As new pharmaceuticals are brought to market, the concern is always: How do we reward drugmakers to encourage innovation but keep treatments affordable?
Gov. Jerry Brown is weighing this question as he decides whether to sign state Sen. Jerry Hill's SB598, which would restrict the use of cheaper versions of drugs known as biosimilars by requiring pharmacies to notify doctors and sometimes patients when the drugs are substituted for the brand-name biologics. The result would be discouraging the use of biosimilars and protecting the market for biologics, which had grown to $157 billion in 2011.
Biologics, used to treat serious illnesses such as cancer, diabetes and multiple sclerosis, are costly for patients - or their insurance companies or taxpayers. Genentech's Herceptin, a breast cancer drug, for example, is $61,000 or more a year. Biosimilars, which are approved for used in Europe but not yet in the United States, offer significant savings.
Their use will avoid shifting even more health care costs onto employers and patients, which is why Kaiser Permanente and the California Public Employees' Retirement System, who spend billions on health care, oppose the bill.
Biosimilars offer much less of a savings than substituting generics for brand-name drugs -- 25 to 30 percent, compared with 70 to 80 percent. Safety concerns make bringing biosimilars to market more costly because they must go through clinical trials.
A generic drug is a chemical reformulation of the original drug. A biosimilar is different from the "innovator" drug it simulates because it is based on a different protein. As such, it may cause an adverse reaction. Notification would help track effects and, the biotech industry hopes, build confidence among doctors for this new class of drugs.
But U.S. Food and Drug Administration standards for safely substituting biosimilars, expected early next year, will also build confidence.
California should wait for the FDA to do its work and not rush to pass a state law more about protecting profits than patients. The governor should veto SB598.
-- San Francisco Chronicle