Promoting Healthy Biopharmaceutical Competition

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The Hatch-Waxman Act, enacted by Congress 23 years ago, created an abbreviated approval pathway for generic copies of conventional, or what are known as “small-molecule,” drugs. These drugs are composed of relatively simple molecules that can be synthesized easily, using their chemical formulas as blueprints for assembling individual chemical elements into a therapeutically useful molecule. Most of the products we think of as pharmaceuticals, from aspirin to Zoloft, are classified as “drugs.” 

Another class of pharmaceuticals, called biological products or biologics, is composed of much larger and more complex molecules that, historically, have been too intricate to synthesize chemically. These include vaccines, blood products, antitoxins, and therapeutic proteins and peptides. Their structure is so complex that they typically must be produced by, and extracted from, living organisms—bacteria, viruses, yeasts, plants, or animals—then purified into isolated products. And biologics are not just different from drugs chemically; they are also, generally speaking, regulated under a separate statute. 

At the time Hatch-Waxman was enacted, little consideration was given to the possibility of generic biological products because their large, complex, and idiosyncratic nature made them impossible to duplicate with 1984 technology. Consequently, the Act applied only to products regulated as drugs. Much has changed over the past two decades, however, and it is now possible to duplicate certain types of biological products with a high degree of fidelity. Yet there still is no analogous pathway through which the Food and Drug Administration (FDA) may approve copycat biological products for commercial use. That could soon change, however, because Congress has been considering legislation to create just such a process. If the final legislation properly balances rapid approval of generic biologics with incentives for name-brand firms to continue innovating, Americans may soon benefit from healthy competition in the biopharmaceuticals market.