Brown Vetoes Limits on Biotech Generic Drugs that Don’t Yet Exist

Wednesday, October 16, 2013

The biotech industry and the California Legislature loved it, the generic drug industry hated it and Governor Jerry Brown vetoed it. The “it” was legislation to regulate drugs that have not yet made their way to the public, but hold the promise of billions of dollars in profits for biotech companies.

Senate Bill 598 would have made it harder for generic versions of expensive biotechnology drugs to be approved for use in the state by setting a standard for them that required they be “interchangeable,” i.e. near exact replicas, of the original drug rather than just similar. The bill, which passed with near unanimous support in the Legislature, also would have required pharmacists to inform patients when a biosimilar version of a product was being dispensed and send that information back to the prescriber.

Pharmacists are allowed, by law, to substitute generics for the original in most cases. AB 598 would have allowed doctors to forbid the substitution.

Brown called the measure “premature” in his veto message (pdf), because the law wouldn’t take effect until the U.S. Food and Drug Administration (FDA) approved the drugs, and, to date, the agency hadn’t even drawn up guidelines defining the difference between “interchangeable” and “biosimilar.”

Although many people expect biosimilar drugs to be the wave of the future, there are none currently available in the United States. Biotech companies argue that legislation like SB 598 is necessary to protect patient safety, while critics say all they care about is protecting market share in a burgeoning multi-billion-dollar industry. Biosimilar drugs have been available in Europe for awhile.

Biotech drugs, made from living cells, make up around 25% of the $320 billion spent on medications in the country each year. Like generic alternatives to non-biotech drugs, companies making biosimilars want to offer consumers a cheaper version of biological drugs, which can cost tens and hundreds of thousands of dollars per patient.

The governor seemed mystified by the controversy over the notification process, “which on its face looks reasonable, [but] is for some reason highly controversial.” Doctors have indicated they want the feedback, but officials at California Public Employees’ Retirement System (CalPERS) argue it would cast aspersions on the generic drugs’ safety and desirability even after they were approved by the FDA.

The generic drugs, once standards are set and they are approved, could save users between 20% and 50% on a range of expensive products from companies like Amgen and Genentech that treat cancer, rheumatoid arthritis, multiple sclerosis and other maladies.

Similar bills to California’s have been introduced in Texas, Illinois and eight other states this year, according to the New York Times, and been defeated each time. But North Dakota passed one like it. Oregon, Utah and Virginia passed it too, but with sunset provisions that could retract the law before the FDA acts. Florida enacted a version without the doctor notification and at least two other states are considering their own versions.

The biotech industry is relatively new, and legislatures and regulatory agencies are still feeling their way on a number of issues. The Times points out there is still no agreement on whether to call generics by the same name as the original or give them a different name.    

 –Ken Broder   


To Learn More:

Gov. Brown Vetoes Biosimilar Drugs Bill (by Ron Leuty, San Francisco Business Times)

Governor Vetoes Bill to Limit Use of Generic Drugs in California (by Andrew Pollack, New York Times)

Calif. Bill to Restrict Biosimilars Gets Governor’s Veto (by Alaric DeArment, Drug Store News)

Generic Drugs under Siege by Biotech Firms Out to Reclaim Multi-Billion-Dollar Turf (by Noel Brinkerhoff, AllGov)

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