What can the industry learn from the response to Allergan’s recent transfer of patents to a sovereign entity?

I think they could learn 2 things. One, that folks will do just about anything to protect a blockbuster product. I’ve got to say that the lawyers who came up with that should get an award; I thought that was unbelievably creative. I guess the lesson is to expect anything.

The second thing folks can learn is that timing is everything. I thought the timing of this was awful. Drug pricing issues are swirling around, you’ve got Congress looking at it, you’ve got FDA looking at it, and to pull what I think can only be considered a stunt like this, it’s just awful timing for the industry. It might be good for the company that did it, but I think it plays very poorly with the regulators and policy makers.

It reminds me of something that happened probably 20 years ago in the Hatch-Waxman context where you had a similar atmosphere of criticism of the industry and criticism of some of the tactics that companies use to ward of generic competition, and just at that moment 1 big company got a new patent issued, and I think it was at 11:00 at night the day before generics were supposed to be approved, they submitted the patent to FDA and blocked generics for another 30 months. That set off a firestorm and actually prompted FTC to complain and FDA to change their regulations. Ultimately, it prompted Congress to step in and change the statute and address something like that.

I actually saw a lot of similarities between that situation and this situation, and I would not be surprised if you see some sort of legislative response to it.

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Scott Lassman, JD, partner in Goodwin's Technology and Life Sciences Group, responds to Allergan's recent transfer of patents to a soverign entity, and gives 2 takeaways for industry.

Scott Lassman: Industry Takeaways from Allergan's Patent Transfer

Will product sponsors need to take steps to transition their products to biologic status?

That’s another good question, I think it’s going to be FDA edict. FDA actually put out a draft guidance document a couple of years ago where they described how they see the transition process going. It was severely criticized by a number of people, and I think the biggest complaint is that it creates what folks have described as a “regulatory dead zone.” What FDA has said is, for things like insulin, the statute says you can submit an [New Drug Application, NDA,] until I think it’s March 21, 2020. But the FDA said that if you don’t get approved by that date, we will not review it any longer, and you have to pull that application and submit it as a biosimilar.

Companies, when they look at this, say, “Well, the FDA’s typical review is 10 months, so if we’re thinking about submitting an NDA say, 9 months before that date, chances are it’s not going to get approved, and we’ll have to pull it. So why would we even submit it?”

Typically, things go through a couple of review cycles, so it might even be longer than 10 months. Actually, if you look at the most recent insulin and insulin-like products, FDA’s review was anywhere from 2 to 5 years. Then you have to factor in, well, "What if we’re subject to a 30-month-stay?" A rational player would look at that and say, at some point, "It doesn’t make sense for us to submit an NDA because the risk that it’s not going to get approved is too high, so why don’t we just wait and submit the biosimilar application?"

The problem is that you’ve got this 2- or 3- or 4-year period where no one is submitting anything. I think that one is going to be, we’ll have to see, but I think that one is ripe for litigation because FDA’s position from policy point-of-view doesn’t make any sense, and I think legally it’s very suspect as well.

Scott Lassman, JD, partner in Goodwin's Technology and Life Sciences Group, explains how the upcoming transition of follow-on biologics to regulation as biosimilars could create a "regulatory dead zone."

Scott Lassman: Follow-on Biologics and the "Regulatory Dead Zone"

How do prior authorizations affect patients who have been prescribed biologics?

Like “fail first,” prior authorization is a tactic used by health insurance providers to reduce prescription drug costs. They serve an important purpose in seeking to reduce healthcare costs; however, when they are excessive in length and difficult to navigate because of variance, and depending on the insurance company requirements, prior authorization can become a real barrier to care.

By requiring physicians to submit additional paperwork to prove that a patient requires an advanced therapy—sometimes still requiring the use of a fax machine&mdash;they are encouraging physicians to prescribe an older, possibly less effective option to avoid the prior authorization effort required by the insurer. Physicians often report having to dedicate several staff members full time to processing prior authorization forms for patients. And from the patient perspective, prior authorization requirements mean that accessing their prescription is delayed, which can lead to serious health consequences or complications, not to mention much more stress.

Legislative efforts to address this issue have focused on streamlining and bringing uniformity to prior authorization forms and appeals processes within states around the country.

Seth Ginsberg, co-founder and president of the Global Healthy Living Foundation, discusses the impact of prior authorization requirements on patients and providers.

Seth Ginsberg: Biologics and Prior Authorization

What are fail-first policies, and how do they affect patients? 

“Fail first” is a term often used to describe a health insurance utilization management strategy called step therapy. Step therapy is a program put into place by a patient’s health insurance provider. It encourages the use of less costly yet effective medications before more costly medications are approved for coverage. In some specific instances, step therapy can be an appropriate way to reduce cost, however when applied to more complex diseases and conditions, it can be unethical, prolong suffering, exacerbate disease, and increase cost.

Most of the time, the problem with step therapy is that it unilaterally applies a one-size fits all policy to individual patients without regard to their specific medical history. A doctor may have prescribed a more expensive, more complex medication—like a biologic&mdash;to her patient for specific reasons. For an insurance company to reject the prescription and require a patient to try something different, first, is problematic, to say the least. For example, in many cases, a patient may have already tried the less expensive medication and either not responded to it or experienced an adverse event. But if they are new to their health insurance plan, that history may be disregarded. This puts the health of the person at risk by delaying and/or preventing effective treatment. State legislatures across the country as well as Congress are addressing this issue by reforming the appeals process to bypass a step therapy procedure or accelerate an appeal. Legislation provides specific criteria with which a physician can use justify an appeal and puts in place response time requirements that insurers must comply with when answering appeal submissions from patients and providers.

Fail-first policies intrude on the patient/physician relationship and lead to:

Unstabilized care and the potential for permanent damage to occur

Forcing patients to sometimes take drugs that are not FDA approved for their condition

Our organization has been a leader in helping people understand fail-first practices, educating policy makers and regulators about fail-first practices, and keeping the public updated on each state’s approach to fail first. The web site for that information is www.FailFirstHurts.org.

Seth Ginsberg, co-founder and president of the Global Healthy Living Foundation, explains how "fail-first" policies, or step therapy, affect patients. 

Seth Ginsberg: Step Therapy's Effect on Patients

What challenges do patients with inflammatory diseases face in accessing biologic therapies?

There are several challenges that patients with inflammatory diseases, like rheumatoid arthritis or RA, face in accessing biologic therapies.

First, patients respond uniquely to biologics. It is impossible for a rheumatologist to predict which medicine might work best in their patients, based on specific criteria. This is in our future, however. Instead, today, patients must often go through a “trial and error” process when they try a medicine for 3 to 6 months to see if there is a positive response. It could take months or even years for a person with arthritis to find an effective therapy. So the challenge here lies in not knowing which biologic to select for optimal results.

Another challenge patients face isn’t related to biology. Rather, it’s related to their wallet. A person’s health insurance—public, private or a combination&mdash;will often dictate which medicines are available in their plan’s formulary and affordable based on the required co-pay or deductible. Rheumatologists (and their practice staffs) spend countless hours working with their patients to wade through paperwork and jargon to determine which therapies might be obtainable to the patient. In some cases, patients must go through lengthy approval processes (including prior authorization or “fail first” protocols) to qualify to obtain the medicine prescribed by their physician. It’s not an exaggeration to say that the physician-patient relationship is being undermined by insurance companies (and their partner pharmacy benefit managers) who are making medicine decisions based on dollar signs rather than medical judgement.

Seth Ginsberg, co-founder and president of the Global Healthy Living Foundation, discusses the challenges that patients face in accessing biologic medicines. 

Seth Ginsberg: Patient Access to Biologics

What are some drugs that will be transitioned to regulation as biologics in the future?

That’s a good question. I don’t have a list, I think the FDA put out a tentative list. Enoxaparin probably will not because that’s a sugar, and the way the statute was revised is they added the word “protein.” So proteins are now regulated clearly as biologics, and as I said there’s a transition provision, so by 2020, all of these proteins are going to be transitioned.

So it’s really the proteins, I think somatropin is an example of one, insulin is an example of another, enoxaparin I don’t think is because I think that’s more of a sugar molecule, so I don’t think it’s going to necessarily be covered.

It’s mainly the proteins, and then there’s actually a question; there’s been a petition that was filed. There are a number of products called peptides, which are just a little bit smaller than proteins. The FDA’s cut-off I think is 40 amino acids, so you’ve got some of these products that are 38, 39 [amino acids], and there was a petition that was submitted arguing that those ought to be transitioned as well because they’re close enough. It would be interesting to see how that pans out. I think people want it to get transitioned so they can take advantage of this 14 years of exclusivity. But it’s an interesting question and I think folks are going to be fighting that one out in the next couple of years as we get closer to 2020.

Scott Lassman, JD, partner in Goodwin's Technology and Life Sciences Group, explains which products currently regulated as drugs will be transitioned to regulation as biologics by 2020.

Scott Lassman: Products to be Regulated as Biologics by 2020

Ha Kung Wong, JD, Partner at Fitzpatrick, Cella, Harper and Scinto

Could the STRONGER Patents Act impact biosimilars?

That's an interesting act, actually. My understanding is that the STRONGER patents act, among other things, proposes to harmonize the burdens and claim construction standards between PTAB, the Patent Trial and Appeal Board, that hears IPRs, and the district courts that hear district court litigations. In particular, the bill proposes to change the burden of proving invalidity in IPR and a related action, called a PGR, or a post-grant review, to the clear and convincing evidence standard and to use the narrower ordinary meaning claim construction standard that is used in litigation. In other words, it would change the burdens and standards to match what you see in litigation.

The bill would also limit standing to those who had been sued by the patent owner. So it kind of limits who would have standing as well to actually raise the IPR.

Another thing that it does is that it allows for appeal of an institution decision, which is something that you don’t have today. Today, an institution decision, whether [an IPR] is instituted or not is not appealable. So this would give you another shot at saying the PTAB was wrong in instituting an IPR. Given the estoppel provisions already associated with IPR and PGR, these changes could greatly reduce the popularity of these proceedings.

Although in a macro sense, it’s possible that having more restrictive paths to invalidating patents may mean that some biosimilars take longer to clear the necessary IP to launch risk-free, It’s unlikely that this legislation, the STRONGER Patents Act, would affect the ability of biosimilars to reach the market. In some ways, due to the size of most biologics patent portfolios, a biosimilar company may even prefer going to district court where they can challenge a number of patents all at the same time.

Ha Kung Wong, JD, partner at Fitzpatrick, Cella, Harper and Scinto, discusses how the STRONGER Patents Act could affect biosimilars. 

Ha Kung Wong: Biosimilars and the STRONGER Patents Act

Might Congress revisit the Biologics Price Competition and Innovation Act (BPCIA)?

In the small-molecule pharmaceutical context, we saw Congress reform the Hatch-Waxman Act several times as procedural issues arose. For example, the Hatch-Waxman Act was amended in 2003 to address some patent listing and enforcement strategies issues. If we continue to see the same sorts of issues arise, or, for example, if we see a number of at-risk launches that end with biosimilar injunctions, Congress could well decide to amend the BPCIA. But one thing I don’t like to predict is what Congress will and won’t do. I think many have tried in the recent past and very few have been accurate.

Ha Kung Wong, JD, partner at Fitzpatrick, Cella, Harper and Scinto, discusses whether Congress might revisit the Biologics Price Competition and Innovation Act (BPCIA).

Ha Kung Wong: Congress and the BPCIA

Does a designation of an innovator product as a drug as opposed to a biologic make it easier or harder to enter the market with a follow-on?

It really depends on the specific product you’re talking about. In some cases, it could be easier, in some cases it could be harder. I will say upfront that very soon, in 2020, all those products, like insulin, which are now regulated as drugs and get approved through NDAs and 505(b)(2) applications, they’re all going to be transitioned to biologics and they’re going to have to submit BLAs.

So, this issue won’t exist for much longer. But again, given the current state it really does depend on the particular drug involved. So for products like insulin that are currently regulated as drugs, there are two pathways to get approval of a “generic.” There’s the NDA pathway and the 505(b)(2) pathway. I think a lot of these products are probably so complex that the NDA pathway isn’t a very realistic possibility.

The FDA will take the position, and has taken the position, that you can’t really demonstrate that the active ingredients are the same. On the other hand, if it were regulated as a biologic and you could do a biosimilar, biosimilars don’t have to be identical. In that sense, it might be easier for some of these products to get approval as a biosimilar because you don’t have to show the level of identity that you do to get an ANDA. The other thing is that biosimilars can be supported by clinical data whereas NDAs cannot. I guess the third issue that folks need to look at is the level of exclusivity. Biologics have 14 years of exclusivity, so if you’re blocked by that, that’s going to be a lot longer than you’d be blocked if the product were subject to an NDA. The longest exclusivity period is 5 years, and even adding on the delays for potential patent litigations, the most it’s going to be is 30 months. In some cases if you’re looking at a reference product that has the 14 years of exclusivity, you’d probably prefer that it were regulated as a drug rather than a biologic.

Scott Lassman, JD, partner in Goodwin's Technology and Life Sciences Group, explains differences between follow-ons and biosimilars.

Scott Lassman: Follow-On Products Versus Biosimilars

When the FDA waives the requirement of a single shared REMS system, what additional burden does that waiver place on the FDA?

A waiver of a REMS doesn’t really add a burden to the FDA. There may be a small burden because they’ve got to review and approve 2 different REMS, but the work it takes to help companies agree to a single shared REMS I think is at least as burdensome for FDA as reviewing and approving 2 REMS. I think where the real burden lies, and this is where FDA’s main concern is, is on the healthcare system. For instance, pharmacies and hospitals, they may get used to brands REMS and then all of a sudden, a generic is approved and if it has its own REMS, now you’ve got 2 different REMS that you’ve got to try and juggle. I think pharmacies don’t like it, physicians don’t like it, hospitals don’t like it, and I think that’s where FDA’s real concern is and why they’ve been so hesitant in a lot of cases to waive the single shared REMS requirement. 

Scott Lassman, JD, partner in Goodwin's Technology and Life Sciences Group, explains the burden to the health system when FDA waives a single shared REMS requirement.

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