If a new law is passed, the Food and Drug Administration (FDA) may soon have the authority to approve generic versions of biologic drugs in the US. As part of the proposed requirements, Congress heard proposals last Thursday to make clinical trials mandatory as part of the approval process - which is not the case for traditional drugs. However, CROs who are licking their lips at the thought of the potential new business this could bring should not be so hasty. "The theory that this would benefit CROs since generics biotech companies usually don't have the resources necessary to conduct drug trials themselves and therefore would have to outsource to a CRO is correct, however, we are talking about a volume of clinical trials which is really small compared to the current market," Janice Reichert, senior research fellow at Tufts Center for the Study of Drug Development, told Outsourcing-Pharma.com. "Even if the bill is passed with further clinical trial requirement for biogeneric applications, it will be a tiny drop in a bucket for CROs." Reichert's argument is that first, if clinical trials are required to get a biogeneric approved, it will be a small clinical study, a Phase I conducted quickly as the biologic's properties are already known. So any potential benefits will be limited to those CROs with specialty Phase I units. Also, in the US, there are only a few protein-based therapeutics where the market is big enough to attract large competition, and not many generic companies would be brave enough to get into copying biologics that are not set to be blockbusters. What is more, there are not that many biologics coming off patent. So far, only a few are now susceptible to competition from biogenerics including insulin, human growth factor, epotein, interferon alpha and interferon beta. An eccentricity of the FDA is that insulin is considered as a normal drug since it was approved as an indication, not a product. "This quirk in the law makes the FDA system a bi-model. It is surprising that generic companies are not pushing for a clearer pathway for products that already exist," said Reichert. The proposed Senate bill would grant the FDA powers to approve "follow-on" biologics (dubbed biosimilars by the European regulators) and would enable the agency to decide whether clinical trials and other data would be necessary to ensure the new biosimilars are safe and effective - a debate that has been going on for months. But in the past few weeks, the debate has shifted from whether the bill should pass to what level of testing it will require for the new drugs. According to Reichert, some biologics such as insulin and human growth hormones are relatively easy to reproduce, while others are complex and require additional testing. In addition, there are questions remaining regarding the actual savings that would potentially be made, should such biosimilars be introduced. Indeed, there is a growing concern surrounding the steep cost of developing and manufacturing new biologics. Biotech drugs that treat diseases such as cancer and multiple sclerosis cost tens of thousands of dollars per patient. "The US drug market has faced similar challenges before", said Senator Edward Kennedy during the Senate hearing last week. In the early 1980s, the cost of prescription drugs was spiralling upward. In response, Congress came up with the Waxman-Hatch Act that balanced the need to reduce costs for consumers through increased competition with the requirement to promote innovation. That legislation is known by the names of its sponsors, Senator Orrin Hatch and Representative Henry Waxman. But the new potential law wouldn't necessary lower prices as much as it did with standard drugs. "Usually, the first generic version of a drug to be launched on the market costs 85 to 90 per cent of the price of the original product, so the discount is not dramatic," said Reichert. She said it is only when there is additional competition, when the third or fourth version of a drug is launched on the market, that prices go down significantly. Something she said would be difficult to see considering the small markets most biologics are in. And so the debate continues, with branded drug makers saying that "generic" biologics should never be considered interchangeable with the original drug - a view obviously disputed by generics firms.