Omnitrope's Off-Label Future
When Sarah Sellers heard on May 31 that the U.S. Food & Drug Administration had approved a generic-like version of human growth hormone (HGH), she was less than thrilled. The product, called Omnitrope and made by a unit of Novartis (NVS), is the first low-cost, copycat biotech drug to be approved by the FDA.
For parents of short children, who take the hormone so they can grow to normal height, the new treatment could be great news. But that's not what worries Sellers, a Chicago drug-safety consultant to the FDA and others. She's afraid Omnitrope will fuel the burgeoning anti-aging industry, which has latched onto HGH as a panacea for fending off aging. HGH is not approved for that purpose, so patients who buy into the fountain-of-youth claims often have to pay thousands of dollars a month out of their own pockets for the drug. "Will [Omnitrope] fuel off-label use? Absolutely," Sellers gripes.
Fact is, Omnitrope is likely to be more of a boon to the anti-aging industry than it will be to the handful of companies itching to make generic biotech drugs. Omnitrope was approved via the FDA's 505(b)(2) pathway, which prohibits Novartis from claiming that the drug is identical to Genotropin, the Pfizer (PFE) version of HGH that Omnitrope was modeled on.
NO CLEAR PATH.
It also prevents pharmacies from automatically substituting Novartis's low-cost option when a physician prescribes a more pricey form of HGH -- a common practice with standard generic drugs. Ultimately, then, "we'll have to market it as if it were a new drug," admits Ajaz Hussain, vice-president of biopharmaceutical development for Novartis (see BW Online, 11/28/05, "My, How You've Grown").
The arrival of generic biologics has long been feared by investors in such pure-play biotech companies as Amgen (AMGN) and Genentech (DNA), the latter of which markets its own form of HGH. But Omnitrope isn't paving a clear path to mass FDA approvals of generic biotech drugs (see BW Online, 05/09/05, "Biotech Drugs: Where Are the Generics").
That's because HGH was originally approved under a different law than the one that governs most biotech drugs. In a research note, Sanford Bernstein analyst Gbola Amusa writes that 505(b)(2) will not be an approval option "for the overwhelming majority of biotech products." The FDA has yet to define a clear approval route for future low-cost biologic drugs, which are more complicated to make than standard chemically-based medications.
In a statement released following the approval, the FDA confirmed that Omnitrope is not a new "follow-on biologic" -- the preferred term for generic biotech drugs. Walter Moore, vice-president of government affairs for Genentech, puts it more bluntly: "The way I see it, [Omnitrope] is the seventh growth hormone on the market. We've got a new competitor out there."
And there's no guarantee that Omnitrope's price advantage will be steep enough to win converts from older, more established drugs. Although Novartis has not yet announced the U.S. price of Omnitrope, in Germany it sells at about a 25% discount to the older growth hormones, Hussain says. The typical generic drug sells at a 50% discount or more to its branded cousin.
If the Omnitrope discount is just 25% in the U.S., it may not offer enough incentive for insurance companies to lump the drug in with other generic drugs, which generally carry the lowest co-payments. Without the advantage of dirt-cheap co-pays, it could be difficult for Novartis to persuade parents to abandon HGH leaders like Genentech and Pfizer, which have decades of experience and safety data to back up their sales pitches. Pfizer did not respond to requests for comment.
The anti-aging industry, on the other hand, is likely to welcome Omnitrope with open arms. In the $56 billion market for products that purport to turn back the hands of time, HGH is a star. Many anti-aging physicians believe it can improve memory, cardiac function, and body composition. The FDA has not approved HGH for that purpose -- and likely never will. But an estimated 30% of prescriptions written for growth hormone are done so for off-label purposes, according to an Oct. 26, 2005 paper in The Journal of the American Medical Assn. One of the only deterrents for potential patients is the cost, which can run as much as $2,000 a month. Shaving 25% off that price tag "will make the drug much more accessible," says critic Sellers.(see BW Online, 03/20/06, "Selling the Promise of Youth").
Counters Novartis's Hussain about the risks associated with selling a drug off-label: "These challenges exist for many drugs. There's nothing unique about Omnitrope." Despite the limited nature of the Omnitrope approval, Novartis executives remain optimistic that the FDA will eventually establish a broad plan for green-lighting follow-on biologics. "This is a major step forward," Hussain says of the Omnitrope decision. He adds that generic biologics will play a major role in Novartis's long-term growth strategy -- the company has five more in the pipeline.
That's likely to be music to the ears of anti-aging proponents, who are looking to the biotech industry as a source of other drugs they might use to delay aging. Dr. Ronald M. Klatz, president of the American Academy of Anti-Aging Medicine, has predicted that most biotech drugs could have anti-aging properties. As prices of biotech drugs come down, the growing debate between physicians such as Klatz and critics who say the anti-aging claims are hooey will only grow louder.