Executives make many trips to Washington to argue for 14 years of sales exclusivity for new drugs made from cells

Bob Armitage has been racking up frequent flier miles in a big way this year.

The general counsel for Indianapolis-based Eli Lilly and Co. has been making weekly treks to Washington, D.C., to talk to
members
of Congress, their aides and others about legislation to allow generic biotech drugs.

Lilly brass thinks this is the year Congress will finally OK cheaper, generic copies of fantastically expensive biotech medicines.
It’s a concept Lilly supports as long as it and other makers of biotech drugs have plenty of time to recoup their investment
and turn a profit first.

With President Barack Obama firmly in support, the debate now is between two competing bills filed in the U.S. House of Representatives
this month.

One, sponsored by Rep. Henry Waxman, D-Calif., calls for giving biotech drugs the same period of exclusive sales as prescribed
for traditional chemical drugs by the 1984 Hatch-Waxman Act, which created the U.S. generic drug industry.

Accordingly, Waxman’s biotech bill would allow five years of exclusive sales before allowing generic copies to come on the
market. Existing biotech drugs that won approval for a new use could get three more years of exclusivity.

The other bill, sponsored by Rep. Anna Eshoo, D-Calif., would protect biotech drugs for 12 years before allowing generic competition.
Existing drugs that won approval for a new use could get two more years of exclusivity.

These periods of exclusivity are separate from patents, which on average keep away generic competitors for 14 years. But Lilly
and its peers are constantly waging court battles with generic drugmakers to protect those patents.

Lilly, which now derives 26 percent of its sales from biotech drugs, naturally favors Eshoo’s bill. Lilly CEO John Lechleiter
has even gone to Washington to make that preference known.

"We know that you can actually make this model work for the generic industry. The key is to make it work so we survive,"
said
Armitage, referring to Lilly and its peers that sell the branded drugs generic drugmakers later copy.

Indeed, generic biotech drugs represent a big threat to the large pharmaceutical companies, which increasingly have turned
to biotech drugs for growth as their most successful chemical-pill-form medicines cruise toward the end of their patent lives.

Biotech drugs are proteins produced by massive cultures of living cells. Scientists splice DNA into the genes of these cells
to get them to produce the protein they want.

Biotech drugs are literally brewed-like beer — in a series of increasingly larger tanks, up to tens of thousands of
gallons.
The typical biotech medicine comes as an injectable liquid.

For years, pharmaceutical companies argued that biotech drugs couldn’t really be copied because any subtle change in the genetic
engineering or in the "brewing" process would produce a different protein.

But more recently, pharmaceutical companies have thrown their support behind generic biotech drugs-as long as their window
on sales exclusivity doesn’t close too quickly. Trouble is, biotech has become a synonym for exorbitant. For example, Herceptin,
a biotech breast cancer treatment introduced 11 years ago by Genentech Inc., costs $40,000 for one year of treatment.

"Excessive exclusivity means that it will be decades before patients have access to affordable biogeneric medicines,"
said
Kathleen Jaeger, CEO of the Generic Pharmaceutical Association, in a statement. "Timely access to affordable biogenerics
will
save lives and save consumers and state and federal governments billions of dollars."

But Armitage thinks the limits in Waxman’s bill would make biotech drug development too risky for companies large and small.

He said drugmakers would develop only drugs for which they are certain they have ironclad patents, meaning they can probably
avoid generic competitors for 14 years.

"Patents are extremely important, but they can’t do the job alone," Armitage said.