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U.S. VC's want extended protection for biologics
WASHINGTON, July 14 |
WASHINGTON, July 14 (Reuters) - Venture capital critical to biotechnology companies would dry up if biologic medicines did not have extended protection from generic competition, the head of one company told Congress on Tuesday..
Without the extended protection, "the volume of that investment activity will decline substantially," Jack Lasersohn, head of the venture capital firm Vertical Group, told a subcommittee of the U.S. House of Representatives Judiciary Committee.
The House committee was considering several different lengths of extended protection for drugmakers ranging from five years to 12 years.
Late on Monday, the Senate health committee voted in favor of 12 years of exclusivity for brand-name biotech drugs. The plan, seen as a major victory for biotech drugmakers such as Amgen Inc (AMGN.O) and Roche Holding AG (ROG.VX) could change when the issue reaches the full Senate. [ID:nN13231081]
Senators also will need to reach agreement with the House, where the matter is still being debated. A key lawmaker, House Energy and Commerce Committee Chairman Henry Waxman, backs up to five years of protection. Another bill backed by Rep. Anna Eshoo gives 12 years.
As part of the healthcare overhaul, U.S. lawmakers have been debating an approval process for generic versions of biotech medicines, or biologics, which are made from living things and are more complicated to produce than traditional, chemical-based drugs.
The Federal Trade Commission, which specializes in antitrust and consumer welfare, had concluded allowing generic versions of biotechnology drugs, would create some savings for consumers.
But the commission also found that the savings would be less than consumers save from generic versions of chemical drugs.
The FTC report, which the pharmaceutical groups have roundly criticized, concluded that competitors would likely enter the market only for drugs that had more than $250 million of annual sales, and only two to three generic entrants would be expected for each drug.
This means prices would likely drop just 10 to 30 percent while the first manufacturers would likely retain 70 to 90 percent of their market share, the FTC said.
Bruce Leicher, general counsel of Momenta Pharmaceuticals (MNTA.O) which makes both original and follow-on biologics, said his company supported a shorter exclusivity period.
He argued that a shorter exclusivity period would push biotechnology companies to move onto developing the next new drug, while the 12-year period would actually slow innovation.
Twelve-year advocate Eshoo, whose congressional district covers a portion of Silicon Valley, defended her bill as necessary to properly defend patents and to ensure that the follow-on biologics are as safe and effective as the drugs that they copy.
"The field of biotechnology is the future of medicine," she said, pointing to data showing that just 1 percent of biologic drugs make it to market. (Reporting by Diane Bartz; editing by Leslie Gevirtz)
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