Are Generic Bio Drugs on the Way?

According to the results of a study released today, patients and insurance providers could save at least $71 billion over ten years if legislation (introduced yesterday) is passed allowing FDA approval of generic biotech drugs. The study was conducted by pharmacy benefit manager Express Scripts Inc. The average biotech drug costs $71,600/year, vs. $1,200 for a traditional drug, and biotech inflation is rising three times faster. Generic drugs typically cost 60% less than brand name, but some experts say stricter FDA requirements on biodrugs, and higher manufacturing expenses, won't allow for the same level of discounting by generic drug makers. Kathleen Jaeger, CEO of the Generic Pharmaceutical Association said even if generic biologics were just 25% cheaper the cost savings for consumers would be huge. But Jim Greenwood, CEO of the Biotechnology Industry Organization, says that true bio-generics are impossible, because derivatives from a living source can not be exactly copied.

Sources: Press Release of Study, AP/New York Times
Commentary: Senators Reintroduce 'Fair' Bill to Ban Authorized Generics • Generic vs. Generic • Teva: Aiming for the Lead in Generic Pharmaceuticals
Stocks/ETFs to watch -- Top generic drug makers: Teva Pharmaceutical Industries (TEVA), Barr Pharmaceuticals Inc. (BRL), Mylan Laboratories Inc. (MYL), Watson Pharmaceuticals Inc. (WPI). Top biotech companies: Genentech Inc. (DNA), Amgen Inc. (AMGN), Gilead Sciences Inc. (GILD)

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