Biosimilars: The Last 'Patent Dance'

In an unprecedented unanimous ruling on June 12, 2017, the Supreme Court ruled that biosimilar drug manufacturers applying for approval from the FDA “may provide notice of commercial marketing to the branded biologic drug manufacturer before obtaining a license.”

This ruling was significant for all stakeholders in the health care space. From biologic and biosimilar drug manufacturers, to payers, providers, pharmacies, and, most importantly, patients requiring these medications, this ruling will have a lasting impact.

The precedent set during this case allows for an increase in the speed to market for biosimilar drugs by up to 180 days. To understand the impacts that this case will have on the future of biologics and biosimilars, let’s first take a step back and discuss biologic and biosimilar drugs.

Biologics and Biosimilars

According to the FDA website, “Biological products include a wide range of products such as vaccines, blood and blood components, allergenics, somatic cells, gene therapy, tissues, and recombinant therapeutic proteins.”

Biologic medications differ from traditional medications in that they are isolated from natural living sources rather than being chemically synthesized. Biologics are produced by biotechnology methods and are typically very large mixtures of molecules.

Unlike simple chemical structures that can be drawn in an organic chemistry class, biologics are typically comprised of tens of thousands of atoms. They typically have strict storage and handling requirements, as many need to be stored at a certain temperature and may be injected or infused; therefore, they must remain sterile from manufacturing through delivery.

All of these attributes make biologic medications more difficult to manufacture, dispense, and deliver. It also makes them very difficult to replicate and reproduce.

Although biologics are extremely difficult to replicate, it is valuable to produce similar molecules with the same targets as these biologic drugs to bring additional competition to the market. The difficulties surrounding the manufacturing and handling of these drugs make them extremely expensive and the high cost makes it difficult for patients to gain access to them.

Introducing additional competition can greatly decrease cost and, therefore, improve patient access. In order to fulfill this need, many pharmaceutical manufacturers worked to create drugs similar to biologics, referred to as biosimilars.

As you can imagine from the description of biologic medications, biosimilars are different than traditional generic medications in that they are not an exact copy of the reference product. According to the FDA, “a biosimilar product is a biological product that is approved based on a showing that it is highly similar to an FDA-approved biological product, known as a reference product, and has no clinically meaningful differences in terms of safety and effectiveness from the reference product.”

Similar to generic medications, there is an allowance by the FDA for small differences between the inactive ingredients in biosimilar and biologic products. Although biosimilars have been relatively slow to market in the United States, there are many biosimilars in the European market. It’s estimated that there were $4.8 billion dollars in sales of biosimilars in Europe in 2016.

Biosimilars Decrease Cost and Improve Access in Europe

An IQVIA (formerly QuintilesIMS) report released in June 2016 showed a drastic price decrease leading to increased patient uptake of biologic treatments.⁴

“The increased competition affects not just the price for the directly comparable product but also has an effect on the price of the whole product class,” the report states. “In countries which used to have low usage/availability in the classes, the price reductions seem to have a significant impact on the increased access.”

This report tracked 4 classes of treatments for which biosimilar products were introduced in Europe: epoetins, granulocyte-colony stimulating factor, human growth hormone, and anti-tumor necrosis factor drugs.

The cost savings shown in these drug classes when biosimilars were brought to market were significant, upwards of 50% in some cases. Again, this incremental savings was not only seen for the reference product, but for the entire product class when the biosimilar product was introduced.

A separate report in March 2016 found that biosimilars could save health systems across Europe and the United States as much as $110 billion through 2020. If we see similar savings to what has been realized in Europe and bring additional biosimilars to market in the United States, it is clear that biosimilars could have a significant impact on drug costs in the United States.

Since 2006, the European Union has had more than 20 biosimilars approved, while only 5 have been approved in the United States. If the European Union is seeing drastic cost savings and improvements to access noted above, why is the United States lagging behind in approvals? Let’s take a look at the laws surrounding biosimilar approval in the United States so that we may get closer to this answer.

Biological Price Competition and Innovation Act

The Biological Price Competition and Innovation Act (BPCIA) was signed into law in 2010 by President Barack Obama as part of the Patient Protection and Affordable Care Act (ACA). Since the process to approve generic medications is predicated on the generic product having the same active compound as the drug, there was a need for additional legislation to allow a similar compound to go through an abbreviated pathway as well.

We wouldn’t want to force biosimilars through the full NDA process, so the BPCIA allows for this abbreviated licensure pathway for either biosimilar or interchangeable drugs. We discussed the definition of biosimilar above, but what is the difference between biosimilar and interchangeable?

For a biological product to be deemed interchangeable with a reference product, it must be biosimilar and also meet the requirements set forth for interchangeability by the FDA. Once labeled as interchangeable, the drug “may be substituted for the reference product by a pharmacist without the intervention of the health care provider who prescribed the reference product.”

This is the main difference between these designations. Products that are biosimilar, but not interchangeable, may not be substituted for the prescribed reference product without authorization to do so by the prescriber. Therefore, according to the FDA, “for products that will be administered more than once, the data and information must show that switching a patient back and forth between the reference product and the proposed interchangeable product presents no greater risk to the patient in terms of safety or diminished efficacy when compared to treating them with the reference product continuously.”

In other words, a patient would need to be able to switch back and forth between the reference product and the biosimilar with no significant change in efficacy or safety for it to be labeled interchangeable.

There have been 5 biosimilar products approved in the US market to date. In order to discuss the experience that has taken place in the United States around biosimilars coming to market, I’ll introduce you to a concept called “The Patent Dance.”

The Patent Dance

Sandoz’s Zarxio (filgrastim-sndz) was approved by the FDA on March 6, 2015, as biosimilar to Amgen’s Neupogen (filgrastim). As the first biosimilar approved in the United States, Zarxio’s approval was a milestone in the health care industry.

The internet was abuzz with articles expressing excitement regarding the drug, predictions about how this approval would change the future of biosimilars in the United States and, notably, a significant amount of confusion. Since the US biologic drug industry had no experience with an approved biosimilar, it seemed that nobody was sure what to do next. This led to the first “patent dance,” so to speak.

After Zarxio’s approval in March 2015, Sandoz sent full disclosure notification of the FDA’s decision to Amgen in accordance with the provisions in the BPCIA that require notification of the reference product manufacturer by the biosimilar manufacturer. Amgen felt that Sandoz violated the disclosure provisions, stating that Sandoz should have sent the information 6 months prior to filing for marketing.

Amgen took the matter to court and filed multiple other claims against Sandoz in the lawsuit, including unfair competition and conversion. Although the claims of unfair competition and conversion were dismissed, the court stated that Sandoz should have sent notification to Amgen 6 months prior to marketing Zarxio and ruled that Sandoz could begin marketing the drug after September 3, 2015, 6 months after the disclosure was received by Amgen.

This was relatively good news for Sandoz, as they were given the green light to take Zarxio to market. However, this 6-month waiting period delayed the cost savings and improvements in patient access to filgrastim that Zarxio would bring once marketed.

Now let’s circle back to the ruling made by the Supreme Court to bring it all together.

Bringing it All Together

The data from the European Union around biosimilars is clear: there is a significant incremental cost savings opportunity for the US health care system tied to the approval of biosimilars. These cost savings will lead to improved patient access to these lifesaving therapies.

Patients will be able to finally start therapies that they need and could not previously afford; however, approval is only the first step in the process. These benefits cannot be realized until the biosimilar drugs come to market.

Therefore, the June 2017 Supreme Court ruling that allows for biosimilar manufacturers to notify the manufacturer of their reference product prior to licensing or approval is vital. This will enable biosimilar manufacturers to bring their drug to market at the time of FDA approval so that patients can gain access at a lower price as soon as possible.

About the Author

Kimberly Firtz earned her Doctor of Pharmacy degree from Duquesne University and is currently enrolled in the Masters of Science in Pharmacy Business Administration (MSPBA) program at the University of Pittsburgh, a 12-month, executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines. Kimberly has spent the last 5 years working in Specialty Pharmacy, initially as a clinical pharmacist and most recently working on a variety of high profile Specialty Operations Projects. Her current role is working with the Process Innovation team on an effort to transform Specialty Operations and optimize the stakeholder experience.