NCPA - National Center for Policy Analysis


April 10, 2007

Biopharmaceuticals, or biologics, are proteins made by splicing genetic material into living cell cultures.  Many biologics are breakthrough therapies, from Avastin, which chokes off the blood supply to cancerous tumors, to Cerezyme, which treats the rare genetic disorder Gaucher's disease.  These drugs are expensive: Some can run to thousands of dollars a year.  According to IMS Health, the total cost reached $52.7 billion in 2005, some 13 percent of U.S. drug spending. That figure is expected to rise to $90 billion by 2009.

California Rep. Henry Waxman has introduced the Access to Life-Saving Medicine Act because, he claims, all this is "too expensive."

The Waxman legislation:

  • Would establish "interchangeability," or therapeutic equivalence, as the Food and Drug Administration standard; a prescription for expensive Avastin, say, could be filled by a cheaper generic product, even though the two might function differently in the body.
  • Enforces an abbreviated FDA review process, circumventing the multiyear clinical trials and postmarket studies required of the original drugs.
  • Restricts the FDA's authority to require postmarket tests, in effect assuming into the process facts not in evidence.
  • Weakens intellectual property protections such as clinical trial data exclusivity, and also establish compulsory licensing.
  • Offers incentives for generics to work around the many patents that cover complex biologics before they expire (even the European Union provides more stringent patent guarantees).

The high prices of biologics reflect the difficulty and expertise required to develop these medicines.  It should be possible to preserve incentives to innovate while advancing legitimate public health goals like increased access.  And generics can play a useful role in spurring the reformulation of existing medicines in more efficacious ways.  The challenge is to strike a balance between access and innovation, which Waxman and his allies fail to do.  The real costs of this agenda might well be fewer new biological therapies, says the Wall Street Journal.

Source: Editorial, "Dr. Waxman's Drug Lab," Wall Street Journal, April 10, 2007.

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