Table of Contents
What is a Biologic?
Biologics refer to powerful medications constructed out of biological components—sugars, proteins, bacteria, DNA, whole cells or tissues, you name it. This type of drug treats many different diseases, comes in many myriad forms, and can be produced from a wide range of living sources.
Vaccines, allergenics, blood and blood components, gene-based and cellular treatments are all examples of biologics.
Biologics, because of both their natural components and diverse sources, tend to have complex, costly development and manufacturing processes. But it’s in that complexity that puts biologics at the forefront of medical advances. Particularly in the case of gene and cell-based biologics, they serve as the only available treatment for certain conditions and illnesses.
We at the Zero Theft Movement are dedicated to achieving economic justice so that all Americans can thrive. While biologics present seemingly limitless opportunities for unique and effective treatments, are their manufacturers taking measures to unethically profit off of patients?
In the U.S., drug prices, on average, are 2.56 times higher than those in 32 developed nations. Americans spend about $1,200 on prescription medication annually.
Developing and Manufacturing Biologic Drugs
Developing biologics with DNA
source: ‘Manufacturing of Biologics’ by Jared J. Nathan, Monica Ramchandani, Primal Kaur
Most drugs have a known structure and can be chemically synthesized. Thus, manufacturers can consistently and (more) cheaply produce effective drugs than their biologic counterparts.
As mentioned in the introduction, biologics come from all kinds of natural components that work together to have medicinal properties. There’s no set blueprint or known structure that manufacturers can simply follow. It’s their unique, complex, and large compositions that can make them extremely effective treatments, but also generate developmental and manufacturing difficulties and costs.
For example, biologics involve a lot of work to purify, process, and produce because their natural parts are sensitive to environmental factors (light, temperature, microbial contamination, etc.). Manufacturers must follow aseptic principles throughout the whole process to ensure they produce an effective product. And even then, the end product proves much more unpredictable than most traditional drugs.
A Short List of Five Well Known Biologics
- Manufacturer: AbbVie, an Abbott Laboratories spinoff
- Global Sales in 2020: $19.8 billion
- Generic name: Adalimumab
- Launch date: 2002
Not only the global top-selling biologic, Humira has repeatedly been the best-selling drug in general. Humira is an anti-inflammatory drug, used to mainly but not exclusively treat rheumatoid arthritis. In essence, the drug contains monoclonal antibodies that trap specific molecules in the body that cause inflammation.
Some claim AbbVie has created a Humira ‘patent thicket.’ That’s when a pharmaceutical company acquires as many patents as they can get in order to establish an insurmountable barrier to entry, preserve its monopoly, and ultimately profit as much as possible without competition.
source: Diabetes Frees
- Manufacturer: Sanofi
- Global Sales in 2020: €2.6 billion ($3.22 billion)
- Patient costs per month:
- Generic name: Insulin glargine [rDNA origin] injection
- Launch date: 2000
Lantus is a long-acting, biologic form of insulin that controls blood sugar levels in patients with diabetes. Diabetes causes patients’ blood sugar levels to spike. Insulin helps the body convert that excess sugar into energy, or store it in muscles, fat, and the liver for future use. Lantus works for adults with type 1 and type 2 diabetes, and children (6 years and older) with type 1 diabetes.
The Journal for American Medical Association published a 2019 study into cost-related underuse of insulin. During June-August 2017, researchers surveyed 199 outpatients with type 1 or type 2 diabetes who were prescribed insulin and seen at the Yale Diabetes Center. A quarter of the patients reported underusing insulin due to the prohibitive cost.
Political watchdog Public Citizen has alleged “Pharma’s price gouging on insulin is…killing patients.”
source: Fierce Pharma
- Manufacturer: Abbvie via Allergan
- Global Sales in 2020 (Cosmetic + Therapeutic): $1.06 billion
- Generic name: OnabotulinumtoxinA
- Launch date: 2002
Botox is a biologic manufactured from a bacteria called Clostridium botulinum. In essence, the biologic has a toxin that prevents nerves and muscles from activating. While it’s perhaps more famous for its cosmetic applications (i.e. reducing wrinkles), it also has many therapeutic uses, including controlling muscle spasms, underarm perspiration, migraines, etc.
Pharmaceutical giant Abbvie acquired Botox-maker Allergan in a $63 billion deal in 2020. Consumers groups and unions had reportedly cautioned the Federal Trade Commission against approving the acquisition.
Due to the non-interference clause in Medicare Part D, the government cannot negotiate drug prices. Does this lead to much more taxpayer money being spent on drugs than necessary?
See what the ZT community has found through their investigations…
- Manufacturer: Roche
- Global Sales in 2019: $6.08 billion
- Generic name: Trastuzumab
- Launch date: 1998
Herceptin refers to the biologic drug used to treat HER2-positive breast cancer and HER2-positive metastatic stomach cancer. It attacks HER2-positive cancer cells and blocks processes causing cancerous cells to grow uncontrollably.
In 2017, South African citizens accused Roche of fixing the price of Herceptin. According to Pharmaceutical Technology, South Africa’s Competition Commission launched an investigation into the matter. Nothing new seems to have surfaced (as of April 2021).
- Manufacturer: Roche via Genentech
- Global Sales in 2019: $7.12 billion
- Generic name: Bevacizumab
- Launch date: 2006
Avastin is a biologic widely used and prescribed in ophthalmology offices, particularly those that treat patients with retinal illnesses such as age-related macular degeneration. Avastin can prevent new leaky blood vessels from developing under the retina, protecting a patient’s vision.
According to a 2020 Policy & Medicine, the French Competition Authority fined Novartis and Roche a collective $526 million due to its promotion of Avastin and Lucentis (a similar biologic). It found that the companies had “promot[ed] Lucentis over Roche’s less expensive cancer drug Avastin, which can be used off-label to treat AMD. As there was a significant difference in treatment cost for patients using Lucentis versus Avastin, any use of Avastin instead of Lucentis would likely lead to a significant loss of earnings for each of the three companies [Novartis, Roche, and Genentech] involved.
In 2014, the Italian competition authority reportedly imposed a €180 million (~$218 million) collective fine on Novartis and Roche for similar allegations.
Anti-competition in the U.S. Biologics Market
Avik Roy, the President of the Foundation for Free Economic Opportunity, authored a 2020 study examining competition in the U.S. biologics market. He argues that big pharma has broken the ‘social contract’ by “distorting monopoly power through patent thickets.”
We have paraphrased what we believed to be some of the major takeaways from Roy’s report. Of course, we recommend you to peruse the actual report if you have the time.
- In 2018, biologics represented only 0.4% of total U.S. prescriptions, but account for 46% of all U.S. Rx spending. Data suggests that the biologics spending share will continue to increase, according to Roy
- The alleged lack of competition in the U.S. biologic market has cost U.S. patients $5 billion from 2015-2020. Without reform, biologics will cost patients an extra $25 billion by 2029
- In order to boost innovation and lower costs for patients, Roy argues comprehensive reform should:
- Enable biosimilar drugs to release without the risk of treble damages
- Establishing fair biosimilar interchangeability standards
- Eliminating patent trolling
- Reforming Medicare Parts B And D
- Finding avenues to achieve price reductions for non-generalizable biologics
Biologics…What Does Our Future Hold?
It appears we might be at something of a crossroads with biologics. They present ample opportunity for unique and innovative therapeutic interventions. However, current legislation and regulation might not properly address the cost to patients.
Big pharma advocates would likely justify biologic price tags by pointing to the extensive and complex research, development, and manufacturing processes. For the effort and money required, the ‘patent thicket’ might just be fair.
Then again, we are talking about life-saving goods (e.g. insulin). Should they really be increasing in price or having lengthy patents?
Some major biologics lost their patent protection in 2020, so we will have to see whether biosimilar products can help bring the price down. You do have to remember that developing and manufacturing biosimilars will still come with considerable costs due to the complexities of combining various natural components.
So what do you think? As things stand, do biologics rip off the public? Not in effectiveness, but by being cost-prohibitive for many? Should Congress establish specific protections against patent abuse with biologics? If so, what reform would be fair?
The Zero Theft Movement, along with our growing community, works to calculate the best estimate for the monetary costs of corruption in the U.S. Corporate, political, and everything in between.
We have built a safe and independent voting platform where you and your fellow citizens collaborate to thoroughly investigate potential problem areas across the economy, including the pharmaceutical industry and biologics. Everyone votes on whether (1) theft is or isn’t occurring in a specific area of the economy, and (2) how much is being stolen or possibly saved. Through direct democracy, we can collectively decide where the problem areas are and start working on addressing them systematically.
Only through hard evidence can we prove where the rigged parts of the economy exist and force Congress to hold the bad actors accountable. We can achieve economic justice, a financial system that allows the many good businesses (big, medium, and small) and good individuals (regardless of their socioeconomic status) to thrive.
The Zero Theft Movement does not have any interest in partisan politics/competition or attacking/defending one side. We seek to eradicate theft from the U.S economy. In other words, how the wealthy and powerful rig the system to steal money from us, the everyday citizen. We need to collectively fight against crony capitalism in order for us to all profit from an ethical economy.
Terms like ‘steal,’ ‘theft,’ and ‘crime’ will frequently appear throughout the article. Zero Theft will NOT adhere strictly to the legal definitions of these terms (since congress sells out). We have broadly and openly defined terms like ‘steal’ and ‘theft’ to refer to the rigged economy and other debated unethical acts that can cause citizens to lose out on money they deserve to keep.