast cancer trials over the past decade.

Avastin is designed to interfere with the blood supply to a tumor by inhibiting

VEGF, a protein that plays a critical role in angiogenesis, the formation of new

blood vessels to the tumor. Genentech scientists identified the gene for VEGF more

than 15 years ago and despite approval to treat patients with metastatic colon and

advanced non-small cell lung cancer in the past 3 years, we are still years away

from fully understanding how Avastin can best help patients with early-stage disease in the critical time before their cancer spreads.

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 is consistent with their unique regulatory and health care framework. We should be able

to leverage that work to have a frank and transparent scientific debate here in the

United States, allowing us to develop a model which will be compatible with our

own regulatory and health care system.

The key features of the EU process stem from the recognition of the unique characteristics of biotechnology derived proteins. Several years ago, EU legislation clearVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00092 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
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ly 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. Instead, 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 inherent dangers of interchangeability.

The EMEA provided a broad regulatory framework, including the development of

guidance documents, which outline the data requirements necessary to for the 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, which enumerate testing requirements on a product class-by- product class basis. 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; however, clinical testing, immunogenicity testing,

and post-marketing safety surveillance are all 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.

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 proposed legislative pathways for follow-on biologics, you will pursue a 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 BIO and Genentech, that a transparent public process

leveraging known scientific considerations will provide a framework and pathway

for the approval of 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 will be realized for generations of patients to

come.

Again, I thank you for the opportunity to submit testimony for this hearing, and

look forward to answering any questions you may have.

Mr. PALLONE. Thank you. Dr. Allan.

STATEMENT OF GEOFFREY ALLAN, PH.D., PRESIDENT, CEO,

CHAIRMAN OF THE BOARD, INSMED, INCORPORATED

Mr. ALLAN. Good afternoon, Chairman Pallone, and members of

the Health Subcommittee. Thank you for the opportunity to testify

today.

I am Geoffrey Allan, president, CEO, and chairman of the board

for Insmed, Incorporated, a small biotechnology company whose

goal is to provide therapeutic products for metabolic and endocrine

disorders. I am here this afternoon, to urge Congress to pass legislation that defines a practical, science-driven approval pathway for

biogenerics based on the key principles that timely approval and

timely commercialization of biogenerics will create savings to publicly financed healthcare programs and will accelerate research and

development of new and improved lifesaving medications.

As a pharmacologist, I have spent 27 years in drug research and

development at both mature pharmaceutical companies and earlystage companies like Insmed. I entered this field because I understand complex molecules and I have dedicated my work at Insmed

to helping patients with rare disorders. It is now my mission to utiVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00093 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
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lize the scientific experiences and capabilities of our industry to

bring medicines to patients where there is an unmet medical need.

My goal is to extend our mission to include working with the backbone of the biotech industry, the researchers, the contract manufacturers, and like-minded small research and development companies

to unleash our scientific expertise for the development of biogeneric

molecules.

In 2005 Insmed received FDA approval for a drug called IPLEX.

This drug is an orphan drug to treat children with a rare growth

disorder. It is a recombinant protein molecule and it is similar in

complexity to many of the recombinant protein products that are

the topic of discussion regarding biogenerics.

We believe our experience with the development and approval of

IPLEX has positioned us to successfully manufacture biogenerics.

We have developed the infrastructure for the manufacture, the preclinical and clinical evaluation for recombinant protein products,

and we now want to leverage that expertise for the development of

generic recombinant proteins. As I said, we have the scientific and

technical experience, the personnel, and the facilities to produce

safe and affordable generic biologics. I believe our experience with

IPLEX is very illustrative of the scientific and technical issues that

confront biogeneric drug developers, issues such as comparability

testing, the nature of clinical data needed to support the characterization of a biogeneric product. Given our experience of the manufacturing and clinical development of IPLEX and including structurally characterizing proteins, ensuring potency and purity, I believe the scientific expertise and capability exists for many companies to manufacture safe and affordable biogeneric products.

In an effort to provide scientific insight into our experiences,

Insmed implemented several manufacturing changes during the

production of IPLEX. We changed cell lines, we changed locations,

we changed overall facilities. We still maintained the purity, the

consistency of the product. The impact of the manufacturing

changes was assessed by comparability testing in which we used

extensive analytical tests and short-term clinical studies to determine if any changes to the product resulted. Our experience with

IPLEX gave us the expertise also in longer term clinical outcome

studies and in the assessment of the immunogenicity which measures the potential antibodies to the IPLEX product.

One might ask how our expertise in the production of one recombinant protein product would allow us to develop any generic protein. Although the manufacture of each product is unique, they all

share the same types of manufacturing processes, the same internal quality control systems are used to monitor these processes.

The manufacturing procedures for different proteins have actually

more in common than they are dissimilar. The same basic technologies and principles are applied to fermentation, expression, and

purification of any recombinant protein product produced. We

would not need information on the manufacturing methods used for

the brand product but instead would use our own expertise and tailor it to the specific generic protein of interest.

In fact, some of the exact test methods or specifications set by

the innovator company that were to standardize the brand product

may well be outdated. Analytical technology has advanced considVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00094 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
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erably over the last 20 years, and therefore there is a real possibility that generic protein drugs will have a more robust characterization than the innovator product.

Brand companies have been quick to point out that sometime

things can go wrong during the manufacture of a recombinant protein product. That is true. I do not know of any industry where occasional errors do not happen. However, it is critical to understand

that there are safeguards that prevent any potential errors from

ever affecting the safety of the product. Patient safety is paramount, and I believe we enforce good manufacturing practices that

manufacturers do follow, as well as the process and the testing, the

evaluation that is conducted by the Food and Drug Administration

in order to obtain approval, whether the product is brand or generic. There is no reason to believe that a generic biologic would

be of a lesser quality and less safe than a brand product. The FDA

has only one single standard to approve safe and effective products.

You have heard that the science now exists to allow for the safe

production——

Mr. PALLONE. Doctor, if you can summarize, you are about a

minute over.

Dr. SCHENKEIN. I apologize. The summary is essentially we know

that the science is here, we would like to be involved in the development of these products, and I would like to thank you very much

for the testimony this afternoon.

[The prepared statement of Mr. Allan follows:]

STATEMENT OF GEOFFREY ALLAN

Good morning Chairman Pallone, Chairman Dingell, Ranking Members Deal and

Barton, and Members of the Health Subcommittee. Thank you for the opportunity

to testify today.

I am Geoffrey Allan, president, CEO and chairman of the board of Insmed Incorporated. I testify before you this morning as Chairman of the Coalition for Biotechnology Innovation (CBI), and it gives me great pleasure to announce the launch

of this newly formed organization to give a voice to small biotechnology companies

that are being brought together by a shared interest in advancing innovation in the

biotechnology industry. Our primary goal is to pass legislation in the 110th Congress that defines a practical, science-driven approval pathway for biogenerics. Collectively, members of CBI will stand together on the key principle that timely approval and timely commercialization of biogenerics will create savings to publiclyfinanced health care programs, and will accelerate research and development of new

and improved life-saving medications.

As a pharmacologist, I have spent 27 years in drug research and development at

mature pharmaceutical companies in combination with my experience at an earlystage company like Insmed. —I entered this field because I understand complex

molecules, and I have dedicated my work at Insmed to helping patients with rare

disorders. The scientific advancement in the biotechnology field has been tremendous, and as the CEO of a small biotechnology company whose goal is to provide

therapeutic products for metabolic and endocrine disorders, it is my mission to utilize the scientific experiences and capabilities of our industry to bring medicines to

patients where there is an unmet medical need. My goal is to extend our mission

to include working with the backbone of the biotech industry the researchers, contract manufacturers, and like-minded small research and development companies to

unleash our scientific expertise in developing biogenerics.

As I learned about Congress’ interest and role in creating a biogenerics market,

I felt compelled to contribute to the creation of a platform for our coalition to educate Congress about the burgeoning interest among smaller biotechnology companies to compete in a biogenerics market. I believe we all agree that when a generic

version or multiple versions of a therapy are available, competition will drive down

overall cost of these life saving medicines. —The development of biogenerics will create an explosion of both investment and innovation in the biologics market.

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Innovation is at the core of biotechnology and solving the mysteries of disease is

the goal of our industry. Unfortunately, protecting monopolies and the financial bottom line has had an impact on this mission. Our hope is Congress will allow the

FDA to evaluate biogenerics on the basis of scientific facts and not the politics of

the bottom line. In addition, small biotech companies often face financial hardship

due to the high cost of development, but with the ability for small biotech to compete in the biogeneric market, they will have a source of revenue to invest into research and development of new and improved therapies.

In 2005 Insmed received FDA approval for the drug, IPLEX, to treat children with

a rare growth disorder. IPLEX is a recombinant protein product that is similar in

complexity to many of the recombinant protein products that are the topic of discussion regarding biogenerics.

We believe our experience with the development and approval of IPLEX has positioned us to successfully manufacture biogenerics. Insmed has developed the infrastructure for the manufacture, preclinical and clinical evaluation and approval of recombinant proteins that we now want to leverage for the development of generic recombinant proteins. We have the scientific and technical experience, the personnel,

and the facilities to be able to produce safe and affordable generic biologics. I believe

our experience with IPLEX is very illustrative of the scientific and technical issues

confronting biogeneric drug developers, issues such as comparability testing and the

nature of clinical data needed to support characterization of a biogeneric product.

The same scientific approach we applied to the development and approval of IPLEX

can be applied to the development of biogenerics.

I believe the scientific expertise and capability exist for many companies to manufacture safe and affordable biogeneric products. During the development of IPLEX,

Insmed gained valuable experience in the manufacture and clinical development of

recombinant protein products. We have developed expertise in all aspects of the

manufacture of a protein product and in the many analytical assays that are used

to structurally characterize proteins and ensure potency and purity. Insmed implemented several manufacturing changes during the development of IPLEX, including

a change in the cell line used to produce IPLEX. The impact of the manufacturing

changes was assessed by comparability testing in which extensive analytical tests

were used to determine if any changes to the product resulted.

Insmed also developed several clinical approaches to establish safety and efficacy

during the development of IPLEX. These included pharmacokinetic studies to determine the level of product in the blood and how long it lasts and pharmacodynamic

studies that were short-term to determine the effect of the product on a specific relevant clinical marker. Pharmacokinetic studies, and in some cases

pharmacodynamic studies can also be useful to assess comparability. These shortterm clinical studies were used together with several analytical tests to determine

any potential differences in the product after a manufacturing change. Our experience with IPLEX also gave us expertise in longer-term clinical outcome studies and

in assessment of immunogenicity, which measures potential antibodies to the

IPLEX protein.

One might ask how our expertise in the production of one recombinant protein

product would allow us to develop any generic protein. Although the manufacture

of each product is unique they all share the same types of manufacturing processes

and the same internal quality control systems are used to monitor these processes.

The manufacturing procedures for different proteins have more in common than

they are dissimilar. For example, the same basic technologies and principles are applied to the fermentation, expression and purification of any recombinant protein

product. We would not need information on the manufacturing methods used for the

brand product but instead would use our expertise and tailor it to the specific generic protein of interest.

There is a similar ability to leverage one’s knowledge regarding structural and analytical characterization of one protein to the development of a generic protein.

While the types of analytical tests are tailored to each product there are well established batteries of tests that are common for proteins. One would not need the exact

test methods or specifications set by the innovator company that were used to

standardize the brand product. In fact, some of the tests used on the brand product

may well be outdated. Since analytical technology has advanced considerably over

the last 20 years, there is a real possibility that a generic protein drug will have

a more robust characterization than its innovator product.

There is sometimes a misconception that the skill and expertise of generic manufacturers is less than that of brand manufacturers. I assure you that at Insmed, our

personnel are highly skilled and have years of experience in manufacturing recombinant protein products. Many of our employees came from the brand industry and

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were involved in the manufacture of the brand products that are now under consideration as biogenerics. We retain a highly skilled workforce.

Brand companies have been quick to point out that sometimes things can go

wrong during a manufacture of a recombinant protein product. That is true and I

do not know of any industry where occasional errors do not happen. However, it is

critical to understand that there are safeguards that prevent any potential errors

from ever affecting the safety of the product. Patient safety must be paramount.

One of these safeguards is that every manufacturer must follow strict Federal laws

and make their product according to Good Manufacturing Practices, which mandates multiple internal controls and the establishment of precise product specifications. Further safeguards are provided by FDA in that the FDA thoroughly reviews

the manufacturing process, the test methods and the quality and integrity of multiple batches before it would approve any product, whether brand or generic. The

FDA also inspects the manufacturing facility before approval and at regular intervals after approval to assure the quality and integrity of the product, the manufacturing facility and compliance with good manufacturing processes. There is no reason to believe that a generic biologic would be of a lesser quality and less safe than

a brand product. The FDA has only a single standard to approve safe and effective

products.

You have heard that the science exists to allow for the safe production of

biogenerics. I have told you that Insmed, like many other companies, currently has

the expertise and capability to produce biogenerics. What is lacking at this time is

legislation that provides the regulatory pathway. We need a pathway for biogenerics

that gives the FDA authority and flexibility. The FDA can determine the scientific

issues and the amount of data required for the approval of biogenerics on a caseby-case basis.

We expect the FDA to issue general guidance documents at some time regarding

biogenerics, but guidance documents are not absolutely necessary. Furthermore, we

would not wait for the issuance of guidance before submitting applications to the

FDA. Insmed believes that close interaction and dialog with the FDA on a case by

case basis would allow a more robust approval process than would result from a

broad guidance system. At Insmed, we have shown that we can successfully work

with the FDA and plan to continue to work closely with the FDA during the development of future biogeneric products.

In summary, we have seen that the science is there for biogenerics. The expertise

and capability also exists for the manufacture of biogenerics. However, the regulatory pathway is not available and we are asking you to support legislation that

would create such a regulatory pathway. This would allow not only Insmed to make

safe and affordable biogenerics available to the American public but would open the

floodgates for all the small biotech firms with the drive, technology, and know how

necessary to create a new and competitive biogenerics industry that will generate

savings and new innovation for all.

Mr. PALLONE. Thank you. Mr. Kingham.

STATEMENT OF RICHARD F. KINGHAM, PARTNER, COVINGTON

& BURLING

Mr. KINGHAM. Thank you very much, Mr. Chairman. I am a

partner in Covington & Burling. I am assigned to both the Washington and London offices, and my practices involves regulation of

biologics and biotechnology products under both U.S. and European

community law.

I submitted a prepared statement that discusses in detail the criteria that ought to be applied in establishing a legislative pathway

for follow-on biologics and also summarizes the European community experience with establishing a system for so-called similar biological medicinal products.

In my time now, I would like to focus on a single criteria that

I believe any such system should satisfy and that is the need for

a substantial period of non-patent data exclusivity. Now, this is a

period of time during which follow-on applicants may not rely on

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facturer in support of a reference product. Every developed nation

in the world has such a period of time that it allows for medicinal

products. Data exclusivity serves a different purpose from patents.

Patents protect inventions, any sort of invention, and they are

available for any type of product and indeed for things that are not

even products. Innovative medicines present a special societal

issue, and that is the need to do lengthy, expensive and commercially risky studies to demonstrate their safety and effectiveness to

meet FDA approval requirements. Today it takes about 15 years

from the time of the original invention to bring a new biotechnology product to market, and the fully allocated costs of research and development are estimated to be about $1.2 billion per

product. Even with all this, there is no guarantee that a particular

product will get to market or that it will recover R&D costs if it

does. Investments and risks of this magnitude are I think unique

to the pharmaceutical industry. Whether or not patents are available to protect products of this kind, society has a profound interest

in assuring that there are adequate incentives to do the studies

necessary to bring these products to market.

Now everything I have said up to now is applicable really to all

pharmaceutical products, though some of the figures for timing and

cost may be greater for biotechnology drugs. But there are special

issues posed by biotech products which I believe more clearly justify a substantial data exclusivity period.

Under the Hatch-Waxman Act as applied to small-molecule

drugs, a generic product for which an abbreviated new drug application, or ANDA, is filed must contain an active ingredient which

has demonstrated to be the same as or identical to that of the referenced drug upon which it relies. This means that if there is a

patent for that active ingredient and that patent is valid, it is likely that that applicant will run head on into the patent which protects the referenced product and therefore the referenced product

will enjoy a period of effective market exclusivity equal to the life

of that patent.

But under any legislative pathway, and I refer not simply to the

one that Representative Waxman has proposed, but any scientifically reasonable approach to the issues presented by follow-on biologics, it will in fact be necessary to allow FDA the discretion to

consider applications for products which are similar to but not

identical to the referenced products. Dr. Woodcock explained the

scientific reasons why that is true, and that means that the possibility exists for different processes and different structures to be

used in producing the active ingredients of follow-on products so

that they will avoid the protection of both product and process patents that protect the innovator. This creates the real potential for

patents not to serve the same protective market purpose that is

served by patents for small-molecule drugs under Hatch-Waxman.

Now that is the biggest point, but there are subsidiary points. Increasingly, for example, the Patent and Trademark Office and the

courts have required that the patent applications, the claims for

biotechnology products be even more narrowly drawn than in the

past, thereby increasing the plausibility that people can make

small changes in the structure of follow-on products and avoid the

patents for the innovative product. And even if a patent contains

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claims which cover a wide variety or an extensive variety of molecular structures, if patent term restoration is granted, it will apply

only to the specific molecule that was approved by FDA, not to the

other structures that may be covered by broader patent claims.

And of course, we saw only last Monday in KSR against Teleflex

that the Supreme Court is increasingly scrutinizing that patents

should be granted at all and applying a tougher standard with respect to what constitutes a significant innovation that warrants

protection under the patent laws.

Now, these are all very legitimate issues for patent lawyers to be

concerned with and for policy discussions to be held about. But

whatever we decide with respect to the scope of patents, there remains an overwhelming need of society to provide the incentive for

the studies necessary to develop these products. What is the period

of time that should be provided? Well, the Congress said in 1984

that an effective patent life of 14 years a period of market exclusivity guaranteed by the patent life of a drug was the appropriate

time. If patent protection is not fully adequate, and I think it may

not be, then I think the period of 14 years is still the right number.

Thank you very much.

[The prepared statement of Mr. Kingham follows:]

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Mr. PALLONE. Thank you, Mr. Kingham. Mr. Downey.

STATEMENT OF BRUCE DOWNEY, CHAIRMAN OF THE BOARD,

GENERIC PHARMACEUTICAL ASSOCIATION, CHAIRMAN AND

CEO, BARR PHARMACEUTICALS, INCORPORATED

Mr. DOWNEY. Thank you, Mr. Chairman. Thank you, Ranking

Member Deal for inviting me to testify today. I have prepared a

written statement and I ask that it be accepted into the record, and

I would like to expand on that in just a few points.

First I would like to say that while I am chairman of the GPHA,

the Generic Trade Association, I am actually appearing today in

my capacity as CEO and chairman of Barr Pharmaceuticals, a company that is a member of the Generic Association and one that aspires to make generic biologics which are the subject of this hearing.

I note at the outset that we are at a historic time, and I was

thinking as I came over this morning it is a 23-year cycle. In 1938,

the Food, Drug, and Cosmetic Act was amended to require drugs

be proven to be safe. Actually 22 years later, the Kefauver amendment required they be proven to be effective. Twenty-two years

after that the Hatch-Waxman bill adds a pathway for generic pharmaceutical products, and we are here in 2007, 23 years later we

hope to add a pathway for generic biologics.

And I think we have reached an amazing consensus over the last

2 or 3 years hearing members of the committee on both sides of the

aisle, the number of organizations listed by Congressman Waxman

in his statement, there really is an emerging consensus that it is

not whether there should be a pathway but what that pathway

should look like and what other provisions it should contain. I

think we all agree or could agree that safety is the number one

issue, and we as a potential manufacturer of generic biologic product certainly want to manufacture safe and effective products. So

we don’t disagree with that at all. And we think FDA is the proper

arbiter of what safety standards should be applied.

We also think there should be a balance between those in the innovator industry and those in the generic industry, a balance similar to the one struck in the Waxman-Hatch Act. And there were

two provisions in that Act that dealt with exclusivities and rights

of innovators. One was the patent term restoration component

which as a formula to add patent life to products were lost in regulatory review, and I point out that that patent term restoration

provision not only applies to pharmaceutical products but applies

to the biologic products developed by innovators. So they have already got the prepayment on the biologic side of the patent term

restoration features of Hatch-Waxman.

Now, Hatch-Waxman also included a 5-year exclusivity—and I

personally don’t object to that period. I certainly will disagree with

the 14-year period but 5 years I think is an appropriate number

and one that I could certainly support. I can’t again speak for my

trade association on that point. And the third is we all want to ensure that innovation is protected, and I would argue and I think

correctly argue that the pathway for generic pharmaceuticals was

the greatest boon to pharmaceutical innovation in history because

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it forced brand manufacturers to replenish their products in the

face of generic competition.

And so you look at the statistics, and I didn’t prepare it for today

but I certainly could and submit it if the committee wants, the rate

of investment in R&D in the brand industry skyrocketed post

Hatch-Waxman because of the threat of generic competition. And

I think the same will happen here in the biologics business. If

there is a generic pathway, you will see increased innovation and

increased spending on R&D.

I would like to quickly, in my last 90 seconds, cover three points.

One is that in the pathway that I think we should follow, the same

standard for BLA, that is innovator biologic products, NDA’s,

ANDA’s, and that is a pathway that is sponsor-initiated, we propose the product, we propose the clinical trial, and the FDA responds and it adds requirements or agrees as they see proper. I

think that provides the great level of safety that we all seek. It also

provides an efficient and flexible system that can deal with different products in different ways.

Second, I think we need to have a provision that would permit

resolution of intellectual property disputes in advance of launching

the product. These are very contentious issues. Many of these products do not have one or two patents, but 30, 40 patents and there

are disagreements about whether we infringe or if they are valid,

and there needs to be a mechanism that allows those issues to be

decided before there is a launch of the product that allows both innovator and generic companies to manage the risks that they confront and it also allows for the earliest lawful entry of the product

and doesn’t allow the litigation post-exclusivity period, post-patent

to delay the launch of a product.

And then finally I think we need to have the flexibility for the

FDA to establish the requirements on an individual product basis,

and I urge we reject the idea of this public hearing with all the

comments and first to get a draft guidance and refine it once it is

out. I think that simply delays the process, and the process currently followed where your sponsor initiated products are presented

it to the FDA, the FDA comments, we carry it out, has provided

safety and efficacy over all sorts of pharmaceutical and device products and would work very well here. It works for the innovators in

the biologic area, and I would point out that H.R. 1038 has all

three of these features and I would urge that whatever legislation

comes out has them also. Thank you very much.

[The prepared statement of Mr. Downey follows:]

TESTIMONY OF BRUCE L. DOWNEY

Chairman Pallone, Ranking Member Deal and members of the House Energy and

Commerce Committee Subcommittee on Health. I am Bruce Downey, the chairman

and chief executive officer of Barr Pharmaceuticals, a leading global generic pharmaceutical company.

I want to thank you for convening this hearing and for allowing me to express

my company’s views on issues so vital to the continued success of the generic pharmaceutical industry—an industry that saves consumers and taxpayers literally billions of dollars each year in prescription drugs costs. Indeed, no other industry has

made, or continues to make, a greater contribution to affordable health care than

the generic pharmaceutical industry.

While my testimony today is on behalf of Barr Pharmaceuticals, I also serve as

chairman of the Generic Pharmaceutical Association, which represents more than

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100 generic manufacturers, distributors and suppliers of bulk active pharmaceutical

chemicals worldwide. I mention my role in GPhA because it is important to note

that the issue we address today—that of generic biological medicines—is at the top

of the association’s priority list of legislative and policy initiatives.

Mr. Chairman, this Congress holds the key that will open the door for generic and

other manufacturers to provide affordable access to many of the life-saving biological medicines used in the treatment of diabetes, cancer, rheumatoid arthritis, HIV/

AIDS and other diseases. Today, the cost of these treatments can put them out of

reach of many consumers. The rheumatoid arthritis and psoriasis treatment Enbrel,

for instance, costs an average of $16,000 a year per patient. Biological drugs for

multiple sclerosis range in price from $16,000 to $25,000 a year. Neulasta, used to

correct chemotherapy-induced white blood cell deficiency, costs an average $3,500

per chemotherapy cycle.

What becomes frightening from the cost perspective is that not only are the costs

of biological treatments getting more expensive each year, but the utilization of

these medicines is growing, as well. These two factors coupled together yields exponential growth in the amount we are spending on biologics every year.

According to the 2006 Drug Trend Report released in April by Express Scripts,

biotech drug spending increased 21 percent last year, even as growth in traditional

prescription drug expenditures slowed. The report showed that growth hormone deficiency spending rose nearly 23 percent in 2006 due to a 10.7 percent increase in

utilization, coupled with the increase in product cost.

This dual impact of higher prices and greater utilization presents a recipe for disaster which will end in price controls. The alternative, as we are seeing in the chemical drug sector, is competition.

Thus, creating a pathway that allows for the introduction of safe and affordable

generic alternatives to these medicines is vital. It not only will save consumers and

taxpayers billions of dollars a year, but, again, will allow more patients access to

these important medicines.

This committee is well aware of the role traditional chemical generic drugs play

in helping consumers, insurers, and the government in achieving billions of dollars

in savings each year. Generic drugs filled more than one-and-a-half billion prescriptions in the U.S. last year. That is nearly 55 percent of all prescriptions dispensed

nationwide. Considering that the average cost of a generic prescription is less than

$30, while the average cost of a brand prescription is close to $95, it is easy to see

how the Congressional Budget Office estimates the savings generated by generic

drug use to be between $8 billion and $10 billion each and every year.

As this committee knows, Congress made these savings possible over 20 years ago

with the 1984 enactment of the Hatch-Waxman Amendments to the Federal Food,

Drug, and Cosmetic Act. Hatch-Waxman achieves a critical balance between access

to less costly generics and innovation of new brand-name drugs. I, and many others,

believe that it is time for Congress to take the next step and let generic companies

provide savings in the biological field. Doing so, however, will require brushing aside

the current political maneuvering that threatens progress on this issue, and enacting appropriate legislation that would allow FDA to begin approving safe, effective,

and affordable generic biologics.

DISCUSSION

Today, I want to briefly discuss three points that I hope this committee will consider as you move forward on generic biologics legislation:

• legislation must provide a regulatory pathway for approving generic biologics

that is free of artificial barriers and unnecessary roadblocks, as well as a mechanism for allowing expeditious resolution of patent disputes that would delay generic

market entry;

• market competition generated by generic biologics would unleash incentives for

further innovation of newer medicines, just as Hatch-Waxman did over twenty years

ago; and

• generic biologics will provide a market-based mechanism to help manage private

and Federal expenditures and achieve significant savings.

I. LEGISLATIVE FRAMEWORK

Effective generic biologics legislation must include two parts: a regulatory pathway that allows FDA to expeditiously approve safe and affordable generic biologics

and a mechanism for allowing generic companies to resolve certain patent disputes

without delaying FDA approval. I will discuss some important aspect about both of

these issues.

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A. APPROVAL PATHWAY

Effective biologics legislation must include a regulatory approval pathway that

does not impose unnecessary barriers to prompt market entry. Hatch-Waxman was

largely successful in achieving this goal for generic drugs regulated under the Federal Food, Drug and Cosmetic Act, and this legislation should do the same for biologics regulated under the Public Health Service Act. An adequate abbreviated pathway must include, for example:

• clearly defined comparability criteria;

• provisions giving FDA discretion to require the needed tests—and only the needed tests—to make safety and effectiveness determinations;

• provisions setting forth the circumstances under which FDA can deny approval;

• provisions setting forth the contents of an abbreviated biological application;

• the ability to obtain an interchangeability rating that is immediately operative;

• no unique names for generic biologics, which is fully consistent with FDA’s position that unique biologic names should not be used to differentiate products with

the same active ingredient(s) when credible scientific data demonstrate that no

pharmacologically relevant differences exist;

• a timely review process that allows a company to discuss with the FDA research

and testing and to know when action on the application can be anticipated; and

• an approval process that gives FDA flexibility as to what should be required on

the label.

Equally as important, effective biologics legislation must not include provisions

like those advocated by groups such as BIO—provisions that would unnecessarily

delay approval and/or prevent consumers from receiving the biggest benefit from generic biological products. For example, legislation should not include:

• a requirement that all generic applications include full clinical and human

trials, or any clinical trials other than those that FDA deems necessary to the relevant scientific issues;

• further legislation, or Congressional authorization/oversight or FDA regulations

or guidances before the agency can give an interchangeability rating to a generic

product;

• unique names for generic biologics, which would impede interchangeability findings and thus prevent the substitution of generic for brand that is essential for cost

savings;

• provisions requiring agency-issued guidance or notice and comment rulemaking,

which can take years and years to complete, before FDA can accept or approve a

generic biologic application; and/or

• provisions requiring the generic company to have an identical label to the reference product, particularly where the brand has patented certain labeling information.

There is no justification for provisions like these, which will delay generic market

entry and the interchangeability rating needed for consumers to benefit most from

generic competition. They are entirely unnecessary to ensuring approval of safe and

affordable generic biologics.

For example, while today clinical data may be needed for most biological products,

Congress should not impose rigid requirements for such testing in all circumstances.

Rather, Congress should give FDA the ability to draw on its decades of experience

with these compounds by granting the agency the discretion to require such tests

only when it determines that such clinical studies are needed.

It is significant that FDA agrees. FDA Deputy Commissioner Janet Woodcock addressed this during Congressman Waxman’s Oversight & Government Reform Committee hearings last month, testifying that the ‘‘use of human subjects for trials that

are not needed but are simply to check a box on a regulatory requirement is not

desirable.’’ Dr. Woodcock added that the ability to physically characterize protein

molecules and other complex substances ‘‘has evolved and is continuing to evolve’’

and that ‘‘flexibility in enabling FDA to incorporate the new science into the regulatory process...is in the best interest of the public as well as the agency and the

industry.’’ Congress has entrusted FDA to make scientific judgments regarding

drugs and biologics. This scientific advice from the agency should be headed.

Barr urges Congress to pass a regulatory framework for approving generic biologics that is free of unnecessary barriers and roadblocks in the form of artificial

requirements, such as clinical studies and agency guidances. Such a framework will

give FDA the flexibility it needs to approve safe and interchangeable generic biological products as quickly as possible.

119

B. PATENT PROVISIONS AND OTHER IP PROVISIONS

A key part of effective generic biologics legislation is a mechanism that allows the

generic company to resolve certain patent disputes without that litigation impacting

FDA approval. This was also a goal of Hatch-Waxman, although the brand industry

has found ways around the law’s intent, which was that patent disputes be resolved

early, so that the generics can enter the market at the earliest time after valid and

applicable patents have expired. Barr submits that any bill providing a pathway for

generic biological products should take into account what we have learned from our

20-plus years of experience with the Hatch-Waxman patent provisions and improve

upon that system in order to ensure that affordable biological products reach the

public as quickly as possible. Thus, an effective generic biologic bill must, at the

very least, contain patent provisions like the following:

• First, companies need patent certainty prior to marketing. Without it, companies will not invest in bringing affordable, comparable products to market prior to

patent expiration because doing so could subject them to enormous patent infringement damages. Thus, effective legislation must include provisions that allow a generic company to obtain the required certainty—through litigation if necessary—

while FDA is reviewing the application.

• Second, equally as important, however, is the fact that generic companies not

be forced to litigate every patent relating to the brand product in order to obtain

the patent certainty needed to launch. Thus, a biological patent system should provide a mechanism for litigating only those patent disputes that the generic company

believes would delay its launch. There will be other patents—for example patents

applicable to manufacturing processes that the generic company is not using—for

which the only effect of early litigation would be unnecessary delay. I am not suggesting that the brand company should forever be foreclosed from asserting its patents. The brand company should have that opportunity, just not before the generic

company markets its product. Accordingly, the system that will allow for the most

expeditious generic market entry is one that permits the generic company to select

the patents that will be litigated pre-product launch. This system also protects the

brand company’s intellectual property by allowing for suit on any patent that can

reasonably be asserted after the generic company begins marketing.

• Third, generic companies need to be able to resolve patent disputes without

those disputes delaying the FDA approval process, as we now experience with small

molecule drugs under Hatch-Waxman.

• Fourth, generic companies must be able to litigate patent disputes quickly and

efficiently. This will only happen if the generic company is permitted to designate

a forum that would allow for more efficient litigation resolution. Right now, the

brand company has the ability to bring suit against an ANDA applicant in virtually

any district court in the country. Brand companies increasingly have brought suit

in districts with the longest time to trial. In some courts, its takes from three to

five years just to get to trial. Where certainty is essential, this means more delayed

market entry.

• Fifth, if a brand company refuses to participate in the patent process, as increasingly happens with small molecule applications, the generic company must be

allowed to enter the market without risking potentially massive damages. Under

proposals such as those found in H.R. 1038, generic companies have some protection

in the event that the brand company refuses to participate in the patent process.

Brand companies have complained that this takes away substantive patent rights

and forces them to give what amounts to a compulsory patent license. Not true.

These provisions only apply if the brand company violates its statutory obligation

to participate in the patent process. If the brand company follows the law, all of its

patent rights would remain intact.

Finally, part of the so-called IP discussion surrounding generic biologics is the

idea of exclusivity. On the generic side, the issue is clear: consumers and taxpayers,

without question, will see the most significant savings from interchangeable products. Thus, it is essential that any generic biologics bill incentivize generic companies to do the work necessary to achieve an interchangeability rating from FDA. At

present, no such incentive currently exists and, therefore, will need to be included

in the legislation.

On the brand side, the issue also seems clear: lengthy, new exclusivity periods for

brand companies are not necessary because the law currently provides more than

enough incentive to continue innovating. For example, brand companies already get

significant incentives, including multiple provisions allowing for patent term restorations, orphan drug exclusivity, and various tax credits. If the brand companies

disagree, they are free to come forward and present data to support their argument.

Indeed, Representative Waxman has invited discussion on this issue. However, the

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brands have not yet come forward with any concrete data that would suggest that

additional incentives are necessary. It is my view that only if they do come forward

with such evidence should Congress consider enacting new exclusivity periods.

II. GENERIC COMPETITION WILL SPUR INNOVATION

There is a misconception that market competition from generic biologics would diminish the incentive for originators to innovate new biologics. Generic competition

will not slow innovation. In fact, just the opposite would be true. Market competition generated by generic biologics would accelerate further innovation of new biological products, while at the same time lowering the cost of treatment with existing

medicines.

For example, Dr. Scott Gottlieb, recently the FDA Director of Medical Policy Development and Deputy Commissioner for Medical and Scientific Affairs, has explained: ‘‘Legislation to expose today’s biologics to easier competition, after legitimate patents have expired, is going to accelerate development of improved products,

not just lower-cost. Those making static assumptions .—.—. about how much savings this legislation is likely to bring are losing sight of the competition and

progress it will have unleashed.’’ [Forbes 4/17/07 edition (emphasis added)]. Similarly, the January 2007 study released by the Pharmaceutical Care Management

Association concluded that increased competition from generic biologics would not

only create pressure to reduce the cost of these products, but also produce added

incentives for further innovation. Thus, generic biologics legislation would provide

the dual benefit of increased savings and advancements in medical treatments.

III. SAVINGS

No one can legitimately dispute that generic biologics will provide a market-based

mechanism to help manage private and Federal expenditures and achieve significant savings. And no one can dispute that the American health care system has ever

needed those savings more than it does today.

As the use of life-saving biological drugs continues to increase, so does the amount

consumers and taxpayers spend. Indeed, spending on biotech drugs increased 21

percent in 2006, to approximately $40 billion, according to the 2006 Drug Trend Report. Spending in this sector is expected to grow to $100 billion over just the next

four years. By 2010, biological medicines will account for 26 percent of total drug

spending in the U.S. It is particularly important to note that Medicare spending for

biological drugs continues to escalate disproportionately to Medicare funding. To put

things in perspective, Medicare and Medicaid will spend $2.5 billion this year on

just one biological drug—the anemia treatment Epogen—which is a half-billion dollars greater than the entire fiscal year 2007 budget of the Food and Drug Administration.

The solution to managing this spending is, of course, the use of safe and effective,

lower-cost generic biologics. Just as generic chemical drugs have saved billions of

dollars so, too, will generic biological drug products. A study released by Express

Scripts in February 2007 showed that generic biologics would save payors $71 billion over 10 years. An Engel & Novitt study in January 2007, as well as other independent economic analyses we have seen, show that generic biologics would generate significant savings for Medicare Part B reimbursed medicines. Now, the brand

companies take issue with some of these studies. Significantly, though, they do not

take issue with the fact that generic biologics will save billions of dollars. They only

take issue with how many billions will be saved. But in the end, whether the number is $71 billion or $7.1 billion, we simply cannot afford to lose the savings that,

without question, would be achieved through use of generic biological medicines.

Congress should act now and pass legislation giving FDA authority to review abbreviated applications for generic biologics. The agency would be able to begin reviewing those applications as soon as they were submitted and the public would be

assured that when the FDA approves a generic version of a biological product, just

as has been the case with traditional drugs over the past 30 years, it will be safe,

effective and have the same performance as the innovator product.

Chairman Palone and Members of the Committee, Barr always has been deeply

committed to providing the public with affordable, safe generic drug products, and

to do so as expeditiously as possible under the circumstances. That is why Barr has

joined with consumer groups like AARP, Consumers Union, Families USA; employee

unions life AFL-CIO and AFSCME; major corporations like Caterpillar, Ford, GM,

and Kodak; healthcare providers Aetna, Blue Cross Blue Shield and Kaiser

Permanente; pharmacy leaders like CVS/Caremark and the National Association of

Chain Drug Stores; and no less than 18 of the nation’s governors in calling on ConVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00126 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
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gress to pass legislation creating the framework for the approval of safe, effective

and lower-cost generic biological drugs.

Congress has the opportunity this year to create—a huge win for patients, for taxpayers and for employers alike.— Indeed, effective generic biologics legislation very

well could be the most important piece of consumer legislation enacted this year.

We urge Congress to move forward in this effort.

Thank you, Mr. Chairman. I am happy to respond to any questions you and the

committee may have.

Mr. PALLONE. Thank you. Ms. Hoffman.

STATEMENT OF RUTH HOFFMAN, EXECUTIVE DIRECTOR, THE

CANDLELIGHTERS CHILDHOOD CANCER FOUNDATION

Ms. HOFFMAN. Chairman Pallone, Ranking Member Deal, and

members of the committee, I sincerely thank you for giving me the

opportunity to testify on an issue of great importance to the childhood cancer community and to me personally.

I am here today to explain the crucial role of biologics in the ongoing war on childhood cancers. Children with cancer have unique

needs. They are not simply little adults; children have their own

biological systems and unique tumor characterizations. Current

toxic therapies that have proven effective for adults aren’t a solution for children with cancer. In fact, these treatments are causing

secondary cancers in the children who do survive to adulthood.

The best hope for children with cancer rests in the research and

development of new and targeted biologics. So please don’t deprive

children with cancer future cures by depriving the biotech industry

of incentives to innovate.

My name is Ruth Hoffman, and I am the executive director of

the National office of Candlelighters Childhood Cancer Foundation.

Candlelighters was founded in 1970 by concerned parents of children with cancer, and today we have a membership of over 50,000

families at the national office and more than 100,000 families

across the country.

Advocating for children with cancer is my job, but I am also the

mother of eight children, including a 20-year survivor of childhood

cancer.

On July 10, 1987, my world changed forever. My 7-year-old

daughter had been sick for 9 months. She had been diagnosed by

her family physician as having a bug bite, a virus, an infection—

she was on antibiotics; ear infections—she had tubes put in; tonsillitis, she had her tonsils and adenoids removed; and a neurotic

mother, who is me. Despite these attempts to explain her failure

to thrive, Naomi continued to deteriorate to a mere 32 pounds. So

in shear desperation, I carried her to the emergency ward of our

local Children’s Hospital and it was on that day in July that I

heard the words that seared my heart and my soul forever, my

daughter had cancer.

Naomi was diagnosed with acute myelogenous leukemia, M5, the

bad leukemia. Her prognosis was poor. Few survived AML in 1987.

Fortunately, bone marrow transplants were just beginning as a potential therapy to treat children with AML, and her 9-year-old

brother was a perfect donor match. Her treatment included IV

chemotherapy for 5 days on, 24 hours a day, followed by 3 weeks

off, and that continued for 5 months. This was followed by highVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00127 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
122

dose chemotherapy and total body radiation. After 9 months of living in a complete bubble environment where for many months she

never was able to get off her bed, Naomi was considered cured.

What I didn’t know then but I sadly know now is that childhood

cancer is for life. The 5-year survival rate used to determine adult

cancers as ‘‘cured’’, has little meaning to children who complete

treatment at 8 years of age. We are treating children with intensive toxic therapies at a time in their lives when they have growing

bodies and developing brains. You can’t treat a young child’s body

with these kinds of invasive therapies and not impact their overall

health for the rest of their life.

Naomi did not emerge from her treatments unscathed, either.

She has cataracts, heart damage, endocrine dysfunction, and is

sterile. Then 21⁄2 years ago, I received a second call that made my

life stand still once again. Naomi was diagnosed with papillary thyroid carcinoma, metastatic to her lymph and bones, a second cancer

but this was caused directly by the total body radiation that she

received as a little girl to treat her first cancer.

Treatment for children with cancer really hasn’t changed much

since Naomi was originally diagnosed in 1987. Today all children

with cancer continue to be treated solely, and I say solely with

highly toxic cancer drugs that were developed 20 to 30 years ago.

Only one new drug has received marketing approval by the FDA

for childhood cancer in the last decade. That drug too was not a

new class of smart drugs or biologics, it too was another toxic

chemotherapy agent.

These traditional chemotherapy drugs have not provided a cure

for many childhood cancer tumor types. Cancer remains the No. 1

disease killer of America’s children, more children still die from

cancer than cystic fibrosis, muscular dystrophy, asthma, and AIDS

combined.

Those who do survive face lifelong late effects including severe

drop in IQ, heart damage, sterility, deafness, severe growth deficits, and most shockingly, secondary cancers. What is even more

disturbing is that these mortality rates have not changed in the

last decade. I want to repeat that. Toxic chemotherapy and radiation treatments have not increased the survivorship of children

within the last 10 years. We have reached a plateau with survival

rates, and we have reached a limit of toxicity from current chemotherapy drugs and radiation treatments that we can give our children. I can’t offer hope to any more families whose children are diagnosed with cancer today than I could 10 years ago.

Is there hope for these youngest cancer patients in this country?

Absolutely. We stand at the threshold of a new era in the genetic

treatment of disease. Large research initiatives are underway to

identify the genetic fingerprints of many types of adult cancers, but

funding for targeted therapeutic research for childhood cancer is

minimal. What kids need is increased incentives for industry to develop new types of targeted therapies to treat children with cancer,

not fewer incentives.

Children with cancer need treatment breakthroughs. They need

new molecular-based therapies that will kill the cancer and not the

kid. Biologic drugs have proven to be an effective weapon in the

war on cancer for adults.

123

Today you are considering the important issue of allowing for abbreviated approvals of biosimilar products. We fully support increasing access to affordable drugs, but what kids with cancer really need most is access to drugs that can truly treat and truly cure

their disease. Please don’t create legislation that reduces costs by

reducing incentives for biotech companies to develop targeted

therapies for cancer. For me and for the parents I represent, lifesaving trumps cost saving any day.

My daughter Naomi draws her inspiration from something Ralph

Waldo Emerson wrote: ‘‘Do not go where the path may lead, go instead where there is no path and leave a trail.’’ We are a nation

of trailblazers and innovators. I want to thank Representatives Inslee, Baldwin, and Green for introducing legislation that will enable

this tradition of innovation to thrive in service to our Nation’s children with cancer.

Candlelighters’ motto is ‘‘...because kids can’t fight cancer alone!’’

and I urge the members of this committee to think hard about the

impact of your decisions on young lives. Kids can’t fight cancer

alone. They rely on adults like you and me to offer them hope so

that they too may live a long a healthy life.

[The prepared statement of Ms. Hoffman follows:]

TESTIMONY OF RUTH HOFFMAN

Chairman Pallone, Ranking Member Deal, and members of the subcommittee, I

sincerely thank you for giving me the opportunity to testify before you today on an

issue of great importance to the childhood cancer community, and to me personally.

I’m referring to the crucial role of biologics in the ongoing war on childhood cancers. Children with cancer have unique needs. They are not simply ‘‘little adults;’’

children have their own biologic systems and unique tumor characterizations. Current toxic therapies that have proven effective for adults aren’t a solution for kids

with cancer—in fact, these treatments are causing secondary cancers in some of the

children who survive to adulthood. The best hope for children with cancer rests in

the research and development of new and targeted biologics. I am here today to explain to the committee how important it is that you not deprive children with cancer

of future cures by depriving the biotech industry of incentives to innovate.

My name is Ruth Hoffman, and I am the executive director of the national office

of Candlelighters Childhood Cancer Foundation. Candlelighters was founded in

1970 by concerned parents of children with cancer. Our mission, then and now, is

to provide information and awareness for children and adolescents with cancer and

their families, to advocate for their needs, and to support research so every child

has the opportunity to survive and lead a long and healthy life. Today we have a

membership of over 50,000 members of the national office and more than 100,000

members across the country linked to our 37 affiliate offices in 28 States.

Advocating for children with cancer is my job as Director of Candlelighters. But

I am also the mother of a 20-year survivor of childhood cancer.

Twenty years ago, on July 10, 1987, my world changed forever. I was 31 years

old, had a 9-year old son, a 7-year old daughter (Naomi), a 1-year old son—and I

was 5 months pregnant with identical twin boys. My daughter Naomi had been sick

for 9 months. She had been diagnosed by our family physician as having a bug bite,

virus (put on antibiotics), ear infections (had tubes put in), tonsillitis (tonsils and

adenoids removed), and a neurotic mother—me! Despite these attempts to explain

her ‘‘failure to thrive,’’ Naomi continued to deteriorate to a mere 32 pounds. She was

no longer able to walk. So in sheer desperation, I carried her to the emergency ward

of our local Children’s hospital. It was on that day in July that I heard the words

that seared my heart and my soul forever: ‘‘Your daughter has cancer.’’

Naomi was diagnosed with Acute Myelogenous Leukemia (M5)—the ‘‘bad’’ leukemia. Her prognosis was poor. Few survived AML in 1987. Fortunately, bone marrow

transplants were just beginning as a potential therapy to treat children with AML,

and her 9-year-old brother was a perfect donor match for Naomi. Her treatment included I.V. chemotherapy for 5 days on, 24 hours a day, followed by 3 weeks off,

for 5 months. This was followed by high dose chemotherapy and total body radiVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00129 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
124

ation. After 9 months of living in a complete bubble environment, Naomi was considered ‘‘cured.’

What I didn’t know then, that I sadly know now, is that childhood cancer is for

life. The 5-year survival rate used to determine adult cancers as ‘‘cured’’ has little

meaning to children who complete treatment at 8 years of age. We are treating children with intensive toxic therapies at a time in their lives when they have growing

bodies and developing brains. You can’t treat a child’s young body with these kinds

of invasive therapies and not impact their overall health for the rest of their life.

Naomi did not emerge from her treatments unscathed. She had cataracts, heart

damage, endocrine dysfunction, and was sterile. But she had her life, and she was

determined to live it to the fullest. Then, 21⁄2 years ago, shortly after Naomi graduated from college, I received the call that made my life stand still once again.

Naomi was diagnosed with papillary thyroid carcinoma, metastatic to her lymph

and bones—a second cancer—but this one was caused directly by the total body radiation that she received to treat her first cancer.

Naomi just keeps living her life and doing her best to invest it with meaning. She

currently works at Children’s National Medical Center here in Washington, DC,

where she’s employed as a clinical trial coordinator for a study of boys with

Duchenne Muscular Dystrophy. She volunteers as a camp counselor for children

with special needs including cancer, and she recently attended the Lance Armstrong

Summit in Texas, where she represented and advocated for survivors of childhood

cancer.

Naomi lives every day with the fact that, in all likelihood, cancer will end her life

prematurely. But she hasn’t given up hope. On the contrary, she’s more committed

than ever to making her life matter—not just to herself, but to other young people

with cancer. She’s so committed to the search for new molecular-based therapies for

children with cancer that she is organizing her own fundraiser this November. Naomi’s Hope for a Cure will raise money for research towards a genomic characterization of pediatric AML.

Treatment for children with cancer hasn’t really changed much since Naomi was

originally diagnosed in 1987. Today, ALL children with cancer continue to be treated solely with highly toxic cancer drugs that were developed 20 to 30 years ago.

Only one new drug has received marketing approval by the FDA for childhood cancer in the last decade. That drug was not a new class of ‘‘smart drugs.’’ It too was

another toxic chemotherapy agent.

These traditional chemotherapy drugs have not provided a cure for many childhood cancer tumors, and they leave those children who do survive facing lifelong

late-effects, including severe drop in IQ, heart damage, sterility, deafness and—most

shockingly—secondary cancers. As a result, cancer remains the number one disease

killer of America’s children—more children still die from cancer than Cystic Fibrosis, Muscular Dystrophy, Asthma, and AIDS combined.

Every day I get calls from frantic parents around the country, looking for guidance and for hope. Just last week, I got a call from a young father whose 10-day

old son, Jack, had just been diagnosed with a brain stem tumor. My job was to tell

him that all doctors can offer infants like Jack is chemotherapy—they can’t radiate

children under three. What I did not want to tell him was that even with treatment

there’s only a 10 percent chance that Jack will survive to see his second birthday.

Jack is not alone. Only half of children diagnosed with metastatic bone cancer will

survive 5 years. Even today, half of children and teens diagnosed with Naomi’s

original cancer—acute myelogenous leukemia—will die within 5 years.

What is even more disheartening is that these mortality rates have not changed

in the last decade! I want to repeat that: the toxic chemotherapy and radiation

treatments that we are giving our children with cancer have NOT increased survivorship in the last 10 years! We have reached a plateau with survivorship rates,

and we have reached the limit of toxicity for current chemotherapy drugs and radiation treatments. I can’t offer any more hope to families whose children are diagnosed with cancer today, than I could 10 years ago.

As director of Candlelighters, I’ve come here to tell you that the status quo is not

good enough for children with cancer. As Naomi’s mother, I’m asking you: ‘‘Can’t

we do better for our children?’’

Is there hope for this youngest cancer patients? The answer is a resounding YES!

We stand at the threshold of a new era in the genetic treatment of cancer. Large

research initiatives are underway to identify the genetic fingerprints of many types

of adult cancers—but funding for targeted therapeutic research for childhood cancer

is minimal, and lagging behind today’s adult cancer research initiatives. What kids

need is increased incentives for industry to develop new types of targeted therapies

to treat children with cancer.

125

Children with cancer need treatment breakthroughs. They need new molecularbased therapies that will ‘‘kill the cancer, not the kid.’’ Biologic drugs have proven

to be an effective weapon in the war on cancer for adults, and one of the most promising treatments for the future. Because conventional chemotherapy and radiation

treatments are so dangerous to children, young cancer patients are depending on

innovative biotech companies to continue to develop more effective and targeted

treatments in the future.

At this critical moment when targeted therapies are finally bearing the fruit of

decades of research and providing new hope for cancer patients and their families,

it is essential that we not undermine the development of these life-saving biologic

agents.

Today you are considering the important issue of allowing for abbreviated approvals of biosimilar products. We fully support increasing access to affordable drugs.

But what kids with cancer need most is access to drugs that can treat and cure

their disease. A policy that produces more copies and less innovation will not help

the children and their families living with cancer. Please don’t create legislation

that reduces costs by reducing incentives for biotech companies to develop targeted

therapies for cancer. For me, and for the parents I represent, life-saving trumps

cost-saving any day.

Elizabeth Edwards said in her statement to the press upon her relapse of breast

cancer, ‘‘Femara didn’t exist 5 years ago. I don’t expect to get yesterday’s medicine.

If I can help it, I’d like to get tomorrow’s medicine.’’ Don’t our children with cancer

deserve the promise of tomorrow’s drugs as well? The R&D pipeline for new biologics is a lifeline of hope for these kids and their families. Please don’t shut it off.

My daughter Naomi draws her inspiration from something Ralph Waldo Emerson

wrote: ‘‘Do not go where the path may lead, go instead where there is no path and

leave a trail.’’ We are a nation of trailblazers and innovators. I want to thank Representatives Inslee, Baldwin, and Green for introducing legislation that will enable

this tradition of innovation to thrive in service to our Nation’s children with cancer.

And I want to thank the committee for recognizing that the future of biologics can’t

be measured in dollars and cents alone—that the bottom line for patients and their

families is the priceless currency of life, health, and hope.

Candlelighters’ motto is ‘‘... because kids can’t fight cancer alone!’’ I urge the

members of this committee to think hard about the impact of your decisions on

young lives. Kids can’t fight cancer alone. They rely on adults like you and me to

offer them hope, towards a healthy adult future of their own.

Mr. PALLONE. Thank you, Ms. Hoffman, and thank you for telling

the story about your daughter and implications that you think it

has for the legislation. We appreciate it.

Dr. Weisbart.

STATEMENT OF ED WEISBART, M.D., CHIEF MEDICAL

OFFICER, MEDICAL AFFAIRS, EXPRESS SCRIPTS, INC.

Dr. WEISBART. Thank you. First I want to just tell you how sorry

I am for the problems in your family.

I am Dr. Ed Weisbart. I am the chief medical officer at Express

Scripts, and I am a practicing physician; and I am delighted to be

here today to talk about the issue of biogenerics from the perspective of a leading pharmacy benefit management company. Express

Scripts would like to thank you and the committee for consideration of this historic policy which we believe will fundamentally improve health outcomes by giving people access to lower-cost biologic

alternatives.

Express Scripts is one of the Nation’s largest pharmacy benefit

managers. We monitor prescription drug trends and expenses for

1,600 clients including large, self-insured nationwide employers;

Government payers; unions; and across the sector health insurance

companies, with over 50 million American lives. We work every day

on behalf of our clients and their patients to make prescription

drugs safer and more affordable. It should come as no surprise that

126

with the rise in cost of biotech pharmaceuticals that our clients are

looking to us for advice on how to manage this ever-increasing

biotech drug spend. In fact, our clients are demanding that we help

deal with this issue.

I would like to make three main points today. First, specialty

drug spending, especially in biologic agents, is growing at an

alarming rate. Second, pharmacy benefit managers have developed

many highly effective tools to manage the increasing cost of prescription drugs, and third, we are eager to apply these tools to

biogenerics with the potential benefits to patients, plan sponsors,

and the certainly to the Government.

Spending on pharmaceuticals is now 11 percent of total

healthcare spending. Within pharmaceuticals are specialty drugs

which are mostly the highly priced biologic agents we have been

discussing. As spending for non-specialty pharmaceuticals now

slowed to single-digit growth, specialty drug spending is now up to

26 percent increase in 2006. In 2006, spending on specialty drugs was $54 billion, representing 20 percent of the pharmaceutical spending. In 2010, spending

for specialty drugs will nearly double as we heard today to almost

$100 billion. This rate of increase is the second highest rate of increase in healthcare today, exceeded only by diagnostic imaging

tests, the second largest today.

As I said, Express Scripts represents 1,600 clients, managing the

pharmacy benefit for over 50 million Americans. We have sophisticated tools such as formularies, tiered co-payments, step therapies,

and a variety of other drug utilization management programs, just

to name a few. These tools promote the most clinically sound and

cost effective use of pharmaceuticals.

One of the most potent tools we have is the promotion of generic

medications. Generic medications are time-tested, proven to be

clinically effective, and have highly characterized safety profiles.

An additional advantage, of course, is that they are the most affordable option for patients and plan sponsors. Because of the affordability and the other reasons, patients actually have higher

compliance rates with generic medications than with the newer

brand medications. Using these programs, our company leads the

industry in filling as many as 60.3 percent of all prescriptions with

generic drugs. If I had more time, I would be delighted to tell you

of the success we have had lately in promoting the adoption of

generics in the statin category last year. In that category alone, we

saved over $230 million for our clients and their members, just

since January 2006. Reducing costs safely, while preserving clinical

outcomes and not shifting costs to patients is our core competency

as a pharmacy benefit manager.

The money spent on biologics is increasing at an alarming rate.

The legislation before you would allow for a pathway for FDA for

companies to bring to market generic versions of these important

medications. We have the tools today to assist patients in

transitioning to these more cost-effective biogenerics. In fact, our

transitioning tools would be even more effective in this market because of the limited number of patients involved, a limited number

of prescriptions, and the limited number of treating physicians, not

to mention the enormous potential savings. Our plan sponsors, our

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1 Express Scripts, Inc., 2006 Drug Trend Report, www.express-scripts.com/ourcompany/news/

outcomesconference

clients, are extremely motivated to have us help pursue each and

every one of these savings opportunities.

Regardless of whether the FDA deems a product interchangeable

or comparable, we will be quite effective at working with prescribing physicians to help patients receive the most effective and clinically appropriate care. Many studies, including a detailed one by

Express Scripts, have sought to demonstrate the potential savings

associated with the FDA’s ability to approve biogeneric products.

They each differ in methodology assumptions but what is clear

about each one of these studies is that the Federal Government as

well as all payers stand to find savings in the billions of dollars.

That is billions with a B, not a number you can ignore in

healthcare today.

In closing, this historic legislation will allow patients, payers,

physicians, and PBM’s to work together to make these wonderful

therapies more available with frankly improved health outcomes

and tremendous savings.

Thank you for allowing us to talk about this.

[The prepared statement of Dr. Weisbart follows:]

TESTIMONY OF ED WEISBART, M.D.

Good Morning Chairman Pallone, Ranking Member Deal and other distinguished

members of the committee.

I am Dr. Ed Weisbart, chief medical officer at Express Scripts, and I am pleased

to be here today to discuss the issue of biogenerics from the perspective of a leading

pharmacy benefit management company. Express Scripts would like to thank the

Chairman and committee for their consideration of this historic policy issue which

we believe will fundamentally improve health outcomes by giving patients access to

lower-cost biologic alternatives.

Express Scripts is one of the Nation;s largest pharmacy benefit managers. We

monitor prescription drug trends and expenditures for 1,600 clients including large,

self-insured employers, government payers, unions and health insurance companies

with over 50 million lives. We work every day on behalf of our clients and their patients to make prescription drugs safer and more affordable. It should come as no

surprise given the dramatic rise in the cost of biotech pharmaceuticals that our clients look to us for advice on how to manage this ever-increasing biotech drug spend.

In fact, they have been demanding action to make these therapies more affordable.

In my testimony today, I want to make three basic points:

• First, specialty drug spend, especially biologic agents, is growing at an alarming

rate;

• Second, pharmacy benefit managers have developed many tools to manage the

increasing cost of prescription drugs; and

• Third, how we would apply these tools to biogenerics and the potential benefit

to patients, plan sponsors and the government.

I. Trends in Specialty Spend

Spending on pharmaceuticals now represents 11 percent of total health care

spend. Within the pharmaceuticals are specialty drugs, which are mostly the high

priced biologic agents being discussed today. As spend for non-specialty pharmaceuticals has slowed to single-digit growth, specialty drug spend increased 21 percent in 2006. 1

In 2006, spending on specialty drugs was $54 Billion, representing 20 percent of

the pharmaceutical spend. In 2010, spend for specialty drugs will almost double to

$99 billion. This rate of increase is the second highest in health care field, exceeded

only by diagnostic imaging tests.

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II. TOOLS OF PBMS

As I said, Express Scripts represents 1,600 clients, managing the pharmacy benefit for over 50 million individuals. To this end, we have developed sophisticated

tools, such as formularies, tiered copayments, step therapies and drug utilization

management programs to name a few. These tools promote the most clinically sound

and cost effective use of pharmaceuticals.

One of the most potent tools we have is the promotion of generic medications.

These therapies are time-tested, proven to be clinically effective, and have well characterized safety profiles. One additional key advantage is that they are the most affordable option for patients and plan sponsors. For these reasons, patients achieve

higher compliance rates with these therapies. Utilizing these programs, our company leads the industry in filling as many as 60.3 percent of all prescriptions with

generic drugs.

When a particular drug comes off patent and can be filled with a generic, that

fill rate climbs to about 96 percent. An example of this would be when simvastatin

came onto the market as a generic version of Zocor.

Where there is considerable patient monitoring needed, such as the case in preventing transplant rejections, what we call a narrow therapeutic index, physician

prescribing patterns are more cautious and we see a generic fill rate of 83 percent.

These generic fill rates are based on empirical drug spend data.

It is important to recognize that all of our programs for promoting the use of

generics, or less expensive branded medications, are reviewed by our external Pharmacy and Therapeutics committee. This independent self-governing committee is

made up of both primary care and sub-specialty physicians and pharmacists, none

of whom are employed by Express Scripts.

III. HOW WE WOULD APPLY PBM TOOLS TO BIOGENERICS

As we have stated, the money spent on biologic agents is increasing at an alarming rate. This legislation will allow for a pathway at FDA for companies to bring

to market generic versions of these important medications. PBMs have the tools to

assist patients in transitioning to the more cost-effective biogenerics. In fact, our

transitioning tools will be even more effective in this market because of the limited

numbers of patients, prescriptions and treating physicians, and the potential enormous savings. Our plan sponsors will be very motivated to have us pursue each and

every savings opportunity.

Regardless of whether the FDA deems a product as interchangeable or just comparable, we will be quite effective at working with the prescribing physician to aid

patients in receive the most cost effective and clinically appropriate therapy.

To use a non-biologic example, Express Scripts’ P&T Committee reviewed the potency of drugs called statins to determine the degree that they lowered LDL or

‘‘bad’’ cholesterol. Our independent P&T Committee concluded that three statins

were in the ‘‘high-potency’’ category.

In this case, statin A had a much higher price than statin B. So, we educated

consumers and physicians about the lower cost alternative brand product. We successfully moved 49 percent of market share to the preferred brand product within

6 months, and the outcomes for the patients are equally successful.

At the same time, statin B’s product went generic. And, Express Scripts simultaneously moved 96 percent of market share to the preferred generic agent within 3

months, resulting in $230 million of savings since January of 2006 in the area of

anti-cholesterol drugs alone.

While they have remained a relatively small percentage of prescriptions, biologics

are the single, largest segment of drug spend, with an additional 400 to 700 biologics in the pipeline. The average cost per day of a biopharmaceutical is $45 compared with $2 per day for a traditional medicine. In the traditional drug market,

generic medications decrease prices 60–90 percent as compared to branded oral-solid

medications.

Many studies—including a detailed one by Express Scripts—have sought to demonstrate the potential savings associated with the FDA’s ability to approve biogeneric products. What is clear about each of these studies is that the Federal Government—as well as all payors—stands to find savings in the billions of dollars.

In closing, this historic legislation will allow patients, payers, physicians and

PBMs to work together to make these wonderful therapies more available, with improved health outcomes and tremendous savings.

Mr. Chairman and Members of the Committee, thank you for allowing me to testify before the Committee on this important issue. I would be happy to answer any

questions you may have.

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Mr. PALLONE. Thank you, Doctor. We will now go to questions

from the members, and I will start. I am recognizing myself for 5

minutes.

I wanted to ask Mr. Kingham, as you heard, Dr. Woodcock—well,

I don’t know if you were here when she testified, presumably.

Mr. KINGHAM. Yes, I was.

Mr. PALLONE. She, at least I think she said, that clinical trials

should not be mandated or required for the approval of follow-on

biologics. She argued that FDA should have the flexibility to require different levels of testing depending on the complexity of the

follow-on product and that while clinical trials might be required

for the more complex molecules today, that could change with advancements in science. Now that seems to be at odds with your

written testimony which states that clinical trials should be required for all products, and my question really is if the FDA is telling us that clinical trials shouldn’t be mandated and we shouldn’t

have flexibility, why should we disregard that and require them?

Aren’t they the real experts that we should be listening to?

Mr. KINGHAM. Well, first of all, Congress has told FDA what to

do with respect to the data to support applications for drugs on a

number of occasions, so it is not unprecedented. And then the FDA

has to do what you tell them to do. You did that in 1962 when you

required proof of efficacy by only one type of clinical trial, not just

clinical trials adequate and well-controlled clinical investigations.

And in the legislation that Representative Waxman cosponsored in

1984 that Congress specified a particular type of comparative clinical trial, a bioequivalent study to demonstrate that generic drugs

should be approvable.

So you have done it many times. But the fact is that at the

present time, both in Europe and the United States, nobody has

seen a protein product of the type that we are dealing with under

section 351 that can be approved without some use in humans. I

think as a matter of basic science and policy, it is entirely reasonable to require some experimentation, some clinical use of a product before it is introduced into medical practice in those circumstances. I am quite happy that the FDA has substantial discretion as to the exact testing that is required. Right now where they

have that discretion they are requiring substantial clinical tests,

not minor ones but major clinical tests lasting months and involving substantial numbers of patients.

Mr. PALLONE. So you think there should at least be some trials,

it is just a question of what they would do?

You give flexibility in what they do but——

Mr. KINGHAM. I think the thing that disturbs me in at least one

of the bills that is before this committee, H.R. 1038, is that while

the legislation does ultimately give the FDA the power to require

a clinical trial, it segregates the clinical trial issue from other types

of data and attaches to it a sort of warning to the agency that they

better not require duplicative or unethical tests. Now, I have never

seen anything like that in a bill directed to the FDA before, but the

message that it clearly sends is you shouldn’t really be doing this.

The message I heard from Dr. Woodcock was most of the time,

probably all the time for the foreseeable future, for the types of

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proteins that are regulated under section 351, some form of clinical

testing is going to be necessary.

Mr. PALLONE. I will admit that it wasn’t totally clear what she

was saying. I would like to ask Dr. Allan. When Hatch-Waxman

was enacted in 1984, his detractors claimed that it would stifle innovation, yet the number of new technologies developed in the last

20 years, particularly in biologics, has been staggering. You noted

in your testimony that the pending legislation would be a positive

step for the biotech industry and would continue to fuel the cycle

of innovation. You want to just elaborate on that a little if you

could? Now, I am talking about Mr. Waxman’s legislation.

Mr. ALLAN. Yes. I think the innovation that would be stimulated

by an act of this type would be enormous in the area of analytical

methodology to characterize proteins, there would be an absolute

rush to the door for people to develop this methodology, to assist

in the development of these novel protein products. We were hearing this morning that science might be many years away. I would

absolutely guarantee that if the incentive was provided to the scientists out there in both research laboratories within universities

or biotech companies that there would be an enormous leap in our

knowledge of how to characterize proteins efficiently and effectively.

Mr. PALLONE. OK.

Mr. ALLAN. And this argument would disappear.

Mr. PALLONE. OK. Thank you. Ms. Hoffman, I appreciate your

being here and what you said. But the way I see it, innovators

have a virtual monopoly on the market now and aren’t necessarily

doing the research and development that you say is needed. So I

guess what I don’t understand is how the approval of the followons which we are talking about today would dramatically change

the playing field. In other words, if we approve a pathway for follow-ons, then why would that mean that there would be any less

innovation along the lines of what you suggest or what you think

is needed?

Ms. HOFFMAN. I guess I was saying that in terms of orphan diseases—diseases like childhood cancer, it doesn’t appear that there

is enough incentive to be producing biologics and new treatments

and new therapies for these patient populations; and I can’t see

that by reducing any sort of incentive that that is going to make

things better.

So my proposal is that anything to cut back on incentives is

going to make things even worse. I mean, we are already at zero,

but we have no hope, none at all, to even get on the playing field.

And I mean, it is not just childhood cancer, it is all orphan diseases, whether it is muscular dystrophy or other children’s diseases, it is a huge issue. And if we take that incentive away from

biotech companies, I just don’t see that there will be cures that

come down.

Mr. PALLONE. I understand your concern. You want to make sure

that we don’t eliminate incentives.

Ms. HOFFMAN. Yes.

Mr. PALLONE. Thank you. Mr. Deal.

Mr. DEAL. Thank you. I want to thank all the witnesses. You

have been very helpful, very informative and your written testiVerDate 11-SEP-98 12:45 Apr 28, 2008 Jkt 000000 PO 00000 Frm 00136 Fmt 6633 Sfmt 6633 Q:\DOCS\110-40 SCOM1 PsN: SCOM1
131

mony elaborates even further than your 5 minutes did. I thank you

for that.

Mr. Kingham, let me ask you specifically some questions so I can

clarify some terms here and thank you for refining your testimony

down to talking about the issue of exclusivity. I do believe that is

one of the two, in my opinion, major areas. The other big major

area I would classify would be the overall safety issue, and I want

to talk to some of you about that in just a second.

Let me first of all understand: patent extension currently extends

to biologics, does it not?

Mr. KINGHAM. Yes, it does, sir.

Mr. DEAL. OK. In your literature and in your attachment in particular, the terms market exclusivity and data exclusivity are used.

Are they the same information? Is it the same term? Does it mean

the same thing?

Mr. KINGHAM. No, not necessarily. Market exclusivity is a term

for a period during which there is not competition because of some

regulatory or other legal protection. It can be a patent, it could be

orphan exclusivity under the orphan drug amendments, something

like that. Data exclusivity is the period during which someone cannot rely upon your data to get a follow-on product approved. Data

exclusivity does not preclude another company that is prepared to

do research and development and do its own clinical trials from obtaining approval of a competitive product. That is why we have

multiple biologic products in a number of therapeutic categories

today because different companies did the work to support their

products.

Mr. DEAL. So when you were talking about the 14 years, you

were talking about market——

Mr. KINGHAM. That is correct. What I am saying is that I believe

Congress made a judgment in 1984 that that was a reasonable period to provide the incentives needed to do the research and development.

Mr. DEAL. OK. Now, in terms of data EE, that comes to the issue

of how much can a follow-on piggyback onto what FDA currently

has submitted by the original innovator, am I correct?

Mr. KINGHAM. That is correct.

Mr. DEAL. All right. Are you advocating a period of data EE?

Mr. KINGHAM. Yes, I am.

Mr. DEAL. How long?

Mr. KINGHAM. Of 14 years and the reason for that is that I believe that with all the various problems I identified, we cannot be

sure that patents will provide a certain period of market EE. I

would propose that that be provided with data EE.

Mr. DEAL. If we are talking about market exclusivity being different than patent protection which I understood you to advocate,

why would you also need data EE?

Mr. KINGHAM. You need it because the patents may not protect

the products under a system of——

Mr. DEAL. But if you got a statutory market EE, that gives you

the protection, does it not?

Mr. KINGHAM. Yes, sir, if the provision of the law were similar,

for example, to what is in the orphan drug amendments of 1983

which provides a period of time during which a competitive product

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cannot be approved without regard to patents, without regard to

data and so forth. That would achieve the same purpose.

Mr. DEAL. OK. The data exclusivity to me comes under my big

category of the safety issue as to how much can you use in determining the safety of the follow-on product. In that regard, I have

been intrigued by some indications of people who suggested that we

look at the FRFRA provisions of the EPA as it relates to the regulation of pesticides. They have some unique statutory provisions

there. Have you had any occasion to ever look at those?

Mr. KINGHAM. Well, I have. Of course, the pesticide law led to

some very serious constitutional problems back in the 1970’s when

the Environmental Protection Agency under instructions from Congress sought to use the data that had been submitted by innovators

in order to approve follow-on pesticide products, but they had actually assured people who filed data under the previous application

system that the data would not be used in that manner. That led

to a significant constitutional issue and very complicated questions

concerning how and if to compensate people for the use of their

data which brought down the whole registration system for a number of years.

Mr. DEAL. My reading of the Ruckelshaus case in 1984 that was

supplemented by the Thomas v. Union Carbide case of 1985 seems

to have approved at the Supreme Court level those statutory

schemes, and in that regard I need to ask you this question before

time runs out.

Mr. KINGHAM. OK.

Mr. DEAL. Part of that was all based on I think what the language was, reasonable investment backed expectation that the information submitted to a Government agency would not be violated

or remain invalid.

Mr. KINGHAM. That is correct.

Mr. DEAL. Is there anything as you see it under current law that

gives to current innovators of biologics a reasonable investmentbacked expectation that the information would not be shared? If so,

is it stated or is it simply implied?

Mr. KINGHAM. Well, in 1974, the Food and Drug Administration

said in the Federal Register that they would not use the safety and

effectiveness data filed under an application under section 351 of

the Public Health Service Act to approve competitive products. It

was very clearly stated that they would not approve generic products on the basis of data that were submitted by innovators.

Mr. DEAL. Other than that, is there anything that you think is

there?

Mr. KINGHAM. Well, that has been the continuous course of conduct since then. The agency has never taken that back, and the

regulation that it promulgated on the basis of that legal approach

remains in effect today. It is a bit complicated because it has to do

with the implementation of the Freedom of Information Act, but

the representation has existed since 1974 that data will not be

used to approve other people’s products.

Mr. DEAL. Thank you.

Mr. PALLONE. Mr. Waxman?

Mr. WAXMAN. Mr. Chairman, with all due respect, Mr. Kingham

is a lawyer and he is presenting to us his understanding of the law,

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but perhaps we ought to have lawyers from the generic industry as

well. I certainly can’t substitute for them, but I can tell you I wrote

these laws. And I think that the gentleman has made some statements that are incorrect.

There is a patent, and the patent is for 20 years. When you go

into FDA, there is a period of time in which FDA takes to review

it. Sometimes there is a delay at FDA because of FDA, sometimes

there is a delay at FDA because of the manufacturers. The argument in the mid-1980’s was in addition to the patent, there ought

to be exclusivity for some of the time lost at FDA for approval. So

the bill is the restoration of some of that time. The law didn’t guarantee 14 years, it said up to 14 years. That was the maximum.

Now, what we have presented to us from the industry, the bio industries, they ought to have a minimum of 14 years.

Now, we also provided some other exclusivities. We provided exclusivity of only 5 years for the most innovative new molecular entity, because we wanted to encourage the companies to look for new

uses for some of the drugs that were out there, and we said we will

give you 5 years of exclusivity. Well, that was 5 years for something really worthwhile. If it weren’t so dramatic, we gave them 3

years.

I also wrote the Orphan Drug Act. The Orphan Drug Act was to

give an incentive to develop drugs that weren’t profitable, so we

provided a term of exclusivity in the Orphan Drug Act. Now we

have the testimony from Mr. Kingham that we ought to give them

what was given under the Orphan Drug Act, but these are companies that are making biological drugs that are profitable. Nobody

is going to want to make, by the way, a generic version of a nonprofitable biologic drug. So the question then should be should they

have the same kind of exclusivity that was given to the orphan

drug act which was to make up for the fact that they probably

weren’t going to get a big windfall. By the way, many of them did.

You can never take back exclusivity. You can never take back some

of that period of time.

So if I were looking for the wish list of the biotech industry, since

they now take the position, well, we ought to have a pathway, my

wish list would be as follows. Let us give the companies that are

already on the market and may be on the market with new products as much exclusivity as possible, and that is certainly what

they are arguing. It is in their economic interest to argue for that

position. I would also argue, Mr. Schwieterman, if I were in the

biotech industry that argues that any legislation should rule out

the possibility of establishing interchangeability because ‘‘it is not

possible in the present state of science and technology to treat

them as interchangeable.’’ Do you agree that it is impossible given

the current state of science to devise studies necessary to determine whether two biologics are interchangeable?

Mr. SCHWIETERMAN. No, I don’t agree. I don’t agree that it is impossible. The use of the term interchangeability is a term that connotes confidence in data and the science and the use of a product

in a particular patient that provides a particular effect. It is to me

a term that actually is science-driven and data-driven, and I think

it fully possible in certain settings where the data exists and in the

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context of the application an indication that you could, in fact, in

those——

Mr. WAXMAN. In fact, the terms in my bill is lack of significant

clinical difference in the safety of effectiveness. So in effect, you can

have an interchangeable provision. Well, if I were I guess from the

bio industry, I would say, well, I certainly don’t want this to be

considered equivalent in this way because it will be substituted.

That is how we get our big savings is we substitute a generic drug.

Mr. Downey, a number of proposals would require FDA issue

guidance to classic cases of biologics before the agency may approve

a generic biologic. You have experience with the agency both as a

generic manufacturer and as a company that sells some brandname products. Would requiring a guidance for a class of generic

biologics be consistent with current FDA policy and would it make

sense?

Mr. DOWNEY. Well, no, it is not consistent with FDA policy today.

Even the innovative biologic products are not subject to a guidance.

They propose their own product and their own guidelines, and the

FDA comments. That is precisely what happens in BLA’s, new drug

applications, abbreviated drug applications, and that is what we

think should happen here.

Mr. WAXMAN. Well, if I were from BIO and I was trying to figure

out how do I extend my exclusivity period, I would also want to

complicate things by several years making me have to go through

this rigmarole.

Mr. DOWNEY. I believe if we had that process the first generic biological would extend beyond the career horizon of the current executives in the bio industry.

Mr. WAXMAN. Then you make them do more clinical trials. That

also would postpone the competition. So you want more exclusivity

and if that doesn’t protect you to make maximum profits, then you

want more obstacles before you get the competitor out there.

All of the wish list is in the other bill that is before this committee. I think we all agree there ought to be a pathway and there

needs to be a balance. But we need incentives not only for new

products, we need incentives for generic products as well; and before the Hatch-Waxman Act was adopted over 20 years ago, there

was no generic industry. In fact, the only thing the generic guys

did was reproduce the drugs for the brand-name companies. The

brand-name companies said, well, they don’t know how to do this

sort of thing. Well, they were actually making the drugs but the

brand-name companies were selling them for whatever the monopoly would allow.

We want that balance for both sides, and I would submit that the

bill that Mr. Inslee introduced is one that I would want us to walk

through very carefully and make sure that that balance is

achieved.

Thank you for that.

Mr. PALLONE. Thank you. Dr. Burgess.

Mr. BURGESS. Thank you, and thank you all for being with us.

It really has been an informative panel.

Dr. Schenkein, if I could ask you, you heard the line of questioning that Mr. Waxman was just following. Is that period of EE, is

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that something that you feel is important to the continued development of breakthrough and innovative products?

Dr. SCHENKEIN. I do. I believe it is critically important. As we

look at the development of biologics, particularly as they have a

better efficacy-to-safety ratio, they are safer, they appear to be

more effective, we move them into the agavent setting. By doing so,

we need to wait for the pivotal studies to first be done in the metastatic setting. So the timing by which we can move these medicines

up to the agavent setting where we believe they will have the biggest impact and potential possible cures, particularly in malignancies, and transform other illnesses, takes a long period of time.

It can be as long as a decade after the original approval to complete or design those studies.

Mr. BURGESS. Let me see if I understand that concept correctly.

You are developing these products that are used in individuals

with fairly advanced disease, stage IV metastatic cancer, and as

you develop the expertise of the comfort level with those products,

they are then possibly going to be investigated as agavent therapy

for someone with early stage disease to prevent recurrents and extend life at an earlier stage of a similar cancer, is that——

Dr. SCHENKEIN. That is absolutely correct, and that period takes

a long period of time.

Mr. BURGESS. Is it possible to make some of these difficult compounds, is it possible to make them so that they are just absolutely

identical? We heard the testimony from the gentleman from Express Scripts about the symptostatin story and no doubt that someone can make an exact replica of that molecule, with some of the

things that you work with, is it going to be possible to make an

exact replica of the molecule?

Dr. SCHENKEIN. At this point the science that we have available

today, it is not possible for us to say that these are the same.

Mr. BURGESS. How do you even then extrapolate that to the individuals where we are going to treat their lymphocytes and give

them back those? I mean, how do you do a study when your population is one and it is either effective or it is not?

Dr. SCHENKEIN. That raises the complexity even to the next level

above the standard proteins or antibodies that are being processed

now. So it will become even more complicated than that setting.

Mr. BURGESS. But as we get into the realm of personalized medicine of individuals, that is going to be critical, is it not?

Dr. SCHENKEIN. I believe so.

Mr. BURGESS. And it will be expensive, will it not?

Dr. SCHENKEIN. It is too early yet. We don’t know. We know that

these innovative——

Mr. BURGESS. Let me rephrase that. Even if it is expensive, it

is very likely to be worth it, is that a fair statement?

Dr. SCHENKEIN. After careful testing, if it determines safety and

efficacy, then that will be a therapy that will be useful.

Mr. BURGESS. What about the doctor who writes a prescription

for someone to go to the drug store and fill it with recombinant

DNA—in your experience would it be OK for someone just to substitute something different from what the doctor has established as

the product that he wants his patient to receive?

136

Dr. SCHENKEIN. As a physician, I think it is critically important

that I have that relationship with my patients so I know exactly

what that patient is receiving when I prescribe it. I am making

challenging decisions at every point about a variety of different

medicines I can use. And unless the product is exactly the same,

which we are not talking about in the case of follow-on biologics,

I need to have the ability to make a decision with that patient on

which medicine I want to give them.

Mr. BURGESS. Is that a big enough difference to be a difference?

Could that affect the critical outcome of a patient?

Dr. SCHENKEIN. It is certainly possible. When I make a decision

to use a therapy, I base that decision on clinical evidence, largescale clinical trials that have been published and presented. If that

is not available for another molecule, I factor that in the decision.

It is a totally different level of evidence to be able to base an important decision with a patient.

Mr. BURGESS. If I could, I would like to ask a question. I would

like both you and Mr. Kingham to respond and anyone else if you

feel so moved. When I first heard of this issue of generic biologics

or follow-on biologics, I thought that has to be a pretty small universe. We talk of savings, again the gentleman from Express

Scripts talked about with statins. That is a huge universe. But

when we talk about follow-on biologics, and maybe it is just an era

that is just beginning, but realistically, what kind of savings can

we expect, should we expect if we were to pass say the Waxman

bill through Congress this year?

Dr. SCHENKEIN. So again, as a physician and an oncologist designing clinical trials, I don’t think that is my best area of expertise

to comment on cost savings.

Mr. BURGESS. Well, then Mr. Kingham, do you have an opinion

about——

Mr. KINGHAM. Well, I can’t give you a precise number but I think

there are a number of reasons why the number will be smaller

than many advocates of the legislation suggested. Studies that I

have seen assume that there aren’t any effective patents for any

major products where as there are. They assume that the legislation and regime would be in place immediately and drugs would be

improved within months or a very short period of time after the

law was passed. The European experience doesn’t support that.

They have had a system in place for 31⁄2 years and they have approved two products.

It assumes that a number of products that present very complex

issues for approval, like monoclonal antibodies and so forth, would

be in the groups of products that will get approved and will compete. I think it is going to be a long time before the science is there,

much less the patent situation. It assumes tradition or something

very similar to traditional substitution patterns for generic drugs.

Quite apart from the scientific issues of interchange, these drugs

aren’t administered and dispensed in the same way so that the patterns of substitution that apply with prescriptions taken to the

drugs store won’t be relevant. And it assumes price differentials

that I think may be greater than the price differentials that will

actually occur based on experience in markets outside the United

States. There are a lot of assumptions that have been set into these

137

projections. I suspect we are talking about savings, and there

would be some for sure that are a small fraction of the savings that

have been suggested.

Mr. BURGESS. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you, Dr. Burgess.

Mr. DOWNEY. I would like to respond to——

Mr. PALLONE. OK. But let me just tell everybody what we are

going to do here. We have to vote on the Iraq supplemental, and

we only have 13 minutes. So we will ask Mr. Downey to respond,

and then we are going to have Ms. DeGette and then we will go

and vote.

Mr. DOWNEY. There is only one aspect to Mr. Kingham’s response

that I agree with and that is there will be very few approvals in

the first 5 years because it takes a longer time to bring the generic

versions to market than a generic pharmaceutical. But today, the

Taxpayers Against Government Waste issued a report where they

said after the first 5-year period, the next 10 years will result in

$43 billion in savings and I don’t think that is an unreasonable estimate. And I do strongly disagree we won’t achieve the same substitution rates. I know that we believe that we achieve those rates

in the hospital setting for other pharmaceutical products, we will

achieve them here. I know that the drug benefit managers like Express Scripts do an excellent job of educating patients and physicians about the benefits of generic products, and I am sure they

will carry that expertise into the biologic areas and we will achieve

those substitution rates and we will achieve that level of savings.

Mr. PALLONE. Thank you. The gentlewoman from——

Dr. WEISBART. May I?

Mr. PALLONE. Well, I just don’t want to run out of time. If you

want to be quick, go ahead.

Dr. WEISBART. I will be very brief. A couple quick points. Your

decisions will determine how much the savings is. Your decisions

will determine that. If you decide to follow some of those recommendations, you will have very little savings. If you decide to

pay attention to the wisdom of Mr. Waxman and yourself just a

minute ago, your savings are potentially enormous. Clients are

pressing us to do this. They are not that many prescriptions, they

are all handled through specialized pharmacists with a few physicians we know how to reach them. If you think of the savings I just

talked about for Simvastatin for a $40 or $80 change of prescription, these are hundreds of dollars. Our clients are very motivated

to have us do everything we are doing today and way more to make

these savings happen. In terms of the timing of this, that is up to

the courts. As we know, there are lots of drugs that come off patent

protection for which generic drugs reach market years in advance

of when the brand manufacturers—but the 10K filing would make

you think that is the not case.

And last, a large part of the savings early on are due to

erythroproteins which a large percentage of it comes to the Federal

Government. So the savings that are potential here are savings for

the Federal Government in large part. It is a huge opportunity.

That is soon if you introduce legislation.

Mr. PALLONE. All right. Thank you. I recognize the gentlewoman

from Colorado for 5 minutes.

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Ms. DEGETTE. Thank you, Mr. Chairman. I am a little nervous

because I do want to vote on the supplemental.

Mr. PALLONE. You have 11 minutes left. If you take 5 we will

still get there.

Ms. DEGETTE. I want to ask you, Dr. Shenkein, as we have been

hearing this testimony, the view of all of the representatives at

BIO who are here is that because biologics are so complex, it would

be very difficult to create a generic version; and what we have

heard from several of the witnesses is BIO seems to be supportive,

employing a biosimilar pathway similar to the one in the EU which

relies heavily on clinical trials. So if that is the case, do you think

we will ever have a situation where biosimilar will not have to go

through pretty much full clinical trials before approval?

Dr. SCHENKEIN. I can’t obviously predict what will happen in the

future. All I know is right now, the science in the foreseeable future, we don’t have the ability to be able to determine that these

molecules are the same.

Ms. DEGETTE. So your answer would be in all probability these

follow-on biologics would need to go through a full clinical trial,

correct?

Dr. SCHENKEIN. Yes.

Ms. DEGETTE. Well, then my next question, and I am going to

also ask Mr. Downey that question, too, is we have several proposals in front of us to create these pathways to approve follow-on biologics, and I haven’t signed on to any of these approaches because

like most of us, I am still trying to figure out the right balance. But

all of the approaches are predicated on the belief that the FDA is

going to handle increased responsibilities for the process. So my

question is given the fact the FDA is continuing to struggle to meet

its current obligations with fewer and fewer resources, what would

that agency need to be able to oversee a whole new pathway for

biosimilars? I want to start with Dr. Schenkein, and then I want

you to answer.

Dr. SCHENKEIN. So we do believe it is critically important that

with any policy that moves forward that it doesn’t distract the FDA

from the ability to review and approve innovative drugs that are

advancing the field forward. That has to be the primary focus. I

can’t comment on what the FDA would require to be able to——

Ms. DEGETTE. Do you think they would need substantial additional resources to do this job adequately?

Dr. SCHENKEIN. I can’t really comment.

Ms. DEGETTE. OK. What about you then Mr. Downey?

Mr. DOWNEY. House bill 1038 provides user fees to support the

generic biologic program at FDA and——

Ms. DEGETTE. Some of us have real concerns about user fees, too.

Mr. DOWNEY. Well, you asked how it would be funded.

Ms. DEGETTE. OK.

Mr. DOWNEY. At least in 1038 it contemplates user fees, and I

would support that because I think the FDA does need additional

resources and that is a place from which they can come and there

will be great savings achieved by it. On the clinical trials, I disagree with the comments that were made. In terms of mandating

clinical trials in the statute, that is not required for an original innovator BLA. Those requirements are all imposed by FDA on a

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product-by-product basis with product relevant clinical testing.

That is handled in the drug area, it is handled in the innovator biologic area, and what we believe is appropriate for generic biologics.

And I think also if you recall Dr. Woodcock’s testimony, she said

they have approved products with limited clinical studies and those

that have required more clinical studies.

Ms. DEGETTE. But all of them needed clinical studies.

Mr. DOWNEY. For today.

Ms. DEGETTE. So I think for today we have to go on that assumption.

Mr. DOWNEY. I would disagree. I think you need to think as I

talked about it earlier, it is 20-year cycles. This is the bill that I

think will last 20 years, and as you all know it is very difficult to

reopen these very contentious and difficult issues; so I believe we

should provide FDA the flexibility and the resources to handle this

issue for a long period of time. And if you look at the products, I

do disagree with some of the testimony here today. I think simple

proteins, like insulin, can be fully characterized and they don’t

really require the clinical trials. Now, I realize that FDA is probably going to disagree with me on that, but I do believe that

science is advancing so fast and it is so clear that in a very short

time we will be able to have very minor clinical trials, if any.

Ms. DEGETTE. I will say, I don’t disagree with what you are saying, but I do think it is probably a little naive to say we will just

do user fees and that will cover the cost. I am really going to look

forward to working with Mr. Waxman and Mr. Pallone to make

sure that whatever we do here, we give the FDA adequate resources to do this. I myself have a 13-year-old daughter who is insulin-dependent. I am not going to use a generic insulin with her

unless I am pretty darn well sure. Ms. Hoffman, mother of eight,

is sitting here nodding, too. We are just not going to do that unless

we are sure.

Mr. PALLONE. I am going to have to stop you. I appreciate it because we want Mr. Inslee to have a little time, but there is only

5 minutes left on the vote. You are at your own peril here. You

might have missed the vote.

Mr. INSLEE. Regarding data exclusivity we have a couple of numbers that have been suggested so far, one is zero and one is 14

years. And the previous incarnation which I appreciate Mr. Downey, he called it the Waxman-Hatch bill. That is appropriately honoring the House.

Mr. DOWNEY. I try to remember which house I am in.

Mr. INSLEE. I appreciate that. It had between a 5- and 14-year

data exclusivity as opposed to paying—is there any reason that any

of you could articulate to go backwards to zero on that if indeed

there was a societal purpose to protect data exclusivity for the reasons Mrs. Hoffman has talked about, to have an incentive for innovation. Is there any reason to have gone backwards? For instance,

is it easier to do a follow-on biologic for instance and some of the

other chemical or is the FDA much faster than it used to be so that

you don’t need that much protection? Is there any reason to go

backwards to zero? Can anyone articulate any reason?

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Mr. PALLONE. Let me just indicate we are going to have about

a minute to answer the question and then we got to go because otherwise we are going to miss the vote.

Mr. KINGHAM. Well, I would just say quite simply no, I can’t conceive of any reason for a zero.

Mr. INSLEE. That is the right answer. I have to go vote. Thank

you very much.

Mr. PALLONE. Thank you. Thank you, gentlemen and lady. We

appreciate your input. This was a very good hearing I feel, and I

got a lot of insight. It is a very difficult and complex problem, so

we thank you very much. You may get additional questions in writing from us within the next 10 days which we would like you to

respond to, and without further ado, this hearing is adjourned.

[Whereupon, at 2:30 p.m., the subcommittee was adjourned.]

[Material submitted for inclusion in the record follows:]

STATEMENT OF PRIYA MATHUR, CALIFORNIA PUBLIC EMPLOYEES’

RETIREMENT SYSTEM

On behalf of the California Public Employees’ Retirement System (CalPERS), I

appreciate the opportunity to provide testimony for the hearing record on the high

cost of biopharmaceuticals and the need to establish a safe pathway for the approval

of biogenerics. As vice-chair of Health Benefits for the Board of Administration of

CalPERS, I was elected by 400 thousand public sector members to serve on the

board of CalPERS to invest their $230 billion of retirement assets and to manage

their multi-billion dollar health benefit program.

The high cost of biopharmaceutical products presents an unsustainable challenge

to CalPERS and to our entire health care system. At a time when our state is trying

to expand health insurance coverage to more Californians, slow the rate of growth

in health care costs, and make our health care system more efficient, we cannot afford the status quo. I commend Chairman Pallone for his leadership in this area.

In addition, I would like to thank the sponsors of the bipartisan Access to Life-Saving Medicines Act, introduced by Representatives Waxman, Emerson, Pallone and

others.

CALPERS BACKGROUND

CalPERS was established by state law in 1932 to provide retirement benefits for

California public sector employees. In 1962, state law authorized CalPERS to provide health benefits to their members. Our mission is to advance the financial and

health security for all who participate in the System.

CalPERS’ health program covers 1.2 million active and retired state and local government public employees and their family members. Of that total, approximately

two-thirds are active members and one-third are retirees. Notably, CalPERS is the

third largest purchaser of employee health benefits in the Nation—behind the Federal Government and General Motors Corporation—and is the largest purchaser of

health benefits in California.

This year, CalPERS will spend almost $5 billion on health benefits—or $13.4 million per day. Of that amount, CalPERS—for the first time—will spend over $1 billion on our members’ prescription drugs.

SLOWING THE RATE OF GROWTH IN HEALTH CARE

Recognizing that we have a fiduciary responsibility to constrain cost growth and

ensure healthcare value, CalPERS has long been a leader in implementing cost-effective programs. These initiatives include consumer-friendly managed care, aggressively negotiating favorable contracts with insurers by leveraging our pool of enrollees, state of the art hospital purchasing and quality assurance arrangements. In addition, we have instituted innovative prescription drug benefit cost-sharing designs

to maximize the use of generics and therapeutically appropriate brand drugs. We

have also provided incentives for the use of over-the-counter and mail-order medications and mail-order, particularly for the treatment of chronic diseases.

CalPERS has enjoyed tremendous success in controlling prescription drug costs

through the use of generics. This has been possible thanks to the efforts of this

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Committee, and particularly Mr. Waxman, whose efforts two decades ago led to the

enactment of the ‘‘Drug Price Competition and Patent Term Restoration Act of

1984,’’ better known as Hatch-Waxman.

As members of this committee well know, Hatch-Waxman gave the Food and

Drug Administration (FDA) the authority to provide an abbreviated approval process for those products deemed equivalent to an innovator product once a product’s

patent had expired. For multi-source drugs in our self-funded PPO, which covers

about a quarter of our members, our generic substitution rate is approximately 96

percent. Without generic substitution, we estimate that our costs would be about 60

percent higher—saving our enrollees and our state taxpayers hundreds of million

of dollars annually.

In spite of all of our cost-containment efforts, we are experiencing double-digit increases in health care spending over time. Since 2002, CalPERS has seen an average annual increase of about 13.5 percent for our HMOs and PPOs, and a 12 percent average annual increase in our association member plans.

INCREASING COST OF BIOPHARMACEUTICALS

Because of the complex delivery requirements of many biopharmaceuticals, it is

exceedingly difficult to break out a stand-alone spending line for these products.

However, we believe that our spending on so-called ‘‘specialty drugs’’ is a good proxy

because biotech products make up the great majority of spending in this category.

CalPERS spending for these products is distressingly substantial and rising at a

rate that is significantly higher than traditional pharmaceuticals.

Total spending for specialty drugs was $83.7 million in 2006, up from $67.4 million in 2004. Spending on these prescriptions increased by 16.9 percent in 2005—

compared to a 5.4 percent increase in traditional prescription drugs. On average,

spending for biotech products was at least $55 per day—compared to traditional

drugs at only $2 per day.

PROMISE OF BIOGENERICS—COMPETITION AND LOWER COST

CalPERS supports a competitive health care marketplace that leads to innovation

and further development life-saving medicines. Today, biopharmaceutical manufacturers enjoy monopoly positions. Today, unlike traditional pharmaceuticals, no competition is created in the marketplace once a patent has expired on a brand name

biopharmaceutical. Competition does not exist because the FDA has held that it

does not have the authority to approve biogeneric products. CalPERS supports giving the FDA explicit authority to approve biogeneric products that are safe.

It is imperative that Congress take action this year to enact bipartisan legislation

to give FDA the authority to approve safe biogenerics. Today’s biotech companies

are benefiting long after patents expire and are profiting at the expense of all Americans. No employer, labor organization or health plan can continue to offer affordable coverage without competition in the biopharmaceutical industry. Without the

ability to access less expensive, comparable, and interchangeable biopharmaceuticals, CalPERS ultimately will be forced to increase prescription drug co-pays

or increase premiums, shifting the increasingly unaffordable costs onto the individuals who can least afford them.

Finally, I would like to address the issue of safety. Opponents of this legislation—

primarily the biotech industry—are claiming that those who support the Access to

Life-Saving Medicines Act are ignoring the safety threat of bringing biogenerics to

the marketplace. I want to be clear—the safety and health of our members comes

first in any decision we make about any policy. That is why we strongly support

providing FDA with full discretion to make the ultimate decision about whether and

when any prescription drug product, whether it be brand or generic, comes to market. The Access to Life-Saving Medicines Act does provide the FDA with that discretion.

CalPERS is proud and honored to add our support to the growing list of workers,

seniors, patient groups, businesses, health plans, health care providers, pharmacy

benefit managers and countless others who support the Access to Life-Saving Medicines Act to open the door to biogeneric competition. We stand ready to work with

the Committee to pass legislation to give FDA the authority to approve safe and effective biogenerics as a means to providing consumers with affordable alternatives

to high-cost biopharmaceuticals. Thank you for the opportunity to provide testimony

for the hearing record.

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STATEMENT OF COALITION FOR A COMPETITIVE PHARMACEUTICAL

MARKET

Thank you Chairman Pallone, Congressman Deal, and members of the Subcommittee on Health. The Coalition for a Competitive Pharmaceutical Market

(CCPM) appreciates the opportunity to submit this statement to the hearing record.

We commend you for holding this important hearing on the need to establish a

workable, safe and science-based regulatory pathway within the Food and Drug Administration (FDA) for the approval of biogeneric products.

BACKGROUND

CCPM is an organization of employers, health plans, pharmacy benefit managers,

chain drug stores, generic drug manufacturers, and others committed to a competitive pharmaceutical market that expands access to affordable prescription medications. To achieve this outcome, we believe we must remove barriers to competition

and choice that generic drugs bring to the market. We also need to develop new

pathways to bring that same competition to the marketplace as it relates to biopharmaceuticals. Monopolies, such as what currently exist in this arena, are not

only detrimental from a consumer and business perspective, they actually remove

incentives for innovation. This helps explain our commitment to the establishment

of a workable pathway for biogenerics.

As employers, including some of the Nation’s largest manufacturers, it is imperative that our employees have access to safe and affordable prescription medications

for two reasons. First, a healthy and productive workforce is critical to our ability

to compete in a global economy. Second, the high cost of health care is limiting our

ability to compete with other nations, and pharmaceuticals are the single fastest

growing segment of overall health care costs. As health plans and pharmacy benefit

managers, access to safe and affordable prescription medications is critical to our

ability to slow the rate of growth in health insurance premiums for businesses and

consumer out-of-pocket costs. As chain drug stores, we are on the front line as witnesses to the impact of high-cost prescription drugs on consumers. Finally, as generic drug manufacturers, we are committed to producing safe and affordable generic alternates to employers and consumers. Our membership is diverse, but we

are united in our belief that a definitive regulatory pathway for the approval of

biogenerics is critical to improving our Nation’s health and controlling prescription

drug costs.

VIEW ON PRESCRIPTION DRUG MARKETPLACE

CCPM strongly supports a vigorous and competitive prescription drug market, one

in which innovation leads to new life-saving medicines. Currently competition is

limited in the biopharmaceutical market because the FDA does not have the clear

authority to approve biogeneric products. As a result, even when a patent has expired on a brand biopharmaceutical, the lack of a pathway thwarts competition, and

keeps biopharmaceutical prices artificially high. CCPM urges Congress 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. 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 of dollars

each year. We believe that bipartisan legislation introduced this year by Representatives Waxman and Emerson, H.R. 1038, the Access to Life-Saving Medicine Act,

is an important next step in ensuring that biologic prescription drugs are more affordable and accessible. CCPM supports this important legislation, which will provide the clear authority that the FDA needs to approve biogenerics and bring muchneeded competition to the biopharmaceutical market.

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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 .

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 so the sooner these lower cost biogenerics can enter into the marketplace, the better.

Additionally, when exploring avenues to introduce competition into the marketplace, CCPM

urges 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.

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 is expected to rise to $497.5 billion by 2016. 1

The use of biopharmaceuticals is increasing at almost twice the rate of traditional medicines accounting for approximately $30 billion in U.S. sales and 12 percent of

total pharmaceutical usage last year. 2

The reason for the dramatic increase becomes clear when one examines the cost

biopharmaceuticals compared to synthetic drugs. The average cost of a biopharmaceutical is $45 per patient per day, versus $1.66 per patient per day for a synthetic

drug. 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 many consumers.

Providers of prescription drug coverage, both in the private sector as well as the

Federal Government through programs such as Medicare and Medicaid, depend

heavily on the role of generic products to help control costs. The lack of certainty

in the prescription drug marketplace, particularly in the biopharmaceutical sector,

poses great challenges to payers. Forecasting future health care expenditures remains difficult because there is no clear timeline for when or even 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

GUIDING PRINCIPLES FOR BIPARTISAN LEGISLATION

When considering legislation to provide a clear regulatory pathway for the approval of biogenerics, CCPM encourages Congress to consider five key principles:

1. Protect and promote fair and open competition. CCPM members are leaders

within their industries, and highly competitive. Several Coalition members are patent holders, and as such, respect and understand the development of innovation and

need for patent protections. However, we strongly believe that 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 and pharmacists 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 this hearing will affirm 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. CCPM is encouraged to hear reports that members are committed

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to including a workable pathway in FDA Revitalization efforts, including the prescription drug reauthorization legislation (PDUFA) and strongly support you in this

endeavor.

CCPM is pleased that the Energy and Commerce Health Subcommittee is considering issues like biogenerics that can make a positive impact on our health care system. We believe a bipartisan bill that empowers the FDA to use the best science

to encourage innovation and biogeneric competition should be passed this year. The

Waxman-Emerson-Pallone bill certainly meets this standard and, as such, CCPM

has called for—and is urging—its passage. However, like the sponsors of this legislation, we well understand that there will be compromises to make before any bill

is signed into law. What must not be compromised is safety as well as a workable,

science-based pathway to provide competition and choice to consumers, employers,

health plans and Federal, state, and local purchasers of pharmaceuticals. The very

act of holding this hearing represents an important step to achieving this outcome

and ending the unsustainable monopoly that currently exists. We commend you,

Chairman Pallone, for taking this step and we look forward to working with you

and all the other members of the Subcommittee and full Committee on this important issue.

COALITION FOR COMPETITIVE PHARMACEUTICAL MARKETPLACE (CCPM) MEMBERSHIP

April 2007

Aetna Inc, America’s Health Insurance Plans, Apotex, Barr Laboratories, Ben

Venue Laboratories, Blue Cross Blue Shield Association, Caremark, Caterpillar,

Inc., DaimlerChrysler Corporation, Eastman Kodak Company, Express Scripts, Ford

Motor Company, General Motors Corporation, Generic Pharmaceutical Association,

Hospira, Humana, Kaiser Permanente, Medco, Mylan Labs, National Association of

Chain Drug Stores, National Association of Health Underwriters, Pharmaceutical

Care Management Association, Ranbaxy Pharmaceuticals, Teva Pharmaceuticals

USA, Wallgreens Company , Watson Pharmaceuticals, Wellpoint

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May 23, 2007

David Schenkein, M.D.

Vice President

Clinical Hematology/Oncology

Genentech

1 DNA Way

South San Francisco, CA 94080

Dear Dr. Schenkein:

Thank you for appearing before the Subcommittee on Health on Wednesday, May

2, 2007, at the hearing entitled ‘‘Assessing the Impact of a Safe and Equitable Biosimilar Policy in the United States.’’ We appreciate the time and effort you gave as

a witness before the Subcommittee on Health.

Under the Rules of the Committee on Energy and Commerce, the hearing record

remains open to permit Members to submit additional questions to the witnesses.

Attached are questions directed to you from certain Members of the Committee. In

preparing your answers to these questions, please address your response to the

Members who have submitted the questions and include the text of the Member(s

question along with your response. In the event you have been asked questions from

more than one Member of the Committee, please begin the responses to each Member on a new page.

To facilitate the printing of the hearing record, your responses to these questions

should be received no later than the close of business Friday, June 1, 2007. Your

written responses should be delivered to 316 Ford House Office Building and faxed

to 202–225–5288 to the attention of Melissa Sidman, Legislative Clerk/Public

Health. An electronic version of your response should also be sent by e-mail to Ms.

Melissa Sidman at melissa.sidman@mail.house.gov in a single Word formatted document.

Thank you for your prompt attention to this request. If you need additional information or have other questions, please contact Melissa Sidman at (202) 226–2424.

Sincerely,

John D. Dingell

Chairman

RESPONSES TO QUESTIONS FROM MAY 2, 2007, HOUSE ENERGY & COMMERCE,

HEALTH SUBCOMMITTEE HEARING, DR. DAVID SCHENKEIN, GENENTECH, INC.

THE HONORABLE EDOLPHUS TOWNS

A protein that was recently approved under the 505(b) 2 pathway,

Omnitrope, contains a rating indicating that FDA has not evaluated sufficient data to justify a finding of interchangeability. In addition, you have

recently testified it will take at least another ten years to establish standards of interchangeability for biological products. Since it appears that

there is a huge gap in our understanding of how to demonstrate interchangeability of follow-on protein products, it might be advisable to allow

physicians to make decisions based on their patients’ specific clinical situations. Would you agree?

Yes. Given that follow-on versions of biological products cannot be identical to or

the same as the innovator product they seek to emulate, only treating physicians

should be allowed to make decisions regarding the interchangeability of products.

They should not substitutable at the pharmacy level.

Given the greater complexities of biologics compared to smaller molecules, it seems logical that we establish a pre-approval requirement for

clinical data with follow-on protein products.— Would you agree that,

based on state-of-the-art science, FDA could not approve a follow-on protein product without clinical data?

Yes, I agree. Again, given the fact that follow-on biological products cannot be scientifically the same as the innovator product, it is necessary to test them independently in clinical trials to assure their safety and efficacy.

THE HONORABLE ANNA ESHOO

Representative Waxman’s legislation provides no market exclusivity to

innovator products—zero years. Representative Inslee’s bill provides 14

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years of market exclusivity. In the Senate, one of Senator Kennedy’s draft

proposals affords 10 years of market exclusivity to innovator products. For

comparison, the European Union allows a total of 11 years of innovator exclusivity. In the U.S., pharmaceutical drugs (pills) are allowed 5 years of exclusivity plus 3 years for new uses of approved drugs under Hatch-Waxman. What factors (e.g. expense, risk, length of Research and Development period, patent protections) must Congress take into account in arriving at the

‘‘right’’ number?

All of these factors need to be taken into consideration for Congress to arrive at

the ‘‘right number.’’ As you are aware, the research and development cycle of biological products is lengthy, costly and risky. In addition, given that the approval

standard for a follow-on biologic will necessarily be based on ‘‘similarity’’ or ‘‘comparability’’ and not ‘‘sameness,’’ we are concerned that the patent protections afforded innovators may not be sufficiently protective to ensure an adequate return

on our investment. Specifically, follow on manufacturers may engineer around our

patents, yet still gain FDA approval for a product that is ‘‘similar’’ or ‘‘close’’ to the

innovator product. If this is the case, then follow on companies could theoretically

piggy back on an innovator’s investment once the innovator product goes to market.

To ensure that companies such as Genentech are able to continue to invest in researching and developing life-saving therapies, Congress should construct a system

that guarantees a sufficient amount of time during which our invention and data

are protected. The legislative history of Hatch-Waxman indicates that Congress contemplated that 14 years is the intended period of effective patent life for a small

molecule, whether achieved through patent protection, data exclusivity, patent term

restoration, or a combination of all 3. As such, we believe that the same 14 years

should be applicable to innovator biologics; however, the only true way to guarantee

such time is through data exclusivity.

Genentech has 14 products on the market today. How important is market exclusivity for the average biotech company, which typically has only

a few, if any, approved products in its portfolio?

Extremely important. Every company needs the assurance of an appropriate

amount of time during which to recoup the investment made in R&D.

How does this system affect academic and medical research centers, such

as Stanford University and the University of California, who are also patent holders? Any final bill must assure appropriate patent notification provisions to ensure that academic and medical research centers have sufficient notice in order to protect their own intellectual property rights. Without notification procedures, these institutions could unwittingly be denied

the opportunity to protect their inventions, either through entering into licensing agreements or through litigation.

Assuring the safety and efficacy of all drugs is my #1 priority in this debate.

Why is it important for a follow-on manufacturer to conduct post-market

studies to ensure the safety of their products?

Given that follow-on biologic products are, by definition, different than the innovator product, it is extremely important that the FDA have the authority to require

post-marketing studies of the follow-on applicant in order to ensure the on-going

safety of the product once it is marketed and available for use.

In constructing a follow-on biologics pathway, should Congress limit

FDA’s ability to impose post-market studies on follow-on biologics manufacturers?

No. The FDA should have the authority to require post-marketing studies of both

follow-on and innovator companies.

If a generic drug manufacturer were to submit an application for a follow-on version of a breakthrough cancer biologic, and that follow-on was

not clinically tested:

As a physician, would you be comfortable having your patients switched

from a biological product that you have prescribed, to a follow-on product?

Would you want your mother or child to receive a follow-on biologic?

No, I would not. Again, given that follow-on products are by definition different

than the innovator they seek to replicate, it is critical that the follow-on product be

independently tested to assure its safety and efficacy. As a physician, I would not

prescribe a follow on product that had not been independently tested, as I could not

be certain it was safe to do so.

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What types of risks to patient safety does mandatory interchangeability

present with respect to biologics? Do generic drugs (pills) possess these

same risks?

There are significant risks to the patient in the context of mandatory interchangeability between follow-on and innovator products. Since the products are not identical, unlike small molecule generics, they should not be treated as such. Rather,

only treating physicians should be empowered to make decisions about which drugs

to prescribe his or her patients, whether a follow-on or innovator product. Generic

pills (small molecules) are shown to be identical to their innovator counterpart. As

such, the FDA is able to allow the safe interchangeability of generics in this context

because the innovator counterpart has been proven to be safe and effective. In this

case, the follow-on and innovator product cannot be the same and should be not

deemed to be interchangeable by the FDA or a pharmacist. Only a treating physician should make such a determination.

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