n engl j med
ing the late 1980s, a brand-namedrug generally lost about 15 to30% of its sales volume in thefirst 2 years after its patent ex-pired.
In contrast, when Eli Lilly lost patent protection for the anti-depressant drug Prozac (fluoxe-tine) in 2001, generic competi-tors garnered more than 70% of Prozac’s market within 2 months.
Today, brand-name drugs that face generic competition rapidly lose market share, and prices of generic products generally fall to25 to 50% of the original brand-name prices.
Although intenseprice competition reduces the fi-nancial returns for brand-namedrugs, the patent period providesimportant protections, and the in- vestment of U.S. drug companiesin research and development hasgrown rapidly — from $26 billionin 2000 to about $43 billion in2006.
It was possible to achieve thebenefits of the Hatch–WaxmanAct because the Food and DrugAdministration (FDA) could re- view data establishing bioequiva-lence and be confident that dataon the safety and efficacy of theoriginal drug would apply to ge-neric versions as well. Biopharma-ceuticals are frequently muchmore complex than small-mole-cule drugs, and their manufac-ture often entails the use of livecells and complicated biologicprocesses that are difficult toreplicate. Indeed, the manufactur-ing process can be a trade secret.Thus, obtaining evidence that adrug is similar to and will havethe same effects as the original ismore complicated for biopharma-ceuticals.The European Union is aheadof the United States in dealing with these issues, although theFDA has begun to address themin an ad hoc fashion. Any U.S.policy in this arena will no doubt share some basic features with
regulation of follow-on biologics
Key Provisions of the Hatch–Waxman Act.
Creates an abbreviated approval process for generic pharmaceuticalsRequires the manufacturers of generic drugs to demonstrate bioequivalence to brand-name products but allows them to rely on originators’ clinical trials to establishsafety and efficacyAllows testing before the originators’ patents expireCreates an incentive for generic-drug manufacturers to challenge originators’ patentsSets forth a process for handling patent disputesDefines the conditions for patent extensions
Top-Selling Biopharmaceuticals Approved before 1993.*DrugIndicationApproval Date2003 Sales
Humulin (human insulin)DiabetesOctober 19821,060Intron A (interferon alfa-2b)Cancer, infectionJune 19861,851Humatrope (somatropin)Growth failureMarch 1987371Infanrix (diphtheria–tetanus–pertussis vaccine)Immunization against diphtheria,pertussis, and tetanusMarch 1987551Epogen (epoetin alfa)AnemiaJune 19892,435Engerix-B (hepatitis B vaccine)Immunization against hepatitis BAugust 1989684Botox (botulinum toxin type A)Cervical dystoniaDecember 1989564Epogin (epoetin beta)AnemiaApril 1990551Procrit (epoetin alfa)AnemiaDecember 19903,984Neupogen (filgrastim)NeutropeniaJanuary 19911,267Cerezyme (imiglucerase)Gaucher’s diseaseApril 1991739NovoSeven (recombinant factor VII)HemophiliaApril 1992589* The patents on these products expire after 20 years; most patents are applied for during the drug-development stage. Dataare from
“Top 200 World’s Best Selling Medicines” (2004;23(5):60-4).
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