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Unwelcome News For AbbVie, J&J, Amgen, Roche

After months of intense lobbying by rival groups of drugmakers, California Governor Jerry Brown over the weekend vetoed a controversial bill that would have allowed substitutions for interchangeable biosimilars - which are medicines based on brand-name biologics - but only if certain conditions are met by prescribing physicians and pharmacies.

The bill emerged as part of a multi-state campaign by some drugmakers to draw clear lines for allowing substitution, even though the FDA has not yet approved a biosimilar or decided whether a biosimilar is interchangeable with a brand-name biologic. Many biologics are priced at tens of thousands of dollars a year and once biosimilars become available, the debate over cost is expected to accelerate.

As we reported previously, the multi-state push to generate new laws on substitution is the result of an aggressive lobbying effort by biotechs, notably Amgen (AMGN) and Genentech, to protect their lucrative franchises and blunt the inroads that biosimilars are expected to make in the marketplace. So far, the effort has been rejected in 10 states and gained little traction elsewhere.

Biologics now top the lists of best-selling drugs globally and, because they’re harder to copy, the stocks of makers of these drugs have been highly valued, including those of the sellers of three huge biologics that treat rheumatoid arthritis and other immune system disorders.

ABBV Chart

ABBV data by YCharts

AbbVie’s (ABBV) blockbuster Humira brought in $9.3 billion in sales last year and is expected to best that figure by at least 10% this year. It begins losing patent protection in December 2016. It competes against Amgen’s Enbrel, sales of more than $8 billion; and Johnson & Johnson’s (JNJ) Remicade, sales of more than $7 billion.

The legislative effort in California, however, was being closely watched because the state is not only large, but is often seen as a bellwether for pharmacy practice. Moreover, Amgen and Genentech, a unit of Roche (RHHBY), are both based in California, and so their lobbying campaign was viewed, by some, as a litmus test for their political muscle. (Roche has a particularly promising pipeline of new drugs.)

To read the remainder of this article, go to Pharmalot.

Ed Silverman, a contributing editor of YCharts, is the founder and editor of Pharmalot. He previously reported on the pharmaceutical industry and other business topics for the Star-Ledger of New Jersey, New York Newsday and Investor’s Business Daily. He can be reached at editor@ycharts.com. Read the RIABiz profile of YCharts. You can also request a demonstration of YCharts Platinum.

Read more articles about: Company Analysis  pharma stocks   

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