Will Teva's Play Usher Generic, Biosimilar Makers Into "Innovator" Territory?

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

PhRMA is facing a controversial, potentially industry-altering decision. The generics king Teva has requested to become a member of the trade organization that traditionally represents “innovators”.

Teva’s request to join has raised some eyebrows at PhRMA — though this reaction should not come as a surprise. Since the launch of small-molecule generics decades ago, generics makers have been pitted against innovators and their patents for space in the market. Today, this division continues to be further emphasized as biosimilar makers begin battling biologics for a more timely market release. As such, Teva’s potential admittance to PhRMA is, to some members, akin to “a spy” entering the ranks, The New York Times reports. As one expert from a PhRMA member company tells the NYT, “Teva has sought to invalidate patents in 29 cases since 2011,” a fact which he says calls into question “Teva’s commitment to innovation.”

But Teva’s request highlights a key shift within the industry that has only been accentuated by the arrival of biosimilars. Teva is often identified by the industry and media as a generics powerhouse — especially now following its $40.5 billion acquisition of Allergan’s generics business. But the company also has a pipeline of novel drugs — most notably its multiple sclerosis drug Copaxone. (In fact, like many PhRMA-ites, it has been actively fighting to protect Copaxone from generic competition.) Altogether, brand-name drugs have garnered the company $6 billion in revenue. Because of its efforts developing both brand-name and generic drugs, Teva identifies itself as a hybrid company and emphasizes that its revenue from novel drugs is high enough to warrant membership in PhRMA.

There are some ways PhRMA could benefit from Teva’s inclusion, including an increase in the organization’s resources, strength, and revenue. Similarly, having a generics company within its ranks could increase the organization’s credibility as lobbyists continue addressing criticism over the price of drugs. Even though PhRMA hasn’t voted on Teva’s membership, some lobbyists are already predicting the company will be granted membership. This could be because PhRMA’s CEO Stephen Ubl has shown interest in growing the organizations ranks, adding several smaller companies as members during his tenure. The meeting at which Teva’s membership will be voted on has been scheduled for this month.

Regardless of PhRMA’s decision, Teva’s action is a momentous occasion for the generics industry. With the advent of biosimilars, it’s become clear that the once-firm line between generic and innovator has begun to blur. One expert put it best in the NYT article when he said, “The walls between what’s generic and what’s brand are breaking down.” After all, innovators are no longer solely dedicated to developing brand-name drugs. Take companies like Pfizer and Novartis, which are major players in both the innovator and biosimilar industries. And, in order to bring these treatments to market, these companies will find themselves (if they haven’t already) on the other side of the patent challenge fence.

This ‘hybrid movement,’ as I like to call it, has been on my mind for some time, especially because of how it impacts pharma’s definitions of “innovation.” After all, when it comes to Teva’s PhRMA membership, the question arises of just how devoted to innovation a generics company can be. As the number of companies involved in biosimilar development continues to increase, the “innovation question” also extends to these drugs. I penned an article a few months ago about where — or even if — biosimilars fall on the innovation spectrum. At the time, the ongoing negotiations surrounding biosimilar naming, labeling, and interchangeability seemed to be signs the industry was struggling to determine just how innovative biosimilars are. Now, given the differences in biosimilar naming and labeling, these almost identical copies are clearly considered more innovative than generics when compared to their reference product — at least in the U.S.

Perhaps it’s time that industry groups begin to express this hybrid movement through their membership rosters. As innovator companies begin to explore what once were typically separate businesses, it makes sense to include members that are heavily invested in the generic/biosimilar side of things. While there are likely to be continued disagreements over innovation as it relates to patents, we’re entering an age where it’s no longer just generic/pure-play biosimilar companies that are carrying out these challenges against innovators. As brand companies begin to engage in the patent dance themselves, the more well-rounded their perceptions of innovation will likely become.