Cheaper clinical trials: the real solution to the biologic industry's Gordian knot.

I. INTRODUCTION Biologies include a wide range of products, such as vaccines, allergenics, gene therapies, and tissues, among others.1 Biologies are complex combinations of sugars, proteins, or nucleic acids that are produced by biotechnology methods or other advanced technology.2 Biologies often represent the only medical treatment for complex medical conditions such as: Hepatitis B; Measles, Mumps, Rubella and Varicella; and Tetravalent meningococcal conjugate among others.3 As a result, biologic sales are growing at twice the rate of chemical pharmaceuticals4 and are expected to exceed $158 billion by 2015.5 Various interest groups, including patients, insurers, and regulatory agencies, raised concerns about the financial impact that biologies may have on health care costs. Congress and the Food and Drug Administration (FDA) faced pressure to provide a solution to the soaring biologic costs, namely through a regulatory pathway for generic biologies ("follow-on biologies") to manufacture cheaper products.6 Although a regulatory pathway for generic chemical pharmaceuticals ("generic") exists under the Hatch-Waxman Act, a similar regulatory pathway for follow-on biologies did not exist prior to 2010. Under the Hatch-Waxman Act, generic manufacturers could create cheaper versions of chemical pharmaceuticals.7 Many follow-on biologic manufacturers wanted the FDA to apply the Hatch-Waxman Act to biologies, enabling follow-on biologies to produce cheaper biologies.8 However, the FDA refused to permit most biologies to fall under the Hatch-Waxman Act.9 Instead, the FDA deferred to Congress to approve an appropriate regulatory pathway for follow-on biologies.10 On November 4, 2008, the American people elected Barack Obama as the 44th President of the United States. President Obama made it clear that health care reform would remain among his top initiatives. As a result, health care reform was the topic of heated debate between the Democrats and Republicans. Despite this disagreement, President Obama vowed to decrease expensive health care costs, such as biologies. Consequently, Congress approved the Biologies Price Competition and Innovation Act of 2009 ("BPCIA"), which created a regulatory pathway for follow-on biologies under the Patient Protection and Affordable Care Act ("PPACA") on March 23, 2010. n While the BPCIA attempts to create health care savings, it fails to adequately maintain incentives to innovate and protect consumer safety. Instead, Congress should have explored solutions to reduce clinical trial costs, such as cost-sharing, government subsidies, or imposing regulation to create efficiencies within the clinical trial markets, rather than approve a regulatory pathway for follow-on biologies. These solutions would target clinical trials, the true cause of expensive biologic costs, without risking patient safety, infringing on pioneer biologic manufacturers' constitutional rights, or threatening pioneer biologic manufacturers' incentives to innovate. Part II of this note provides an overview of the biologic industry, and Part III describes the current regulatory pathways for chemical pharmaceuticals. Part rV explores the need for legislation to require interchangeability between pioneer and follow-on biologies. Part V reviews the constitutionality of applying the Hatch-Waxman Act to biologies, and Part VI analyzes the BPCIA. Finally, Part VII explores methods to reduce the price of clinical trials. II. BIOLOGIC INDUSTRY A biologie is a drug derived from a living organism that treats human diseases, such as a "virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, or analogous product, or arsphenamine or derivative of arsphenamine."12 Some biologies stimulate an immune response in the body, which forms antibodies that fight a particular disease.13 The biologic industry is important for the medical community because biologies are often the best medical treatment available for certain medical conditions, such as chronic kidney disease. …