Are there some therapeutic areas where biosimilars are must urgently needed in the US market?

I would have to start with the most urgent need is in the immunology space. That's where the innovation is happening, right?  We know immune oncology, gene therapy, all these things that are happening, and more so in the oncology space to treat cancer, which is a pretty significant challenge from a healthcare perspective.

But we have these products and these biologics that have been in the market now for 20 years. We have an approved biologic for rheumatoid arthritis that's been approved by the FDA since 2016. And we still haven't been able to launch it.

So I think that's probably where the biggest opportunity is. You see these massive products that are $14, 16 billion a year that even if you assumed that a biosimilar coming to the market could save you 15% to 20%, that is tremendous value to put back into the healthcare system in the [United States].

So I think that's probably the biggest area, if you think about immunology and then oncology at the same time as all of this incredible innovation is happening. Who could have imagined just a few years ago that you can actually get people suffering from lung cancer to actually have survival? Melanoma, right, we now have these mega curves in survival. Well, in order to be able to make those products accessible, then we have to absolutely take advantage of what biosimilars bring to the marketplace.

And then finally I would just say how many people in the [United States] don't get access to a biologic because they simply can't afford it? And I think that's part of the promise of biologics. We know that the sooner you treat someone who's suffering from an immunological disease, the sooner you treat them the more likely you're going to be to avoid the long-term effects of that and actually give them a better quality of life.

So I think those are the 2 benefits. There's the cost benefit, but then there's also the opportunity for people who might otherwise not be able to access these medications.

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Sheila Frame, vice president and head of biopharmaceuticals, North America, at Sandoz, discusses which therapeutic areas need biosimilars the most. 

Sheila Frame: Therapeutic Areas That Need Biosimilars

What are some of the key differences between the US market and the EU market for biosimilars?

I think one is experience, right? In the [United States]—I think the [United States] has always prided itself on being the leader in innovation.

And so, as a result of that, the policy environment has always protected innovation, much more so than in some of the other countries. So I think that's a fundamental difference, and I think it's an area that we absolutely need to continue to focus on. I think there's not a person in this industry who will say to you that innovation and protecting it isn’t important, and I'm a huge, passionate believer in patent and patent acts, trying to protect that innovation. Absolutely the inventor deserves to be protected and to benefit from the innovation, especially in healthcare where it benefits humankind.

Having said that, the World Trade Organization says 20 years, not 28 years, not 35 years, right? So, I think, as we look at this situation, Europe has very clean and specific policies as it relates to making the right balance between rewarding innovation and also the sustainability of the healthcare system. And I kind of feel like that's where we are with the US system today. We have to figure out a way to contribute to the sustainability of the system and make room for that innovation.

So, you know, as much as the FDA is there absolutely to protect the safety and wellness of people and of patients who ultimately take our products, I think we have this tremendous experience that we've had in Europe, where the conversion of the marketplace to biosimilars has not hurt anyone but actually benefitted not only patients but obviously the system as well.

So I think those are some of the learnings: clarity, simplicity of policy, and then this notion of it's not about being balanced between the originator and the biosimilar but rather actually enabling the uptake of biosimilars in order to create that space.

And then I would say finally, you know, in biologics, one of the things that patients often forget and we all forget, I think, the originator products that have been in the marketplace for 15, 20, 25 years, they actually are a biosimilar of themselves with every single batch. So biosimilars are not new. They're new maybe to the US market from the point of view of a Sandoz or another organization launching them, but within the originator companies, every batch is slightly different, and we certainly know that, because we sample them, right, in order to make that comparability, in order to get our own regulatory approval. So I think we just need to sometimes kind of keep that in mind.

Sheila Frame, vice president and head of biopharmaceuticals, North America, at Sandoz, addresses key differences between the US market and the EU market for biosimilars.

Sheila Frame: Differences Between the US and European Biosimilars Markets

Are there some ongoing Biologics Price Competition and Innovation Act (BPCIA) litigations that you’re keeping your eye on?

Well, I am watching very closely the litigations involving biologics that are related to rheumatoid arthritis. There are a number of them going on, and I think that what happens in those cases and how those companies are going to be able to penetrate the market is going to determine whether other companies—smaller companies that have developed biosimilars in places like India, where they have developed and launched them&mdash;whether they will get into the biosimilar game in the United States.

Sal Patel, JD, partner at Schiff Hardin, LLP, explains why he is watching litigations concerning rheumatoid arthritis drugs closely.

Sal Patel, JD: Ongoing BPCIA Litigations

Are there lessons learned from Hatch-Waxman proceedings that you think can be applied to Biologics Price Competition and Innovation Act [BPCIA] litigation?

Yes—I would say that the BPCIA litigation is Hatch-Waxman on steroids. The reason I can say that is because we’re seeing a lot of brand-versus-brand interactions. Amgen, Pfizer…they all want to get into the biosimilars game, when in historical times, not so long ago, they were all making brand drugs, trying to stave off competition.

So what you’re going to now see is a lot of emerging trends about any ideas people had at Hatch-Waxman, where, from a generic company point of view, they’d have to pick and choose to prioritize specific arguments to fit within tighter budgets, now, on a brand-versus-brand larger scale, we can leave no stone unturned and be able to investigate a lot of issues and really dig down into the dip issues of invalidity, prior sale, prior use, anything that goes to invalidating those prior patents in the biosimilars world.

And those are things that are from the Hatch-Waxman space, but carried over really to a further extent on the biosimilars side. 

Imron Aly, JD, partner at Schiff Hardin, LLP, explains how lessons learned from Hatch-Waxman proceedings can be applied to Biologics Price Competition and Innovation Act (BPCIA) litigation.

Imron Aly, JD: Hatch-Waxman and BPCIA Litigation

What are some of the biggest challenges in getting a biosimilar to market from a manufacturer’s perspective? 

Well, I think it starts with the intellectual property (IP) situation in the United States, right? It's so different, and it's kind of a unique situation in the United States. You know, usually the [United States] leads innovation. In the case of biosimilars, we're about 10 to 12 years behind the rest of the world, largely because of the IP situation and what we call the "patent estates" that a number of the originator companies have been able to put up.

The second big sort of challenge and obstacle, I think, has been in the past more of a policy sort of challenge where biosimilars were to some extent disadvantaged, whether it was through CMS or the FDA, and other things. So, from a policy perspective, just in the last 6 months I never could have imagined that we would have seen some of the policy solutions that have been put forward by the government.

So we've resolved some of those to at least I would say get biosimilars to be equivalent to the originator. I think our hope now is, is there not a policy opportunity for us to now maybe enable biosimilars by giving them more of a favorable sort of policy pathway, and certainly that's the energy that we're feeling from [FDA Commissioner Scott Gottlieb, MD] and other officials in the government is to try to now really enable the biosimilar uptake.

And then the final one, I think, is really the system in the United States with what everyone's referring to today as the “rebate wall” certainly is a big hurdle for us in terms of "how do we overcome that?" And, again, I think Americans are looking for a lot more transparency. It's a very complicated system compared to other countries. But, you know, we're now at a stage where we have at Sandoz 86 countries where we've been successfully marketing biosimilars.

The time feels right to us that some of these challenges will start knocking down pretty quickly. I think the [United States] is definitely ready to free up the capacity to fund these innovations. I mean, you know, even in oncology when you think about what's happened from an innovation perspective in the last 5 years, if we don't create the room in the marketplace to take advantage of these savings now, then we're not going to be able to have access to these new innovations, and I think that's what really excites us the most at Sandoz in terms of the value that we can create for Americans in the US healthcare system.

Sheila Frame, vice president and head of biopharmaceuticals, North America, at Sandoz, discusses the challenges that biosimilar developers face in getting their products to market. 

Sheila Frame: The Manufacturer's Challenges in Getting Biosimilars to Market

Sandoz was the first to launch a biosimilar—Zarxio&mdash;in the United States. What are some of the key lessons learned from that product launch?

You know, for Sandoz it's been 35 years' worth of experience developing and selling biopharmaceuticals and biological products. With Zarxio, because it was the first to be launched through the new FDA process with a true biosimilar, we have learned so much, and we've had such incredible success.

It takes a little while, right, for the marketplace to get used to biosimilars. It was pretty new in the United States. But what we've seen in the last couple of years is just incredible excitement in the marketplace about the value that systems can benefit from and reinvest in patient care. So we've had some terrific successes. We've also had some challenges, as you can imagine, right. I mean, it's new for patients. It's new for treatment providers. So we're really excited that we were able to use Zarxio as the first example. It's something that supports patient care from a managing side effects perspective in oncology. It's relatively speaking a short term therapy.

We're really excited.  It has been a tremendous opportunity for many physicians, patients, and other healthcare systems. So we've got some great examples now. We've got good publications behind it. I think people are feeling much more comfortable with the value that biosimilars can bring.

Sheila Frame, vice president and head of biopharmaceuticals, North America, at Sandoz, discusses lessons learned from the launch of the company’s biosimilar filgrastim. 

Sheila Frame: Lessons Learned From Launching Zarxio

What are some factors that are driving high costs of prescription drugs? Are pharmacy benefit managers playing a role here? 

It’s really a diminishing returns issue here. When [pharmacy benefit managers, PBMs] first started, they were the administrative arm. They were the folks who tracked the distribution of drugs to patients, and they typically charged 10%.

Today, and today is kind of a metaphor here, they then found out that they could make a lot more money if they became more active. They were spun off as independent companies, they were free to do that, and while no one was watching, they took over the healthcare system in the [United States]. It’s not for the good of patients. Now, it’s a multi-billion-dollar monster that needs to be fed. I think Express Scipts' profits for 2017 were over $4 billion.

That’s money that doesn’t go to patients. At [Global Healthy Living Foundation, GHLF], we wonder whether that’s money that even needs to be in circulation. If you look at Medicare, it allocates 98 cents of every dollar to patient care. It’s the most efficient healthcare program in the United States, probably in the top 10 in the world. So, we know how to do this.

Louis Tharp, cofounder and executive director of the Global Healthy Living Foundation, discusses what drives high drug costs in the United States.

Louis Tharp: Drivers of High Drug Costs

What’s the burden of out-of-pocket costs for patients who rely on these drugs?

There is a burden, and it can be substantial. Unfortunately, we have so many different kinds of insurance, whether its [Veterans' Affairs, VA], or TRICARE, or commercial insurance, or Medicare, or Medicaid, It's impossible to understand what your costs can be, even if you’re buying the insurance or have a chronic condition that you know about, it's still going to be difficult to buy insurance that's going to be the best kind for you.

So, if we take as an example the new out-of-pocket costs for 2018, $7350 a year for an individual and over $14,000 dollars for a family...You can be on the hook for $14,700 dollars for your biologic.

As of about 4 months ago,* you could rely on co-pay cards from biologics manufactures, and from other drug companies, depending on your condition, so that could help ease you through that deductible period. Now the [pharmacy benefit managers, PBMs] especially have started what’s called co-pay accumulators. There are a couple of different names for it. What they do is take your co-pay card and don’t apply that against your deductible. So, at the end of the time, let’s say March or April, your co-pay card is used up, you’ve spent all of your money there, and you still have this very high deductible to meet: $7350 or $14,700 for a family.

So why is this wrong? Well its wrong because the patient gets a big surprise. Number 2, the PBM in this case is double-dipping, and what they’re doing is charging you retail for the drug and using your co-pay card to pay retail for the drug when they’re actually getting it at a substantial discount. They’re getting rebates and other concessions [while] you’re not seeing any of that, so they’re not only making a profit off of your premium and then off of your deductible, but they’re making a profit off of your co-pay card.

So, it’s an interesting situation. There used to be this saying “when you go into a crystal shop, you break it you buy it.” With PBMs, they bought that industry, and then they broke it. They’re making a lot of money, but the patients are not getting the best service or pricing that they could.    

Louis Tharp, cofounder and executive director of the Global Healthy Living Foundation, discusses the burden of high-cost biologics for patients with rheumatic diseases.

Louis Tharp: The Burden of High-Cost Biologics

Can you share some of your success stories in challenging patents and lowering the cost of drugs for patients? 

A lot of our work happened in India in the initial years on a number of first-line and second-line HIV drugs, [anti-retrovirals, ARVs]. We were successful in challenging those patents so Indian engineering companies could continue to export them to African countries. For example, India supplies 80% of generic HIV medicines to African countries, so we were able to keep that pipeline open.

In a number of cases our cases have actually lent themselves to creating leverage over the pharmaceutical companies in such that they’ve struck licensing deals. For example, we helped some of our colleagues in Ukraine and now Ukraine is included in that license as a result of that challenge.

The knock-on effect is to try and take some of the power away from the pharmaceutical companies, where you threaten the very rights that allow them to have all that power. Really, it’s about balancing the interests and making sure the system is working for both sides.

Unfortunately, I feel we’ve titled far too much in the favor of the pharmaceutical companies, and that’s why we see the problems we have today where drug prices are going up astronomically and, unfortunately, no one is able to really do anything about it. That’s why we feel our intervention is critical in terms of trying to redress some of those imbalances.

Tahir Amin, DipLP, co-founder and director of intellectual property of Initiative for Medicines, Access, and Knowledge, discusses successes in drug patent challenges. 

Tahir Amin: Successful Challenges to Drug Patents

Do you see differences in the attitudes toward patients in the United States versus other nations?

Well that’s interesting, because largely the United States and the Europeans and Japanese have largely been the drivers of the modern intellectual property system, given particularly the United States and Europe, and then in the 80s the Japanese because they became very tech savvy and their economy grew as a result of all the technologies that they started to export.

But now as you see today, China has the highest number of applications of patents than any other country. So, I think the attitudes towards intellectual property of patents has changed, still largely driven by the philosophies of Europe and the United States, but now China is exceeding both of those in terms of number of filings.

Does that mean that China is innovating more? Probably not. I think…the number of patents equating to better innovation or higher innovation is unfortunately a myth. I think there’s a number of academic studies or ways of studying that which can disprove a lot of the statistical reasoning. I think that’s what we as an organization are trying to get to the bottom of, to say that actually just because you have more patents or just because you’re pushing more patents is going to actually enhance innovation.

We understand that people need incentives and something to secure their investments, but we think it’s a bit of a race to the bottom. Because now we’re seeing people saying, “Well only if you have more than 30,000 patent applications a year are you doing real innovation?” and I don’t think it works that way.

Tahir Amin, DipLP, co-founder and director of intellectual property of Initiative for Medicines, Access, and Knowledge, discusses the link between drug patents and innovation.

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