The ACA Ruling: What it Means for Specialty Pharmacy

Much has been made about the recent US Supreme Court decision upholding the Affordable Care Act (ACA). Although specialty pharmacy has not been a central focus of the discussion, it is clear that certain provisions of the ACA directly impact the future of specialty pharmacy, and especially the future of the development and approval of biosimilar products in the United States.

To get perspective on the ACA ruling’s impact on specialty pharmacy, Specialty Pharmacy Times interviewed D’vorah Graeser, PhD, about the Biologics Price Competition and Innovation Act (BPCIA). The BPCIA, which was included as part of the ACA, provides a pathway for the approval of biosimilar products.

Dr. Graeser is the founder and CEO of Graeser Associates International (GAI), an international intellectual property firm specializing in the preparation, filing, and prosecution of medical device, biotechnology, pharmaceutical, bioinformatics, and medical software patents. She has been a United States Patent Agent for more than 15 years and has extensive experience and expertise in the biomedical field.

Q. What would have happened to the development of biologics if the Biologics Price Competition and Innovation Act (BPCIA) were not upheld? What would this have done to the biotechnology industry?

A. If the BPCIA had not been upheld, then further progress for biosimilars would have been blocked, as this Act authorizes the existence of biosimilars and provides guidance as to their regulation. A significant part of the biotechnology industry is now considering biosimilars or would be expected to participate in the development of biosimilars (eg, by partnering with traditional generic pharma companies that want to move into this space); this part of the biotechnology industry would have been damaged by the failure of the BCPIA.

However, biotechnology companies that are originators (ie, selling the original biologics) would have expected to see profits at least maintain their present course, and probably would have seen an increase.

Q. What is the current exclusivity period for biosimilars under the BPCIA?

A. There are 2 types of basic exclusivity provided by the BPCIA: a first, shorter period, during which no application for a biosimilar may be filed, which is 4 years from the date that the FDA approves the originator drug; and a second longer period during which no such application may be approved, which is 12 years from the date that the FDA approves the originator drug.

The second period is the one that has the originator biotech companies up in arms, as they have argued that it is too short. President Obama however wishes to shorten this period to 7 years, arguing that it is too long. I would argue that given the complexity of the biosimilar filing and approval process, and also that given that Europe has seen relatively low market penetration of biosimilars, even granting the shorter period for approval is not likely to significantly affect penetration of biosimilars into the market in the near future.

Q. Europe already has many

approved biosimilar products

. Is the United States lagging behind the EU in terms of innovation?

A. While Europe has approved many biosimilar products, these products have not enjoyed significant market penetration. For example, GCSF (granulocyte colony-stimulating factor) has only reached slightly above 10% market penetration in Europe by volume of drug sold as of the end of 2010. However, penetration has been higher in countries such as Germany, which encourages the use of biosimilars. Therefore, Europe is not overall rapidly embracing biosimilars; one problem is that biosimilars are not regarded as interchangeable with the reference product in all European countries.

Despite this relatively slow penetration, Europe should expect to see greater penetration as physicians and patients develop more experience with biosimilars, barring any problems such as adverse immune reactions. In order for penetration to be successful, Europe will need to learn more about characterizing and comparing biologics, and this experience is expected to give an advantage to Europe and to European biosimilar manufacturers. If the United States does not invest significant resources in characterizing and comparing biologics, it will fall behind Europe in terms of innovation.

Q. What do you see as some of the roadblocks to adopting biosimilars?

A. Characterizing and comparing biologics is a significant roadblock to adopting biosimilars, as a detailed analysis and understanding will not only be required for approval but will also be required for interchangeability (which in turn is a prerequisite for significant market penetration by biosimilars). Another roadblock is experience—without positive experience with biosimilars over a number of years, regulators will be reluctant to approve them, physicians will be reluctant to prescribe them, and patients will be reluctant to take them.

A further potential roadblock in the United States are legal actions to block approval of biosimilars by manufacturers of the reference biologics, as in Abbott's recent citizen petition to the FDA to block any potential biosimilar version of Humira. Such originators may also be expected to undertake court actions to block biosimilars generally; they will also presumably use patents to attempt to block specific biosimilars, as the FDA process and guidance regarding the role of patents in the biosimilar process is insufficient.

Q. Looking to the approved products in Europe as a model, when can a biosimilar truly be considered interchangeable from a legal standpoint?

A. Actually, the real question is, when is the biosimilar sufficiently "similar" to be considered interchangeable? This question has both scientific aspects, including the very real and open question of how to evaluate similarity between biologics, and legal aspects, which relates to a determination of when the scientific hurdles have been sufficiently overcome to a) determine similarity and b) determine whether a sufficiently high level of similarity has been met. In Europe, these questions have been answered on a country by country basis; Germany seems to generally accept that biosimilars are truly similar, while Spain and France passed legislation blocking substitution of the biosimilar drug by a pharmacist without explicit permission from the prescribing physician.

At the moment, scientific analysis is still in its infancy, so it is difficult to develop objective standards. One standard that Europe has adopted, and which relates to many of the most serious scientific concerns regarding biosimilars, is the requirement for extensive monitoring for adverse immune reactions both during the clinical trial of the biosimilar and after, along with post-approval monitoring for adverse immune reactions. Beyond this one aspect of interchangeability, further scientific research will be required before suitable legal standards may be objectively drafted.

Q. How do you think an onslaught of new biosimilar products will affect branded pharmaceuticals and pharmaceutical companies?

A. Initially there is not likely to be high market penetration of any given biosimilar among existing patients receiving the reference product, particularly given concerns in the United States about liability of insurance companies, pharmacists, and physicians, if any of these parties were to restrict the patient to the biosimilar. However, it seems likely that new patients, particularly those without insurance or with insurance that requires high copays or has a relatively low prescription drug benefit, will take the biosimilar. As many of these patients might not have been able to afford the originator drug in the first place, biosimilars could actually initially expand the market without taking away market share from the originator. However, as time passes, I would expect biosimilars to gain market penetration, although it could take 10 years or more before significant penetration is achieved.

Q. Do you think a shortened exclusivity period for biologics would have stifled research and development?

A. No, I don't, largely because there are few small molecule "blockbuster" drugs coming onto the market, and there is a fear that such drugs are likely to be few and far between in the future. Biologics, however, are still viewed as a promising field for "blockbusters," and so research and development of such drugs is likely to continue in any case, regardless of the exclusivity period.