"Biogenerics" is the next wave in biotechnology and it's a loaded term with a reality that is quite different. The term has been in the headlines (at least the headlines I read) the past few days and I am still saying hurrumph about it. That being said, or grunted, let's go over a a couple of things.
What: "Biogenerics" is actually an efficient term - and that's funny, given this is life sciences word - and means what it says: a generic version of a biological drug, something made from a biological process, not the mixture of compounds into a pill or liquid.
Where: "Biogenerics" sort of exists in Europe in the form of generic human growth hormones, and do not exist here (sort of) due a lack of regulatory authority from the FDA.
No kidding. The U.S. government forgot to regulate something - go figure. Well, the didn't so much forget as they were lobbied hard into ignoring biogenerics. As a post script, I live in Washington D.C. and trust me, nothing is forgotten if campaign funds can be raised.
When: The first European approval for a biogeneric was in the past year and in the U.S. there is legislation on Capitol Hill to enable the FDA to authorize biogenerics.
Why: Why has it been so hard to authorize the biogenerics? This is important - generic copies of a pill or liquid made from chemical compounds do not require clinical trials because the formulas are known and all the FDA requires is bioequivalence: that the generic works the way the proprietary drug works. Not so with biogenerics.
Biogenerics typically use different manufacturing processes and biotech outfits claim this makes the final product different than the original, and, further, that these generics should be run through clinical trials. I am not into unnecessarily high prices and extra requirements, but the biotechs have a point. If an end product, such as Amgen's Epogen and Aranesp, is intimately tied to the manufacturing process, how exactly do you insure the generic has the same efficacy with a patient?
Who: Are there winners and losers? If biogenerics become a reality there will be. And as rumors and legislation swirl around, the stocks of these winners and losers will move long before a biogenerics hit the market.
And the winner is: the world's largest generics company, Teva (TEVA) of Israel. It's a great company with lots of quiet development work underway in biogenerics. The loser is AMGEN (AMGN), already being hit by the Feds because of excessive use and potentially excessive reimbursement for their anemia drugs. Frankly, generic competition would hit AMGEN very hard. These drugs are a natural target for generics companies as they constitute a huge, multibillion market.
Stay tuned - I am going to have a lot of fun as the lobbyists, legislators, lawyers and other louts join the fray.