At a conference of the Generic Pharmaceutical Association, Congressman Henry Waxman (D.-Calif.) said he would introduce a bill before year's end that would prod the Food and Drug Administration in its efforts to create guidelines for generic versions of biotech drugs. That could lower what consumers and government agencies that administer Medicaid pay for biotech drugs, such as insulin and human growth hormone.
The Food and Drug Administration approves generic versions of conventional drugs once the original products' patents have expired. The biotech industry, led by giants such as Amgen Inc. and Genentech Inc. produce drugs made from proteins taken from living cells.
Federal health officials say the scientific complexity of biotech products makes it difficult to design a process to ensure the safety of generic versions.
"There remain important scientific questions that need to be worked out, so it is premature to discuss a political framework," said Scott Gottlieb, FDA Deputy Commissioner. "It is not known, for example, how you show that two similar proteins can be safely substituted for one another and used interchangeably without incurring potentially dangerous immune reactions."
Generic drug companies point out that the European Union already has a regulatory process for generic biotechs. The FDA has been working on guidelines for approving generic biotech drugs since at least 2000 but has yet to release any details. A bill from Waxman, ranking member of the House Government Reform Committee, would likely push the FDA toward releasing the guidance.
Earlier on Tuesday, Barr Pharmaceuticals Inc. CEO Bruce Downey, chairman of the GPA, suggested drug makers should ask elected officials at the state level to join the effort to get generic biotechs.
Last month, four state governors petitioned the FDA to release guidelines on the production of generic insulin and human growth hormone, two of the most commonly prescribed biotech drugs.
Generic drug makers say $11.5 billion worth of biotech drug patents expire by the end of 2006. The potential for such a huge market comes as the global market for conventional pharmaceuticals is slowing.
According to UBS, which looked at a handful of generic drug companies representative of the industry, gross margins fell to 47 percent in the second year compared to 52.2 percent a year ago. At the same time, the market for pharmaceuticals in the United States and major European countries increased by only about 5 percent in the last year, according to separate statistics from IMS Health.
Shares of Barr Pharmaceuticals rose 2 cents to close at $53.74 Tuesday on the New York Stock Exchange. Shares of Amgen fell 31 cents to $69.45 on the Nasdaq while shares of Genentech rose 27 cents to end at $79.29 on the New York Stock Exchange.

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