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
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.
New medicine development is a lengthy process:
The average development time has increased to
between 10 and 15 years.
R&D expenditures for each new biologic averaged
$1.24 billion in 2006.
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
DiMasi, JA and Grabowski, HG.
“The Cost of Biopharmaceutical R&D: Is Biotech Different?”
Managerial and Decision Economics
79 (Jun. 2007); PhRMA.
“Drug Discovery and Development: Understanding the R&D Process.” (2007).
Pisano, GP. “Science Business
the Promise, the Reality, and the Future of Biotech.”
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.
Gary Pisano, Harvard Business School
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.
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.
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.
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
investment of $15 billion.
High Value Added per Employee
Pharmaceutical firms generated an average
$425,529 in value added per employee
compared to $130,218 for all manufacturing.
DeVol et al., “Biopharmaceutical Industry Contributions to State and U.S. Economies,” Milken Institute, October 2004;
R. Shapiro, et al.,
Economic Effects of
Intensive Manufacturing in the United States
, July 2007.
The Growing Importance of Biotechnology Medicines
Source: Biotechnology Research Continues to Bolster Arsenal Against Disease with 633 Medicines in Development. PhRMA, 2008.
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.
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.
The Complexity of Biologics Leads to Unique Challenges
Development and manufacturing process is more complex than that
for small molecule drugs:
Requires growing and harvesting the product from living cells
Can take many months to produce
Biologics are often dozens to thousands of times larger than
Traditional generic drugs must be shown to be the same as the
reference drug; however, with modern science, follow
on biologics or
biosimilars can only be similar to the reference or innovator biologic
In Establishing a Regulatory Pathway for “Biosimilar” Products, It
Is Critical to Appropriately Consider Scientific and Safety Aspects
Biosimilars will be highly similar to existing, approved biologic
not the same as
Biosimilars must demonstrate safety and efficacy through clinical
America’s biopharmaceutical research companies support
the establishment of a science
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
Research and development for biologics is long, costly and risky.
A regulatory approval pathway for
must include adequate
measures for assuring patient safety.
At least 14 years of data exclusivity
or data protection must be part of
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
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:
Require clinical trials to demonstrate safety and efficacy
Require clinical trials for each indication unless otherwise
Recognize that current science does not permit automatic
substitution of one biologic product for another
Different biologics may have different clinical and therapeutic effects
in patients; switching should be a conscious decision made by
physicians in consultation with their patients
Innovator Products Need At Least 14 Years of Data Exclusivity
Patent protection in the context of biosimilars is less certain than for
traditional small molecule drugs.
Competitors may be able to get around patents while relying on the innovator
company’s data for FDA approval
Economic analysis of the time required for a portfolio of biologics to break
even on their R&D investment indicates data protection for biologics should
between 12.9 and 16.2 years.
Data exclusivity or data protection of at least 14 years is necessary to provide
the certainty to ensure continued R&D investment in this sector based on
economic analysis and the unique aspects of biologics, including the high
costs and time required to build specialized facilities, the higher costs of
capital and dependence on venture capital and other private sources of
capital, and the robust research and development that continues after
approval leading to medical advances in often very different disease areas.
H. Grabowski, Data Exclusivity for New Biological Entities, Duke University Economics Department Working Paper, June 2007,
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Note personal connections
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you never know, he or she just might do it, and start a
Explain what this means to you and your community
Writing an Effective Letter to Congress on Biosimilar Legislation
America’s biopharmaceutical companies
support health care reform that expands access
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.