A Regulatory Approval Pathway for Biosimilars. April 2009. America’s Biopharmaceutical Companies Have Made Significant Contributions to the Health of Americans.
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A Regulatory Approval Pathway for Biosimilars
America’s Biopharmaceutical Companies Have Made Significant Contributions to the Health of Americans
Companies in the vibrant biopharmaceutical sector choose to headquarter their operations in the U.S., in part, because favorable public policies enable their success.
Many federal and state policies help biopharmaceutical companies achieve a greater level of innovation, including intellectual property protections and an ability to provide returns to investors.
Emerging health threats and an aging and increasingly sicker population drives the critical need for further innovation.
New Medicine Development is Lengthy, Costly, and Risky
New medicine development is a lengthy process: The average development time has increased to between 10 and 15 years.1
It is virtually impossible to
find other historical examples [outside of the biotech sector],
at least at the industry level, for which such a large fraction of
new entrants can be expected
to endure such prolonged periods of losses and for which the vast majority may never become
viable economic entities.2
— Gary Pisano, Harvard Business School
The R&D process is very risky: For every 5,000 to 10,000 compounds tested, just 5 will make it to clinical trials and, of those, only 1 will eventually receive FDA approval.
R&D expenditures for each new biologic averaged $1.24 billion in 2006.1
Only 2 in 10 approved medicines bring in enough revenue to recoup the average cost of development.
Individual company returns reflect the high risk and long lead times inherent in drug discovery and development.
Sources: 1DiMasi, JA and Grabowski, HG. “The Cost of Biopharmaceutical R&D: Is Biotech Different?” Managerial and Decision Economics 469-79 (Jun. 2007); PhRMA. “Drug Discovery and Development: Understanding the R&D Process.” (2007). 2Pisano, GP. “Science Business – the Promise, the Reality, and the Future of Biotech.”
Biopharmaceutical R&D Creates Economic Growth and
High Value Jobs
Biopharmaceutical research companies are leaders in today’s knowledge-based economy, in which growth and productivity are driven by investments in innovation and R&D.
Expanding GDP by Investing in R&D
[T]he pharmaceutical and biotechnology industry, … expands GDP by at least $27 billion annually, on a permanent basis, for every one-time R&D investment of $15 billion.2
Scientific & Engineering Jobs
In 2004, biopharmaceutical research companies employed 400,000 people, and generated economic growth responsible for employing 2.4 million additional people in other industries.1
In the pharmaceutical industry, the number of science and engineering jobs increased nearly 86% from 2000–2004, compared to a 16% increase for all manufacturing industries.1
High Value Added per Employee
Pharmaceutical firms generated an average $425,529 in value added per employee compared to $130,218 for all manufacturing. 2
Source: 1DeVol et al., “Biopharmaceutical Industry Contributions to State and U.S. Economies,” Milken Institute, October 2004; 2R. Shapiro, et al., Economic Effects of Intellectual Property-Intensive Manufacturing in the United States, July 2007.
The Growing Importance of Biotechnology Medicines
Biotechnology medicines have been proven to be safe and effective with an excellent record of patient satisfaction and safety.
Biotechnology has produced more than 125 medicines including for some of the most serious and intractable diseases.
In 2008, there were 633 biotechnology medicines in development, including 254 for cancer and related conditions and 162 for various infectious diseases.
Developing a biologic’s full therapeutic potential can take time. New treatment advances are often realized from biologics that have been on the market for some time, but which were not known until additional research was conducted.
Source: Biotechnology Research Continues to Bolster Arsenal Against Disease with 633 Medicines in Development. PhRMA, 2008.
The Complexity of Biologics Leads to Unique Challenges
In Establishing a Regulatory Pathway for “Biosimilar” Products, It Is Critical to Appropriately Consider Scientific and Safety Aspects
America’s biopharmaceutical research companies support the establishment of a science-based, biosimilars regulatory approval pathway with substantial incentives for innovation that ensures patient safety and does not hinder the development of future medicines.
Points to Consider for Establishing a Regulatory Approval Pathway for Biosimilars
Biologics are complex molecules with the potential for critical medical advances.
Research and development for biologics is long, costly and risky.
A regulatory approval pathway for biosimilars must include adequate measures for assuring patient safety.
At least 14 years of data exclusivityor data protection must be part of any biosimilars legislation to provide the certainty necessary for continued R&D investment leading to needed medical advances.
Regulatory Process for “Biosimilars” Should Include Adequate Measures for Assuring Patient Safety
Because follow-on biologics may be similar but not the same as the reference product, biosimilars could have different safety and therapeutic profiles than the innovator product.
Regulatory pathway must:
Innovator Products Need At Least 14 Years of Data Exclusivity
Source: 1 H. Grabowski, Data Exclusivity for New Biological Entities, Duke University Economics Department Working Paper, June 2007, http://www.econ.duke.edu/Papers/PDF/DataExclusivityWorkingPaper.pdf.
Writing an Effective Letter to Congress on Biosimilar Legislation
America’s biopharmaceutical companies support health care reform that expands access to high-quality, affordable health care for all Americans, preserves patient and provider choices, fights chronic disease and advances medical innovation for the benefit of our nation’s health and economy.