ȱ
ȱȱȱ Ȭȱȱ
ȱǯȱȱ
ȱȱȱ¢ȱ
¢ȱŘŚǰȱŘŖŖşȱ
ȱȱȱ
ŝȬśŝŖŖȱ
ǯǯȱ
řŚŖŚśȱ
ȱȱȱ
Pr
epared for Members and Committees of Congress

ȱȱȱ Ȭȱȱ
ȱ
¢ȱ
Congress has been considering legislation that would expand regulatory activities of the Food and
Drug Administration (FDA) by opening a pathway for the approval of follow-on biologics. A
biologic is a preparation, such as a drug or a vaccine, that is made from living organisms. A
follow-on biologic is similar to the brand-name (innovator) product made by the pharmaceutical
or biotechnology industry. In contrast to a biologic, most commonly used drugs are synthesized
via a chemical process.
The new regulatory pathway would be analogous to the FDA’s authority for approving generic
chemical drugs under the Drug Price Competition and Patent Term Restoration Act of 1984 (P.L.
98-417). Often referred to as the Hatch-Waxman Act, this law allows the generic company to
establish that its drug product is chemically the same as the already approved innovator drug, and
thereby relies on the FDA’s previous finding of safety and effectiveness for the approved drug.
The generic drug industry achieves cost savings by avoiding the expense of clinical trials, as well
as the initial drug research and development costs that were incurred by the brand-name
manufacturer. The cost of speciality drug products, such as biologics, is often prohibitively high.
For example, the rheumatoid arthritis and psoriasis treatment Enbrel costs $16,000 per year. It is
thought that a pathway enabling the FDA approval of follow-on biologics will allow for market
competition and reduction in prices, though perhaps not to the same extent as occurred with
generic chemical drugs under Hatch-Waxman.
In contrast to chemical drugs, which are small molecules and for which the equivalence of
chemical composition between the generic drug and innovator drug is relatively easy to
determine, a biologic, such as a protein, is much larger in size and much more complex in
structure. Therefore, comparing a follow-on protein with the brand-name product is more
scientifically challenging than comparing chemical drugs. In many cases, current technology will
not allow complete characterization of biological products. Additional clinical trials may be
necessary before the FDA would approve a follow-on biologic.
This report provides a brief introduction to the relevant law, the regulatory framework at the
FDA, the scientific challenges for the FDA in considering the approval of follow-on biologics,
and a description of the proposed legislation. Bills introduced during the 110th Congress on this
topic include H.R. 1038/S. 623, H.R. 1956, H.R. 5629, S. 1505, and S. 1695.

ȱȱȱ

ȱȱȱ Ȭȱȱ
ȱ
ȱ
Relevant Laws ................................................................................................................................. 4
Regulatory Framework.................................................................................................................... 6
Scientific Challenges ....................................................................................................................... 8
110th Congress Legislation ............................................................................................................ 10

ȱ
Author Contact Information .......................................................................................................... 13

ȱȱȱ

ȱȱȱ Ȭȱȱ
ȱ
ongress has been considering legislation that would expand regulatory activities of the
Food and Drug Administration (FDA) by opening a pathway for the approval of follow-on
C biologics.1 This pathway would be somewhat analogous to that which allowed for the
approval of generic chemical drugs via passage of the Drug Price Competition and Patent Term
Restoration Act of 1984 (P.L. 98-417), often referred to as the Hatch-Waxman Act.2 By offering
an alternative to brand-name drug products, the Hatch-Waxman Act is credited with lowering the
cost of drugs to consumers, as well as allowing for the expansion of the generic drug industry in
the United States.
At the time that Hatch-Waxman was being
Biologic vs. Follow-on Biologic
debated by Congress and implemented by the
A biologic is a preparation, such as a drug or a vaccine,
FDA, the biotechnology industry was just
that is made from living organisms. In contrast, a
beginning to develop its first human
chemical drug is synthesized via a chemical process. A
follow-on biologic is similar but not identical to the brand-
therapeutic agents. The first FDA approval of
name, or innovator, product made by the pharmaceutical
a biotechnology drug for human use, human
or biotechnology industry; biosimilar is the term used in
insulin, occurred in 1982, followed by human
the European Union.
growth hormone in 1985, alpha interferon in
1986, tissue plasminogen activator in 1987, and erythropoietin in 1989. Biotechnology products
are expected to become a larger and larger share of the drugs sold by the pharmaceutical industry
to U.S. consumers. However, with no equivalent to the generic alternatives to chemical drugs, the
cost of therapeutic biologics is often prohibitively high for individual patients. For example, the
rheumatoid arthritis and psoriasis treatment Enbrel costs $16,000 per year, and biological drugs
for multiple sclerosis range in price from $16,000 to $25,000 per year.3 Spending by Medicare in
2006 on just one such drug, Epogen, was $2.8 billion.4 The amount spent on Epogen is more than
the entire FY2006 budget for FDA, which was $1.863 billion ($1.494 billion in direct
appropriations and $369 million in user fees).5
In 2006, U.S. spending on such speciality drugs was $54 billion, or about 20% of total spending
on pharmaceuticals.6 Speciality drugs are expected to comprise 26% of total pharmaceuticals
purchased by 2010, almost doubling to $99 billion per year, a rate of increase that is second
highest among all the components of health care spending, exceeded only by diagnostic imaging.7

1 Sometimes referred to as biogenerics, biosimilars, or generic biologics. The FDA and many others consider the use of
the word generic to be inaccurate because the term has been used, in the context of chemical drugs, to mean identical.
The FDA often uses the term follow-on protein product, because many biologics are proteins; biosimilar is used in the
European Union.
2 For further information, see CRS Report RL32377, The Hatch-Waxman Act: Legislative Changes Affecting
Pharmaceutical Patents, by Wendy H. Schacht and John R. Thomas, and CRS Report RL30756, Patent Law and Its
Application to the Pharmaceutical Industry: An Examination of the Drug Price Competition and Patent Term
Restoration Act of 1984 (“The Hatch-Waxman Act”), by Wendy H. Schacht and John R. Thomas.
3 Bruce L. Downey, Chairman and CEO Barr Pharmaceuticals, Inc., testimony before the House Energy and Commerce
Subcommittee on Health, May 2, 2007, at http://energycommerce.house.gov/cmte_mtgs/110-he-hrg.050207.Downey-
testimony.pdf.
4 Personal communication with Lisa Yen, Centers for Medicare and Medicaid Services Office of Legislation, February
13, 2009.
5CRS Report RL34334, The Food and Drug Administration: Budget and Statutory History, FY1980-FY2007,
coordinated by Judith A. Johnson.
6 Speciality drugs consist of mostly high-priced biologic agents. Jonah Houts, Senior Analyst, Express Scripts, Inc.,
testimony before the Committee on Oversight and Government Reform, March 26, 2007, at http://oversight.house.gov/
documents/20070326173059-55945.pdf.
7 Ibid., and Express Scripts, 2006 Drug Trend Report, April 2006, p. 38.
ȱȱȱ
ŗȱ

ȱȱȱ Ȭȱȱ
ȱ
From 2005 to 2006, the cost of non-speciality (i.e., chemical) drugs rose 6%, whereas speciality
(mostly biologic) drugs rose 21%.8 From 2006 to 2007, the cost of non-speciality drugs rose
4.7%, and speciality drugs rose 14%.9 Spending on all pharmaceuticals currently represents about
11% of health care spending in the United States.
In the case of chemical pharmaceuticals, before a generic drug can be marketed, the generic drug
company must demonstrate to the FDA that the drug product is identical to the original product.
This “sameness” allows the generic company to rely on or “reference” the FDA’s previous finding
of safety and effectiveness for the approved drug. For chemical drugs, some experts argue that
“generic medications decrease prices 60% to 90% on branded oral-solid medications.”10 The
Congressional Budget Office estimated the savings generated by generic drug use in 1994 was
between $8 billion and $10 billion.11 The generic drug industry achieves these cost savings by
avoiding the expense of clinical trials, as well as the initial drug research and development costs
that were incurred by the brand-name manufacturer.
Even though patents for several speciality biotechnology drug products have expired, very few
have had to face the same type of market competition that occurs with chemical drugs. In contrast
to the relatively simple structure and manufacture of chemical drugs, follow-on biological
products, with their more complex nature and method of manufacture, will not be identical to the
brand-name product, but may instead be shown to be similar. The Generic Pharmaceutical
Association (GPhA) has advocated that the FDA establish a regulatory system for the approval of
follow-on biologics under its existing statutory authority.12 However, the Biotechnology Industry
Organization (BIO) has filed a citizen petition with the FDA requesting a number of actions that
would inhibit the approval of follow-on biologics.13
On April 12, 2006, the European Commission approved the first biosimilar product Omnitrope, a
human growth hormone, in Europe following a positive scientific opinion issued by the European
Medicines Agency (EMEA); a second biosimilar human growth hormone, Valtropin, was
approved on April 24, 2006.14 Sales of Omnitrope in the United States only occurred following
the April 10, 2006, ruling by the US District Court in the District of Columbia in favor of
Omnitrope’s sponsor, Sandoz. The court ruled that the FDA must move forward with
consideration of the abbreviated application, submitted by Sandoz in 2003, that presents
Omnitrope as “indistinguishable” from the FDA-approved Genotropin marketed by Pfizer.
Sandoz “alleged that the FDA had violated its statutory obligation to act on the Omnitrope
application within 180 days, a time frame that the FDA characterized as merely a congressional
aspiration.”15

8 Express Scripts, 2006 Drug Trend Report, April 2006, p. 5.
9 Express Scripts, 2007 Drug Trend Report, April 2007, p. 6.
10 Jonah Houts, testimony before the House Committee on Oversight and Government Reform, March 26, 2007.
11 Congressional Budget Office, “How Increased Competition from Generic Drugs Has Affected Prices and Returns in
the Pharmaceutical Industry,” July 1998.
12 Bill Nixon, President and CEO, Generic Pharmaceutical Association, letter to Daniel Troy, Chief Counsel, FDA,
January 18, 2002, at http://www.fda.gov/cder/ogd/GPHA_jan_21.htm.
13 BIO Citizen Petition, Follow-on Therapeutic Proteins, April 23, 2003, at http://www.fda.gov/OHRMS/DOCKETS/
DOCKETS/03p0176/03p-0176-cp00001-01-vol11.pdf.
14 “Europe approves two follow-on human growth hormones,” Nature Biotechnology, vol. 24 (June 2006), p. 601.
15 Ibid.
ȱȱȱ
Řȱ

ȱȱȱ Ȭȱȱ
ȱ
Proposed legislation (H.R. 1038/S. 623, H.R. 1956, H.R. 5629, S. 1505, and S. 1695) would
provide a mechanism for FDA approval of biological products that are similar to the brand-name
product, thereby allowing for market competition and reduction in prices, though perhaps not to
the same extent as with generic chemical drugs. Economic studies on potential savings to the
federal government over 10 years due to the use of follow-on biologics have ranged “between
nothing and $14 billion.”16 A study by Avalere Health estimated “government savings at $3.6
billion in the first 10 years”; another study by Express Scripts estimated “10-year consumer
savings at $71 billion and federal savings at $14 billion.”17 On June 25, 2008, the Congressional
Budget Office (CBO) released a cost estimate on S. 1695. The CBO study found that enactment
of S. 1695 would save the federal government $5.9 billion over 10 years (2009-2018) and would
reduce total expenditures on biologics in the United States by about $25 billion over the same
period.18
Although most observers agree that lower prices for biologics would be of great benefit both to
consumers and payors, some have expressed concern that the abbreviated application process
allowing for expedited FDA approval of these complex therapeutics might compromise patient
safety. A report published in October 2008 investigated the nature, frequency and timing of
safety-related regulatory actions for biologics approved in the United States and the European
Union.19 It found that 41 of 174 biologics approved since 1995 were the subject of 82 regulatory
actions regarding safety. These regulatory actions were primarily letters to healthcare
professionals and some “black box” warnings on product labels but no product withdrawals.
The October 2008 study found that the probability of a first safety-related regulatory action was
14% 3 years after approval and 29% 10 years after approval. The authors noted that these may be
underestimates—not all drugs are marketed right after approval (and some may never be
marketed), but all biologics that obtained market authorization were included in the study. As is
the case with chemically produced drugs, many safety problems are identified only after drug
approval because some serious adverse drug effects are rare and will only become apparent
following use in large numbers of patients. Lastly, and perhaps most importantly for individuals
interested in follow-on biologics products, the study found that the first biologics approved in a
chemical, pharmacological and therapeutic subgroup (in other words, innovator products) were
especially prone to safety-related regulatory action compared with later approved products in that
subgroup.
This report provides an overview of the FDA regulatory issues involved in the approval of
follow-on biologics.20

16 “CBO Weighs 2 Studies That Show Little Savings From Biogenerics,” Inside Health Policy, July 19, 2007.
17 Ibid.
18 Congressional Budget Office, Cost Estimate, S. 1695, Biologics Price Competition and Innovation Act of 2007, June
25, 2008, at http://www.cbo.gov/ftpdocs/94xx/doc9496/s1695.pdf.
19 Thijs J. Giezen, Aukje K. Mantel-Teeuwisse, and Sabine M. J. M. Straus, et al., “Safety-related regulatory actions for
biologicals approved in the United States and the European Union,” Journal of the American Medical Association, vol.
300, no. 16 (October 22, 2008), pp. 1887-1896.
20 For patent issues, see CRS Report RL33901, Follow-On Biologics: Intellectual Property and Innovation Issues, by
Wendy H. Schacht and John R. Thomas.
ȱȱȱ
řȱ

ȱȱȱ Ȭȱȱ
ȱ
ȱ ȱ
In general, biological products are regulated (licensed for marketing) under the Public Health
Service Act—originally by the National Institutes of Health (NIH) and its precursors and later,
starting in 1972, by the FDA—and chemical drugs are regulated (approved for marketing) under
the Federal Food Drug and Cosmetic Act—by the FDA. This section provides a brief history of
these two Acts and other relevant laws, as well as some of the important amendments that have
occurred during the past 100 years.
The regulation of biologics by the federal government began with the Biologics Control Act of
1902, “the first enduring scheme of national regulation for any pharmaceutical product.”21 The act
was groundbreaking, “the very first premarket approval statute in history.”22 It set new
precedents, “shifting from retrospective post-market to prospective pre-market government
review.”23 The Biologics Act was passed in response to deaths (many in children) from tetanus
contamination of smallpox vaccine and diphtheria antitoxin. The act focused on the
manufacturing process of such biologic products and required an inspection of the manufacturing
facility before a federal license was issued to market the product.
The Biologics Act predates the regulation of drugs under the Pure Food and Drugs Act, which
was enacted in 1906. The 1906 Act “did not include any form of premarket control over new
drugs to ensure their safety ... [and] did not include any controls over manufacturing
establishments, unlike the pre-existing Biologics Act and the later-enacted Federal Food Drug and
Cosmetic Act (FDC Act).”24 The Pure Food and Drugs Act was replaced by the FDC Act in 1938.
The FDC Act required that drug manufacturers submit a new drug application (NDA) prior to
marketing that demonstrated, among other things, that the product was safe.25
The Biologics Act was revised and re-codified (42 USC 262) when the Public Health Service Act
(PHS Act) was passed in 1944. The 1944 Act specified that a biological product that has been
licensed for marketing by the FDA under the PHS Act is also subject to regulation (though not
approval) under the FDC Act. A biological product is defined under section 351(i) of the PHS
Act, as
a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative,
allergenic product, or analogous product ... applicable to the prevention, treatment or cure of
a disease or condition of human beings.
Section 351(j) of the PHS Act states that “the FDC Act applies to a biological product subject to
regulation under this section, except that a product for which a license has been approved under
subsection (a) shall not be required to have an approved application under section 505 of such

21 David M. Dudzinski, “Reflections on Historical, Scientific, and Legal Issues Relevant to Designing Approval
Pathways for Generic Versions of Recombinant Protein-Based Therapeutics and Monoclonal Antibodies,” Food and
Drug Law Journal, vol. 60, pp. 143-260.
22 Ibid, p. 147.
23 Ibid.
24 Gary E. Gamerman, “Regulation of Biologics Manufacturing: Questioning the Premise,” Food and Drug Law
Journal, vol. 49, 1994, pp. 213-235.
25 For further information, see CRS Report RL32797, Drug Safety and Effectiveness: Issues and Action Options After
FDA Approval, by Susan Thaul.
ȱȱȱ
Śȱ

ȱȱȱ Ȭȱȱ
ȱ
Act.” Most biological products regulated under the PHS Act also meet the definition of a drug
under section 201(g) of the FDC Act:
articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease
in man or animals; and articles (other than food) intended to affect the structure or any
function of the body of man or other animals.
The FDA Modernization Act of 1997 (FDAMA) amended the PHS Act to require a single
biological license application (BLA) for a biological product, rather than the two licenses—
Establishment License Application (ELA) and Product License Application (PLA)—that had been
required between 1944 and 1997. The PHS Act provides authority to suspend a license
immediately if there is a danger to public health.
As stated previously, biological products are, in general, regulated—licensed for marketing—
under the PHS Act, and chemical drugs are regulated—approved for marketing—under the FDC
Act. However, through a historical quirk, the FDA was given regulatory authority over certain
natural source biological products; these products have been regulated as drugs under the FDC
Act rather than as biologics under the PHS Act. In 1941, three years prior to the re-codification of
the Biologics Act, Congress gave the FDA authority over the marketing of insulin.26 Insulin is a
peptide hormone, a small protein that regulates carbohydrate metabolism.27 In the 1940s, insulin
“was obtained in the same manner as many biologics, namely extraction from animals. Despite
this similarity with biologics, insulin was regulated by FDA.”28 In addition to insulin, the
distinction of a biological product regulated as a drug under the FDC Act rather than as a biologic
under the PHS Act holds true for a small set of products that are mostly hormones: glucagon,
human growth hormone, hormones to treat infertility, hormones used to manage menopause and
osteoporosis, and certain medical enzymes (hyaluronidase and urokinase).29
This distinction is important because the Hatch-Waxman Act provides a mechanism for the
approval of generic drugs under the FDC Act but not under the PHS Act. Generic pharmaceutical
companies could seek to gain approval of follow-on biological products for the small number of
biologics approved under the FDA Act but not the much larger group of biologics approved under
the PHS Act. Hatch-Waxman added two abbreviated pathways to the FDC Act for subsequent
versions of already approved products: section 505(j) and section 505(b)(2).
Section 505(j) established an Abbreviated New Drug Application (ANDA) process for a generic
drug that contains the same active ingredient as the brand-name innovator drug. In the ANDA, the
generic company establishes that its drug product is chemically the same as the already approved
innovator drug, and thereby relies on the FDA’s previous finding of safety and effectiveness for
the approved drug. The 505(j) pathway is used for the approval of most generic chemical drugs.

26 Dudzinski, Food and Drug Law Journal, vol. 60, p. 153. The Insulin Amendments P.L. 77-366, codified at 21 USC
356, were repealed by P.L. 105-115, the Food and Drug Administration Modernization Act (FDAMA).
27 A protein is a large organic molecule composed of a long chain or chains of amino acids linked by chemical bonds.
Insulin is a short chain of 51 amino acids. Examples of carbohydrates include sugars and starch.
28 Dudzinski, Food and Drug Law Journal, vol. 60, p. 154.
29 Janet Woodcock, Deputy Commissioner, Chief Medical Officer, FDA, testimony before the House Committee on
Oversight and Government Reform, March 26, 2007, at http://oversight.house.gov/documents/20070326104056-
22106.pdf; BIO Citizen Petition, Follow-on Therapeutic Proteins, April 23, 2003, at http://www.fda.gov/OHRMS/
DOCKETS/DOCKETS/03p0176/03p-0176-cp00001-01-vol11.pdf.
ȱȱȱ
śȱ

ȱȱȱ Ȭȱȱ
ȱ
Under the second pathway, a drug that has a significant difference from an innovator drug, but is
still sufficiently similar to that drug, may be the subject of a 505(b)(2) application. The company
filing the application must submit additional non-clinical and clinical data to show that the
proposed product is safe and effective.30 However, the application may rely on published
literature or on the FDA’s finding of safety and effectiveness for the already approved product to
support the approval of the proposed product. The 505(b)(2) pathway has been used to approve
Omnitrope, a follow-on human growth hormone, and a few other follow-on protein products.31
All have been members of the small set of biologic products that were regulated as drugs.
¢ȱ ȱ
Following enactment of the 1902 Biologics Act, regulatory responsibility for biologics was first
delegated to the Hygienic Laboratory, a precursor of NIH.32 In 1972, regulatory authority for
biologics was transferred from the NIH Division of Biological Standards to the FDA Bureau of
Biologics, which eventually became the agency’s Center for Biologics Evaluation and Research
(CBER).33
Because biotechnology products frequently cross the conventional boundaries between biologics,
drugs, and devices, determining the jurisdictional status of these new products has been difficult
for both the FDA and industry. Some products have had characteristics that met multiple statutory
and scientific definitions.34 In 1991, the FDA published an Intercenter Agreement between CBER
and the Center for Drug Evaluation and Research (CDER).35 In general, the agreement stated that
traditional biologics (vaccines, blood, blood products, antitoxins, allergenic products), as well as
most biotechnology products, would be regulated by CBER. The small set of biologics mentioned
earlier that are regulated as drugs under the FDC Act would continue to be regulated by CDER,
regardless of the method of manufacture.
In 2002, however, the FDA announced its intention to reorganize review responsibilities,
consolidating review of new pharmaceutical products under CDER, thereby allowing CBER to

30 Janet Woodcock, testimony before the House Committee on Oversight and Government Reform, March 26, 2007.
31 These products are GlucaGen (glucagon recombinant for injection), Hylenex (hyaluronidase recombinant human),
Hydase and Amphadase (hyaluronidase), and Fortical (calcitonin salmon recombinant) Nasal Spray. Center for Drug
Evaluation and Research, U.S. Food and Drug Administration, Omnitrope (somatropin [rDNA origin]) Questions and
Answers, May 30, 2006, at http://www.fda.gov/cder/drug/infopage/somatropin/qa.htm.
32 Ibid., p. 148, and The NIH Almanac—Historical Data: Chronology of Events, at http://www.nih.gov/about/almanac/
historical/chronology_of_events.htm. In 1937, the biologics control program was assigned to the newly established
Division of Biologics Control. In 1955, the biologics control function was placed in the newly formed Division of
Biologics Standards.
33 The NIH Almanac; Donna Hamilton, “A Brief History of the Center for Drug Evaluation and Research,” FDA
History Office, November 1997, at http://www.fda.gov/cder/about/history/Histext.htm. During the early 1980s, the
Bureau of Drugs and the Bureau of Biologics merged to form the National Center for Drugs and Biologics. In 1984, all
of the National Centers within FDA were redesignated simply as Centers. In 1987, the Center for Drugs and Biologics
was split into the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation and
Research (CBER). CBER continues to use NIH facilities and buildings until the expected move in 2012 to the new
FDA headquarters in White Oak, Maryland (see http://www.fda.gov/oc/whiteoak/projectschedule.html).
34 See, for example, “Assignment of Agency Component for Review of Premarket Applications,” Final Rule, Federal
Register, vol. 56, no. 225, November 21, 1991, pp. 58754-58758, at http://www.fda.gov/OHRMS/DOCKETS/98fr/91-
27869.pdf.
35 The Intercenter Agreement is available at http://www.fda.gov/oc/ombudsman/drug-bio.htm.
ȱȱȱ
Ŝȱ

ȱȱȱ Ȭȱȱ
ȱ
concentrate on vaccines, blood safety, gene therapy, and tissue transplantation.36 On June 30,
2003, responsibility for most therapeutic biologics was transferred from CBER to CDER.37 Under
the new structure, biological products transferred to CDER will continue to be regulated as
licensed biologics under section 351 of the PHS Act. Examples of products transferred to CDER
include monoclonal antibodies; proteins intended for therapeutic use (interferons, thrombolytic
enzymes); immunomodulators (other than vaccines and allergenic products); and, growth factors,
cytokines, and monoclonal antibodies intended to alter production of blood cells.38 Remaining at
CBER are traditional biologics such as vaccines, allergenic products, antitoxins, antivenins,
venoms, and blood and blood products, including recombinant versions of plasma derivatives
(clotting factors produced via biotechnology).
As stated previously, the Hatch-Waxman Act added two abbreviated pathways under the FDC
Act—505(j) and 505(b)(2)—but not under the PHS Act, for the approval of additional products
subsequent to the innovator product. Because of the complex nature of most biological products
and their methods of manufacture, such products will not be identical to the brand-name product;
therefore, the 505(j) pathway cannot be used for product approval. However, if a biological
product is sufficiently similar to the innovator product, the 505(b)(2) pathway may be used by a
company for the approval of its biologic. Following the enactment of Hatch-Waxman, the FDA
published in 1999 a draft guidance on applications covered by section 505(b)(2); the guidance has
never been finalized.39
As things currently stand, and as discussed above, the 505(b)(2) pathway has been used only for
those biologics that have been regulated as drugs under the FDC Act. However, the vast majority
of biologics have been regulated under the PHS Act. The FDA’s position is that additional
legislation is required to provide such a pathway under the PHS Act. For traditional biologics
regulated under the PHS Act, the agency’s longstanding policy has been that a full BLA,
including clinical testing, would be required for the licensing of each such product. In a 1974
Federal Register notice, the FDA stated that
[u]nlike the regulation of human and animal drugs, all biological products are required to
undergo clinical testing in order to demonstrate safety, purity, potency and effectiveness
prior to licensing, regardless whether other versions of the same product are already
marketed or standards for the product have been adopted by rulemaking. Indeed, many of the
existing standards require specific clinical testing before approval will be granted. This is
required because all biological products are to some extent different and thus each must be
separately proved safe, pure, potent, and effective.... There is no such thing as a “me-too”
biologic.40
When publishing the final rule on the ANDA procedure that had been outlined in Hatch-Waxman,
the FDA stated in 1992 that “these procedures are inapplicable to ... biological drug products

36 FDA Press Release, “FDA to Consolidate Review Responsibilities for New Pharmaceutical Products,” September 6,
2002, at http://www.fda.gov/bbs/topics/NEWS/2002/NEW00834.html.
37 Federal Register, vol. 68, no. 123, June 26, 2003, pp. 38067-38068.
38 Transfer of Therapeutic Products to the Center for Drug Evaluation and Research, at http://www.fda.gov/cber/
transfer/transfer.htm. Also of interest is Approved Products Transferring to CDER, at http://www.fda.gov/cber/transfer/
transfprods.htm, and Therapeutic Biological Products, at http://www.fda.gov/cder/biologics/default.htm.
39 Guidance for Industry, Applications Covered by Section 505(b)(2), October 1999, at http://www.fda.gov/CDER/
GUIDANCE/2853dft.pdf.
40 Federal Register, v. 39, no. 248, December 24, 1974, p. 44641.
ȱȱȱ
ŝȱ

ȱȱȱ Ȭȱȱ
ȱ
licensed under 42 USC 262 (section 351 of the PHS Act).”41 Most recently, during hearing
testimony on May 2, 2007, before the Subcommittee on Health of the House Energy and
Commerce Committee, Janet Woodcock, Deputy Commissioner and Chief Medical Officer of the
FDA, stated in response to questioning that there is no pathway under the PHS Act for the
approval or licensing of follow-on biologics that is similar to the 505(b)(2) pathway under the
FDC Act, and that the FDA would be willing to work with Congress in crafting a legislative
approach to creating such a pathway.
ȱȱ
Comparing a follow-on protein with the brand-name product is more scientifically challenging
than comparing generic and brand-name chemical drugs. For chemically synthesized drugs,
which are relatively small molecules, the equivalence of chemical composition between the
generic drug and innovator drug is relatively easy to determine. In contrast, therapeutic proteins
are much larger in size (100- to 1,000-fold larger than chemically synthesized drugs), have a
much more complex three dimensional structure, and may consist of mixtures rather than one
pure entity.
A protein is a large organic molecule composed of a long chain of component parts, called amino
acids, which are linked by chemical bonds. This amino acid chain folds into a complex three-
dimensional structure. Slight changes in the chain or three-dimensional shape can influence the
protein’s biological activity. Proteins can also be altered by the addition of other chemicals, such
as sugar groups (glycosylation), at various points along the amino acid chain. In many cases,
current technology will not allow complete characterization of biological products. In prepared
testimony before Congress, FDA Deputy Commissioner Janet Woodcock outlined the scientific
challenges involved in determining the safety and effectiveness of follow-on biologics, often
referred to by FDA as follow-on protein products.
Current technologies, such as peptide mapping, protein sequencing, and mass spectroscopy
enable manufacturers to determine, with certainty, the amino acid sequence of a recombinant
protein. However, the amino acid sequence is the most rudimentary characteristic of a
protein. Conclusive analysis of other aspects of a protein’s structure requires much more
sophisticated technologies and is fraught with uncertainties that are proportional to the size
and complexity of the protein itself. Such complexities include folding of the protein’s amino
acid chain into highly organized structures, post-translational modification of the protein
with a broad range of biochemical additions (e.g., glycosylation, acetylation,
phosphorylation, etc.), and association of multiple protein molecules into aggregates. It is the
combination of the protein’s amino acid sequence and its structural modifications that give a
protein its unique functional characteristics. Therefore, the ability to predict the clinical
comparability of two products depends on our understanding of the relationship between the
structural characteristics of the protein and its function, as well as on our ability to
demonstrate structural similarity between the follow-on protein and the reference product.
Although this currently may be possible for some relatively simple protein products,
technology is not yet sufficiently advanced to allow this type of comparison for more
complex protein products.42

41 Federal Register, v. 57, no. 82, April 28, 1992, p. 17951.
42 Janet Woodcock, Deputy Commissioner, Chief Medical Officer, FDA, testimony before the Subcommittee on
Health, Committee on Energy and Commerce, May 2, 2007, at http://energycommerce.house.gov/cmte_mtgs/110-he-
(continued...)
ȱȱȱ
Şȱ

ȱȱȱ Ȭȱȱ
ȱ
Another challenge for the FDA is determining whether the follow-on biologic is sufficiently
similar to the brand-name biologic that the two products are interchangeable. Several terms are
important to this discussion. Products that are considered to be therapeutically equivalent “are
approved drug products, usually made by different manufacturers, that are pharmaceutical
equivalents and for which bioequivalence has been demonstrated. Therapeutic equivalents can be
expected to have the same clinical effect and safety profile when administered to patients under
the conditions specified in the labeling.”43 Pharmaceutical equivalents are products that contain
the same active ingredient in the same strength, dosage form, and route of administration.44
Bioequivalence means that the products are absorbed into the body at a similar rate and extent.45
Interchangeability “is not defined by FDA and could have a number of different meanings. It
could refer to products that are therapeutic equivalents, and thus could, in some circumstances, be
substituted at the pharmacy level without a physician’s intervention. Alternatively, the term could
describe similar products that are not ‘substitutable’ but which, under a physician’s supervision,
could be used to treat the same disease or condition in the same patient.”46
Most drugs approved under section 505(j) are therapeutically equivalent to the already approved
drug product. In her testimony, Dr. Woodcock explains the importance of a determination of
therapeutic equivalence for a generic drug and the reasons why such a determination for a follow-
on protein product may not be possible, at least at the present time:
In many jurisdictions, therapeutically equivalent drugs may be substituted at the pharmacy
level, without a physician’s intervention.... Because of the variability and complexity of
protein molecules, current limitations of analytical methods, and the difficulties in
manufacturing a consistent product, it is unlikely that, for most proteins, a manufacturer of a
follow-on protein product could demonstrate that its product is identical to an already
approved product. Therefore, the section 505(j) generic drug approval pathway, which is
predicated on a finding of the same active ingredient, will not ordinarily be available for
protein products.47
Immunogenicity, or the ability to elicit an immune response, is another important term in the
discussion of follow-on proteins. An immune response to a therapeutic protein can range from
detectable, but clinically insignificant, to one that can cause safety problems for the patient or
limit the effectiveness of the product. For some biologics, such as vaccines, stimulating an
immune response is the intended outcome. However, for other types of therapeutic products, an
immune response can lower the clinical effect of a protein. Dr. Woodcock describes the
implications at length in the prepared testimony:
Adverse safety events from an immune response could include hypersensitivity reactions
such as anaphylaxis, rash, fever and kidney problems, to cross-reaction with an endogenous
(naturally occurring in the body) protein (e.g., erythropoietin). Immunogenicity may be
influenced by patient-related, disease-related, or product-related factors. Immune responses

(...continued)
hrg.050207.Woodcock-testimony.pdf.
43Ibid.
44 Janet Woodcock et al., “The FDA’s Assessment of Follow-on Protein Products: A Historical Perspective,” Nature
Reviews Drug Discovery, published online April 13, 2007, at http://www.nature.com/reviews/drugdisc.
45 Ibid.
46 Janet Woodcock, testimony before the Subcommittee on Health, Committee on Energy and Commerce, May 2, 2007.
47 Ibid.
ȱȱȱ
şȱ

ȱȱȱ Ȭȱȱ
ȱ
to administered protein products can be extremely serious or life-threatening; therefore, this
issue requires significant attention. The ability to predict immunogenicity of a protein
product, particularly the more complex proteins, is extremely limited. Therefore, some
degree of clinical assessment of a new product’s immunogenic potential will ordinarily be
needed. The extent of independent testing needed will again depend on a variety of scientific
factors such as the indication, whether the product is to be administered chronically, the
overall assessment of the product’s immunogenic potential, and whether there is the
possibility of generating a cross-reaction with an important endogenous molecule.
Even if a follow-on protein product is found to be safe and effective by the FDA, this finding
does not mean that the follow-on protein product would be interchangeable with, or substitutable
for, the originally approved brand-name product. To establish that the follow-on protein product
is substitutable for the brand-name product, the manufacturer of the follow-on product must
demonstrate through additional clinical data that repeated switches from the follow-on product to
the brand-name product (and vice versa) would have no negative effect on the safety and/or
effectiveness of the products. In other words, there must be no problems with immunogenicity.
“For many follow-on protein products, and, in particular, the more complex proteins, there is a
significant potential for repeated switches between products to have a negative impact on the
safety and/or effectiveness. Therefore, the ability to make determinations of substitutability for
follow-on protein products may be limited.”48
ŗŗŖȱȱȱ
Early in the first session of the 110th Congress, two competing legislative approaches were
introduced that would have allowed FDA to approve follow-on biologic products: H.R. 1038
(Waxman)49 vs. H.R. 1956 (Inslee) and S. 1505 (Gregg). In general, H.R. 1038 was favored by
the generic drug industry and others interested in encouraging the development follow-on
biologics products whereas H.R. 1956 and S. 1505 were favored by the companies that developed
the reference products, also referred to as innovator or brand-name products. With the
introduction of S. 1695 (Kennedy) in June 2007, the bipartisan Senate authors claimed to have
negotiated a compromise between the brand-name manufacturers and the generic drug industry.
The introduction of H.R. 5629 (Eshoo) in March 2008 provided an alternative compromise
approach. H.R. 5629 is similar in some respects to S. 1695 with a few important differences that
are favored by the brand-name industry. The following paragraphs a summary of the provisions in
these five bills.
Interchangeability. H.R. 1038 and S. 1695 would have allowed FDA to make a determination on
the interchangeability of a brand-name product and follow-on biologic product. H.R. 1956 and S.
1505 would not have allowed FDA to designate a follow-on biologic as interchangeable with (or
therapeutically equivalent to) the brand-name product. H.R. 5629 would have allowed FDA to
make a determination on interchangeability; however, it would also have required (1) the
publication of final guidance on interchangeability prior to determinations on interchangeability,
(2) the biological product must be biosimilar to the reference product and any licensed product
that is interchangeable with the reference product, and (3) the biological product must produce
the same clinical result for each condition of use on the reference product label.

48 Ibid.
49 The companion bill to H.R. 1038 is S. 623 (Schumer), which was introduced on February 15, 2007.
ȱȱȱ
ŗŖȱ

ȱȱȱ Ȭȱȱ
ȱ
Clinical studies waiver. H.R. 5629 would have required clinical studies of immunogenicity;
these studies may be waived only if final guidance on immunogenicity determinations has been
published. In contrast, S. 1695 would have required that clinical studies submitted in support of a
biological product application must be designed to avoid needless duplication or unethical clinical
testing; the requirement for clinical and other studies may be waived.
FDA Guidance documents. H.R. 1956 and S. 1505 would have required the publication of a
final product class-specific guidance document (H.R. 1956) or a final product class-specific rule
(S. 1505) before an application for a follow-on biologic could be submitted to the FDA. S. 1695
did not require the publication of a guidance document prior to consideration of a follow-on
biologic application, but the bill did specify criteria that would be required if product class-
specific guidance was issued. H.R. 5629 would require the publication of product-class specific
guidance prior to the approval of a biological product. H.R. 1038 did contain any requirement on
the publication by FDA of product class-specific guidance documents.
Nonproprietary name. H.R. 1956 and S. 1505 would have set in place provisions governing the
nonproprietary naming of biotechnology-derived biologics.50 These bills would have amended the
FDC Act to deem such a biologic to be misbranded if its labeling failed to meet the new
requirements. H.R. 1038 would have allowed the Secretary to designate the same official name
for the comparable biological product as the reference product, but not if it differs from the
reference product with respect to comparability, interchangeability, structural features,
mechanism of action, route of administration, dosage form, strength. naming provisions. H.R.
5629 would have required the Secretary to ensure that the labeling and packaging of each
biological product bears a unique name that distinguishes it from the reference product and any
other biological products that are evaluated against the reference product. S. 1695 did not contain
a provision on naming.
According to media reports, “the brand industry successfully pushed for different names [for
brand-name and follow-on products] in Europe. The brand industry argues having different names
helps pinpoint which drugs are hurting people, but the generic drug industry believes it is a ploy
to thwart generic substitution.”51 The brand name drug companies believe that “having different
names would make it easier for FDA to tell when a brand or a biosimilar is the cause of side
effects. However, FDA urged European regulators to not use this approach when they were

50 The nonproprietary name for a drug (also called a generic, common or established name) identifies a drug’s active
ingredient. While a drug’s chemical name can be lengthly and difficult to pronounce and the brand or trademark name
is protected by intellectual property protections, the nonproprietary name is in the public domail and is used for all legal
and regulatory matters and in all official correspondence. For example, the active ingredient ibuprofen is found in the
brand name product called Advil in the United States or Dolofprt in Germany. Using the same name for the active
ingredient helps physicians and patients recognize similarities and differences among products in different countries.
Varience in non-proprietary names among countries has become less likely due to the International Nonproprietary
Name (INN) program launched by the World Health Organization (WHO) in 1950. The United States Adopted Names
(USAN) Council is a national committee devoted to non-proprietary drug nomenclature in this country. Usually a
manufacturer works with the USAN Council to develop a non-proprietary name; the proposed USAN name is then
forwarded to WHO for the INN. Within all 193 member states of WHO, a medical preparation cannot be sold without
an established non-proprietary name. From: R. John Fidelino, “In pursuit of distinction: The method of the non-
proprietary name,” Journal of Generic Medicines, v. 5, October 2007, p. 45-52.
51 John Wilkerson, “Senate Bill does not Require Biogenerics be ‘Same’ as Brands,” Inside Health Policy, June 25,
2007.
ȱȱȱ
ŗŗȱ

ȱȱȱ Ȭȱȱ
ȱ
debating it last winter. FDA says it already has ‘many alternative mechanisms’ to prevent
inappropriate substitution.”52
Market exclusivity for reference product. S. 1695 would have provided 12 years of exclusive
marketing for the brand-name product prior to the approval of a follow-on biologic. H.R. 1956
and S. 1505 would have provided at least 14 years of exclusive marketing for the brand-name
product; H.R. 5629 would have provided at least 12 years and possibly up to 14½ years of
exclusive marketing for the brand-name product. H.R. 1038 did not provide an exclusivity period.
Market exclusivity for the first interchangeable product. H.R. 1038, S. 1695, and H.R. 5629
would have allowed for a period of exclusive marketing for the follow-on biologic product that is
the first to be established as interchangeable with the reference product. H.R. 1956 and S. 1505
did not contain such a provision.
Patents. H.R. 1038 would have set forth provisions governing patent infringement claims against
an applicant or prospective applicant for a comparable biological product license. S. 1505 would
have allowed patent owners to obtain information from a biosimilar applicant that would allow
them to ascertain whether the biosimlar would infringe any pertinent patents. S. 1695and H.R.
5629 would have established a new process for identifying patents that might be disputed
between the brand-name company and the company submitting a biosimilar application. These
two bills also would have established a multistep patent resolution process.
Pediatric uses for biologics. S. 1695 would have required that all applications involving a
follow-on biologic product include data on the use of the product in children. Data would not
have been required if the product is interchangeable with the reference product.
Biological products approved under FFDCA. S. 1695 and H.R. 5629 stipulated that all
biological product applications must be submitted under section 351 of the PHS Act. For the
small number of biological products that were approved under section 505 of the FFDCA, the
approved application would be deemed to be a license for the biological product under section
351 as of 10 years after enactment.
User fees. S. 1695 and H.R. 5629 would have allowed for the collection of user fees for the
approval of a follow-on biological product.
Special reserve fund. S. 1695 would have required that the Secretary of HHS along with the
Treasury Secretary determine for each fiscal year the amount saved to the federal government and
transfer that amount to the Biological Product Savings Fund. Amounts in the fund would have
been spent by the Secretary of HHS on activities authorized under the PHS Act.
President Barack Obama has indicated his support in general for the eventual FDA approval of
follow-on biologics as a way lower health care costs.53 The Bush Administration supported efforts
to create a pathway for the approval by FDA of follow-on biologics, but it was opposed to several

52 John Wilkerson, “HHS Opposes Senate Plan for Biogenerics “Interchangeability” with Brands,” Inside Health
Policy, June 28, 2007.
53 Shannon Pettypiece and Catherine Larkin, “Merck to start biologic program; Drugs based on live cells, not
chemicals,” The San Diego Union-Tribune, December 10, 2008, p. C1; and, Ed Silverman, “Merck wants to develop
follow-on biologics,” Pharmalot, December 9, 2008, at [http://www.pharmalot.com/2008/12/merck-wants-to-develop-
follow-on-biologics/].
ȱȱȱ
ŗŘȱ

ȱȱȱ Ȭȱȱ
ȱ
provisions such as allowing FDA to make determinations on interchangeability, allowing the
approval of follow-on biologics without prior issuance of guidance, the creation of the Biological
Products Savings Fund, and the possible waiver by FDA of a requirement for clinical trials prior
to the approval of a follow-on biologic.54 The Bush Administration also believed that a follow-on
biologic should have a different nonproprietary name than the brand name product. A June 26,
2007, letter from HHS Secretary Michael Leavitt to the Chairman of the Senate HELP Committee
outlines the Bush Administration’s position.55
In an attempt “to better evaluate the merits, benefits and costs” of these various legislative
proposals and reach consensus on a single bill, the Committee on Energy and Commerce asked
members of the biotechnology community and other stakeholders to answer a series of 46
questions in order that the responses would allow the Committee “to understand more fully the
range of perspectives, concerns, and objectives that might be address in such a legislative
proposal.”56 Almost 500 pages of comments from 29 stakeholders were received and posted by
the Committee.57 The Committee is considering the responses and possible adjustments to the
proposed legislation.

ȱȱȱ

Judith A. Johnson

Specialist in Biomedical Policy
jajohnson@crs.loc.gov, 7-7077

54 Ibid.
55 Letter found at http://insidehealthpolicy.com/secure/data_extra/dir_07/he2007_2375.pdf.
56 The April 3. 2008, Committee on Energy and Commerce letter can be found at
[http://energycommerce.house.gov/Press_110/110-ltr.040308.list.Biologic%20ltr.pdf].
57 Responses to the April 3, 2008 Committee on Energy and Commerce letter are at
[http://energycommerce.house.gov/Press_110/040308.FOB.Responses.shtml].
ȱȱȱ
ŗřȱ