Biosimilars – In The Pipeline or Still a Pipe Dream?

By Jonathan Larsen, JD, MPP and Adrienne R. Ghorashi, Esq.

The US Food and Drug Administration (FDA) approved the first biosimilar for use in the United States in March 2015. The approval came after several years of regulatory process development authorized by the Biologics Price Competition and Innovation (BPCI) Act of 2009, a component of the Affordable Care Act.

Biosimilars are highly similar, but not identical, copies of FDA-approved biologics, known as “reference” products. Biologics are used to treat a variety of diseases and medical conditions, including cancer. For many years, biosimilar development was thought to be too complex and too costly to advance, and exclusivity patents for reference biologics prohibited developers from marketing competing biosimilars. Now that those patents have started to expire, biosimilar development can finally begin, at a potentially huge benefit to patients.

A 2011 white paper published in the Journal of the National Comprehensive Cancer Network estimated that introducing biosimilars could result in cost savings between 25 percent and 40 percent over existing biologics. In 2014, six of the top 10 drugs used to treat cancer in the clinic setting were biologics. Expenditures for these six drugs alone was approximately $5.8 billion, equal to nearly 80 percent of total expenditures for the top 10 cancer drugs in clinic settings, based on data published in the American Journal of Health-System Pharmacy. Thus, biosimilars present an opportunity to reduce overall drug expenditure costs and increase patient access to some of the most expensive treatments on the market.

If the incentive for introducing biosimilars is a more competitive pharmaceutical market that provides better access to treatment, then recent regulatory changes, as well as the expiration of biologic patents, have potentially opened that doorway. The new abbreviated regulatory process, made possible by the 2009 BPCI Act, provides an alternative to the lengthy and expensive approval process required for new biologics. The FDA has approved three new biosimilars just this year, and the economics of creating biosimilars is beginning to make a lot more sense.

Based on the BPCI Act, the FDA has designated two levels of abbreviated approval: biosimilar and interchangeable biosimilar. For a biologic to be approved as a biosimilar, it must prove to be highly similar to a reference biologic and must show no clinically meaningful differences from the reference product. Interchangeable biosimilars, in addition to meeting the biosimilarity standard, must also produce the same clinical result as the reference product in any given patient.

An FDA-approved biosimilar may be prescribed by a physician as an alternative to its reference biologic, but may not be autonomously substituted by a pharmacist. If a biosimilar is approved as interchangeable, then it may be autonomously substituted by a pharmacist for its reference biologic. Currently, no biosimilars have been approved as interchangeable, and developers are still waiting for FDA draft guidance on demonstrating interchangeability, which is expected to be released before the end of 2017. Licensed biologics, including any biosimilar and interchangeable products, will be listed in the FDA’s Purple Book.

State legislatures have taken notice of the recent activity in biosimilar development and have met such activity with laws that regulate how biosimilars will be integrated into clinical practice. Currently, 22 states have already passed such legislation in anticipation of regulating pharmacist substitution of interchangeable biosimilars. Our team at the Policy Surveillance Program has developed a dataset that captures the elements of these substitution laws, and will monitor their expansion. Our goal is to enable public health policy evaluation of their effectiveness related to health outcomes, cost of care, and other relevant public health measures.

22 states in the US regulate biosimilar substitution
Twenty-two states regulate biosimilar substitution

The fact that only a few biosimilars have been approved so far, and FDA guidance on interchangeability has not yet been released, begs the question, “Are biosimilars actually in the pipeline, or is this still a pipe dream?” An interim report produced by the Eastern Research Group and commissioned by the FDA may shed some light on this pressing question. From 2013 to the end of the first quarter of 2015, the FDA received only five biosimilar applications. However, the FDA has ramped up its review of biosimilars substantially in the past year with an influx of new applications and approvals. In September 2015, Dr. Janet Woodcock, Director of the FDA’s Center for Drug Evaluation and Research, reported that there were 57 products proposed as biosimilars for 16 reference biologics.

The recent increase in regulatory activity won’t be conclusive on when and how biosimilars will be integrated into practice, though. Doctors may still be hesitant to prescribe biosimilars in place of their reference biologics. Industry lobbying of state legislatures influences restrictions on automatic substitution of biosimilars. Patent litigation issues on market exclusivity have also presented roadblocks to marketing biosimilars. But with such a rapid surge of biosimilars activity, it will be interesting to observe how state laws will continue adapting, and how the healthcare industry will ultimately be affected by their arrival on the market.

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