Generic drugmakers see potential in biotech

By Deena Beasley

NEW YORK (Reuters) - Generic drugmakers expect to see progress soon on U.S. guidelines for marketing generic versions of costly biotechnology drugs as pressure increases from both governments and insurers to lower health-care costs.

Congressional Democrats, now in the majority, have already introduced a bill that would establish a process for the U.S. Food and Drug Administration to approve lower-cost copies of biotech drugs, which are produced from living cell cultures rather than chemical synthesis.

"There is an economic imperative to deal with this," said George Barrett, president and chief operating officer of North America operations at Teva Pharmaceutical Industries Ltd. (TEVA.O: Quote, Profile, Research, Stock Buzz), at the Reuters Health Summit in New York this week.

He expects clarification soon on a regulatory path in the United States for copycat versions of blockbuster biotech drugs, which are used to treat conditions ranging from anemia to cancer.

In addition, the governors of 10 states have petitioned the FDA establish a pathway for approval of generic biologics, which are among the fastest growing and most expensive components of the nation's drug bill.

"Right now it is a regulatory monopoly -- that's just not sustainable," Bruce Downey, chief executive of Barr Pharmaceuticals Inc. (BRL.N: Quote, Profile, Research, Stock Buzz), said at the summit.

He said the FDA clearly has the authority to review and approve generic biotech drugs, but "has chosen not to exercise it."

Barr recently acquired Croatian drugmaker Pliva, a specialist in the field, while Teva in January 2004 bought Sicor Inc., gaining the capacity to produce generic injectable drugs and biopharmaceuticals.

"We are very committed to it," Teva's Barrett said, noting that traditional generic drugs currently account for up to 60 percent of U.S. drug prescriptions.

Without the potential for competition in the biotechnology space, "we are not going to be able to pay for it," he said.

Barrett said the push for biogeneric drugs in the United States is building momentum and, at the same time, the science behind producing the drugs has improved and simplified.

Downey said Barr gained, with the Pliva deal, $600 million in sales of injectable generic drugs in Europe and is developing 10 biogeneric drugs.

"I think we could see products on the U.S. market in five years," he said.

Barrett conceded that there are challenges, including the potential requirements for abridged clinical trials.