Biotechs Facing New Challenges

    By Donald Zuhn --

Last Friday, The San Francisco Chronicle reported on new challenges facing the biotech industry.  In an article by Bernadette Tansey entitled "As biotech patents run out, innovation and competition may thrive," the Chronicle addressed the expiration of key biotech patents, increased competition being applied by generic manufacturers, and new biologics legislation making its way through Congress (although possibly stalled until 2008).  According to the article, biotech companies are trying to overcome these challenges through innovation by developing next-generation drugs to supplant their original biotech drugs.

The article cites Amgen as an example of a biotech company that has begun to develop next-generation products - in particular, the anemia drug Aranesp, a longer-acting version of Amgen's Epogen, for which injections can be given less frequently.  According to the article, Amgen's U.S. sales of Aranesp and Epogen totaled $2.8 billion and $2.5 billion, respectively, in 2006.

To provide additional time for the development of such next-generation drugs, biotech companies are attempting to convince Congress to enact legislation that guarantees them at least 14 years following FDA approval of a biologic before a generic version can be sold.  This would give biotechs an advantage that traditional pharmaceutical companies have not enjoyed.

Surprisingly, the push by biotech companies to develop next-generation drugs doesn't seem to have affected the generic drug manufacturers much.  For example, Jake Hansen, vice president of governmental affairs for generic drug manufacturer Barr Pharmaceuticals noted that "everybody wins" as a result of such innovation since it "fills [Barr's] future pipeline, and consumers benefit from better medicines."

For additional information on this topic, please see:

• "Senate Committee Passes Biologics Legislation," July 5, 2007