US Senate panel backs 12-year biotech drug shelter

* Decision seen as victory for biotech drugmakers

* White House, AARP back seven-year limit

* Generic drugmakers decry decision as blow to consumers

By Lisa Richwine

WASHINGTON, July 13 (Reuters) - Biotechnology medicines would be protected from cheaper rivals for 12 years under a plan that cleared a U.S. Senate committee on Monday.

The 16-7 vote in the Senate health committee was a victory for major biotech drugmakers such as Amgen Inc (AMGN.O) and Roche Holding AG (ROG.VX). Manufacturers of brand-name biotech drugs have been pushing for a period of 12 to 14 years before generic copies of their medicines can win approval.

Generic drugmakers have backed proposals limiting the exclusivity period to five or seven years.

The Senate plan could change when the healthcare bill goes to the floor for a vote. Senators also will need to work out an agreement with the House, where the issue is still being debated.

A key lawmaker, House Energy and Commerce Committee Chairman Henry Waxman, backs up to five years of protection.

Biotech medicines, or biologics, are made from living things and are more complicated to produce than traditional, chemical-based drugs. They can cost tens of thousands of dollars per year.

The drugs treat conditions ranging from anemia and rheumatoid arthritis to cancer. Examples include Roche's Herceptin and Avastin cancer treatments, and Amgen's Epogen and Aranesp anemia therapies.

Lawmakers working on an overhaul of the U.S. healthcare system are crafting plans to create a legal path for approval of cheaper copies of biotech medicines. The exclusivity period for the brand-name versions has been a key sticking point.

Brand-name companies say they need an adequate period without competition to encourage companies to develop new medicines.

The Senate panel rejected a shorter period of seven years, the time the White House says strikes an appropriate balance between promoting innovation and providing competition. Seniors lobbying group AARP also backed seven years.

"This unprecedented action strikes a huge blow to consumers at a time when many Americans are struggling to pay for the medicines they need," Kathleen Jaeger, president of the Generic Pharmaceutical Association, said of the Senate panel's action.

Companies aiming to sell copies of biologics include generic drugmakers such as Teva Pharmaceutical Industries Ltd (TEVA.TA) and Mylan Inc (MYL.O).

A spokeswoman for the Biotechnology Industry Organization, an industry group representing brand-name companies, had no immediate comment. (Editing by Eric Walsh)