Washington Editor

The president's new rule on generic drugs isn't quite as scary as it may seem. It's not going to ruin the drug industry by drying up pipelines. Instead, it's really just a way of reinterpreting and enforcing some issues already on the books.

Bush first spoke of the rule last fall just days in advance of the midterm elections. The rule was designed to introduce less-expensive generics to the market faster by closing a few loopholes in the Hatch-Waxman Act of 1984. (Biologics are not included in Hatch-Waxman.)

Under Hatch-Waxman, the law credited with creating the generic drug industry, companies with brand-name drugs often are awarded multiple, consecutive 30-month stays (or extensions) on any number of patents filed on a drug. Some drug companies have been accused of "stacking" stays, therefore keeping generics off the market for years.

The FDA says it can approve generic drugs as soon as the patent on a brand name expires or when a court determines that the generic would not infringe on the innovator's patent or that the patent is invalid. The agency and generic makers have long said stacking stays stops them in their tracks.

But that will end Aug. 18 when the Bush rule goes into effect.

The prospect of reforming Hatch-Waxman has been kicked around for years as Republicans, Democrats and two administrations have failed to provide senior citizens with access to more affordable prescription drugs.

Senators Judd Gregg (R-N.H.) and Chuck Schumer (D-N.Y.) authored legislation currently making it through the Senate that addresses Hatch-Waxman and some of the issues in the Bush rule. (The Bush rule must be in compliance with the law.)

But whether any of this will help flood the market with generics is a matter of debate.

"Congress or the FDA can now say they've plugged this hole you've been reading about in The New York Times or The Wall Street Journal," Brian Coggio, an intellectual property partner with the law firm Orrick, Herrington & Sutcliffe in New York, told BioWorld Today. "That's true, but it's such a small portion of the Hatch-Waxman Act that in most instances is working pretty well. But it does cure some of the high-profile problems."

Indeed, he said stacking patents is more common in the blockbuster arena where companies are aching to make back money spent in development.

The Bush rule also clarifies issues surrounding patents. "This is to make sure improper patents do not find their way into the Orange Book. There's been a lot of complaints about that sort of thing," Coggio said.

For example, under the Bush plan, a company cannot list a process patent, a packaging patent or a metabolite in the Orange Book (FDA's official register of approved pharmaceutical products), Coggio said. But a company can list the drug product itself, formulation patents or method-of-use patents. "They are not changing that much, but what they are going to do is enforce it," he said. "A lot of times the FDA doesn't really look at patents and sometimes things sneak in. Now you'll have to file a declaration. The declaration they use now is pretty bland, but the one they are proposing asks a series of questions that is going to make it more difficult."

To help manage generic issues within the FDA, Bush requested an additional $13 million in the upcoming budget. With the extra money, the agency plans to hire 40 generic reviewers and implement an efficiency plan.

Tommy Thompson, secretary of Health and Human Services, estimated that changes in the FDA rules could save consumers $35 billion in 10 years.

Over in the Senate, the Health, Education, Labor and Pensions Committee passed Gregg-Schumer legislation that would limit companies to one 30-month extension per drug. Also, Gregg-Schumer carries "forfeit provisions" on the 180-day market exclusivity given to the first generic to make it to market.

Under the bill, a generic drug company would forfeit its rights to that exclusivity if it were found to have made an anticompetitive deal with a brand company or otherwise fails to come to market in a timely manner. If one of the forfeiture provisions in the bill occurs, the exclusivity would be forfeited and the market would open to any generic company.

As it stands today, biologics are not caught up in the generic debate.

Nevertheless, on word that the FDA is considering a generic pathway for some biotechnology products, the Washington-based Biotechnology Industry Organization sent a 70-page citizen petition to the FDA asking the agency to solicit public participation on scientific, legal and policy issues before adopting any new "pathways." (See BioWorld Today, April 28, 2003.)

The problem here is that some biologics, like insulin and human growth hormone, were approved as "new drugs" under the Federal Food, Drug and Cosmetic Act, which allows for abbreviated approvals for generics. By contrast, most biotech products are licensed under the Public Health Service Act as biological products.

When asked whether he believes biologics eventually will be sold as generics, Coggio said it doesn't make sense to believe it's not going to happen. "It's more complicated than dealing with the Paxils [GlaxoSmithKline's anti-depressant and anxiety drug] of the world. I think the mystery surrounding making biologics will be removed or lessened once people become more comfortable with them."