Drug giants needled by expensive name game

Pharmaceutical companies and copycat producers tangle in battle for the £32bn biotechs

The pharmaceutical industry is facing a fresh financial threat as political pressure for the large-scale production of generic biotechnology drugs grows.

The market for biotech drugs, which are different from conventional drugs, is currently thought to be worth around $60bn (£32bn). But US politicians Henry Waxman, Senator Charles Schumer and Senator Hillary Clinton have introduced the "Access to Life-Saving Medicines Act", which seeks to set a clear regulatory pathway to copy some of the industry's most valuable biotech drugs.

Adding to the pressure is the World Health Organisation. It is meeting next month to tackle the prickly issue of whether generic biotech drugs that are not exact replicates of the branded drugs can still carry the same clinical name. This is a big stumbling block for regulators.

"The scene we have now is that the [pharmaceutical] companies want to hang on to what they've got," said Mike Ward, an analyst at Nomura Code Securities. "There are no set guidelines on either side of the Atlantic as to how you get these generics to the market. But the market is huge."

Big pharmaceutical companies have been aggressively buying biotechnology companies and licensing their products as a way to bulk-up traditional drug pipelines. An added attraction to biotech is that pharmaceutical market dynamics, where blockbuster drugs are undercut by cheap knock-offs when they lose patent protection, do not apply. The new regulatory frameworks currently being discussed could change that.

The issue centres on biologics, which are complex medicines made from living cells. They are also some of the world's most expensive drugs, with some costing health authorities more than £50,000 per patient per year. Those now being contested include interferon alpha, used to treat certain cancers, and human growth hormone for people with growth deficiencies.

Due to their complexity, biologics cannot be exactly replicated in the same way as traditional, small-molecule medicines. So producers of branded biologics, such as US drugs giant Pfizer and rival Amgen, argue that generic copies should be subjected to a battery of clinical testing to prove safety and efficacy. That vastly increases the time, money and effort to bring a generic version to market.

Traditional generic drugs, which are easily copied, have to pass much more basic thresholds. They can also use the same International Nonproprietary Name, which is the name of the active ingredient of the branded drug. The INN is crucial for generics' producers because it gives patients and doctors an instant reference and allows for easy substitution. It also means that generics companies do not need to spend on marketing, as the product and its effects are already known. At the WHO meeting, the pharmaceutical companies will argue that "biosimilars", as generic biologics are called, should be given different names.

"Our first concern is patient safety," said Thomas Bols, the head of government affairs at Amgen. "With so many new biotech products coming on the market, and more biosimilar products, granting them all the same INN would become unmanageable. Their effects are not always the same." Amgen makes Epoetin, the brand name for a biologic treatment for anaemia.

The generics companies, however, believe the drugs companies concerns are just cynical tactics to protect products. "They raise safety concerns to keep their market share," said Suzette Kox of the European Generics Association. "They don't want biosimilars to have the same name because they don't want interchangeability."

Some progress has been made, however. The European Agency for the Evaluation of Medical Products set out basic guidelines earlier this year for the approval of biosimilars, and two got the green light this year. In the US, regulators lag further behind. The Food and Drug Administration did approve Omnitrope, which is a generic for Pfizer's human growth hormone Genotropin, in September. It was the first biosimilar approved in America, but only came about after Novartis, which makes Omnitrope, sued the regulator.

"The longer they can delay this, the more money they can make," said Joanna Chertkow, an analyst from Datamonitor.