Study by Leading Economist Identifies Potential for $378 Billion of Savings From Follow On Biologics

Tuesday, February 12, 2008 General News
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RICHMOND, Va., Feb. 11 A report released today,commissioned by Insmed Inc. (Nasdaq: INSM), identifies potential cost savingsof approximately $378 billion over the next 20 years from making follow onbiologics (FOBs) available in the U.S.

The econometric study by economist Dr. Robert J. Shapiro, former UnderSecretary of Commerce in the Clinton Administration, found that "...genericversions of the top 12 categories of biologic treatments with patentprotections that have expired or that are due to expire in the near futurecould save Americans $67 billion to $108 billion over 10 years and$236 billion to $378 billion over 20 years."

According to other published reports, an estimated $10 billion worth ofbiologic drugs are expected to come off patent by 2010, with an additional $10billion by 2015. FOBs would provide safe and effective therapies at a reducedcost following the expiration of the original product's patent.

Dr. Shapiro's report, entitled The Potential American Market for GenericBiological Treatments and the Associated Cost Savings, also finds that "...theeconomic and medical benefits from generic biologics should be as great orperhaps even greater as those from generic forms of traditionalpharmaceuticals... Moreover, the potential savings from the discounted pricesthat generics provide will be larger with biogenerics, because originalbiologics are so much more expensive than other brand pharmaceuticals..."

The scientific, regulatory and legal framework for the approval of small-molecule generic drugs is well developed, and a regulatory system forapproving FOBs was established in Europe in 2006. However, no regulatorypathway currently exists for FOBs, which are also commonly referred to asbiosimilars or biogenerics, in the U.S.

"Dr. Shapiro's comprehensive analysis presents a compelling case for theneed for Congress to adopt legislation so patients can receive affordableaccess to life-saving biotech drugs in a timely manner," said Geoffrey Allan,CEO of Insmed, a developer of follow-on biologics and biopharmaceuticals."The cost savings to the health care system have the potential to be enormous,while the environment for new market participants could introduce competitionto these monopolistic markets, similar to that seen in the traditionalpharmaceutical generics industry."

The release of Dr. Shapiro's report is part of Insmed's broad educationcampaign on the importance of establishing a regulatory pathway in the U.S.for large molecule protein-based drugs, known as follow-on biologics (FOBs),which are also commonly referred to as biosimilars or biogenerics.

Insmed is currently developing a portfolio of FOBs and intends to initiateclinical trials for its first two FOBs in 2008. Members of Insmed's skilledbiologics team have worked on over 50 therapeutic proteins. Their focusedprotein-based drug development backgrounds, coupled with the Company's FDA-approved protein manufacturing facility, and clinical and regulatoryexpertise, positions Insmed, upon the establishment of a regulatory pathway,to be an initial entrant into the U.S. FOBs market with a broad range ofmedicines following the expiration of patents covering the innovator products.

Dr. Shapiro is the chairman of Sonecon, LLC, a private firm that advisesU.S. and foreign businesses, governments and non-profit organization.

His full report is available on Insmed's website at: Journalists may contact Dr. Shapiro by calling202-213-7233 or e-mailing

Insmed is currently developing a portfolio of FOBs and intends to initiateclinical trials for its first two FOBs in 2008, both of whose brand salesrepresent over $3 billion in current sales world wide. Members of Insmed'sskilled biologics team have worked on over 50 therapeutic proteins. Theirfocused protein-based drug development ba

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