FEBRUARY 01, 2007

Congressional action to create a clear regulatory pathway for generic biotech drugs would conservatively result in $14 billion in prescription drug cost savings for the Medicare Part B program over the next 10 years, according to a new research study. The analysis, conducted by researchers at Engel & Novitt, concludes that "Medicare must continue to pay higher costs—even on older, off-patent biologics—because the FDA lacks a clear regulatory pathway for approving ‘biogenerics.'"

In addition to the $14 billion in savings estimated for Part B, the researchers predicted that billions more in drug savings from the new Medicare Part D would also result from FDA guidance for approving "follow-on biologics." In calling for fast action from Congress, the researchers noted that expenditures for biologics are rising faster than most other Medicare costs, and that, last year alone, Part B spending for these products exceeded $5 billion.

"Lifesaving and enhancing biologics can cost tens or even hundreds of thousands of dollars per patient per year, so introducing as much competition as possible is vital to making these treatments more accessible to consumers," said the Pharmaceutical Care Management Association, which sponsored the study.