Sara Karlovitch

In the 10 years since the passing of the Biologics Price Competition and Innovation Act (BPCIA), the field of biosimilar legislation and litigation has rapidly expanded, creating a new, complex legal environment. To help navigate the expanding biosimilar legal space, Goodwin law released the 

Guide to Biosimilars Litigation and Regulation in the U.S.

 which provides a guide to each section of the BPA. Goodwin partners Robert Cerwinski, JD, and Alexandra Valenti, JD, discussed the guide on a recent 

“The guide covers all legal and regulatory issues that we've either already seen litigated or expect to see litigated in the coming years that relate to biosimilar products,” Valenti said. The publication is meant as both a guide for those who work closely with biosimilars and biosimilar litigation as well as for those who are new to the space. 

Valenti noted that since the passage of the BPCIA, the Supreme Court, in 

, resolved the issue as to whether a private party had the ability to enforce the act's provisions that pertain to the prelitigation information exchange, or patent dance. "That decision also held that notice of commercial marketing under the statute could be given at any time by the biosimilar, that the biosimilar didn't need to wait for product approval to provide notice of commercial marketing," she said.

One possible issue that is being watched is to see if product liability claims arise in biosimilars. “The interesting thing that we’ll be watching in that space is whether federal preemption principles that have been held to shield generic small molecule drug manufacturers from certain types of product liability claims will also apply in the biosimilar context,” Valenti said.

Anotjher issue to watch is the streamlining of patent issues by district judges, said Cerwinski. A judge may attempt to manage the process in such a way that might be considered more timely and efficient, but this is raising concerns by branded manufacturers.

“Brands have really been concerned about this as a streamlining by district court judges on the ground that not permitting a brand or a patentee to assert whatever patents the [Patent Trade Office] PTO has issued it is unconstitutional,” Cerwinski said. “And is somehow taking a property right or preventing them from exercising them property right? And we expect to see that actually appealed all the way up to the Supreme Court at some point.”

To learn more about the Guide to Biosimilars Litigation and Regulation in the US, visit the purchase page 

Articles

What is ahead for biosimilar litigation? We highlight a recent interview Goodwin partners gave recently about their new guide to biosimilar litigation. 

What's Ahead for Biosimilar Litigation?

As the healthcare delivery model transitions from a fee-for-service (FFS) model to a value-based model, biosimilars may begin to play a much larger role.

The American healthcare system has largely operated under the FFS model, but a value-based model places more emphasis on cost-saving practices when clinically appropriate and using less-expensive alternatives to branded medications.

In a recent podcast interview broadcast on 

, Jeffery Scott, MD, chief medical officer of Integra Connect, a company that uses cloud-based technologies and services that help specialty care providers optimize their performance in the ongoing shift to value-based models, talked about the future of the value-based system, what’s holding it back, where it’s already working, and what role biosimilars will play in a value-based system.

“The key about value-based contracting would be trying to identify products that offer the best care or in the setting of multiple entities that have similar outcomes, contracting, to drive down  the total cost of care by choosing the one that you get a contract on,” Scott said.

A value-based model is already being used in some areas of the healthcare space, most notably Veterans Affairs (VA). Although the VA, like Medicare, is paid for with taxpayer money, the VA is separate and has the ability to negotiate its prices with industry, according to Scott.

“The prices paid to the VA and other DOD, the Department of Defense, facilities are, are not calculated as part of the average selling price. So this would allow the VA to lower cost of care through negotiations since anything that they pay is related to the cost of the drug, not a markup,” Scott said.

According to Scott, a system like the one the VA has would allow physicians to lower out-of-pocket costs for patients. However, several things are holding the value-based system back, with contracts being one of the most prominent.

So far, the value-based system has had very little impact on the oncology space because there are not currently contracts based on value, according to Scott. For example, United Healthcare has signed a deal that forces physicians to use the branded version of pegfilgrastim, Neulasta (which is produced by Amgen).

“And the community, we deal with Part B and D in the Medicare plans,” Scott said. “The Part B Medicare for the injectable drugs sets a market reimbursement at average selling price plus 6%. Short of a change in the Medicare Modernization Act of 2003 or a Medicare waiver, it would be a challenge for any value-based contract.”

According to Scott, any discount provided would impact the rest of the market because it would lower reimbursement, thus taking the ASP lower.

While Scott believes biosimilars have an important role to play in a value-based market, healthcare needs to go beyond biosimilars to provide true savings to the patient.

“When I think of a value-based contract, I think of an opportunity for us not to just lower the acquisition cost to the practice, but commensurate to that, lower the cost that the payer has to pay,” Scott said.

According to Scott, over 60% of the total costs of care come from drugs, most of which are new immunotherapies (IO). IO can have an amazing impact on patients but also contribute to massive growth in cost, he noted.

“Now, across the IO class, multiple drugs appear to be similar. I think there's an opportunity for payers and the IO companies to start to have discussions, for example, that could lead to a preferred choice of therapy and exchange to a lower cost,” Scott said.

“I think if there's a way to maintain the physician margin while lowering the cost of care to the payer, there'll be a lot of interest in that contracts and those types of contracts,” Scott said.

In case you missed it: Jeffery Scott, MD, chief medical officer of Integra Connect, discussed what role biosimilars will play in a value-based system on a recent podcast episode of Not So Different.

How Can Value-Based Care Embrace the Possibilities of Biosimilars?

Winnie Tiedemann, 73, of New Jersey lives with her son and his 5 children. She worked for years as a secretary for her husband and son’s company, John Tiedemann, Inc. Which specializes in church paintings and historic restorations. 

Tiedemann was diagnosed with diabetes at age 25 and has been insulin-dependent for the past 20 or so years. She has insurance, Medicare and AARP health insurance. Tiedemann is currently dependent on Humalog (insulin lispro), which is manufactured by Eli Lilly, and Levemir (insulin detemir), which is manufactured by Novo Nordisk.

Her out of pocket costs? Around $3600 a year.

Tiedemann is lucky. Her son picks up the cost of insulin.

“I don't get much money. I didn't work that many years, so I get very little in social security” Tiedemann said in an interview. "He just picks it up for me. And if he didn't, I wouldn't be able to use it.”

The gross amount spent on insulin per person has increased by nearly $3000 dollars between 2012 and 2016 despite daily insulin use by people with type 1 diabetes increasingly only 3%, according to a 2019 

 conducted by the nonprofit Health Care Cost Institute, which receives data contributions from Humana, Aetna, Kaiser Permanente, and UnitedHealthcare.

, this price hike can be deadly as people try to ration their insulin and bring down costs.

“The fact that type 1 diabetes has gone from a death sentence to a survival condition [and] back to a death sentence in the US is shameful,” James Elliott, a T1International trustee, wrote in an email to The Center for Biosimilars®. “We know of at least four young Americans with type 1 who have died since June.”

 has been introduced that could potentially reduce the price of insulin by 75%, bringing it back down to 2006 levels. Caps on the price increase of insulin would be set as one way to help bring down the type of insulin. But biosimilars insulins are also increasingly seen as a solution to the problem.

Insulin has traditionally been regulated as a drug, not as a biologic. Subsequent-entry versions of insulins are therefore follow-on products, rather than biosimilars, and are not subject to the biosimilar approval pathway’s interchangeability provision. Insulins, along with some other products, will transition to regulation as biologics and biosimilars in 2020, in keeping with a date set out in the Biologics Price Competition and Innovation Act.

“By moving insulin and other applicable products to be under the [Public Health Service Act], Congress has promoted a pathway for follow-on insulin products to become available” acting FDA administer Norman Sharpless, MD said in a May 2019 

. “So, this means that insulin and insulin analogs will now be open to biosimilar competition. Which in turn can lead to development of more affordable biosimilar insulin products, including products that are interchangeable with branded insulins, without any compromise in safety and effectiveness.”

The increased competition biosimilars provide will hopefully drive down the cost of insulin, according to the FDA. Six million people in the United States alone are insulin-dependent, and the introduction of a biosimilar insulin could be revolutionary to their healthcare needs-and policy changes cannot come fast enough; follow-on insulins available to date, including 

, which is manufactured by Sanofi and references Eli Lilly’s Humalog, has a list price of only approximately 15% less than Humalog.

According to Elliott, shallow cost savings are because the US insulin market is dominated by just 3 major companies, and competition is not robust.  

“So long as the US market is dominated by the Big 3 entities; Eli Lilly, Sanofi, Novo Nordisk, all of whom are under multiple investigations for collusion, I don't see the market changing significantly” Elliott said in his email. “Ultimately, insulin in the US needs to head towards commodity status, and I don't see this happening until there are more than a handful of supplies, or a public or non-for-profit manufacturer.”

 from the New York attorney general regarding their pricing practices, and the Senate Finance Committee has 

 CMS for insulin information as part of its own investigation.

For Elliott, biosimilar insulin and reducing the cost of insulin as a whole will affect everyone—not just insulin dependent people.

“Patients who need insulin to live, their families, government-funded drug programs, tax-payers, shareholders of new entrants, the economy as a whole—the sheer scale of the $30-billion-dollar-a-year insulin market would cause money to be redirected.”

For people living with diabetes, rising costs means less money for daily necessities and can even get too expensive for health insurance to cover. For Tiedemann, her insurance has already switched her medication once because it got too expensive. She’s up to try anything that can help reduce costs.

“I mean, if it's going to do the same thing, why not?”

Winnie Tiedemann, 73, of New Jersey lives with her son and his 5 children. Tiedemann was diagnosed with diabetes at age 25 and has been insulin-dependent for the past 20 or so years. Her out of pocket costs for insulin? Around $3600 a year.

Sara Karlovitch

What's Ahead for Biosimilar Litigation?

How Can Value-Based Care Embrace the Possibilities of Biosimilars?

Patients Say They Are Ready for Cost-Saving Biosimilar Insulin